TEN Holdings, Inc. Reports Full Year 2024 Financial Results

Rhea-AI Summary

TEN Holdings (NASDAQ: XHLD) reported its full year 2024 financial results, showing a decline in performance. Total revenues decreased 5.8% to $3.5 million from $3.7 million in 2023. The company's net loss widened to $2.97 million compared to $1.69 million in 2023, with loss per share increasing to ($0.12) from ($0.07).

Key financial metrics include:

• Gross profit margin declined to 81.4% from 85.1%
• SG&A expenses increased 13.7% to $5.39 million
• Cash position decreased to $48,000 from $357,000

The company completed its IPO on February 18, 2025, and is now trading on Nasdaq as XHLD. Strategic initiatives include developing a new platform-as-a-service (PaaS) model, enhancing the Xyvid Pro Platform, and focusing on customer relationship strengthening.

Positive

• Maintained high customer retention with 9 of top 10 customers being repeat customers
• Successfully completed IPO and listed on Nasdaq in February 2025
• Development of new PaaS model for recurring revenue streams
• Physical events segment showed growth with $91,000 revenue increase

Negative

• Revenue declined 5.8% to $3.5 million
• Net loss increased 75.7% to $2.97 million
• Gross profit margin declined to 81.4% from 85.1%
• SG&A expenses increased 13.7% to $5.39 million
• Cash position decreased significantly to $48,000 from $357,000
• Operating cash outflow increased to $2.48 million from $266,000

Insights

Financial Analyst

TEN Holdings' 2024 financial results reveal concerning trends that overshadow its strategic initiatives. Revenue declined 5.8% to $3.5 million, while costs increased substantially across multiple categories - cost of revenue up 17.5%, SG&A expenses up 13.7% to $5.39 million, and R&D expenses increased to $128,891. These diverging trajectories resulted in a net loss of $2.97 million, significantly worse than 2023's $1.69 million loss.

Most alarming is the company's cash position, which dwindled to just $48,000 at year-end from $357,000 in 2023. This precipitous decline, coupled with cash burn accelerating dramatically from $266,000 to $2.48 million, indicates severe financial strain. The February 2025 IPO likely provided essential capital infusion not reflected in these 2024 figures, but came at a critical moment.

The fundamental issue is structural: TEN Holdings is spending far more than it earns. With SG&A expenses ($5.39 million) significantly exceeding total revenue ($3.5 million), the company faces an unsustainable cost structure. The gross margin deterioration to 81.4% from 85.1% compounds these challenges.

While management frames 2024 as a "building year" focused on investments for future growth, the financial reality suggests a company that must quickly execute its strategic pivot to a recurring revenue model while substantially reducing expenses to extend its runway.

Business Strategy Expert

TEN Holdings is attempting a pivotal strategic transformation from a project-based event services model to a recurring revenue platform-as-a-service (PaaS) approach. This shift represents a fundamental business model change that could eventually stabilize revenue, improve predictability, and enhance valuation multiples if executed successfully.

The company's strategic pillars include:

• Developing a PaaS model to enable customer self-service and recurring revenue
• Enhancing the Xyvid Pro Platform with new engagement features and analytics
• Reengineering go-to-market strategy with reorganized sales and digital marketing
• Pursuing potential acquisitions of complementary businesses

However, this transition faces significant execution challenges. The 5.8% revenue decline indicates the company is losing ground in its core business while investing in future capabilities. Customer retention appears solid with nine of ten top customers returning, but this doesn't offset the overall revenue slide.

Most concerning is whether TEN Holdings has sufficient resources to complete this transition. Capital expenditures of $1.04 million alongside operating losses demonstrate commitment to the strategy, but with minimal cash reserves, the company has little margin for error. The February 2025 IPO was clearly timed to provide essential capital for this transformation.

The strategic vision of building recurring revenue streams is sound, but the execution timeline is compressed by financial realities. Success hinges on rapid customer adoption of the PaaS model and significant operational efficiencies to reduce the unsustainable cash burn rate.

LANGHORNE, Pa., March 28, 2025 /PRNewswire/ -- TEN Holdings, Inc. (Nasdaq: XHLD) ("TEN Holdings" or the "Company"), a provider of event planning, production, and broadcasting services, today announced its full year 2024 financial results.

"Fiscal year 2024 was a building year for our business, as we worked to develop a pipeline of new strategies and markets that we can grow over the next few years. During the year, we invested in research and development and capital expenditures to prepare to execute on our growth initiatives. By working towards strengthening and enhancing our customer relations, expanding the scope of the Xyvid Pro Platform, and the integration of a new platform-as-a-service (PaaS) model, I am confident that we will build a solid foundation that is necessary to capitalize on our competitive strengths to provide revenue and margin performance to drive value for our shareholders," commented TEN Holdings Chief Executive Officer, Randolph Wilson Jones III.

Business Highlights

• The Company initiated preparations for its initial public offering ("IPO") in 2024, successfully completing the IPO on February 18, 2025, with the Company's securities now trading on the Nasdaq Stock Market under ticker symbol "XHLD."
• For the year ended December 31, 2024, nine of our top ten customers, in terms of our revenue, were repeat customers.
• The Company reengineered it's go-to-market strategy with the addition of a new sales executive, realignment of its sales force, and by enhancing demand generation initiatives through industry conferences and digital advertising campaigns to drive engagement.
• The Company began the development of its new platform-as-a-service (PaaS) model to drive recurring revenue streams.

Earnings Results

• The Company reported fiscal year 2024 total revenues of $3.5 million, down 5.8% from $3.7 million in fiscal year 2023. The decrease was due to the following factors:

a.) Revenues from the delivered events – Virtual and Hybrid business segment decreased by approximately $306,000, mainly due to a 2023 event that did not repeat in 2024.

b.) Revenue from the delivered events – Physical business segment increased by approximately $91,000, mainly due to a corporate restructuring which resulted in the addition of a full year of activity during the year ended December 31, 2024.

c.) During the year ended December 31, 2023, the Company only reported revenue from "delivered events – physical" in June through December of 2023.

• Cost of revenue in fiscal year 2024 increased by approximately $97,000, or 17.5%, over the same period last year, to approximately $652,000, due to higher outsourced labor costs associated with physical events and a singular hybrid event that required significant third-party production and labor costs.
  
  
• Gross profit margin for fiscal year 2024 declined by 3.7% to 81.4% from 85.1% in fiscal year 2023, due to a decrease in revenues and higher labor expenses.
  
  
• Selling, general and administrative expenses increased by approximately $648,000, or 13.7%, to approximately $5.39 million in fiscal year 2024 compared to $4.74 million in fiscal year 2023, mainly due to accounting and professional service expenses, computer and software related expenses, and increased payroll expenses due to the addition of key members of the management team.
  
  
• Research and development expenses were $128,891 in fiscal year 2024 compared to $105,885 in fiscal year 2023.
  
  
• Interest expense was $210,000 in fiscal year 2024 compared to $52,000 in fiscal year 2023.
  
  
• Net loss for fiscal 2024 increased to $2.97 million compared to $1.69 million in fiscal year 2023, due to lower revenues and higher expenses.
  
  
• Net loss per share attributable to shareholders for fiscal year 2024 was ($0.12) compared to ($0.07) in fiscal year 2023.

Selected Balance Sheet and Cash Flow Results

• As of December 31, 2024, the Company had total cash of approximately $48,000 compared to $357,000 in fiscal year 2023.
  
  
• Net cash used in operating activities increased from approximately $266,000 in fiscal year 2023 to approximately $2.48 million in fiscal year 2024. The increase in cash outflow was primarily due to the higher loss in fiscal 2024.
  
  
• Capital expenditures for fiscal year 2024 was $1.04 million compared to $1.07 million in fiscal year 2023, due to the acquisition of computer hardware, equipment and capitalized software.

Company Outlook

• TEN Holdings plans to promote future business growth by strengthening customer relationships, improving customer loyalty, and increasing marketing and sales efforts with additional investment in digital marketing and sales team expansion.
  
  
• The Company plans to continuously enhance the proprietary Xyvid Pro Platform by introducing new interactive features to boost attendee engagement, integrating advanced data analytics tools for real-time insights and comprehensive event reporting, and improving the platform's scalability and flexibility.
  
  
• TEN Holdings is planning to launch a new platform-as-a-service (PaaS) model, empowering customers to independently utilize the Company's advanced technology through a recurring revenue model. Management anticipates that this strategic expansion will broaden the customer base, enhance market reach, and generate sustainable recurring revenue streams.
  
  
• The Company plans to identify, invest in, partner with, and acquire appropriate businesses that offer complementary and strategic advantages to enhance overall competitiveness and growth.

About TEN Holdings, Inc.
The Company is a provider of event planning, production, and broadcasting services headquartered in Pennsylvania. The Company mainly produces virtual and hybrid events and physical events. Virtual and hybrid events involve virtual and hybrid event planning, production and broadcasting services, and continuing education services, all of which are supported by the Company's proprietary Xyvid Pro Platform. Physical events mainly involve live streaming and video recording of physical events. To learn more, visit www.tenholdingsinc.com.

FORWARD-LOOKING STATEMENTS
Certain statements contained in this press release about future expectations, plans and prospects, as well as any other statements regarding matters that are not historical facts, may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The words "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "should," "target," "will," "would" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including: the uncertainties related to market conditions and other factors discussed in the "Risk Factors" section of the Company's registration statement filed with the U.S. Securities and Exchange Commission (the "SEC") and other SEC filings. For these reasons, among others, investors are cautioned not to place undue reliance upon any forward-looking statements in this press release. Any forward-looking statements contained in this press release speak only as of the date hereof, and TEN Holdings, Inc. specifically disclaims any obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.

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SOURCE TEN Holdings, Inc.

FAQ

What caused XHLD's revenue decline in 2024?

XHLD's revenue declined due to a $306,000 decrease in Virtual and Hybrid events segment, primarily from a 2023 event that didn't repeat in 2024, partially offset by a $91,000 increase in Physical events.

How much did XHLD's net loss increase in 2024?

XHLD's net loss increased to $2.97 million in 2024 from $1.69 million in 2023, primarily due to lower revenues and higher operating expenses.

What are XHLD's main growth strategies for the future?

XHLD plans to launch a PaaS model, enhance the Xyvid Pro Platform, strengthen customer relationships, increase marketing efforts, and pursue strategic acquisitions.

How much cash does XHLD have as of December 31, 2024?

XHLD reported cash of approximately $48,000 as of December 31, 2024, down from $357,000 in 2023.

What was XHLD's customer retention rate in 2024?

Nine out of XHLD's top ten revenue-generating customers were repeat customers in 2024.