HeartCore Enterprises reported third‑quarter 2025 revenue of $3.0 million, down 81% from $16.24 million in the same period last year. The decline is largely attributable to the loss of a one‑time $13 million signature warrant revenue that was earned in Q3 2024; no comparable warrant revenue was generated in Q3 2025. Gross profit fell to $1.5 million from $14.0 million, reflecting the shift from high‑margin warrant work to lower‑margin consulting services. Net income was $0.38 million, a modest profit compared with a $10.8 million net income in Q3 2024, and adjusted EBITDA rose to $0.5 million from $12.0 million.
For the nine‑month period ended September 30 2025, revenue was $7.1 million versus $21.27 million a year earlier, and gross profit was $2.6 million compared with $15.1 million. The company posted a net loss of $1.72 million, a swing from a $7.1 million net income in the prior year, while adjusted EBITDA was $(0.6) million versus $10.4 million. The loss of the warrant revenue and the divestiture of the software subsidiary are the primary drivers of the revenue and margin contraction.
HeartCore completed the sale of its wholly‑owned subsidiary, HeartCore Japan, on October 31 2025 in an all‑cash transaction that generated approximately $12 million. The proceeds were used in part to pay a one‑time distribution of $0.13 per share to shareholders on November 17, 2025, with a record date of November 10. The divestiture marks a full pivot to the Go IPO consulting business, allowing the company to focus its resources on a higher‑margin, high‑growth service line.
The company’s pro‑forma cash balance as of November 18 was $2.5 million, up from $1.5 million at the end of September. While the shift to consulting has compressed gross margins from roughly 86% in Q3 2024 to about 49% in Q3 2025, operating expenses have been reduced, helping to preserve profitability. The margin compression is a short‑term cost of shedding the software business, but management believes the Go IPO platform can generate sustainable earnings as it scales.
CEO Sumitaka Kanno emphasized that the divestiture and pivot are “strategic and transformative” steps designed to sharpen the company’s focus on a more profitable business. He noted that the company is actively pursuing new IPO engagements and expects the Go IPO consulting segment to grow as Japanese firms seek U.S. listings. The company’s cash position and disciplined cost structure provide a buffer as it builds the new business, but the near‑term challenge remains to replace the lost warrant revenue and achieve consistent revenue growth.
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