Xiao-I Corporation (Nasdaq: AIXI) (“Xiao-I” or the “Company”), a
leading cognitive artificial intelligence (“AI”) enterprise in
China, today announced its unaudited and unreviewed financial
results for the six months ended June 30, 2023.
First Half 2023 Financial Highlights
- Net revenues increased 106% year
over year to a record high of US$26.5 million.
- Sale of cloud platform products
increased 523% year over year to US$22.7 million.
- Gross profit increased 124% year
over year to US$20.5 million.
- Gross margin was 77.3%, up 620
basis points year over year.
Mr. Hui Yuan, Chairman and Chief Executive
Officer of Xiao-I, commented, “Amidst our industry’s dynamic and
ever-evolving landscape, we remained steadfast in our dedication to
innovation and growth. Our results speak volumes, as we achieved an
outstanding 106% increase in net revenues during the first half of
this year, reaching a record-breaking $26.5 million. This
remarkable performance underscores the value of our continuous
investments in cutting-edge AI technology that are effectively
aligned with the growing digital transformation demands of various
businesses.”
“Our commitment to innovation is exemplified by
our unparalleled R&D investment in the first half of 2023,
which surpasses our entire investment for the previous year. More
importantly, we have significantly expanded our product and service
portfolio with the introduction of our distinguished large language
model, Hua Zang. This innovative offering is expected to be
seamlessly applied across a wide array of industries swiftly with
cost-efficiency, opening up new horizons for our clients. In
addition to our product innovations, we have also made substantial
strides in our global expansion. This includes the establishment of
a U.S. subsidiary and active participation in a local exhibition.
These concerted efforts place us in a good position to lead the
global AI industry into a future full of immense opportunities and
transformative solutions to drive our continued growth.”
Recent Developments and Strategic
Highlights:
- Secured Contract for AI
Contact Center Project with Leading Chinese Aviation
Group: In June 2023, Xiao-I secured a contract for an
intelligent contact center project with a leading Chinese aviation
group. This partnership aims to enhance the aviation group's
service provision capabilities and drive its digital
transformation.
- Introduced Pioneering Hua
Zang Generative AI Model: In June 2023, Xiao-I launched
Hua Zang, its advanced large language model. The model, analogous
to an operating system, is built on Xiao-I's robust platform
capabilities and designed to empower various industries.
- Establishment of U.S.
Subsidiary as Part of Going Global Strategy: In June 2023,
Xiao-I established an U.S. subsidiary, Xiao-I Plus Inc., marking
another significant milestone for its global expansion
strategy.
- Launched IDP Solution for
Future-Ready Enterprise Document Management: In May 2023,
Xiao-I launched its state-of-the-art Intelligent Document
Processing (“IDP”) product. This innovative solution is delivered
by a smart and efficient platform that streamlines and automates
the document management process, empowering businesses towards an
era of intelligent operations.
- Recognition as Outstanding
Supplier by China Merchants Bank Credit Card Center: In
May 2023, Xiao-I announced that the Credit Card Center of China
Merchants Bank Co. recognized it as an outstanding supplier. This
prestigious acknowledgement follows the Bank's annual supplier
assessment evaluation for 2022, during which Xiao-I demonstrated
exemplary performance in business collaboration, product
implementation, and service quality.
First Half 2023 Financial
Results
Net RevenuesNet revenues were US$26.5 million
for the first half of 2023, up 106% year over year from US$12.9
million for the same period of 2022. The increase was primarily due
to the increased sales of cloud platform products and hardware
products.
By Revenue Type |
|
1H 2023 |
|
1H 2022 |
|
% ChangeYoY |
Sale of cloud platform products |
|
$ |
22,719,659 |
|
$ |
3,648,339 |
|
523 |
|
Technology development
service |
|
|
1,763,797 |
|
|
6,296,844 |
|
(72 |
) |
Sale of software products |
|
|
535,004 |
|
|
1,397,996 |
|
(62 |
) |
Maintenance & support
service |
|
|
1,426,784 |
|
|
1,497,871 |
|
(5 |
) |
Sale of hardware products |
|
|
30,175 |
|
|
18,431 |
|
64 |
|
Total |
|
$ |
26,475,419 |
|
$ |
12,859,481 |
|
106 |
|
Cost of Revenues
Cost of revenues was US$6.0 million for the
first half of 2023, up 61% year over year from US$3.7 million for
the same period of 2022. With a smaller increase compared to net
revenues, cost efficiency has improved due to economies of
scale.
Gross Profit
Gross profit was US$20.5 million for the first
half of 2023, representing an increase of 124% year over year from
US$9.1 million for the same period of 2022. Gross margin was 77.3%
for the first half of 2023, up 620 basis points from 71.1% for the
same period of 2022. The increase in gross margin was mainly due to
a shift in product mix towards subscription for cloud platform
products from one-time software sales.
Operating Expenses
Total operating expenses were US$34.1 million in
the first half of 2023, representing an increase of 355% year over
year from US$7.5 million for the same period of 2022. While the
selling, general and administrative expenses demonstrated improved
efficiency with larger business scales, they couldn’t offset the
increase in research and development expenses, which grew by 708%
year over year.
Income (Loss) from Operations
Loss from operations was US$13.6 million for the
first half of 2023, compared to an income of US$1.6 million from
operations for the same period of 2022.
Total Other LossTotal other loss was US$1.3
million for the first half of 2023, generally on par with the same
period of 2022.
Net Income (Loss)
Net loss was US$18.8 million for the first half
of 2023, compared to a net income of US$0.6 million for the same
period of 2022.
The financial statements for the first half year
ended June 30, 2023 herein have not been audited or reviewed by the
Company’s independent registered accounting firm. The financial
statements for the six months ended June 30, 2023 to be disclosed
in the Company’s Form 6-K may differ from the above-mentioned
unaudited and unreviewed financial statements.
Conference Call Information
The Company will conduct a corresponding
conference call at 8:00 a.m. U.S. Eastern Time (8:00 p.m. China
Time) to discuss the results.
What: |
Xiao-I First Half 2023 (ended June 30, 2023) Earnings Call |
When: |
8:00 a.m. U.S. Eastern Time on Monday, September 25, 2023 |
Webcast: |
ir.xiaoi.com/events |
To join the conference call via telephone,
participants must use the following link to complete an online
registration process. Upon registering, each participant will
receive email instructions to access the conference call, including
dial-in information and a PIN number allowing access to the
conference call. This pre-registration process is designed by the
operator to reduce delays due to operator congestion when accessing
the live call.
Online Registration:
https://register.vevent.com/register/BI10db54de77c5448db98e85f4efbfed41
Participants who have not pre-registered may
join the webcast by accessing the link at ir.xiaoi.com/events.
A live and archived webcast of the conference
call will be available on the Investors section of Xiao-I’s website
at www.xiaoi.com.
About Xiao-I Corporation
Xiao-I Corporation is a leading cognitive
intelligence enterprise in China that offers a diverse range of
business solutions and services in artificial intelligence,
covering natural language processing, voice and image recognition,
machine learning and affective computing. Since its inception in
2001, the Company has developed an extensive portfolio of cognitive
intelligence technologies that are highly suitable and have been
applied to a wide variety of business cases. Xiao-I powers its
cognitive intelligence products and services with its cutting-edge,
proprietary AI technologies to enable and promote industrial
digitization, intelligent upgrading, and transformation.
Forward-Looking Statements
Certain statements in this announcement are
forward-looking statements. These forward-looking statements
involve known and unknown risks and uncertainties and are based on
the Company’s current expectations and projections about future
events that the Company believes may affect its financial
condition, results of operations, business strategy and financial
needs. Investors can identify these forward-looking statements by
words or phrases such as “approximates,” “assesses,” “believes,”
“hopes,” “expects,” “anticipates,” “estimates,” “projects,”
“intends,” “plans,” “will,” “would,” “should,” “could,” “may” or
similar expressions. The Company undertakes no obligation to update
or revise publicly any forward-looking statements to reflect
subsequent occurring events or circumstances, or changes in its
expectations, except as may be required by law. Although the
Company believes that the expectations expressed in these
forward-looking statements are reasonable, it cannot assure you
that such expectations will turn out to be correct, and the Company
cautions investors that actual results may differ materially from
the anticipated results and encourages investors to review other
factors that may affect its future results in the Company’s
registration statement and other filings with the SEC.
For investor and media inquiries, please
contact:Ms. Berry XiaPhone: +86 186 8158 5169Email:
ir@xiaoi.com
XIAO-I CORPORATION |
CONDENSED CONSOLIDATED BALANCE SHEETS |
(In U.S. dollars, except for share and per share data,
or otherwise noted) |
|
|
|
As of |
|
|
|
December 31,2022 |
|
June 30,2023 |
|
|
|
|
|
(Unaudited) |
|
Assets |
|
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
1,026,245 |
|
|
$ |
4,746,836 |
|
|
Accounts receivable, net |
|
|
41,362,705 |
|
|
|
16,025,831 |
|
|
Amounts due from related parties |
|
|
346,517 |
|
|
|
- |
|
|
Inventories |
|
|
768,216 |
|
|
|
701,119 |
|
|
Contract costs |
|
|
2,012,309 |
|
|
|
1,936,073 |
|
|
Advance to suppliers |
|
|
1,115,672 |
|
|
|
1,586,618 |
|
|
Deferred offering costs |
|
|
1,330,902 |
|
|
|
- |
|
|
Prepaid expenses and other current assets, net |
|
|
460,854 |
|
|
|
6,656,705 |
|
|
Total current
assets |
|
|
48,423,420 |
|
|
|
31,653,182 |
|
|
|
|
|
|
|
|
|
|
Non-current
assets: |
|
|
|
|
|
|
|
Property and equipment, net |
|
|
219,470 |
|
|
|
313,953 |
|
|
Intangible assets, net |
|
|
637,114 |
|
|
|
557,995 |
|
|
Long-term investment |
|
|
2,852,492 |
|
|
|
3,187,416 |
|
|
Right of use assets |
|
|
865,399 |
|
|
|
969,400 |
|
|
Deferred tax assets, net |
|
|
3,888,574 |
|
|
|
- |
|
|
Prepaid expenses and other, non-current assets |
|
|
3,697,675 |
|
|
|
3,616,218 |
|
|
Amount due from related parties-non current |
|
|
- |
|
|
|
11,018,714 |
|
|
Total non-current
assets |
|
|
12,160,724 |
|
|
|
19,663,696 |
|
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS |
|
$ |
60,584,144 |
|
|
$ |
51,316,878 |
|
|
|
|
|
|
|
|
|
|
Commitments and
Contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
Short-term borrowings |
|
$ |
18,784,459 |
|
|
$ |
16,548,757 |
|
|
Accounts payable |
|
|
9,180,532 |
|
|
|
7,222,235 |
|
|
Amount due to related parties-current |
|
|
896,431 |
|
|
|
742,714 |
|
|
Deferred revenue |
|
|
2,553,808 |
|
|
|
3,444,636 |
|
|
Convertible loans |
|
|
3,754,269 |
|
|
|
- |
|
|
Accrued expenses and other current liabilities |
|
|
17,006,713 |
|
|
|
9,214,618 |
|
|
Lease liabilities, current |
|
|
435,462 |
|
|
|
458,018 |
|
|
Total current
liabilities |
|
|
52,611,674 |
|
|
|
37,630,978 |
|
|
|
|
|
|
|
|
|
|
Non-current
liabilities: |
|
|
|
|
|
|
|
Amount due to related parties-non current |
|
|
8,581,743 |
|
|
|
7,573,563 |
|
|
Accrued liabilities, non-current |
|
|
8,073,912 |
|
|
|
5,194,843 |
|
|
Lease liabilities, non-current |
|
|
300,974 |
|
|
|
392,436 |
|
|
Total non-current
liabilities |
|
|
16,956,629 |
|
|
|
13,160,842 |
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES |
|
|
69,568,303 |
|
|
|
50,791,820 |
|
|
|
|
|
|
|
|
|
|
Shareholders’
(deficit)/equity |
|
|
|
|
|
|
|
Ordinary shares (par value of $0.00005 per share; 1,000,000,000
shares authorized as of December 31, 2022 and June 30, 2023,
respectively; 22,115,592 and 24,015,592 shares issued and
outstanding as of December 31,2022 and June 30, 2023,
respectively) |
|
$ |
1,106 |
|
|
$ |
1,201 |
|
|
Additional paid-in capital |
|
|
75,621,294 |
|
|
|
108,762,797 |
|
|
Statutory reserve |
|
|
237,486 |
|
|
|
237,486 |
|
|
Accumulated deficit |
|
|
(78,483,156 |
) |
|
|
(102,449,177 |
) |
|
Accumulated other comprehensive loss |
|
|
(3,262,666 |
) |
|
|
(2,852,695 |
) |
|
XIAO-I CORPORATION shareholders'
(deficit)/equity |
|
|
(5,885,936 |
) |
|
|
3,699,612 |
|
|
Non-controlling interests |
|
|
(3,098,223 |
) |
|
|
(3,174,554 |
) |
|
Total shareholders’
(deficit)/equity |
|
|
(8,984,159 |
) |
|
|
525,058 |
|
|
TOTAL LIABILITIES AND
SHAREHOLDERS’ (DEFICIT)/EQUITY |
|
$ |
60,584,144 |
|
|
$ |
51,316,878 |
|
|
XIAO-I CORPORATION |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME/(LOSS) |
(In U.S. dollars, except for share and per share data,
or otherwise noted) |
|
|
|
For the six months ended June 30, |
|
|
|
2022 |
|
|
2023 |
|
|
Sale of software products |
|
$ |
1,397,996 |
|
|
$ |
535,004 |
|
|
Sale of hardware products |
|
|
18,431 |
|
|
|
30,175 |
|
|
Technology development service |
|
|
6,296,844 |
|
|
|
1,763,797 |
|
|
M&S service |
|
|
1,497,871 |
|
|
|
1,426,784 |
|
|
Sale of cloud platform products |
|
|
3,648,339 |
|
|
|
22,719,659 |
|
|
Net revenues |
|
|
12,859,481 |
|
|
|
26,475,419 |
|
|
Cost of sale of software products |
|
|
(170,377 |
) |
|
|
(368,021 |
) |
|
Cost of sale of hardware products |
|
|
(12,545 |
) |
|
|
(26,118 |
) |
|
Cost of technology development service |
|
|
(2,661,707 |
) |
|
|
(1,286,290 |
) |
|
Cost of M&S service |
|
|
(339,213 |
) |
|
|
(805,948 |
) |
|
Cost of sale of cloud platform products |
|
|
(536,863 |
) |
|
|
(3,519,521 |
) |
|
Cost of revenues |
|
|
(3,720,705 |
) |
|
|
(6,005,898 |
) |
|
Gross profit |
|
|
9,138,776 |
|
|
|
20,469,521 |
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
Selling expenses |
|
|
(2,094,124 |
) |
|
|
(2,377,409 |
) |
|
General and administrative expenses |
|
|
(1,725,928 |
) |
|
|
(2,070,052 |
) |
|
Research and development expenses |
|
|
(3,669,196 |
) |
|
|
(29,649,703 |
) |
|
Total operating expenses |
|
|
(7,489,248 |
) |
|
|
(34,097,164 |
) |
|
|
|
|
|
|
|
|
|
Income/(Loss) from operations |
|
|
1,649,528 |
|
|
|
(13,627,643 |
) |
|
|
|
|
|
|
|
|
|
Other
loss: |
|
|
|
|
|
|
|
Investment losses |
|
|
(121,618 |
) |
|
|
(225,351 |
) |
|
Interest expenses |
|
|
(1,202,391 |
) |
|
|
(1,570,847 |
) |
|
Other income, net |
|
|
44,160 |
|
|
|
525,431 |
|
|
Total other
loss |
|
|
(1,279,849 |
) |
|
|
(1,270,767 |
) |
|
|
|
|
|
|
|
|
|
Income/(Loss) before income
tax expense |
|
|
369,679 |
|
|
|
(14,898,410 |
) |
|
Income tax benefits/(expenses) |
|
|
220,820 |
|
|
|
(3,871,118 |
) |
|
Net
income/(loss) |
|
$ |
590,499 |
|
|
$ |
(18,769,528 |
) |
|
Net loss attributable to non-controlling interests |
|
|
(2,674 |
) |
|
|
(173,782 |
) |
|
Net income/(loss) attributable to XIAO-I CORPORATION
shareholders |
|
|
593,173 |
|
|
|
(18,595,746 |
) |
|
Other comprehensive
income/(loss) |
|
|
|
|
|
|
|
Foreign currency translation change, net of nil income taxes |
|
|
145,129 |
|
|
|
507,422 |
|
|
Total other comprehensive income |
|
|
145,129 |
|
|
|
507,422 |
|
|
Total comprehensive
income/(loss) |
|
$ |
735,628 |
|
|
$ |
(18,262,106 |
) |
|
Total comprehensive income/(loss) attributable to non-controlling
interests |
|
|
124,849 |
|
|
|
(76,331 |
) |
|
Total comprehensive income/(loss) attributable to XIAO-I
CORPORATION shareholders |
|
|
610,779 |
|
|
|
(18,185,775 |
) |
|
Earnings/(Loss) per ordinary share
attributable to XIAO-I CORPORATION shareholders |
|
|
|
|
|
|
|
Basic |
|
|
0.03 |
|
|
|
(0.80 |
) |
|
Diluted |
|
|
0.03 |
|
|
|
(0.80 |
) |
|
Weighted average
number of ordinary shares outstanding |
|
|
|
|
|
|
|
Basic |
|
|
22,115,592 |
|
|
|
23,308,370 |
|
|
Diluted |
|
|
22,362,552 |
|
|
|
23,308,370 |
|
|
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