Xiao-I Corporation (“Xiao-I” or the “Company”), a leading cognitive
artificial intelligence (“AI”) enterprise in China, today reported
its unaudited 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 Revenues
Net 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, which was primarily driven by the significantly
increase of professional service fee, including the purchase of
supercomputing service fees, data services, intelligent computing
technology services and software outsourcing, etc. mainly from four
third parties for the requirement of big data model development
project and other cloud platform products. In November 2022, OpenAI
launched the ChatGPT, which opened up a new situation of artificial
intelligence. Under such background, the Company increased
investment in AI+ Industrial Internet research and development,
including the research and procurement of intelligent collaborative
platform, digital twin platform, data intelligence platform,
industrial enterprise services and research and judgment platform
and other platform products.
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 Loss
Total 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.
Significant related party transactions
In early 2022, we invested in Zhizhen Guorui
(Shanghai) Information Technology Development Co., Ltd. (“Zhizhen
Guorui”) at a total consideration of $2.9 million, acquiring less
than 51% of its equity interest with significant influence, which
was accounted as long-term investment. For the purpose of Zhizhen
Guorui’s operation use, on March 31, 2023, Shanghai Xiao-i Robot
Technology Co., Ltd. (“Shanghai Xiao-i Robot”) entered into
agreement to provide credit line to Zhizhen Guorui of US$13.8
million (RMB100.0 million) with interest free.
As of June 30, 2023, the loan provided to
Zhizhen Guorui by Shanghai Xiao-i Robot was US$11.0 million
(RMB79.9 million).
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 |
|
XIAO I (NASDAQ:AIXI)
Historical Stock Chart
From Jun 2024 to Jul 2024
XIAO I (NASDAQ:AIXI)
Historical Stock Chart
From Jul 2023 to Jul 2024