Ispire Technology Inc. (ISPR) Earnings

Management highlights

This quarter marked a turning point for iSpire. Business has stabilized, operating model is sharper and more disciplined. Ended the quarter with $18 million in cash, up $468,000 sequentially. Transition behind us, executing against phased growth roadmap. Malaysia manufacturing platform alive, provides 25% tariff advantage over China. Plans underway to launch Vapor ODM initiative in July. Building long duration optionality through differentiated technology like IKE Tech and G-Mesh glass technology. Strengthened liquidity, improved operating discipline, advanced roadmap with multiple high-value catalysts.

Guidance

Reinforces confidence in becoming cash flow positive in the second half of 2026. Building on momentum to operating discipline, working capital management, and ramp of new revenue catalysts.

Segment performance

For the fiscal third quarter ended March 31st, 2026, Aspire reported revenue of 18.7 million, compared with 26.2 million in the third quarter of fiscal 2025, and 20.3 million in the prior quarter. The modest decline primarily reflected seasonal factory downtime associated with Chinese New Year. Total operating expenses excluding credit loss were 5.9 million, down 36% year-over-year, from 9.3 million and down 3.7% from the December quarter. Credit loss in the quarter was $5.6 billion, down roughly $500,000 year-over-year. Net loss first quarter was 9.5 million compared with 10.9 million in the year-ago period and 6.6 million in the prior quarter. Ended the quarter with $18 million in cash, an increase of approximately 468,000 sequentially.

Analyst Q&A

• Q: Yeah, good morning. Thanks for taking the questions, and congrats on the quarter. First for me, just on the vague news and the recent flavored approval, there was discussion around the digital lease software, which maybe was a reason the FDA viewed that application favorably. I guess two questions off that. Do you believe proximity-based restrictions will be the path the FDA takes? And if so, do you have the capability to incorporate that tech into your tech if you don't have it already?

  A: Nick, thank you. The first part of the question, actually I will go straight to the second part. Yes, we do have that built into our solution. And from day one, that was the key differentiation between our technology and other solutions out there. So more importantly, our platform is now moving out of the old app model more into a platform model. So this again reinforced the continuous authentication capabilities. And more importantly, because it's a platform, we would allow for brands to customize and set their own, I guess, performance parameter, you can say. Really, from brand to brand, we provide that capability because we also want to make sure brands, in dealing with the different regulations across the world, they can set the parameters differently, country by country, depending on regulations too. So simple answer is yes, we have the continuous authentication capability and it's in our solution. And the advantage really is so many solutions out there, especially solutions developed years ago tend to be either having the device turned on after initial age verification and then stay on forever which is of course highly undesirable from regulatory point of view, or they would have a periodic re-authentication or verification. that also creates gaps where potential misuse of the device could happen. So that's why from day one, our solution was continuous authentication. And that proved to be very important to regulators, not only with FDA, but outside the U.S. as well. Nick, I hope I answered your question.

• Q: Yeah, that's perfect and very encouraging. Second for me, just on partnerships, this PMTA announcement also validated age-gating positioning and getting flavors to market. I know this is maybe too early, but what have you seen with discussions with potential partners in terms of potentially accelerating off of this approval? What has changed in the last few days in terms of the clients you're talking to?

  A: You're right. Indeed, in the last 48 hours, up to 72 hours, the ground was moving per se. So that's really encouraging to us. President Trump's pressure on the FDA obviously went a long way for the industry. And the immediate approval of the four additional SKUs for glass sent a strong signal to the industry. I think all the key players in the industry are familiar with the pros and cons of different solutions. Collectively, we have the shared consensus that our solution is most advanced versus other technologies. So with the news of the last couple of days, certainly we got accelerated existing conversations with brands. In a couple of situations, we actually have even moved one step further discussing using our technology in some of their existing PMPAs through a so-called supplemental PMPA to accelerate the approval of their flavored products. So it's clear the industry recognize that flood gate is opening and age gating is the only way to get a flavored approval. And lastly, with everybody's understanding for solution being far ahead of competition. So we are absolutely getting, I would say, Yesterday, put it this way, I worked 17 hours. That's much longer than my typical day of 12 hours. So it says a lot about the effort we put into entertaining those conversations.

• Q: If I could squeeze just one more in on the state-by-state structures, with regulators becoming more constructive around VAPE, How do you anticipate states will respond? Several markets still have banned flavors. Some have banned foreign imports. How do you see the state landscape changing as potentially more flavors come to market in the legal market?

  A: I think from a flavor ban point of view, those, I think, five, six states literally are aligned with FDA's flavor ban. So they are just reinforcing these bans accordingly. So from that point of view, there is a consistency. I certainly hope with FDA feeling comfortable with educating technology and start approving flavors, those states would align as well, would support approved flavors. But of course, we all know the general flavor ban in place right now is really trying to minimize the impact of a black market from selling devices to underage users. So that was a real goal by those states. So I think from that point of view, there is a perfect alignment with the FDA. I certainly hope the state would follow FDA's lead in terms of supporting approved flavors. But regarding other state-by-state situation, Texas, for example, is driving toward banning China-made vaping devices. So that is absolutely supporting our strategy of producing our product in Malaysia. So I think that's a plus for us. But some other state-by-state restrictions I think involve in probably banning disposables. We all know disposables are not environmentally friendly approach to vaping. So I think the industry is moving further and further into pod systems versus disposable. And California, as we know, banned online sales to further protect consumers. So I don't think that is going to change. That is the right policy. because online sales is so hard to regulate and verify, certify. But ultimately, the true solution in protecting underage consumers or people and to protect adult consumers from using risky, dangerous products is by FDA approving flavored devices with age-gating built-in. So I think I'm happy for the industry knowing glass devices were approved and this is a new beginning for the industry. I'm happy for consumers and certainly this is a major win for the regulators as well. Instead of doing nothing for flavored products, finally this is the right thing using technology here to solve the problem. Nick, that's my answer.