Aeries Technology, Inc Q3 FY2025 earnings call

• Strategic focus on profitable growth: Realigned business model to concentrate on high-value, long-term engagement with core North American clientele (over 93% of revenue), exiting non-core segments like Middle East to support profitable growth on cash flow and adjusted EBITDA basis.
• Robust cost discipline and financial health: Eliminated significant SG&A costs and annual expenses, with these cost optimization efforts expected to positively impact the bottom line starting next quarter.
• Innovation and AI-driven transformation: Global capability center (GCC) model remains central to growth; AI practice gaining traction with complementary AI assessment to help clients optimize areas for AI automation, e.g., telecom client with 90% churn prediction accuracy and healthcare IT support with 40% reduced human intervention.

For the third fiscal quarter of 2025, North American revenue was $16.4 million, representing a 13.1% year-over-year growth. Total revenues reached $17.6 million, down 6.8% year-over-year. North American revenue now accounts for over 93% of the company's revenue. Gross profit for the quarter was $4.0 million, resulting in a gross margin of 23.0%. Income from operations was negative $5.2 million compared to $0.7 million in the third fiscal quarter of 2024. Net income was $2.0 million, contrasting with a net loss of $16.3 million in the same period last year. Adjusted EBITDA for the quarter was negative $2 million. Core adjusted EBITDA for the third fiscal quarter of 2025 was $1.5 million, up from negative $0.02 million in the third fiscal quarter of 2024. As of December 31, 2024, the company had $2.4 million in cash and cash equivalents and $1.5 million in total long-term debt.

• Fiscal year 2025 guidance: Revenue between $71 million and $73 million, core adjusted EBITDA between $6 million and $7 million.
• Fiscal year 2026 outlook: Expected revenues between $74 million and $80 million, adjusted EBITDA between $6 million to $8 million; fiscal 2026 reporting and guidance will not include core adjusted EBITDA as prior non-core market credit losses are expected to be fully addressed in 2025.

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