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, exiting non-core segments like Middle East to enhance service quality and achieve profitable growth. - Robust cost discipline and financial health: Recent cost optimization efforts eliminated significant SG&A costs and annual expenses, expected to positively impact the bottom line next quarter. - Innovation and AI-driven transformation: Global capability center (GCC) model central to growth strategy; AI practice gaining traction with complementary AI assessment and examples like telecom churn prediction (90% accuracy) and healthcare IT support reduction (40% human intervention).

For the third fiscal quarter of 2025, North American revenue was $16.4 million, representing 13.1% year-over-year growth. Total revenues were $17.6 million, down 6.8% year-over-year. North American revenue now accounts for over 93% of the business. Gross profit 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 versus negative $16.3 million in the same period last year. Adjusted EBITDA was negative $2 million. Core adjusted EBITDA was $1.5 million compared to negative $0.02 million in the third fiscal quarter of 2024. As of December 31, 2024, cash and cash equivalents were $2.4 million, and long-term debt was $1.5 million.

• 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 fully addressed.