Algorhythm Holdings, Inc. Q1 FY2025 earnings call

• Acquired SemiCab Solutions Private Limited (SemiCab India), with SemiCab being the exclusive technology provider to the National Digital Freight Exchange (NDFE). The NDFE has over $1.4 billion annually in freight spend, with $400 million in annual freight spend ideally suited for optimization.
• SemiCab's U.S. and India sales grew almost five-fold, clients doubled, added pilots with Unilever, Marico, etc., and fleet increased to over 500 trucks.
• Karaoke business facing supply chain challenges, volatile retail demand, economic headwinds, and tariffs; seeking strategic alternatives for the Singing Machine business.

The company has two main segments: Karaoke and SemiCab. For the Karaoke segment, sales decreased to $2 million in the first quarter of 2025 from $2.4 million in the first quarter of 2024. Karaoke is a seasonal, discretionary business affected by inflation, tariffs, and is expected to see annual sales decrease over the next 12 months. The SemiCab segment saw revenue expected to increase substantially in the next 12 months due to a growing customer base. Gross profit was $500,000 for both the first quarter of 2025 and 2024. The gross margin improved from 21% to 25% for the Karaoke segment due to a decrease in returns. The SemiCab business is expected to drive future growth.

• Karaoke: Expected total annual sales to decrease over the next 12 months due to tariffs.
• SemiCab: Revenue expected to increase substantially in the next 12 months as business grows from the customer base.
• Stockholders’ equity: Back in compliance with NASDAQ listing requirements with $3.3 million as of March 31, 2025, after the warrant liability was reclassified to stockholders’ equity.

• Tariffs: Increase in tariffs on goods imported from China, affecting karaoke product sales.
• Seasonality: Karaoke is a seasonal business, with Q1 revenue typically lower.
• Regulatory: Previously had a stockholders’ deficit but is now in compliance with NASDAQ listing requirements.

Q: On SemiCab software development and state of software.

A: The SemiCab platform is commercially secured and scaling. The main platform is working, transacting, and doesn't need large software development or investment, though there is ongoing maintenance.

Q: Acquisition of SemiCab India and business in U.S.

A: SemiCab has U.S. operations including managed services and a new business model for the U.S. with announcements coming soon.

Q: Speed of $400M opportunity in India.

A: The $400M addressable market in India is achievable in the near-term future, within the next 2-3 years, leveraging existing customers in the NDFE consortium.