Algorhythm Holdings, Inc. Q3 FY2025 earnings call

• Gary Atkinson starts by mentioning the transition to a clean financial presentation after selling the legacy Singing Machine business, focusing on SemiCab as the core operation. The global truckload transportation market is massive and inefficient, and SemiCab's AI-driven platform is addressing this. Revenue increased ~1,300% YOY in Q3 2025, added 4 new Fortune 500 clients in India, and converted 5 pilot programs to contract expansions. - Alex Andre details the financial results, including the sale of Singing Machine as discontinued operations, SemiCab's revenue growth, gross loss, operating expenses, and net loss. - Gary highlights the launch of SemiCab Apex, a new SaaS platform for U.S. and global markets. Apex is a high-margin SaaS product, scales quickly, and is globally deployable, aiming to improve blended company margins and profitability.

For the 3 months ended September 30, 2025, sales increased to $1.7 million from $100,000 in the same period of 2024. The $1.7 million revenue in 2025 was from SMCB Solutions Private Limited, which owns the SemiCab business in India. SemiCab's legacy U.S. business contributed the $100,000 in 2024. SemiCab's annualized revenue run rate tripled to over $7 million since January 2025. They expect to generate around $2 million in revenue during the fourth quarter of 2025 and anticipate annualized revenue run rate to reach between $15 million and $20 million by the end of next year. Gross loss for the 3 months ended September 30, 2025, was $351,000 compared to $32,000 in 2024, with gross margin percentage decreasing to negative 20% from negative 25% in the prior year. Operating expenses for the 3 months ended September 30, 2025, decreased to $1.2 million from $1.8 million in 2024. Net loss for the 3 months ended September 30, 2025, was $1.8 million, down from $2.1 million in 2024.

• SemiCab is expected to generate around $2 million in revenue during the fourth quarter of 2025. - Anticipates revenue to increase substantially with SemiCab's annualized revenue run rate reaching between $15 million and $20 million by the end of next year. - Expect gross loss to decrease over the next 12 months as revenue growth from additional routes exceeds the increase in cost of sales. - General and administrative expenses are expected to increase as the company invests in the growth and development of SemiCab. - Net loss available to common stockholders is expected to remain at similar levels over the next 12 months, with cost reduction activities offset by investments in SemiCab's growth.

Q: Can you explain the go-to-market strategy for SemiCab Apex?

A: Yes. The three verticals identified are enterprise shippers (like fast-moving consumer goods companies with their own dedicated fleets who can integrate Apex via APIs), 3PL warehousing customers that offer freight brokerage services (who can white label the platform), and carriers (large transporters with thousands of trucks who can use it to improve their operations). We'll be growing our sales team as we engage with these customer groups.

Q: Is this call going to be on the website, and is the U.S. market a better immediate place to attack than India?

A: This call is recorded and will be available on our website later today. The U.S. is particularly exciting because SaaS products have typically 90% to 95% gross margins, which meaningfully transform the company's financials. Also, Apex in the U.S. can scale quickly without being limited by access to trucking fleets like in India, though India has massive growth opportunities too.