Revenue growth of 15% in 2025Q4 is offset by structural margin compression, with gross margins falling to 21% from historical peaks exceeding 30%.
| Sales/Revenue | 164.48M | 142.81M | 150.36M | 152.02M | 126.06M | 89.42M | 64.93M | 48.94M | 31.36M | 29.02M |
| Revenue Growth % | 15.17% | -5.02% | -1.1% | 20.59% | 40.98% | 37.7% | 32.68% | 56.04% | 8.05% | - |
| Cost of Goods Sold | 130.05M | 109.87M | 115.87M | 111.03M | 85.89M | 58.3M | 41.18M | 31.28M | 18.67M | 17.46M |
| COGS % of Revenue | 79.07% | 76.93% | 77.07% | 73.04% | 68.13% | 65.2% | 63.42% | 63.91% | 59.53% | 60.17% |
| Gross Profit | 34.43M | 32.95M | 34.48M | 40.99M | 40.17M | 31.12M | 23.75M | 17.66M | 12.69M | 11.56M |
| Gross Margin % | 20.93% | 23.07% | 22.93% | 26.96% | 31.87% | 34.8% | 36.58% | 36.09% | 40.47% | 39.83% |
| Gross Profit Growth % | 4.5% | -4.45% | -15.88% | 2.04% | 29.09% | 31.01% | 34.5% | 39.15% | 9.79% | - |
| Operating Expenses | 40.97M | 35.49M | 34.41M | 33.58M | 31.8M | 27.91M | 26.84M | 15.94M | 11.09M | 10.95M |
| OpEx % of Revenue | 24.91% | 24.85% | 22.88% | 22.09% | 25.22% | 31.22% | 41.34% | 32.56% | 35.35% | 37.72% |
| Selling, General & Admin | 35.16M | 29.72M | 25M | 27.15M | 20.54M | 19.4M | 19.56M | 8.1M | 6.85M | 5.37M |
| SG&A % of Revenue | 21.37% | 20.81% | 16.63% | 17.86% | 16.29% | 21.7% | 30.13% | 16.55% | 21.86% | 18.5% |
| Research & Development | 5.82M | 7.16M | 8.34M | 7.97M | 13.34M | 10.44M | 7.98M | 7.84M | 4.23M | 5.58M |
| R&D % of Revenue | 3.54% | 5.01% | 5.54% | 5.24% | 10.58% | 11.67% | 12.29% | 16.02% | 13.5% | 19.22% |
| Other Operating Expenses | 0 | -1.39M | 1.07M | -1.54M | -2.08M | -1.93M | -697.37K | 0 | 0 | 0 |
| Operating Income | -6.54M | -2.54M | 76.39K | 7.41M | 8.38M | 3.21M | -3.09M | 1.73M | 1.61M | 613.65K |
| Operating Margin % | -3.98% | -1.78% | 0.05% | 4.87% | 6.64% | 3.59% | -4.76% | 3.53% | 5.12% | 2.11% |
| Operating Income Growth % | -157.76% | -3422.92% | -98.97% | -11.58% | 161.22% | 203.75% | -279.03% | 7.54% | 161.56% | - |
| EBITDA | -4.67M | -1.29M | 1.3M | 8.32M | 9.05M | 3.8M | -2.69M | 1.93M | 1.75M | 667.76K |
| EBITDA Margin % | -2.84% | -0.9% | 0.86% | 5.47% | 7.18% | 4.25% | -4.14% | 3.95% | 5.58% | 2.3% |
| EBITDA Growth % | -262.84% | -199.21% | -84.42% | -8.12% | 138.26% | 241.41% | -239.04% | 10.5% | 161.88% | - |
| D&A (Non-Cash Add-back) | 1.88M | 1.25M | 1.22M | 912.25K | 677.24K | 593.17K | 403.7K | 206.17K | 143.63K | 54.1K |
| EBIT | -5.08M | -2.54M | 2.46M | 7.41M | 8.38M | 3.21M | -3.07M | 1.73M | 1.61M | 613.65K |
| Net Interest Income | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Income | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Interest Expense | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Income/Expense | 1.06M | 851.83K | 763.52K | 228.35K | -98.85K | 708.68K | -155.62K | 876.63K | 497.72K | 1.44M |
| Pretax Income | -5.48M | -1.69M | 839.91K | 7.63M | 8.28M | 3.91M | -3.25M | 2.6M | 2.1M | 2.05M |
| Pretax Margin % | -3.33% | -1.18% | 0.56% | 5.02% | 6.57% | 4.38% | -5% | 5.32% | 6.71% | 7.08% |
| Income Tax | 947.53K | 160.72K | 674.34K | 3.05M | 1.26M | 835.44K | 186.62K | 112.13K | 118.55K | 269.15K |
| Effective Tax Rate % | -17.29% | -9.53% | 80.29% | 39.9% | 15.19% | 21.34% | -5.75% | 4.31% | 5.64% | 13.1% |
| Net Income | -7.05M | -2.33M | 192.53K | 4.46M | 6.82M | 2.94M | -3.27M | 2.43M | 2.05M | 1.83M |
| Net Margin % | -4.29% | -1.63% | 0.13% | 2.93% | 5.41% | 3.29% | -5.04% | 4.97% | 6.53% | 6.29% |
| Net Income Growth % | -202.57% | -1310.19% | -95.68% | -34.64% | 132% | 189.86% | -234.31% | 18.9% | 12.12% | - |
| Net Income (Continuing) | -6.43M | -1.85M | 165.56K | 4.59M | 7.02M | 3.08M | -3.43M | 2.71M | 2.22M | 1.78M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 2.05M | 1.41M | 927.8K | 1.25M | 1.04M | 1.27M | 608.16K | 676.28K | 477.11K | 4.03K |
| EPS (Diluted) | -0.26 | -0.09 | 0.01 | 0.21 | 0.39 | 0.20 | -0.24 | 0.21 | 0.15 | 0.14 |
| EPS Growth % | -181.39% | - | -96.05% | -46.15% | 95% | 183.33% | -214.29% | 40% | 7.14% | - |
| EPS (Basic) | -0.26 | -0.09 | 0.01 | 0.21 | 0.39 | 0.20 | -0.24 | 0.21 | 0.15 | 0.14 |
| Diluted Shares Outstanding | 27.53M | 25.21M | 23.15M | 21.06M | 17.57M | 14.69M | 13.84M | 11.64M | 13.59M | 13.29M |
| Basic Shares Outstanding | 27.53M | 25.21M | 23.15M | 20.92M | 17.28M | 14.69M | 13.84M | 11.52M | 13.59M | 13.29M |
| Dividend Payout Ratio | - | - | 610.65% | - | 0.5% | - | - | 25.18% | 35.97% | 289.09% |
Margin erosion from labor
According to recent financial disclosures, CLPS achieved a 15% year-over-year revenue increase in 2025Q4, yet this top-line expansion has failed to translate into profitability, suggesting that the company's current growth model is heavily reliant on scaling headcount rather than achieving meaningful operational leverage or pricing power.
While the 15% revenue growth indicates successful sales execution within the financial services sector, the inability to convert this volume into positive operating income warrants caution. Investors should monitor whether this growth is sustainable or if it reflects an aggressive, low-margin strategy that prioritizes market share over bottom-line stability.
As reported in recent income statements, the company's gross margin has compressed to 21% in 2025Q4, down from historical peaks exceeding 30%, which indicates that rising personnel costs are increasingly difficult to pass on to banking clients in a competitive IT services environment.
The decline in gross margins suggests that the company's labor-intensive delivery model is highly sensitive to wage inflation within the Chinese technology sector. Without a shift toward higher-value proprietary solutions, the current margin profile appears vulnerable to further erosion if talent acquisition costs continue to outpace billable rate adjustments.
Based on the latest quarterly data, SG&A expenses have climbed to $20.5M, significantly outpacing gross profit growth and resulting in a negative operating margin of 7.2%, which implies that administrative and operational overhead is currently scaling faster than the company's ability to generate core service revenue.
The lack of operating leverage suggests that the company's infrastructure is not yet optimized for its current scale, or that recent diversification efforts are adding costs without immediate revenue benefits. This trend warrants further investigation into whether management can effectively control fixed costs while continuing to expand its consultant headcount.
Data from the most recent filings reveal that CLPS has consistently posted negative net income for several quarters, raising concerns that the company's reliance on staff augmentation may be fundamentally incompatible with achieving long-term profitability in the current competitive landscape for IT services.
Short-term investors should focus on the risk that the company's 'Virtual Banking' training platform may not be providing the expected cost-saving moat, given the persistent operating losses. The reliance on equity-funded growth without a clear path to positive net margins suggests that the current business model may require a significant strategic pivot to avoid long-term value destruction.
Quick answers to the most common questions about buying CLPS stock.
For fiscal year 2025, CLPS Incorporation (CLPS) reported total revenue of $164.5M. This represents a 466.7% increase compared to $29.0M in 2016.
CLPS Incorporation (CLPS) reported a net loss of $7.0M for the fiscal year ending 2025.
CLPS Incorporation (CLPS) reported an operating income of $-6.5M, resulting in an operating profit margin of -4.0%. This margin reflects the operational efficiency of the business before interest and taxes.
CLPS Incorporation (CLPS) generated $34.4M in gross profit for the year, representing a gross profit margin of 20.9%. This demonstrates the company's core pricing power and production efficiency.