Revenue growth has stalled significantly with a 27.5% year-over-year decline, while gross margins have compressed to 16.4% from historical highs of 65.4%.
| Sales/Revenue | 37.17M | 20.22M | 19.8M | 12.81M | 11.37M |
| Revenue Growth % | - | 2.1% | 54.56% | 12.71% | - |
| Cost of Goods Sold | 30.63M | 16.44M | 14.75M | 7.5M | 6.62M |
| COGS % of Revenue | - | 81.31% | 74.47% | 58.52% | 58.24% |
| Gross Profit | 6.54M | 3.78M | 5.05M | 5.31M | 4.75M |
| Gross Margin % | 17.61% | 18.69% | 25.53% | 41.48% | 41.76% |
| Gross Profit Growth % | - | -25.25% | -4.89% | 11.97% | - |
| Operating Expenses | 9.82M | 5.48M | 7.02M | 9.16M | 5.7M |
| OpEx % of Revenue | - | 27.13% | 35.47% | 71.53% | 50.1% |
| Selling, General & Admin | 8.3M | 4.45M | 5.34M | 7.15M | 5.46M |
| SG&A % of Revenue | - | 22.01% | 26.95% | 55.85% | 47.99% |
| Research & Development | 1.52M | 1.04M | 1.69M | 2.01M | 239.97K |
| R&D % of Revenue | - | 5.12% | 8.52% | 15.69% | 2.11% |
| Other Operating Expenses | 0 | 0 | 0 | 0 | 0 |
| Operating Income | -3.28M | -1.71M | -1.97M | -3.85M | -948.45K |
| Operating Margin % | -8.82% | -8.44% | -9.94% | -30.05% | -8.34% |
| Operating Income Growth % | - | 13.32% | 48.87% | -305.9% | - |
| EBITDA | -2.84M | -1.46M | -1.65M | -3.25M | 92.86K |
| EBITDA Margin % | -7.65% | -7.24% | -8.34% | -25.38% | 0.82% |
| EBITDA Growth % | - | 11.36% | 49.22% | -3601.23% | - |
| D&A (Non-Cash Add-back) | 437.07K | 242.7K | 317.41K | 598.44K | 1.04M |
| EBIT | -1.88M | -1.05M | -976.34K | -3.4M | 593.39K |
| Net Interest Income | -288.12K | -145.12K | -108.62K | -68.59K | 40.38K |
| Interest Income | 501 | 0 | 0 | 0 | 40.38K |
| Interest Expense | 288.62K | 145.12K | 108.62K | 68.59K | 0 |
| Other Income/Expense | 582.62K | 509.12K | 883.31K | 449.35K | 1.57M |
| Pretax Income | -2.17M | -1.2M | -1.08M | -3.4M | 626.3K |
| Pretax Margin % | -5.82% | -5.92% | -5.48% | -26.54% | 5.51% |
| Income Tax | 5.86K | 6K | -4.95K | 5.54K | 2.47K |
| Effective Tax Rate % | -0.27% | -0.5% | 0.46% | -0.16% | 0.39% |
| Net Income | -2.17M | -1.2M | -1.08M | -3.41M | 623.84K |
| Net Margin % | -5.84% | -5.95% | -5.45% | -26.59% | 5.49% |
| Net Income Growth % | - | -11.38% | 68.29% | -645.96% | - |
| Net Income (Continuing) | -2.17M | -1.2M | -1.08M | -3.41M | 623.84K |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | -4.53 | -2.52 | -1.97 | -6.40 | 1.14 |
| EPS Growth % | - | -27.79% | 69.19% | -661.4% | - |
| EPS (Basic) | - | -2.52 | -1.97 | -6.40 | 1.14 |
| Diluted Shares Outstanding | 478.94K | 479.5K | 547.69K | 547.69K | 547.69K |
| Basic Shares Outstanding | 478.94K | 479.5K | 547.69K | 547.69K | 547.69K |
| Dividend Payout Ratio | - | - | - | - | - |
Acute liquidity and solvency risk
As reported in recent financial filings, EPWK's revenue growth has decelerated significantly, with the most recent quarterly figures showing a 27.5% year-over-year decline, signaling that the company's hybrid O2O model is struggling to maintain traction within the increasingly competitive and cooling Chinese SME services market.
The sharp revenue contraction suggests that the company's core platform and business solutions are failing to capture incremental demand. This trend indicates that the firm's localized ecosystem strategy may be losing its competitive edge against larger, more agile digital-first platforms.
Based on the company's latest income statement, gross margins have compressed to 16.4%, a stark departure from the 65.4% levels observed in late 2021, which suggests that the firm's high-touch service model is becoming increasingly expensive to fulfill relative to the revenue it generates.
The inability to maintain higher gross margins implies that the company is likely absorbing significant direct costs associated with its physical office footprint and custom software delivery. Investors should monitor whether this margin profile is a permanent feature of the business model or a temporary result of operational inefficiencies.
According to historical income statements, EPWK has failed to achieve positive operating leverage, as evidenced by a persistent negative operating margin of -9.3% in the most recent quarter, indicating that administrative and selling expenses continue to outpace the company's ability to scale its revenue base.
The lack of operating leverage suggests that the company's cost structure is heavily weighted toward fixed obligations that do not scale with transaction volume. This structural mismatch makes achieving profitability difficult without a radical shift in the company's expense discipline or a significant increase in high-margin service revenue.
Data from recent financial statements reveals a precarious cash position of only $227,826, which, when viewed alongside consistent quarterly operating losses, suggests that the company may face an imminent liquidity crisis that could force a dilutive capital raise or a fire sale of assets.
The discrepancy between the company's revenue scale and its minimal cash reserves warrants extreme caution, as it implies a lack of financial flexibility. Short-term survival appears to depend on either undisclosed financing access or an aggressive management of payables, both of which introduce significant risk to the equity holder.
Quick answers to the most common questions about buying EPWK stock.
For fiscal year 2023, EPWK Holdings Ltd. (EPWK) reported total revenue of $20.2M. This represents a 77.9% increase compared to $11.4M in 2020.
EPWK Holdings Ltd. (EPWK) reported a net loss of $1.2M for the fiscal year ending 2023.
EPWK Holdings Ltd. (EPWK) reported an operating income of $-1.7M, resulting in an operating profit margin of -8.4%. This margin reflects the operational efficiency of the business before interest and taxes.
EPWK Holdings Ltd. (EPWK) generated $3.8M in gross profit for the year, representing a gross profit margin of 18.7%. This demonstrates the company's core pricing power and production efficiency.