Revenue volatility remains high, with a 59.6% decline in 2025Q2 followed by a 4.4% increase in 2025Q4, while gross margins have deteriorated to a razor-thin 6.4%.
Hitek Global Inc. (HKIT) annual income statement — 10-year revenue, gross profit & net income history
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 |
|---|
| Sales/Revenue | 8.83M | 6.54M | 2.9M | 4.56M | 6.43M | 6.46M | 5.8M | 6.93M | 6.92M | 6.89M | 6.9M |
| Revenue Growth % | - | 125% | -36.35% | -29.01% | -0.5% | 11.31% | -16.29% | 0.26% | 0.41% | -0.11% | - |
| Cost of Goods Sold | 8.18M | 5.85M | 1.9M | 2.64M | 2.89M | 2.58M | 2.63M | 3.19M | 3.04M | 3.21M | 5.04M |
| COGS % of Revenue | - | 89.44% | 65.37% | 57.9% | 44.98% | 39.95% | 45.37% | 45.99% | 43.95% | 46.57% | 73.05% |
| Gross Profit | 649.97K | 690.47K | 1.01M | 1.92M | 3.54M | 3.88M | 3.17M | 3.75M | 3.88M | 3.68M | 1.86M |
| Gross Margin % | - | 10.56% | 34.63% | 42.1% | 55.02% | 60.05% | 54.63% | 54.01% | 56.05% | 53.43% | 26.95% |
| Gross Profit Growth % | - | -31.36% | -47.64% | -45.68% | -8.84% | 22.35% | -15.32% | -3.39% | 5.34% | 98.06% | - |
| Operating Expenses | 5.62M | 2.48M | 2.75M | 1.82M | 1.91M | 1.78M | 1.42M | 1.55M | 1.07M | 1.08M | 1.44M |
| OpEx % of Revenue | - | 37.97% | 94.77% | 39.88% | 29.71% | 27.49% | 24.42% | 22.4% | 15.5% | 15.71% | 20.95% |
| Selling, General & Admin | 5.62M | 2.48M | 2.75M | 1.82M | 1.91M | 1.78M | 1.42M | 1.55M | 1.07M | 1.03M | 1.39M |
| SG&A % of Revenue | - | 37.97% | 94.77% | 39.88% | 29.71% | 27.49% | 24.42% | 22.4% | 15.5% | 14.91% | 20.15% |
| Research & Development | 0 | 0 | 0 | 0 | 0 | 43.66K | 35.9K | 25.32K | 26.83K | 24.16K | 23.91K |
| R&D % of Revenue | - | - | - | - | - | 0.68% | 0.62% | 0.37% | 0.39% | 0.35% | 0.35% |
| Other Operating Expenses | 0 | 0 | 0 | 0 | 0 | -43.66K | -35.9K | -25.32K | -26.83K | 30.78K | 31.58K |
| Operating Income | -4.97M | -1.79M | -1.75M | 101.06K | 1.63M | 2.1M | 1.75M | 2.19M | 2.8M | 2.6M | 413.2K |
| Operating Margin % | - | -27.41% | -60.14% | 2.21% | 25.31% | 32.56% | 30.21% | 31.61% | 40.56% | 37.72% | 5.99% |
| Operating Income Growth % | - | -2.53% | -1828.8% | -93.79% | -22.64% | 19.94% | -19.99% | -21.84% | 7.97% | 528.68% | - |
| EBITDA | -4.38M | -1.5M | -1.49M | 154.89K | 1.65M | 2.46M | 2.13M | 2.57M | 2.88M | 2.63M | 444.78K |
| EBITDA Margin % | - | -22.91% | -51.21% | 3.39% | 25.65% | 38.06% | 36.74% | 37.09% | 41.65% | 38.16% | 6.45% |
| EBITDA Growth % | - | -0.65% | -1060.42% | -90.61% | -32.94% | 15.33% | -17.09% | -10.7% | 9.58% | 490.96% | - |
| D&A (Non-Cash Add-back) | 589.03K | 294.19K | 259.55K | 53.83K | 21.88K | 355.74K | 378.59K | 379.86K | 75.5K | 30.78K | 31.58K |
| EBIT | -2.51M | 437.58K | -543.01K | 1.91M | 2.15M | 2.21M | 1.75M | 2.19M | 2.8M | 2.6M | 413.2K |
| Net Interest Income | 1.06M | 534.48K | 607.29K | 598.01K | 260.2K | 10.52K | 102.18K | -4.84K | -4.68K | -4.02K | -5.17K |
| Interest Income | 1.37M | 843.35K | 921.23K | 911.88K | 545.55K | 10.52K | 102.18K | 0 | 0 | 0 | 5.17K |
| Interest Expense | 308.87K | 308.87K | 313.94K | 313.86K | 285.35K | 0 | 0 | 4.84K | 4.68K | 4.02K | 0 |
| Other Income/Expense | 2.47M | 1.92M | 890.2K | 1.49M | 241.75K | 108.68K | 204.32K | 166.12K | -112.41K | 36.12K | 72.12K |
| Pretax Income | -2.5M | 128.71K | -856.94K | 1.59M | 1.87M | 2.21M | 1.96M | 2.36M | 2.69M | 2.63M | 485.32K |
| Pretax Margin % | - | 1.97% | -29.5% | 34.94% | 29.07% | 34.24% | 33.73% | 34.01% | 38.93% | 38.24% | 7.04% |
| Income Tax | -77.4K | -51.44K | 39.75K | 546.88K | 453.22K | 542.85K | 269.24K | 339.18K | 472.69K | 498.61K | 105.3K |
| Effective Tax Rate % | 3.1% | -39.96% | -4.64% | 34.3% | 24.25% | 24.54% | 13.75% | 14.38% | 17.56% | 18.93% | 21.7% |
| Net Income | -2.21M | 180.14K | -896.69K | 1.05M | 1.42M | 1.67M | 1.69M | 2.02M | 2.22M | 2.14M | 380.02K |
| Net Margin % | - | 2.76% | -30.87% | 22.96% | 22.02% | 25.84% | 29.09% | 29.12% | 32.09% | 31% | 5.51% |
| Net Income Growth % | - | 120.09% | -185.59% | -26% | -15.19% | -1.15% | -16.35% | -9.04% | 3.95% | 461.87% | - |
| Net Income (Continuing) | -2.21M | 180.14K | -896.69K | 1.05M | 1.42M | 1.67M | 1.69M | 2.02M | 2.22M | 2.14M | 380.02K |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | - | 25.00 | -77.88 | 98.75 | 162.50 | 137.50 | 187.50 | 162.50 | 187.50 | 175.00 | 30.50 |
| EPS Growth % | - | 132.1% | -178.86% | -39.23% | 18.18% | -26.67% | 15.38% | -13.33% | 7.14% | 473.77% | - |
| EPS (Basic) | - | 25.00 | -54.38 | 98.75 | 162.50 | 137.50 | 187.50 | 162.50 | 187.50 | 175.00 | 30.50 |
| Diluted Shares Outstanding | 8.31M | 6.89K | 11.51K | 10.61K | 8.79K | 11.99K | 8.79K | 12.47K | 11.99K | 8.79K | 12.47K |
| Basic Shares Outstanding | 8.31M | 6.89K | 11.51K | 10.61K | 8.79K | 11.99K | 8.79K | 12.47K | 11.99K | 8.79K | 12.47K |
| Dividend Payout Ratio | - | - | - | - | - | - | - | - | - | - | - |
Quick answers to the most common questions about buying HKIT stock.
For fiscal year 2025, Hitek Global Inc. (HKIT) reported total revenue of $6.5M. This represents a 5.2% decline compared to $6.9M in 2016.
Hitek Global Inc. (HKIT) is profitable, generating $0.2M in net income for the fiscal year ending 2025 with a net profit margin of 2.8%.
Hitek Global Inc. (HKIT) reported an operating income of $-1.8M, resulting in an operating profit margin of -27.4%. This margin reflects the operational efficiency of the business before interest and taxes.
Hitek Global Inc. (HKIT) generated $0.7M in gross profit for the year, representing a gross profit margin of 10.6%. This demonstrates the company's core pricing power and production efficiency.
Key Metrics
Top Statement Risk
Margin compression and obsolescence
Volatile Revenue Driven by Hardware
According to the provided quarterly data, HKIT's revenue trajectory exhibits extreme volatility, swinging from a 59.6% decline in 2025Q2 to a 4.4% increase by 2025Q4, suggesting that top-line growth is driven by lumpy, non-recurring hardware procurement contracts rather than a stable, scalable software-as-a-service model.
The erratic revenue pattern indicates that the company lacks a predictable recurring revenue base, which is typical for firms acting as hardware resellers rather than proprietary software providers. Investors should monitor whether these fluctuations represent a sustainable shift in market share or merely the timing of low-margin enterprise hardware fulfillment cycles.
Structural Margin Erosion from Reselling
As reported in financial statements, HKIT's gross margin has collapsed from historical highs above 60% in 2021 to a razor-thin 6.4% in 2025Q4, reflecting a fundamental transition toward low-margin hardware distribution that significantly undermines the company's profile as a software-application entity.
This margin compression suggests that the company is increasingly reliant on commodity hardware sales, which offer little pricing power and high exposure to input cost volatility. The inability to maintain historical gross margins implies that the firm's competitive moat in the tax-control space is likely being eroded by commoditization.
Operating Leverage Remains Deeply Negative
Based on the income statement history, HKIT's operating leverage is currently non-existent, as evidenced by the 2025Q4 operating margin of -7.7% and the consistent failure of gross profit to cover administrative and selling expenses, which remain stubbornly high relative to the company's current revenue scale.
The persistent operating losses indicate that the company's cost structure is not optimized for its current revenue mix, suggesting that scaling the top line has only served to increase the absolute dollar amount of operating losses. Without a significant reduction in SG&A or a pivot to higher-margin software services, the firm may struggle to achieve sustainable operating profitability.
Net Income Masking Operational Weakness
Analysis of the income statement reveals a recurring disconnect where HKIT reports positive net income despite persistent operating losses, as seen in 2025Q4, suggesting that bottom-line results are heavily reliant on non-operating items like government subsidies or interest income rather than core business performance.
This reliance on non-operating income warrants caution, as it obscures the underlying economic reality of the business. Investors should discount the reported net income figures to assess the true viability of the firm's core operations, which appear to be currently incapable of self-funding.
Existential Risks to Business Model
The most significant challenge to the current narrative is the potential for regulatory obsolescence, as the Chinese government's transition toward fully digitalized electronic invoicing threatens to decouple tax compliance from the physical hardware disks that currently serve as the primary anchor for HKIT's regional client base.
If the regulatory environment shifts to cloud-native tax filing, the company's hardware-centric revenue stream could face a rapid and permanent decline. Furthermore, the current reliance on low-margin hardware reselling leaves the company highly vulnerable to any supply chain disruptions or competitive bidding wars that could further compress already thin margins.