The deteriorating profitability and negative operating cash flow signal structural margin pressure. Monitor next quarter for any improvement in gross margin or cash flow; the $30.3M in short-term bank loans due within one year adds refinancing risk given the negative cash from operations.
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Executive Summary
CLPS Inc. filed its annual 20-F for fiscal year ended June 30, 2026, reporting revenue growth of 4.7% to $172.2 million but a deepening net loss of $12.9 million (vs. $6.4 million loss in FY2025). Gross margin contracted sharply to 17.8% from 22.1%, driven by cost of revenue growth outpacing revenue. The company recorded a $1.4 million goodwill impairment on its Academic Education reporting unit and a $1.7 million impairment on deferred contract costs. Operating cash flow was negative $0.4 million. The filing also notes the company regained Nasdaq compliance in September 2026 after a minimum bid price deficiency.
Key Facts
- Revenue grew 4.7% YoY to $172.2 million in FY2026 from $164.5 million in FY2025.
- Net loss attributable to CLPS shareholders widened to $13.2 million from $7.0 million in FY2025.
- Gross margin declined to 17.8% from 22.1% in FY2025.
- Operating cash flow was negative $0.4 million in FY2026 vs. negative $2.5 million in FY2025.
- Goodwill impairment of $1.4 million recorded on the Academic Education reporting unit.
- Impairment of deferred contract costs of $1.7 million recognized.
- Accounts receivable decreased to $42.5 million from $44.9 million as of June 30, 2025.
- Total bank loans were $30.3 million as of June 30, 2026, all due within one year.
- Company regained Nasdaq minimum bid price compliance in September 2026.
- Top client accounted for 15.6% of total revenue in FY2026.
Financial Impact
Revenue up $7.7M (4.7%) to $172.2M; net loss worsened by $6.5M to $12.9M; gross margin down 430 bps to 17.8%.
Risk Factors
- Continued gross margin compression from rising cost of revenues.
- Negative operating cash flow and $30.3M in short-term debt maturing within one year.
- Goodwill and deferred contract cost impairments may recur if Academic Education unit underperforms.
- Customer concentration risk with top client at 15.6% of revenue.
Investment Themes
Documents Analyzed
This report is based on 4 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 20-F Filing (Primary) | 0001213900-26-110018 |
| Document: ea030717901ex10-21.htm | 0001213900-26-110018 |
| Document: ea030717901ex10-20.htm | 0001213900-26-110018 |
| Document: ea030717901ex10-19.htm | 0001213900-26-110018 |
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Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 16, 2026 11d ago | Press Release | $0.9201 $0.9370 | ▼ −1.84% | ▼ −2.27% | $0.9600 (−4.34%) |
Oct 16, 2026 11d ago | 20-F | $0.9200 $0.9370 | ▼ −1.85% | ▼ −1.75% | $0.9600 (−4.35%) |
Sep 4, 2026 7w ago | 6-K | $1.06 $1.04 | ▼ −1.89% | ▼ −0.68% | $0.9600 (−9.43%) |
Jun 23, 2026 18w ago | 6-K | $0.9701 $0.8420 | ▼ −13.20% | ▼ −14.22% | $0.9600 (−1.04%) |
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