WEB NEWS Comments & Business Outlook
Second Quarter 2020 Financial Results
Revenues increased by 38.2% to $42.6 million from $30.8 million.
Non-GAAP net income attributable to CLPS Incorporation's shareholders[1] increased by 33.1% to $3.4 million, or $0.24 basic and diluted earnings per share, compared to $2.6 million, or $0.19 basic earnings per share and $0.18 diluted earnings per share
Mr. Raymond Lin, Co-Founder and Chief Executive Officer of CLPS, commented, "With strong demand for global financial IT services and solutions, CLPS was able to continue the implementation of its global expansion strategy and make further improvements in its business. Our highly effective IT services and solutions were able to deliver on demand, and new technologies such as micro services, robotic process automation (RPA) applications, and big data lowered operational costs. We also provided professional training in management and technical subjects in order to improve the overall capabilities of our staff and to attract more talent."
"For the remainder of the fiscal year, CLPS will continue to expand globally, proactively acquire and service more international clients, especially those in the U.S., and continue to grow our acquired businesses. At the same time, we will launch comprehensive services related to our advantages in the credit card industry. We will also ensure sustainable and high quality growth for CLPS, and create long-term value for shareholders."
Ms. Rui Yang, acting Chief Financial Officer of CLPS, commented, "During the first six months of fiscal 2020, revenues continued to grow strongly, increasing 38.2% year over year. Net income attributable to CLPS Incorporation's shareholders for this period turned profitable to $2.4 million compared to a loss of $1.4 million in the same period last year. GAAP and non-GAAP basic earnings per share were $0.17 and $0.24, respectively. With the continued implementation of our global expansion strategy, we are confident that we have the ability to continue delivering good financial performance and to continuously improve our capabilities to create value for our shareholders."
Financial Outlook
For fiscal year 2020, the Company expects, absent material acquisitions or non-recurring transactions, total sales growth in the range of approximately 30% to 35%, net income to turn profitable, and non-GAAP net income growth in the range of approximately 30% to 35% compared to fiscal year 2019 financial results. The foregoing guidance includes estimated 2020 financial results of the RiDiK Pte. Ltd. acquisition, an entity in which the Company acquired an 80% equity stake in September 2019. In addition, this guidance necessarily assumes no significant adverse price changes during fiscal year 2020.
This forecast reflects the Company's current and preliminary views, which are subject to change and are subject to risks and uncertainties, including, but not limited to, potential accounting adjustments attributable to RiDiK Pte. Ltd. acquisition as well as various risks and uncertainties facing the Company's business and operations as identified in its public filings.
Shareholder Letters
SHANGHAI, Jan. 9, 2020 /PRNewswire / -- CLPS Incorporation (Nasdaq: CLPS) ("CLPS" or "the Company"), today released a letter to shareholders from the Chairman of the Company's Board of Directors (the "Board"), the full text of which is provided below. All CLPS shareholders are encouraged to read it.
Dear Shareholders,
On behalf of the Board, I wish you a happy new year!
In 2019, global demand for financial IT services and solutions was fueled by growth in the fintech industry and advancements in the areas of artificial intelligence, blockchain, big data, and cloud applications. At the same time, there is still a shortage of professional IT talent in the above-mentioned areas.
We believe that such demand will continue to gain momentum in 2020. In response, CLPS continues to invest in resources, improve our performance, and drive technological and management innovation to achieve high quality development. With our comprehensive understanding of market needs in financial IT services and solutions in China and globally, we are committed to the strategy of continuously expanding into the international market, providing more clients with the professional IT services that CLPS has to offer. As a result, it enables us to further expand our market share, improve our brand influence, and achieve significant growth.
Let us look back at the highlights of the Company's performance in 2019 and our plans for 2020.
1. Client Base and Revenue Growth
CLPS has expanded its overseas and domestic client base in the financial services and IT industries, which covers global credit cards, banking, data analysis, business intelligence, and decision-making, among others. For the fiscal year 2019, CLPS's revenues increased by $16.0 million, or 32.7%, to $64.9 million from $48.9 million in the prior year period. Gross profit increased by $6.1 million, or 34.5%, to $23.8 million for the fiscal year 2019, from $17.7 million in the prior year period.
2. IT Innovation
We are dedicated to the research and applications of innovative technologies, including distributed application systems, cloud computing, micro services, open API, robotic process automation (RPA), blockchain, and big data. In the past year, we have applied RPA and big data technology to our internal human resources management and financial management systems, which significantly improved our operational efficiency. In addition, we deployed RPA to our clients, and we have received positive feedback on our technology. In 2020, we intend to apply more innovative technologies to our internal management systems to further reduce operational costs. The learnings derived from our internal implementations will then enable us to offer the technologies to our clients. In addition, we aim to optimize our capability in credit card services. Through our efforts, we will be able to improve our IT services efficiency, achieve client satisfaction, and attain high quality performance growth.
3. Management Excellence
We continue to optimize our internal enterprise resource planning (ERP) management system to provide timely and effective data for management decisions. CLPS Academy regularly provides professional training for both our management staff and our IT professionals to improve employee competency and sustain our high talent retention rate. We are also committed to our partnerships with universities including Shanghai Sanda University, the Shanghai Institute of Technology, and Shanghai Jian Qiao University. With our partners, we aim to further develop new financial IT talent by including financial IT courses in university curriculums and by deploying our CLPS Virtual Bank Training Platform. In 2020, we will continue to improve the function and efficiency of our ERP management system, develop more financial IT talent, enable more staff to receive technical and management training, and support the Company to achieve greater heights.
4. Business Expansion Strategy
The Company's overseas financial IT business expanded significantly in 2019. CLPS acquired 80% of the equity of RiDik Pte. Ltd. ("RiDik"), a Singapore-based IT services company, in September 2019, and completed the business integration of Infogain Pte. Ltd. ("Infogain") and RiDiK, our two subsidiaries in Southeast Asia, into CLPS Singapore, the Singapore division of CLPS. After the integration, CLPS Singapore is expected to achieve total revenue growth of over 200% year over year for fiscal year 2020. In 2020, we will continue to implement our international expansion strategy, which includes expanding the scale of our IT services business in the United States to better cater to our North America clients. We also plan to establish a global delivery center in India, which will work closely with our delivery centers in China to provide quality IT services to our overseas clients. In addition, we will increase our investment to penetrate the Japan IT services market to broaden our Asia market presence.
In conclusion, CLPS remains in line with its growth and development strategies to improve our overall competitiveness and bring value to our shareholders. On behalf of the CLPS family, I extend my gratitude to our shareholders' unwavering support and confidence in the Company.
With sincerity and determination,
Paul Xiao Feng Yang
Shareholder Letters
SHANGHAI, Jan. 9, 2020 /PRNewswire / -- CLPS Incorporation (Nasdaq: CLPS) ("CLPS" or "the Company"), today released a letter to shareholders from the Chairman of the Company's Board of Directors (the "Board"), the full text of which is provided below. All CLPS shareholders are encouraged to read it.
Dear Shareholders,
On behalf of the Board, I wish you a happy new year!
In 2019, global demand for financial IT services and solutions was fueled by growth in the fintech industry and advancements in the areas of artificial intelligence, blockchain, big data, and cloud applications. At the same time, there is still a shortage of professional IT talent in the above-mentioned areas.
We believe that such demand will continue to gain momentum in 2020. In response, CLPS continues to invest in resources, improve our performance, and drive technological and management innovation to achieve high quality development. With our comprehensive understanding of market needs in financial IT services and solutions in China and globally, we are committed to the strategy of continuously expanding into the international market, providing more clients with the professional IT services that CLPS has to offer. As a result, it enables us to further expand our market share, improve our brand influence, and achieve significant growth.
Let us look back at the highlights of the Company's performance in 2019 and our plans for 2020.
1. Client Base and Revenue Growth
CLPS has expanded its overseas and domestic client base in the financial services and IT industries, which covers global credit cards, banking, data analysis, business intelligence, and decision-making, among others. For the fiscal year 2019, CLPS's revenues increased by $16.0 million, or 32.7%, to $64.9 million from $48.9 million in the prior year period. Gross profit increased by $6.1 million, or 34.5%, to $23.8 million for the fiscal year 2019, from $17.7 million in the prior year period.
2. IT Innovation
We are dedicated to the research and applications of innovative technologies, including distributed application systems, cloud computing, micro services, open API, robotic process automation (RPA), blockchain, and big data. In the past year, we have applied RPA and big data technology to our internal human resources management and financial management systems, which significantly improved our operational efficiency. In addition, we deployed RPA to our clients, and we have received positive feedback on our technology. In 2020, we intend to apply more innovative technologies to our internal management systems to further reduce operational costs. The learnings derived from our internal implementations will then enable us to offer the technologies to our clients. In addition, we aim to optimize our capability in credit card services. Through our efforts, we will be able to improve our IT services efficiency, achieve client satisfaction, and attain high quality performance growth.
3. Management Excellence
We continue to optimize our internal enterprise resource planning (ERP) management system to provide timely and effective data for management decisions. CLPS Academy regularly provides professional training for both our management staff and our IT professionals to improve employee competency and sustain our high talent retention rate. We are also committed to our partnerships with universities including Shanghai Sanda University, the Shanghai Institute of Technology, and Shanghai Jian Qiao University. With our partners, we aim to further develop new financial IT talent by including financial IT courses in university curriculums and by deploying our CLPS Virtual Bank Training Platform. In 2020, we will continue to improve the function and efficiency of our ERP management system, develop more financial IT talent, enable more staff to receive technical and management training, and support the Company to achieve greater heights.
4. Business Expansion Strategy
The Company's overseas financial IT business expanded significantly in 2019. CLPS acquired 80% of the equity of RiDik Pte. Ltd. ("RiDik"), a Singapore-based IT services company, in September 2019, and completed the business integration of Infogain Pte. Ltd. ("Infogain") and RiDiK, our two subsidiaries in Southeast Asia, into CLPS Singapore, the Singapore division of CLPS. After the integration, CLPS Singapore is expected to achieve total revenue growth of over 200% year over year for fiscal year 2020. In 2020, we will continue to implement our international expansion strategy, which includes expanding the scale of our IT services business in the United States to better cater to our North America clients. We also plan to establish a global delivery center in India, which will work closely with our delivery centers in China to provide quality IT services to our overseas clients. In addition, we will increase our investment to penetrate the Japan IT services market to broaden our Asia market presence.
In conclusion, CLPS remains in line with its growth and development strategies to improve our overall competitiveness and bring value to our shareholders. On behalf of the CLPS family, I extend my gratitude to our shareholders' unwavering support and confidence in the Company.
With sincerity and determination,
Paul Xiao Feng Yang
Comments & Business Outlook
SHANGHAI, Dec. 23, 2019 /PRNewswire / -- CLPS Incorporation (Nasdaq: CLPS) ("CLPS" or "the Company"), a leading information technology consulting and solutions service provider focusing on the banking, insurance, and financial sectors in China and globally, today announced that it has recently completed the business integration of Infogain Pte. Ltd. ("Infogain") and RiDiK Pte. Ltd. ("RiDiK"), its two subsidiaries in Southeast Asia, into the Company's Singapore Division ("CLPS Singapore"). After the integration, CLPS Singapore is expected to achieve total revenue growth of over 200% year over year for fiscal year 2020. CLPS Singapore's financial growth rate is forecasted to be in the double-digit percentage point after fiscal year 2020 due to strong demands for fintech services in Southeast Asia.
CLPS acquired Infogain and RiDiK, both Singapore-based IT services providers, in August 2018 and September 2019, respectively. The integration of the two subsidiaries enables the Company to achieve overall management and operational efficiency, provide exemplary services to clients, drive overseas business expansion, enhance the Company's share of IT services in the Southeast Asia market, and support the Company's future international business development.
Mr. Henry Li, Chief Operating Officer of CLPS, commented, "The Company remains committed to its international business expansion strategy. We believe that CLPS Singapore will further enhance our competitiveness in serving the Southeast Asia market and will serve as a gateway to our global expansion."
Mr. Srustijeet Mishra, founder of RiDiK and CEO of CLPS Singapore, added, "From the perspective of the Company's business development, the integration allows us to further expand our business and improve our operational efficiency. It also helps improve CLPS's overseas profitability and becomes a new major contributor to our development in Southeast Asia."
Comments & Business Outlook
SHANGHAI, Oct. 18, 2019 /PRNewswire / -- CLPS Incorporation (the "Company" or "CLPS") (CLPS), a leading information technology ("IT") consulting and solutions service provider focusing on the banking, insurance and financial sectors in China and globally, today announced its unaudited financial results for the six months and fiscal year ended June 30, 2019.
Second Half of Fiscal 2019 Highlights (all results compared to the six months ended June 30, 2018)
Revenues increased by 27.7% to $34.1 million from $26.7 million.
Gross profit increased by 43.0% to $12.6 million from $8.8 million.
Net loss attributable to CLPS Incorporation's shareholders of $1.8 million, or $0.13 basic and diluted loss per share, compared to net income attributable to CLPS Incorporation's shareholders of $1.1 million, or $0.10 basic and $0.09 diluted earnings per share.
Non-GAAP net income attributable to CLPS Incorporation's shareholders[1] increased by 5.6% to $1.2 million, or $0.08 basic and diluted earnings per share, from $1.1 million, or $0.10 basic and $0.09 diluted earnings per share (See Use of Non-GAAP Financial Measures below for a discussion of such measures as used in this press release).
Fiscal Year 2019 Highlights (all results compared to the twelve months ended June 30, 2018)
Revenues increased by 32.7% to $64.9 million from $48.9 million.
Gross profit increased by 34.5% to $23.8 million from $17.7 million.
Net loss attributable to CLPS Incorporation's shareholders of $3.3 million, or $0.24 basic and diluted loss per share, compared to net income attributable to CLPS Incorporation's shareholders of $2.4 million, or $0.21 basic and diluted earnings per share.
Non-GAAP net income attributable to CLPS Incorporation's shareholders[1] increased by 53.9% to $3.7 million, or $0.27 basic and diluted earnings per share, from $2.4 million, or $0.21 basic and diluted earnings per share (See Use of Non-GAAP Financial Measures below for a discussion of such measures as used in this press release).
Mr. Raymond Lin, Chief Executive Officer of CLPS, commented, "During the second half of our 2019 fiscal year, we continued to grow revenues by double digits, resulting in full year sales growth of 32.7%, which was in line with our expectations. Our non-GAAP net income for the fiscal year grew by 32.0%, which was also in line with our expectations. Our client retention was 98% during this period, which accentuates the high quality services we provided to our clients."
"Our strong performance was driven by the continued execution of our growth strategy of geographic and market growth, developing applications of industry-leading technology, and attracting and retaining quality talent. During the second half of fiscal 2019, we followed our InfoGain acquisition with an increased stake in CLPS Lihong Financial Information Services Co., Ltd., an online lending platform in China, and made a strategic investment in Economic Modeling Information Technology Co., Ltd., a financial modeling and big data analysis services provider. We have also made further progress with our research and development efforts, including developing real-world applications of technologies such as blockchain, robotic process automation, cloud computing, and big data. Our talent development partners now include the Shanghai University of Finance and Economics, Shanghai Sanda University, Ngee Ann Polytechnic in Singapore, and China's Ministry of Education through its 2019 Industry-University Cooperative Educational Program, among others."
"Over the next fiscal year, we remain focused on investing in our long-term sustainable growth and delivering on our dual-engine strategy of horizontal and vertical expansion. We will continue to pursue growth in our global footprint and market share as well as in technological and talent development. By delivering on our strategy, we expect to drive shareholder value," concluded Mr. Lin.
Second Half and Fiscal Year 2019 Financial Results
Revenues
In the second half of fiscal 2019, revenues increased by $7.4 million, or 27.7%, to $34.1 million from $26.7 million in the prior year period. For the year ended June 30, 2019, revenues increased by $16.0 million, or 32.7%, to $64.9 million from $48.9 million in the prior year period. This increase in revenue was mainly due to an increase in revenue from IT consulting services.
Revenue from IT consulting services increased by $6.5 million, or 25.4%, to $32.0 million and accounted for 93.7% of total revenue in the second half of fiscal 2019 compared to $25.5 million, or 95.5% of total revenue, in the same period of the previous year. For the year ended June 30, 2019, revenue from IT consulting services increased by $14.6 million, or 30.9%, to $61.8 million and accounted for 95.1% of total revenue from $47.2 million, or 96.4% of total revenue, in the same period of the previous year. The increase was due to increased demand for the Company's IT consulting service from banks and other financial institutions, primarily from existing clients. For the twelve months ended June 30, 2019 and 2018, 47.5% and 46.8% of IT consulting services revenue were from international banks, respectively.
Revenue from customized IT solution services increased by $1.0 million, or 89.0%, to $2.1 million in the second half of fiscal 2019 from $1.1 million in the same period of the previous year. Revenue from customized IT solution services increased by $1.4 million, or 86.1%, to $3.0 million for the year ended June 30, 2019, from $1.6 million in the same period of the previous year. The increase was primarily due to growth from existing clients.
During the second half of fiscal 2019, revenue from other services decreased by $0.06 million to $0.04 million from $0.1 million in the same period of the previous year. During fiscal 2019, revenue from other services remained relatively flat at $0.1 million for the year ended June 30, 2019, compared to the prior year period.
Gross Profit and Gross Margin
Gross profit increased by $3.8 million, or 43.0%, to $12.6 million in the second half of fiscal 2019 from $8.8 million in the prior year period. Gross margin increased to 36.9% in the second half of fiscal 2019 compared to 32.9% in the prior year period.
Gross profit increased by $6.1 million, or 34.5%, to $23.8 million for the year ended June 30, 2019, from $17.7 million in the prior year period. Gross margin increased to 36.6% for the year ended June 30, 2019, compared to 36.1% in the prior year period. The increase in gross margin was primarily due to an increase in billing rates of both IT consulting services and customized IT solution services.
Operating Expenses
Selling and marketing expenses increased by $0.1 million, or 10.4%, to $1.2 million in the second half of fiscal 2019 from $1.1 million in the prior year period. Selling and marketing expenses remained relatively flat at $2.2 million for the year ended June 30, 2019, compared to the prior year period.
Research and development expenses increased by $0.7 million, or 15.5%, to $4.9 million in the second half of fiscal 2019 from $4.3 million in the prior year period. Research and development expenses increased by $0.2 million, or 1.8% to $8.0 million for the year ended June 30, 2019, from $7.8 million in the prior year period.
General and administrative expenses increased by $5.4 million, or 192.9%, to $8.2 million in the second half of fiscal 2019 from $2.8 million in the prior year period. The increase was primarily due to an addition of $2.9 million non-cash share-based compensation expenses related to the grants under the 2017 Equity Incentive Plan. After the deduction of non-cash share-based compensation expenses, non-GAAP general and administrative expenses2 increased by $2.5 million, or 87.9%, to $5.3 million in the second half of fiscal 2019 from $2.8 million in the same period of the previous year.
General and administrative expenses increased by $11.5 million, or 196.1%, to $17.4 million for the year ended June 30, 2019, from $5.9 million in the prior year period. The increase was primarily due to an addition of $7.0 million non-cash share-based compensation expenses related to the grants under the 2017 Equity Incentive Plan. After the deduction of non-cash share-based compensation expenses, non-GAAP general and administrative expenses[2] increased by $4.5 million, or 77.5%, to $10.4 million for the year ended June 30, 2019, from $5.9 million in the same period of the previous year. The increase in non-GAAP administrative expenses was primarily due to routine expenses incurred after going public and due to a year-over-year increase in salary and compensation expenses.
Operating Loss
Operating loss was $1.8 million in the second half of fiscal 2019 compared to an income of $0.6 million in the same period of the previous year. After the deduction of non-cash share-based compensation expenses, non-GAAP operating income[3] increased by $0.6 million, or 93.9%, to $1.2 million in the second half of fiscal 2019 from $0.6 million in the same period of the previous year. Non-GAAP operating margin[4] increased to 3.6% in the second half of fiscal 2019 from 2.3% in the prior year period.
Operating loss was $3.8 million for the year ended June 30, 2019, compared to an operating income of $1.7 million in the same period of the previous year. After the deduction of non-cash share-based compensation expenses, non-GAAP operating income[3] increased by $1.5 million, or 87.0%, to $3.2 million for the year ended June 30, 2019, from $1.7 million in the same period of the previous year. Non-GAAP operating margin[4] increased to 5.0% for the year ended June 30, 2019, from 3.5% in the prior year period.
Other Income and Expenses
Subsidies and other income decreased to $0.1 million in the second half of fiscal 2019 from $0.5 million in the same period of the previous year.
Subsidies and other income decreased to $0.7 million for the year ended June 30, 2019, from $0.9 million in the same period of the previous year.
Income Taxes
Income tax benefits were approximately $0.1 million in the second half of fiscal 2019 compared to benefits of $0.2 million in the same period of the previous year, mainly due to the increase of current income tax expenses.
Provision for income tax was $0.2 million for the year ended June 30, 2019, compared to benefits of $0.1 million in fiscal 2018, mainly due to a reverse of the beginning balances of deferred tax assets related to the net operating losses for some of the Company's subsidiaries.
Net Loss and Loss Per Share
Net loss for the second half of fiscal 2019 was $1.7 million compared to an income of $1.4 million in the prior year period. After the deduction of non-cash share-based compensation expenses, non-GAAP net income[5] decreased by $0.1 million, or 9.7%, to $1.3 million in the second half of fiscal 2019 from $1.4 million in the same period of the previous year. After the deduction of non-controlling interests, net loss attributable to CLPS Incorporation's shareholders in the second half of fiscal 2019 was $1.8 million, or $0.13 basic and diluted loss per share. After excluding the impact of non-cash share-based compensation expenses, non-GAAP net income attributable to CLPS Incorporation's shareholders[1] in the second half of fiscal 2019 was $1.2 million, or $0.08 basic and diluted earnings per share. This is compared to net income attributable to CLPS Incorporation's shareholders of $1.1 million, or $0.10 basic and $0.09 diluted earnings per share, in the second half of fiscal 2018.
Net loss for the year ended June 30, 2019, was $3.4 million compared to a net income of $2.7 million in the prior year period. The decrease in net income was due to the increase in non-cash share-based compensation expenses. After the deduction of non-cash share-based compensation expenses, non-GAAP net income[5] increased by $0.9 million, or 32.0%, to $3.6 million for the year ended June 30, 2019, from $2.7 million in the same period of the previous year. After the deduction of non-controlling interests, net loss attributable to CLPS Incorporation's shareholders for the year ended June 30, 2019, was $3.3 million, or $0.24 basic and diluted loss per share. After excluding the impact of non-cash share-based compensation expenses, non-GAAP net income attributable to CLPS Incorporation's shareholders1 for the year ended June 30, 2019, was $3.7 million, or $0.27 basic and diluted earnings per share. This is compared to net income attributable to CLPS Incorporation's shareholders of $2.4 million, or $0.21 basic and diluted earnings per share, in the prior year period.
Cash Flow
As of June 30, 2019, the Company had cash and cash equivalents of $6.6 million compared to $9.7 million as of June 30, 2018.
Net cash provided by operating activities was approximately $0.4 million for the twelve months ended June 30, 2019. Net cash used in investing activities was approximately $3.9 million. Net cash provided by financing activities was approximately $0.5 million. The Company believes that its current cash position and cash flow from operations are sufficient to meet its anticipated cash needs for at least the next 12 months.
Financial Outlook
For fiscal year 2020, the Company expects, absent material acquisitions or non-recurring transactions, total sales growth in the range of approximately 30% to 35%, and non-GAAP net income growth in the range of approximately 32% to 37%, compared to 2019. The foregoing guidance includes estimated 2020 financial results of the RiDik acquisition, an entity in which we acquired 80% equity stake in September 2019. In addition, this guidance necessarily assumes no significant adverse price changes during fiscal year 2020.
This forecast reflects our current and preliminary views, which are subject to change and are subject to risks and uncertainties, including, but not limited to, potential accounting adjustments attributable to RiDik acquisition as well as various risks and uncertainties facing our business and operations as identified in our public filings.
Comments & Business Outlook
SHANGHAI, Oct. 18, 2019 /PRNewswire / -- CLPS Incorporation (the "Company" or "CLPS") (CLPS), a leading information technology ("IT") consulting and solutions service provider focusing on the banking, insurance and financial sectors in China and globally, today announced its unaudited financial results for the six months and fiscal year ended June 30, 2019.
Second Half of Fiscal 2019 Highlights (all results compared to the six months ended June 30, 2018)
Revenues increased by 27.7% to $34.1 million from $26.7 million.
Gross profit increased by 43.0% to $12.6 million from $8.8 million.
Net loss attributable to CLPS Incorporation's shareholders of $1.8 million, or $0.13 basic and diluted loss per share, compared to net income attributable to CLPS Incorporation's shareholders of $1.1 million, or $0.10 basic and $0.09 diluted earnings per share.
Non-GAAP net income attributable to CLPS Incorporation's shareholders[1] increased by 5.6% to $1.2 million, or $0.08 basic and diluted earnings per share, from $1.1 million, or $0.10 basic and $0.09 diluted earnings per share (See Use of Non-GAAP Financial Measures below for a discussion of such measures as used in this press release).
Fiscal Year 2019 Highlights (all results compared to the twelve months ended June 30, 2018)
Revenues increased by 32.7% to $64.9 million from $48.9 million.
Gross profit increased by 34.5% to $23.8 million from $17.7 million.
Net loss attributable to CLPS Incorporation's shareholders of $3.3 million, or $0.24 basic and diluted loss per share, compared to net income attributable to CLPS Incorporation's shareholders of $2.4 million, or $0.21 basic and diluted earnings per share.
Non-GAAP net income attributable to CLPS Incorporation's shareholders[1] increased by 53.9% to $3.7 million, or $0.27 basic and diluted earnings per share, from $2.4 million, or $0.21 basic and diluted earnings per share (See Use of Non-GAAP Financial Measures below for a discussion of such measures as used in this press release).
Mr. Raymond Lin, Chief Executive Officer of CLPS, commented, "During the second half of our 2019 fiscal year, we continued to grow revenues by double digits, resulting in full year sales growth of 32.7%, which was in line with our expectations. Our non-GAAP net income for the fiscal year grew by 32.0%, which was also in line with our expectations. Our client retention was 98% during this period, which accentuates the high quality services we provided to our clients."
"Our strong performance was driven by the continued execution of our growth strategy of geographic and market growth, developing applications of industry-leading technology, and attracting and retaining quality talent. During the second half of fiscal 2019, we followed our InfoGain acquisition with an increased stake in CLPS Lihong Financial Information Services Co., Ltd., an online lending platform in China, and made a strategic investment in Economic Modeling Information Technology Co., Ltd., a financial modeling and big data analysis services provider. We have also made further progress with our research and development efforts, including developing real-world applications of technologies such as blockchain, robotic process automation, cloud computing, and big data. Our talent development partners now include the Shanghai University of Finance and Economics, Shanghai Sanda University, Ngee Ann Polytechnic in Singapore, and China's Ministry of Education through its 2019 Industry-University Cooperative Educational Program, among others."
"Over the next fiscal year, we remain focused on investing in our long-term sustainable growth and delivering on our dual-engine strategy of horizontal and vertical expansion. We will continue to pursue growth in our global footprint and market share as well as in technological and talent development. By delivering on our strategy, we expect to drive shareholder value," concluded Mr. Lin.
Second Half and Fiscal Year 2019 Financial Results
Revenues
In the second half of fiscal 2019, revenues increased by $7.4 million, or 27.7%, to $34.1 million from $26.7 million in the prior year period. For the year ended June 30, 2019, revenues increased by $16.0 million, or 32.7%, to $64.9 million from $48.9 million in the prior year period. This increase in revenue was mainly due to an increase in revenue from IT consulting services.
Revenue from IT consulting services increased by $6.5 million, or 25.4%, to $32.0 million and accounted for 93.7% of total revenue in the second half of fiscal 2019 compared to $25.5 million, or 95.5% of total revenue, in the same period of the previous year. For the year ended June 30, 2019, revenue from IT consulting services increased by $14.6 million, or 30.9%, to $61.8 million and accounted for 95.1% of total revenue from $47.2 million, or 96.4% of total revenue, in the same period of the previous year. The increase was due to increased demand for the Company's IT consulting service from banks and other financial institutions, primarily from existing clients. For the twelve months ended June 30, 2019 and 2018, 47.5% and 46.8% of IT consulting services revenue were from international banks, respectively.
Revenue from customized IT solution services increased by $1.0 million, or 89.0%, to $2.1 million in the second half of fiscal 2019 from $1.1 million in the same period of the previous year. Revenue from customized IT solution services increased by $1.4 million, or 86.1%, to $3.0 million for the year ended June 30, 2019, from $1.6 million in the same period of the previous year. The increase was primarily due to growth from existing clients.
During the second half of fiscal 2019, revenue from other services decreased by $0.06 million to $0.04 million from $0.1 million in the same period of the previous year. During fiscal 2019, revenue from other services remained relatively flat at $0.1 million for the year ended June 30, 2019, compared to the prior year period.
Gross Profit and Gross Margin
Gross profit increased by $3.8 million, or 43.0%, to $12.6 million in the second half of fiscal 2019 from $8.8 million in the prior year period. Gross margin increased to 36.9% in the second half of fiscal 2019 compared to 32.9% in the prior year period.
Gross profit increased by $6.1 million, or 34.5%, to $23.8 million for the year ended June 30, 2019, from $17.7 million in the prior year period. Gross margin increased to 36.6% for the year ended June 30, 2019, compared to 36.1% in the prior year period. The increase in gross margin was primarily due to an increase in billing rates of both IT consulting services and customized IT solution services.
Operating Expenses
Selling and marketing expenses increased by $0.1 million, or 10.4%, to $1.2 million in the second half of fiscal 2019 from $1.1 million in the prior year period. Selling and marketing expenses remained relatively flat at $2.2 million for the year ended June 30, 2019, compared to the prior year period.
Research and development expenses increased by $0.7 million, or 15.5%, to $4.9 million in the second half of fiscal 2019 from $4.3 million in the prior year period. Research and development expenses increased by $0.2 million, or 1.8% to $8.0 million for the year ended June 30, 2019, from $7.8 million in the prior year period.
General and administrative expenses increased by $5.4 million, or 192.9%, to $8.2 million in the second half of fiscal 2019 from $2.8 million in the prior year period. The increase was primarily due to an addition of $2.9 million non-cash share-based compensation expenses related to the grants under the 2017 Equity Incentive Plan. After the deduction of non-cash share-based compensation expenses, non-GAAP general and administrative expenses2 increased by $2.5 million, or 87.9%, to $5.3 million in the second half of fiscal 2019 from $2.8 million in the same period of the previous year.
General and administrative expenses increased by $11.5 million, or 196.1%, to $17.4 million for the year ended June 30, 2019, from $5.9 million in the prior year period. The increase was primarily due to an addition of $7.0 million non-cash share-based compensation expenses related to the grants under the 2017 Equity Incentive Plan. After the deduction of non-cash share-based compensation expenses, non-GAAP general and administrative expenses[2] increased by $4.5 million, or 77.5%, to $10.4 million for the year ended June 30, 2019, from $5.9 million in the same period of the previous year. The increase in non-GAAP administrative expenses was primarily due to routine expenses incurred after going public and due to a year-over-year increase in salary and compensation expenses.
Operating Loss
Operating loss was $1.8 million in the second half of fiscal 2019 compared to an income of $0.6 million in the same period of the previous year. After the deduction of non-cash share-based compensation expenses, non-GAAP operating income[3] increased by $0.6 million, or 93.9%, to $1.2 million in the second half of fiscal 2019 from $0.6 million in the same period of the previous year. Non-GAAP operating margin[4] increased to 3.6% in the second half of fiscal 2019 from 2.3% in the prior year period.
Operating loss was $3.8 million for the year ended June 30, 2019, compared to an operating income of $1.7 million in the same period of the previous year. After the deduction of non-cash share-based compensation expenses, non-GAAP operating income[3] increased by $1.5 million, or 87.0%, to $3.2 million for the year ended June 30, 2019, from $1.7 million in the same period of the previous year. Non-GAAP operating margin[4] increased to 5.0% for the year ended June 30, 2019, from 3.5% in the prior year period.
Other Income and Expenses
Subsidies and other income decreased to $0.1 million in the second half of fiscal 2019 from $0.5 million in the same period of the previous year.
Subsidies and other income decreased to $0.7 million for the year ended June 30, 2019, from $0.9 million in the same period of the previous year.
Income Taxes
Income tax benefits were approximately $0.1 million in the second half of fiscal 2019 compared to benefits of $0.2 million in the same period of the previous year, mainly due to the increase of current income tax expenses.
Provision for income tax was $0.2 million for the year ended June 30, 2019, compared to benefits of $0.1 million in fiscal 2018, mainly due to a reverse of the beginning balances of deferred tax assets related to the net operating losses for some of the Company's subsidiaries.
Net Loss and Loss Per Share
Net loss for the second half of fiscal 2019 was $1.7 million compared to an income of $1.4 million in the prior year period. After the deduction of non-cash share-based compensation expenses, non-GAAP net income[5] decreased by $0.1 million, or 9.7%, to $1.3 million in the second half of fiscal 2019 from $1.4 million in the same period of the previous year. After the deduction of non-controlling interests, net loss attributable to CLPS Incorporation's shareholders in the second half of fiscal 2019 was $1.8 million, or $0.13 basic and diluted loss per share. After excluding the impact of non-cash share-based compensation expenses, non-GAAP net income attributable to CLPS Incorporation's shareholders[1] in the second half of fiscal 2019 was $1.2 million, or $0.08 basic and diluted earnings per share. This is compared to net income attributable to CLPS Incorporation's shareholders of $1.1 million, or $0.10 basic and $0.09 diluted earnings per share, in the second half of fiscal 2018.
Net loss for the year ended June 30, 2019, was $3.4 million compared to a net income of $2.7 million in the prior year period. The decrease in net income was due to the increase in non-cash share-based compensation expenses. After the deduction of non-cash share-based compensation expenses, non-GAAP net income[5] increased by $0.9 million, or 32.0%, to $3.6 million for the year ended June 30, 2019, from $2.7 million in the same period of the previous year. After the deduction of non-controlling interests, net loss attributable to CLPS Incorporation's shareholders for the year ended June 30, 2019, was $3.3 million, or $0.24 basic and diluted loss per share. After excluding the impact of non-cash share-based compensation expenses, non-GAAP net income attributable to CLPS Incorporation's shareholders1 for the year ended June 30, 2019, was $3.7 million, or $0.27 basic and diluted earnings per share. This is compared to net income attributable to CLPS Incorporation's shareholders of $2.4 million, or $0.21 basic and diluted earnings per share, in the prior year period.
Cash Flow
As of June 30, 2019, the Company had cash and cash equivalents of $6.6 million compared to $9.7 million as of June 30, 2018.
Net cash provided by operating activities was approximately $0.4 million for the twelve months ended June 30, 2019. Net cash used in investing activities was approximately $3.9 million. Net cash provided by financing activities was approximately $0.5 million. The Company believes that its current cash position and cash flow from operations are sufficient to meet its anticipated cash needs for at least the next 12 months.
Financial Outlook
For fiscal year 2020, the Company expects, absent material acquisitions or non-recurring transactions, total sales growth in the range of approximately 30% to 35%, and non-GAAP net income growth in the range of approximately 32% to 37%, compared to 2019. The foregoing guidance includes estimated 2020 financial results of the RiDik acquisition, an entity in which we acquired 80% equity stake in September 2019. In addition, this guidance necessarily assumes no significant adverse price changes during fiscal year 2020.
This forecast reflects our current and preliminary views, which are subject to change and are subject to risks and uncertainties, including, but not limited to, potential accounting adjustments attributable to RiDik acquisition as well as various risks and uncertainties facing our business and operations as identified in our public filings.
Acquisition Activity
SHANGHAI, Sept. 27, 2019 /PRNewswire / -- CLPS Incorporation (Nasdaq: CLPS) ("CLPS" or "the Company"), a leading information technology consulting and solutions service provider focusing on the banking, insurance, and financial sectors in China and globally, today announced that, through its subsidiary Qiner Co., Limited ("Qiner"), it has acquired 80% of the equity of RiDik Pte. Ltd. ("RiDik"), a Singapore-based IT services company.
Incorporated in 2010, RiDik provides professional IT services and solutions to various target market segments, from startups to large enterprises in Singapore and Malaysia. It serves clients across multiple industries, including telecommunications, finance, energy, and engineering. RiDik also explores cutting-edge technologies and undertakes client projects in the areas of mobile application, robotic process automation (RPA), business intelligence (BI), and business analytics.
Mr. Raymond Lin, Co-Founder and Chief Executive Officer of CLPS, commented, "We are excited to welcome RiDik into the CLPS family, our second international acquisition following InfoGain. The potential and dynamic we see in RiDik enable us to further expand our market share and brand influence in the Southeast Asia region and to provide extensive IT solution implementations to a broad array of potential client and application scenarios. In addition, our globalization strategy helps us to attract more international talent to boost our talent development program and, in the process, produce more professionals that can ably compete in the global stage."
Mr. Srustijeet Mishra, Founder of RiDik, said, "Using CLPS's extensive experience in setting up offshore delivery centers (ODC), its acquisition of RiDik will fast track our expansion plan by establishing the same in Bhubaneswar, India, thus creating an efficient synergy in the IT consulting field."
Comments & Business Outlook
SHANGHAI, Aug. 28, 2019 /PRNewswire / -- CLPS Incorporation (CLPS) ("CLPS" or "the Company"), a leading information technology consulting and solutions service provider focusing on the banking, insurance, and financial sectors in China and globally, today announced that its talent development strategy will be implemented into China'seducational program. Conforming to the application guidelines of China's Ministry of Education, CLPS has been selected to be in the first batch of companies to participate in the 2019 Industry-University Cooperative Educational Program.
The program aims to build bridges between the universities and companies to develop top-notch talent to meet industrial development needs. The first batch is comprised of 324 Chinese and global companies, including blue chip IT companies, such as Google, Microsoft, IBM, Baidu, Alibaba, and Tencent.
CLPS has 45 shortlisted financial-oriented training programs that will be implemented in the program's objectives which cover emerging engineering education, teaching content and curriculum systems reform, teacher training, the building of industry-based infrastructures and centers, and innovation and entrepreneurship educational reform. The professional and industrial skills involved in these projects include computer science and technology, software engineering, cloud computing, big data, internet of things, artificial intelligence and mathematics, among others.
Mr. Jun Liu, Vice President of CLPS Academy, said, "We are extremely proud to be associated with this educational program. CLPS will leverage its IT project capabilities and integrate them into the needs of the fintech industry. Through our cooperation with the colleges and universities, the strategy enables us to generate competent and qualified financial IT talent."
Mr. Raymond Lin, Co-Founder and Chief Executive Officer of CLPS, commented, "Being selected into the educational program proves our commitment to produce professional IT talent to ensure the sustainable supply of financial IT talent resources. This educational program also provides us a new platform to promote our talent development strategy through cooperation with colleges and universities."
Comments & Business Outlook
SHANGHAI, July 10, 2019 /PRNewswire/ -- CLPS Incorporation (CLPS) ("CLPS" or "the Company"), a leading information technology consulting and solutions service provider focusing on the banking, insurance, and financial sectors in China and globally, today provided an update on its most recent cloud computing research and development efforts.
CLPS has recently upgraded its credit card system product and is currently on its final phase of testing. Through the joint effort of CLPS's Research Institute and Credit Card Service teams, the essential parts of the system will be migrated to the cloud platform.
Advancements in cloud computing and the application of financial cloud technology have enabled banks to improve their business efficiency, reduce IT costs, innovate their business models, and optimize the customer experience. Cloud computing will be widely utilized within the banking platform moving forward and the migration of banking systems to the cloud platform has become an exciting area of growth within the overall fintech industry.
CLPS's credit card system product provides a set of end-to-end solutions for banks and online financial institutions. It covers all credit card business processes and functions including application, authorization, account processing, embossing, settlement, risk control, collection, customer service, among other functions and applications. It also enjoys the advantage of fast deployment and easy customization.
CLPS's cloud-based upgrade utilizes a combination of the legacy host system and open source platforms currently used in an integrated architecture of large-scale banking systems. Functions such as the point management system will be migrated to the cloud platform, and enable real-time processing and international operational support.
After the upgrade, CLPS's new product platform will leverage the advantages of cloud computing. Combined with the micro-service application, it paves the way to achieve dynamic horizontal and vertical expansions, resulting in improved performance, reliability, utilization of resources, and significantly reduced infrastructure costs. It also improves the display interface, gated launch and other features that enhance the user experience. In addition, the new product platform adopts the Open-API, or Application Program Interface, concept to provide ample APIs to facilitate the connection between channels, merchants and enterprises. The upgrade also includes an integrated monitoring platform that covers comprehensive monitoring and an early warning signal of basic settings and business transactions which allow clients to quickly locate and solve problems.
Ms. Jing Zhao, Vice President of CLPS Research Institute, said, "We are pleased to provide this upgrade to existing and potential customers. Our upgraded credit card system is designed based on micro-service architecture. We gradually migrated the system to the cloud platform to ensure stability of the existing system while completing the upgrade. We also utilize the DevOps system to control the entire product life-cycle which guarantees product quality and improves development, operations and maintenance efficiency."
Mr. Raymond Lin, Co-Founder and Chief Executive Officer of CLPS, commented, "The migration of CLPS's credit card system product to the cloud platform has attracted notable attention from our clients. Our initial plan is to promote the product to customers based in the Southeast Asia region to help our overseas clients meet the ever changing market demand in the internet age and embrace the advent of cloud computing era. We believe that this upgrade can help enhance customer loyalty, expand our client base and contribute to our financial performance over time."
Shareholder Letters
SHANGHAI, May 28, 2019 /PRNewswire / -- CLPS Incorporation (CLPS) ("CLPS" or "the Company"), a leading information technology consulting and solutions service provider focusing on the banking, insurance, and financial sectors in China and globally, today released a letter to shareholders from the Chairman of the Company's Board of Directors, the full text of which is provided below. All CLPS shareholders are encouraged to read it.
Dear Shareholders,
It is with great pleasure that we mark our first anniversary as a publicly traded company listed on the NASDAQ Stock Market. During this period, we have seen an increasing demand for financial IT services and solutions not only in China, but also globally, especially in the areas of artificial intelligence, blockchain, big data, and cloud applications. These technological innovations enable businesses to improve operational efficiency and reduce operating costs. In addition, demand for professional IT talent in these areas has increased. As we continue to grow, we are constantly improving our understanding of the financial IT services and solutions needs in China and globally, and working on meeting such needs.
At CLPS, we value our shareholders. I would like to share with you our summary of the Company's recent achievements and our vision of its future plans. In this first year since our listing on the NASDAQ Stock Market on May 24, 2018, CLPS has gained more attention and support from our existing clients, and we have been able to win new clients. The Company's management team participated in several investor conferences in the U.S. to share our story with the investor community. For the first half of fiscal year 2019, CLPS reported a 38.7% revenue increase year over year. In addition, we achieved significant growth in our client base and business deals, made further progress on our advanced technology research, gained positive feedback from our clients for our solution services, delivered thousands of hours of training to our IT professional and management staff, and improved our corporate governance. We also drove our global expansion strategy forward with mergers and acquisitions.
The details of our achievements are as follows:
1. Performance growth
During our first year as a publicly traded company, CLPS has significantly expanded its overseas and domestic client base in the financial and IT industries, including in applications such as global credit cards, banking, social media, online travel agency, and more. In the first half of fiscal 2019, CLPS's revenues increased by $8.6 million, or 38.7%, to $30.8 million from the prior year period, while gross profit increased by $2.3 million, or 25.8%, to $11.2 million.
CLPS continues to work on its future growth. CLPS has devoted resources for advanced technological innovation research and solution improvements, including blockchain, robotic process automation, cloud applications, big data, and credit card solutions.
The Company has also worked on making its internal operations more efficient. We constantly update our internal enterprise resource planning management system to provide an effective shared database, thereby improving the management's decision-making process. CLPS continues to provide professional training for management staff and IT professionals to improve employee competency and sustain high retention rates. To further develop new financial IT talent, we have cooperated with one of the top financial and economic universities in China, the Shanghai University of Finance and Economics, and implemented an online technical training platform based on blockchain. We have also cooperated with Shanghai Sanda University to deliver financial IT courses and deploy our CLPS Virtual Bank Training Platform. In addition, we have signed a memorandum of understanding with Ngee Ann Polytechnic to further develop financial IT talent in Singapore.
The Company's overseas financial IT business has been steadily expanding. CLPS successfully achieved its business goal of expanding to Southeast Asia through the acquisition of 80% of the equity stake of InfoGain Solutions Pte. Ltd. ("InfoGain") in Singapore. Furthermore, our presence in Hong Kong targets developing fintech businesses by providing them with competitive IT services.
CLPS continues to achieve its objective of sustained growth, improved operating efficiency and staff training, and steady overseas expansion. We intend to continue on this growth trajectory to enhance our overall competitiveness.
2. Transfer to Nasdaq Global Market; auditor changes
In November 2018, CLPS transferred to the NASDAQ Global Market from the NASDAQ Capital Market, joining companies with similarly global leadership and international reach.
In December 2018, CLPS appointed Ernst & Young Hua Ming LLP as the independent auditor of the Company to support us as we execute our international expansion strategy.
3. Recent merger and acquisition activities
Adhering to the principle of acquiring or merging with complementary resources and technological innovation, we successfully completed the acquisition of 80% of InfoGain's equity stake in Singapore last August.
In February 2019, we increased the Company's ownership stake in Lihong Financial Information Services Co., Ltd. to 36.8%. Both parties believe that the increased investment will result in a mutually beneficial ongoing business relationship.
In May 2019, we announced a strategic investment in Economic Modeling Information Technology Co., Ltd. ("EMIT") with a 30% ownership stake. The investment in EMIT allows us to expand our expertise in providing the financial industry with applications based on industry-leading technologies. EMIT's expertise in data modeling, deep learning and machine learning, and blockchain technology will benefit CLPS's future development by further expanding our client network. In addition, by offering applications of data mining, we will be able to extend our competitive edge in the banking, insurance and financial sectors.
We will continue to proceed strategically so that we can achieve common development goals and enter into win-win business relationships.
We will continue to grow in accordance with our goals, improve the overall strength of CLPS, enhance the value of CLPS, and focus on our shareholders. On behalf of the CLPS family, I extend our gratitude to our shareholders' unwavering support and confidence in our company.
With sincerity and determination,
Paul Xiao Feng Yang
Acquisition Activity
SHANGHAI, May 15, 2019 /PRNewswire / -- CLPS Incorporation (CLPS) ("CLPS" or "the Company"), a leading information technology consulting and solutions service provider focusing on the banking, insurance, and financial sectors in China and globally, today announced a strategic investment in Economic Modeling Information Technology Co., Ltd. ("EMIT"), a financial big data company. Upon closing of the transaction, CLPS will hold a 30% ownership stake in EMIT.
Established in 2017, EMIT was founded by a team of PhD faculty members from Shanghai University of Finance and Economics ("SHUFE") in cooperation with SHUFE's Fintech Research Institute. EMIT provides financial modeling and analysis services to financial services companies and delivers a full range of value-added data mining and data analytics IT solutions to its clients that include intelligent investment systems, risk warning systems, and credit card decision engine core systems. EMIT's "financial data modeling platform + financial risk warning platform" business model provides its customers with comprehensive financial data services, such as financial data strategic planning, service mode design, and risk control.
Mr. Raymond Lin, Co-Founder and Chief Executive Officer of CLPS, commented, "Big data has become an important area of technological advancement in the financial industry. Our strategic investment in EMIT allows us to expand upon our expertise in providing the financial industry with applications of industry-leading technologies. EMIT's expertise in data modeling, deep learning and machine learning, and blockchain technology will benefit CLPS's future development by further expanding our client network. In addition, by offering applications of data mining, we will be able to extend our competitive edge in the banking, insurance and financial sectors."
Comments & Business Outlook
SHANGHAI, May 15, 2019 /PRNewswire / -- CLPS Incorporation (CLPS) ("CLPS" or "the Company"), a leading information technology consulting and solutions service provider focusing on the banking, insurance, and financial sectors in China and globally, today announced a strategic investment in Economic Modeling Information Technology Co., Ltd. ("EMIT"), a financial big data company. Upon closing of the transaction, CLPS will hold a 30% ownership stake in EMIT.
Established in 2017, EMIT was founded by a team of PhD faculty members from Shanghai University of Finance and Economics ("SHUFE") in cooperation with SHUFE's Fintech Research Institute. EMIT provides financial modeling and analysis services to financial services companies and delivers a full range of value-added data mining and data analytics IT solutions to its clients that include intelligent investment systems, risk warning systems, and credit card decision engine core systems. EMIT's "financial data modeling platform + financial risk warning platform" business model provides its customers with comprehensive financial data services, such as financial data strategic planning, service mode design, and risk control.
Mr. Raymond Lin, Co-Founder and Chief Executive Officer of CLPS, commented, "Big data has become an important area of technological advancement in the financial industry. Our strategic investment in EMIT allows us to expand upon our expertise in providing the financial industry with applications of industry-leading technologies. EMIT's expertise in data modeling, deep learning and machine learning, and blockchain technology will benefit CLPS's future development by further expanding our client network. In addition, by offering applications of data mining, we will be able to extend our competitive edge in the banking, insurance and financial sectors."
Comments & Business Outlook
SHANGHAI, Feb. 22, 2019 /PRNewswire / -- CLPS Incorporation (the "Company" or "CLPS") (CLPS), a leading information technology ("IT") consulting and solutions service provider focusing on the banking, insurance and financial sectors in China and globally, today announced its financial results for the six months ended December 31, 2018, or the first half of the Company's fiscal year 2019.
First Half of Fiscal 2019 Highlights (all results compared to the six months ended December 31, 2017)
Revenues increased by 38.7% to $30.8 million from $22.2 million.
"We also expanded our talent development capabilities as we launched CLPS Academy with the vision of establishing it as a Center of Excellence to fulfill the quality and professional IT training needs of our staff, business partners, and potential clients. Furthermore, we expect to open additional training centers overseas to meet employee demand globally. Our CLPS Research Institute remains dedicated to exploring the application of new and emerging technology such as big data, blockchain, distributed financial cloud applications, and robotic process automation, which we have been piloting internally. Our efforts were recently recognized by industry peers at the China Finance Summit in December, where we received the 2018 Fintech Brand Leadership Award."
"As we look to the remainder of this fiscal year and beyond, we expect to continue to make long-term investments to support our continued growth. We remain focused on expanding horizontally and vertically, growing our global footprint and market share, and continuing to support our talent and technology development. We intend to continue to drive forward our dual-engine growth strategy and to create long-term sustainable value for our shareholders," concluded Mr. Lin.
Comments & Business Outlook
SHANGHAI, Feb. 22, 2019 /PRNewswire / -- CLPS Incorporation (the "Company" or "CLPS") (Nasdaq: CLPS), a leading information technology ("IT") consulting and solutions service provider focusing on the banking, insurance and financial sectors in China and globally, today announced its financial results for the six months ended December 31, 2018, or the first half of the Company's fiscal year 2019.
First Half of Fiscal 2019 Highlights (all results compared to the six months ended December 31, 2017)
Revenues increased by 38.7% to $30.8 million from $22.2 million.
"We also expanded our talent development capabilities as we launched CLPS Academy with the vision of establishing it as a Center of Excellence to fulfill the quality and professional IT training needs of our staff, business partners, and potential clients. Furthermore, we expect to open additional training centers overseas to meet employee demand globally. Our CLPS Research Institute remains dedicated to exploring the application of new and emerging technology such as big data, blockchain, distributed financial cloud applications, and robotic process automation, which we have been piloting internally. Our efforts were recently recognized by industry peers at the China Finance Summit in December, where we received the 2018 Fintech Brand Leadership Award."
"As we look to the remainder of this fiscal year and beyond, we expect to continue to make long-term investments to support our continued growth. We remain focused on expanding horizontally and vertically, growing our global footprint and market share, and continuing to support our talent and technology development. We intend to continue to drive forward our dual-engine growth strategy and to create long-term sustainable value for our shareholders," concluded Mr. Lin.
Acquisition Activity
SHANGHAI, Feb. 5, 2019 /PRNewswire / -- CLPS Incorporation (the "Company" or "CLPS") (Nasdaq: CLPS), a leading information technology ("IT") consulting and solutions service provider focusing on the banking, insurance and financial sectors in China and globally, today announced that it has increased its ownership stake in Lihong Financial Information Services Co., Ltd. ("Lihong"), an online lending platform company in China.
CLPS made its first strategic investment in Lihong six months ago. Now the parties have agreed to increase the Company's ownership stake from 2.7% to 36.8%.
In recent years, the rapid growth of the consumer lending business has fueled China's consumer spending. According to China's most recent annual consumer loan index, Lihong has been one of the major players in the industry with approximately RMB 5 million in average daily loan volume and growing. With CLPS's keen understanding of the business potential of consumer lending and Lihong's business development capability, both parties believe that the increased investment will result in a mutually beneficial ongoing business relationship.
Founded in 2015 and headquartered in Shanghai, Lihong's online lending platform uses big data technology to enable individual, small- and mid-sized Chinese banks to provide consumer loans with insurance policies acting as debt collateral. Lihong receives a per-transaction fee, which is generally contingent upon the size of the loan transaction, as well a fixed maintenance fee.
In line with the CLPS's development goals, the increased investment will further diversify its revenue model into new business services, is anticipated to add to the Company's ability to generate additional operating income, and to further support the Company's "dual engine" strategy.
Comments & Business Outlook
SHANGHAI, Jan. 24, 2019 /PRNewswire / -- CLPS Incorporation (the "Company" or "CLPS") (Nasdaq: CLPS), a leading information technology ("IT") consulting and solutions service provider focusing on the banking, insurance and financial sectors in China and globally, today announced the success of an internal pilot test run of its Robotic Process Automation (RPA) technology.
Robotic Process Automation (RPA) has been one of the important research areas of CLPS Research Institute. In December 2018, CLPS ran a successful internal pilot test of RPA, aiming to automate the in-house human resources department's business processes, which cover more than 2,000 employees. Instead of manual work, the RPA mimics human activity that streamlines the internal management system and improve efficiency.
Through its in-depth RPA research effort, CLPS has been able to transform its routine human resources business processes from manual work to automated processes. This development optimizes the Company's operations and, as a result, will reduce operational costs and human error without compromising the legacy HR system. Most importantly, employees will be able to devote more time to higher-value tasks like data analysis, decision-making, and innovation.
The RPA pilot not only benefits the Company's ongoing various business processes and operating efficiency, it also lays a solid foundation for offering RPA technology solutions to clients in the banking, insurance, and financial industries. Going forward, CLPS plans to explore solutions that combine RPA with artificial intelligence and big data to facilitate digital transformation and to create greater business value to its clients.
Joint Venture
Hong Kong, Sept. 25, 2018 (GLOBE NEWSWIRE ) -- Technovative Group, Inc. (“Technovative” or the “Company”) (OTCPK: TEHG), a company engaged in delivering financial technology, Artificial Intelligence (AI), Blockchain and Distributed Ledger Technology (DLT) Solutions, Big Data Analytics and Cloud Computing to financial service institutions (“FSI”) in the Greater China Region (“GCR”), Southeast Asia Region and beyond, announced today, that it has entered into a strategic partnership with CLPS Incorporation (NASDAQ: CLPS), an information technology (“IT”) consulting and solutions service provider focused on delivering services to global institutions in banking, insurance and financial sectors, both in the PRC and globally.
Pursuant to the strategic partnership with CLPS Incorporation, Technovative is expected to supply and maintain, Artificial Intelligence, Big Data Analytics, Distributed Ledger Services (Blockchain) and Cloud Computing solutions and technologies, to the many global clients of CLPS Incorporation in the United States, European Union, Australia, Hong Kong, and the PRC.
Nicolas Kuan Liang Lin, Chief Executive Officer of Technovative Group stated, “Recognizing our mutual strengths in supplying technology solutions to meet the ever-expanding demands of the financial services sector, we have come to an agreement to work with the Management Team of CLPS Incorporation and provide comprehensive solutions to global banks, insurance giants, and other leading financial institutions.”
Raymond Ming Hui Lin, Chief Executive Officer of CLPS Incorporation, said, “The demand for practical and effective solutions for advance, faster, and more secure financial service technologies continues to challenge global institutions. Together with Technovative Group, we expect to remain leaders in the sector providing the best customized, scalable service solutions and unique products to our global clients.”
Comments & Business Outlook
SHANGHAI, Dec. 10, 2018 /PRNewswire / -- CLPS Incorporation (the "Company" or "CLPS") (CLPS), a leading information technology ("IT") consulting and solutions service provider focusing on the banking, insurance and financial sectors in China and globally, today announced that it has signed a memorandum of understanding ("MOU") with Ngee Ann Polytechnic ("NP") and Infogain Solutions Pte. Ltd. ("ISPL") to support NP's Financial Information Technology Education Program, which is offered by NP's School of InfoComm Technology ("NP-ICT").
"Through this MOU, we will deliver to Ngee Ann Polytechnic School of InfoComm Technology students, staff, alumni, and members of the public our CLPS Financial Information Technology Certification Course," commented Mr. Raymond Lin, Co-Founder and Chief Executive Officer of CLPS. "Upon completion of the course, students will earn a quality certification for training and assessment programs in the financial information technology industry. In return, we will be able to provide our clients with fintech consultants who not only hold diplomas from a leading polytechnic institution, but also possess effective job-ready training and skills."
NP is one of Singapore's leading institutions of higher learning funded by the Singapore Government. The polytechnic offers both business-related and technology-based diploma and advanced diploma programs.
"By aligning with a leading higher learning institution such as NP, we glocalize our successful virtual technology learning platforms and boost our brand. We also gain access to the PolyFintech100 alliance of top-tier polytechnic schools, which will support our expansion into the broader South East Asia region," Mr. Lin added.
Throughout the three-year term of the MOU, CLPS and its Singapore subsidiary, ISPL, will provide at least one internship per academic year to NP-ICT students enrolled in the course, including possible internships with CLPS and ISPL vendors and customers. In addition, CLPS and ISPL staff and partners will be guest speakers at NP-ICT and be available as industry mentors. The three parties will also explore the design and development of post-diploma certificate programs customized for CLPS and ISPL clients.
"At CLPS, we believe that talent is the key to success in our field. Our work with NP further demonstrates our commitment to developing the best talent in the industry, which ultimately translates into higher revenue and positive value for our shareholders. We look forward to the work to be completed under this MOU and are proud to add it to our portfolio of industry-leading talent development programs alongside CLPS Academy, our Talent Creation Program, and our Talent Development Program," concluded Mr. Lin.
Comments & Business Outlook
SHANGHAI, Nov. 19, 2018 /PRNewswire / -- CLPS Incorporation (CLPS) ("CLPS" or "the Company"), a leading information technology consulting and solutions service provider focusing on the banking, insurance, and financial sectors in China and globally, today announced that management will participate in the Benchmark Discovery Conference. The conference will be held on Thursday, November 29, 2018 at the Palmer House Hilton in Chicago, IL.
CLPS management will host one-on-one meetings with interested investors during the conference. For more information on the conference, or to schedule a one-on-one meeting, please contact a Benchmark representative.
Comments & Business Outlook
SHANGHAI, Nov. 13, 2018 /PRNewswire / -- CLPS Incorporation (the "Company" or "CLPS") (CLPS), a leading information technology ("IT") consulting and solutions service provider focusing on the banking, insurance and financial sectors in China and globally, today announced that the listing of its common shares has been transferred to the NASDAQ Global Market from the NASDAQ Capital Market. The Company's common shares will begin trading on the NASDAQ Global Market effective at the start of trading on Wednesday, November 14, 2018 under the same symbol "CLPS."
Mr. Raymond Lin, Co-Founder and Chief Executive Officer of CLPS, commented, "The transfer and uplisting of our common shares to the NASDAQ Global Market reflect the notable progress we have made on strengthening our financial performance and corporate governance."
Acquisition Activity
SHANGHAI, Aug. 27, 2018 /PRNewswire / -- CLPS Incorporation (CLPS) ("CLPS" or "the Company"), a leading information technology consulting and solutions service provider focusing on the banking, insurance, and financial sectors in China and globally, today announced that, through its subsidiary CLPS Technology (Singapore) Pte. Ltd., it has acquired 80% of the equity of InfoGain Solutions Pte. Ltd. ("InfoGain") for cash consideration of 576,000 Singapore dollars (or approximately USD 420,000).
Established in 2013, InfoGain is a consulting and IT services company headquartered in Singapore that specializes in staff augmentation services, managed IT services, software development, and business consulting. InfoGain's 70+ full time employees service various customers with a focus on banking and financial services.
Mr. Raymond Lin, Co-Founder and Chief Executive Officer of CLPS, commented, "We are excited to welcome InfoGain into the CLPS family. This first international acquisition is a key component of CLPS's global expansion strategy and mission to meet the IT, consulting, and scalable solutions demands of our global clients as they grow their businesses. We look forward to the many synergies that this acquisition brings to us, including the expansion of our customer base, local talent pool, and brand influence across Southeast Asia, including in Indonesia, Malaysia, the Philippines, Thailand, and India."
Ms. Tian van Acken, Chief Financial Officer of CLPS, added, "As a result of this acquisition, CLPS will take on an expanded regional client base, and we intend to complete the integration of InfoGain's full employee base by the end of the year. In the long term, as we expand further into InfoGain's geographies and implement our operational expertise, we anticipate decreased operating costs, improved margins, and increased profits."
Acquisition Activity
Shanghai, China, July 09, 2018 (GLOBE NEWSWIRE ) -- CLPS Incorporation (the "Company" or Nasdaq: CLPS), a leading information technology consulting and solutions service provider focusing on the banking, insurance and financial sectors in China and globally, today announced that it has reached an agreement with GloBird Energy Pty. Ltd. (“GloBird Energy”), a competitive cost energy provider in Australia, to establish a QR Code based billing service using the Q-Bill product to facilitate utility payments.
In an effort to provide an efficient cash free payment system, CLPS and SuperPay, a widely used cross border payment brand in Australia, jointly launched Q-Bill, a QR-Code based payment system. The Company, through its consolidated subsidiary, CLPS Technology (Australia) Pty. Ltd., signed a service agreement with GloBird Energy dated June 13, 2018, pursuant to which the Company will use Q-Bill to provide a QR Code billing for utility payments to GloBird Energy. Q-Bill will generate QR Codes for GloBird clients which can be scanned for mobile payments through widely adopted platforms, including Alipay and WeChat Pay. GloBird will be able to review and download the transaction data from a web portal.
Mr. Raymond Lin, Co-Founder and Chief Executive Officer of CLPS Incorporation, commented: “In recent years China has become a global leader implementing “cash-free” payment systems. CLPS brings its long history of expertise in payment systems to Australia as we offer an attractive alternative to cash payments with Q-Bill. This innovative product is attractive to GloBird Energy’s customers, as they can now leave their wallets behind and easily pay their utility bills with their phone, while GloBird Energy benefits from convenient access to transaction history.”
Mr. Lin concluded: “We are excited to see further adoption of Q-Bill as CLPS continues to offer solutions that are practical, efficient, and features cutting edge technology.”
Comments & Business Outlook
Third Quarter of 2018 Financial Results
Revenues increased by 63.8% to $12.88 million for the three months ended March 31, 2018, from $7.87 million for the same period of last year, mainly due to an increase in revenues from both IT consulting services and customized IT solution services.
Basic and diluted earnings per share were $0.03 for the three months ended March 31, 2018, compared with $0.02 for the same period of last year.
Mr. Raymond Lin, Chief Executive Officer of CLPS Incorporation, commented, “We are proud to report our financial results for the third quarter of 2018. Our revenue reached $12.88 million and our net income was $0.6 million for the third quarter, a year-over-year increase of 63.8% and 142.8%, respectively.”
Mr. Lin continued, “As we reflect on the financial results of the fiscal quarter before our successful initial public offering in May 2018, we are pleased with the notable revenue increase in both our IT consulting and customized solution services. We believe that we are positioned for success in the coming fiscal quarters given our solid strategic foundation, stable margins and growth in revenue and net income, and the additional boost that the net proceeds from our initial public offering offer us, as we consider new opportunities and expand existing business lines.”
Shareholder Letters
Shanghai, China, June 20, 2018 (GLOBE NEWSWIRE ) -- CLPS Incorporation (the "Company", “CLPS”, or Nasdaq: CLPS), a leading information technology (“IT”) consulting and solutions service provider focusing on the banking, insurance and financial sectors in China and globally, today released a letter to shareholders from the Chairman of the Company's Board of Directors, the full text of which is provided below. All CLPS shareholders are encouraged to read it.
Dear Shareholders,
So far, this year has been extraordinary for our Company. In May 2018, we completed our initial public offering and listing of our securities on the Nasdaq Stock Market in the United States, marking a new era for CLPS Incorporation as a US-listed public company. Following this success, CLPS will continue to serve its existing client base and partners in the financial sector. The Company will also work on enhancing its original financial technology service offerings to expand to international markets, serve international customers, and provide innovative solutions and products to support more world-class technology customers. The successful listing of the Company’s securities on Nasdaq is a new beginning for our Company. CLPS will continue to rely on its strength and corporate strategy to develop, improve, innovate and expand to strengthen the Company and enhance shareholder value.
The financial IT services market continues to grow and expand in China and globally. The demand for these services is fueled by China’s economic growth and the need for continuous upgrade and maintenance of financial information technology. While the demand for financial IT services has increased, the availability of human capital to supply these services remains constrained. Financial institutions require in-depth understanding and knowledge of business processes driven and supported by IT. At the same time, large-scale institutions require highly trained personnel on a cost competitive basis to alleviate shortages of qualified personnel. We strive to meet this demand through and by means of our platform, the CLPS College, which recruits, trains, develops and retains employees. We have collaborated with more than 100 universities to leverage technical curriculum and provide professional certifications and we have developed a deep pool of talent to support complex IT projects. Our training programs provide industry expertise with up to date financial domain knowledge, technical development and skills in advanced programming languages and solutions. More than 70% of our personnel are dedicated to serving foreign financial institution clients. We have broad geographic reach to support customers. Currently, we have over 1600 IT professional staff in 11 offices.
Going forward, we intend to pursue the following objectives:
Revenue growth - We intend to continue to grow revenue from both existing Chinese and global clients as well as target new Chinese and global clients, using our comprehensive service and solution offerings and deep domain expertise in the financial industry. Furthermore, we intend to continue to invest in a delivery platform that benefits both Chinese and global clients, capturing synergies between the Chinese and global markets to benefit both groups of clients. As part of these efforts, we intend to hire a U.S. based senior executive to head a wholly owned U.S. subsidiary to expand our business in North America before the end of the calendar year.
As stated above, our recently completed IPO and Nasdaq listing provide a firm foundation for the Company’s future growth and value creation. We intend to deliver and execute upon our business objectives.
On behalf of the Company’s management team, I wish to express my deep appreciation and gratitude for your support and confidence in the Company.
With sincerity and determination,
Xiao Feng Yang
Notable Share Transactions
Shanghai, China, June 15, 2018 (GLOBE NEWSWIRE) -- CLPS Incorporation (the "Company" or Nasdaq: CLPS), a leading information technology consulting and solutions service provider focusing on the banking, insurance and financial sectors in China and globally, today announced that The Benchmark Company, LLC, the representative of the underwriters in connection with and the book running manager of the Company’s U.S. firm commitment underwritten initial public offering (“IPO”), has exercised in full its over-allotment option to purchase an additional 300,000 common shares at the IPO price of $5.25 per share.
As a result, the Company has raised gross proceeds of approximately $1.58 million, in addition to the IPO gross proceeds of approximately $10.5 million, or combined gross proceeds in this IPO of approximately $12.08 million, before underwriting discounts and commissions and offering expenses. The closing of this over-allotment option exercise took place on June 8, 2018.
The Company’s shares trade on The Nasdaq Capital Market under the trading symbol “CLPS.”
The Benchmark Company, LLC acted as the book running manager and Cuttone & Co., LLC acted as co-manager for the offering.
Notable Share Transactions
Shanghai, China, May 29, 2018 (GLOBE NEWSWIRE ) -- CLPS Incorporation (the "Company" or Nasdaq: CLPS), a global leading information technology consulting and solutions service provider focusing on the banking, insurance and financial sectors in China and globally, today announced the closing of a U.S. underwritten initial public offering (“IPO”) of 2,000,000 common shares at a price to the public of $5.25 per share. The Company’s shares began trading on The Nasdaq Capital Market on May 24, 2018.
The Company received aggregate gross proceeds of approximately $10.5 million from this offering, before deducting underwriting discounts, commissions and other related expenses. In addition, the Company has granted the underwriters a 45-day option to purchase up to an additional 300,000 common shares at the public offering price, less underwriting discounts and commissions.
Proceeds from the offering will be used for global expansion, R&D, talent development and working capital and general corporate purposes.
The Benchmark Company, LLC acted as the book running manager and Cuttone & Co., LLC acted as co-manager for this offering.
Schiff Hardin LLP acted as US legal counsel to the Company; Hunter Taubman Fischer & Li LLC acted as legal counsel to the underwriters in connection with this offering.
A registration statement on Form F-1 relating to this offering was filed with the Securities and Exchange Commission (“SEC”) and was declared effective by the SEC as of May 23, 2018. The offering of these securities was made only by means of a prospectus, forming a part of the registration statement. The registration statement on Form F-1 and the final prospectus relating to this offering are available on the SEC’s website at www.sec.gov. Copies of the final prospectus relating to this offering may be obtained from The Benchmark Company, LLC by calling 212-312-6700 or prospectus@benchmarkcompany.com.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of the Company's securities, nor shall such securities be offered or sold in the United States absent registration or an applicable exemption from registration, nor shall there be any offer, solicitation or sale of any of the Company's securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction.
Notable Share Transactions
Shares to Commence Trading on May 24, 2018 on the NASDAQ Capital Market as "CLPS"
Shanghai, China, May 23, 2018 (GLOBE NEWSWIRE ) -- CLPS Incorporation (the "Company"), a global leading information technology (“IT”), consulting and solutions service provider focusing on the banking, insurance and financial sectors, today announced the pricing of a U.S. underwritten initial public offering ("IPO") of 2,000,000 common shares at a price to the public of $5.25 per share. The shares will begin trading on The Nasdaq Capital Market ("Nasdaq") on May 24, 2018 under the ticker symbol "CLPS."
The Company expects to receive aggregate gross proceeds of approximately $10.5 million from this offering, before deducting underwriting discounts, commissions and other related expenses. In addition, the Company has granted the underwriters a 45-day option to purchase up to an additional 300,000 common shares at the public offering price, less underwriting discounts and commissions. The offering is expected to close on or about May 29, 2018, subject to customary closing conditions.
Proceeds from the offering will be used for global expansion, R&D, talent development and working capital and general corporate purposes.
The Benchmark Company, LLC acted as the book running manager and Cuttone & Co., LLC acted as co-manager for the offering.
A registration statement on Form F-1 relating to this U.S. offering was filed with the Securities and Exchange Commission (“SEC”) and was declared effective by the SEC as of May 23, 2018. The offering of these securities was made only by means of a prospectus, forming a part of the registration statement. The registration statement on Form F-1 and the final prospectus relating to the U.S. offering are available on the SEC’s website at www.sec.gov. Copies of the final prospectus relating to the U.S. offering may be obtained from The Benchmark Company, LLC by calling 212-312-6700 or prospectus@benchmarkcompany.com.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of the Company's securities, nor shall such securities be offered or sold in the United States absent registration or an applicable exemption from registration, nor shall there be any offer, solicitation or sale of any of the Company's securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction.
