MicroAlgo Inc. (NASDAQ: MLGO) reported fiscal‑year 2025 results that included a net profit of RMB 127.56 million (USD 18.15 million) and operating revenue of RMB 422.05 million (USD 60.05 million). Earnings per share rose to RMB 14.87 (USD 2.12) from RMB 3.99 (USD 0.57) in 2024, a 272.7% increase. Gross profit reached RMB 108.82 million (USD 15.48 million), giving a gross margin of 25.8%. Operating profit climbed to RMB 22.38 million (USD 3.18 million), an 11.1% rise from the prior year. Total shareholders’ equity more than doubled to RMB 2,321.80 million (USD 330.33 million) as of December 31 2025, up 122.8% from RMB 1,041.93 million (USD 148.58 million) at the end of 2024.
The company’s revenue fell from RMB 541.5 million (USD 75.3 million) in 2024 to RMB 422.05 million (USD 60.05 million) in 2025, a decline driven by a shift in demand away from legacy product lines. Despite the revenue contraction, net profit surged 143.5% year‑on‑year, largely because operating expenses dropped 35.3% as the company completed major algorithm‑development projects and tightened cost controls. The combination of lower costs and a higher‑margin mix enabled the firm to expand its operating profit margin and deliver a strong earnings per share beat.
"2025 is the year when we achieved outstanding results. We have achieved strong growth in net profit while maintaining stable cash flow and ample liquidity. These achievements fully demonstrate the robustness of the company's core business and our continuous efforts in cost control and operational efficiency improvement," said CEO Min Shu.
MicroAlgo’s strategic pivot to central‑processing algorithm services has become the company’s sole revenue source, replacing its former focus on intelligent chips. The firm invested RMB 111.7 million (USD 15.5 million) in research and development in 2024, underscoring its commitment to innovation. The balance sheet remains solid, with cash and equivalents of RMB 1,035.9 million (USD 144.1 million) at year‑end 2024 and a low debt‑to‑equity ratio. However, the company has issued a large amount of equity to repay debt, resulting in a nearly 6,000% increase in shares outstanding and raising concerns about shareholder dilution.
The company’s short interest has surged, reaching over 1,700% of float in May 2025, reflecting significant market skepticism. Valuation metrics such as price‑to‑book and price‑to‑earnings ratios are low, but analysts caution that regulatory risks—including PRC approval processes, cybersecurity oversight, and potential delisting under U.S. laws—could impact future performance.
Overall, MicroAlgo’s fiscal‑year 2025 results demonstrate a sharp turnaround in profitability, driven by disciplined cost management and a high‑margin service focus. Investors should weigh the revenue decline and regulatory headwinds against the company’s strong liquidity and earnings growth when assessing its long‑term prospects.
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