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NETCLASS TECHNOLOGY INC Announces Earnings Results for the First Half of Fiscal Year 2025

1. NTCL's revenue fell 3.0% to $3.7 million for H1 2025. 2. Gross profit decreased 47.7%, impacting profitability significantly. 3. Operating expenses surged 94.7% due to increased marketing and tech costs. 4. Net loss worsened by 137.2%, indicating financial strain. 5. Company plans to boost brand through marketing despite rising costs.

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Why Bearish?

The substantial increase in net loss and operating expenses poses a risk to investor confidence. Historical examples show that sustained financial losses have often led to downturns in stock prices, particularly if not mitigated by strong revenue growth.

How important is it?

The findings reveal significant operational challenges that could influence investor perceptions and decision-making, thus affecting NTCL's market performance.

Why Short Term?

The immediate financial concerns and losses are likely to affect the stock price short-term. In the past, similar financial downturns have resulted in quick market reactions, particularly when investor sentiment weighs heavily on profits.

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SINGAPORE and HONG KONG, Sept. 30, 2025 (GLOBE NEWSWIRE) -- NETCLASS Technology INC (Nasdaq: NTCL; the “Company” or “NetClass”), a leading B2B smart education IT solutions provider with offices in Shanghai, Hong Kong, Singapore and Tokyo, today announced its unaudited condensed consolidated financial results which have not been reviewed by an independent certified public accountant for the six months ended March 31, 2025.  Financial Highlights for the First Half of Fiscal Year 2025                    %  2025 2024 Change Change Revenues: 3,654,410   3,766,192   (111,782) (3.0)%Cost of revenues 3,349,020   3,182,743   166,277  5.2 %Gross profit 305,390   583,449   (278,059) (47.7)%Total operating expenses 5,488,125   2,818,410   2,669,715  94.7 %Loss from operations (5,182,735)  (2,234,961)  (2,947,774) 131.9 %Loss before income taxes (4,997,292)  (2,244,424)  (2,752,868) 122.7 %Net loss (4,897,965)  (2,065,011)  (2,832,954) 137.2 %Comprehensive loss attributable to shareholders$(4,840,185) $(2,028,488) $(2,811,697) 138.6 % Financial Results for the First Half of Fiscal Year 2025 Revenue For the six months ended March 31, 2025, our total revenue was approximately $3.7 million compared to approximately $3.8 million for the six months ended March 31, 2024. The Company’s total revenue decreased by approximately $0.1 million, or 3.0%. The overall decrease in total revenue was attributable to approximately $0.2 million decrease in revenue from subscription services offset by $0.1 million increase in revenue from application development services. Gross Profit Our gross profit decreased by approximately $0.3 million or 47.7% from approximately $0.6 million for the six months ended March 31, 2024 to approximately $0.3 million for the six months ended March 31, 2025.  Profit margin as a percent of overall revenue for the six months ended March 31, 2025 and 2024, was approximately 8.4% and 15.5%, respectively. The decrease in profit margin was due to the need to keep competitive price for customers despite cost increases. Operating Expenses Our operating expenses increased by approximately $2.7 million or 94.7% from approximately $2.8 million for the six months ended March 31, 2024, to approximately $5.5 million for the six months ended March 31, 2025. The increase in operating expenses is mainly due to an increase of marketing expenses, to promote the Company’s brands and an increase of costs in technology upgrading and strategy consulting and business consulting after the Company’s initial public offering (“IPO”). Net loss As a result of the foregoing, our net loss increased by approximately $2.8 million, or 137.2%, from approximately $2.1 million net loss for the six months ended March 31, 2024, to approximately $4.9 million net loss for the six months ended March 31, 2025.  The increase of net loss is mainly attributed to approximately $2.7 million increase in operating expenses and $0.3 million decrease of gross profit, offset by $0.2 million increase in net other income.   About NETCLASS TECHNOLOGY INC NETCLASS TECHNOLOGY INC is a leading B2B smart education specialist with offices in Shanghai, Hong Kong, Singapore, and Tokyo, providing innovative IT solutions to schools, training institutions, corporations, public agencies, and other organizations. Our services include SaaS subscription services and application software development, with solutions spanning teaching and campus management, online teaching, examinations, epidemic prevention, data storage, EDC (Education Credit) blockchain systems, and lecturer evaluation services. Our mission is to deliver reliable, high-quality products that drive sustainable growth for our customers. For more information, please visit the Company’s website: https://ir.netclasstech.com  Safe Harbor Statement  This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. Without limiting the generality of the foregoing, words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “estimate” or “continue” or the negative or other variations thereof or comparable terminology are intended to identify forward-looking statements. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements. These forward-looking statements are not guarantee of future performance and are subject to certain risks, uncertainties, and assumptions that are difficult to predict and many of which are beyond the control of Netclass. Actual results may differ from those projected in the forward-looking statements due to risks and uncertainties, as well as other risk factors that are included in the Company’s filings with the U.S. Securities and Exchange Commission. Although Netclass believes that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could prove inaccurate and, therefore, there can be no assurance that the results contemplated in forward-looking statements will be realized.  In light of the significant uncertainties inherent in the forward-looking information included herein, the inclusion of such information should not be regarded as a representation by Netclass or any other person that their objectives or plans will be achieved. Netclass does not undertake any obligation to revise the forward-looking statements contained herein to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. For investor and media inquiries, please contact:NETCLASS TECHNOLOGY INCInvestor RelationsEmail: ir@netclasstech.com Jackson LinLambert by LLYCPhone: +1 (646) 717-4593Email: jian.lin@llyc.global NETCLASS TECHNOLOGY INCUNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS(Expressed in U.S. dollar, except for the number of shares)  March 31, September 30, 2025 2024 unaudited auditedASSETS     CURRENT ASSETS:     Cash$1,805,463  $410,716 Restricted cash 504,058   4,564 Accounts receivable, net 4,654,356   5,298,006 Inventories, net 199,869   70,681 Advances to vendors 1,645,537   1,124,030 Prepayments and other current assets 441,534   40,990 Deferred issuance costs -   138,463 TOTAL CURRENT ASSETS 9,250,817   7,087,450       Property and equipment, net 32,764   39,707 Long-term prepaid expenses, net 437,500   - Intangible assets, net 465,137   - Operating lease right of use assets 1,153,272   13,122 Deferred tax assets, net 93,498   88,445 TOTAL NONCURRENT ASSETS 2,182,171   141,274 TOTAL ASSETS$11,432,988   $ 7,228,724       LIABILITIES AND EQUITY     CURRENT LIABILITIES:     Accounts payable$1,766,033  $2,860,703 Advance from customers 1,612,363   425,116 Accrued expenses and other liabilities 393,648   297,360 Due to related parties 157,114   228,951 Taxes payable 310,233   341,217 Operating lease liabilities, current portion 1,272   13,122 TOTAL CURRENT LIABILITIES 4,240,663   4,166,469       Long-term bank loan 372,070   - Operating lease liabilities, non-current portion -   - TOTAL NON-CURRENT LIABILITIES 372,070   -       TOTAL LIABILITIES 4,612,733    4,166,469       COMMITMENTS AND CONTINGENCIES -   -       SHAREHOLDERS’ EQUITY:     Ordinary shares, 200,000,000 shares authorized, consisting of 190,000,000 Class A ordinary shares of $0.00025 par value per share and 10,000,000 Class B ordinary shares of $0.00025 par value per share     Class A Ordinary shares, 15,830,000 and 13,760,000 ordinary shares issued and outstanding as of March 31, 2025 and September 30, 2024, respectively 3,958   3,440 Class B Ordinary shares, 2,000,000 ordinary shares issued and outstanding 500   500 Additional paid in capital 13,285,824   4,821,992 Statutory reserves 35,448   35,448 Accumulated deficit (6,528,896)  (1,704,065)Accumulated other comprehensive loss (201,488)  (186,134)TOTAL SHAREHOLDERS’ EQUITY 6,595,346   2,971,181 Non-controlling interest 224,909   91,074 TOTAL EQUITY 6,820,255   3,062,255       TOTAL LIABILITIES AND EQUITY$11,432,988   $ 7,228,724  NETCLASS TECHNOLOGY INCUNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(Expressed in U.S. dollar, except for the number of shares)  For the Six Months EndedMarch 31, 2025  2024     Revenues$3,654,410  $3,766,192 Cost of revenues (3,349,020)  (3,182,743)Gross profit 305,390   583,449       Operating expenses:     Selling and marketing (468,864)  (207,160)General and administrative (3,979,733)  (397,873)Research and development (1,039,528)  (2,213,377)Total operating expenses (5,488,125)  (2,818,410)Loss from operations (5,182,735)  (2,234,961)      Other (expense) income:     Interest income (expense), net (2,939)  210 Gain on acquisition of a subsidiary 201,197   - Other (expense) income, net (12,815)  (9,673)Total other (expense) income, net 185,443   (9,463)      Loss before income taxes (4,997,292)  (2,244,424)      Income tax benefit 99,327   179,413 Net loss (4,897,965)  (2,065,011)      Other comprehensive income     Foreign currency translation adjustments (15,354)  36,523 Comprehensive loss (4,913,319)  (2,028,488)Less: Comprehensive loss attributable to non-controlling interests 73,134   -  Comprehensive loss attributable to shareholders $(4,840,185) $(2,028,488)      Loss per share     Basic and diluted$(0.29) $(0.13)      Weighted average number of shares outstanding     Basic and diluted 16,927,527   15,760,000 

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