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Xiao-I Corporation Announces Strong 2024 Results: Revenue Up 19% with Path to Profitability in 2025

1. AIXI's revenue grew 18.8% to $70.31 million in 2024. 2. Gross profit margin increased to 68.3%, indicating operational efficiency. 3. R&D expenses reduced by 33.8%, enhancing cost management. 4. Net loss narrowed significantly, positioning AIXI for future profitability. 5. Legal proceedings against Apple are unresolved, but financial health shows strong signs.

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Why Bullish?

Strong revenue growth and improving margins indicate a positive outlook for AIXI. Historical instances show that consistent profitability signals can elevate stock prices significantly.

How important is it?

The detailed financial improvements and future profitability plans play a crucial role in investor sentiment and stock performance.

Why Long Term?

Future profitability in 2025 suggests sustained investor interest. Companies that demonstrate revenue growth and reduced losses typically see long-term gains.

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Profitability Roadmap: Efficiency and Discipline , /PRNewswire/ -- Xiao-I Corporation ("Xiao-I" or the "Company") (NASDAQ: AIXI), a global leader in artificial intelligence solutions, today announced selected audited financial results for the year 2024, highlighting approximately $70.31 million in revenue, representing a 18.8% year-over-year growth, a gross profit margin (GPM) improvement of 2 percentage points, and a significant narrowing of net loss to $14.55 million. These results position the Company to achieve profitability in 2025. Key Financial Highlights  - Revenue Growth: revenue for 2024 reached approximately $70.31 million, up 18.8% year-over-year, driven by surging demand for its Hua Zang LLM - powered Model-as-a-Service (MaaS) solutions and breakthrough AI hardware sales.  - Gross Profit: Gross profit increased from $39,423,570 in 2023 to $48,049,547 in 2024, representing a growth rate of approximately 21.9%. - Margin Expansion: Gross profit margin improved to 68.3%, compared to 66.6% in 2023, reflecting operational leverage from MaaS commercialization and cost-optimized deployment.  - R&D Expenses: Research and development expenses totaled $34.66 million, down from $52.39 million in 2023. The 33.8% reduction reflects improved efficiency and the productization of core technologies. - Net Loss Reduction: Net loss narrowed significantly to $14.55 million in 2024, down 46.1% from $27.01 million in 2023, underscoring disciplined cost management and revenue scalability.  Material Unfinished Matters During the fiscal year 2024, Xiao-I Corporation pursued legal proceedings against Apple Inc. regarding alleged patent infringement. Key developments in the case include: July 31, 2024: The trial phase of the lawsuit concluded. September 24, 2024: The Shanghai High People's Court held a hearing session, attended by legal representatives from both parties. November 1, 2024: The Shanghai High People's Court held a second hearing session. As of the date of this release, all legal processes have been completed, with all parties awaiting the court's final ruling. Management Comment "2024 marks our evolution into a mature AI-driven growth company, powered by the Hua Zang LLM foundation. Going forward, while advancing profitability through hardware innovations like AI Glasses and tAIkbox, we confront material risks requiring vigilant management. Geopolitical fragmentation—particularly US-China technology decoupling—impacts hardware procurement cycles and cross-border service deployments. Also, multi-tier supply chain resilience remains critical for AI hardware scaling, with regional conflicts posing potential component shortages. With 90% domestic operational anchoring, MaaS model's tariff-agnostic nature provides partial insulation, while AI-driven G&A optimization below 15% of revenue enhances risk absorption capacity. Management remains committed to disciplined execution across these vectors to achieve 2025 profitability targets."  About Xiao-I Corporation Xiao-I Corporation is a leading cognitive intelligence enterprise in China that offers a diverse range of business solutions and services in artificial intelligence, covering natural language processing, voice and image recognition, machine learning, and affective computing. Since its inception in 2001, the Company has developed an extensive portfolio of cognitive intelligence technologies that are highly suitable and have been applied to a wide variety of business cases. Xiao-I powers its cognitive intelligence products and services with its cutting-edge, proprietary AI technologies to enable and promote industrial digitization, intelligent upgrading, and transformation. For more information, please visit: www.xiaoi.com. Forward-Looking Statements This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. When the Company uses words such as "may," "will," "intend," "should," "believe," "expect," "anticipate," "project," "estimate" or similar expressions that do not relate solely to historical matters, it is making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause the actual results to differ materially from the Company's expectations discussed in the forward-looking statements. These statements are subject to uncertainties and risks including, but not limited to, the following: the Company's ability to achieve its goals and strategies, the Company's future business development and plans for future business development, including its financial conditions and results of operations, product and service demand and acceptance, reputation and brand, the impact of competition and pricing, changes in technology, government regulations, fluctuations in general economic and business conditions in China, and assumptions underlying or related to any of the foregoing and other risks contained in reports filed by the Company with the U.S. Securities and Exchange Commission ("SEC"). For these reasons, among others, investors are cautioned not to place undue reliance upon any forward-looking statements in this press release. Additional factors are discussed in the Company's filings with the SEC, including under the section entitled "Risk Factors" in its annual report on Form 20-F filed with the SEC on May 15, 2025, as well as its current reports on Form 6-K and other filings, all of which are available for review at www.sec.gov. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof. For investor and media inquiries, please contact:Ms. Berry XiaEmail: [email protected] XIAO-I CORPORATION CONSOLIDATED BALANCE SHEETS (In U.S. dollars, except for share and per share data, or otherwise noted) As of December 31, 2023 2024 Assets Current assets: Cash and cash equivalents $ 1,564,542 $ 846,593 Restricted cash 20,676 - Accounts receivable, net 28,326,985 55,543,017 Amounts due from related parties, current - 13,587,536 Inventories 67,826 14,362 Contract costs 1,691,293 2,502,678 Advance to suppliers 1,149,642 3,205,098 Prepaid expenses and other current assets, net 5,233,553 792,732 Total current assets 38,054,517 76,492,016 Non-current assets: Property and equipment, net 2,125,629 1,867,736 Intangible assets, net 212,445 143,370 Long-term investments 2,650,458 2,497,594 Right of use assets 2,431,475 833,030 Prepaid expenses and other non-current assets 7,000,357 3,677,728 Amount due from related parties, non-current 13,859,350 - Total non-current assets 28,279,714 9,019,458 TOTAL ASSETS $ 66,334,231 $ 85,511,474 Liabilities Current liabilities: Short-term borrowings $ 26,760,940 $ 32,879,865 Accounts payable 13,674,339 27,131,439 Amount due to related parties, current 704,947 217,068 Deferred revenue 1,654,145 2,385,228 Convertible loans - 216,756 Accrued expenses and other current liabilities 13,938,253 23,289,453 Lease liabilities, current 929,755 483,658 Total current liabilities 57,662,379 86,603,467 Non-current liabilities: Amount due to related parties, non-current 7,905,290 7,336,833 Accrued liabilities, non-current 7,759,474 7,043,185 Lease liabilities, non-current 1,473,950 295,962 Total non-current liabilities 17,138,714 14,675,980 TOTAL LIABILITIES 74,801,093 101,279,447 Commitments and Contingencies - - Shareholders' deficit Ordinary shares (par value of $0.00005 per share; 1,000,000,000 shares     and 1,000,000,000 shares authorized as of December 31, 2023 and    2024, respectively; 24,015,592 shares and 31,949,038 shares issued    and outstanding as of December 31, 2023 and 2024, respectively) $ 1,201 $ 1,598 Preferred shares (par value of $0.00005 per share; 3,700,000 preferred    shares authorized as of December 31, 2023 and 2024, respectively;    3,700,000 preferred shares issued and outstanding as of December    31, 2023 and 2024, respectively) 185 185   Additional paid-in capital 108,729,047 115,745,140   Statutory reserve 237,486 237,486   Accumulated deficit (110,833,045) (125,338,509)   Accumulated other comprehensive loss (2,998,562) (2,848,314)   XIAO-I CORPORATION shareholders' deficit (4,863,688) (12,202,414)   Non-controlling interests (3,603,174) (3,565,559) Total shareholders' deficit (8,466,862) (15,767,973) TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT $ 66,334,231 $ 85,511,474 XIAO-I CORPORATIONCONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(In U.S. dollars, except for share and per share data, or otherwise noted) For the years ended December 31, 2022 2023 2024 Sale of software products $ 3,547,113 $ 1,566,455 $ 1,516,169 Sale of hardware products 46,295 75,363 1,395,345 Technology development service 16,419,889 7,839,700 24,105,644 M&S service 2,429,526 2,676,185 2,419,901 Sale of cloud platform products 25,742,135 47,007,556 40,877,256 Net revenues 48,184,958 59,165,259 70,314,315 Cost of sale of software products (888,220) (834,570) (98,442) Cost of sale of hardware products (25,141) (51,201) (583,939) Cost of technology development service (12,194,044) (6,059,330) (10,444,827) Cost of M&S service (1,255,973) (971,417) (781,258) Cost of sale of cloud platform products (3,015,766) (11,825,171) (10,356,302) Cost of revenues (17,379,144) (19,741,689) (22,264,768) Gross profit 30,805,814 39,423,570 48,049,547 Operating expenses: Selling expenses (3,911,818) (4,550,997) (3,320,886) General and administrative expenses (6,028,637) (4,407,215) (22,940,916) Research and development expenses (24,001,138) (52,387,540) (34,658,779) Total operating expenses (33,941,593) (61,345,752) (60,920,581) Loss from operations (3,135,779) (21,922,182) (12,871,034) Other income/(expenses): Investment (loss)/income (143,181) 75,542 (81,618) Interest expenses, net (2,440,815) (2,323,341) (2,319,820) Foreign currency exchange (loss)/gain (68,902) 2,789 3,864 Other income, net 444,018 949,116 717,280 Total other expenses (2,208,880) (1,295,894) (1,680,294) Loss before income tax expense (5,344,659) (23,218,076) (14,551,328) Income tax expense (660,655) (3,787,692) - Net loss $ (6,005,314) $ (27,005,768) $ (14,551,328) Net loss attributable to non-controlling interests (106,779) (543,961) (45,864) Net loss attributable to XIAO-I CORPORATIONshareholders (5,898,535) (26,461,807) (14,505,464) Other comprehensive income Foreign currency translation change, net of nil income taxes 403,816 303,114 233,727 Total other comprehensive income 403,816 303,114 233,727 Total comprehensive loss $ (5,601,498) $ (26,702,654) $ (14,317,601) Total comprehensive income/(loss) attributable to non-    controlling interests 95,280 (504,951) 37,615 Total comprehensive loss attributable to XIAO-I     CORPORATION shareholders (5,696,778) (26,197,703) (14,355,216) Loss per ordinary share attributable to XIAO-I    CORPORATION shareholders     Basic (0.27) (1.12) (0.56)     Diluted (0.27) (1.12) (0.56) Weighted average number of ordinary sharesoutstanding Basic 22,115,592 23,646,003 25,760,207 Diluted 22,115,592 23,646,003 25,760,207 SOURCE Xiao I Corporation WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM? 440k+ Newsrooms & Influencers 9k+ Digital Media Outlets 270k+ Journalists Opted In

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