Linkage Global Inc Reports First Half 2024 Financial Metrics

Linkage Global Inc's Financial Performance Overview

In a significant update, Linkage Global Inc, known for its robust cross-border e-commerce services, has published its unaudited financial results for the first half of 2024. The company, headquartered in Japan, faced considerable challenges during this period but has outlined strategies to navigate the evolving market dynamics.

Key Financial Highlights

As reported, Linkage Global's net revenues totalled approximately USD4.80 million for the six months ending March 31, 2024, marking a sharp decline from USD9.03 million during the same period in 2023. Such a decrease underlines the turbulent environment in which the company operates.

The gross profit witnessed a significant drop of 64%, declining from USD1.95 million to USD0.71 million in this timeframe, highlighting a gross margin decrease from 21.55% to 14.77%. Dissatisfactory operational outcomes reflected a loss of USD0.91 million compared to a profit of USD0.87 million recorded in the first half of 2023.

Challenges Affecting Revenues

Several factors have contributed to this disappointing financial outcome. Primarily, revenues from cross-border sales plunged by approximately 34%, attributed to stricter customs inspections by Chinese authorities and the depreciation of the yen against the dollar. The average exchange rate swung from $1=¥136.8638 in 2023 to $1=¥148.1735 in 2024, signaling an 8.26% shift that undoubtedly impacted performance.

Operational Insights

Cross-border sales from subsidiaries, particularly EXTEND CO., LTD, accounted for around USD3.50 million, a drop of 36% year-over-year. Additionally, integrated e-commerce service revenues reduced significantly by 78%, resulting from decreased demand for digital marketing services. The stringent policies imposed by Google also contributed to this decline, moving towards a model favoring new merchants while disincentivizing existing ones.

Strategic Adjustments

In light of these challenges, Linkage Global has made pivotal strategic decisions, including entering an agreement with Huntmobi Holdings Limited to enhance their digital advertising efforts across platforms such as TikTok and Facebook. This initiative reflects the company's commitment to adapt to changing market conditions while nurturing the growth of their e-commerce-related services.

Financial Outlook and Future Plans

The company's operating expenses surged to USD1.62 million, an increase of 50%. This rise predominantly stemmed from heightened general and administrative costs linked to professional services since the initial public offering and bad debt allowances. Conversely, several expense categories, including selling and marketing costs, saw a reduction as a response to declining revenues.

Linkage Global acknowledges the hurdles presented by recent market shifts and positions itself for recovery. By focusing on strengthening its service offerings and optimizing operational efficiencies, the firm aims to regain its footing in 2024.

About Linkage Global Inc

Founded in the Cayman Islands, Linkage Global Inc operates through subsidiaries in Japan, Hong Kong, and mainland China, offering integrated cross-border e-commerce services. The company continues to focus on delivering value through its comprehensive service system, comprising of cross-border sales and integrated e-commerce services.

For additional details, Linkage Global welcomes inquiries through their Investor Relations team.

Frequently Asked Questions

What are the main reasons for Linkage Global Inc's revenue decline?

The revenue decline is primarily due to stricter customs inspections in China and unfavorable currency exchange rates that impacted cross-border sales.

How did Linkage Global Inc adapt to the changes in Google’s marketing policies?

The company entered into a partnership with Huntmobi Holdings Limited for digital advertising and adjusted its service offerings to remain competitive.

What is the current financial outlook for Linkage Global Inc?

Linkage Global aims to recover its performance through operational efficiencies and strategic service enhancements in 2024.

How has the company's operating expense changed?

Operating expenses increased to USD1.62 million due to rising administrative costs and the impact of professional services related to their IPO.

What is the significance of Linkage Global Inc's gross profit reduction?

The reduction in gross profit reflects challenges faced in integrated e-commerce services, affecting overall profitability and gross margins.

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