- Net revenues grew 22.8% year over year to a record high of
US$59.2 million
- MaaS business grew 48.5% year over year to US$19.2 million, and accounted for over 30% of
total revenue
- Gross margin rose 270 basis points year over year to 66.6%
SHANGHAI, April 30,
2024 /PRNewswire/ -- Xiao-I Corporation ("Xiao-I" or
the "Company"), a leading cognitive artificial intelligence ("AI")
enterprise, today announced its unaudited financial results for the
full year ended December 31,
2023.
2023 Financial Highlights
- Net revenues increased 22.8% year over year to a record high of
US$59.2 million.
- Sale of cloud platform products increased 82.6% year over year
to US$47.0 million.
- Net revenue of MaaS business increased 48.5% year over year to
US$19.2 million, and MaaS business
accounted for over 30% of the total net revenue for the first
time.
- Gross profit increased 28.0% year over year to US$39.4 million.
- Gross margin was 66.6%, up 270 basis points year over
year.
Mr. Hui Yuan, Chairman and Chief
Executive Officer of Xiao-I, commented, "Our achievements are a
testament to our commitment. In 2023, we achieved a
significant 22.8% increase in net revenues, reaching an all-time
high of $59.2 million. These
results demonstrate our ability to succeed in a
competitive landscape, highlighting our achievement in generating
substantial revenue growth and solidifying our position in the
market. "
Speaking about the recent advancements, Mr. Hui Yuan stated, "The year 2023 marked a
significant milestone for us with the introduction of the 'Hua Zang
Universal Large Language Model'. This groundbreaking model
addresses prevalent challenges within the global AI landscape with
innovative solutions. Leveraging the robust framework of the Model,
we further expanded our reach with the unveiling of the
transformative Hua Zang Ecosystem in October
2023. The ecosystem is a comprehensive suite of services,
including development support, market outreach, and financial
investment, and emphasized its role in fostering a dynamic network
that connects global partners, customers, and developers." He also
emphasized the successful commercialization of Hua Zang LLM, "our
MaaS business grew 48.5% to $19.2
million, which is primarily attributed to Hua Zang LLM, and
it's really encouraging to see the business accounted for over 30%
of the total net revenue for the first time."
Furthermore, Mr. Hui Yuan shared
the progress in global expansion, stating, "We have also expanded
our presence internationally. This includes the establishment of
U.S. and United Arab Emirates
subsidiaries, demonstrating our commitment to reaching new markets
globally and connecting with a broader audience."
In terms of Xiao-I's significant growth in both MaaS and
non-Maas business during 2023, Mr. Hui
Yuan revealed, "Our MaaS business experienced a signficant
growth rate of 48.5%, reaching US$19.2
million, and the advancement is attributable to the success
of the Hua Zang LLM. Additionally, within the year, revenue from
our non-MaaS segment grew by 13.4%, amounting to US$40.0 million. This growth signifies the
effectiveness of Xiao-I's diversified business approach and its
ability to capture opportunities beyond the MaaS sector."
In addition, Mr. Hui Yuan
anticipates that Hua Zang LLM is poised to enhance its
commercialization efforts even further. "With a wealth of
experience in commercialization and a proven track record of
completing over 1,000 projects, we expect our B2B operations will
continue to exhibit a robust and consistent growth trajectory, with
around 20% of growth rate on a yearly basis. Meanwhile, we firmly
believe that the integration of AI models and consumer applications
has become increasingly seamless and influential, fostering
innovation and meeting consumer demand with greater effectiveness.
As a result, we have expanded our business into the B2C market to
capitalize on this opportunity."
Recent Developments and Strategic Highlights:
- Introduction of the Hua Zang Universal Large Language Model
Ecosystem: In October 2023,
Xiao-I introduced the Hua Zang Universal Large Language Model
Ecosystem (the "Hua Zang Ecosystem"), marking a significant
milestone in its journey. This groundbreaking ecosystem is crafted
to streamline the development, application, and operational aspects
of cognitive intelligence solutions, fostering a synergy that
enhances speed, cost-effectiveness, and overall efficiency. The
tailor-made solutions cater to specific business requirements,
empowering organizations to create unique and branded
conversational AI experiences.
- Secured Contract for AI Contact Center Project with Leading
Chinese Aviation Group: In June
2023, Xiao-I secured a contract for an intelligent contact
center project with a leading Chinese aviation group. This
partnership aims to enhance the aviation group's service provision
capabilities and drive digital transformation.
- Introduced Pioneering Hua Zang Generative AI Model: In
June 2023, Xiao-I launched Hua Zang,
its advanced large language model. The model, analogous to an
operating system, is built on Xiao-I's robust platform capabilities
and designed to empower various industries.
- Establishment of U.S. and United Arab Emirates Subsidiaries
as Part of Going Global Strategy: In May
2023, Xiao-I established a U.S. subsidiary, Xiao-I Plus
Inc., and in March 2024, Xiao-I
established its United Arab
Emirates subsidiary, Xiao-I Super Ltd. marking good progress
in its global expansion strategy.
- Launched IDP Solution for Future-Ready Enterprise Document
Management: In May 2023, Xiao-I
launched its state-of-the-art Intelligent Document Processing
("IDP") product. This innovative solution is delivered by a smart
and efficient platform that streamlines and automates the document
management process, empowering businesses towards an era of
intelligent operations.
- Recognition as Outstanding Supplier by China Merchants Bank
Credit Card Center: In May 2023,
Xiao-I announced that the Credit Card Center of China Merchants
Bank Co. recognized it as an outstanding supplier. This prestigious
acknowledgement follows the Bank's annual supplier assessment
evaluation for 2022, during which Xiao-I demonstrated exemplary
performance in business collaboration, product implementation, and
service quality.
2023 Financial Results
Net Revenues
Net revenues were US$59.2 million
for 2023, up 22.8% year over year from US$48.2 million for 2022. The increase was
primarily due to the increased sales of cloud platform products and
hardware products.
By Revenue
Type
|
|
2023
|
|
2022
|
|
% Change
YoY
|
Sale of cloud platform
products
|
|
47,007,556
|
|
25,742,135
|
|
83
|
Technology development
service
|
|
7,839,700
|
|
16,419,889
|
|
(52)
|
Sale of software
products
|
|
1,566,455
|
|
3,547,113
|
|
(56)
|
M&S
service
|
|
2,676,185
|
|
2,429,526
|
|
10
|
Sale of hardware
products
|
|
75,363
|
|
46,295
|
|
63
|
Total
|
|
$59,165,259
|
|
$48,184,958
|
|
23
|
|
|
|
|
|
|
|
|
Cost of Revenues
Cost of revenues was US$19.7
million for 2023, up 13.6% year over year from US$17.4 million for the same period of 2022. With
a smaller increase compared to net revenues, cost efficiency has
improved due to economies of scale.
Gross Profit
Gross profit was US$39.4 million
for 2023, representing an increase of 28.0% year over year from
US$30.8 million for 2022. Gross
margin was 66.6% for 2023, compared to 63.9% for the same period of
2022. The increase in gross margin was primarily attributed to the
significant increase in the proportion of revenues from sales of
cloud platform products with a higher profit margin of 74.8%.
Operating Expenses
Total operating expenses were US$61.3
million in 2023, representing an increase of 80.7% year over
year from US$33.9 million for the
same period of 2022. While the selling, general, and administrative
expenses demonstrated improved efficiency with larger business
scales, they couldn't offset the increase in research and
development expenses, which grew by 118.3% year over year.
Income (Loss) from Operations
Loss from operations was US$21.9
million for 2023, compared to a loss of US$3.1 million from operations for the same
period of 2022.
Total Other Loss
Total other loss was US$1.3
million for 2023, compared to a loss of US$2.2 million for the same period of 2022.
Net Income (Loss)
Net loss was US$27.0 million for
2023, compared to a net loss of US$6.0
million for the same period of 2022.
The financial statements for the year ended December 31, 2023, herein have not been audited
by the Company's independent registered accounting firm. The
financial statements for the twelve months ended December 31, 2023, to be disclosed in the
Company's Form 20-K may differ from the above-mentioned unaudited
financial statements.
Conference Call Information
The Company will conduct a corresponding conference call at
8:00 a.m. U.S. Eastern Time
(8:00 p.m. China Time) to discuss the
results.
What: Xiao-I Corporation Full Year 2023 (ended
December 31, 2023) Earnings
Conference Call
When: 8:00 a.m. U.S. Eastern
Time on Friday, April 30, 2024
Webcast: Xiao-I Corporation - Events (xiaoi.com)
To join the conference call via telephone, participants must use
the following link to complete an online registration process. Upon
registering, each participant will receive email instructions to
access the conference call, including dial-in information and a PIN
number allowing access to the conference call. This
pre-registration process is designed by the operator to reduce
delays due to operator congestion when accessing the live call.
Online Registration: Conference Registration
(vevent.com)
Participants who have not pre-registered may join the webcast by
accessing the link at Xiao-I Corporation - Events (xiaoi.com)
A live and archived webcast of the conference call will be
available on the Investors section of Xiao-I's website at Cognitive
Intelligence AI Solution Provider | Xiao-i (xiaoi.com)
About Xiao-I Corporation
Xiao-I Corporation is a leading artificial intelligence company
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 adaptable and have been successfully implemented across
numerous business scenarios. 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.
Forward-Looking Statements
Certain statements in this announcement are forward-looking
statements. These forward-looking statements involve known and
unknown risks and uncertainties and are based on the Company's
current expectations and projections about future events that the
Company believes may affect its financial condition, results of
operations, business strategy, and financial needs. Investors can
identify these forward-looking statements by words or phrases such
as "approximates," "assesses," "believes," "hopes," "expects,"
"anticipates," "estimates," "projects," "intends," "plans," "will,"
"would," "should," "could," "may" or similar expressions. The
Company undertakes no obligation to update or revise publicly any
forward-looking statements to reflect subsequent occurring events
or circumstances, or changes in its expectations, except as may be
required by law. Although the Company believes that the
expectations expressed in these forward-looking statements are
reasonable, it cannot assure you that such expectations will turn
out to be correct, and the Company cautions investors that actual
results may differ materially from the anticipated results and
encourages investors to review other factors that may affect its
future results in the Company's registration statement and other
filings with the SEC.
XIAO-I CORPORATION
|
CONSOLIDATED BALANCE
SHEETS
|
(In U.S. dollars, except for share and per share data,
or otherwise noted)
|
|
|
|
As of December
31,
|
|
|
|
2022
|
|
|
2023
|
|
Assets
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
1,026,245
|
|
|
$
|
1,564,542
|
|
Restricted
cash
|
|
|
-
|
|
|
|
20,676
|
|
Accounts receivable,
net
|
|
|
41,362,705
|
|
|
|
28,326,985
|
|
Amounts due from
related parties
|
|
|
346,517
|
|
|
|
-
|
|
Inventories
|
|
|
768,216
|
|
|
|
67,826
|
|
Contract
costs
|
|
|
2,012,309
|
|
|
|
1,691,293
|
|
Deferred offering
costs
|
|
|
1,330,902
|
|
|
|
-
|
|
Advance to
suppliers
|
|
|
1,115,672
|
|
|
|
1,149,642
|
|
Prepaid expenses and
other current assets, net
|
|
|
460,854
|
|
|
|
5,233,553
|
|
Total current
assets
|
|
|
48,423,420
|
|
|
|
38,054,517
|
|
|
|
|
|
|
|
|
|
|
Non-current
assets:
|
|
|
|
|
|
|
|
|
Property and
equipment, net
|
|
|
219,470
|
|
|
|
2,125,629
|
|
Intangible assets,
net
|
|
|
637,114
|
|
|
|
212,445
|
|
Long-term
investments
|
|
|
2,852,492
|
|
|
|
2,650,458
|
|
Right of use
assets
|
|
|
865,399
|
|
|
|
2,431,475
|
|
Deferred tax assets,
net
|
|
|
3,888,574
|
|
|
|
-
|
|
Prepaid expenses and
other non-current assets
|
|
|
3,697,675
|
|
|
|
7,000,357
|
|
Amount due from
related parties-non current
|
|
|
-
|
|
|
|
13,859,350
|
|
Total non-current
assets
|
|
|
12,160,724
|
|
|
|
28,279,714
|
|
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS
|
|
$
|
60,584,144
|
|
|
$
|
66,334,231
|
|
|
|
|
|
|
|
|
|
|
Commitments and
Contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Short-term
borrowings
|
|
$
|
18,784,459
|
|
|
$
|
26,760,940
|
|
Accounts
payable
|
|
|
9,180,532
|
|
|
|
13,674,339
|
|
Amount due to related
parties-current
|
|
|
896,431
|
|
|
|
704,947
|
|
Deferred
revenue
|
|
|
2,553,808
|
|
|
|
1,654,145
|
|
Convertible
loans
|
|
|
3,754,269
|
|
|
|
-
|
|
Accrued expenses and
other current liabilities
|
|
|
17,006,713
|
|
|
|
13,938,253
|
|
Lease liabilities,
current
|
|
|
435,462
|
|
|
|
929,755
|
|
Total current
liabilities
|
|
|
52,611,674
|
|
|
|
57,662,379
|
|
|
|
|
|
|
|
|
|
|
Non-current
liabilities:
|
|
|
|
|
|
|
|
|
Amount due to related
parties-non current
|
|
|
8,581,743
|
|
|
|
7,905,290
|
|
Accrued liabilities,
non-current
|
|
|
8,073,912
|
|
|
|
7,759,474
|
|
Lease liabilities,
non-current
|
|
|
300,974
|
|
|
|
1,473,950
|
|
Total non-current
liabilities
|
|
|
16,956,629
|
|
|
|
17,138,714
|
|
TOTAL
LIABILITIES
|
|
|
69,568,303
|
|
|
|
74,801,093
|
|
|
|
|
|
|
|
|
|
|
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,
2022 and 2023,
respectively; 22,115,592 shares and 24,015,592 shares
issued and outstanding as
of December 31, 2022 and December 31, 2023,
respectively)
|
|
$
|
1,106
|
|
|
$
|
1,201
|
|
Preferred shares (par
value of $0.00005 per share; nil and 3,700,000 preferred
shares authorized as of December 31, 2022 and 2023,
respectively; nil and
3,700,000 preferred shares issued and outstanding as
of December 31, 2022 and
2023, respectively)
|
|
|
-
|
|
|
|
185
|
|
Additional paid-in
capital
|
|
|
75,621,294
|
|
|
|
108,729,047
|
|
Statutory
reserve
|
|
|
237,486
|
|
|
|
237,486
|
|
Accumulated
deficit
|
|
|
(78,483,156)
|
|
|
|
(110,833,045)
|
|
Accumulated other
comprehensive loss
|
|
|
(3,262,666)
|
|
|
|
(2,998,562)
|
|
XIAO-I CORPORATION
shareholders' deficit
|
|
|
(5,885,936)
|
|
|
|
(4,863,688)
|
|
Non-controlling
interests
|
|
|
(3,098,223)
|
|
|
|
(3,603,174)
|
|
Total shareholders'
deficit
|
|
|
(8,984,159)
|
|
|
|
(8,466,862)
|
|
TOTAL LIABILITIES
AND SHAREHOLDERS' DEFICIT
|
|
$
|
60,584,144
|
|
|
$
|
66,334,231
|
|
XIAO-I CORPORATION
|
CONSOLIDATED STATEMENTS
OF OPERATIONS AND COMPREHENSIVE INCOME/(LOSS)
|
(In U.S. dollars, except for share and per share data,
or otherwise noted)
|
|
|
|
For the years
ended December 31,
|
|
|
|
2021
|
|
|
2022
|
|
|
2023
|
|
Sale of software
products
|
|
$
|
14,878,256
|
|
|
$
|
3,547,113
|
|
|
$
|
1,566,455
|
|
Sale of hardware
products
|
|
|
75,011
|
|
|
|
46,295
|
|
|
|
75,363
|
|
Technology development
service
|
|
|
9,246,992
|
|
|
|
16,419,889
|
|
|
|
7,839,700
|
|
M&S
service
|
|
|
2,772,795
|
|
|
|
2,429,526
|
|
|
|
2,676,185
|
|
Sale of cloud platform
products
|
|
|
5,550,959
|
|
|
|
25,742,135
|
|
|
|
47,007,556
|
|
Net revenues
(including sales to related parties of $286,875, nil
and nil for the years ended December 31, 2021, 2022
and 2023,
respectively)
|
|
|
32,524,013
|
|
|
|
48,184,958
|
|
|
|
59,165,259
|
|
Cost of sale of
software products
|
|
|
(771,293)
|
|
|
|
(888,220)
|
|
|
|
(834,570)
|
|
Cost of sale of
hardware products
|
|
|
(29,970)
|
|
|
|
(25,141)
|
|
|
|
(51,201)
|
|
Cost of technology
development service
|
|
|
(4,390,825)
|
|
|
|
(12,194,044)
|
|
|
|
(6,059,330)
|
|
Cost of M&S
service
|
|
|
(1,862,483)
|
|
|
|
(1,255,973)
|
|
|
|
(971,417)
|
|
Cost of sale of cloud
platform products
|
|
|
(3,831,160)
|
|
|
|
(3,015,766)
|
|
|
|
(11,825,171)
|
|
Cost of
revenues
|
|
|
(10,885,731)
|
|
|
|
(17,379,144)
|
|
|
|
(19,741,689)
|
|
Gross
profit
|
|
|
21,638,282
|
|
|
|
30,805,814
|
|
|
|
39,423,570
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling
expenses
|
|
|
(4,620,113)
|
|
|
|
(3,911,818)
|
|
|
|
(4,550,997)
|
|
General and
administrative expenses
|
|
|
(6,657,251)
|
|
|
|
(6,028,637)
|
|
|
|
(4,407,215)
|
|
Research and
development expenses
|
|
|
(5,363,909)
|
|
|
|
(24,001,138)
|
|
|
|
(52,387,540)
|
|
Total operating
expenses
|
|
|
(16,641,273)
|
|
|
|
(33,941,593)
|
|
|
|
(61,345,752)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income/(Loss) from
operations
|
|
|
4,997,009
|
|
|
|
(3,135,779)
|
|
|
|
(21,922,182)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
income/(loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment
(losses)/income
|
|
|
(156,630)
|
|
|
|
(143,181)
|
|
|
|
75,542
|
|
Interest
expenses, net
|
|
|
(1,866,831)
|
|
|
|
(2,440,815)
|
|
|
|
(2,323,341)
|
|
Foreign currency
exchange gain/(loss)
|
|
|
11,252
|
|
|
|
(68,902)
|
|
|
|
2,789
|
|
Other income,
net
|
|
|
932,557
|
|
|
|
444,018
|
|
|
|
949,116
|
|
Total other
loss
|
|
|
(1,079,652)
|
|
|
|
(2,208,880)
|
|
|
|
(1,295,894)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income/(Loss) before
income tax expense
|
|
|
3,917,357
|
|
|
|
(5,344,659)
|
|
|
|
(23,218,076)
|
|
Income tax
expense
|
|
|
(552,355)
|
|
|
|
(660,655)
|
|
|
|
(3,787,692)
|
|
Net
income/(loss)
|
|
$
|
3,365,002
|
|
|
$
|
(6,005,314)
|
|
|
$
|
(27,005,768)
|
|
Net loss attributable
to non-controlling interests
|
|
|
(312,811)
|
|
|
|
(106,779)
|
|
|
|
(543,961)
|
|
Net income/(loss)
attributable to XIAO-I CORPORATION
shareholders
|
|
|
3,677,813
|
|
|
|
(5,898,535)
|
|
|
|
(26,461,807)
|
|
Other comprehensive
(loss)/income
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation change, net of nil income taxes
|
|
|
(117,291)
|
|
|
|
403,816
|
|
|
|
303,114
|
|
Total other
comprehensive (loss)/income
|
|
|
(117,291)
|
|
|
|
403,816
|
|
|
|
303,114
|
|
Total comprehensive
income/(loss)
|
|
$
|
3,247,711
|
|
|
$
|
(5,601,498)
|
|
|
$
|
(26,702,654)
|
|
Total comprehensive
(loss)/income attributable to non-controlling
interests
|
|
|
(370,503)
|
|
|
|
95,280
|
|
|
|
(504,951)
|
|
Total comprehensive
income/(loss) attributable to XIAO-I
CORPORATION shareholders
|
|
|
3,618,214
|
|
|
|
(5,696,778)
|
|
|
|
(26,197,703)
|
|
Earnings/(Loss) per
ordinary share attributable to XIAO-I
CORPORATION shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
0.17
|
|
|
|
(0.27)
|
|
|
|
(1.12)
|
|
Diluted
|
|
|
0.16
|
|
|
|
(0.27)
|
|
|
|
(1.12)
|
|
Weighted average
number of ordinary shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
22,115,592
|
|
|
|
22,115,592
|
|
|
|
23,646,003
|
|
Diluted
|
|
|
22,362,552
|
|
|
|
22,115,592
|
|
|
|
23,646,003
|
|
View original
content:https://www.prnewswire.com/news-releases/xiao-i-corporation-reports-unaudited-full-year-2023-financial-results-302131629.html
SOURCE Xiao-I Corporation