HeartCore Enterprises, Inc. (HTCR)·Q4 2024 Earnings Summary

Executive Summary

• Q4 2024 was a comedown from a record Q3, with revenue at $3.44M and EBITDA deeply negative; quarterly volatility is tied to timing of Go IPO client listings and FY 2024 impairments primarily at Sigmaways . Values retrieved from S&P Global.*
• Versus S&P Global consensus, Q4 revenue missed by ~27% (actual $3.44M vs $4.73M) and EPS missed (actual -$0.44 vs $0.00), while Q3 had clean beats on both revenue and EPS. Values retrieved from S&P Global.*
• Management emphasized one-time impairment ($7.2M) and corrective actions (separating Sigmaways liabilities, tightening vendor exposure), with confidence in adjusted EBITDA and a strategy focused on SaaS transition, multi-year licensing, and selective M&A to deepen wallet share .
• Near-term catalysts: additional Go IPO deal flow across APAC (South Korea seminar now targeted for September 2025), SaaS expansion and customer success initiatives (BizDev team), and high retention in Japan’s CMS market .

What Went Well and What Went Wrong

What Went Well

• Record Q3 execution: revenues $17.9M and diluted EPS $0.53, driven by warrants and ordinary shares from two Go IPO client listings, demonstrating the monetization engine of the consulting arm .
• Strategic software pivots: shift to multi-year licenses and expansion of CMS into a SaaS model to build recurring, predictable revenue streams; management projects outsized software growth from these changes .
• Customer success focus: formal BizDev team, “Health Check” program, and cross-selling of WAF/security and related services to expand wallet share and retention within 1,000+ enterprise clients .

What Went Wrong

• FY 2024 impairments: $3.88M intangible and $3.28M goodwill mainly related to Sigmaways (total ~$7.2M), depressing reported results despite management’s one-time characterization .
• Q4 reset vs Q3 peak: quarterly revenue fell to $3.44M with EBITDA and EPS turning negative, reflecting timing dependency of Go IPO listings and lack of similar warrant/ordinary share realizations in Q4. Values retrieved from S&P Global.*
• Operational headwinds earlier in the year: yen depreciation, maintenance contract step-down vs 2023, Sigmaways losses, and a returned Go IPO fee that weighed on 1H results .

Financial Results

Quarterly Performance vs Prior Periods and vs Estimates

Values retrieved from S&P Global.*

Actual vs S&P Global Consensus

• Number of estimates: Revenue (Q2: 1, Q3: 1, Q4: 1); EPS (Q2: 1, Q3: 1, Q4: 1). Values retrieved from S&P Global.*

Bold significant results:

• Q3 revenue/EPS: Beat vs consensus; execution underpinned by two Go IPO listings .
• Q4 revenue/EPS: Miss vs consensus; quarter lacked comparable Go IPO monetization and reflects timing sensitivity. Values retrieved from S&P Global.*

Segment Breakdown (available disclosure)

Additional KPIs and Disclosures

• Customer retention: management cites 90%+ retention as a core strength of CMS .
• Dividends: second $0.02 dividend authorized in Q3; distributions totaled $834,566 in FY 2024 cash flows .
• Cash: $2.1M at Dec 31, 2024; $1.2M at Sep 30, 2024 .

Guidance Changes

No formal numerical revenue, margin, tax rate, or OpEx guidance ranges were provided; management emphasized strategic initiatives and qualitative growth targets .

Earnings Call Themes & Trends

Note: No Q4 2024 earnings call transcript was available in our document set; themes reflect management disclosures across Q2–Q4 press releases and 8-Ks. We searched for earnings-call-transcript documents for HTCR across Q4/Q3/Q2 and found none.

Management Commentary

• “We made several strategic advancements… aimed at driving sustainable and predictable revenue growth… With a well-established customer base… our acquisition strategy will primarily focus on deepening wallet share… and leveraging effective use of AI… target launch aimed for the first half of 2026” — CEO Sumitaka Kanno .
• “We recorded approximately $7.2 million in impairment… primarily related to Sigmaways… classified as one-time… implemented corrective measures, including separating Sigmaways’ liabilities and suspending transactions with small venture companies… adjusted EBITDA totaled $7.3 million for 2024” .
• “The third quarter saw two new Go IPO clients successfully listed on the Nasdaq… warrants and ordinary shares… contributed to our highest financial results… we anticipate closing additional deals…” .
• “We transitioned towards offering multi-year software licensing agreements… added a SaaS delivery model… intended to create more stable, durable, and long-term revenue…” .
• “By prioritizing investments in customer experience… Health Check… and leveraging cross-selling opportunities… the Company projects 12% sales growth in FY 2025 from existing CMS customers” .
• “Plans to expand Go IPO consulting services into South Korea… partnership with regional venture fund… hosting seminar (rescheduled to September 2025)” .

Q&A Highlights

• No Q4 2024 earnings call transcript was found; therefore, Q&A themes and live guidance clarifications were unavailable in our document set. We searched for HTCR earnings-call-transcript documents within Q4 2024, Q3 2024, and Q2 2024 and found none.

Estimates Context

• Coverage is sparse (1 estimate per metric for each quarter). Q4 revenue missed consensus by ~27% and EPS missed (actual -$0.44 vs $0.00); Q3 achieved modest revenue beat (+1.5%) and EPS beat (+$0.10), while Q2 missed on both. Values retrieved from S&P Global.*
• Given quarterly variability driven by Go IPO listing timing, sell-side estimates may need to incorporate deal-flow cadence and non-linear recognition of warrants/ordinary shares.

Key Takeaways for Investors

• HeartCore’s quarter-to-quarter results are highly sensitive to the timing of Go IPO client listings; Q3 was an outlier peak, while Q4 reverted to the base level without comparable monetization. Values retrieved from S&P Global.*
• Strategic software initiatives (SaaS + multi-year licenses + BizDev) should improve predictability and margins; monitor conversion of these programs into recurring revenue growth through FY 2025 .
• One-time impairments tied to Sigmaways (~$7.2M) cloud FY optics but management has taken corrective actions and points to adjusted EBITDA as a more representative metric .
• APAC expansion of the Go IPO business (South Korea) and an active acquisition pipeline focused on synergistic tech and AI could unlock incremental growth and cross-sell opportunities .
• Dividend continuity and regained Nasdaq compliance add shareholder-friendly and listing stability dimensions; track sustainability amid cash flow variability .
• Near-term trading lens: stock likely reacts to visibility on the next tranche of Go IPO deals and proof points on SaaS/recurring revenue traction; Q4 misses underscore the importance of pipeline disclosures and deal timing. Values retrieved from S&P Global.*
• Medium-term thesis: balancing episodic Go IPO monetization with durable software ARR is key; watch execution on international expansion and M&A synergies to deepen wallet share and reduce earnings volatility .

Citations:

• FY 2024 results and impairment/actions:
• Q3 results and drivers:
• SaaS/multi-year & customer success initiatives:
• APAC/South Korea expansion and schedule change:
• Nasdaq compliance:
• Dividend actions and cash flow:

S&P Global disclaimer:

• All values marked with an asterisk (*) are retrieved from S&P Global (Capital IQ) consensus and fundamentals data.