RR
Richtech Robotics INC
NASDAQ
10-Q: Richtech Robotics Reports Increased Revenue and Strategic Shift to Robotics-as-a-Service in Q1 2025
Sentiment:
Quarterly Report
14 February 2025 4:05 PM
Richtech Robotics saw a 14% increase in revenue in Q1 2025, driven by a strategic transition to a Robotics-as-a-Service (RaaS) model and expansion into new markets.
Worse than expected
The company reported a net loss of $3.548 million, which is worse than the net loss of $2.750 million in the same period last year.
Capital raise
The company issued an aggregate of 3,814,611 shares of Class B common stock and received aggregate proceeds of $5,149,724.85 in January 2025.
The company entered into a warrant exercise inducement offer letter with a holder of Existing Warrants exercisable for an aggregate of 2,699,797 shares of its Class B common stock, to exercise its Existing Warrants at the existing exercise price of $1.35 per share, generating gross proceeds of approximately $3,644,726 before deducting financial advisory fees.
In consideration for the immediate exercise of the Existing Warrants, the Company issued to such holder 2,699,797 new warrants (the Inducement Warrants) with an exercise price of $4.00 per share, which are immediately exercisable and valid for five years from issuance (the Armistice Warrant Inducement).
Summary
- Richtech Robotics Inc. reported its financial results for the first quarter of fiscal year 2025.
- The company is transitioning to a Robotics-as-a-Service (RaaS) model to generate recurring revenue.
- Revenue increased by 14% to $1.257 million, compared to $1.106 million in the same period last year.
- The increase in revenue is attributed to the expansion of service and leasing offerings under the RaaS model.
- Cost of revenue decreased significantly to $123 thousand from $497 thousand due to the RaaS model and favorable product costs.
- Gross profit increased by 86% to $1.134 million, with a gross margin of 90% compared to 55% in the previous year.
- Sales and marketing expenses decreased by 59% to $245 thousand due to the success of the referral program and cost-saving measures.
- General and administrative expenses increased by 198% to $4.303 million due to professional fees and payroll expenses as a public company.
- The company reported a net loss of $3.548 million, compared to a net loss of $2.750 million in the same period last year.
- Cash and cash equivalents increased to $19.8 million, primarily due to $9.2 million in proceeds from the issuance of new shares.
- The company opened its first One Kitchen store near Chicago and plans to open additional stores near Atlanta and San Diego in late spring 2025.
- The first Clouffee & Tea store opened in February 2025, marking the company's entry into the automated coffee and tea service market.
Sentiment
Score: 6
Explanation: The sentiment is neutral to slightly positive. While revenue increased and the company is making strategic shifts to improve profitability, the net loss and increased administrative expenses temper the overall outlook. The successful warrant exercises and new store openings are positive signs.
Highlights
- Richtech Robotics' revenue increased by 14% to $1.257 million in Q1 2025.
- The company is strategically transitioning to a Robotics-as-a-Service (RaaS) model.
- Cost of revenue decreased by 75% to $123 thousand due to the RaaS model and favorable product costs.
- Gross profit increased by 86% to $1.134 million, with a gross margin of 90%.
- Sales and marketing expenses decreased by 59% to $245 thousand.
- General and administrative expenses increased by 198% to $4.303 million.
- Cash and cash equivalents increased to $19.8 million due to proceeds from new share issuance.
- The company opened its first One Kitchen store and Clouffee & Tea store.
Positives
- Revenue increased by 14% to $1.257 million, indicating growth in the business.
- The strategic shift to the RaaS model is expected to generate more predictable and recurring revenue streams.
- Cost of revenue decreased significantly by 75% to $123 thousand, improving profitability.
- Gross profit increased by 86% to $1.134 million, with a high gross margin of 90%.
- Sales and marketing expenses decreased by 59% to $245 thousand, showing improved efficiency in these areas.
- Cash and cash equivalents increased to $19.8 million, providing financial flexibility for future investments.
- The opening of new One Kitchen and Clouffee & Tea stores demonstrates expansion into new markets and innovative concepts.
Negatives
- The company reported a net loss of $3.548 million, indicating ongoing challenges with profitability.
- General and administrative expenses increased significantly by 198% to $4.303 million, primarily due to costs associated with being a public company.
- Service/Rental revenue decreased significantly, from $799 thousand to $133 thousand, due to the shift to the RaaS model.
Risks
- Increased competition in the robotics market could lead to price competition and declining profit margins.
- A recession could lead to a decline in customer demand for robotic products and services.
- Supply chain disruptions from suppliers in China could delay the supply of products.
- Inflationary pressures could affect the cost of components and impact profit margins.
- Rising interest rates could increase borrowing costs and reduce consumer spending and business investment.
Future Outlook
The company anticipates continued growth in service and leasing revenue as it further expands its RaaS offerings and market reach. They are confident that this strategic initiative, combined with their commitment to innovation and customer service, will strengthen their position in the rapidly evolving robotics market.
Management Comments
- The company is strategically transitioning from a traditional product sales model to a RaaS model.
- The company remains dedicated to innovation and technological advancement.
- The company has significantly increased its investment in sales and marketing initiatives.
- The company is confident in the potential of the Clouffee & Tea brand and plans to open additional locations.
Industry Context
The company operates in the rapidly growing service robotics market, which is driven by the increasing need for automation in various industries to address labor shortages and improve efficiency. The shift to a RaaS model aligns with the broader industry trend towards subscription-based services, making advanced robotic solutions more accessible to a wider range of businesses. Competitors in this space include companies offering similar robotic solutions for delivery, cleaning, and food service applications.
Comparison to Industry Standards
- Comparing Richtech Robotics to other robotics companies is difficult without specific financial benchmarks for similar-sized firms in the service robotics sector.
- However, the 90% gross margin reported by Richtech is significantly higher than the average for hardware companies, suggesting a successful shift towards higher-margin service-based revenue.
- Companies like SoftBank Robotics and Boston Dynamics, while much larger, also focus on robotics solutions, but their financial details are not directly comparable due to their scale and diversified operations.
- The RaaS model is becoming increasingly common in the robotics industry, with companies like Knightscope and Cobalt Robotics offering security robots under similar subscription models.
- Richtech's expansion into the food and beverage sector with One Kitchen and Clouffee & Tea aligns with the growing trend of automation in restaurants and cafes, similar to initiatives by companies like Miso Robotics.
Stakeholder Impact
- Shareholders may be concerned about the net loss, but encouraged by the revenue growth and strategic shift to RaaS.
- Employees may benefit from the company's expansion and investment in new initiatives.
- Customers may benefit from the increased accessibility of robotic solutions through the RaaS model.
- Suppliers may see increased demand for components as the company expands its production.
- Creditors may be reassured by the increase in cash and cash equivalents.
Next Steps
- Continue expanding the RaaS model and service offerings.
- Open additional One Kitchen stores near Atlanta and San Diego in late spring 2025.
- Open additional Clouffee & Tea locations in the coming months.
- Implement cost optimization measures to manage general and administrative expenses.
- Explore new partnerships and collaborations to expand market reach.
Legal Proceedings
- The company entered into a Settlement Agreement with ACSS, pursuant to which the parties agreed to mutually release and all claims against each other arising out of that certain engagement letter, dated as of July 2, 2024, by and between the Company and ACSS.
- Pursuant to the Settlement Agreement, the Company agreed to pay to ACSS a sum of $430,000.
Key Dates
- July 19, 2016: Richtech Creative Displays, LLC was established in Nevada.
- June 22, 2022: Richtech Creative Displays, LLC was converted to Richtech Robotics Inc.
- November 21, 2023: Completion of Richtech Robotics' initial public offering.
- October 25, 2024: Received notice from Nasdaq regarding minimum bid price requirement.
- January 6, 2024: Received notice from Nasdaq that the Company has regained compliance with the minimum bid price requirement and the matter is closed.
- February 9, 2025: Opened first Clouffee & Tea franchise store in Las Vegas, Nevada.
- February 10, 2025: Entered into a warrant exercise inducement offer letter.
- February 13, 2025: Entered into a settlement and release agreement with AC Sunshine Securities LLC.
- February 14, 2025: Date of the quarterly report.
- Late Spring 2025: Anticipated opening of additional One Kitchen stores near Atlanta and San Diego.
- August 2027: Lease expiration for corporate headquarters in Las Vegas, Nevada.
Keywords
RR
Richtech Robotics INC
NASDAQ
Sector: Industrials
Filings with Classifications
Capital raise
3 March 2025 10:38 PM
Annual Report Amendment
- On September 3, 2024, the Company issued the following securities to certain institutional investors, pursuant to that certain Securities Purchase Agreement, dated as of August 29, 2024, and to certain retail purchasers (together with the institutional investors, the Investors), pursuant to the Companys prospectus, dated August 29, 2024, as filed with the SEC on August 30, 2024, in a public offering: (i) an aggregate of 13,242,963 shares of the Companys Class B common stock, (ii) pre-funded warrants to purchase up to 2,312,594 shares of Class B common stock (the Pre-Funded Warrants), and (iii) warrants to purchase up to 15,555,557 shares of Class B common stock (the Common Warrants), at a purchase price per share and accompanying Common Warrant of $1.35.
Worse than expected
3 March 2025 10:38 PM
Annual Report Amendment
- The company's total revenue decreased from $8,759 thousand in 2023 to $4,240 thousand in 2024.
- The company experienced a net loss of $8,140 thousand in 2024, compared to a net loss of $339 thousand in 2023.
Capital raise
14 February 2025 4:05 PM
Quarterly Report
- The company issued an aggregate of 3,814,611 shares of Class B common stock and received aggregate proceeds of $5,149,724.85 in January 2025.
- The company entered into a warrant exercise inducement offer letter with a holder of Existing Warrants exercisable for an aggregate of 2,699,797 shares of its Class B common stock, to exercise its Existing Warrants at the existing exercise price of $1.35 per share, generating gross proceeds of approximately $3,644,726 before deducting financial advisory fees.
- In consideration for the immediate exercise of the Existing Warrants, the Company issued to such holder 2,699,797 new warrants (the Inducement Warrants) with an exercise price of $4.00 per share, which are immediately exercisable and valid for five years from issuance (the Armistice Warrant Inducement).
Worse than expected
14 February 2025 4:05 PM
Quarterly Report
- The company reported a net loss of $3.548 million, which is worse than the net loss of $2.750 million in the same period last year.
Capital raise
10 February 2025 8:01 PM
Current Report
- Richtech Robotics is set to receive approximately $3.64 million in gross proceeds from the exercise of existing warrants.
- The company is issuing new warrants with an exercise price of $4.00 per share as an inducement for the warrant holder to exercise their existing warrants.
Worse than expected
14 January 2025 4:53 PM
Annual Results
- The company's revenue decreased significantly due to the transition to a RaaS model.
- The company's net loss increased substantially compared to the previous year.
Worse than expected
31 October 2024 4:30 PM
Current Report
- The company's stock price falling below $1.00 for 30 consecutive days is worse than expected and triggers a delisting notice from Nasdaq.
Capital raise
5 September 2024 4:58 PM
Public Offering Announcement
- The company completed a public offering of 13,242,963 shares of Class B common stock, pre-funded warrants for 2,312,594 shares, and warrants for 15,555,557 shares.
- The offering generated approximately $19.4 million in net proceeds for the company.
- The company is restricted from issuing common stock or equivalents for 90 days and from variable rate transactions for one year, with some exceptions.
Capital raise
29 August 2024 9:50 PM
Registration Statement
- Richtech Robotics is seeking to raise up to $1,087,502.30 through the sale of Class B common stock, pre-funded warrants, warrants, and placement agent warrants.
- The offering is being conducted to raise additional capital for the company.
- The Placement Agent is acting as the placement agent on behalf of the Company on a best efforts basis.
Capital raise
27 August 2024 9:24 AM
Registration Statement
- Richtech Robotics is conducting a public offering to sell up to 14,492,753 shares of Class B common stock and warrants to purchase an equal number of shares.
- The company is also offering pre-funded warrants as an alternative to shares for investors who might exceed beneficial ownership limits.
- The assumed combined offering price is $1.38 per share and accompanying warrant, based on the stock's price on August 23, 2024.
- The company aims to raise up to $20 million through this offering.
Worse than expected
14 August 2024 6:16 PM
Quarterly Report
- The company reported a net loss of $5.181 million for the nine months ended June 30, 2024, which is worse than the loss of $2.543 million for the same period in 2023.
- Product revenue decreased by 55% due to the transition to a RaaS model, which is worse than the previous period.
Capital raise
14 August 2024 6:16 PM
Quarterly Report
- The company entered into a Standby Equity Purchase Agreement with YA II PN, Ltd. for up to $50 million.
- The company received $3 million in pre-advances via convertible promissory notes, which were fully repaid in July 2024.
- The company issued 259,350 shares of Class B common stock as a commitment fee.
Worse than expected
14 May 2024 5:41 PM
Quarterly Report
- The company's net loss increased significantly compared to the same period last year, indicating worse than expected financial performance.
- Product revenue decreased by 59%, which is a significant drop and worse than expected.
Capital raise
14 May 2024 5:41 PM
Quarterly Report
- The company entered into a Standby Equity Purchase Agreement with YA II PN, Ltd., which could provide up to $50 million in funding over 24 months.
- The company issued three convertible promissory notes for $1 million each, with the first two in February and March 2024, and the third in April 2024.
- The company issued 259,350 shares of Class B common stock to the investor as a commitment fee.
Capital raise
22 April 2024 5:50 PM
Debt Financing Agreement
- The promissory note represents a $1 million capital raise for Richtech Robotics.
- The company may need to raise additional capital through share sales to meet its monthly payment obligations under the note.
- The conversion feature of the note could result in a future capital raise through the issuance of new shares to the investor.
Capital raise
29 March 2024 8:23 PM
S-1/A Filing
- Richtech Robotics has a standby equity purchase agreement with YA II PN, Ltd. for up to $50 million.
- The company may issue up to 12,983,208 shares of Class B common stock to the investor.
- The company can obtain pre-advances up to $3 million via convertible notes.
Better than expected
26 March 2024 8:43 PM
Annual Report Amendment
- The company's revenue increased by 45% year-over-year, indicating better than expected growth.
- The company's gross profit margin increased from 65% to 69%, indicating improved profitability.
- The company's net loss decreased from $507 thousand to $339 thousand, indicating improved financial performance.
Capital raise
22 March 2024 5:02 PM
Debt Financing Agreement
- The company has raised $1 million through a promissory note.
- The note can be converted into Class B common stock, potentially leading to further equity issuance.
- The company may need to issue shares to cover monthly payments if it does not have sufficient cash.
Capital raise
15 March 2024 6:13 PM
S-1 Filing
- The document details a potential capital raise of up to $50 million through a standby equity purchase agreement with YA II PN, Ltd.
- The agreement allows Richtech to sell shares of Class B common stock to the investor over a 24-month period.
- The company can also receive pre-advances of up to $3 million via convertible promissory notes.
Capital raise
15 March 2024 4:15 PM
Material Definitive Agreement Amendment
- The agreement involves a potential $50 million share purchase agreement with YA II PN, Ltd.
- The company has received a $1 million pre-advance and is expected to receive two additional $1 million pre-advances upon the satisfaction of certain conditions.
Capital raise
15 March 2024 4:05 PM
Financing Agreement Announcement
- Richtech Robotics has entered into a Standby Equity Purchase Agreement with YA II PN, Ltd. for up to $50 million.
- The company has also secured a pre-advance facility of up to $3 million.
- The company will issue shares to the investor as part of the agreement.
Capital raise
21 February 2024 4:08 PM
Standby Equity Purchase Agreement
- The document details a Standby Equity Purchase Agreement for up to $50 million.
- The agreement includes a pre-advance of up to $3 million, with the first $1 million already advanced.
- The company can issue shares to the investor over a 24-month period, subject to certain conditions and limitations.
Worse than expected
14 February 2024 5:01 PM
Quarterly Report
- The company's net loss increased significantly compared to the same period last year, indicating worse than expected financial performance.
Capital raise
11 January 2024 5:28 PM
Annual Report
- The company anticipates that it will need additional funding in connection with its continuing operations after twelve months.
- The company expects to finance its future cash needs through public or private equity or debt financings, third-party funding, and other arrangements.
- The company will continue seeking additional capital to expand its operations, advance its products, and scale its sales and marketing capabilities.
- The company will continue seeking additional financing sources to meet its working capital requirements, make investment in research and development and make capital expenditures needed to maintain and expand its business.
- If the company raises additional funds through further issuances of equity or convertible debt securities, its existing stockholders could suffer significant dilution.
Worse than expected
11 January 2024 5:28 PM
Annual Report
- The company reported a net loss of $339 thousand in 2023, compared to a net loss of $507 thousand in 2022, indicating that while losses have decreased, the company is still not profitable.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.