Ispire Technology — Fourth Quarter and Fiscal Year 2026 Earnings Summary

Financial Performance

• Q4 2026 revenue was $26.7 million, a 33% increase year-over-year and 43% sequentially compared to $20.1 million in Q4 2025.
• Full-year 2026 revenue was $96.0 million, a 24.7% decrease year-over-year from $127.5 million in fiscal 2025.
• Q4 2026 gross profit was $1.7 million with a 6.3% margin, compared to $2.5 million and 12.3% margin in Q4 2025; Q4 gross margin was impacted by inventory impairments.
• Full-year 2026 gross profit was $12.3 million with a 12.8% margin, compared to $22.6 million and 17.8% margin in fiscal 2025; full-year margin was impacted by product mix changes and a one-time inventory provision increase.
• Q4 2026 total operating expenses were $15.2 million, an 11.1% reduction from $17.1 million in Q4 2025; credit loss expense was $9.2 million, up $533,000 from $8.6 million in the prior year period.
• Full-year 2026 total operating expenses were $44.9 million, a 26% reduction from $60.5 million in fiscal 2025; credit loss expense was $20.7 million, down $1.3 million from $22.0 million in fiscal 2025.
• Q4 2026 net loss was $13.8 million ($0.24 per share), an improvement of $971,000 from a net loss of $14.8 million ($0.26 per share) in Q4 2025.
• Full-year 2026 net loss was $33.2 million ($0.58 per share), an improvement of $6.0 million from a net loss of $39.2 million ($0.69 per share) in fiscal 2025.
• Q4 2026 Adjusted EBITDA loss was $2.3 million, an improvement of $2.1 million from a loss of $4.4 million in Q4 2025.
• Full-year 2026 Adjusted EBITDA loss was $4.0 million, an improvement of $4.8 million from a loss of $8.8 million in fiscal 2025.
• Net cash used in operating activities for full-year 2026 was $569,000, an improvement of $6.8 million compared to $7.4 million used in fiscal 2025.
• As of June 30, 2026, the company held $19.3 million in cash and $803,000 in working capital.
• Fiscal 2026 revenue decline was driven by lower cannabis vaping hardware sales in the U.S. (down $17.4 million to $15.1 million), lower vaping product sales in Europe (down $12.7 million to $61.4 million), and lower sales in Asia Pacific excluding China (down $1.4 million to $10.9 million).

Guidance and Future Outlook

• The company previously expected to achieve cash-flow-positive performance in the second half of calendar year 2026 but now states the timing is less certain due to investments in the Malaysia manufacturing facility during the first quarter of fiscal 2027.
• Management expects fiscal 2027 to be a transformational year of fundamental growth, marking the first full year of vapor and nicotine pouch production at company-owned factories in Malaysia.
• Fiscal 2027 is expected to feature major commercial developments and contracts within the IKE Tech joint venture and continued investment in technologies expected to be accretive to the balance sheet.
• Management remains focused on reaching positive cash flow as benefits from new manufacturing and commercial programs begin to scale.

Business Segments and Product Lines

• The Malaysia manufacturing facility is now fully operational.
• The Vapor ODM platform is entering the market, with mid-sized brands targeted in 2026 and large brand partnerships targeted for 2027.
• The company has expanded beyond vaping through a joint venture with Jincheng Pharma to enter the nicotine pouch market.
• IKE Tech's proprietary age-gating technology is advancing toward commercialization, with potential to address the ~$50-70 billion U.S. flavored vape market.
• G-Mesh technology is generating interest from leading global tobacco companies and major international brands, with licensing discussions underway for the $24+ billion legal global vape market.
• The company holds over 400 patents worldwide.

Market and Competitive Landscape

• The Malaysia manufacturing facility provides a 25% tariff advantage over China for exports to the U.S. within the ~$73 billion global vape market.
• The company is positioning to expand its addressable customer base and strengthen its competitive position through new manufacturing and ODM platforms.
• The company is marketing Ispire ONE™ and G-Mesh technologies to meet unmet needs in the U.S. and global markets.

Risks and Challenges

• Risks include the potential failure to re-enter the U.S. ENDS market, rejection of any PMTA submissions, and success in expanding into the African market.
• There are risks regarding the success of joint ventures with Touch Point Worldwide Inc. (d/b/a Berify) and Chemular Inc., as well as the joint venture with Jincheng Pharma.
• Challenges include the ability to collect accounts receivable in a timely manner, the success of G-Mesh and Ispire ONE™ in meeting goals, and the timing of achieving positive cash flow.
• Forward-looking statements note uncertainties regarding product safety, market success, and regulatory approvals.

Management Commentary and Tone

• Steven Przybyla, President, described Q4 results as an "important inflection point" for the company and the turnaround begun over a year ago.
• Management stated that restructuring and investments are beginning to translate into improved operating performance.
• The tone is optimistic regarding the diversified set of growth drivers created by initiatives spanning different stages of development.

Other Key Points

• The company will hold a conference call on September 16, 2026, at 8 am ET to discuss results.
• The company has a joint venture with Jincheng Pharma to enter the nicotine pouch market.
• The company is advancing proprietary age-gating technology (IKE Tech) and G-Mesh technology toward commercialization.
• Fiscal 2026 saw a reduction in total operating expenses by 26% year-over-year.
• The company reported a decrease in cash and restricted cash of $4.97 million for the year ended June 30, 2026.
• Stock-based compensation expenses were $3.49 million for the year ended June 30, 2026, down from $5.62 million in the prior year.
• Inventory impairment was $2.82 million for the year ended June 30, 2026, compared to $754,976 in the prior year.