HeartCore Enterprises (HTCR -2.59%), a software and consulting company offering customer experience management, digital transformation, and IPO advisory services, posted its second quarter 2025 financial results on August 13, 2025. The company reported its first profitable quarter in recent history, with net income of $1.1 million (GAAP), compared to a $2.2 million loss in the same period last year. Revenue (GAAP) increased 16.7% to $4.7 million, nearly $0.6 million below the analyst consensus of $5.27 million. While gross profit more than doubled and expenses dropped, the softer revenue figure and persistent cash outflows provide a mixed view on the company’s overall progress.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (GAAP) | $(0.09) | $(0.04) | $(0.11) | $(0.02) |
| Revenue (GAAP) | $4.7 million | $5.27 million | $4.1 million | 14.6% |
| Gross Profit | $2.2 million | $0.8 million | 175.0% | |
| Adjusted EBITDA | $0.1 million | $(1.2 million) | N/A | |
| Operating Expenses | $2.1 million | $2.3 million | (8.7%) |
Source: Analyst estimates for the quarter provided by FactSet.
Business Overview and Focus Areas
HeartCore Enterprises develops and sells enterprise software, runs digital transformation consulting, and offers advisory services for companies looking to go public in the United States. Its main products include the Customer Experience Management (CXM) platform, which helps businesses coordinate customer data, marketing, sales, and content from a single interface. Other pillars include digital transformation (DX) consulting and its Go IPO advisory program for Japanese firms planning U.S. stock listings.
Recently, HeartCore has focused on expanding core software sales, optimizing operational efficiencies, and growing its higher-margin consulting business. Growth drivers include sales of on-premise content management system (CMS) software, digital automation through acquired businesses like Sigmaways, and building a pipeline of IPO advisory clients. Success now hinges on converting contract wins into recognized revenue, extending high-margin software deals, and sustaining partnership-driven innovation.
Q2 2025 Results and Quarterly Developments
The quarter saw HeartCore’s software business play a central role in the company’s return to profitability. Sales of on-premise CMS licenses drove most of the company’s topline growth. Product enhancements included integrating a new recommendation engine with Silver Egg Technology and a strategic partnership with NEC Solutions Innovators to improve CMS process efficiency. These developments helped the software segment deliver a substantial gross margin boost as fixed costs remained largely unchanged while software sales rose.
Gross profit reached $2.2 million, up 175% from a year ago, even though overall revenue grew at a much slower pace. Gross profit expansion was driven by increased sales of on-premise software, reduced costs in customized software development and services, and higher profits from IPO consulting services. The revenue figure (GAAP) still missed analyst expectations by 10.7%.
On the expense side, HeartCore reduced operating expenses to $2.1 million, down from $2.3 million in Q2 2024. Most savings came from lower general and administrative costs, reflecting tighter expense control.
Not all business lines moved ahead evenly. Revenue from digital transformation and customized software services declined during the six months ended June 30, 2025, partly due to intense competition in the U.S. market. The company addressed gross profit pressure in these segments by lowering outsourcing costs, particularly at Sigmaways. The Go IPO segment signed two new contracts, raising its total to 16, but did not convert any client listings to actual IPOs. Management expects future listings, especially with the planned Go IPO Korea event, to increase revenue in this segment going forward.
HeartCore closed the quarter with $2.3 million in cash (GAAP) and maintained shareholders’ equity above Nasdaq’s $2.5 million continued listing threshold. Still, the business consumed $2.7 million in operating cash flow (GAAP) during the first half of 2025, highlighting continued reliance on outside funding and the need for successful contract conversion to sustain operations.
Products, Segments, and Partnerships Explained
The platform helps organizations manage all customer interactions in one place, spanning marketing outreach, sales, service requests, and content publishing.
Its digital transformation division provides solutions in robotics process automation (RPA), process mining, and task mining, helping companies automate repetitive business processes. After acquiring Sigmaways, HeartCore has honed its software development capacity and cost structure. Meanwhile, the Go IPO advisory business helps Japanese and regional firms prepare for U.S. stock listings by assisting with regulatory, financial, and procedural requirements. These services come with high fees and can yield significant one-time revenue when a client achieves a listing.
Outlook and Commentary
The company did not issue numerical guidance for either the third quarter or fiscal 2025. Management noted continued progress in its pipeline, expecting a notable Go IPO client to achieve a Nasdaq listing in the third quarter. Beyond that, HeartCore highlighted its target of expanding in the Asia-Pacific region, particularly through its Go IPO Korea event planned for September 2025. The company’s outlook remains tempered by the lumpy timing of advisory revenue, ongoing cash consumption, and the need to convert sales contracts into realized revenue.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
