EXCLUSIVE: Guardforce H1'24 Earnings: 50% Jump in Gross Profit, Turns Net Income Positive, Expands AI Solutions

On Tuesday, Guardforce AI Co GFAI GFAIW reported financial results and provided a business update for the first half of 2024 ended June 30, 2024.

Net revenue decreased by 2.4% year-on-year to $17.6 million in for the six months ended 2024, mainly due to reduced foreign currency exchange rates between Thai Baht and U.S. Dollars.

Despite the impact of foreign currency exchange rates, revenue for the secured logistics business increased by 5.2% year over year.

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Gross profit increased by 50% Y/Y to $3.2 million, driven partly by an improvement in gross profit margin, which increased 18.4% by 640 bps Y/Y.

Gross profit margin growth reflected cost control initiatives and a higher profit margin from its continued growing GDM business and Cash-In-Transit business with its retail customers.

Adjusted net income was $0.1 million for the six months ended June 2024 compared to an adjusted net loss of $1.8 million a year ago.

Selling, distribution, and administrative expenses decreased 25.7% year over year to $5.0 million. Operating loss improved by 82.5% year over year to $2.1 million, mainly due to reduced fixed asset depreciation and inventory provisions.

As of June 30, 2024, the company had $15.5 million in cash and equivalents.

Chair and CEO Lei (Olivia) Wang stated, “Our primary focus is developing GFAI Agents, which serve as the key technological backbone for our AI-driven travel and purchase solutions. By concentrating on high-margin services within the retail and travel sectors, alongside implementing cost-control initiatives, we’ve achieved notable results. We expanded services to over 25,000 retail stores, turned adjusted net income positive, and achieved an approximately 50.0% increase in gross profit in H1 2024 compared to H1 2023.”

Guardforce consolidated legacy business by securing long-term contracts with key clients, driving growth in higher-margin solutions.

Guardforce Cash Solutions Security (Thailand) Company (GFCS) won a 5-year contract to operate a Consolidate Cash Center (CCC) in Chiang Mai, Thailand. The company will become the largest CCC operator on behalf of the Bank of Thailand, operating 50% of its CCC operations.

Beijing Wanjia Security System Limited secured two long-term contracts with existing key clients, expanding security alarm solutions to an additional 3,900 stores, representing an over 50% increase year over year and bringing the total number of stores serviced to 12,000 across Mainland China. 

The total number of retail stores served in the security sector surpassed 25,000.

Guardforce developed GFAI Agents as the core technology foundation for AI Purchase and AI Travel Solutions.

The company launched a decentralized spatial computing solution that utilizes robots’ unused computing power to process complex tasks beyond advertising.

Price Action: GFAI stock closed higher by 0.88% at $1.15 on Monday.

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