How did ATXG's revenue and expenses shift in Q3 2025?

Addentax Group Corp. (ATXG) experienced a decrease in total revenue and a shift in revenue composition in Q3 2025 compared to the previous year, while operating expenses showed improvements.

1. **Revenue Shift**:
- **Total Revenue**: ATXG's total revenue for Q3 2025 was $1.06 million, marking a decrease of 27.9% from the same period in 2024, which was $1.468 million. This decline was primarily attributed to a decrease in revenue from the logistics services business.
- **Revenue Segments**: The garment manufacturing segment contributed approximately 8.3% to the total revenue for the nine months ended December 31, 2024. Logistics services accounted for 70.2% of the revenue, while property management and subleasing made up 21.6%. The decrease in logistics services revenue had a significant impact on the overall revenue.
- **Geographical Performance**: The company operates predominantly in China, and all revenue for the three and nine months ended December 31, 2024, was generated from customers located in China.
- **Sales Units**: The garment manufacturing business experienced a low level of sales due to factory facilities renewal and repairs, which impacted production capacity.
2. **Expense Analysis**:
- **Cost of Revenues**: The cost of revenues for Q3 2025 was $976,543, representing 92.2% of sales, up from 88.9% in the same quarter of the previous year. This increase was due to higher raw material costs in the garment manufacturing segment.
- **Gross Profit**: The company reported a gross profit of $82,819 for the quarter, which was a decrease from the $162,327 reported in the same quarter of the previous year. The decline was attributed to increased costs in the garment manufacturing segment.
- **Operating Expenses**: Selling, general, and administrative expenses decreased to $463,873 from $611,919, primarily due to reduced general and administrative expenses across segments.
- **Net Loss**: ATXG reported a net loss of $1,085,721 for Q3 2025, which was a significant improvement from the net loss of $2,607,662 in the same quarter of the previous year. This improvement was largely due to reduced fair value losses and lower net finance costs.
3. **Comparative Insights**: When compared to the second quarter of 2025, ATXG's revenue remained relatively flat at $1.34 million, while the net loss decreased by 153% from $1.36 million to $721.5 million, resulting in a $0.14 loss per share.

In conclusion, ATXG faced challenges in Q3 2025, primarily in its logistics services and garment manufacturing segments, which affected its revenue. However, the company managed to improve its net loss position through reduced operating expenses and favorable financial adjustments.