Highway Holdings 2025 Q4 Earnings Strong Performance as Net Income Improves 73.4%

Highway Holdings (HIHO) reported its fiscal 2025 Q4 earnings on Jun 30th, 2025. The company's results exceeded expectations, with net income showing a significant year-over-year improvement. Despite facing ongoing macroeconomic challenges, the company remains optimistic about its future prospects. Highway Holdings anticipates stable demand for existing products and expects the new motor project to positively impact future results, reinforcing its commitment to long-term shareholder value.

Revenue
Highway Holdings reported a revenue increase of 4.7% to $1.49 million in 2025 Q4, compared to $1.42 million in 2024 Q4.

Earnings/Net Income
Highway Holdings narrowed its losses to $0.07 per share in 2025 Q4, a substantial improvement from the $0.27 per share loss in 2024 Q4. The company reduced its net loss by 73.4%, reporting a deficit of $315,000 compared to the $1.18 million net loss from the previous year. EPS improvement signals a positive trend for Highway Holdings.

Post-Earnings Price Action Review
The strategy of acquiring Highway Holdings shares post-revenue decline on the earnings release date and holding for 30 days resulted in poor performance. The strategy showed a Compound Annual Growth Rate (CAGR) of -0.29%, with an excess return of -57.58% and an overall return of -0.85%. This approach significantly underperformed compared to its benchmark, which yielded a return of 56.73%. A maximum drawdown of -48.56% highlighted substantial downside risk, while the Sharpe ratio of -0.01 indicated unfavorable risk-adjusted returns. Investors need to reevaluate this strategy given its historical performance.

CEO Commentary
Roland Kohl, Chairman, President, and CEO of Highway Holdings, expressed cautious optimism about the company's recovery, citing a 60.1% year-over-year revenue increase and a 117.8% rise in gross profit in fiscal Q2 2025. He acknowledged that customer demand has not yet reached pre-COVID levels but highlighted new product initiatives, including a motor project slated for production in fiscal Q3 2025. Mr. Kohl emphasized the importance of expanding revenue and maintaining a healthy financial position, with over $5.6 million in cash, amidst ongoing macroeconomic uncertainties.

Guidance
Highway Holdings anticipates stable or slightly improved demand for its existing products while benefiting from additional revenue from the new motor project, expected to positively impact fiscal Q4 2025 results. The company is evaluating various growth ventures that could significantly enhance future performance, underscoring its commitment to long-term shareholder value.

Additional News
Highway Holdings appointed Marcum Asia CPAs LLP as its new independent auditor, replacing ARK Pro CPA & Co. This change is part of a broader strategy to upgrade corporate standards in preparation for generational transition and future growth. Additionally, four new directors were appointed to the board, bringing diverse expertise in finance, manufacturing, entrepreneurship, and strategy. These appointments reflect Highway Holdings' efforts to rejuvenate its leadership and explore new business areas beyond traditional OEM activities. The company continues to declare dividends, with recent announcements of cash dividends to shareholders, demonstrating its commitment to returning capital.