EpicQuest Education Group Surges 114% After Hours Amid Robust Revenue Growth and Reduced Losses

EpicQuest Education Group International Limited's shares surged 113.71% after-hours, driven by a 29.1% revenue increase to $5.37 million and a 95.5% reduction in net loss to $0.16 million. The company attributes its growth to expanded international foundational and collaborative programs. Despite strong performance, liquidity concerns persist with cash and cash equivalents declining 71.3% to $0.33 million.

EpicQuest Education Group International Limited (NASDAQ: EEIQ) reported a robust 29.1% increase in revenue to $5.37 million for the first half of fiscal 2025, compared to $4.16 million for the same period in 2024. The company's shares surged 113.71% after-hours, driven by this significant revenue growth and a 95.5% reduction in net loss to $0.16 million.

The revenue increase was primarily attributed to an expansion in international foundational and collaborative programs, which enable students to begin their studies in their home countries before moving to overseas universities. These programs, offered by Davis University and EduGlobal College, have been key drivers of growth.

EpicQuest Education's gross profit also increased by 42.5% to $3.42 million, driven by the 29.1% revenue increase and a 10.8% increase in costs of services. The company's gross margin improved to 63.7% from 57.7% in the previous year.

Operating expenses decreased by 17.9% to $5.38 million, primarily due to a 22.9% reduction in general and administrative expenses, which were offset by a 24.9% increase in selling expenses. This resulted in a significant improvement in the operating loss, which decreased by 52.7% to $1.96 million.

The company's liquidity position, however, remains a concern. Cash and cash equivalents declined by 71.3% to $0.33 million, indicating a significant reduction in liquidity. The company's negative working capital increased to $3.96 million, and the current ratio decreased to 0.57. This suggests that the company may need to focus on improving its cash flow and liquidity position.

EpicQuest Education's CEO, Jianbo Zhang, commented on the company's performance, stating, "We are pleased to announce a 29% increase in revenue for the first half of our 2025 fiscal year. Our global recruitment initiatives continue to expand, and we have entered into an agreement to boost student enrollment from Africa and the Middle East to Davis University."

Despite the strong financial performance, investors should be cautious about the company's liquidity position. The company will need to address its cash flow and liquidity concerns to ensure sustainable growth.

References:
[1] https://finance.yahoo.com/news/epicquest-education-announces-first-half-210000190.html