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Revenue: $85.1 million, up 2.8% year over year from $82.8 million.
Growth was primarily driven by higher demand for IT consulting and customized IT solutions.
Revenue by service
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IT consulting services: $81.8 million, up 2.2% YoY, representing 96.2% of total revenue.
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Customized IT solutions: $2.2 million, up 134.7% YoY.
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Academic education services: $0.9 million, down 19.0% YoY.
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Other services: $0.1 million, down 79.9% YoY.
The strong increase in customized IT solutions reflects new products such as Nibot, the company’s automation and AI integration platform.
Revenue by industry vertical
CLPS provides technology solutions primarily to financial institutions and digital businesses.
Key sector performance in H1 FY2026:
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Banking: $26.1 million, down 22.0% YoY
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Wealth management: $14.6 million, down 5.1% YoY
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E-commerce: $15.2 million, up 1.9% YoY
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Automotive: $11.1 million, up 21.5% YoY
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Other industries: $18.0 million, up 83.6% YoY.
The decline in banking revenue reflects reduced activity from a major client’s China solution centers, while newer sectors are driving diversification.
Geographic expansion supports growth
Revenue generated outside mainland China increased significantly:
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International revenue: $31.0 million, up 63.1% year over year.
Growth was driven by operations in:
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Singapore
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Hong Kong
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Japan
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United States.
This reflects the company’s strategy to diversify beyond China and expand globally.
Profitability improves
CLPS delivered modest improvements in profitability.
First half FY2026
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Gross profit: $19.5 million, up 2.1% YoY
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Gross margin: 23.0% vs 23.1% last year.
Operating profitability improved significantly:
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Operating income: $0.6 million, up 300% from $0.2 million.
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Operating margin: 0.7%, compared with 0.2% last year.
Net income
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Net income: $0.3 million, up 74.9% YoY.
GAAP EPS
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Basic and diluted EPS: $0.003 per share.
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Non-GAAP results
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Non-GAAP net income: $2.1 million
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Non-GAAP EPS: $0.06 per share, in line with the prior year period.
Expense trends
Operating expenses reflected cost optimization efforts.
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Selling & marketing expenses: $2.1 million, down 13.6% YoY.
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R&D expenses: $2.0 million, down 38.7% YoY.
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General & administrative expenses: $14.9 million, up 5.8% YoY due to severance costs linked to a major client restructuring.
Management attributed cost reductions to AI-driven automation and workforce optimization initiatives.
Cash flow and balance sheet
As of December 31, 2025, the company reported:
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Cash and cash equivalents: $28.4 million.
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Cash flow (H1 FY2026)
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Operating cash flow: $4.7 million
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Investing cash flow: –$0.2 million
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Financing cash flow: –$4.6 million.
The company indicated that its cash position and operating cash flow are sufficient to meet operational needs over the next 12 months.
Management Commentary
Management highlighted resilience in the company’s business model despite headwinds from a major client’s restructuring.
Key strategic initiatives include:
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Expanding AI driven IT solutions and automation platforms
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Increasing global presence across Asia and North America
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Strengthening customized IT solution services.
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The company also authorized a share repurchase program of up to 1 million shares, reflecting confidence in the company’s long term outlook.
Outlook
For fiscal year 2026, CLPS expects:
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Revenue growth: 10%–15% year over year
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Non-GAAP net income: $4.4 million – $5.0 million.
Management noted that the outlook may be affected by currency fluctuations and macroeconomic conditions.
Key Takeaways
1. Gradual revenue growth amid client headwinds
The decline in banking-sector revenue was offset by expansion in other sectors.
2. Strong growth in customized IT solutions
The 134% growth in this segment indicates increasing demand for AI-enabled technology solutions.
3. International diversification accelerating
Overseas revenue growth of 63% highlights successful geographic expansion.
4. Profitability improving but still thin
Operating margin remains below 1%, indicating limited pricing power in IT outsourcing services.
Bottom line
CLPS delivered steady revenue growth and improved profitability in the first half of fiscal 2026 despite headwinds from client restructuring in its banking segment. Strong growth in customized IT solutions, international expansion, and continued investment in AI-driven digital transformation services position the company for moderate growth through the remainder of fiscal 2026.