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Onfolio Holdings Loss Widens in Q1, Revenues Surge 77% Y/Y

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Shares of Onfolio Holdings, Inc. (ONFO - Free Report) have declined 4.8% since reporting results for the first quarter of 2025. This compares with the S&P 500 index’s 0.4% rise over the same time frame. Over the past month, the stock has lost 10.7% against the S&P 500’s 10.3% rally, signaling investor caution despite revenue growth and operational updates.

Revenue & Earnings Performance

Onfolio Holdings reported a 77% surge in revenues for the first quarter of 2025 to $2.81 million from $1.59 million in the same period of 2024. This top-line expansion was driven by organic improvements and contributions from 2024 acquisitions, such as RevenueZen and Eastern Standard. Gross profit surged 70% to $1.71 million from $1 million a year ago, reflecting enhanced service revenues and margin gains despite rising costs.

However, the company reported a net loss of $0.9 million attributable to common shareholders, which widened 61% from the prior year’s loss of $0.6 million. The loss per share increased to 18 cents from 11 cents in the year-ago quarter.

Onfolio Holdings Inc. Price, Consensus and EPS Surprise

 

Other Key Business Metrics

Onfolio Holdings’s cost of revenues soared 90% year over year to $1.10 million, in line with growth in service delivery and product sales. Operating expenses jumped 71% to $2.49 million from $1.46 million due to elevated selling, general and administrative costs, higher professional fees, and a one-time spike in stock-based compensation and amortization expenses. Notably, stock-based compensation alone accounted for $272,930 of the expense increase, most of which was non-recurring.

Adjusted EBITDA for the quarter was negative $88,310, improving from a negative $472,163 in the first quarter of 2024. The company highlighted that removing one-time costs presents a more favorable trend in core earnings, even as GAAP net loss widened.

Management Commentary

CEO Dominic Wells acknowledged the increased net loss but attributed much of it to non-cash charges, including stock-based compensation and higher amortization. He emphasized operational improvements across the portfolio, including reduced cash burn (down to $145,049 in the first quarter of 2025 from $431,007 in the year-ago period) and better efficiency across subsidiaries. Wells stated that these changes support the firm’s ambition to reach profitability in the second half of 2025.

Factors Influencing Headline Numbers

Top-line growth reflects benefits from recent acquisitions and a focus on digital services. Segment-wise, B2B services such as RevenueZen and Eastern Standard contributed the bulk of the development, with B2B revenues soaring to $1.69 million in the first quarter of 2025 from $678,122 a year earlier. The gross profit margin improved due to a decline in product sales’ cost ratio and the addition of higher-margin service revenues.

On the cost side, rising interest expenses, up more than fivefold year over year to $100,720, impacted the bottom line. This increase stems from debt-financed acquisitions and preferred stock dividends, which totaled $103,921 for the quarter.

Guidance

Management reiterated its confidence in reaching profitability in the second half of 2025, contingent on the successful execution of organic growth initiatives and targeted acquisitions. The presentation further outlined an expanding AI integration strategy, including automated content production and marketing efficiencies aimed at accelerating margin improvement.

Other Developments

Onfolio Holdings did not close any new acquisitions in the first quarter of 2025 but continued integrating its 2024 purchases. These included RevenueZen, a provider of SEO services, and Eastern Standard, a digital marketing agency. The company funded these transactions using a mix of seller notes, preferred equity and debt. Additionally, the press release noted the company’s successful sale of $700,000 in Series A Preferred Shares in the quarter, which were used to bolster the balance sheet ahead of further expansion.

Overall, Onfolio Holdings’s first-quarter results show notable top-line momentum and improved operational discipline. However, widening losses and lack of profitability remain concerning for investors, as reflected in the stock’s underperformance relative to the broader market.


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