Growth was primarily driven by high demand for IT consulting and customized IT solutions.
Income per 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.
Strong growth in customized IT solutions reflects new products such as Nibot, a company automation and AI integration platform.
Income by sector is stagnant
CLPS provides technology solutions especially for 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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IE-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 income reflects reduced activity from China’s largest client solutions centers, while new sectors drive diversification.
Spatial expansion supports growth
China’s foreign earnings have increased significantly:
Growth was driven by activities 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.
Profits are improving
CLPS has delivered a modest improvement 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 profit has 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 to 0.2% last year.
Net income
GAAP EPS
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, consistent with the prior period.
Cost trends
Operating costs reflected cost optimization efforts.
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Selling and 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 and administrative costs: $14.9 million, up 5.8% YoY due to severance costs associated with a major client restructuring.
Management attributed cost reductions to AI-driven automation and workforce development initiatives.
Cash flow and balance sheet
As of December 31, 2025, the company reported:
Cash flow (H1 FY2026)
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Cash performance: $4.7 million
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Investing income: – $0.2 million
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To support cash flow: – $4.6 million.
The company has indicated that its cash position and operating cash flow are sufficient to meet operating needs over the next 12 months.
Management Comments
Management highlighted resilience in the company’s business model despite headwinds from a major customer restructuring.
Key strategies include:
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Expanding AI-driven IT solutions and automation platforms
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Expand global presence in Asia and North America
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Strengthening customized IT solutions services.
The company also approved a share repurchase program of up to one million shares, which shows confidence in the company’s long-term vision.
Outlook
For fiscal year 2026, CLPS expects to:
Management noted that the outlook could be affected by currency fluctuations and macroeconomic conditions.
Key Takeaways
1. Steady revenue growth amid a flurry of clients
The decline in the banking industry’s income was influenced by the growth in other sectors.
2. Strong growth in customized IT solutions
The 134% growth in this segment reflects the growing demand for AI-enabled technology solutions.
3. International diversification is accelerating
International revenue growth of 63% highlights successful geographic growth.
4. Profit is improving but still small
Operating margins remain below 1%, indicating limited pricing power for IT outsourcing services.
Bottom line
CLPS delivered strong revenue growth and improved profitability in the first half of fiscal 2026 despite headwinds from customer 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 in the remainder of fiscal 2026.
