TOP Financial Group Limited reported a significant decline in its financial performance for fiscal year 2025, with total revenues decreasing by 58.60% to $3.33 million from $8.04 million in fiscal year 2024. The company recorded a net loss of $6.0 million for fiscal year 2025, a reversal from a net income of $1.1 million in fiscal year 2024. This revenue contraction was primarily driven by a 46.10% decrease in futures brokerage commissions to $1.83 million and a 70.50% decline in trading solution service fees to $0.806 million.
The company also incurred a proprietary trading loss of $1.42 million in fiscal year 2025, contrasting with a gain of $0.122 million in fiscal year 2024. The termination of the OTC derivative business in fiscal year 2025 resulted in a $1.5 million compensation expense for customers, further impacting profitability. Cash, cash equivalents, and restricted cash decreased substantially from $38.7 million as of March 31, 2024, to $15.2 million as of March 31, 2025, driven by $14.5 million used in operating activities and $9.4 million in investing activities.
Despite the overall decline, the nascent loan business emerged as a strong growth area, with interest income surging by 251.48% to $0.833 million in fiscal year 2025. This growth was fueled by an expansion of disbursed loans from $4.0 million in fiscal year 2024 to $8.3 million in fiscal year 2025. The company also identified a material weakness in its internal control over financial reporting, citing a lack of sufficient competent personnel for US GAAP and SEC reporting and inadequate formal policies for the CECL process.
To address the internal control weakness, TOP Financial Group has engaged experienced financial consultants and provided additional U.S. GAAP training to its CFO and financial reporting personnel. The company is also improving financial oversight for complex accounting issues. Management believes its current cash position and anticipated operational cash flows will be sufficient for general corporate purposes for at least the next 12 months.
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