10-Q · May 20, 2026
Foxx Development Holdings experienced significant revenue decline in Q3 2026, with net revenues falling 23.9% to $8.67 million compared to $11.39 million in Q3 2025. The increase in net loss to $36.27 million from $4.08…
Earnings analysis · 10-K
FOXX earnings analysis
Filed September 28, 2026 · Our reading of the company's report
The latest report
Foxx is pursuing product and channel diversification, including IoT, e-commerce, dropshipping and a new mobile operating-system platform, but the fiscal-year results show significant deterioration. Revenue declined…
Read full summary
Foxx is pursuing product and channel diversification, including IoT, e-commerce, dropshipping and a new mobile operating-system platform, but the fiscal-year results show significant deterioration. Revenue declined 20.2% to $52.6 million, gross margin fell to 3.2%, operating loss reached $43.9 million and EPS was negative $7.61, driven by weak phone demand, tariffs, inventory impairments and a $25.9 million lease impairment. Liquidity is critical, with a $34.1 million working-capital deficit, substantial doubt about going concern and a Nasdaq MVLS deficiency that must be remedied by January 19, 2027.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $-7.61
What stood out
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Broader product and channel strategy
Foxx is diversifying beyond mobile phones through tablets, wearables, IoT products and e-commerce channels. It launched IoT products such as water-leak sensors, began TikTok Shop operations in March 2024, and expects continued growth through Amazon and other online platforms.
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Dropship model reduces inventory
The company began a dropship arrangement in January 2026 to reduce freight costs and warehouse usage; management said the change promoted better wholesale gross margins. Inventory declined from $12,686,739 to $3,275,587 year over year.
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Operating-system roadmap underway
Foxx entered a January 2026 operating-system development agreement totaling $3,115,000, covering cross-platform compatibility, proprietary applications and advertising/payment modules. Approximately 60% of the project was completed by June 30, 2026, with $1,869,000 recognized as R&D expense.
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Selective growth and cash burn improvement
Tablet revenue increased 82.6% to $930,845, while e-commerce revenue increased from $1,334,622 to $2,110,733. Net operating cash outflow improved to $357,994 from $6,560,121 in the prior year, although the company remains loss-making.
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Capital retained for expansion
The company has no dividend history and states it does not anticipate paying dividends in the foreseeable future, retaining funds for business development. It made no equity repurchases and investing cash flow was positive $8,826, primarily from equipment sales.
What to watch
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Severe liquidity and going-concern risk
Management and the auditor said substantial doubt exists about going concern within one year. At June 30, 2026, cash and restricted cash were $1,476,724, working capital deficit was approximately $34.1 million, accumulated deficit was approximately $72.7 million, and net loss was $52,689,938.
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Nasdaq minimum-value deficiency
Foxx received a Nasdaq deficiency letter after its market value of listed securities stayed below the $35,000,000 MVLS threshold for 30 consecutive business days. It must reach at least $35 million for 10 consecutive business days by January 19, 2027 or face potential delisting proceedings.
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Customer, supplier and tariff concentration
Tariffs, pricing uncertainty and higher memory-chip costs reduced demand: revenue fell 20.2% to $52,584,432, while gross margin fell from 7.2% to 3.2%. Two customers represented 68% and 10% of revenue, and one supplier represented 96% of purchases, leaving limited pricing and supply-chain flexibility.
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Large operating losses and impairments
Profitability deteriorated sharply: operating loss increased to $43,896,854 from $9,697,934, and net loss increased to $52,689,938 from $9,020,136. The deterioration included $25,855,427 of right-of-use-asset impairment and $6,981,771 of inventory impairments.
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Material weaknesses in financial controls
Disclosure controls and internal control over financial reporting were deemed ineffective due to material weaknesses including insufficient segregation of duties, inability to prepare complete and accurate GAAP financial statements timely, inadequate related-party controls, and deficiencies in App Services revenue and lease-rate controls.
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Expensive vendor financing exposure
The company incurred $8,758,798 of interest expense, of which $8,747,494 related to unpaid purchase balances. Amounts payable to the primary vendor were $33,347,658, and the applicable rate can increase to 2.5% per month after 120 days past the due date.
Management's outlook
No quantitative annual guidance was provided in the 10-K; the company states that historical results are not necessarily indicative of future results and discusses monitoring demand, product costs, tariffs and pricing conditions.
Earlier filings 4
10-Q · February 13, 2026
Foxx reported Q2 (three months ended December 31, 2025) revenue of $16,716,572 and a loss per share of $(0.62). Gross profit was $2,216,780 (gross margin 13.27%), but operating loss and higher interest drove net loss of…
10-Q · November 18, 2025
Q1 (three months ended Sept 30, 2025) revenue declined to $20.22M from $23.11M a year ago (-$2.89M, -12.5%), but gross profit improved sharply to $2.745M (gross margin 13.57% vs 1.72% prior year) and operating loss…
10-Q · February 14, 2025
Foxx reported strong top-line growth for the quarter with revenue of $17,480,231 (vs. $832,827 a year earlier) and reported net income of $1,424,146, or $0.20 basic EPS (vs. net loss $(640,610) and $(0.19) EPS prior…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.