10-K · September 21, 2026
AiRWA is repositioning toward AI services and advertising, producing 101% revenue growth to $25.8 million, but the expansion has not yet translated into profitability or cash generation. Gross margin fell to…
Earnings analysis · 10-Q
YYAI earnings analysis
Filed September 22, 2026 · Our reading of the company's report
The latest report
AiRWA delivered 608% year-over-year revenue growth to $21.2 million as AI services and advertising replaced royalty revenue, but gross margin fell to 26.6% from 75.2% and the company swung to a $296,766 operating loss…
Read full summary
AiRWA delivered 608% year-over-year revenue growth to $21.2 million as AI services and advertising replaced royalty revenue, but gross margin fell to 26.6% from 75.2% and the company swung to a $296,766 operating loss and $(9.63) diluted EPS. Operating cash flow of $27.7 million was driven largely by a $19.0 million reduction in digital assets and an $11.2 million accounts-receivable collection, while the Best Life acquisition consumed $29.4 million and left substantial deferred and contingent consideration. Liquidity, potential earn-outs, provisional acquisition accounting, and the Nasdaq deficiency notice keep the risk profile elevated despite strong reported revenue growth.
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
- $-9.63
What stood out
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Revenue surged on AI and advertising
Revenue increased 608% year over year to $21,243,892 from $3,000,000, driven by $15,232,000 of AI services revenue and $6,011,892 of advertising revenue.
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Gross profit grew despite margin compression
Gross profit rose 150% to $5,639,282 from $2,255,769, although gross margin compressed to 26.6% from 75.2% as cost of revenue increased 1,997% to $15,604,610.
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Operating cash flow turned positive
The company generated $27,672,258 of operating cash flow versus $1,083,809 of operating cash used in the prior-year quarter, primarily from a $19,015,825 reduction in digital assets and an $11,195,371 reduction in accounts receivable.
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Working capital released cash
Accounts receivable declined to $8,833,379 from $17,997,211, while contract liabilities declined to $5,755,300 from $10,802,800; the remaining performance obligation tied to contract liabilities was $5,800,000 and is expected to be recognized by April 30, 2027.
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Revenue mix shifted materially
AI services and advertising replaced royalty income as the primary revenue streams: royalty revenue fell from $3,000,000 to $0, while the two new streams contributed $21,243,892 in aggregate.
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Contracted revenue supports near-term sales
Management expects at least $5,800,000 of remaining contract liabilities to convert to revenue during fiscal 2027, while Best Life was acquired for fixed consideration with $20,000,000 of deferred balance consideration and potential earn-outs of $30,000,000 and $50,000,000.
What to watch
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Growth has not translated into profit
Profitability deteriorated sharply: operating income of $1,491,383 in the prior-year quarter became an operating loss of $296,766, and net income of $1,260,931 became a net loss of $507,193. Diluted EPS declined to $(9.63) from $3,464.10.
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Liquidity is strained by acquisition claims
Cash declined to $11,085,200 from $12,780,208 despite $27,672,258 of operating cash flow, because the company used $29,367,266 for the Best Life acquisition. Current liabilities were $57,702,129, including $19,041,225 of deferred consideration and $21,540,103 of contingent consideration.
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Nasdaq listing compliance is at risk
Nasdaq issued a deficiency notice on August 24, 2026 under Listing Rule 5250(c)(1) after the company failed to timely file its Form 10-K. Nasdaq could initiate delisting procedures, potentially affecting liquidity, market price, capital raising, and investor confidence; the company states the exception could extend to January 25, 2027 but provides no assurance of compliance.
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Digital-asset custody creates counterparty risk
Digital assets fell to $229,946 from $19,245,771, and the company states it did not directly control the private keys while assets were held through Ju.com, exposing it to cybersecurity, withdrawal suspension, insolvency, and regulatory risks.
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Acquisition accounting remains uncertain
Best Life purchase accounting remains provisional and included $51,557,335 of identifiable intangible assets and $27,351,584 of goodwill; the company states valuation adjustments may be material.
Management's outlook
No numeric revenue or EPS guidance was provided. Management says existing cash at filing is expected to fund anticipated operating needs for at least 12 months, while future capital needs depend on R&D, acquisitions, market developments, additional capital expenditures, and potential Best Life earn-outs. The company also states it may be unable to raise sufficient funds on acceptable terms.
Earlier filings 4
10-Q · March 17, 2026
AiRWA, Inc. reported significant growth in revenue for the third quarter of fiscal year 2026, with total revenue reaching approximately $7 million, a 113% increase compared to the prior year. However, the company…
10-Q · December 23, 2025
AiRWA, Inc. reported a mixed performance for the quarter ended October 31, 2025, with revenues of $3 million, consistent with the prior quarter but a decline from the previous year. Operating income saw a significant…
10-Q · September 15, 2025
Connexa Sports Technologies Inc. reported mixed results for its fiscal Q4 2025, with total revenue declining 8% year-over-year to $3 million. Operating expenses surged dramatically due to increased administrative costs,…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.