Ispire Revenue Dips 16% Amid US Nicotine Market Retreat
Ticker: ISPR · Form: 10-K · Filed: Sep 15, 2025 · CIK: 1948455
Sentiment: mixed
Topics: Vaping Industry, Cannabis Vaping, Regulatory Risk, International Expansion, Manufacturing, Supply Chain, PMTA
TL;DR
**ISPR is making a risky bet by pulling back from the US nicotine market, but their international expansion and cannabis focus could pay off if regulations align.**
AI Summary
Ispire Technology Inc. (ISPR) reported a significant revenue decline for the fiscal year ended June 30, 2025, falling to $127.49 million from $151.91 million in 2024, a decrease of 16%. This was primarily driven by a substantial 48.4% drop in North American revenue, from $63.08 million in 2024 to $32.57 million in 2025, largely due to the decision not to market nicotine products in the U.S. without PMTA approvals. Conversely, European revenue increased by 13.5% to $74.11 million from $65.26 million. The company is expanding its manufacturing capabilities with a new 31,000 sq ft facility in Malaysia, which commenced operations on February 5, 2024, and received an interim license for nicotine product manufacturing in May 2025. Key business changes include a strategic shift away from the U.S. nicotine market due to regulatory hurdles and an increased focus on cannabis vaping hardware and international nicotine markets. Risks include reliance on a single majority supplier, Shenzhen Yi Jia, owned 95% by co-CEO Tuanfang Liu, and the volatile regulatory landscape for vaping products globally. The strategic outlook involves leveraging proprietary technologies like DuCore and Ispire ONE, expanding global distribution, and securing PMTA approvals for future U.S. nicotine market re-entry.
Why It Matters
Ispire's 16% revenue decline, largely from a strategic withdrawal from the U.S. nicotine market due to regulatory challenges, signals a critical pivot for the company. This shift impacts investors by highlighting the significant regulatory risks inherent in the vaping industry, particularly the FDA's stringent PMTA process. For employees, the new Malaysian manufacturing facility, operational since February 2024, represents a strategic investment in global production capabilities and potential job growth outside of China. Customers in Europe and emerging cannabis markets may see increased product availability and innovation, while the competitive landscape in the U.S. nicotine market becomes less crowded for compliant players.
Risk Assessment
Risk Level: high — The risk level is high due to a 16% revenue decline, primarily from a 48.4% drop in North American sales, directly linked to the decision not to market nicotine products in the U.S. without PMTA approvals. Furthermore, the company's majority supplier, Shenzhen Yi Jia, is 95% owned by co-CEO Tuanfang Liu, creating a significant conflict of interest and supply chain concentration risk.
Analyst Insight
Investors should closely monitor Ispire's progress in securing PMTA approvals and the ramp-up of its Malaysian manufacturing facility. Evaluate the growth trajectory in European and cannabis markets to determine if these segments can offset the U.S. nicotine market withdrawal. Consider the implications of the related-party supplier relationship on long-term operational stability and governance.
Financial Highlights
- revenue
- $127.49M
- revenue Growth
- -16.0%
Revenue Breakdown
| Segment | Revenue | Growth |
|---|---|---|
| North America | $32.57M | -48.4% |
| Europe | $74.11M | +13.5% |
Key Numbers
- $127.49M — Total Revenue (Decreased from $151.91M in 2024, a 16% decline.)
- $32.57M — North America Revenue (Decreased from $63.08M in 2024, a 48.4% decline.)
- $74.11M — Europe Revenue (Increased from $65.26M in 2024, a 13.5% increase.)
- 58.1% — Europe Revenue Percentage (Increased from 43.0% in 2024, becoming the largest revenue region.)
- 25.5% — North America Revenue Percentage (Decreased from 41.5% in 2024.)
- 95% — Ownership of Shenzhen Yi Jia (Owned by co-CEO Tuanfang Liu, highlighting related-party risk.)
- 31,000 sq ft — Malaysian Manufacturing Facility Size (New facility operational since February 5, 2024.)
- 57,277,874 — Shares of Common Stock Outstanding (As of September 15, 2025.)
- $99,098,253 — Aggregate Market Value of Non-Affiliate Common Equity (As of December 31, 2024.)
- 30 — Countries (Number of countries where Aspire brand tobacco vaporizer products are sold.)
Key Players & Entities
- Ispire Technology Inc. (company) — registrant
- Tuanfang Liu (person) — co-chief executive officer, chairman, controlling stockholder, and 95% owner of Shenzhen Yi Jia
- Jiangyan Zhu (person) — director and wife of Tuanfang Liu
- Shenzhen Yi Jia Technology Co., Limited (company) — majority supplier to Ispire Technology Inc.
- Nasdaq Capital Market (regulator) — exchange where Common Stock is registered
- FDA (regulator) — reviewing products in development for PMTA approvals
- Malaysia (company) — location of new manufacturing facility
- Europe (company) — primary market for e-cigarette products
- North America (company) — region with significant revenue decline
- United States (company) — market where nicotine products are not marketed without PMTA approvals
FAQ
What caused Ispire Technology Inc.'s revenue decline in 2025?
Ispire Technology Inc.'s revenue declined by 16% to $127.49 million in 2025, primarily due to a 48.4% decrease in North American revenue, from $63.08 million in 2024 to $32.57 million in 2025. This was a strategic decision not to market nicotine products in the United States until PMTA approvals are secured.
How is Ispire Technology Inc. addressing manufacturing and supply chain risks?
Ispire Technology Inc. is addressing manufacturing risks by establishing its own 31,000 square foot manufacturing facility in Malaysia, which commenced operations on February 5, 2024, and received an interim license for nicotine products in May 2025. This move aims to reduce reliance on its majority supplier, Shenzhen Yi Jia, which is 95% owned by co-CEO Tuanfang Liu.
What is Ispire Technology Inc.'s strategy for the U.S. nicotine market?
Ispire Technology Inc. has decided not to market nicotine products in the United States until it secures PMTA (Premarket Tobacco Product Application) approvals for its ENDS (Electronic Nicotine Delivery Systems) devices. This indicates a cautious, compliance-focused approach to re-entering the U.S. nicotine market.
Which geographic regions are key for Ispire Technology Inc.'s revenue?
For the fiscal year ended June 30, 2025, Europe became Ispire Technology Inc.'s largest revenue region, contributing $74.11 million (58.1% of total revenue), an increase from $65.26 million in 2024. North America, while declining, still represented $32.57 million (25.5%) of revenue, and the company sells its Aspire brand in over 30 countries.
What proprietary technologies does Ispire Technology Inc. highlight?
Ispire Technology Inc. highlights several proprietary technologies, including BDC (bottom dual coil) and BVC (bottom vertical coil) coil technologies for enhanced flavor and vapor production. For cannabis vaporizers, they use patented DuCore (Dual Coil) technology, and in June 2023, introduced Ispire ONE technology to improve manufacturing consistency and consumer safety.
What are the potential conflicts of interest at Ispire Technology Inc.?
A significant conflict of interest exists because Tuanfang Liu, Ispire Technology Inc.'s co-chief executive officer and director, along with his wife Jiangyan Zhu, beneficially own a majority of the Common Stock. Additionally, Mr. Liu owns 95% of Shenzhen Yi Jia, which is Ispire's majority supplier, raising concerns about related-party transactions.
How does Ispire Technology Inc. approach the cannabis vaping market?
Ispire Technology Inc. sells its cannabis vaping hardware under the Ispire brand name, primarily on an original design manufacturer (ODM) basis, in the United States, Canada, and South Africa. The company is expanding its sales network in Europe and South America in anticipation of legalization, and importantly, does not 'touch the cannabis plant,' avoiding specific cannabis-related regulatory and taxation provisions.
What are the risks associated with the volatility of Ispire Technology Inc.'s stock price?
The trading price of Ispire Technology Inc.'s Common Stock may be volatile, which could result in substantial losses for investors. This volatility is influenced by factors such as regulatory changes in the vaping industry, competition, economic downturns, and the company's ability to manage growth and execute strategies effectively.
What is the significance of Ispire Technology Inc.'s 'emerging growth company' status?
As an 'emerging growth company' under the JOBS Act, Ispire Technology Inc. is permitted to rely on exemptions from certain disclosure requirements. This status can reduce compliance costs but may also mean less information is available to investors compared to larger, more established companies.
What is Ispire Technology Inc.'s market value of non-affiliate common equity?
As of December 31, 2024, the aggregate market value of the voting and non-voting common equity held by non-affiliates of Ispire Technology Inc. was approximately $99,098,253, based on the closing price of its common stock on the Nasdaq Capital Market.
Risk Factors
- Nicotine Vaping Industry Regulations [high — regulatory]: Existing and new laws, regulations, policies, and restrictions in the nicotine vaping industry have materially and adversely affected business operations. The recent implementation of regulations in the U.S. led to the decision not to market nicotine products without PMTA approvals.
- Cannabis Vapor Product Regulations [high — regulatory]: Cannabis vapor products are subject to regulations and restrictions in the United States and are prohibited in many other countries, impacting market access and operations.
- Related Party Supplier Concentration [high — financial]: Co-CEO Tuanfang Liu owns 95% of Shenzhen Yi Jia, the majority supplier. This creates a conflict of interest and reliance on a single, related-party supplier.
- Health Risks and Market Acceptance [high — market]: If vaping products are perceived to pose long-term health risks, usage may decline significantly, adversely affecting financial condition and results of operations.
- Product Defects and Quality Issues [medium — operational]: Business operations may be adversely impacted by product defects or other quality issues, potentially leading to reputational damage and financial losses.
- Global Political and Foreign Policy Events [medium — market]: Global political events and foreign policy responses, including tariffs, can negatively affect the business and the industry.
- Product Liability and Misuse [medium — legal]: Misuse or abuse of products may lead to adverse health effects, subjecting the company to complaints, product liability claims, and negative publicity.
- Cybersecurity Incidents [medium — operational]: Significant cybersecurity incidents or disruptions to IT systems could damage user relationships and lead to substantial reputational, financial, legal, and operational consequences.
Industry Context
The vaping industry faces significant regulatory scrutiny globally, particularly concerning nicotine products in the U.S. market. Companies are navigating complex approval processes like PMTA while also expanding into cannabis vaping hardware and international markets. Competition exists across hardware innovation, product safety, and market access.
Regulatory Implications
The company's strategic shift away from the U.S. nicotine market highlights the significant impact of regulatory hurdles, specifically the PMTA process. Compliance with evolving global regulations for both nicotine and cannabis vaping products is critical for future growth and market access.
What Investors Should Do
- Monitor PMTA progress and U.S. market re-entry strategy.
- Assess diversification of revenue streams and geographic reliance.
- Evaluate related-party transaction risks and supplier diversification.
- Track expansion and licensing in Malaysia.
Key Dates
- 2024-02-05: New Malaysian Manufacturing Facility Commenced Operations — Expands manufacturing capabilities to support global operations and potential future market re-entry.
- 2025-05: Interim License for Nicotine Product Manufacturing in Malaysia — A step towards compliance and potential future production of nicotine products in a new jurisdiction.
Glossary
- PMTA
- Premarket Tobacco Application. A submission required by the U.S. Food and Drug Administration (FDA) for new tobacco products, including e-cigarettes, to be legally marketed. (Crucial for re-entry into the U.S. nicotine market; the lack of PMTA approvals drove the decision to halt U.S. nicotine product marketing.)
- ENDS
- Electronic Nicotine Delivery Systems. Devices that deliver nicotine through an aerosol, commonly known as e-cigarettes or vapes. (The company's nicotine vaping products fall under this category, subject to stringent U.S. regulatory requirements like PMTA.)
Year-Over-Year Comparison
Ispire Technology Inc. reported a significant 16% revenue decline year-over-year, driven by a sharp 48.4% drop in North American sales due to regulatory challenges. This was partially offset by a 13.5% increase in European revenue, which now represents the largest share of sales. The company is actively expanding manufacturing capabilities in Malaysia, a key strategic development. New risks related to the U.S. regulatory environment for nicotine products have become more prominent, alongside existing concerns about related-party supplier concentration and product liability.
Filing Stats: 4,545 words · 18 min read · ~15 pages · Grade level 14.4 · Accepted 2025-09-15 16:06:16
Key Financial Figures
- $0.0001 — ch registered: Common Stock, par value $0.0001 per share ISPR The Nasdaq Stock Market
Filing Documents
- ea0255094-10k_ispire.htm (10-K) — 1735KB
- ea025509401ex21-1_ispire.htm (EX-21.1) — 4KB
- ea025509401ex23-1_ispire.htm (EX-23.1) — 3KB
- ea025509401ex23-2_ispire.htm (EX-23.2) — 2KB
- ea025509401ex31-1_ispire.htm (EX-31.1) — 9KB
- ea025509401ex31-2_ispire.htm (EX-31.2) — 9KB
- ea025509401ex32-1_ispire.htm (EX-32.1) — 5KB
- image_001.jpg (GRAPHIC) — 75KB
- image_002.jpg (GRAPHIC) — 82KB
- ex23-1_001.jpg (GRAPHIC) — 3KB
- ex23-2_001.jpg (GRAPHIC) — 9KB
- ex23-2_002.jpg (GRAPHIC) — 7KB
- 0001213900-25-087632.txt ( ) — 9185KB
- ispr-20250630.xsd (EX-101.SCH) — 75KB
- ispr-20250630_cal.xml (EX-101.CAL) — 61KB
- ispr-20250630_def.xml (EX-101.DEF) — 366KB
- ispr-20250630_lab.xml (EX-101.LAB) — 705KB
- ispr-20250630_pre.xml (EX-101.PRE) — 396KB
- ea0255094-10k_ispire_htm.xml (XML) — 1104KB
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RISK FACTORS
RISK FACTORS The following is a summary of the material risks and uncertainties that we have identified, which should be read in conjunction with the more detailed description of each risk factor found below in " ITEM 1A. Risk Factors " Risks Related to Our Business and Industry Existing laws, regulations and policies and the issuance of new or more stringent laws, regulations, policies and any other restrictions or limitations in relation to the nicotine vaping industry have and can materially and adversely affect our business operations. Cannabis vapor products are subject to regulations and restrictions in the United States and are prohibited in many other countries. Because Tuanfang Liu, our co-chief executive officer, who is also director, and his wife, Jiangyan Zhu, who is also a director, beneficially own a majority of our Common Stock and Mr. Liu owns 95% of the equity of our majority supplier, Mr. Liu has a conflict of interest. The recent implementation of regulations relating to e-cigarettes has resulted in our decision not to market nicotine products in the United States until we secure PMTA approvals on our ENDS devices. Recently enacted legislation and regulations in the United States may make it more difficult to sell nicotine and cannabis vaping products in the United States. We are exposed to risks relating to our relationship with a related party, and we may not be able to successfully operate manufacturing operations. If it is determined or perceived that the usage of nicotine or cannabis vaping products poses long-term health risks, the use of vaping products may decline significantly, which is likely to materially and adversely affect our business, financial condition, and results of operations. Our business, financial condition and results of operations may be adversely impacted by product defects or other quality issues. Our business may be negatively affected by global political events and foreign policy responses, inclu