Algorhythm Holdings Inc. (NASDAQ: RIME) Q2 2025 Earnings | 08/20/2025

The call detailed a major strategic shift for Algorhythm Holdings. The company has divested its legacy business, The Singing Machine (a home karaoke product company), to fully focus on its high-growth subsidiary, SemiCab, an AI-powered logistics platform. The sale generated $4.5 million, reduced liabilities by $4 million, and is expected to significantly lower the company's cash burn.

SemiCab Business Highlights (The New Focus):

• Explosive Growth: SemiCab's Annualized Revenue Run Rate (ARR) has tripled since January 2025 to ~$7 million and is projected to reach $15-20 million over the next 12 months.

• Strong Client Base: The platform works with major multinational corporations in India, including Procter & Gamble, Unilever, Kellogg's, and Apollo Tires.

• Key Metrics: The company reported a breakthrough quarter with five new client contracts and existing clients expanding their geographic lanes and volume by 100-200%. The fleet of trucks on the platform grew from 140 to 450.

• Value Proposition: SemiCab distinguishes itself from digital freight brokers by using AI to solve the industry problem of "deadhead miles" (trucks driving empty). The platform boasts an 85% truck utilization rate, significantly higher than the industry average of 66%, saving clients money on fuel, labor, and depreciation.

Financial Results (Mixed, but Reflecting the Transition):

• Revenue: Q2 sales were $2.7 million, up from $2.4 million YoY. This includes $1.5 million from the newly acquired SemiCab India (consolidated since May 2nd) and $1.2 million from the declining Singing Machine business.

• Profitability: Gross margin improved to 35% due to one-time adjustments, but is expected to normalize to a lower 5-10% range, which is standard for the logistics business. The net loss decreased significantly to $809,000 from $6.2 million YoY.

• Future Outlook: With the sale of The Singing Machine complete, operating expenses are expected to decrease substantially. However, the company anticipates continued investment in SemiCab's growth, which will require additional capital raising (likely equity) to finance receivables and further expand the truck fleet.

Leadership & Communication: The company announced it has re-hired Brendan Hopkins for Investor Relations to improve transparency and communication with shareholders following this strategic pivot.