TLDR
- SOS surges after hours despite widening losses and sharp cash depletion.
- SOS pivots to commodities; revenue up, but losses and cash risks grow.
- SOS earnings lift stock post-market as revenue jumps 48% on rubber sales.
- SOS revenue surges, but losses deepen and liquidity remains a concern.
- SOS stock rallies after hours on growth, despite cash crunch and losses.
SOS stock closed at $1.95 during regular trading on September 26, 2025, down 3.94% from the prior session. However, shares surged 17.95% after hours to $2.30 following the earnings release. The contrasting stock reaction reflects optimism around revenue growth but concern over losses and cash depletion.
Revenue Growth Driven by Commodities Trading
SOS Limited reported semi-annual results for the six months ended June 30, 2025. The company achieved revenue of $89.6 million, reflecting a 48.1% increase from the prior year. Growth came mainly from higher natural rubber sales as demand in China recovered steadily.
The commodities trading segment contributed 94.9% of revenue, while hosting services delivered 4.3% and others provided 0.8%. The company shifted away from cryptocurrency mining operations to focus on hosting services. Management highlighted stronger demand for third-party hosting despite suspending self-mining.
Nevertheless, despite higher revenue, SOS faced a gross loss of $1.3 million, reversing a gross profit of $2.4 million in 2024. The gross margin stood at negative 1.5%, down from a positive 4% in the previous year. Falling rubber spot prices and losses from petroleum coke weighed heavily on profitability.
Losses Widen and Costs Escalate
The company recorded a GAAP net loss of $14.2 million, a 30.3% increase from last year’s $10.9 million. Operating costs surged 56.5% to $90.9 million, outpacing revenue growth and further pressuring margins. Selling expenses rose slightly to $2.3 million, mainly due to higher transportation costs.
General and administrative expenses dropped 35% to $9.4 million as mining machines were fully impaired and required no depreciation. However, this reduction did not offset the broader rise in costs across operations. The loss per share was $(0.0139), compared with $(0.0299) a year earlier.
The company sold petroleum coke inventory at cost and absorbed over $1.6 million in losses from rubber price declines. Management emphasized a strategy of pursuing market share over short-term profitability. Competitive pricing was prioritized to maintain trading volume amid challenging conditions.
Liquidity Risks and Strategic Investments
Cash and cash equivalents fell sharply to $4.2 million from $246.7 million a year earlier. The decline of 98.3% resulted mainly from a $228.4 million prepayment for blockchain commodity trading platform development. Management described the payment as a move to secure long-term value and secure critical partner resources.
During the reporting period, the company raised $6.8 million in net proceeds through a registered direct offering under Form F-3. Despite this, liquidity remains constrained, and further capital raising plans have been confirmed. The shift underscores the company’s ongoing dependence on external funding to sustain operations.
