Descrypto Holdings Inc (WTCG) reported a Q4 2024 results snapshot that shows a very small revenue base but remarkably strong profitability on a per-dollar of revenue basis. Revenue was 35,676 USD with gross profit of 34,168 USD, yielding a gross margin of approximately 95.8%. More strikingly, the company posted operating income of 2,505,514 USD and EBITDA of 2,396,117 USD, driving a net income of 2,439,653 USD and earnings per share (EPS) of 0.0104 on 41.58 million diluted shares. Management metrics imply YoY improvements in operating and net income of roughly 2,431% and 2,215% respectively, with EPS up about 130% YoY and ~527% QoQ, though these comparisons are derived from a very small revenue base and should be interpreted with caution due to potential one-time items or data alignment issues.
From a balance-sheet and cash-flow perspective, the quarter of record profitability coexists with significant liquidity stress: cash and cash equivalents stood at 4,770 USD, current liabilities at 467,814 USD, and short-term debt at 382,863 USD. Retained earnings are deeply negative (-10,912,283 USD) and total stockholders’ equity is negative (-463,044 USD), resulting in a net debt position of 378,093 USD. Free cash flow was negative (-243,747 USD), and operating cash flow was also negative (-243,747 USD), signaling cash-burn dynamics despite robust reported earnings. These balance-sheet and cash-flow characteristics pose meaningful investment risks and warrant close monitoring of liquidity, debt maturities, and any announced deleveraging actions. The absence of disclosed forward-looking guidance in the data underscores the need for vigilance around execution and sustainability of profitability.
Overall, the QQ4 2024 results present a high-variance profile: compelling per-dollar profitability on a tiny revenue base but fragile liquidity and solvency metrics. Investors should balance the potential upside from asset strategy and blockchain initiatives against the near-term liquidity risk and lack of peer benchmarking.