{"success":true,"data":{"pressRelease":{"id":"163193","rtpr_id":"nGNX3Xz5Cz-20261007","ticker":"LGCL","exchange":"NASDAQ","all_tickers":["LGCL"],"title":"Lucas GC Limited Announces 1H 2026 Financial Results: Revenue at US$35.74 million with Increases in Gross Margin","author":"Globe Newswire","published_at":"2026-10-07T13:00:01.938Z","article_body":"NEW YORK, Oct. 07, 2026 (GLOBE NEWSWIRE) -- Lucas GC Limited (NASDAQ: LGCL)\n(“Lucas” or the “Company”), an artificial intelligence (the “AI”)\ntechnology-driven Platform-as-a-Service (the “PaaS”) company, applying\nsuch technologies in human resources and insurance industry verticals today\nannounced its financial results for 1H fiscal year of 2026.\n\n1H 2026 Financial Highlights\n* Our revenue was RMB245.3 million (US$35.7 million) for the six months ended\nJune 30, 2026, compared with RMB386.9 million for the six months ended June\n30, 2025, representing a decrease of 36.6%.\n\n* We recorded a gross margin of 35.4% for the six months ended June 30, 2026,\nrepresenting an increase of 1.7% compared with that of the six months ended\nJune 30, 2025.\n\n* We recorded net income of RMB19.9 million (US$2.9 million) for the six\nmonths ended June 30, 2026, compared with RMB21.5 million for the six months\nended June 30, 2025.\n\n* Our net income margin increased to 8.0% for the six months ended June 30,\n2026, compared with 5.5% for the six months ended June 30, 2025.\nManagement Commentary\n\nHoward Lee, Chief Executive Officer of Lucas, said: “Our first-half\nperformance highlights the success of our ongoing pivot from providing\ntraditional service into higher value-added technology services. While\nmacroeconomic headwinds in China and our strategic shift from lower-margin\ncontracts impacted top-line revenue, our focus on higher-margin product lines\nand expansion delivered remarkable bottom-line expansion. In return, our gross\nmargin expanded by 1.7% to 35.4%, while net income decreased slightly by 7.6%\nyear-over-year to RMB19.9 million, with a net margin of 8.0%.”\n\nComparison of Interim Financial Results for the six months ended June 30, 2025\nand 2026\n\nThe following table summarizes the results of our operations during the six\nmonths ended June 30, 2025 and 2026, respectively, and provides information\nregarding the dollar and percentage increase or (decrease) during such\nperiods.\n\n For the Period Ended June 30, Variance \n 2025 2026 Amount Percentage \n RMB % RMB US$ % RMB % \n (In thousands, except percentages) \n Total revenues 386,890 100.0 245,285 35,744 100.0 (141,605 ) (36.6 ) \n Cost of revenues (256,355 ) (66.3 ) (158,392 ) (23,081 ) (64.6 ) (97,963 ) (38.2 ) \n Gross profit 130,535 33.7 86,893 12,663 35.4 (43,642 ) (33.4 ) \n Operating expenses \n Selling and marketing expenses (30,562 ) (7.9 ) (19,204 ) (2,798 ) (7.8 ) (11,358 ) (37.2 ) \n General and administrative expenses (38,798 ) (10.0 ) (17,807 ) (2,595 ) (7.3 ) (20,991 ) (54.1 ) \n Research and development expenses (45,881 ) (11.9 ) (24,017 ) (3,500 ) (9.8 ) (21,864 ) (47.7 ) \n Total operating expenses (115,241 ) (29.8 ) (61,028 ) (8,893 ) (24.9 ) (54,213 ) (47.0 ) \n Income from operations 15,294 3.9 25,865 3,770 10.5 10,571 69.1 \n Other income (expenses) \n Financial expenses, net (325 ) (0.1 ) (1,402 ) (204 ) (0.6 ) 1,077 331.4 \n Other (expenses) income, net (89 ) (0.0 ) 13 2 0.0 102 114.6 \n Total other expenses, net (414 ) (0.1 ) (1,389 ) (202 ) (0.6 ) 975 235.5 \n Income before income tax benefit (expenses) 14,880 3.8 24,476 3,568 9.9 9,596 64.5 \n Income tax benefit (expenses) 6,613 1.7 (4,620 ) (673 ) (1.9 ) (11,233 ) (169.9 ) \n Net income 21,493 5.5 19,856 2,895 8.0 (1,637 ) (7.6 ) \n\n\n\nRevenues\n\nOur revenues decreased by approximately RMB141.6 million, or 36.6%, from\nRMB386.9 million for the six months ended June 30, 2025 to RMB245.3 million\n(US$35.7 million) for the six months ended June 30, 2026, primarily due to a\ndecrease of revenues from outsourcing service. The following table sets forth\na breakdown of our revenues, each expressed in the absolute amount and as a\npercentage of our total revenues, for the periods indicated:\n\n For the Six Months Ended June 30, Variance \n 2025 2026 Amount Percentage \n RMB % RMB US$ % RMB % \n (In thousands, except percentages) \n Revenues: \n Recruitment service 31,806 8.2 26,266 3,828 10.7 (5,540 ) (17.4 ) \n Outsourcing service 334,471 86.5 213,656 31,134 87.1 (120,815 ) (36.1 ) \n Others 20,613 5.3 5,363 782 2.2 (15,250 ) (74.0 ) \n Total revenues 386,890 100.0 245,285 35,744 100.0 (141,605 ) (36.6 ) \n\nRevenues from recruitment services decreased by RMB5.5 million, or 17.4%, from\nRMB31.8 million for the six months ended June 30, 2025 to RMB26.3 million\n(US$3.8 million) for the six months ended June 30, 2026. Broader macroeconomic\nheadwinds led corporate customers to exercise caution regarding headcount\ngrowth, resulting in lower volume for traditional recruitment placements as\nclients increasingly favored outsourced workforce solutions.\n\nRevenues from outsourcing services decreased by approximately RMB120.8\nmillion, or 36.1%, from RMB334.5 million for the six months ended June 30,\n2025 to RMB213.7 million (US$31.1 million) for the six months ended June 30,\n2026. The decrease was primarily driven by a reduction in corporate customer\ndemand, as customers exercised spending discipline and deferred investments in\ncustom IT systems, process automation, and labor-optimization projects. To\nmitigate these top-line headwinds, management focused on optimizing our\nservice mix by prioritizing toward higher-value technology solutions during\nthe period.\n\nRevenues from other services decreased by RMB15.3 million, or 74.0%, from\nRMB20.6 million for the six months ended June 30, 2025 to RMB5.4 million\n(US$0.8 million) for the six months ended June 30, 2026. The decrease was\nmainly due to softened demand for non-core information technology services as\nclients exercised budget discipline amid a challenging economic climate.\n\nCost of revenues\n\nOur cost of revenues decreased by approximately RMB98.0 million, or 38.2%,\nfrom RMB256.4 million for the six months ended June 30, 2025 to RMB158.4\nmillion (US$23.1 million) for the six months ended June 30, 2026, which was\nmainly due to the decrease in outsourcing service, which had higher cost. The\nfollowing table sets forth a breakdown of our cost of revenues by revenue\nstreams, expressed as an absolute amount and as a percentage of the total\nrevenues, for the periods indicated.\n\n For the Six Months Ended June 30, Variance \n 2025 2026 Amount Percentage \n RMB % RMB US$ % RMB % \n (In thousands, except percentages) \n Cost of revenues: \n Recruitment service 17,873 4.6 12,708 1,852 5.2 (5,165 ) (28.9 ) \n Outsourcing service 224,733 58.1 142,453 20,758 58.1 (82,280 ) (36.6 ) \n Others 13,749 3.6 3,231 471 1.3 (10,518 ) (76.5 ) \n Total cost of revenues 256,355 66.3 158,392 23,081 64.6 (97,963 ) (38.2 ) \n\nCost related to recruitment services decreased by approximately RMB5.2\nmillion, or 28.9%, from RMB17.9 million for the six months ended June 30, 2025\nto RMB12.7 million (US$1.9 million) for the six months ended June 30, 2026,\nprimarily due to the decrease of revenues in recruitment service.\n\nCost related to outsourcing services decreased by approximately RMB82.3\nmillion, or 36.6%, from RMB224.7 million for the six months ended June 30,\n2025 to RMB142.5 million (US$20.8 million) for the six months ended June 30,\n2026, primarily attributable to the decline in active outsourcing project\nvolume, which reduced direct operational expenditures, including fees paid to\nthird-party partners.\n\nCost related to other services decreased by approximately RMB10.5 million, or\n76.5%, from RMB13.7 million for the six months ended June 30, 2025 to RMB3.2\nmillion (US$0.5 million) for the six months ended June 30, 2026, primarily in\nline with the decrease in other services.\n\nGross profits and margin\n\nThe following table sets forth a breakdown of our gross profit, margin by\nrevenue streams, expressed as an absolute amount and as a percentage of their\ncorresponding revenues for the periods indicated.\n\n For the Six Months Ended June 30, Variance \n 2025 2026 Amount Percentage \n RMB % RMB US$ % RMB % \n (In thousands, except percentages) \n Gross profits: \n Recruitment service 13,933 3.6 13,558 1,976 5.5 (375 ) (2.7 ) \n Outsourcing service 109,738 28.4 71,203 10,376 29.0 (38,535 ) (35.1 ) \n Others 6,864 1.7 2,132 311 0.9 (4,732 ) (68.9 ) \n Total gross profits 130,535 33.7 86,893 12,663 35.4 (43,642 ) (33.4 ) \n\nAs a result of the foregoing, we recorded a gross profit of RMB130.5 million\nand RMB86.9 million (US$12.7 million) for the six months ended June 30, 2025\nand 2026, respectively. Moreover, our strategic transit from pursuing revenue\nscale expansion to driving value optimization through gross margin\nenhancement, attributable to slightly gross profit margin increase from 33.7%\nto 35.4% in 2025 and 2026, respectively.\n\nOperating expenses\n\nOur operating expenses decreased from RMB115.2 million for the six months\nended June 30, 2025 to RMB61.0 million (US$8.9 million) for the six months\nended June 30, 2026, representing a decrease of 47.0%, primarily due to the\nfollowing:\n\nGeneral and administrative expenses\n\nOur general and administrative expenses decreased by 54.1% from RMB38.8\nmillion for the six months ended June 30, 2025 to RMB17.8 million (US$2.6\nmillion) for the six months ended June 30, 2026, which was primarily due to\nthe decrease of RMB22.6 million (US$3.3 million) in user support operation\nexpenses, for which we were able to normalize support spending and optimizing\nadministrative overhead.\n\nResearch and development expenses\n\nOur research and development expenses decreased by 47.7% from RMB45.9 million\nfor the six months ended June 30, 2025 to RMB24.0 million (US$3.5 million) for\nthe six months ended June 30, 2026. This reduction was primarily attributable\nto engineering efficiencies gained from our prior-period platform investments,\nwhich reduced the need for major AI model updates during the period. We will\ncontinue allocating capital toward high-ROI technology initiatives to support\nlong-term commercialization and margin expansion.\n\nSelling and marketing expenses\n\nOur selling and marketing expenses decreased by 37.2% from RMB30.6 million for\nthe six months ended June 30, 2025 to RMB19.2 million (US$2.8 million) for the\nsix months ended June 30, 2026, which was mainly due to our commercial\nstrategy toward margin optimization and organic client retention. Leveraging\nstrong recurring relationships with returning corporate customers allowed us\nto streamline customer acquisition expenditure while continuing to serve the\nhigh-value enterprise accounts that power our core outsourcing business.\n\nOther income/(expenses), net\n\nTotal other expenses, net increased by 235.5% from RMB0.4 million for the six\nmonths ended June 30, 2025 to RMB1.4 million (US$0.2 million) for the six\nmonths ended June 30, 2026.\n\nFinancial expenses mainly consist of interest income and expenses, bank\ncharges and exchange gain or loss. Our financial expenses, net increased from\nRMB0.3 million for the six months ended June 30, 2025 to RMB1.4 million\n(US$0.2 million) for the six months ended June 30, 2026 primarily due to the\nincreased bank interest expenses from 1.0 million for the six months ended\nJune 30, 2025 to 1.5 million for the six months ended June 30, 2026; and the\nincrease is offset by the exchange gain, which decreased from 0.7 million for\nthe six months ended June 30, 2025 to 0.07 million for the six months ended\nJune 30, 2026.\n\nIncome tax benefits (expenses)\n\nWe recorded an income tax expense of RMB4.6 million (US$0.7 million) for the\nsix months ended June 30, 2026, compared to an income tax benefit of RMB6.6\nmillion for the six months ended June 30, 2025. This swing from a tax benefit\nto a tax expense was primarily attributable to the utilization of net\noperating loss carryforwards as profitability improved, alongside adjustments\nto recognized deferred tax assets associated with R&D tax credit incentives\nand prior-year loss carryforwards.\n\nNet income\n\nAs a result of the foregoing, our net income decreased slightly by RMB1.6\nmillion, from RMB21.5 million for the six months ended June 30, 2025 to\nRMB19.9 million (US$2.9 million) for the six months ended June 30, 2026.\n\nCash Flow\n\nAs of June 30, 2026, we had cash and cash equivalents of RMB10.4 million\n(US$1.5 million). The following table sets forth a summary of cash flows for\nthe periods indicated:\n\n For the Six Months Ended June 30, Variances \n 2025 2026 Amount Percentage \n RMB RMB US$ RMB % \n (In thousands, except for percentages) \n Net cash provided by operating activities 4,349 8,345 1,217 3,996 91.9 \n Net cash used in investing activities (68,789 ) (309,602 ) (45,116 ) 240,813 350.1 \n Net cash provided by financing activities 63,368 284,824 41,505 221,456 349.5 \n Effect of exchange rate changes on cash and cash equivalents (507 ) (3,455 ) (405 ) 2,948 581.5 \n Net decrease in cash and cash equivalents (1,579 ) (19,888 ) (2,799 ) 18,309 1,159.5 \n Cash and cash equivalents at the beginning of period 31,661 30,305 4,334 (1,356 ) (4.3 ) \n Cash and cash equivalents at the end of period 30,082 10,417 1,535 (19,665 ) (65.4 ) \n\nCash flows from operating activities\n\nFor the six months ended June 30, 2026, our net cash provided by operating\nactivities was RMB8.3 million (US$1.2 million), which was primarily\nattributable to (i) net income of RMB19.9 million (US$2.9 million), primarily\nadjusted for depreciation of software and equipment of RMB9.8 million (US$1.4\nmillion) and provision of expected credit losses of RMB3.2 million; (ii) an\nincrease in advances to suppliers of RMB44.5 million (US$6.5 million),\nprimarily due to increased upfront payments made to secure critical capacity\nand vendor resources for ongoing IT outsourcing deployments; (iii) an increase\nin accounts receivable of RMB76.9 million (US$11.2 million), primarily driven\nby a concentration of project completions and customer billings toward the end\nof the second quarter for which collections remain outstanding; (iv) an\nincrease in accounts payable of RMB74.9 million (US$10.9 million) due to the\ntiming of vendor settlements near the end of the interim period; and (v) an\nincrease in contract liabilities of RMB17.3 million (US$2.5 million) due to\nthe additional cash prepayments collected from customers in advance of product\ndelivery and milestone completions.\n\nFor the six months ended June 30, 2025, our net cash provided by operating\nactivities was RMB4.3 million, which was primarily attributable to (i) net\nincome of RMB21.5 million, primarily adjusted for depreciation of software and\nequipment of RMB5.7 million and provision of expected credit losses of RMB3.2\nmillion; (ii) an increase in prepaid expenses and other current assets of\nRMB5.0 million; (iii) an increase in deferred tax assets of RMB6.6 million,\ndriven by expanded R&D expenditure and tax loss carryforwards; and offset by\n(iv) a decrease in accounts receivable of RMB10.7 million, reflecting cash\ncollections from clients on outstanding balances during the period; (v) a\ndecrease in accounts payable of RMB18.7 million, resulting from the timely\nsettlement and payment of outstanding vendor balances; and (vi) a decrease in\ncontract liabilities of RMB8.1 million, primarily due to the recognition of\nunearned revenue as performance obligations were fulfilled for advance\ncustomer prepayments.\n\nInvesting activities\n\nFor the six months ended June 30, 2026, our net cash used in investing\nactivities was RMB309.6 million (US$45.1 million), which was primarily due to\n(i) purchase of software and equipment of RMB6.6 million (US$1.0 million);\n(ii) purchase of research development of RMB23.6 million (US$3.4 million); and\n(iii) deposits for investment in partnership entities of RMB279.4 million\n(US$40.7 million).\n\nFor the six months ended June 30, 2025, our net cash used in investing\nactivities was RMB68.8 million, which was primarily due to (i) purchase of\nsoftware and equipment of RMB29.5 million; (ii) purchase of research\ndevelopment of RMB19.2 million; and (iii) deposits for investment in\npartnership entities of RMB21.5 million.\n\nFinancing activities\n\nFor the six months ended June 30, 2026, our net cash provided by financing\nactivities was RMB284.8 million (US$41.5 million), which was primarily\nattributable to (i) proceeds from short-term borrowings of RMB47.0 million\n(US$6.8 million); (ii) sale of ordinary shares through private placement of\nRMB280.0 million (US$40.8 million); and offset by (iii) repayment of\nshort-term borrowing of RMB44.0 million (US$6.4 million).\n\nFor the six months ended June 30, 2025, our net cash provided by financing\nactivities was RMB63.4 million, which was primarily attributable to (i)\nproceeds from short-term borrowings of RMB55.0 million; (ii) sale of public\nshares through public offering of RMB43.6 million; offset by (iii) repayment\nof short-term borrowing of RMB31.7 million; (iv) payments of offering costs\nrelated to follow-on offering of RMB1.3 million; and (v) repayment to a\nrelated party of RMB2.3 million.\n\nAbout Lucas GC Limited\n\nWith 24 granted U.S. and Chinese patents and over 75 registered software\ncopyrights in AI, data analytics and blockchain technologies, Lucas GC Limited\nis an AI technology-driven PaaS company, applying such technologies in human\nresources and insurance industry verticals. For more information, please\nvisit: www.lucasgc.com.\n\nForward-Looking Statements\n\nStatements in this press release about future expectations, plans, and\nprospects, as well as any other statements regarding matters that are not\nhistorical facts, may constitute “forward-looking statements.” The words\n“anticipate,” “believe,” “continue,” “could,” “estimate,”\n“expect,” “intend,” “may,” “plan,” “potential,”\n“predict,” “project,” “should,” “target,” “will,”\n“would” and similar expressions are intended to identify forward-looking\nstatements, although not all forward-looking statements contain these\nidentifying words. Actual results may differ materially from those indicated\nby such forward-looking statements as a result of various important factors,\nincluding the uncertainties related to market conditions. Any forward-looking\nstatements contained in this press release speak only as of the date hereof,\nand Lucas GC Limited specifically disclaims any obligation to update any\nforward-looking statement, whether as a result of new information, future\nevents, or otherwise.\n\nFor Investor Inquiries and Media Contact:\n\nhttps://www.lucasgc.com/\nir@lucasgc.com\nT: 818-741-0923\n\n LUCAS GC LIMITED \n UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS \n (All amounts in thousands, except for share and per share data, or otherwise noted) \n As of December 31, As of June 30, \n 2025 2026 \n RMB RMB US$ \n (Audited) (Unaudited) \n ASSETS \n Current assets \n Cash and cash equivalents 30,305 10,417 1,535 \n Short-term investments 4,813 4,780 704 \n Accounts receivable, net 30,730 104,415 15,389 \n Advance to suppliers, net 156,289 200,760 29,589 \n Deferred offering costs 104 104 15 \n Prepaid expenses and other current assets 3,010 4,125 608 \n Total current assets 225,251 324,601 47,840 \n \n Non-current assets \n \n Software and equipment, net 154,125 150,941 22,246 \n Development expenditures 34,816 58,400 8,607 \n Operating lease right-of-use assets, net 124 186 27 \n Deferred tax assets, net 19,800 15,179 2,237 \n Deposits for investment in partnership entities 19,721 299,134 44,088 \n Total non-current assets 228,586 523,840 77,205 \n \n TOTAL ASSETS 453,837 848,441 125,045 \n \n LIABILITIES AND SHAREHOLDERS’ EQUITY \n Current liabilities \n Short-term borrowings 94,861 97,861 14,423 \n Accounts payable 35,530 110,453 16,279 \n Contract liabilities 2,764 20,026 2,952 \n Income tax payable 55 54 8 \n Amounts due to related parties 5,547 7,371 1,086 \n Operating lease liabilities, current - 105 15 \n Accrued expenses and other current liabilities 977 1,992 292 \n Total current liabilities 139,734 237,862 35,055 \n \n Operating lease liabilities, non-current - 81 12 \n Total non-current liability - 81 12 \n TOTAL LIABILITIES 139,734 237,943 35,067 \n \n Shareholders’ equity \n Class A Ordinary shares (US$0.0002 par value; 235,000,000 shares authorized as of December 31, 2025 and June 30, 2026; 2,792,810 shares issued and 2,790,404 shares outstanding as of December 31, 2025 and 42,792,810 shares issued and 42,790,404 shares outstanding as of June 30, 2026) 3 57 8 \n Class B Ordinary Shares (US$0.0002 par value; 15,000,000 shares authorized as of December 31, 2025 and June 30, 2026; nil shares issued and outstanding as of December 31, 2025 and June 30, 2026) - - - \n Subscription receivables (3 ) (3 ) - \n Treasury Stock (856 ) (856 ) (126 ) \n Additional paid-in capital 182,968 462,914 68,226 \n Statutory reserve 25,836 25,836 3,808 \n Retained earnings 104,335 124,044 18,282 \n Accumulated other comprehensive loss (998 ) (4,459 ) (657 ) \n Total Lucas GC Limited shareholders’ equity 311,285 607,533 89,541 \n Non-controlling interests 2,818 2,965 437 \n Total shareholders’ equity 314,103 610,498 89,978 \n \n TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 453,837 848,441 125,045 \n\n\n\n LUCAS GC LIMITED \n UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME \n (All amounts in thousands, except for share and per share data, or otherwise noted) \n For the six months ended June 30, \n 2025 2026 \n RMB RMB US$ \n (Unaudited) (Unaudited) \n Revenues \n Recruitment service 31,806 26,266 3,828 \n Outsourcing service 334,471 213,656 31,134 \n Others 20,613 5,363 782 \n Total revenues 386,890 245,285 35,744 \n Cost of revenues (256,355 ) (158,392 ) (23,081 ) \n Gross profit 130,535 86,893 12,663 \n \n Operating expenses \n Selling and marketing expenses (30,562 ) (19,204 ) (2,798 ) \n General and administrative expenses (38,798 ) (17,807 ) (2,595 ) \n Research and development expenses (45,881 ) (24,017 ) (3,500 ) \n Total operating expenses (115,241 ) (61,028 ) (8,893 ) \n \n Income from operations 15,294 25,865 3,770 \n \n Other expenses \n Financial expenses net (325 ) (1,402 ) (204 ) \n Other (expenses) income, net (89 ) 13 2 \n Total other expenses, net (414 ) (1,389 ) (202 ) \n \n Income before income tax benefit (expenses) 14,880 24,476 3,568 \n Income tax benefit (expenses) 6,613 (4,620 ) (673 ) \n Net income 21,493 19,856 2,895 \n Less: net income attributable to non-controlling interests (159 ) (147 ) (21 ) \n Net income attributable to Lucas GC Limited’s ordinary shareholders 21,334 19,709 2,874 \n \n Net income 21,493 19,856 2,895 \n Other comprehensive income: \n Foreign currency translation difference, net of tax (506 ) (3,461 ) (504 ) \n Total comprehensive income 20,987 16,395 2,391 \n Less: total comprehensive income attributable to non-controlling interests (159 ) (147 ) (21 ) \n Comprehensive income attributable to Lucas GC Limited 20,828 16,248 2,370 \n \n Earnings per share for Class A and Class B ordinary shares: \n Basic 10.55 0.58 0.08 \n Diluted 10.55 0.58 0.08 \n \n Weighted average number of Class A and Class B ordinary shares outstanding used in calculating basic and diluted earnings per share: \n Basic 2,022,399 34,171,619 34,171,619 \n Diluted 2,022,399 34,171,619 34,171,619 \n\n\n\n LUCAS GC LIMITED \n UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY \n (All amounts in thousands, except for share and per share data, or otherwise noted) \n Ordinary Treasury Subscription Additional Statutory Accumulated Accumulated Total Lucas Non- Total \n Shares Stock paid-in (deficit)/ other GC Limited controlling shareholders’ \n Retained comprehensive shareholders’ \n (loss)/ \n Share Amount Share Amount receivables capital reserve earnings income equity interests equity \n Balance as of December 31, 2024 1,986,677 3 2,406 (856 ) (3 ) 142,828 23,271 97,118 472 262,833 2,745 265,578 \n Net income - - - - - - - 21,334 - 21,334 159 21,493 \n Sale of public shares through public offering, net of offering cost 803,750 - - - - 40,140 - - - 40,140 - 40,140 \n Foreign currency translation - - - - - - - - (506 ) (506 ) - (506 ) \n Balance as of June 30, 2025 2,790,427 3 2,406 (856 ) (3 ) 182,968 23,271 118,452 (34 ) 323,801 2,904 326,705 \n \n Balance as of December 31, 2025 2,790,404 3 2,406 (856 ) (3 ) 182,968 25,836 104,335 (998 ) 311,285 2,818 314,103 \n Net income - - - - - - - 19,709 - 19,709 147 19,856 \n Sale of ordinary shares through private placement 40,000,000 54 - - - 279,946 - - - 280,000 - 280,000 \n Foreign currency translation - - - - - - - - (3,461 ) (3,461 ) - (3,461 ) \n Balance as of June 30, 2026 42,790,404 57 2,406 (856 ) (3 ) 462,914 25,836 124,044 (4,459 ) 607,533 2,965 610,498 \n\n*The shares and per share information are presented on a retroactive basis to\nreflect the reorganization, the stock consolidation on October 13, 2025 and\nthe dual-class share structure.\n\n LUCAS GC LIMITED \n UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS \n (All amounts in thousands, except for share and per share data, or otherwise noted) \n For the six months ended June 30, \n 2025 2026 \n RMB RMB US$ \n (Unaudited) (Unaudited) \n Cash flows from operating activities: \n Net income 21,493 19,856 2,895 \n Adjustments to reconcile net income to net cash provided by operating activities: \n Depreciation and amortization 5,691 9,787 1,426 \n Amortization of right-of-use assets 207 26 4 \n Allowance for expected credit losses 3,162 3,228 470 \n Fair value (gains) losses on short-term investments (18 ) 33 5 \n Changes in operating assets and liabilities: \n Accounts receivable 10,671 (76,913 ) (11,208 ) \n Advance to suppliers, net 1,238 (44,471 ) (6,480 ) \n Prepaid expenses and other current assets (4,976 ) (1,115 ) (162 ) \n Deferred tax assets, net (6,613 ) 4,620 673 \n Accounts payable (18,674 ) 74,923 10,918 \n Contract liabilities (8,063 ) 17,261 2,515 \n Income tax payables - (1 ) - \n Operating lease liabilities (254 ) 99 14 \n Accrued expenses and other current liabilities 485 1,012 147 \n Net cash provided by operating activities 4,349 8,345 1,217 \n \n Cash flows from investing activities: \n Purchases of software and equipment (29,494 ) (6,604 ) (962 ) \n Addition to development expenditures (19,200 ) (23,585 ) (3,437 ) \n Maturities of short-term investments 1,396 - - \n Deposits for investment in partnership entities (21,491 ) (279,413 ) (40,717 ) \n Net cash used in investing activities (68,789 ) (309,602 ) (45,116 ) \n \n Cash flows from financing activities: \n Proceeds from short-term borrowings 55,000 47,000 6,849 \n Repayments of short-term borrowings (31,670 ) (44,000 ) (6,412 ) \n Payments of offering costs related to followed-on offering (1,306 ) - - \n Repayments to a related party (2,300 ) - - \n Advance from a related party - 1,824 266 \n Sale of public shares through public offering 43,644 - - \n Sale of ordinary shares through private placement - 280,000 40,802 \n Net cash provided by financing activities 63,368 284,824 41,505 \n \n Effect of exchange rate changes on cash and cash equivalents (507 ) (3,455 ) (405 ) \n \n Net decrease in cash and cash equivalents (1,579 ) (19,888 ) (2,799 ) \n Cash and cash equivalents at the beginning of period 31,661 30,305 4,334 \n Cash and cash equivalents at the end of period 30,082 10,417 1,535 \n \n Supplemental disclosure of cash flow information: \n Income tax paid 159 - - \n Interest paid 1,014 1,482 216 \n \n Supplemental disclosure of non-cash flow information: \n Obtaining right-of-use assets in exchange for lease liability - 211 31 \n\n(https://www.globenewswire.com/NewsRoom/AttachmentNg/cd92a9e2-678a-46e6-83aa-0b4e080ccaa6)\n\n\n\nGlobeNewswire, Inc. 2026","article_body_html":"","raw_payload":{"data":{"id":"nGNX3Xz5Cz-20261007","title":"Lucas GC Limited Announces 1H 2026 Financial Results: Revenue at US$35.74 million with Increases in Gross Margin","author":"Globe Newswire","ticker":"LGCL","created":"2026-10-07T13:00:01.938Z","tickers":["LGCL"],"exchange":"NASDAQ","article_body":"NEW YORK, Oct. 07, 2026 (GLOBE NEWSWIRE) -- Lucas GC Limited (NASDAQ: LGCL)\n(“Lucas” or the “Company”), an artificial intelligence (the “AI”)\ntechnology-driven Platform-as-a-Service (the “PaaS”) company, applying\nsuch technologies in human resources and insurance industry verticals today\nannounced its financial results for 1H fiscal year of 2026.\n\n1H 2026 Financial Highlights\n* Our revenue was RMB245.3 million (US$35.7 million) for the six months ended\nJune 30, 2026, compared with RMB386.9 million for the six months ended June\n30, 2025, representing a decrease of 36.6%.\n\n* We recorded a gross margin of 35.4% for the six months ended June 30, 2026,\nrepresenting an increase of 1.7% compared with that of the six months ended\nJune 30, 2025.\n\n* We recorded net income of RMB19.9 million (US$2.9 million) for the six\nmonths ended June 30, 2026, compared with RMB21.5 million for the six months\nended June 30, 2025.\n\n* Our net income margin increased to 8.0% for the six months ended June 30,\n2026, compared with 5.5% for the six months ended June 30, 2025.\nManagement Commentary\n\nHoward Lee, Chief Executive Officer of Lucas, said: “Our first-half\nperformance highlights the success of our ongoing pivot from providing\ntraditional service into higher value-added technology services. While\nmacroeconomic headwinds in China and our strategic shift from lower-margin\ncontracts impacted top-line revenue, our focus on higher-margin product lines\nand expansion delivered remarkable bottom-line expansion. In return, our gross\nmargin expanded by 1.7% to 35.4%, while net income decreased slightly by 7.6%\nyear-over-year to RMB19.9 million, with a net margin of 8.0%.”\n\nComparison of Interim Financial Results for the six months ended June 30, 2025\nand 2026\n\nThe following table summarizes the results of our operations during the six\nmonths ended June 30, 2025 and 2026, respectively, and provides information\nregarding the dollar and percentage increase or (decrease) during such\nperiods.\n\n For the Period Ended June 30, Variance \n 2025 2026 Amount Percentage \n RMB % RMB US$ % RMB % \n (In thousands, except percentages) \n Total revenues 386,890 100.0 245,285 35,744 100.0 (141,605 ) (36.6 ) \n Cost of revenues (256,355 ) (66.3 ) (158,392 ) (23,081 ) (64.6 ) (97,963 ) (38.2 ) \n Gross profit 130,535 33.7 86,893 12,663 35.4 (43,642 ) (33.4 ) \n Operating expenses \n Selling and marketing expenses (30,562 ) (7.9 ) (19,204 ) (2,798 ) (7.8 ) (11,358 ) (37.2 ) \n General and administrative expenses (38,798 ) (10.0 ) (17,807 ) (2,595 ) (7.3 ) (20,991 ) (54.1 ) \n Research and development expenses (45,881 ) (11.9 ) (24,017 ) (3,500 ) (9.8 ) (21,864 ) (47.7 ) \n Total operating expenses (115,241 ) (29.8 ) (61,028 ) (8,893 ) (24.9 ) (54,213 ) (47.0 ) \n Income from operations 15,294 3.9 25,865 3,770 10.5 10,571 69.1 \n Other income (expenses) \n Financial expenses, net (325 ) (0.1 ) (1,402 ) (204 ) (0.6 ) 1,077 331.4 \n Other (expenses) income, net (89 ) (0.0 ) 13 2 0.0 102 114.6 \n Total other expenses, net (414 ) (0.1 ) (1,389 ) (202 ) (0.6 ) 975 235.5 \n Income before income tax benefit (expenses) 14,880 3.8 24,476 3,568 9.9 9,596 64.5 \n Income tax benefit (expenses) 6,613 1.7 (4,620 ) (673 ) (1.9 ) (11,233 ) (169.9 ) \n Net income 21,493 5.5 19,856 2,895 8.0 (1,637 ) (7.6 ) \n\n\n\nRevenues\n\nOur revenues decreased by approximately RMB141.6 million, or 36.6%, from\nRMB386.9 million for the six months ended June 30, 2025 to RMB245.3 million\n(US$35.7 million) for the six months ended June 30, 2026, primarily due to a\ndecrease of revenues from outsourcing service. The following table sets forth\na breakdown of our revenues, each expressed in the absolute amount and as a\npercentage of our total revenues, for the periods indicated:\n\n For the Six Months Ended June 30, Variance \n 2025 2026 Amount Percentage \n RMB % RMB US$ % RMB % \n (In thousands, except percentages) \n Revenues: \n Recruitment service 31,806 8.2 26,266 3,828 10.7 (5,540 ) (17.4 ) \n Outsourcing service 334,471 86.5 213,656 31,134 87.1 (120,815 ) (36.1 ) \n Others 20,613 5.3 5,363 782 2.2 (15,250 ) (74.0 ) \n Total revenues 386,890 100.0 245,285 35,744 100.0 (141,605 ) (36.6 ) \n\nRevenues from recruitment services decreased by RMB5.5 million, or 17.4%, from\nRMB31.8 million for the six months ended June 30, 2025 to RMB26.3 million\n(US$3.8 million) for the six months ended June 30, 2026. Broader macroeconomic\nheadwinds led corporate customers to exercise caution regarding headcount\ngrowth, resulting in lower volume for traditional recruitment placements as\nclients increasingly favored outsourced workforce solutions.\n\nRevenues from outsourcing services decreased by approximately RMB120.8\nmillion, or 36.1%, from RMB334.5 million for the six months ended June 30,\n2025 to RMB213.7 million (US$31.1 million) for the six months ended June 30,\n2026. The decrease was primarily driven by a reduction in corporate customer\ndemand, as customers exercised spending discipline and deferred investments in\ncustom IT systems, process automation, and labor-optimization projects. To\nmitigate these top-line headwinds, management focused on optimizing our\nservice mix by prioritizing toward higher-value technology solutions during\nthe period.\n\nRevenues from other services decreased by RMB15.3 million, or 74.0%, from\nRMB20.6 million for the six months ended June 30, 2025 to RMB5.4 million\n(US$0.8 million) for the six months ended June 30, 2026. The decrease was\nmainly due to softened demand for non-core information technology services as\nclients exercised budget discipline amid a challenging economic climate.\n\nCost of revenues\n\nOur cost of revenues decreased by approximately RMB98.0 million, or 38.2%,\nfrom RMB256.4 million for the six months ended June 30, 2025 to RMB158.4\nmillion (US$23.1 million) for the six months ended June 30, 2026, which was\nmainly due to the decrease in outsourcing service, which had higher cost. The\nfollowing table sets forth a breakdown of our cost of revenues by revenue\nstreams, expressed as an absolute amount and as a percentage of the total\nrevenues, for the periods indicated.\n\n For the Six Months Ended June 30, Variance \n 2025 2026 Amount Percentage \n RMB % RMB US$ % RMB % \n (In thousands, except percentages) \n Cost of revenues: \n Recruitment service 17,873 4.6 12,708 1,852 5.2 (5,165 ) (28.9 ) \n Outsourcing service 224,733 58.1 142,453 20,758 58.1 (82,280 ) (36.6 ) \n Others 13,749 3.6 3,231 471 1.3 (10,518 ) (76.5 ) \n Total cost of revenues 256,355 66.3 158,392 23,081 64.6 (97,963 ) (38.2 ) \n\nCost related to recruitment services decreased by approximately RMB5.2\nmillion, or 28.9%, from RMB17.9 million for the six months ended June 30, 2025\nto RMB12.7 million (US$1.9 million) for the six months ended June 30, 2026,\nprimarily due to the decrease of revenues in recruitment service.\n\nCost related to outsourcing services decreased by approximately RMB82.3\nmillion, or 36.6%, from RMB224.7 million for the six months ended June 30,\n2025 to RMB142.5 million (US$20.8 million) for the six months ended June 30,\n2026, primarily attributable to the decline in active outsourcing project\nvolume, which reduced direct operational expenditures, including fees paid to\nthird-party partners.\n\nCost related to other services decreased by approximately RMB10.5 million, or\n76.5%, from RMB13.7 million for the six months ended June 30, 2025 to RMB3.2\nmillion (US$0.5 million) for the six months ended June 30, 2026, primarily in\nline with the decrease in other services.\n\nGross profits and margin\n\nThe following table sets forth a breakdown of our gross profit, margin by\nrevenue streams, expressed as an absolute amount and as a percentage of their\ncorresponding revenues for the periods indicated.\n\n For the Six Months Ended June 30, Variance \n 2025 2026 Amount Percentage \n RMB % RMB US$ % RMB % \n (In thousands, except percentages) \n Gross profits: \n Recruitment service 13,933 3.6 13,558 1,976 5.5 (375 ) (2.7 ) \n Outsourcing service 109,738 28.4 71,203 10,376 29.0 (38,535 ) (35.1 ) \n Others 6,864 1.7 2,132 311 0.9 (4,732 ) (68.9 ) \n Total gross profits 130,535 33.7 86,893 12,663 35.4 (43,642 ) (33.4 ) \n\nAs a result of the foregoing, we recorded a gross profit of RMB130.5 million\nand RMB86.9 million (US$12.7 million) for the six months ended June 30, 2025\nand 2026, respectively. Moreover, our strategic transit from pursuing revenue\nscale expansion to driving value optimization through gross margin\nenhancement, attributable to slightly gross profit margin increase from 33.7%\nto 35.4% in 2025 and 2026, respectively.\n\nOperating expenses\n\nOur operating expenses decreased from RMB115.2 million for the six months\nended June 30, 2025 to RMB61.0 million (US$8.9 million) for the six months\nended June 30, 2026, representing a decrease of 47.0%, primarily due to the\nfollowing:\n\nGeneral and administrative expenses\n\nOur general and administrative expenses decreased by 54.1% from RMB38.8\nmillion for the six months ended June 30, 2025 to RMB17.8 million (US$2.6\nmillion) for the six months ended June 30, 2026, which was primarily due to\nthe decrease of RMB22.6 million (US$3.3 million) in user support operation\nexpenses, for which we were able to normalize support spending and optimizing\nadministrative overhead.\n\nResearch and development expenses\n\nOur research and development expenses decreased by 47.7% from RMB45.9 million\nfor the six months ended June 30, 2025 to RMB24.0 million (US$3.5 million) for\nthe six months ended June 30, 2026. This reduction was primarily attributable\nto engineering efficiencies gained from our prior-period platform investments,\nwhich reduced the need for major AI model updates during the period. We will\ncontinue allocating capital toward high-ROI technology initiatives to support\nlong-term commercialization and margin expansion.\n\nSelling and marketing expenses\n\nOur selling and marketing expenses decreased by 37.2% from RMB30.6 million for\nthe six months ended June 30, 2025 to RMB19.2 million (US$2.8 million) for the\nsix months ended June 30, 2026, which was mainly due to our commercial\nstrategy toward margin optimization and organic client retention. Leveraging\nstrong recurring relationships with returning corporate customers allowed us\nto streamline customer acquisition expenditure while continuing to serve the\nhigh-value enterprise accounts that power our core outsourcing business.\n\nOther income/(expenses), net\n\nTotal other expenses, net increased by 235.5% from RMB0.4 million for the six\nmonths ended June 30, 2025 to RMB1.4 million (US$0.2 million) for the six\nmonths ended June 30, 2026.\n\nFinancial expenses mainly consist of interest income and expenses, bank\ncharges and exchange gain or loss. Our financial expenses, net increased from\nRMB0.3 million for the six months ended June 30, 2025 to RMB1.4 million\n(US$0.2 million) for the six months ended June 30, 2026 primarily due to the\nincreased bank interest expenses from 1.0 million for the six months ended\nJune 30, 2025 to 1.5 million for the six months ended June 30, 2026; and the\nincrease is offset by the exchange gain, which decreased from 0.7 million for\nthe six months ended June 30, 2025 to 0.07 million for the six months ended\nJune 30, 2026.\n\nIncome tax benefits (expenses)\n\nWe recorded an income tax expense of RMB4.6 million (US$0.7 million) for the\nsix months ended June 30, 2026, compared to an income tax benefit of RMB6.6\nmillion for the six months ended June 30, 2025. This swing from a tax benefit\nto a tax expense was primarily attributable to the utilization of net\noperating loss carryforwards as profitability improved, alongside adjustments\nto recognized deferred tax assets associated with R&D tax credit incentives\nand prior-year loss carryforwards.\n\nNet income\n\nAs a result of the foregoing, our net income decreased slightly by RMB1.6\nmillion, from RMB21.5 million for the six months ended June 30, 2025 to\nRMB19.9 million (US$2.9 million) for the six months ended June 30, 2026.\n\nCash Flow\n\nAs of June 30, 2026, we had cash and cash equivalents of RMB10.4 million\n(US$1.5 million). The following table sets forth a summary of cash flows for\nthe periods indicated:\n\n For the Six Months Ended June 30, Variances \n 2025 2026 Amount Percentage \n RMB RMB US$ RMB % \n (In thousands, except for percentages) \n Net cash provided by operating activities 4,349 8,345 1,217 3,996 91.9 \n Net cash used in investing activities (68,789 ) (309,602 ) (45,116 ) 240,813 350.1 \n Net cash provided by financing activities 63,368 284,824 41,505 221,456 349.5 \n Effect of exchange rate changes on cash and cash equivalents (507 ) (3,455 ) (405 ) 2,948 581.5 \n Net decrease in cash and cash equivalents (1,579 ) (19,888 ) (2,799 ) 18,309 1,159.5 \n Cash and cash equivalents at the beginning of period 31,661 30,305 4,334 (1,356 ) (4.3 ) \n Cash and cash equivalents at the end of period 30,082 10,417 1,535 (19,665 ) (65.4 ) \n\nCash flows from operating activities\n\nFor the six months ended June 30, 2026, our net cash provided by operating\nactivities was RMB8.3 million (US$1.2 million), which was primarily\nattributable to (i) net income of RMB19.9 million (US$2.9 million), primarily\nadjusted for depreciation of software and equipment of RMB9.8 million (US$1.4\nmillion) and provision of expected credit losses of RMB3.2 million; (ii) an\nincrease in advances to suppliers of RMB44.5 million (US$6.5 million),\nprimarily due to increased upfront payments made to secure critical capacity\nand vendor resources for ongoing IT outsourcing deployments; (iii) an increase\nin accounts receivable of RMB76.9 million (US$11.2 million), primarily driven\nby a concentration of project completions and customer billings toward the end\nof the second quarter for which collections remain outstanding; (iv) an\nincrease in accounts payable of RMB74.9 million (US$10.9 million) due to the\ntiming of vendor settlements near the end of the interim period; and (v) an\nincrease in contract liabilities of RMB17.3 million (US$2.5 million) due to\nthe additional cash prepayments collected from customers in advance of product\ndelivery and milestone completions.\n\nFor the six months ended June 30, 2025, our net cash provided by operating\nactivities was RMB4.3 million, which was primarily attributable to (i) net\nincome of RMB21.5 million, primarily adjusted for depreciation of software and\nequipment of RMB5.7 million and provision of expected credit losses of RMB3.2\nmillion; (ii) an increase in prepaid expenses and other current assets of\nRMB5.0 million; (iii) an increase in deferred tax assets of RMB6.6 million,\ndriven by expanded R&D expenditure and tax loss carryforwards; and offset by\n(iv) a decrease in accounts receivable of RMB10.7 million, reflecting cash\ncollections from clients on outstanding balances during the period; (v) a\ndecrease in accounts payable of RMB18.7 million, resulting from the timely\nsettlement and payment of outstanding vendor balances; and (vi) a decrease in\ncontract liabilities of RMB8.1 million, primarily due to the recognition of\nunearned revenue as performance obligations were fulfilled for advance\ncustomer prepayments.\n\nInvesting activities\n\nFor the six months ended June 30, 2026, our net cash used in investing\nactivities was RMB309.6 million (US$45.1 million), which was primarily due to\n(i) purchase of software and equipment of RMB6.6 million (US$1.0 million);\n(ii) purchase of research development of RMB23.6 million (US$3.4 million); and\n(iii) deposits for investment in partnership entities of RMB279.4 million\n(US$40.7 million).\n\nFor the six months ended June 30, 2025, our net cash used in investing\nactivities was RMB68.8 million, which was primarily due to (i) purchase of\nsoftware and equipment of RMB29.5 million; (ii) purchase of research\ndevelopment of RMB19.2 million; and (iii) deposits for investment in\npartnership entities of RMB21.5 million.\n\nFinancing activities\n\nFor the six months ended June 30, 2026, our net cash provided by financing\nactivities was RMB284.8 million (US$41.5 million), which was primarily\nattributable to (i) proceeds from short-term borrowings of RMB47.0 million\n(US$6.8 million); (ii) sale of ordinary shares through private placement of\nRMB280.0 million (US$40.8 million); and offset by (iii) repayment of\nshort-term borrowing of RMB44.0 million (US$6.4 million).\n\nFor the six months ended June 30, 2025, our net cash provided by financing\nactivities was RMB63.4 million, which was primarily attributable to (i)\nproceeds from short-term borrowings of RMB55.0 million; (ii) sale of public\nshares through public offering of RMB43.6 million; offset by (iii) repayment\nof short-term borrowing of RMB31.7 million; (iv) payments of offering costs\nrelated to follow-on offering of RMB1.3 million; and (v) repayment to a\nrelated party of RMB2.3 million.\n\nAbout Lucas GC Limited\n\nWith 24 granted U.S. and Chinese patents and over 75 registered software\ncopyrights in AI, data analytics and blockchain technologies, Lucas GC Limited\nis an AI technology-driven PaaS company, applying such technologies in human\nresources and insurance industry verticals. For more information, please\nvisit: www.lucasgc.com.\n\nForward-Looking Statements\n\nStatements in this press release about future expectations, plans, and\nprospects, as well as any other statements regarding matters that are not\nhistorical facts, may constitute “forward-looking statements.” The words\n“anticipate,” “believe,” “continue,” “could,” “estimate,”\n“expect,” “intend,” “may,” “plan,” “potential,”\n“predict,” “project,” “should,” “target,” “will,”\n“would” and similar expressions are intended to identify forward-looking\nstatements, although not all forward-looking statements contain these\nidentifying words. Actual results may differ materially from those indicated\nby such forward-looking statements as a result of various important factors,\nincluding the uncertainties related to market conditions. Any forward-looking\nstatements contained in this press release speak only as of the date hereof,\nand Lucas GC Limited specifically disclaims any obligation to update any\nforward-looking statement, whether as a result of new information, future\nevents, or otherwise.\n\nFor Investor Inquiries and Media Contact:\n\nhttps://www.lucasgc.com/\nir@lucasgc.com\nT: 818-741-0923\n\n LUCAS GC LIMITED \n UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS \n (All amounts in thousands, except for share and per share data, or otherwise noted) \n As of December 31, As of June 30, \n 2025 2026 \n RMB RMB US$ \n (Audited) (Unaudited) \n ASSETS \n Current assets \n Cash and cash equivalents 30,305 10,417 1,535 \n Short-term investments 4,813 4,780 704 \n Accounts receivable, net 30,730 104,415 15,389 \n Advance to suppliers, net 156,289 200,760 29,589 \n Deferred offering costs 104 104 15 \n Prepaid expenses and other current assets 3,010 4,125 608 \n Total current assets 225,251 324,601 47,840 \n \n Non-current assets \n \n Software and equipment, net 154,125 150,941 22,246 \n Development expenditures 34,816 58,400 8,607 \n Operating lease right-of-use assets, net 124 186 27 \n Deferred tax assets, net 19,800 15,179 2,237 \n Deposits for investment in partnership entities 19,721 299,134 44,088 \n Total non-current assets 228,586 523,840 77,205 \n \n TOTAL ASSETS 453,837 848,441 125,045 \n \n LIABILITIES AND SHAREHOLDERS’ EQUITY \n Current liabilities \n Short-term borrowings 94,861 97,861 14,423 \n Accounts payable 35,530 110,453 16,279 \n Contract liabilities 2,764 20,026 2,952 \n Income tax payable 55 54 8 \n Amounts due to related parties 5,547 7,371 1,086 \n Operating lease liabilities, current - 105 15 \n Accrued expenses and other current liabilities 977 1,992 292 \n Total current liabilities 139,734 237,862 35,055 \n \n Operating lease liabilities, non-current - 81 12 \n Total non-current liability - 81 12 \n TOTAL LIABILITIES 139,734 237,943 35,067 \n \n Shareholders’ equity \n Class A Ordinary shares (US$0.0002 par value; 235,000,000 shares authorized as of December 31, 2025 and June 30, 2026; 2,792,810 shares issued and 2,790,404 shares outstanding as of December 31, 2025 and 42,792,810 shares issued and 42,790,404 shares outstanding as of June 30, 2026) 3 57 8 \n Class B Ordinary Shares (US$0.0002 par value; 15,000,000 shares authorized as of December 31, 2025 and June 30, 2026; nil shares issued and outstanding as of December 31, 2025 and June 30, 2026) - - - \n Subscription receivables (3 ) (3 ) - \n Treasury Stock (856 ) (856 ) (126 ) \n Additional paid-in capital 182,968 462,914 68,226 \n Statutory reserve 25,836 25,836 3,808 \n Retained earnings 104,335 124,044 18,282 \n Accumulated other comprehensive loss (998 ) (4,459 ) (657 ) \n Total Lucas GC Limited shareholders’ equity 311,285 607,533 89,541 \n Non-controlling interests 2,818 2,965 437 \n Total shareholders’ equity 314,103 610,498 89,978 \n \n TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 453,837 848,441 125,045 \n\n\n\n LUCAS GC LIMITED \n UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME \n (All amounts in thousands, except for share and per share data, or otherwise noted) \n For the six months ended June 30, \n 2025 2026 \n RMB RMB US$ \n (Unaudited) (Unaudited) \n Revenues \n Recruitment service 31,806 26,266 3,828 \n Outsourcing service 334,471 213,656 31,134 \n Others 20,613 5,363 782 \n Total revenues 386,890 245,285 35,744 \n Cost of revenues (256,355 ) (158,392 ) (23,081 ) \n Gross profit 130,535 86,893 12,663 \n \n Operating expenses \n Selling and marketing expenses (30,562 ) (19,204 ) (2,798 ) \n General and administrative expenses (38,798 ) (17,807 ) (2,595 ) \n Research and development expenses (45,881 ) (24,017 ) (3,500 ) \n Total operating expenses (115,241 ) (61,028 ) (8,893 ) \n \n Income from operations 15,294 25,865 3,770 \n \n Other expenses \n Financial expenses net (325 ) (1,402 ) (204 ) \n Other (expenses) income, net (89 ) 13 2 \n Total other expenses, net (414 ) (1,389 ) (202 ) \n \n Income before income tax benefit (expenses) 14,880 24,476 3,568 \n Income tax benefit (expenses) 6,613 (4,620 ) (673 ) \n Net income 21,493 19,856 2,895 \n Less: net income attributable to non-controlling interests (159 ) (147 ) (21 ) \n Net income attributable to Lucas GC Limited’s ordinary shareholders 21,334 19,709 2,874 \n \n Net income 21,493 19,856 2,895 \n Other comprehensive income: \n Foreign currency translation difference, net of tax (506 ) (3,461 ) (504 ) \n Total comprehensive income 20,987 16,395 2,391 \n Less: total comprehensive income attributable to non-controlling interests (159 ) (147 ) (21 ) \n Comprehensive income attributable to Lucas GC Limited 20,828 16,248 2,370 \n \n Earnings per share for Class A and Class B ordinary shares: \n Basic 10.55 0.58 0.08 \n Diluted 10.55 0.58 0.08 \n \n Weighted average number of Class A and Class B ordinary shares outstanding used in calculating basic and diluted earnings per share: \n Basic 2,022,399 34,171,619 34,171,619 \n Diluted 2,022,399 34,171,619 34,171,619 \n\n\n\n LUCAS GC LIMITED \n UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY \n (All amounts in thousands, except for share and per share data, or otherwise noted) \n Ordinary Treasury Subscription Additional Statutory Accumulated Accumulated Total Lucas Non- Total \n Shares Stock paid-in (deficit)/ other GC Limited controlling shareholders’ \n Retained comprehensive shareholders’ \n (loss)/ \n Share Amount Share Amount receivables capital reserve earnings income equity interests equity \n Balance as of December 31, 2024 1,986,677 3 2,406 (856 ) (3 ) 142,828 23,271 97,118 472 262,833 2,745 265,578 \n Net income - - - - - - - 21,334 - 21,334 159 21,493 \n Sale of public shares through public offering, net of offering cost 803,750 - - - - 40,140 - - - 40,140 - 40,140 \n Foreign currency translation - - - - - - - - (506 ) (506 ) - (506 ) \n Balance as of June 30, 2025 2,790,427 3 2,406 (856 ) (3 ) 182,968 23,271 118,452 (34 ) 323,801 2,904 326,705 \n \n Balance as of December 31, 2025 2,790,404 3 2,406 (856 ) (3 ) 182,968 25,836 104,335 (998 ) 311,285 2,818 314,103 \n Net income - - - - - - - 19,709 - 19,709 147 19,856 \n Sale of ordinary shares through private placement 40,000,000 54 - - - 279,946 - - - 280,000 - 280,000 \n Foreign currency translation - - - - - - - - (3,461 ) (3,461 ) - (3,461 ) \n Balance as of June 30, 2026 42,790,404 57 2,406 (856 ) (3 ) 462,914 25,836 124,044 (4,459 ) 607,533 2,965 610,498 \n\n*The shares and per share information are presented on a retroactive basis to\nreflect the reorganization, the stock consolidation on October 13, 2025 and\nthe dual-class share structure.\n\n LUCAS GC LIMITED \n UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS \n (All amounts in thousands, except for share and per share data, or otherwise noted) \n For the six months ended June 30, \n 2025 2026 \n RMB RMB US$ \n (Unaudited) (Unaudited) \n Cash flows from operating activities: \n Net income 21,493 19,856 2,895 \n Adjustments to reconcile net income to net cash provided by operating activities: \n Depreciation and amortization 5,691 9,787 1,426 \n Amortization of right-of-use assets 207 26 4 \n Allowance for expected credit losses 3,162 3,228 470 \n Fair value (gains) losses on short-term investments (18 ) 33 5 \n Changes in operating assets and liabilities: \n Accounts receivable 10,671 (76,913 ) (11,208 ) \n Advance to suppliers, net 1,238 (44,471 ) (6,480 ) \n Prepaid expenses and other current assets (4,976 ) (1,115 ) (162 ) \n Deferred tax assets, net (6,613 ) 4,620 673 \n Accounts payable (18,674 ) 74,923 10,918 \n Contract liabilities (8,063 ) 17,261 2,515 \n Income tax payables - (1 ) - \n Operating lease liabilities (254 ) 99 14 \n Accrued expenses and other current liabilities 485 1,012 147 \n Net cash provided by operating activities 4,349 8,345 1,217 \n \n Cash flows from investing activities: \n Purchases of software and equipment (29,494 ) (6,604 ) (962 ) \n Addition to development expenditures (19,200 ) (23,585 ) (3,437 ) \n Maturities of short-term investments 1,396 - - \n Deposits for investment in partnership entities (21,491 ) (279,413 ) (40,717 ) \n Net cash used in investing activities (68,789 ) (309,602 ) (45,116 ) \n \n Cash flows from financing activities: \n Proceeds from short-term borrowings 55,000 47,000 6,849 \n Repayments of short-term borrowings (31,670 ) (44,000 ) (6,412 ) \n Payments of offering costs related to followed-on offering (1,306 ) - - \n Repayments to a related party (2,300 ) - - \n Advance from a related party - 1,824 266 \n Sale of public shares through public offering 43,644 - - \n Sale of ordinary shares through private placement - 280,000 40,802 \n Net cash provided by financing activities 63,368 284,824 41,505 \n \n Effect of exchange rate changes on cash and cash equivalents (507 ) (3,455 ) (405 ) \n \n Net decrease in cash and cash equivalents (1,579 ) (19,888 ) (2,799 ) \n Cash and cash equivalents at the beginning of period 31,661 30,305 4,334 \n Cash and cash equivalents at the end of period 30,082 10,417 1,535 \n \n Supplemental disclosure of cash flow information: \n Income tax paid 159 - - \n Interest paid 1,014 1,482 216 \n \n Supplemental disclosure of non-cash flow information: \n Obtaining right-of-use assets in exchange for lease liability - 211 31 \n\n(https://www.globenewswire.com/NewsRoom/AttachmentNg/cd92a9e2-678a-46e6-83aa-0b4e080ccaa6)\n\n\n\nGlobeNewswire, Inc. 2026"},"type":"article","timestamp":"2026-10-07T13:00:02.644221696Z","server_sent_at_ms":1791378002644},"received_at":"2026-10-07T13:00:02.820Z","source_url":null},"analysis":{"id":"151666","press_release_id":"163193","analysis_json":{"industry":{"label":"Professional Services","sector":"Industrials"},"redFlags":["Revenue down 36.6% YoY with declines across all service lines","Massive dilution: ~40 million shares issued in private placement vs 2.79 million outstanding, a ~15x increase","Cash fell 65% in six months to US$1.5 million while RMB279.4 million was deposited into partnership entity investments","Swing from income tax benefit to tax expense reduced net income"],"eventType":"earnings","narrative":"Lucas GC reported 1H 2026 revenue of US$35.7 million (RMB245.3 million), down 36.6% year-over-year, driven mainly by a 36.1% decline in outsourcing service revenue amid China macro headwinds and the company's shift away from lower-margin contracts.\n\nProfitability metrics improved despite the top-line drop: gross margin expanded 1.7 points to 35.4%, operating income rose 69.1% to RMB25.9 million, and net income slipped only 7.6% to RMB19.9 million with a net margin of 8.0%.\n\nThe company completed a RMB280 million (US$40.8 million) private placement, swelling Class A shares outstanding from ~2.8 million to 42.8 million, while cash and equivalents ended the period at just RMB10.4 million (US$1.5 million) after RMB279.4 million of partnership-investment deposits.","sentiment":"mixed","agentHooks":{"shouldPost":true,"suggestedAngle":"Margin story masks a 37% revenue collapse and a 15x share-count jump via private placement -- examine use of RMB279M in partnership deposits."},"keyFigures":{"eps":0.08,"revenue":35744000,"guidance":"","customDimensions":{"net_income":"RMB19.9 million (US$2.9 million)","gross_margin":"35.4%","net_income_yoy":"-7.6%","operating_income":"RMB25.9 million (US$3.8 million)","shares_outstanding":42790404,"cash_and_equivalents":"RMB10.4 million (US$1.5 million)","operating_income_yoy":"+69.1%","private_placement_proceeds":"RMB280.0 million (US$40.8 million)"}},"quotedText":"While macroeconomic headwinds in China and our strategic shift from lower-margin contracts impacted top-line revenue, our focus on higher-margin product lines and expansion delivered remarkable bottom-line expansion.","namedEntities":{"people":[{"name":"Howard Lee","role":"CEO"}],"products":[],"companies":[{"name":"Lucas GC Limited","ticker":"LGCL","relationship":"filer"}],"dollarAmounts":[{"amount":"US$35.7 million","context":"1H 2026 revenue"},{"amount":"US$2.9 million","context":"1H 2026 net income"},{"amount":"RMB280.0 million (US$40.8 million)","context":"private placement proceeds from sale of ordinary shares"},{"amount":"US$40.7 million","context":"deposits for investment in partnership entities"},{"amount":"US$12.7 million","context":"1H 2026 gross profit"}]},"materialImpact":{"score":4,"reasoning":"Revenue fell 36.6% YoY to US$35.7M while net income slipped 7.6% to RMB19.9M; offsets include gross margin expansion to 35.4%, operating income up 69%, and a massive RMB280M private placement that grew shares outstanding ~15x to 42.8M, a major dilution event."},"tickerRelevance":{"others":[],"primary":"LGCL"},"globalImportance":22,"audienceRelevance":12,"eventTypeSecondary":["dilution"],"importanceComponents":{"tickerTier":"micro-cap","eventGravity":"semiannual earnings with major dilution","sectorWeight":"low","retailFavoriteBoost":0}},"event_type":"earnings","event_type_secondary":["dilution"],"sentiment":"mixed","material_impact_score":4,"narrative":"Lucas GC reported 1H 2026 revenue of US$35.7 million (RMB245.3 million), down 36.6% year-over-year, driven mainly by a 36.1% decline in outsourcing service revenue amid China macro headwinds and the company's shift away from lower-margin contracts.\n\nProfitability metrics improved despite the top-line drop: gross margin expanded 1.7 points to 35.4%, operating income rose 69.1% to RMB25.9 million, and net income slipped only 7.6% to RMB19.9 million with a net margin of 8.0%.\n\nThe company completed a RMB280 million (US$40.8 million) private placement, swelling Class A shares outstanding from ~2.8 million to 42.8 million, while cash and equivalents ended the period at just RMB10.4 million (US$1.5 million) after RMB279.4 million of partnership-investment deposits.","key_figures":{"eps":0.08,"revenue":35744000,"guidance":"","customDimensions":{"net_income":"RMB19.9 million (US$2.9 million)","gross_margin":"35.4%","net_income_yoy":"-7.6%","operating_income":"RMB25.9 million (US$3.8 million)","shares_outstanding":42790404,"cash_and_equivalents":"RMB10.4 million (US$1.5 million)","operating_income_yoy":"+69.1%","private_placement_proceeds":"RMB280.0 million (US$40.8 million)"}},"named_entities":{"people":[{"name":"Howard Lee","role":"CEO"}],"products":[],"companies":[{"name":"Lucas GC Limited","ticker":"LGCL","relationship":"filer"}],"dollarAmounts":[{"amount":"US$35.7 million","context":"1H 2026 revenue"},{"amount":"US$2.9 million","context":"1H 2026 net income"},{"amount":"RMB280.0 million (US$40.8 million)","context":"private placement proceeds from sale of ordinary shares"},{"amount":"US$40.7 million","context":"deposits for investment in partnership entities"},{"amount":"US$12.7 million","context":"1H 2026 gross profit"}]},"model_name":"glm-5.3-flashx","prompt_hash":"sha256:5c812bd9e28b810d","schema_hash":"sha256:05005c02d9cffac9","created_at":"2026-10-07T13:00:24.510Z","global_importance":22,"audience_relevance":12,"importance_components":{"tickerTier":"micro-cap","eventGravity":"semiannual earnings with major dilution","sectorWeight":"low","retailFavoriteBoost":0}},"durationMs":18112,"modelName":"glm-5.3-flashx"}}