Why Is Codeifai’s Loss Surging Despite a Strategic SaaS Pivot?

Financial Performance Highlights

Codeifai Limited’s full-year results for 2025 reveal a challenging operating environment marked by a 26% drop in revenue to $598,497 and a substantial increase in net loss after tax to $6.22 million, up 147% from the prior year’s $2.51 million loss. Despite the revenue decline, cash receipts improved significantly, reflecting better receivables management.

The company’s adjusted EBITDA loss widened to $3 million, underscoring the impact of increased expenses related to product development, acquisition fees, and capital raising efforts amid a tough market backdrop.

Strategic Pivot to SaaS and Acquisition

Central to Codeifai’s outlook is its strategic pivot towards self-service Software as a Service (SaaS) platforms. Post-year-end in February 2026, Codeifai completed the acquisition of the Antennae Transfer platform from Canadian-listed Credissential Inc., which will be rebranded as QuantumAI Secure. This move complements ongoing development of ConnectQR, a self-service QR code generation and management platform, positioning the company to capitalize on growing digital identity and security markets.

This pivot reflects a deliberate shift away from traditional product sales towards scalable, subscription-based SaaS offerings, which could provide more predictable revenue streams in the future.

Operational and Market Challenges

The company recorded an impairment of intangible assets related to its patent licence rights, notably impacted by China’s export restrictions on rare earth materials; a key input for its MotifMicro technology. This regulatory hurdle has forced Codeifai to recalibrate its commercial strategy, focusing on licensing opportunities within China’s domestic market.

Additionally, the group faces going concern risks due to net current liabilities exceeding $3 million and operating cash outflows of $2.7 million. However, management remains confident in mitigating these risks through expense reductions, a $2 million loan facility pending shareholder approval, and demonstrated ability to raise capital.

Capital Structure and Shareholder Impact

During 2025, Codeifai undertook a 10:1 share consolidation and issued new shares to support its financing needs. The company did not declare dividends, reflecting its focus on reinvestment and stabilizing its financial position. Share-based payments and options continue to play a role in aligning incentives with performance goals.

While the audit is ongoing, an unmodified opinion is expected with a material uncertainty paragraph regarding going concern, highlighting the importance of forthcoming capital and operational milestones.

Looking Ahead

Codeifai’s 2025 results underscore a company in transition, balancing near-term financial pressures with strategic investments aimed at long-term growth in the SaaS sector. The success of its QuantumAI Secure platform integration and ConnectQR development, alongside navigating regulatory challenges in China, will be critical to restoring profitability and investor confidence.