Recently, Alpha IVF Group Berhad (ALPHA, 0303) released its financial results for the third quarter of FY2025, revealing slight declines in both revenue and net profit. Does this suggest a reduced reliance on assisted reproductive technologies for childbirth? Based on current population growth trends, the answer appears to be no. Rather than speculate, let’s delve into the latest data and insights from ALPHA’s quarterly report to better understand the drivers behind these numbers.

Revenue Comparison (YoY -0.26%, QoQ -6.11%)

For the quarter ended February 28, 2025, ALPHA recorded revenue of approximately RM40.60 million, a decline of 0.26% compared to RM40.70 million in the same period last year. This dip was primarily attributed to weaker performance in Singapore, where revenue fell 55.27% year-on-year to around RM3.27 million. In contrast, the Malaysian market performed strongly, with revenue increasing by 11.76% to RM37.33 million.

On a quarter-over-quarter basis, revenue declined by RM2.64 million or 6.11%. Despite this quarter’s dip in both YoY and QoQ revenue, ALPHA’s cumulative revenue for the first nine months of FY2025 reached approximately RM126.84 million, which was up about RM6.00 million or 4.97% from the same period last year.

According to management, foreign patients continue to make a strong contribution to the business, with Chinese patients representing the fastest-growing demographic. Nevertheless, patients from Indonesia remain ALPHA’s largest source of revenue.

Net Profit Comparison (YoY -12.39%, QoQ -21.16%)

Due to the revenue contraction in Singapore, ALPHA’s net profit declined by approximately 12.39% year-on-year to RM11.91 million. Profit was also impacted by early-stage expenses related to regional expansion, which reportedly amounted to RM2.16 million.

Quarter-over-quarter, net profit dropped by around RM3.20 million or 21.16%.

Despite the earnings dip, ALPHA remains financially robust as a net cash company. By the end of the quarter, the company held approximately RM141.66 million in cash and cash equivalents, an increase of 176.67% compared to the same quarter last year.

Outlook

ALPHA remains committed to expanding its core business of in-vitro fertilization (IVF) services. The company plans to strengthen its presence in Malaysia, China, and the broader Southeast Asian market by accelerating the establishment of new specialty centers and upgrading existing facilities to enhance service quality and operational capacity.

Currently, ALPHA operates four full-fledged IVF centers (Malaysia & Singapore) and two sales offices in China (Shanghai & Guangzhou). As part of its latest growth plan, the company aims to open two new IVF centers in Malaysia (in Johor Bahru and Sabah), two additional centers in Southeast Asia, and four satellite clinics in Indonesia within the next 12 months.

Additionally, by strategically deploying funds raised from its IPO, ALPHA is steadily advancing its regional expansion across Asia, including China, Indonesia, and the Philippines. The company’s growth strategy remains clear and methodical. While short-term profitability may be impacted by upfront expansion costs, the long-term outlook is optimistic, with market growth expected to drive stronger revenue and improved profit margins.