KUALA LUMPUR: Agmo Holdings Bhd’s short-term earnings dip is seen as a strategic trade-off for innovation, the digital solutions provider’s CEO, Tan Aik Keong, said.
He said Agmo is transitioning from purely custom-built projects to developing and owning its own digital platforms to allow the company to generate more scalable and recurring revenue.
“So last quarter, the revenue drop was basically because we invested more manpower into R&D, as we will be launching a new product targeting SMEs, an AI suite for small and medium enterprises. Hence, we didn’t have too much manpower to deliver on existing projects,” he told SunBiz.
Tan said the company foresees healthy growth ahead in both its business solutions development and software-as-a-service segments.
“Our order book remains very strong. That’s the reason behind the temporary revenue dip, because we are investing more time in R&D.”
Tan said Agmo’s order book stands at about RM40 million.
Malaysia remains Agmo’s core market, but the company is expanding into Singapore and Vietnam as part of its regional growth strategy.
“Recently, we secured a contract from one of the regional automotive players in Singapore, which also has operations in Malaysia. That project will be handled under our Singapore entity,” Tan said.
The company formally incorporated a Singapore entity, Agmo SG Pte Ltd (90% owned), on May 5, 2023 as part of its regional expansion.
For the first quarter of FY2026 ended June 30, 2025 (Q1’26), revenue from Malaysia stood at RM7.53 million, accounting for more than 94% of total group revenue.
Singapore contributed RM138,649, down from RM208,390 in the same quarter a year earlier. Vietnam recorded RM274,293, a sharp increase from just RM3,159 previously, while other countries contributed RM55,879.
Overall, Agmo posted a net profit of RM760,000 for Q1’26, down 47.8% from RM1.46 million a year earlier, mainly due to delays in completing key project milestones and higher payroll costs.
Revenue for the quarter fell 8% year-on-year to RM8 million from RM8.69 million previously. The decline reflected slower project deliveries as the group ramped up investment in developing its proprietary solutions to build recurring income streams.
Tan said the artificial intelligence (AI) and electric vehicles (EV) segments will be catalysts for business growth in the current and coming financial years.
“Moving forward, we expect strong demand, particularly in two areas, artificial intelligence and electric vehicles. We have delivered many successful case studies helping clients with digital transformation using AI. This year alone, we are helping two major automotive players in Malaysia launch EV platforms that will allow car owners to charge with different charging operators,” he added.
As of Oct 24, Agmo had a market capitalisation of RM141.38 million. The company recorded a return on equity of 14.37% and a dividend yield of 3.45%.
Agmo posted earnings per share of 3 sen on a diluted and normalised basis, supported by a gross profit margin of 44.68%; earnings before interest, taxes, depreciation and amortisation margin of 32.18%; and operating income margin of 28.89%. Its next earnings announcement is scheduled for Nov 21.
