LICT (OTCPK:LICT) Margin Compression To 8.6% Challenges High Quality Earnings Narrative

LICT (OTCPK:LICT) has posted its FY 2025 results with fourth quarter revenue of US$36.3 million and basic EPS of US$77.49, while trailing twelve month figures show revenue of US$141.4 million and basic EPS of US$771.44. Over the past six reported quarters, revenue has moved from US$33.4 million in Q4 2024 to US$36.3 million in Q4 2025 as quarterly EPS shifted from US$425.67 to US$77.49. This sets the backdrop for a trailing net profit margin of 8.6% versus 15.4% a year earlier. For investors, that combination of high quality earnings with clear margin compression keeps profitability trends firmly in focus this season.

See our full analysis for LICT.

With the headline numbers on the table, the next step is to see how these results line up against the most widely held narratives about LICT’s earnings power and long term prospects.

Curious how numbers become stories that shape markets? Explore Community Narratives

Net margin drops to 8.6%

• Over the last 12 months, LICT earned US$12.2 million of net income on US$141.4 million of revenue, which works out to an 8.6% net profit margin compared with 15.4% a year earlier.
• Bears focus on this profitability squeeze, and the data give them support, with net income on a trailing basis falling from US$20.6 million in Q4 2024 to US$12.2 million in Q4 2025 and quarterly net income going from US$7.0 million in Q4 2024 to US$1.2 million in Q4 2025. Together these figures point to pressure on margins and earnings quality despite the description of past earnings as high quality.
  • The trailing margin shift from 15.4% to 8.6% sits alongside quarterly net income stepping down from US$4.1 million in Q1 2025 to US$1.2 million by Q4 2025.
  • Bears also highlight that earnings have declined by about 18% per year over five years, and the 8.6% margin today versus 15.4% a year ago aligns with that longer term pressure.

Five year earnings down 18%

• Across the past five years, LICT’s earnings have declined at an average rate of 18% per year, consistent with trailing net income of US$12.2 million now compared with US$20.6 million a year earlier on a similar revenue base of US$141.4 million versus US$134.2 million.
• Critics argue that this multi year earnings slide challenges any bullish view built around steady, utility like telecom cash flows, and the quarterly pattern reinforces that. Net income of US$6.98 million in Q4 2024 and US$4.12 million in Q1 2025 stepped down to US$3.63 million in Q3 2025 and then US$1.20 million in Q4 2025, which shows profit compressing even as quarterly revenue moved from US$33.4 million in Q4 2024 to US$36.3 million in Q4 2025.
  • The trailing EPS path, from US$1,235.47 in Q4 2024 to US$771.44 in Q4 2025, echoes that 18% per year decline, so bears see a consistent pattern rather than a single off year.
  • For anyone considering a longer holding period, that combination of higher revenue and lower earnings is exactly what bearish investors point to when they question how durable LICT’s profit base has been.

P/E of 15.3x vs US market

• LICT trades on a trailing P/E of 15.3x at a share price of US$12,000, which sits below the US market average P/E of 18.3x and slightly below the Global Telecom industry average of 16.3x, but above the stated peer average of 7x.
• What is interesting for a more bullish angle is that some investors point to the company’s high quality past earnings even as they weigh the 18% per year earnings decline and the margin compression from 15.4% to 8.6%. This mix of quality and pressure creates tension with the valuation, because a 15.3x P/E is lower than the broader market and near the industry, yet higher than peers that are on 7x.
  • Supporters of a more constructive view highlight that LICT’s trailing net income of US$12.2 million on US$141.4 million of revenue is still profit making, which some compare with peers that might be on lower P/E multiples but with weaker profitability trends.
  • On the other side, investors who lean bearish note that paying 15.3x earnings when net income has moved from US$20.6 million to US$12.2 million over a year means the market is not treating LICT like the cheapest option within its peer group.

To see how other investors are interpreting this mix of lower margins, multi year earnings decline and a mid teens P/E, it can help to read through the broader range of community views on LICT Curious how numbers become stories that shape markets? Explore Community Narratives

Next Steps

Don’t just look at this quarter; the real story is in the long-term trend. We’ve done an in-depth analysis on LICT’s growth and its valuation to see if today’s price is a bargain. Add the company to your watchlist or portfolio now so you don’t miss the next big move.

With sentiment split between pressure on earnings and ongoing profitability, this is a good time to look through the numbers yourself and decide what matters most. To round out that view and see both sides of the story, check the 1 key reward and 2 important warning signs

See What Else Is Out There

LICT is still profitable, but the squeeze from a 15.4% to 8.6% net margin and five year earnings decline raises questions about paying its current P/E.

If shrinking margins and softer earnings leave you wanting stronger profit resilience, compare this profile with 72 resilient stocks with low risk scores to quickly focus on companies that prioritise stability.

This article by Simply Wall St is general in nature. We provide commentary based on historical data
and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your
financial situation. We aim to bring you long-term focused analysis driven by fundamental data.
Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
Simply Wall St has no position in any stocks mentioned.

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