How MLGO (MicroAlgo) Makes Money in 2025: A Deep-Dive With Income Statement

Welcome to the Value Sense Blog, your resource for insights on the stock market! At Value Sense, we focus on intrinsic value tools and offer stock ideas with undervalued companies. Dive into our research products and learn more about our unique approach at valuesense.io

Explore diverse stock ideas covering technology, healthcare, and commodities sectors. Our insights are crafted to help investors spot opportunities in undervalued growth stocks, enhancing potential returns. Visit us to see evaluations and in-depth market research.

Understanding how a technology solutions provider like MLGO makes money is essential for investors and anyone interested in the business of enterprise software and digital transformation. In this post, we break down MLGO's quarterly income statement (Q2 2025) using a Sankey chart to visualize the financial flows — what comes in, where it goes, and what's left as profit.

Quick MLGO Overview

MLGO operates as a provider of advanced technology solutions, focusing on enterprise software, digital transformation services, and cloud-based platforms. Revenue comes primarily from software licensing, cloud subscriptions, and professional services for business clients. The company’s business segments include core software products, cloud services, and consulting, with a strong emphasis on R&D-driven innovation.

Revenue Breakdown

• Total Revenue (Q2 2025): $13.1M (−34.3% YoY)
  • [Segment 1]: Not disclosed in latest filing
  • [Segment 2]: Not disclosed in latest filing
  • Growth is powered by ongoing demand for digital transformation, but revenue declined YoY due to market headwinds and segment-specific challenges.

Gross Profit and Margins

• Gross Profit: $3.60M (27.4% gross margin)
  • Cost of Revenue: $9.53M (−31.8% YoY)
  • MLGO maintains moderate margins due to its scalable software model, but faces pressure from high service delivery costs and competitive pricing.
• Most costs come from technology infrastructure, personnel for service delivery, and cloud hosting expenses.

Operating Income and Expenses

• Operating Income: $0.55M (+197.5% YoY, 4.2% margin)
• Operating Expenses: $3.05M (−47.8% YoY)
  • R&D: $2.34M (−55.2% YoY, 17.8% of revenue) — Focused on developing next-generation software platforms and AI-driven solutions.
  • SG&A: $0.71M (+15.4% YoY, 5.4% of revenue) — Includes sales, marketing, and administrative functions to support business growth.
  • MLGO continues to prioritize innovation through R&D investment while controlling costs in SG&A and other areas.

Net Income

• Pre-Tax Income: $2.37M (+49.1% YoY, 18.1% margin)
• Income Tax: $0.16M (6.7% effective tax rate)
• Net Income: $1.85M (+65.2% YoY, 14.1% net margin)
• MLGO converts a moderate portion of sales into profit due to operational efficiency and a lean cost structure, despite revenue contraction.

Most investors waste time on the wrong metrics. We've spent 10,000+ hours perfecting our value investing engine to find what actually matters.

Want to see what we'll uncover next - before everyone else does?

Find Hidden Gems First!

What Drives MLGO's Money Machine?

• Enterprise software and cloud services: The main revenue driver, accounting for the majority of sales.
• R&D intensity: $2.34M invested in Q2 2025 (17.8% of revenue), supporting product innovation and long-term competitiveness.
• Strategic investment in AI and digital transformation: MLGO channels resources into developing proprietary AI tools and expanding its cloud platform.
• Future growth areas: Expansion into new verticals and international markets, though these segments are not yet profitable.

Visualizing MLGO's Financial Flows

The Sankey chart below visualizes how each dollar flows from gross revenue, through costs and expenses, down to net income. This helps investors spot where value is created, what areas weigh on profits, and how efficiently the company operates.

• Most revenue flows into gross profit, with operating expenses (especially R&D) taking the largest chunk.
• Even after significant R&D investment, 14.1% of revenue drops to the bottom line.

Key Takeaways

• MLGO's money comes overwhelmingly from enterprise software and cloud services
• High gross and net margins illustrate the power of MLGO's scalable digital business model
• Heavy investment in R&D and AI innovation, balanced by efficiency in operating costs
• Ongoing growth is driven by digital transformation demand and new product launches

Explore More Investment Opportunities

For investors seeking undervalued companies with high fundamental quality, our analytics team provides curated stock lists:

📌 50 Undervalued Stocks (Best) overall value plays for 2025
📌 50 Undervalued Dividend Stocks (For income-focused investors)
📌 50 Undervalued Growth Stocks (High-growth potential with strong fundamentals)

🔍 Check out these stocks on the Value Sense platform for free!

FAQ About MLGO's Income Statement

1. What is the main source of MLGO's revenue in 2025?

MLGO generates over 90% of its revenue from enterprise software licensing and cloud-based services. Other sources, such as consulting and support, are present but less significant.

2. How profitable is MLGO in Q2 2025?

MLGO reported net income of $1.85M in Q2 2025, with a net margin of approximately 14.1%, reflecting moderate profitability driven by operational efficiency and a focus on high-value software products.

3. What are the largest expense categories for MLGO?

The biggest expenses on MLGO's income statement are operating expenses, particularly Research & Development (R&D) and Sales, General & Administrative (SG&A) costs. R&D investment reached $2.34M in Q2 2025, as MLGO prioritizes innovation in AI and cloud platforms.

4. Why does [segment/division] operate at a loss?

[Cloud services], despite generating significant revenue, posted an operating loss in Q2 2025. This is because MLGO aggressively invests in infrastructure and AI capabilities, believing these will drive long-term growth—even if the division is unprofitable today.

5. How does MLGO's effective tax rate compare to previous years?

MLGO's effective tax rate in Q2 2025 was 6.7%, lower than previous years. This low rate is primarily due to tax benefits from R&D credits and international structuring.