China Green Agriculture Inc (CGA) reported its QQ1 2026 results with a clear top-line headwind and a notably improved profitability profile despite a steep year-over-year revenue decline. Revenue came in at $14.46 million, down 36.32% YoY and 41.66% QoQ, while gross profit reached $3.46 million for a gross margin of 23.90%. EBITDA stood at $1.75 million (11.13% EBITDA margin), and operating income was $1.19 million (8.21% operating margin). Net income was $1.09 million, or $0.07 per share, marking a robust earnings contribution on a shrinking revenue base.
The quarter demonstrated meaningful profitability leverage as CGA controlled operating expenses and benefited from non-operating items. Operating income rose 111.1% YoY and 298.2% QoQ, underscoring that the company is extracting more earnings from a lower volume environment. However, free cash flow remained negative at approximately −$1.33 million, driven by negative operating cash flow (−$1.32 million) and working capital dynamics, partially offset by a favorable foreign exchange effect that added $2.58 million to cash. The balance sheet remains liquidity-rich with cash and equivalents of about $53.3 million and a net cash position (net debt) of roughly −$41.1 million, while total liabilities stood at $68.8 million against $88.2 million of equity.
Looking forward, there is limited explicit forward guidance in the disclosed data. The QQ1 results indicate progress on margin and cost control, but the revenue trajectory remains pressured. The company’s earnings power appears to be improving on a per-dollar-of-revenue basis, yet investors should monitor topline stabilization in China’s agricultural inputs market, potential changes in Chinese fertilizer demand, and any working capital normalization that could influence near-term cash flow dynamics.