Company: XTKG
Filing Date: 2025-04-25
Form Type: 20-F
Source: 0001213900-25-035626
Chunk: 115

Company: X3 Holdings Co., Ltd.
Filing Date: 2025-04-25
Form: 20-F
Item: Item 5
Chunk 115
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%. The overall decrease in total revenue was primarily attributable
to approximately $4.4 million decrease in revenue from application development services and approximately $0.5 million decrease in trading
revenue.

Revenue from application development services

Our application development
service contracts are primarily on a fixed-price basis, which require the Company to perform services including project planning, project
design, application development and system integration based on customers’ specific needs. These services also require significant
production and customization. Revenue from application development service is recognized as work is performed based on the ratio of costs
incurred to date to the total estimated costs at completion of the performance obligations.

For the year ended December
31, 2024, our application development service revenue was approximately $5.3 million as compared to approximately $9.8 million for the
year ended December 31, 2023. The decrease in application development service revenue was approximately $4.4 million or 45.3% due to fewer
new projects in current period. In certain application development service arrangements, the contacts included sales of IT equipment.
Such revenue was $4,671,973 for the year ended December 31, 2024, increased from $2,001,750 of the related revenue for the year ended
December 31, 2023.

Revenue from consulting and technical support services

Revenue from consulting and
technical support services is primarily comprised of fixed-fee contracts, which require the Company to provide professional consulting
and technical support services over contract terms beginning on the commencement date of each contract, which is the date its service
is made available to customers. Billings to the customers are generally on a monthly or quarterly basis over the contract term, which
is typically 12 to 24 months. The consulting and technical support services contracts typically include a single performance obligation.
The revenue from consulting and technical support services is recognized over the contract term on a straight-line basis as customers
receive and consume benefits of such services.

Our consulting and technical
support service revenue was approximately $3.6 million for both the years ended December 31, 2024 and 2023.

Revenue from subscription services

Revenue from subscription
services is comprised of subscription fees from customers accessing the Company’s software-as-a-service applications. The Company’s
monthly or quarterly billing to customer is on the basis of number of uses or the actual usage by the customers. The subscription services
contracts typically include a single performance obligation. The revenue from subscription services is recognized over the contract term