Financial Data and Key Metrics Changes - For Q2 2024, the company reported $1.91 million in bookings, significantly higher than the same quarter last year [23] - The annual recurring revenue (ARR) growth reached 120% due to a major expansion deal [26] - The subscription to one-time revenue split was 85% recurring, an increase from 79% a year ago, with gross margins consistently trending above 80% [24][26] Business Line Data and Key Metrics Changes - The company signed its largest expansion deal with a major financial services customer, expanding from two sites to over 25 globally [19] - Bookings growth was driven by renewals and expansions from five enterprise customers across various verticals, including financial services and healthcare [20] Market Data and Key Metrics Changes - The trend towards hybrid work is stabilizing, with 37% of U.S. companies adopting a structured hybrid model, up from 20% in Q1 2023 [6][7] - Office occupancy rates have flattened at around 50% of 2019 levels, indicating a new work norm [5][6] Company Strategy and Development Direction - The company is focused on creating an AI-centric employee experience platform that integrates various workplace functionalities [12][15] - A multiyear, multimillion-dollar agreement with Google Cloud aims to enhance capabilities and drive workplace transformation [20][30] Management's Comments on Operating Environment and Future Outlook - Management emphasized the importance of technology in addressing the challenges of hybrid work, including coordination and productivity issues [9][10] - The company is optimistic about future growth, particularly with the new CXAI platform set for deployment in Q4 [22][30] Other Important Information - The company has completed a full business transformation towards an AI-native SaaS model, with a significant increase in renewal and expansion bookings [25][26] - The company is leveraging AI tools to reduce operational expenses by over 15% compared to last year [27] Q&A Session Summary Question: Is the business with Google set for big growth or slow growth? - Management indicated that working with Google Cloud is set for growth, with initiatives to be announced soon [36] Question: Clarification on the S-1 filing - The S-1 was a refiling due to a delay in the 10-K, not a new issuance [37] Question: Potential partnership with Palantir - Management expressed openness to engage with Palantir but emphasized a current focus on enterprise customers [37]

Revenue Performance - Revenue for the three months ended June 30, 2024, was $1,766 thousand, a decrease of $149 thousand (approximately 7.8%) compared to $1,915 thousand for the same period in 2023[156]. - Revenue for the six months ended June 30, 2024, was $3,584 thousand, an increase from $2,257 thousand for the same period in 2023, reflecting a growth of $1,327 thousand (approximately 58.7%)[164]. Subscription Revenue - Subscription-based revenue accounted for 85% of total revenue for the three months ended June 30, 2024, up from 79% in the same period of 2023, indicating a 6% increase in the revenue mix[156]. - Subscription-based revenue for the six months ended June 30, 2024, was 86% of total revenue, up from 78% in the same period of 2023, indicating an 8% increase in the revenue mix[165]. Profitability and Loss - Gross profit margin improved to 80% for the three months ended June 30, 2024, compared to 75% for the same period in 2023[157]. - Net loss for the three months ended June 30, 2024, was $5,256 thousand, compared to a net loss of $14,730 thousand for the same period in 2023, representing an improvement of $9,474 thousand (approximately 64.3%)[154]. - Gross profit margin increased to 81% for the six months ended June 30, 2024, compared to 75% for the same period in 2023, reflecting a decrease in cost of revenues by approximately $370 thousand, or 35%[166]. - The company reported a net loss of approximately $10,426 thousand for the six months ended June 30, 2024, compared to a net loss of $11,972 thousand for the same period in 2023[182]. Operating Expenses - Operating expenses decreased to $5,063 thousand for the three months ended June 30, 2024, down from $5,118 thousand in the same period of 2023, reflecting a reduction of $55 thousand (approximately 1.1%)[159]. - Operating expenses rose to $10,141 thousand for the six months ended June 30, 2024, up from $5,860 thousand in the same period of 2023, primarily due to increased research and development costs[167]. Other Expenses - Other expenses significantly decreased to $1,765 thousand for the three months ended June 30, 2024, from $12,028 thousand in the same period of 2023, a reduction of $10,263 thousand (approximately 85.3%)[160]. - Other expenses decreased by $6,787 thousand for the six months ended June 30, 2024, attributed to a reduction in changes in fair value of derivative warrant liabilities by $7,831 thousand[168]. Tax Benefits - The company reported an income tax benefit of $159 thousand for the three months ended June 30, 2024, compared to $981 thousand for the same period in 2023[161]. - The company reported an income tax benefit of approximately $366 thousand for the six months ended June 30, 2024, down from a benefit of $2,541 thousand in the same period of 2023[169]. Cash Flow and Liquidity - As of June 30, 2024, the company had a working capital deficiency of approximately $6,807 thousand and cash of approximately $6,160 thousand[180]. - Net cash used in operating activities was $2,560 thousand for the six months ended June 30, 2024, compared to $6,598 thousand for the same period in 2023[179]. - The company believes its current liquidity position, including cash raised under the promissory note of $3,000 thousand, can mitigate going concern indicators for at least one year[181]. - Net cash flows used in investing activities for the six months ended June 30, 2024, was approximately $26 thousand, a decrease from $9,977 thousand in the prior period[184]. - Net cash flows provided by financing activities during the six months ended June 30, 2024, was approximately $2,480 thousand, compared to $328 thousand and $8,892 thousand in the previous periods[185]. Business Combination - The company completed a Business Combination on March 14, 2023, valued at $69,928 thousand, which included the transfer of the Enterprise Apps Business from Inpixon[148]. Securities and Agreements - The company entered into a Securities Purchase Agreement to raise up to $10,000 thousand in shares of common stock, with an initial principal amount of $2,650 thousand received[179]. - The Company entered into a Securities Purchase Agreement on May 22, 2024, to sell up to $10,000 thousand in shares of Common Stock[185]. - The Company received net proceeds of $2,480 thousand from a convertible Pre-Paid Purchase on June 3, 2024[185]. Lease Obligations - Total obligation for operating leases as of June 30, 2024, is approximately $677 thousand, with $389 thousand expected to be paid in the next twelve months[187]. Accounting and Estimates - The Company has not engaged in off-balance sheet guarantees or trading activities involving non-exchange traded contracts[186]. - The Company has elected to take advantage of the extended transition period for complying with new accounting standards as an emerging growth company[192]. - Management believes there have been no significant changes to critical accounting estimates during the six months ended June 30, 2024[190].

Core Viewpoint - The generative AI market is projected to reach $1.3 trillion by 2032, but there are concerns about overhyped AI stocks and potential market corrections similar to the dot-com bubble [1][2][3] Group 1: Nvidia (NVDA) - Nvidia's stock has increased over 115% since the start of the year and nearly 2,500% over the past five years, indicating strong market enthusiasm [4] - Current trading at 32.43X trailing-year sales, with projected revenue for fiscal 2025 at $120.73 billion, a 98.2% increase from the previous year [5] - Earnings surprises have decreased from 28.6% to 8.9% over the past four quarters, raising concerns about the sustainability of its high valuation [6] Group 2: CXApp (CXAI) - CXApp's stock has gained over 67% since the start of the year, but has lost nearly 69% over the past 52 weeks, indicating volatility [9] - The company generated $7.22 million in revenue over the trailing 12 months, trading at 4.42X sales, with projected revenue of $15 million by the end of fiscal 2025 [10] Group 3: Tesla (TSLA) - Tesla is heavily investing in AI for automated mobility but faces challenges such as a recent 4% stock loss and a recall affecting 1.8 million vehicles [11][12] - Weak demand for electric vehicles could be exacerbated by potential political changes, impacting Tesla's market position [13][14]

Revenue Performance - Revenue for the three months ended March 31, 2024, was $1,818 thousand, a decrease of $144 thousand compared to $1,620 thousand for the period from January 1, 2023, to March 14, 2023[167]. - Subscription-based revenue accounted for 87% of total revenue for the three months ended March 31, 2024, up from 74% in the same period of 2023, indicating a 13% increase in revenue mix[168]. Profitability - Gross profit margin improved to 82% for the three months ended March 31, 2024, compared to 70% for the period from January 1, 2023, to March 14, 2023[169]. - The gross profit for the three months ended March 31, 2024, was $1,491 thousand, compared to $1,137 thousand for the period from January 1, 2023, to March 14, 2023[166]. - The net loss for the three months ended March 31, 2024, was $5,170 thousand, compared to a net income of $2,758 thousand for the period from March 15, 2023, to March 31, 2023[165]. - Adjusted EBITDA for the same period was $(2,281) thousand, a decline from $(362) thousand in the prior year[178]. Operating Expenses - Operating expenses were $5,078 thousand for the three months ended March 31, 2024, a decrease of $1,182 thousand compared to $5,518 thousand for the period from January 1, 2023, to March 14, 2023[171]. - Other income/expense was a $1,790 thousand expense for the three months ended March 31, 2024, primarily due to changes in fair value of derivative warrant liabilities[172]. Cash Flow and Liquidity - The company had cash of approximately $5,603 thousand and a working capital deficiency of $5,280 thousand as of March 31, 2024[185]. - Net cash used in operating activities was $650 thousand, a significant improvement from $4,431 thousand used in the same period last year[187]. - Cash flows used in investing activities were approximately $18 thousand, a decrease from $9,980 thousand in the same period last year[188]. - There were no cash flows provided by or used in financing activities during the three months ended March 31, 2024, compared to $328 thousand used in the prior year[189]. - The company believes its current liquidity position is sufficient to meet its working capital needs for at least the next 12 months[186]. Business Developments - The Business Combination with KINS Technology Group Inc. was completed on March 14, 2023, with a valuation of $69,928 thousand[159]. - The company transitioned to a full SaaS model, which contributed to the decline in professional services revenue[167]. - The company entered into an equity line financing agreement for up to $10,000 thousand, with an initial draw of $2,500 thousand expected in Q2 2024[183]. Accounting and Reporting - CXApp is classified as an "emerging growth company" under the JOBS Act, allowing it to delay the adoption of certain accounting standards until they apply to private companies[197]. - The company has elected to take advantage of the extended transition period for complying with new or revised accounting standards, which may affect the comparability of its financial statements[198]. - There have been no significant changes to critical accounting estimates during the three-month period ended March 31, 2024, compared to the previous annual report[196]. - The company has not yet decided whether to take advantage of exemptions from various reporting requirements that apply to non-emerging growth companies[197]. - The use of different judgments, estimates, and assumptions in accounting could have a material impact on the financial statements[195]. - The company’s financial statements are prepared in accordance with U.S. GAAP, requiring assumptions and estimates about future events[193]. - The management regularly reviews accounting policies and estimates to ensure fair presentation in accordance with GAAP[193]. - The decision to not opt out of the extended transition period for accounting standards is irrevocable[198]. - The company’s stock may become less attractive to some investors if it takes advantage of certain exemptions, potentially leading to a less active trading market[197]. - The company’s financial statements may not be comparable to those of companies that comply with new or revised accounting standards due to the extended transition period[198].

Financial Data and Key Metrics Changes - The subscription-based revenue for Q1 2024 was 87% of total revenue, marking a 6-point increase from the previous quarter, the highest in company history [15][54] - The net retention rate (NRR) reached 108%, driven by the renewal and expansion of seven major Fortune 1000 customers [53] - The gross margin improved to 82%, continuing an upward trend linked to increased subscription revenue and reduced one-time revenue [54][55] - Operating expenses were reduced by over 20% from Q4 2023 to Q1 2024, part of a strategy to scale the business with a lower cost structure [55] Business Line Data and Key Metrics Changes - The company has transitioned to a SaaS platform model, focusing on recurring revenue streams, which positions it for long-term sustainable growth [23][24] - The Sky platform, which integrates various workplace functionalities, has been deployed with numerous customers globally, enhancing employee experience [27][28] Market Data and Key Metrics Changes - CXAI operates in 60 countries and over 200 cities, indicating a strong global presence and market penetration [5][44] - The company has a healthy distribution across five major verticals: Financial Services, Technology, Media and Entertainment, Healthcare, and Consumer [30] Company Strategy and Development Direction - The company aims to lead in AI technology, focusing on transforming employee experiences through its AI-first business model [24][67] - Strategic partnerships, particularly with Google Cloud, are crucial for enhancing product offerings and accelerating innovation [41][48] - The launch of the SkyView platform, an AI-based analytics tool for employee experience, is a significant step in creating a new software category [33][67] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in increasing annual recurring revenue (ARR) bookings and strong customer acquisition driving sustainable growth [16] - The focus on continuous innovation and delivering value to an expanded customer base is a priority moving forward [16][67] Other Important Information - The company has developed a comprehensive analytics platform that provides actionable insights into employee engagement and workspace utilization [34][36] - The emphasis on security and compliance is a key differentiator, attracting customers from regulated industries [5][66] Q&A Session Summary Question: What are the key objectives for the company moving forward? - The company is focused on growing existing customers and scaling new Fortune 100 customers, which has led to significant growth in net retention rate [25] Question: How does the SkyView platform differentiate from competitors? - The SkyView platform offers spatial intelligence and predictive analytics, providing a comprehensive view of workspace utilization and employee engagement [11][59] Question: What role does AI play in the company's strategy? - AI is central to the company's offerings, enabling automation, enhancing productivity, and driving engagement within the workplace [13][50]

Market Growth and Trends - The digital workplace market size was valued at $27.4 billion in 2022 and is projected to grow to $90.5 billion by 2030, reflecting a significant growth trajectory[46]. - The global virtual events market was valued at $114.12 billion in 2021 and is anticipated to expand at a CAGR of 21.4% from 2022 to 2030, driven by increased use of collaboration tools[47]. - The digital workplace market size in 2020 was valued at $22.7 billion and is projected to grow to $72.2 billion by the end of 2026 at a CAGR of 21.3%[48]. - The occupancy analytics market in the commercial office space was estimated at $2.17 billion in 2019 and is expected to grow to $5.73 billion by 2024, representing a CAGR of 21.5%[49]. - The workplace experience apps market is estimated to be around 15% of the overall occupancy analytics market[49]. Company Technology and Product Offerings - CXApp's platform integrates technologies such as indoor mapping, on-device positioning, and AI-based analytics to enhance workplace experiences[27]. - CXApp aims to connect every workplace experience through its platform, facilitating data-driven decisions that improve productivity[26]. - CXApp's analytics dashboard provides insights into real estate, technology, and employee interactions, enabling organizations to optimize services and unlock savings[33]. - The company is focused on enhancing its product offerings, including augmented reality and 3D mapping, to adapt to technological advancements[32]. - CXApp's workplace experience app is designed to support hybrid work models, addressing employee engagement and operational efficiency[25]. - The CXApp SaaS platform offers a suite of technology solutions targeting the hybrid workplace market, including an enterprise employee application and AI-based analytics[213]. Financial Performance and Projections - CXApp incurred recurring net losses of approximately $53.6 million and $29.2 million for the fiscal years ended 2023 and 2022, respectively[77]. - The company may need additional capital to support operations, which could be satisfied by additional debt or equity financings, potentially diluting existing stockholders[78]. - The company’s ability to increase revenues depends on successfully selling additional products and services to existing customers and acquiring new customers[85]. - Revenue forecasting remains uncertain, with potential adverse effects on profitability if forecasts are not met[130]. - The company has a history of operating losses, and there is no assurance it will achieve profitability in the future[77]. Legal and Compliance Risks - The company may face legal claims related to the use of trade secrets, which could result in substantial costs and distract management[96]. - The company has not registered copyrights on any of the software developed, which may lead to delays in legal actions and constrain damages for infringement[98]. - The company relies on confidentiality agreements to protect its intellectual property, but there is no guarantee that these measures will prevent misappropriation[100]. - The company is subject to evolving data privacy regulations, such as the GDPR and CCPA, which could impose significant compliance costs and affect customer relationships[174]. - Ongoing legal challenges regarding data transfer mechanisms may limit the company's ability to operate internationally and affect its financial results[175]. Operational Challenges and Management - Management identified material weaknesses in internal control over financial reporting, concluding that effective controls were not maintained as of December 31, 2023[133]. - The company plans to implement enhancements to internal controls starting in the second quarter of 2024, but these weaknesses will not be considered remediated until effective controls are established[135]. - The company faces increased costs and distractions from compliance with SEC and Nasdaq regulations, which may affect its operational efficiency[123]. - The company must ensure timely preparation of financial statements that comply with SEC requirements, which may divert management's focus from revenue-generating activities[125]. - The company’s financial condition may be adversely affected if it cannot manage growth effectively and improve operational controls[92]. Competitive Landscape - The company competes with firms such as Eptura and Modo Labs in the workplace experience app market, and MappedIn and Esri in the mapping product sector[58]. - The company operates in a highly competitive market, facing significant price competition that may force price reductions for products and services[152]. - The company has established a technology partner program with over 75 partners, enhancing seamless integration and workflow for employee experience applications[51]. - The company has over 75 partner integrations, creating a robust ecosystem that helps streamline technology stacks and reduce app overload[60]. Market and Economic Factors - The ongoing military conflict between Russia and Ukraine, as well as the Israel-Hamas conflict, may indirectly affect the company's business due to geopolitical tensions and economic sanctions[162]. - Difficult conditions in global capital markets and economic uncertainty are expected to adversely affect customer spending on technology products and services[169]. - Changes in U.S. trade policies, particularly regarding tariffs on imports from China, could impact the company's supply chain and manufacturing capabilities[170]. - The lasting impact of the COVID-19 pandemic and other global economic factors continues to create uncertainty regarding future operational results[161]. - The company faces risks from natural disasters, political uncertainty, and regulatory changes that could disrupt operations and increase costs[168]. Corporate Governance and Stockholder Considerations - The company completed its Initial Public Offering on December 17, 2020, raising gross proceeds of $276 million[69]. - The company does not intend to pay dividends on its common stock, with future earnings expected to be retained for business development and expansion[110]. - Anti-takeover provisions in the company's organizational documents may delay or prevent a change of control, potentially limiting stockholder benefits[118]. - The company may issue additional securities in connection with investments or acquisitions, which could result in dilution for existing stockholders[116]. - A sustained depression in the market price of the company's common stock could lead to impairment losses that negatively affect financial condition and results of operations[117]. Risk Management and Security - The information security program is aligned with ISO 27001 and SOC 2 frameworks, focusing on risk management and compliance[187]. - Annual risk assessments are conducted to identify and mitigate security risks related to corporate operations and services[188]. - The risk management program includes governance, risk identification, analysis, mitigation planning, and tracking to ensure business continuity[192]. - The board of directors actively oversees cybersecurity risk management and evaluates current policies and procedures[196]. - The company is subject to risks from cybersecurity threats and system failures that could disrupt business operations and harm its reputation[138].

CXApp Inc. (NASDAQ:CXAI) Q4 2023 Results Earnings Conference Call April 17, 2024 4:30 PM ET Company Participants Khurram Sheikh - Chairman and Chief Executive Officer Conference Call Participants Operator Greetings. Welcome to the CXApp Fourth Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. [Operator Instructions]. Please note this conference is being recorded. I will now turn the conference over to your host, Khurram Sheikh, Chairman and CEO. You may begin. Khurram S ...

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Workplace experience platform CXApp (NASDAQ:CXAI) — which offers various analytics and application technologies via a Software-as-a-Solution (SaaS) business model — saw its shares soar on Monday. Earlier this morning, the software specialist announced a partnership with Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL). Specifically, it signed a strategic partnership and development agreement with Google Cloud. In addition, CXAI stock may be benefiting from a short squeeze.According to the company’s press release, Googl ...