CXApp Inc. Q3 FY2024 earnings call

Company Snapshot - CXAI is an AI-first company centered on employees in the growing workplace experiences market. Headquartered in the San Francisco Bay Area with satellite hubs in Toronto and Manila, having a global team of 80 innovators. - Market Insights - Return to office (RTO) and employee engagement are key topics. Gallup's Q12 survey shows low employee engagement with significant productivity loss. CEOs like Andy Jassy are pushing RTO for culture, cost, and innovation reasons. Gartner's hype cycle for digital workplace infrastructure highlights Generative AI-based apps, and CXAI is a key technology leader. - Sky Platform - Comprises Sky apps (multi-OS with AI capabilities), Sky BTS (rule engines and content management), and Skyview (Generative AI analytics platform). Skyview had its first paid customer this quarter and is generally available. - Q3 Highlights - Best financial quarter ever with $1.9 million revenue, net retention rate >106%, subscription to one-time revenue ratio 88%, 18% growth in recurring revenue. - On AWS Marketplace - Another milestone after being on Google Cloud Marketplace. - Sky Platform Pilot - Successfully delivered the first end-to-end AI-based Sky pilot platform to a leading financial service customer. - Sky Kiosk - Interactive digital signage for room, desk, and space booking with ADA compliance.

In Q3 2024, CXAI's revenue was $1.9 million. The net retention rate was greater than 106%, the subscription to one-time revenue ratio was the highest ever at 88%, and the gross margin was maintained at a healthy 80%. Recurring revenue saw an 18% growth. Revenue contribution details: Subscription revenue was dominant with a high ratio, and one-time revenue was a smaller portion but with a strong ratio.

- Continue to focus on expanding the subscription base and deepening partnerships. - Maintain disciplined cost control and strategic investments in product development to achieve cash flow positivity. - Leverage cloud partnerships to drive growth and provide scalable, secure solutions. - Continue to innovate with AI-powered features in the Sky platform.

Q: How has new management impacted growth at SKY?

A: Great question, Dennis. New management, including Joy joining, has had a positive impact. Joy's financial strategy and partnership with Google Cloud Providers have been beneficial. There has also been new talent added to the company.

Q: Could you partner with Palantir to implement AIP?

A: That's a great suggestion Max. We're not currently working in the government sector with Defense Department contracts, but we do see an opportunity and will reach out to explore. Our core focus is scaling up within the commercial segment with our UI, insights, and general AI solution for employee experience.

Q: Can you detail your how your partnership with Google Cloud is progressing?

A: We've had great working sessions and meetings with the Google team. They're helping with go-to-market, inviting us to conferences, and collaborating on product side. Skyview is implemented with Google Cloud partnership, and there are upcoming innovations leveraging Google Cloud AI capabilities. Google Cloud representatives are in our offices daily, with a lot of collaboration and engagement.