CXApp Inc. Q1 FY2026 earnings call

• Company Positioning and Mission

  • CXAI positions Sky as an AI-driven orchestration layer for the modern enterprise, connecting employees, spaces, assets, services, workflows, and data into a single intelligent system, evolving from workplace experience to workplace intelligence.
  • The company operates globally across 200+ cities, 50+ countries, reaching over 1 million users, with 70% of its headcount focused on R&D to support enterprise AI security, compliance, scalability, and domain-specific intelligence.
  • CXAI was recognized by Gartner as a Visionary in the first-ever Enterprise Workplace Magic Quadrant, validating the company's industry innovation and strategic vision.

• Commercial and Product Highlights

  • Q1 2026 outperformed internal bookings forecasts by 19%, driven by rising enterprise demand for AI-powered workplace transformation, with five live production SkySandbox agentic AI deployments currently with enterprise clients.
  • Three large three-year enterprise deals (one new logo, two major renewals) were closed in Q1 with total contract value of $5 million, all with clients adopting the new agentic AI platform Sky 2.0, which is on schedule for full launch in June 2026.
  • A strategic partnership with Google Cloud is validated by a published Google case study of CXAI's differentiated Looker integration for Skyview, the company's embedded analytics platform, which provides a scalable API-first data layer for enterprise-scale real-time AI-powered analytics.
  • The company filed provisional patents for its agentic AI orchestration layer, recommendation engine, and core cortex technology, building a proprietary moat for its platform, with definitive patent filings planned.
  • SkySky (Sky 2.0's mid-market expansion platform) is on track to launch on Google Marketplace and AWS Marketplace in Q2 2026, designed for rapid self-service deployment and channel distribution to small and medium enterprises.

• Financial Discipline

  • Total operating expenses declined 27.6% quarter-over-quarter, driven by a $2.15 million non-cash goodwill impairment charge in Q4 2025; excluding the one-time charge, underlying operating expenses increased only 6% quarter-over-quarter, showing tight cost control.
  • R&D spending remained essentially flat at $1.5 million quarter-over-quarter, sustaining innovation investment while operating efficiently; sales and marketing spending decreased 16% quarter-over-quarter due to optimized targeting of high-probability enterprise opportunities, driving higher conversion rates.

CXAI operates a single integrated business platform focused on AI-powered enterprise workplace orchestration, so no separate product segment financials are reported. Total Q1 2026 revenue was $950,000, a slight decline from $1.02 million in Q4 2025 due to timing of new deal closures and enterprise contract revenue recognition patterns. Recurring subscription revenue represented 98% of total revenue, up from 96% in Q4 2025. Q1 2026 gross margin was 83%, down from 87% in Q4 2025 due to incremental infrastructure investments for agentic AI rollout and the Google Cloud partnership. End-of-period cash balance was $12.3 million, up from $11.1 million at the end of Q4 2025. Q1 2026 earnings per share was negative 8 cents, an improvement from negative 13 cents in Q4 2025. Q1 bookings were $1.4 million, up 12.5% year-over-year from $1.25 million in Q1 2025, and included three large three-year enterprise deals with $5 million in total contract value. Net Revenue Retention (NRR) improved to 98% in Q1 2026, up 12 percentage points year-over-year from 86% in Q1 2025.

• Management did not provide formal quantified guidance for revenue, bookings, or cash flow, consistent with the company's prior guidance policy.
  • Gross margin is expected to stabilize around the 80% range as the company scales its new agentic AI capabilities and Google Cloud partnership investments.
  • Management expects that the strong Q1 2026 bookings momentum (including $5 million in multi-year enterprise commitments) will translate to revenue growth in upcoming quarters as contracts are deployed and recognized per the company's revenue recognition policy.
  • Management confirmed that the full launch of Sky 2.0 agentic AI remains on schedule for June 2026, and the SkySky mid-market platform remains on schedule for Q2 2026 launch on major cloud marketplaces.
  • Management is targeting to regain Nasdaq compliance organically before the September 2026 deadline, with current execution aligned to meet this goal.

• The company faces a pending compliance deadline for regaining exchange listing compliance in September 2026, with no guarantee that organic growth efforts will meet this deadline.
  • Revenue generation is dependent on the timing of enterprise deal closures and deployment cycles, creating near-term revenue volatility even when leading indicators (bookings, total contract value) show growth.
  • The company's pending patent filings have not yet been finalized or granted, and there is inherent uncertainty around potential infringement claims from third parties or the ability to enforce the company's proprietary intellectual property.
  • Gross margin compression occurred in Q1 2026 due to infrastructure investments for AI expansion, and margin may remain under pressure during the product scaling phase.

Q: Can the company regain exchange compliance organically, how is Sky 2.0 progressing, and will the company reach cash flow positive in 2026?

A: Management confirms it believes regaining organic compliance before the September deadline is possible and is working feverishly toward this goal. Sky 2.0 is progressing very well and will launch to the market in the coming months. No formal guidance is provided for 2026 cash flow positivity, though reaching positive EBITDA remains a core company goal. The company is also actively pursuing both organic and inorganic scaling opportunities, with increased partnership interest following platform development.

Q: Do the company's impending patents infringe on existing intellectual property, will the company license its technology to competitors, and will the June Sky 2.0 launch support integration for government agencies?

A: Legal review for patent filings found no expected infringement on existing third-party intellectual property, and management believes the company's patents cover unique, differentiated capabilities that create a proprietary moat. Management says it is open to licensing opportunities for its IP, and will clarify opportunities after the product launch. The June launch of Sky 2.0 will deliver a universal platform that can support any enterprise including government agencies; while government is not an initial focus, the company will evaluate this vertical opportunity after core product launch.

Q: Can you provide more detail on the Google Cloud partnership?

A: The partnership has two core components: first, a product integration where CXAI has built its Skyview analytics and agentic AI platform on Google's Looker, Gemini, and Vertex AI systems, with a differentiated API-first implementation that Google highlighted in a public case study. Second, Google Cloud supports go-to-market for the new SkySky mid-market platform, which will launch on Google Cloud Marketplace this quarter. CXAI benefits from Google's heavy enterprise AI investment, and Google values CXAI's leading innovation in the workplace AI space.

Q: What are management's expectations for the upcoming quarter?

A: The company does not provide formal quantified guidance for revenue or bookings, but expects continued progress on onboarding new Q1 clients, delivering on Sky 2.0 and SkySky launch milestones, and converting strong enterprise demand into tangible commercial results. The team is heavily focused on executing the current roadmap, with a strong pipeline of opportunities that management expects to deliver positive execution updates in the coming weeks and months.