CXApp Inc. Q4 FY2024 earnings call

• Completed product transformation to a single code base, resulting in a profitable CXAI 1.0 application business.
• Hired Terry Blanchard as SVP of Engineering, leveraging his experience from Apple, WhatsApp, and Nvidia.
• CXAI platform has 37 filed patents (17 granted), with global presence in 200+ cities and 50+ countries.
• Q4 2024 revenue was $1.66 million, gross profit $1.43 million, operating expenses $4.6 million.
• Full year 2024 subscription revenue grew 10% to over $6.2 million, with a 27% reduction in cost of revenues.
• Significantly reduced total operating expenses from $58 million in 2023 to $19.6 million in 2024, improving EBITDA by 30% year-over-year.
• Strong balance sheet with runway for at least a year, supported by existing and new customer revenues.

In 2024, subscription revenue accounted for 87% of total revenue, up from 78% in 2023. Gross margin was 82% in 2024 compared to 78% in 2023. Subscription revenue grew 10% over the year, totaling over $6.2 million. The CXAI 1.0 application business is profitable, and the company has reduced operating expenses while improving EBITDA.

• Focus on net retention rate (NRR) and annual recurring revenue (ARR).
• Invest in AI capabilities for deeper product stickiness.
• Maintain tight cost discipline while investing in long-term growth.
• Plan to hold Annual Investor Day in May 2025 to provide details on new product offerings and customer case studies.

• Competition from large companies in the employee experiences space.
• Market risks, but CXAI differentiates with user interface (UI) excellence, simplifying complexity, providing insights, and a partnership model with clients where the platform is deployed as the client's own application.

Q: What are CXAI's future challenges, opportunities, and risks, and how is the company preparing?

A: Competes with large companies but differentiates via UI, complexity simplification, insights, and a partnership model. Risks exist in the market, but focus is on employee experience. Prepares by being a partner with clients, deploying the platform as their own.

Q: Can you provide color on pipeline building year-over-year?

A: Investing in sales and marketing, expecting corresponding revenue, but no specific guidance at this time. Focus is on demonstrating capability and adoption with existing clients