Netcapital Inc. Q3 FY2024 earnings call

• The quarter was challenging with fewer issuers on the funding portal, but the company remains optimistic.
• Overall revenue for the first 9 months of fiscal 2024 dipped 14% compared to prior year, but funding portal revenues increased over 70% with portal fees up 152% and listing fees up 14%.
• Closed a $4 million public offering in December, strengthening working capital and balance sheet.
• The platform has over 100,000 users and 50 companies currently raising capital.
• Plan to continue scaling the platform to cater to accredited and nonaccredited retail investors, early-stage companies, etc., with a user-friendly, 24/7 platform.

During the third quarter, revenue decreased by approximately $1.2 million or 54% to $1 million. Revenue from equity-based contracts decreased by $1.1 million or 56% to $862,000 in the 3 months ended January 31, 2024 compared to $1.9 million in the same period in 2023. Funding portal revenues decreased by approximately $52,000 or 23% to $179,588 in Q3 2024, consisting of portal fees of $84,548 and listing fees of $95,040, down from $231,833 in Q3 2023 (portal fees $99,333, listing fees $132,500). Equity-based contracts contributed 86.2% of the total revenue ($862,000 / $1,000,000), and funding portal revenues contributed 17.96% ($179,588 / $1,000,000).

• Plan to continue scaling the platform and catering to various investors.
• Expect to launch the ATS system more broadly in the near future, with an expectation to do so sooner than 6 months from now.

Q: Do you see the crowd funding market consolidating? It seems so fractured. And if so, would management consider that and use their valuable NASDAQ listing as a potential partner?

A: Yes, it's early in the industry. The equity crowd funding industry is around $1 billion, and there's room for multiple competitors. Management is open to discussions and partnerships to create value for shareholders.

Q: Where does the company stand with the ATS system, the alternative trading system?

A: Currently in a closed beta production environment with Templum. Expect to launch more broadly in the near future, with a goal to launch sooner than 6 months from now.