Netcapital Inc. Q2 FY2025 earnings call

• Revenue decline in Q2 2025 was attributed to lack of consulting service revenue. - Received FINRA approval for broker-dealer subsidiary, Netcapital Securities, Inc., which opens new revenue opportunities like hosting and generating fees from Reg A and Reg D offerings on the platform. - Has over 115,000 investor accounts and a platform connecting investors and issuers, with nearly 300 companies successfully raised on the platform.

Revenues for Q2 fiscal 2025 (ended Oct 31, 2024) decreased by approximately $1.9 million or 92% to $170,528 compared to $2.04 million in Q2 fiscal 2024. The decline was due to lack of consulting service revenue. Operating loss for Q2 fiscal 2025 was approximately $2.2 million vs. an operating profit of $52,220 in Q2 fiscal 2024. Net loss for Q2 fiscal 2025 was approximately $2,220,501 vs. a net profit of $339,616 in the prior year. Cash and cash equivalents as of Oct 31, 2024 were $1,346,739. Revenue contribution: Consulting services were a significant part in prior year but not in Q2 2025.

• Working on Templum ATS secondary transfer functionality but still working through regulatory details, no official timeline set yet. - Believes broker-dealer license positions the company to expand revenue base through new fee structures from larger fundraises under Reg A and Reg D.

• Forward-looking statements involve known and unknown risks, uncertainties, etc., that may cause actual results to differ materially from projections.

Q: Kal Malhi asked about capital structure, number of shares outstanding, warrants, net assets, cash position, and liabilities.

A: Martin Kay and Coreen Kraysler responded that it's all common stock, approximately 1.8 million shares outstanding, deferred on warrant details, net asset value of equity positions over $25 million, and cash and cash equivalents over $1.3 million as of quarter end.

Q: Joichi Sakai asked about differentiators of Netcapital Securities from other broker-dealers and revenue visibility from the new broker-dealer registration.

A: Martin Kay said it's unique due to existing platform ecosystem, over 115,000 investor accounts, and robust digital marketing relationships; new revenue streams possible from Reg A and Reg D offerings, likely percentage fees on larger raises vs flat fees.

Q: John Gilliam asked about the Templum ATS launch timeline.

A: Martin Kay said technical and product build-out is complete but still working through regulatory details, no official timeline, and it's pushed into Q4 2024 with no confident prediction on exact launch time