Netcapital's Q1 2026: Contradictions Emerge on Revenue Growth, Profitability Goals, and Diversification

The above is the analysis of the conflicting points in this earnings call

Date of Call: None provided

Financials Results

• Revenue: $190,058, up ~34% YOY vs $142,227 in Q1 FY2025
• EPS: $(1.27) loss per share, improved from $(5.10) loss in Q1 FY2025

Business Commentary:

• Revenue Growth and Business Model Shift:
• Netcapital Inc. reported revenues of $190,058 for the three months ended July 31, 2025, an increase of approximately 34% as compared to $142,227 in the same period last year.

• The increase in revenues was primarily attributed to an increase in portal fees and an increase in revenues for the services that the company provides in exchange for equity securities during the quarter, driven by a focus on building a stronger, more scalable business model following a strategic shift away from equity-based consulting revenue.

• Operational Loss Gaps:

• The company reported an operating loss of approximately $3.3 million for the first quarter of fiscal year 2026, compared to an operating loss of approximately $2.5 million in the same period last year.

• This widening of the loss gap is likely due to increased investments in strategic growth initiatives such as establishing advisory boards and expanding into blockchain, digital assets, and crypto integration with traditional finance.

• Crypto and Game Advisory Boards:

• Netcapital Inc. established a crypto advisory board and a game advisory board to guide its efforts in integrating blockchain, digital assets, and crypto with traditional finance, as well as to expand its ecosystem by deepening engagement with the online game community.

• These initiatives are aimed at positioning the company to play a larger role in fintech and to explore opportunities in decentralized finance (DeFi), which could potentially drive long-term growth and enhance its services through blockchain, crypto, and digital asset innovation.

• Successful Issuer and Revenue Contribution:

• One issuer accounted for 73% of Netcapital's revenues in the three months ended July 31, 2025.
• The significant contribution to revenue was due to the issuer successfully raising approximately $5 million from March 24, 2025, to May 30, 2025, demonstrating the potential of the company's platform for facilitating capital raising and investment opportunities in the private market.

Sentiment Analysis:

• Revenue grew ~34% YOY to $190,058, but operating loss increased to ~$3.3M from ~$2.5M. Management emphasized strategic progress (crypto and gaming advisory boards) and commitment to long-term growth.