CXApp 2025 Q1 Earnings Strong Performance as Net Income Improves 68.7%

CXApp (CXAI) reported its fiscal 2025 Q1 earnings on May 20th, 2025. The company surpassed analyst expectations by reporting losses of eight cents per share, compared to the anticipated losses of 24 cents. While specific guidance was not provided, CXApp indicated a positive outlook for subscription revenue growth and user engagement. The company reported subscription revenue growth from 87% in Q1 2024 to 99% in Q1 2025, highlighting strong performance in its business strategy.

Revenue

In the first quarter of fiscal 2025, CXApp's total revenue fell by 32.7%, totaling $1.22 million compared to $1.82 million in the same period of 2024. The revenue breakdown includes $1.21 million from License & Maintenance Contracts and $13,000 from Professional Services, contributing to the overall revenue.

Earnings/Net Income

CXApp significantly improved its financial performance, narrowing the loss to $0.08 per share from $0.34 per share in 2024 Q1, marking a 76.5% improvement. The company's net loss was reduced to $1.62 million, a 68.7% decrease from the previous year's net loss of $5.17 million. The improved EPS reflects a positive trend.

Price Action

The stock price of CXApp declined by 3.47% during the latest trading day, increased by 21.93% over the past week, and surged by 26.36% month-to-date.

Post-Earnings Price Action Review

The back-tested strategy of purchasing CXAI stock following a revenue beat and holding for 30 days has proven ineffective. This approach resulted in a substantial loss of 90.93%, characterized by a Sharpe Ratio of -0.15, indicating high risk with minimal returns. The strategy endured a maximum drawdown of 96.19% and a negative compound annual growth rate (CAGR) of 48.98%, underscoring its unreliability. Such results highlight the risks associated with this investment tactic, suggesting a need for reevaluation of the strategy to mitigate future losses and improve profitability.

CEO Commentary

Khurram Sheikh, Founder, Chairman & CEO, highlighted CXApp's transformative impact on the workplace through its CXAI platform, addressing post-pandemic challenges such as return-to-office mandates and employee engagement. He noted a 130% increase in Annual Recurring Revenue from three large Fortune 500 renewals, emphasizing user engagement and adoption. Sheikh expressed optimism about the company's direction, focusing on a robust technology roadmap and strategic partnerships to enhance product offerings in the evolving employee experience market.

Guidance

While no specific quantitative guidance was provided, CFO Joy Mbanugo expressed expectations for continued growth in subscription revenue, emphasizing Annual Recurring Revenue and user engagement. CXApp reported a substantial increase in subscription revenue, rising from 87% in Q1 2024 to 99% in Q1 2025. With a cash balance of $3.98 million at the end of Q1 2025 and access to an additional $20 million from a new convertible note, the company has over 18 months of liquidity at its current operating run rate.

Additional News

CXApp Inc. recently announced the appointment of Terry Blanchard as Senior Vice President of Engineering. Blanchard, with over 30 years of experience from companies like Apple and NVIDIA, will lead CXAI's global engineering organization. His expertise in AI and machine learning will be crucial in accelerating CXAI's product roadmap and technical strategy. Additionally, CXApp has invited shareholders to attend its 2025 Annual Meeting of Shareholders, scheduled for May 20, 2025. The meeting will feature governance matters and a presentation on CXAI's progress in workplace experience technology. Lastly, CXApp announced the availability of its AI-driven employee experience solutions on AWS Marketplace, enhancing workplace operations with personalized interactions and generative AI-based analytics.