Why Did CXApp Stock Plunge 16.9% Despite Strong Earnings?

On April 7, 2025, CXApp's stock experienced a significant drop of 16.9% in pre-market trading, reflecting investor concerns and market sentiment.

During the Q4 2024 earnings call, CXApp's CEO, Khurram Sheikh, highlighted the company's transformational year, emphasizing the success of their CXAI platform. The platform, anchored on customer experience and artificial intelligence, has been pivotal in addressing post-pandemic challenges such as return to office (RTO) and employee engagement. The company has streamlined its cost structure, resulting in a profitable CXAI 1.0 application business, and is now investing in Agentic AI to reshape the employee experience market.

CXApp has also made significant strides in product development, completing the transformation to a single code base and deploying multiple OSs, including Android, iOS, and Web. The company's CXAI Kiosk, designed for office buildings, is now in production and available to all clients. Additionally, CXApp has launched localization solutions with eight languages, catering to diverse global markets.

The company reported double-digit ARR growth in 2024, supported by six major logo renewals in Q4. Subscription revenue accounted for 87% of total revenue, driving a gross margin of 82%. CXApp's net retention rate reached 100%, indicating strong customer satisfaction and product value. The company has also reduced operating expenses significantly, positioning itself for sustainable growth in 2025 and beyond.