Netcapital (NCPL) Q1 Earnings call transcript Sep 17, 2025

The recent earnings call for Netcapital Inc. provided a comprehensive overview of the company's financial performance and strategic initiatives for the first quarter of fiscal 2025. Coreen Kraysler, the CFO, and Martin Kay, the CEO, shared insights into the company's financial results, operational challenges, and future plans.

Financial Results and Challenges

Netcapital reported a decrease in revenues for the first quarter of fiscal 2025, with a decline of approximately 91% compared to the previous year. This decrease was primarily attributed to a lack of revenue from equity-based contracts, which the company has been focusing on establishing a broker-dealer subsidiary to address. The total funding portal revenues also declined by approximately 62%, with a decrease in portal fees and capital raised on the platform. Despite these challenges, the company is working towards obtaining broker-dealer registration with FINRA to expand its revenue streams and enhance its distribution capabilities.

Strategic Initiatives and Future Outlook

The company highlighted several strategic initiatives for the future, including the beta launch of its secondary trading platform through the Templum ATS, which aims to provide better liquidity for secondary trading. The application for broker-dealer registration with FINRA was also mentioned, which could potentially lead to growth in revenues and expanded distribution capabilities. The company remains committed to its vision of empowering entrepreneurs and investors by providing a streamlined platform for capital raising and investing in early-stage and growth-stage companies.

Investor Relations and Future Plans

During the Q&A session, investors expressed concerns about the company's operational burn rate and the potential future transition from a public to a private platform. Martin Kay emphasized the company's commitment to its vision and its belief in the long-term value of the business. The success stories of companies that have raised capital on the platform, such as Avadain, were cited as examples of the growing market awareness and momentum in the industry. The company is also exploring partnerships with marquee issuers to further expand its reach and impact.

Conclusion

The Netcapital Inc. earnings call provided a detailed analysis of the company's financial performance and strategic initiatives for the first quarter of fiscal 2025. Despite facing operational and financial challenges, the company remains optimistic about its future prospects, with a focus on expanding its revenue streams and enhancing its distribution capabilities. The strategic launch of the secondary trading platform and the application for broker-dealer registration with FINRA are key initiatives that could potentially drive growth and create value for both issuers and investors. Overall, the call highlighted Netcapital's commitment to its vision and its belief in the long-term potential of the business.