Netcapital Inc Reports Revenue Decline and Operating Loss Amid Strategic Shifts and Blockchain Exploration

Netcapital Inc (NCPL) has shifted its strategy to focus on scalable growth, secured a broker-dealer license, and facilitated significant fundraising efforts. Despite a decline in revenues from $4.9 million in 2024 to $869,460 in 2025, the company remains committed to democratizing access to private capital markets. Netcapital Inc is exploring the integration of blockchain and digital assets with traditional finance and is focusing on long-term value creation. However, the company experienced an operating loss of approximately $8.3 million for fiscal 2025 and wrote off several investments, resulting in an impairment expense of approximately $19.9 million.

Netcapital Inc. (NCPL) has announced significant financial challenges in its Q4 2025 earnings call, revealing a steep decline in revenue and an increased net loss. Despite these setbacks, the company is pivoting towards a technology-driven strategy, focusing on blockchain integration and expanding its Reg A offerings. The stock saw a modest increase of 0.76% in regular trading, closing at $2.62. According to InvestingPro analysis, NCPL appears undervalued based on its Fair Value calculation, though investors should note the stock’s high volatility and recent -13.82% decline over the past week [1].

Key Takeaways

Revenue dropped sharply to $869,460 in FY2025 from $4.9 million in FY2024. Net loss widened to $28.3 million, up from $4.9 million the previous year. Netcapital is shifting focus to scalable, technology-driven services and blockchain integration. The company discontinued equity-based consulting services to streamline operations. Regulatory challenges continue to pose a significant hurdle in the fintech sector [1].

Company Performance

Netcapital faced a challenging fiscal year, with revenues plummeting by over 80% and a substantial increase in operating losses. The company’s strategic pivot towards integrating blockchain and digital assets with traditional finance marks a significant shift in its business model. This transition comes amid a difficult macroeconomic environment and regulatory uncertainties in the fintech and crypto sectors [1].

Financial Highlights

- Revenue: $869,460 in FY2025, down from $4.9 million in FY2024
- Gross profit: Dropped to $8,290 from approximately $4.8 million
- Operating loss: Increased to $8.3 million from $3.4 million
- Net loss: Widened to $28.3 million from $4.9 million
- Loss per share: Reduced to $20.39 from $28.83

Outlook & Guidance

Looking ahead, Netcapital is expanding its Reg A offerings and exploring further integration of blockchain technologies. The company aims to scale its funding portal, which now charges a 1% fee payable in securities, as part of its strategy to create long-term value for shareholders. With a current market capitalization of just $11.97M and a price-to-book ratio of 0.34, the stock trades at relatively modest valuations [1].

Executive Commentary

CEO Martin Kay emphasized the company’s mission to democratize access to private capital markets, stating, "We’re about democratizing access to capital in the private capital markets." He also highlighted the regulatory challenges, noting, "We spend a lot of time and energy and money, frankly, educating the regulators on what we do and why we do it" [1].

Risks and Challenges

- Regulatory Uncertainty: Ongoing challenges in navigating fintech and crypto regulations could impact operations.
- Market Environment: The current macroeconomic climate poses risks to growth and profitability.
- Transition Strategy: The shift towards blockchain and digital assets involves execution risks and market acceptance.
- Secondary Market Liquidity: Creating liquidity for private investments remains a challenge.
- Competition: Intense competition in the fintech space could pressure Netcapital’s market positioning.

Conclusion

Netcapital Inc. is navigating a challenging financial landscape but remains committed to its mission of democratizing access to private capital markets. The company's strategic pivot towards technology-driven services and blockchain integration marks a significant shift in its business model. However, the company faces significant hurdles in achieving its long-term objectives, including regulatory uncertainties, market volatility, and intense competition in the fintech sector [1].

References

[1] https://za.investing.com/news/transcripts/earnings-call-transcript-netcapital-q4-2025-sees-revenue-plunge-strategic-pivot-93CH-3836946