CXApp (CXAI) Q2 2024 earnings summary

Executive summary

• Achieved the largest expansion deal to date with a major global financial services customer, resulting in 112%–120% ARR growth for that customer and validating the land-and-expand strategy.

• Bookings for Q2 2024 reached $1.91 million, significantly higher year-over-year, driven by renewals and expansions across five enterprise customers in diverse verticals.

• Completed a business transformation to an AI-native SaaS model, with strong momentum in recurring revenue and customer engagement.

• Signed a multi-year, multi-million-dollar strategic partnership with Google Cloud to enhance AI infrastructure, security, and scalability.

• Net loss for Q2 2024 was $5.26M, a significant improvement from $14.73M in Q2 2023, driven by lower other expenses.

Financial highlights

• Q2 2024 bookings totaled $1.91 million, with revenue at $1.77M, reflecting robust expansion and renewals.

• Recurring/subscription revenue accounted for 85% of total revenue, up from 79% a year ago.

• Gross margin improved to 80% in Q2 2024 from 75% in Q2 2023, consistently above 80% in recent quarters.

• Net retention rate improved to 105%, driven by renewals and expansion.

• Operating expenses reduced by over 15% year-over-year due to restructuring and AI-driven efficiencies.

Outlook and guidance

• The company anticipates continued growth through deeper enterprise penetration and global expansion, supported by the Google Cloud partnership.

• The new multi-tenant, multi-cloud CXAI Platform is on track for global deployment in Q4 2024.

• Pilots of the CXAI View analytics platform are underway in multiple verticals, with full solution rollout expected to address hybrid work challenges.

• Management expects the SaaS revenue mix to continue increasing as the company transitions away from one-time professional services.

• Recent funding and cost reductions, including a 20% workforce reduction and lower D&O insurance premiums, are expected to support operations for at least the next year.