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The call emphasized strong forward indicators: bookings growth (12.5% YoY), $5M in multiyear TCV, meaningful NRR improvement (to 98%), strategic Google partnership and Gartner recognition, plus product momentum for CXAI 2.0 and mid-market channel plans. Near-term financials showed a QoQ revenue decline ($950K vs $1.02M) and margin compression (83% vs 87%) driven by timing of deployments and infrastructure investments; underlying operating expenses rose modestly when excluding a prior goodwill charge. Cash increased marginally to $12.3M and EPS loss improved substantially. Overall, the positives around durable bookings, retention, product/partner validation and clear commercialization levers outweigh the near-term revenue and margin headwinds, though timing and compliance risks remain.
The company gave directional (not numeric) guidance: CXAI expects Q1 bookings momentum—$1.4M bookings (up 12.5% YoY from $1.25M) including ~$5M TCV across three 3‑year enterprise deals and a 19% beat to internal bookings forecasts—to convert into revenue over upcoming quarters as CXAI 2.0 (on schedule for June) and CXAI (Sky) (marketplace launch this quarter) are deployed; they said gross margin should stabilize in the ~80% range (Q1 GM 83% vs 87% in Q4), subscription mix remains high at 98% of revenue, Q1 revenue was $950K (vs $1.02M in Q4), cash was $12.3M (vs $11.1M), EPS improved to -$0.08 (from -$0.13), NRR rose to 98% (from 86% a year ago), operating expenses declined $1.87M QoQ (27.6%) though underlying ops ex‑goodwill rose $278K, R&D remains ~70% of headcount at $1.5M, and management said they’re targeting positive EBITDA/cash flow improvement and regaining compliance by September while emphasizing enterprise demand, margin‑protected AI‑native monetization, and global scale (200+ cities, 50+ countries, ~1M users).
Q1 bookings were $1.4M (up 12.5% YoY from $1.25M in Q1 2025). The company closed three enterprise deals with ~ $5M total contract value (3-year terms), demonstrating multiyear commitments and stronger pipeline conversion.
NRR improved to 98% in Q1, up 12 percentage points YoY from 86% in Q1 2025, indicating strong retention and expansion within the existing customer base.
Announced deep product partnership with Google Cloud (embedded Looker integration and access to Google data/AI stack) and was recognized by Gartner as a visionary in the new Enterprise Workplace Magic Quadrant, providing sales 'air cover' and validation.
CXAI 2.0 (agentic AI operating layer) is on schedule for a June rollout; five CXAI Sandbox deployments are live in production. Management reports customers are adopting 2.0 day-1 and that the platform is driving RFP wins.
Subscription revenue mix improved to 98% of total revenue (from 96% in Q4), reflecting a highly recurring revenue base and a monetization model geared toward AI consumption, analytics and integrations.
Over 70% of headcount is in R&D and Q1 R&D spend remained stable at ~$1.5M, signaling continued investment in product differentiation and IP (provisional patents filed for agentic features).
Cash balance increased to $12.3M from $11.1M at Q4 end. GAAP EPS loss improved to negative $0.08 from negative $0.13 in Q4 — a 38% improvement — reflecting operating leverage and expense normalization.
The company beat its internal bookings forecast by 19%, citing improved conversion driven by targeted GTM, Google partnership, and Gartner recognition.
Launched CXAI (Sky) pilot for mid-market with plans to list on Google Marketplace and AWS Marketplace in the quarter, providing a channel-led, rapid-deployment growth vector beyond large enterprise sales.
Greetings. Welcome to the CXApp First Quarter 2026 Earnings Call. [Operator Instructions] I will now turn the conference over to your host, Khurram Sheikh, Chairman and CEO. You may begin.
Thank you, John. Good afternoon, everyone, and thank you for joining CXAI's Q1 2026 Earnings Call. I'm also joined on the call by our CFO, Joy Mbanugo. This quarter represents an important step forward for CXAI, for Sky. We're not simply building workplace software. We are building an AI-driven orchestration layer for the modern enterprise. The enterprise workplace is changing quickly. Companies are looking for platforms that can connect employees, spaces, assets, services, workflows and data into one intelligent system.
This is exactly where CXAI is positioned. Our message today is clear. Enterprise demand is increasing. Our product road map is accelerating. Our monetization model is expanding, and we believe CXAI is positioned to convert that demand into recurring margin protected revenue growth. With that, I'm going to start going through the disclaimer slides. Please -- I want to remind everybody that today's presentation includes forward-looking statements. These statements are based on current expectations and assumptions and are subject to risks and uncertainties.
Please review our SEC filings for a complete discussion on those risks. Next one. We will also reference certain financial information, including non-GAAP measures and market data. We believe these metrics help investors understand our operating performance and the direction of the business, but they should be reviewed to...