Q1 2024 CXApp Inc Earnings Call

Operator: Good afternoon, and welcome to CXAI's Q1 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode, and please be advised that this call is being recorded. And now, I would like to turn the conference call over to Mr. Khurram Sheikh, Chairman and CEO of CXAPP. Please go ahead, sir. Thank you, operator, and thank you.

Good afternoon, and welcome to the CX AI Q1, 2024 earnings conference call. At this time, all participants are in a listen only mode and please be advised that this call is being recorded.

Speaker Change: And now I would like to turn the conference call over to Mr. Gram Shake Chairman and CEO of <unk>, Inc. Please go ahead Sir.

Khurram Parviz Sheikh: Thank you, Operator, and thank you, everyone, for joining the Quality Earnings Call for CHAI. I plan to discuss DxAi's financial results for the first quarter of 2024. I will also provide an overall business update on our progress in shaping the future of work and creating transformative employee experiences using AI technology. By now, everyone should have access to our earnings PR announcement, as well as our new product launch in collaboration with Google Cloud. We'll also be filing our annual 10K for 2023 shortly. All of this information will also be found on our website, www.cxapp.com. Now, I'm going to go through a couple of disclaimer slides.

Gram Shake: Thank you operator and thank.

Gram Shake: Everyone Who's joining the quarterly earnings call for <unk>.

Gram Shake: I plan to discuss.

Gram Shake: <unk> financial results for the first quarter of 'twenty 'twenty four but would also provide an overall business update on our progress in shaping the future of work, including transformative employee experiences using AI technology.

Gram Shake: By now everyone should have access to our earnings PR announcement, as well and get a new product launch in collaboration with Google Cloud.

Gram Shake: I'll also be filing our annual 10-K for 2023 shortly.

All of this information will also be found on our website www dot <unk> dot com.

Gram Shake: And I'm going to go through a couple of disclaimers flights you can read them at your leisure.

Gram Shake: And.

Gram Shake: We'll get to our first slide about the company what we're doing.

Khurram Parviz Sheikh: You can read them at your leisure, and we'll get to our first slide about the company and what we're doing. Dear shareholders, I'm super excited to share our Q1 2024 results and the incredible progress we have made in shaping the future of work. At the heart of CXAI lies a simple yet powerful belief: put the employee first, and everything else follows.

Speaker Change: Dear shareholders I'm Super excited to share our Q1 2024 results Andy.

Speaker Change: The incredible progress we have made in shaping the future of work.

At the heart of <unk> lives simple yet powerful belief put the employee flows and everything else follows.

Khurram Parviz Sheikh: It's not just about the work; it's about the people who do it, the places where they come together, and the things that need to succeed. CXAI redefines how we think about work, life, and the seamless interplay between the two. And we do all of this using the latest AI technology. I'm super excited about this opportunity.

Speaker Change: Not just about the work it's about the people who do it but places where they come together and the things they need to succeed.

Speaker Change: See I redefines, how do we think about work life and the seamless interplay between the two and we do all of this using the latest technology with.

Super excited about this opportunity here. So let me give me a quick snapshot of where we are now as a company. This quarter. We are headquartered in the San Francisco Bay area with regional Tech hubs globally, the global presence and diversity of experience gives us a leading edge as we shipped a creature work everywhere.

Khurram Parviz Sheikh: So, let me give you a little quick snapshot of where we are now as a company. We are headquartered in the San Francisco Bay Area with regional tech hubs globally. The global presence and diversity of experience gives us a leading edge as we shape the future of work everywhere. Of the 80 team members at SC&I, we like to call CXCI at SC&I, more than two-thirds are engineers, and we have doubled the engineering staff over the course of the last year at the same time as reducing overall operating expenses efficiently.

Speaker Change: Of the 80 team members at Sky, we like to call. It <unk> sky more than two third of our engineers and we have doubled being jinx, Jeff over the course of the last year at the same time as reducing overall.

Speaker Change: Bringing expenses efficiently.

Khurram Parviz Sheikh: AI is changing the world, and we are the..., and we are an AI-focused enterprise software company. We believe employees are the center of this multi-billion dollar growing workplace experiences market, and we're creating a new category in software, the employee experience. The CXI platform is based on 30-cent file patents, with 17 of them already granted.

He is changing the world and we are.

Speaker Change: Yeah, we are knee I first enterprise software company.

We believe the employees of the central this multibillion dollar growing workplace experiences market and we're putting a new category in the software employee experiences.

Speaker Change: <unk> platform is based on 37 filed patents with 17 of them already granted this substantial intellectual property not only establishes our company is the technological front runner, but also.

Khurram Parviz Sheikh: This substantial intellectual property not only establishes our company as a technological frontrunner but also establishes Kurs as a pioneer in the industry. This platform has been developed in collaboration with leading AI companies in the tech ecosystem in Silicon Valley. And we're super excited to be partnering with Google Cloud as we scale our business to the next level. We are proud to have some of the largest brands in the world as our customers who are at the leading edge of workplace transformation.

Speaker Change: Secured the accretion as a pioneer in the industry. This platform has been developed in collaboration with leading AI companies in the tech ecosystem in Silicon Valley, and we're super excited to be partnering with Google cloud.

Speaker Change: Scale, our business to the next level.

Speaker Change: We are proud to have some of the largest logos that the world is our customers that are the leading edge.

Speaker Change: The leading edge of workplace transformation more than 20 of fortune 1000 companies, what scaling with us with new deployments globally every day.

Khurram Parviz Sheikh: More than 20 Fortune 1000 companies who are scaling with us with new deployments globally every day. And as you see on the chart, one of the key differentiators for our business is that we have strong security and compliance credentials globally. And that is the reason you see us with so many logos from regulated industries.

Speaker Change: And as you see on the chart one of the key differentiator for our business is that when you have strong security and compliance credentials globally.

Speaker Change: The reason you see us with so many logos from regulated industries. They use <unk> because they know they can trust us with their data.

Khurram Parviz Sheikh: They use CXAI because they know they can trust us with their data and their enterprise security and compliance. If you look at our last presentation, we've grown to now 60 countries, we're in 200 plus cities, we're globally deployed, and we're shaping the future of work as we scale up this business. So now, let me talk about our mission statement, which we've been saying since we took the company public last year.

Speaker Change: Enterprise security and compliance.

Speaker Change: If you look from.

Speaker Change: Our last presentation, we have grown to now 60 countries with 200 plus cities globally deployed we're shaping the future of work as we scale this business.

So now let me talk about you know our mission statement and as you know, which we've been we've been saying since we took the company public last year.

Khurram Parviz Sheikh: The Sky platform is anchored on the intersection of customer experience, CX, and artificial intelligence, AI, providing digital transformation of workspaces to enhance experiences across people, places, and things. That has been the mission for us, and that is what's driving our journey of transformation.

The Sky platform is anchored on the intersection of customer experience.

Speaker Change: Artificial intelligence AI, providing digital transformation of Workspaces for enhanced experiences across people places and things that hasn't been the mission for us and that is what's driving our our journey of transformation.

Khurram Parviz Sheikh: And the journey, as we talked about in our last call, has really been through a transformation of our business model and our technology platform. Our technology platform is state-of-the-art, anchored by AI, and that is what's driving all this innovation. The transition empowers us to deliver a unified work experience in our workplace super app. By leveraging AI, we can personalize the user experience, automate tasks, and provide valuable data-driven insight to our customers. The shift towards a platform model that you see in 2024 plus with recurring revenue streams positions CXEI for long-term sustainable growth. Ultimately, it's a win-win for both CXEI and Oracle.

Speaker Change: And the journey as we talked on our last call has really been through you know a transformation of our business model and our technology platform.

Speaker Change: The new platform is state of the yard anchor.

Speaker Change: Thank God only yard and that is what's driving all of this innovation.

Speaker Change: And the transition empowers us to deliver a unified work experience through our workplace Super App by leveraging AI and personalize the user experience automate tasks and provide valuable data driven insights to our customers.

Speaker Change: Shift towards the platform model that you see in 2024, plus with recurring revenue streams positions <unk>.

Speaker Change: See I for long term sustainable growth ultimately, it's a win win for both CX the iron ore customers, we get and scalability and efficiency for our customers benefit from platform that leverage the software capabilities at scale as it relates probably more engaging productive work experience.

Khurram Parviz Sheikh: We gain scalability and efficiency while our customers benefit from platforms that leverage software capabilities at scale, as well as provide a more engaging, productive work experience. So as you look at this chart, you can see the trajectory of where we started and where we're at today. I'm very proud to say the team has delivered on a number of initiatives that have made this possible, both on the technical side as well as the business side.

Speaker Change: If you look at this chart you can see the trajectory of where we started and where we're at today I'm very proud to say the team has delivered on a number of initiatives that have made this possible both on the technical side as well as the business right more importantly, our customers are adopting the strategy with SaaS platform with micro services or data analytics that's core.

Khurram Parviz Sheikh: More importantly, our customers are adopting this strategy of a SaaS platform with microservices of data analytics that's core and to the offering. And finally, it's based on value-based pricing, which is really resonating with our customers as they look at the net scaling of their business. So, when we thought about, you know, what we were going to do in 2024, the board and I discussed what the key objectives of the company were moving forward.

Speaker Change: And to the into the offering and finally, it's based on value based pricing, which is really resonating with our customers as they look at the net killing off their business.

Speaker Change: So when we thought about you know what are we going to do in 2024.

Speaker Change: You know the board and I and discuss what are the key objectives of the company moving forward and since we you know focus on <unk> that was our initial you know raising the flag that we either needed in the yard we really focus on that Air Force technology and business model, because you know it really revolutionize that employee experience.

Khurram Parviz Sheikh: And since we, you know, focused on AI, that was our initial, you know, raising the flag that we are the leaders in AI, we really focused on that AI-first technology and business model because, you know, it really revolutionized that employee experience segment. You know, when we think about employee experience, we think about consulting all the tools in the mobile-first work super app, streamlining the workflows, boosting efficiency, and productivity. Our AI-powered approach goes beyond basic automation.

Speaker Change: You know when you think about our employee experience. If you think about consulting all the tools in the mobile first walk Super App streamlined workflows, boosting efficiency and productivity or E. R. A powder poised goes beyond basic automation is designed to create an intuitive personal work experience, reducing friction and promoting play collaboration.

Khurram Parviz Sheikh: It's designed to create an intuitive and personalized work experience by reducing friction and promoting employee collaboration, key factors for driving engagement, affinity, and productivity. So, that's been our first skill.

Speaker Change: Key factors for driving engagement affinity and productivity, but thats been our first let's get this E. Our fluids technology business more right now.

Khurram Parviz Sheikh: Let's get this AI-first technology business model right, and I'll talk about that later as well, with the great set of customers that we had in 2023. We want to grow those existing customers and build new Fortune 100 customers to scale. That has been a key initiative, and we're making a lot of progress, as you'll see in the Q1 results. This has been our largest growth in NRR, and this is because a lot of these customers have stepped up and doubled down with us. Thirdly, we wanted to launch the Sky Platform, which is built on AI-first, to our key customers.

And I'll talk about that later as well secondly.

Speaker Change: With a great set of customers that we had in 2023, we want to grow those existing customer and build new fortune 100 customers.

That has been a key initiative and we're making a lot of progress as you'll see in the Q1 results.

Speaker Change: This has been our largest ER growth and there are and this is because of a lot of these customers have stepped up and double down with us.

Speaker Change: Thirdly, we wanted to launch the Sky platform to our key customers. The Sky platform is built on the Air Force, we deploying our first new Fortune 101000 customers. This summer and it's going on track really well. So we're proud of that achievement and then what today, we announced is our AI based analytics product.

Khurram Parviz Sheikh: We're deploying our first new Fortune 1000 customer this summer, and it's going on track really well, so we're proud of that achievement. And then what we announced today is our AI-based analytics product. This has been launched in concert with Google Cloud, in collaboration with Google. And, you know, it's really a revolutionary product. I'm going to talk a lot more about it later.

Speaker Change: It has been launched in concert with Google.

Speaker Change: Google Cloud collaboration with art.

And you know it it's really a revolutionary product I'm going to talk a lot more about it later, but this is a key achievement for the team and last but not least we have been focused on strategic partners here, but you saw the notice will be Google last quarter.

Khurram Parviz Sheikh: But this is a key achievement for the team. And last but not least, we have been focused on strategic partnership. You saw the announcement with Google last quarter, you know, actually last month in April. And since then, we have made rapid progress in terms of launching our first product with them, but also with the broader ecosystem in Silicon Valley around the world. We are working with the best and brightest AI technologists and partners to bring this capability to the workplace experience market. So I'm really excited that we're making a lot of strides in creating this category-leading segment for employee experiences. That, to us, is a first in the market. So you may ask, what is the solution?

Speaker Change: Actually last month in April and since then we've made rapid progress in terms of launching our first party with them, but also with the broader ecosystem in Silicon Valley in the World. We are working with the best and brightest technologist and partners to bring this capability to the workplace experience market. So I'm really excited that we're making a lot of strides.

In creating the category leading segment core employee experiences that to US is the first in the market.

Khurram Parviz Sheikh: What is the, what is the key, what are the key parts of the solution that differentiates us from the rest? Because a lot of people have been talking about, you know, AI experiences. So let me talk about something that went a little too fast.

You may ask what is the solution what is the what are the key what are the key parts of the solution that differentiates us from the rest because a lot of people have been talking about E.

Speaker Change: Our experiences so let me talk about Oh, sorry, we went a little too fast when we talk about the employee experience solution. This is at the intersection of CX. Nei. These are features that power do you think about the life of an employee or a user across the doing what we can do for them.

Khurram Parviz Sheikh: We talk about the employee experience solution. This is at the intersection of CX and AI. These are features that power your day. Think about the life of an employer or user across the day and what we can do for them. The first one, and the most important one, is AI experiential analytics. The use of AI to derive insights into employee engagement and workspace utilization is a core component of SC&I. Emphasizing the value of data in making decisions as well as measuring productivity. And we're gonna talk a lot about that later in the presentation.

Speaker Change: First one of the most important one is this E our exploration of analytics.

Speaker Change: Use of AI to derive insight into employee engagement and workspace utilization is a core component of sky emphasizing the value of data and making decisions as well as measuring productivity and we're going to talk a lot about that.

Speaker Change: In the presentation. The second pillar of course is our workplace Super App, which we've already deployed with tens of customers and also deployed globally in hundreds of locations. This is a central platform integrates with workplace functionality, reflecting sky's emphasis on a unified mobile first approach to workspace technology.

Khurram Parviz Sheikh: The second pillar, of course, is our Workplace Super App, which we've already deployed with tens of customers and also deployed globally in hundreds of locations. This is a central platform that integrates various workplace functionalities, reflecting SC&I's emphasis on a unified, mobile-first approach to workspace technology. Our key differentiator is spatial intelligence.

Speaker Change: A key differentiator in spatial intelligence, that's the key part of Sky's technology stack, focusing and optimizing physical spaces and enhancing interactions within the workplace to location based technologies, providing contextual awareness. This is the way we differentiate among any other booking engine that's out there and find.

Khurram Parviz Sheikh: That's the key part of Sky's technology stack, focusing on optimizing physical spaces and enhancing interactions within the workplace through location-based technologies, providing contextual awareness. This is the way we differentiate ourselves from any other booking engine that's out there. And finally, generative AI. Everybody's been talking about generative AI for the last year.

Jimmy: Generally we are even talking about generative yard for the last year, we're actually implementing it right now in our platform. Both on the backend side is at the front end, sorry, Jimmy Yeah and see.

Khurram Parviz Sheikh: We're actually implementing it right now in our platform, both on the back-end side as well as on the front-end side. Generative AI and CXAI boost efficiency and productivity by enabling voice and text-activated tasks, like scheduling meetings with a simple command and features like search and discovery. This streamlines administrative duties, driving efficiency and convenience for employees, as well as personalization for on-demand knowledge augmentation. You're going to see a lot more of these applications in the coming months as we launch the full Sky platform, but this is the cornerstone of differentiation and growth for the company.

Jimmy: <unk> C I boost efficiency and productivity by enabling waste and text activate a test like scheduling meetings with a simple command and features like search and discovery. This streamlined administrative duties driving efficiency and convenience for employees as well as personalization for on demand knowledge augmentation youre going to see a lot more of these.

Jimmy: And in the coming months as we could be long before the sky platform, but this is the cornerstone of the differentiation in the growth for the company.

Khurram Parviz Sheikh: So let me talk about, you know, from the business side or from the customer side, why this is so important. Why is this really relevant to an enterprise? The reason why it's important is that the world has changed.

Speaker Change: So let me talk about from the business side or from the customer side. Why is this important why is this really relevant to an enterprise.

Speaker Change: The reason why it's important is the world has changed the world has changed dramatically in terms of how the modern workforce operate.

Khurram Parviz Sheikh: The world has changed dramatically in terms of how the modern workforce operates. Society as a whole is redefining what it means to be productive, engaged, and fulfilled professionally. The future of work is not place-dependent.

<unk> as a whole is redefining what it means to be productive engage and fulfilled professionally.

Speaker Change: The feature at work is not place dependent it's happening in the space of endless possibilities with technologies, enabling working life to be blended integrated seamlessly and augmented with intelligent personalization and employees are at the center of this unit was when you look at the Sky Octagon employees the central that the future is here the futures now.

Khurram Parviz Sheikh: It's happening in a space of endless possibilities, where technology is enabling work and life to be blended, integrated seamlessly, and augmented with intelligent personalization. And employees are at the center of this universe. When you look at that sky octagon, employees are at the center of that. The future is here.

Khurram Parviz Sheikh: The future is now, and this is being led by the CXI platform focused on transformational employee experiences. Sky is just not a super app; it's a catalyst for transformation. Businesses that embrace Sky unlock the potential for a more efficient, collaborative, and engaged workforce. In doing so, they set the stage for a future where work truly knows no bounds. We have architected our solution as a platform that solves problems for both employees and employers as they navigate their work lives. We have built the foundations up anchored on artificial intelligence.

Speaker Change: This is being led by the <unk> platform focused on transformational employee experiences sky.

Speaker Change: Sky is just not a super app, it's a catalyst for transformation businesses that improve sky unlock the potential of a more efficient collaborative and engaged workforce in doing so they set the stage for a future where worked really knows no bounds.

Speaker Change: Well I'll kick it our solution as a platform that solves problems for both employees and employers as they navigate their workspace, we have built a grounds up anchored on artificial intelligence.

Khurram Parviz Sheikh: AI is transformative for the future of work, creating massively scalable offerings that create the flywheel effect of automating the workflows, driving engagement, enabling collaboration and productivity, leading to immense affinity in the employer-employee relationship. We've been strong believers in this technology and now to be the first in our industry to offer solutions to our customers. And who are those great customers for?

Speaker Change: <unk> is transformative to the future of work, creating massively scalable offering that created a flywheel effect of automating the workflows driving engagement, enabling collaboration and productivity leading to in meant infinity in the employer employee relationship we've been strong believers in this technology in order to be the first in our <unk>.

Speaker Change: You do offer solutions to our customers.

Speaker Change: And who are those great customers of ours.

Speaker Change: Yeah.

Khurram Parviz Sheikh: Now, our primary business is a SaaS platform that we sell to enterprise customers as an annual subscription for three to five years. Today, customers deploy our cloud-hosted software across their enterprise campuses to allow employees to connect with their workplace for a myriad of use cases, examples being desk room booking, collaboration, navigation, food ordering, and internal communication. Large enterprise customers are mainly divided into the following top five verticals: Financial Services, Technology, Media and Entertainment, Healthcare, and Consumer.

Speaker Change: Now our primary business is a SaaS platform that we haven't sold to enterprise customers as an annual subscription for three to five years today's customers deploy a cloud hosted software across their enterprise campuses to allow employees to connect with their workplace for a myriad of use cases examples.

Speaker Change: Being desk room booking collaboration aggregation food ordering and internal communications.

Speaker Change: Our large enterprise customers are mainly divided into following talk by verticals.

Speaker Change: Financial services Technology media and entertainment healthcare and consumer.

Khurram Parviz Sheikh: We are proud to have some of the largest logos in the world as our customers. They're at the leading edge of the workspace transformation. We have healthy distribution across all verticals, and we see the adoption trend developing from technology sector-focused companies to the larger Fortune 100 portfolio. Our customers are sophisticated by the technology solutions and do not compromise on quality, performance, security, reliability, scalability, and, of course, the technology roadmap. So, as you can see, we've kept increasing the number of logos that are adopting the Sky platform.

Speaker Change: We are proud to have some of the largest logos of the world as our customers are at the leading edge of the workspace a transformation.

Speaker Change: We have a healthy distribution across all verticals when we see the adoption trend developing from technology sector focused companies to the larger fortune 100 portfolio are.

Speaker Change: Our customers are sophisticated buyers of technology solutions, and do not compromise on quality performance security and reliability scalability and and of course technology roadmap. So as you can see we've kept increasing.

Speaker Change: The logos that are adopting the sky platform. We're also increasing the value of the different <unk>.

Khurram Parviz Sheikh: We're also increasing the value of the different technological aspects of their platform. We're working very closely with them on the analytics platform that you'll see. That is driving immense affinity, immense data sets that are helping them be more productive in their work. So that's kind of like an overview of where we are at, what we've accomplished, and things we're doing, you know, overall from a product and business side. But let me talk about the financial results for this quarter.

Speaker Change: Technology aspects in their platform, we're working very closely with them on the analytics platform. There you'll see that is driving in men's affinity in mens datasets that we're helping them be more productive in their work experience.

Speaker Change: So that's kind of like an overview of where we are at what we've accomplished and things. We're doing you know overall from a product and business, but let me talk about the financial results off of.

Speaker Change: This quarter.

Speaker Change: Okay.

Speaker Change: Okay.

Khurram Parviz Sheikh: So this slide highlights several key metrics demonstrating our continued momentum in Q1 from last year. Let's take a closer look at each of the metrics. Between January 1st and March 31st, 2024, we had a record increase in net retention rate, NRR, to 108%.

Speaker Change: So this slide highlights several key metrics demonstrate demonstrating our continued momentum in Q1 from last year.

Speaker Change: So, let's take a closer look at each of the metrics.

Speaker Change: Between Jeremy spoke in March 31, 2024.

Speaker Change: A record increase in net retention rate and there are 208% that was accomplished primarily by renewing expanding several of our largest fortune 1000 customers across all five verticals.

Khurram Parviz Sheikh: That was accomplished primarily by renewing and expanding seven of our largest Fortune 1000 customers across all five verticals. These large renewals are very important because they signal to the market that these customers are now ready for the scale-up. In ARR annual renewals, that's north of $2 million, which is a significant part of our ARR portfolio. So, we are very, very happy with that.

These large renewals are very important because this signals to the market did these customers. They are now ready for the scale up in <unk>.

Speaker Change: Here, our annual renewal, that's north of $2 million, which is a significant part of our ear our portfolio. So very very happy with that and we're also happy that these customers are now looking at the Sky platform in the Sky view, which is the analytics platform, we're going to talk about as the next generation platform they want to scale up to.

Khurram Parviz Sheikh: And we're also happy that these customers are now looking at the Sky platform and the Sky View, which is the analytics platform we're going to talk about as the next generation platform they want to scale up. The other more important metric for a SaaS business is subscription-based revenue. And I'm happy to report that our subscription-based revenue for this quarter was 87% of total revenue. A metric that has been trending upward quarter after quarter, and this quarter marked the highest ever in our history, increased six points from last quarter. This is because of the, um...

Speaker Change: The other more important metric for SaaS is the subscription based revenue and I'm happy to report that our subscription based revenue for this quarter was 87% of the total revenue metric, which had been trending upward quarter after quarter and this quarter marked the highest ever in our history increased six points from la.

Speaker Change: Last quarter this is because of the.

Khurram Parviz Sheikh: The work we've been doing on the planning of the business in terms of, you know, working with our customers to provide value-based solutions, recurring solutions, and then minimizing project work, which traditionally has been done in a manual way, but automating those tasks using AI technology has really helped us get to this really high subscription to one-time revenue number, and I'm very proud of the team's hard work in achieving that. The other metric that we've been trending upward on is the gross margin.

Speaker Change: The work we've been doing on the planning of the business in terms of working with our customers to provide value based solutions recurring solutions and then minimizing project work, which traditionally has been done in a manual way, but automating those tasks using AI technology has really helped us get to this really high subscription.

Speaker Change: The onetime revenue number and I'm very proud of the team's hard work in achieving that.

Speaker Change: The other metric that we've been trending upward is the gross margin. The gross margin was 82% for this quarter, which is higher than the previous quarters.

Khurram Parviz Sheikh: The gross margin was 82% for this quarter, which is higher than the previous quarters, and it's inching up and up, all in the right direction, all tied to the fact that we're getting more subscription revenue, we're getting less one-time revenue, and we're also increasing the profitability of the company.

Speaker Change: Hang up and up all in the right direction, all tied to the fact that we're getting more subscription revenue, we're getting less one time revenue and we're also increasing the profitability of the company to work.

Khurram Parviz Sheikh: And part of all of this is really driven by our land and expansion strategy, which continues to be a key contributor to growing subscription revenues from our existing customer base. And with the new Skyview Analytics product offering, we are looking to ramp up these product expansions, which will really increase the ARR, the NRR, and also the gross margin. And lastly, you know, we've been super focused on creating value for our investors, and in that sense, we're really focused on optimizing the operational cost structure, leveraging our investments in AI and headcount rationalization, which we did in late Q4 and Q1, resulting in a net north of 20% operating expense reduction from Q4'23 to Q1'24. This was done as part of a plan to really scale up the business in 2024 at a much lower cost.

Speaker Change: And part of all of this is really driven by our land and expand strategy, which continues to be a key contributor to growing subscription revenues with our existing customer base and with the new Sky analytics to a protocol spring Youre looking to ramp up these product experience and we can really increase the air are the IRR and.

So the gross margin.

Speaker Change: And lastly, we've been super focused on creating value for our investors and for that were.

Speaker Change: Really focused on optimizing operational cost structure, leveraging our investments in AI and headcount rationalization, which we did four in late Q4 and Q1, resulting in a net.

North of 20% operating expense reduction from Q4, 'twenty three to Q1 'twenty four.

Speaker Change: This was done as part of our plan to really.

Speaker Change: Scale up the business in 2024 with a much lower cost structure.

Khurram Parviz Sheikh: Looking ahead, I'm very confident that increasing ARR bookings, strong customer acquisition, and focus on subtraction revenue will drive sustainable growth. We're committed to continuously innovating the Sky platform and delivering value to our expanded customers. All right, so that's our financial information for this quarter. Now, let me talk about the exciting new announcement that you probably have seen hit the press, announcing SkyView. And we pronounce it SkyView, so it's an extension of our Sky platform. It's an AI-based analytics platform for employee experience. It's the world's first in this area.

Speaker Change: Looking ahead, I'm very confident that our increasing ear, our bookings strong customer acquisition and focus are pressuring revenue will drive sustainable growth, we're committed to contingency and awaiting the sky platform and delivering value to our expanded customer base.

Speaker Change: Alright, so that's all financial information for this quarter, let me talk about the exciting new announcements that you probably have seen has hit the press announcing sky view and we pronounce the sky view, so it's kind of an extension of our sky platform.

Speaker Change: AI based analytics platform for employee experience if the world's first in this area. We're really proud of the revolution work we've done.

Khurram Parviz Sheikh: We're really proud of the revolutionary work we've done to enable this, and I really want to commend the Google Cloud team that has really supported us in this effort. It's been at breakneck speed in terms of getting the platform up and running, and now it's in beta with lots of great customers who are working with us day in, day out, and we want to launch this at the end of Q2 for general availability. And what does this SkyView platform do?

Speaker Change: To enable this and I really want to commend the Google cloud team Theres really supported us in this effort is being at breakneck speed in terms of getting the platform up and running and now it's in beta with lots of great customers, who are working with US day in day out and we want to launch this at the end of Q2 for general availability.

Speaker Change: And what is the Sky view platform do so the sky platform is actually a revenue sharing the workplace environment by measuring work efficiency and providing actionable insights driving employee engagement collaboration and productivity.

Khurram Parviz Sheikh: So the SkyView platform is actually revolutionizing the workplace environment by measuring work efficiency and providing actionable insights, driving employee engagement, collaboration, and productivity. So let me give you a little flavor of what that means, and the key attributes that we focus on. And the interesting thing is that we actually worked with our customers pretty closely over the last year in building this platform. We came up with a lot of interaction with our customers.

Speaker Change: So let me give you a little flavor of what that means.

Speaker Change: And the key attributes that we focus on and the interesting thing is we actually work with our customers pretty closely over the last year in building. This platform. He came from a lot of interaction with our with our customers.

Speaker Change: You know the Sky platform is really driven towards.

Khurram Parviz Sheikh: The SkyView platform is really driven towards providing the first piece in space optimization, really putting those spatial analytics that allow you to understand the key spatialization data, including heat maps and historical trends, which are instrumental in optimizing workspaces and resource allocation. It becomes the most efficient workplace business planning tool out there.

Speaker Change: Providing the first piece and space optimization really putting those spatial analytics that allows you to understand.

Speaker Change: The key space utilization data, including heat maps and historical trends, which are instrumental in optimizing workspaces and resource allocation becomes the most efficient workplace business planning tool out there.

Khurram Parviz Sheikh: The next thing that's important is, what are people doing with the app and in the workplace? And with our platform, we can trace the usage of application functions utilized by the users to gain valuable insights on user behavior, which will drive engagement and productivity. And also, integration with corporate infrastructure that tells you what kind of technology assets people use and how they use them gives a really good profile of how the enterprise is working. More importantly, when you look at all these pieces together, it provides a comprehensive view of the enterprise.

Speaker Change: The next thing that's important is what are the people doing would be happening in the workplace and with our platform. We can trace usage of application function utilized by the users to gain valuable insights on user behavior, which will drive engagement and productivity and also.

Speaker Change: Integrations with corporate infrastructure that tells you what kind of technology assets that people use and how to use it gives us a really good profile of how the how the enterprise is working.

Speaker Change: More importantly, when you look at all of these pieces together to provide a comprehensive view of the enterprise the data that we refuse from more integrations as well as the data we're getting from space and people information is driving this these actual outcomes, which are really data driven and this makes life easier for.

Khurram Parviz Sheikh: The data that we fuse from our integrations, as well as the data we're getting from space and people information, is driving these actual outcomes, which are really data-driven. And this makes life very easy for an enterprise manager, a workplace experience manager, or an IT manager to really decide, and even an HR manager, to decide what is really happening and what we can do to make things better. Last but not least, the most cool thing about this is predictive analytics.

Enterprise manager workplace experience manager or 19 manager to really decide and even an HR manager decide what is really happening and what can we do to make things better.

Speaker Change: And last but not least the most cool thing about this is the predictive analytics. This is a you know a part of the tool. They are really really imagine the whole enterprise with customizable dashboard you can create your own dashboard.

Khurram Parviz Sheikh: This is part of the tool that really reimagines the whole enterprise with customizable dashboards. You can create your own dashboard and get key predictions for KPIs with a very intuitive user interface. I'm going to show you a quick slide view of that.

Get key predictions for Kpis with intuitive user interface I wanted to show you a quick view of that but this is kind of like the four cornerstone pillars. All four of our analytics platform and it's really driven by this oh by our customers, who really wanted to see what are we actually doing with the App what is the real value of.

Khurram Parviz Sheikh: But this is kind of like the four cornerstone pillars of our analytics platform, and it's really driven by our customers who really wanted to see what we were actually doing with the app, what the real value of the app is. So let me talk a little bit about some examples of this platform. So, the first chart will show you a little bit. When you enter the platform, you get this global view of the work experience. This shows you a global view of the campuses around the world.

Speaker Change: Yeah.

Speaker Change: So let me talk about a little bit on some examples of this platform.

Speaker Change: So the first chart will show you.

Speaker Change: A little bit when you enter the platform you kept this global view of the work experience. This shows you a global view of the campuses around the world. So you kind of have.

Khurram Parviz Sheikh: So, you kind of have at the tip of your fingertips the ability to see what's happening in different regions of the world; whether you're in Dubai or you're in Singapore or you're in LA or New York, you can actually see what the utilization per region is, what the bookings have happened, what things are happening in different markets, or what functions have been utilized. So it gives the enterprise manager a really, you know, a bird's And as you move forward, you know, we talk about, you know, what is most important to them, right?

Speaker Change: Typically your fingertips your ability to see what's happening in different regions of the world, whether you're in Dubai or you're in Singapore or you're in L. A and New York you can actually see what the utilization per region is what the bookings have happened or what things are happening in different markets to what functions that we've utilized that gives our enterprise manager are really.

Speaker Change: You know the Sky view of the world of their world.

Speaker Change: And as you move forward you know we talk about you know what is what is most important to them right and one other thing is the workspace optimization to see how many bookings are happening what is the trend line between different years or different months as well as different spaces and different locations, but this gives you a really good view.

Khurram Parviz Sheikh: And one of the things is the workspace optimization to see how many bookings are happening, what the trend line between different years or different months, as well as different spaces and different locations. But this gives you a really good view of the statistical analysis of the data, the data sets out there. But more importantly, you can scroll in, and you can change the filter to allow you to give you different insights.

Speaker Change: You off.

Does this sort of analysis of the data the data that's out there, but more importantly, you can school in and you can change the filter to allow you to give you a different insights. So this gives a really in a tool that allows a workplace experience manager to really drive optimization of their assets and drive efficiency and productivity of those assets.

Khurram Parviz Sheikh: So this is really a tool that allows a workplace experience manager to really drive optimization of their assets and drive efficiency and productivity of those assets. The next exciting part is employee engagement. And this is where it gets very exciting, because we will optimize the solution so that, as a workplace manager or workplace experience manager, you can actually profile yourself and see what things are important to you. You can understand what events are happening at different places in your organization.

Speaker Change: The next exciting part is employee engagement and this is where it gets very exciting where us and we will optimize the solutions. So that as the world class manager or workplace experience manager you can actually profile yourself and see what things are important to you you can understand what events are happening at different places.

Speaker Change: And in your New organization, you can see the trends in terms of who is coming in who's coming out what are they doing what features in the app using and really understanding what integration that you are using a locker are they using you know.

Khurram Parviz Sheikh: You can see the trends in terms of who's coming in, who's going out, what they are doing, what features in the app they're using, and really understand what integrations they are using. For example, are they using a locker?

Speaker Change: Foodservice that you offered or other amenities you awkward. So it gives you a holistic view of what people are doing why are they doing and what matters to them. What's most important and this is being driven by our largest customers who are actually using our app were really things that are mission critical and mission critical is ordering lunch every day mission critical is getting to the office on time wishing for.

Khurram Parviz Sheikh: Are they using the food service that you offer or other amenities you offer? So it gives you a holistic view of what people are doing, why they're doing it, what matters to them, and what's most important. And this has been driven by our largest customers who are actually using our app for really things that are mission critical, and mission critical is ordering lunch every day. Mission critical is getting to the office on time. Another important thing is to find a parking spot. Mission critical is to get home at a reasonable time.

Speaker Change: Critical it is to find a parking spot and mission critical to get home at a at a reasonable time and mission critical is to get your work done faster better and cheaper. This is all happening because now we can tell you exactly what the friction points hopefully the users what are they liking what are they not liking what's going to make them more productive this is simply awesome.

Khurram Parviz Sheikh: And mission critical is to get your work done faster, better, and cheaper. This is all happening because now we can tell you exactly what the friction points are for the users, what they are liking, what they are not liking, and what's gonna make them more productive. This is simply awesome.

Khurram Parviz Sheikh: And if you get to play with the tool, we're going to do some demos of this as we launch it with our customers on our next calls. And you'll see how powerful this is in terms of providing that intuitive nature. And that goes to my next chart on the data-driven piece, right?

Speaker Change: If you get to play with the tool we're going to do some demos of this as we launch it with our customers on our next calls and you'll see how powerful. This is in terms of providing that intuitive nature and two that goes to my next chart on.

Speaker Change: The data driven piece right. The fact that now you can have opinions on what's right. What's wrong why is this market working this way you can actually get real data sets to understand what are the critical thing doing compare data between different locations. You can also decide what active users are using where they're using it in choosing their data will.

Khurram Parviz Sheikh: The fact that now you can have opinions on what's right and what's wrong, why is this market working this way? You can actually get real data sets to understand what the critical things are. You can compare data sets between different locations.

Khurram Parviz Sheikh: You can also decide what active users are using, where they're using it, and fusing that data will give you actionable insights, meaning that once you know how many people are actually coming into the office, how many people are actually using the product, how many people are actually being productive in some of the work functions, you can fuse the data together to create more actionable insights. And this is all data-driven, so that way, there are no opinions on whose site is better or whose campus has got better amenities.

Speaker Change: Give you actionable insights, meaning that once you know how many people are actually coming into the offer is how many people actually using the product how many people actually being productive and some of the work function you confused here together to create more actionable insight and this is all data driven so that theres no opinions on who started as better who's the campus as you go to bed.

Speaker Change: Or amenities at all will show up very clearly on where the decisions are to optimize to improve to enhance the workspace.

Khurram Parviz Sheikh: It all will show up very clearly where the decisions are to optimize, to improve, to enhance the workstations and also the employee engagement. Lastly, the way we've thought about all of this stuff is to really put it in the hands of the employer to really decide how they want to create their own dashboards. People talk about lots of different dashboards. We talk about just creating your own dashboard, which is interactive predictive analytics.

Speaker Change: And also the employee engagement.

Speaker Change: And lastly, the way we've thought about all of this stuff is really to make it in the <unk>.

Speaker Change: In the hands of the employer to really decide how they want to create their own dashboards people talk about lots of different as we talk about just create your own dashboard, which is the indirect or predictive analytics you can ask a question and you'll get an answer that satisfies your question and gives you insight on what else could you have been asking what else do you see.

Khurram Parviz Sheikh: You can ask a question, and you get an answer that satisfies your question and gives you insights on what else you could have been asking or what else you see in that space. We're using the latest GNI models for this, and we're creating all these question communities in native language and creating these custom dashboards containing really relevant information. And using these predictive analytics capabilities, you can estimate the potential impact of future programs.

Speaker Change: In that space, we're using the latest January models for this and we're creating really and you know all these questions can be asked to native language and create these custom dashboard containing really relevant information and using these.

Speaker Change: Predictive analytics capabilities, you can estimate the potential impact on future programs. So this is really the most advanced solution out there.

Khurram Parviz Sheikh: So, this is really the most advanced solution out there that provides that intuitive user experience. So, all of these tools are really cool, and they're getting deployed with our customers, who are embracing them because without this, there's no real value for the full app. Unless you have the analytics tied together, you can't really realize the full value of the workplace experience.

Speaker Change: As you know intuitive user experience.

Speaker Change: So all of these tools are really cool and theyre getting deployed with our customers who are embracing them because without this there's no real value for the full hour unless you have the analytics tied together you can really realize the full value of the workplace experience.

Khurram Parviz Sheikh: So let me talk about our friends at Google who have been partnering with us and really, it's been a great experience working with them, especially because they are the leaders in the AI infrastructure space. And when we think about that, it's not just Google Cloud capability; it's also these other capabilities that I mentioned in the slide in terms of providing these different user interactions, whether it's through voice or images or other sources, whether it's natural language processing Location is super important to us; as you know, we are the spatial intelligence company; we provide really good location data inside the enterprise, but a lot of things are around the enterprise or right near the enterprise, so we provide that full location intelligence, we call it places and things, and then regional variations, localization around different markets.

Speaker Change: So let me talk about you know.

Speaker Change: Our friends at Google who've been parking with us and really it's been a great experience working with their most probably because they are the leaders in the infrastructure space and when we think about that it's not just the Google cloud capability. It's also these other capabilities that I mentioned in the slide in terms of providing these different user interaction whether its through wise or imaging.

Speaker Change: <unk> or other sources, whether it's natural language processing to really understand user intent and deliver more relevant and personalized results location is super important to us as you know we are this patient intelligence company, you probably regret location data inside the enterprise, but a lot of things around the enterprise you're right near the enterprise.

Speaker Change: We provide that full location intelligence, we call it places and things and then regional variations localization around different markets. We've got a really great platform play with Google on that so it's really healthy what are the key things of our business has always been about integrations redo around 100, plus integrations with different customers with Google's Apis.

Khurram Parviz Sheikh: We've got a really great platform, and playing with Google on that is really helping. One of the key things in our business has always been about integrations. We do around 100 integrations with different customers. With Google's API management platform, we're able to do those integrations much, much faster. Think about, you know, months become days, and we can also enable a lot more applications around it.

Speaker Change: Amendment platform, we're able to do Google integration much much faster.

Speaker Change: You know months become D and we can also enable a lot more applications around it.

Khurram Parviz Sheikh: So this is a key differentiator for us compared to our competition. And lastly, but not least, all our major customers really care about security. Security is the prime factor for the reason why they chose us.

Speaker Change: So this is a key differentiator for us compared to our competition.

Speaker Change: And lastly, but not least all our major customers really care about security security is a prime factor for the reason why they chose us and so for us to be at the top of the league on security is Super important and that's why we're we're leveraging all the features on the Google cloud platform for security and compliance and last but not least I believe or not this this.

Khurram Parviz Sheikh: And so, for us to be at the top of the league on security is super important, and that's why we're leveraging all the features on the Google Cloud platform for security and compliance. And last but not least, believe it or not, this business is getting to become not just a nice to have but a must have. When you have a must-have business, you need high reliability, high quality, and high availability. And our customers are demanding that our customers are not happy if they can't order something on the app because they're depending on it.

Speaker Change: Business is getting to become not just a nice to have but a must have when you have a must have business you need high reliability high quality high availability and our customers are demanding that our customers are not happy if they.

Speaker Change: They can order something on the arb because depending on it. So we have to price those really high levels of reliability and quality and availability and this is where we're really partnering with Google AI infrastructure has really helped us and enabling that and we really are looking forward to driving more and more innovation with this year infrastructure.

Khurram Parviz Sheikh: So we have to provide those really high levels of reliability, quality, and availability. And this is where really partnering with Google's infrastructure has really helped us in enabling that. And we really are looking forward to driving more and more innovation with this infrastructure. So anyway, you know, let me close off by talking about why we are important. Why Sky?

Speaker Change: So anyway.

Let me, let me close off by talking about why we are important why sky why are you as an investor should think about it number one.

Khurram Parviz Sheikh: Why you as an investor should think about it. Number one, you know, AI is changing the world. You're seeing that in every segment.

Speaker Change: AI is changing the world Youre seeing that in every segment I think in our space.

Khurram Parviz Sheikh: I think in our space, AI is not just a feature. It's there. It's everywhere. It's present right now.

It is not just the future if there is to it.

Speaker Change: Present, right now and with our solution, we're gonna be transformational to the market. We have a patented leading edge enterprise sales platform. The first in the world very proud of that and we're going to launch it into somewhere after our first department with all of our existing customers.

Khurram Parviz Sheikh: And with our solution, we're going to be a transformation to the market. We have a patented leading-edge enterprise AI SaaS platform, the first in the world. We're proud of that.

Khurram Parviz Sheikh: And we're going to launch it in the summer after our first deployment with all our existing customers. And this existing customer base is growing. It's very strong, very, very loyal to us, and willing to go scale up to the next level. Most importantly, when you think from an AI perspective, we've got diversified deployments globally in 60 countries and 200 plus cities. Those data sets are precious because they give you real data sets that allow these AI models to perform better and provide better training and better outcomes.

Speaker Change: This existing customer base is growing it's where you're strong very very loyal to us and willing to go scale up to the next level.

Speaker Change: Most importantly, when you think from an AI perspective, we've got diversified deployments globally in 60 countries and two of her clustering those datasets are precious because they give you real good if that allowed these AI models to perform better and provide better training and better outcomes. That's what our customers want they just don't want EIA for the sake of Dearborn.

Khurram Parviz Sheikh: That's what our customers want. They just don't want AI for the sake of AI. They want AI to create actionable results that will be meaningful to their business. We believe we are delivering that with this new SkyView platform, as well as the overall SkyView platform. We are an innovation team. We're based in Silicon Valley. Our heritage is about transformation.

Speaker Change: AI to create actionable results that will be meaningful to their business. We believe we are delivering that with this new sky view platform as well as the overall sky platform.

Speaker Change: We are an innovation team are based in Silicon Valley, our heritage as a bar transformation. We're super excited about this area. We're super excited about the challenges we see in the market, but more importantly, we have an experienced management team and our board is very focused on delivering value to our investors.

Khurram Parviz Sheikh: We're super excited about this area. We're super excited about the challenges we see in the market. But more importantly, we have an experienced management team, and our board is very focused on delivering value to our investors. And we, you know, we're not going to do everything ourselves.

Speaker Change: And we you know we're not going to do everything ourselves, we're partnering with leading and awareness you've seen the Google cloud announcements, we'll see further announcements with other folks in the coming months and years and we are working very closely in the whole ecosystem to find the best in class provider.

Khurram Parviz Sheikh: We're partnering with leading innovators. You've seen the Google Cloud announcements. We'll see further announcements with other folks in the coming months and years, and we are working very closely with the whole ecosystem to find the best in class to provide them. And lastly, as I started this journey, you know, a year plus ago when we took the company public, we want to create this new software category. We really believe in employee experiences.

Speaker Change: And lastly, as I started.

Speaker Change: This journey.

Speaker Change: A year plus ago, when we took the company public we want to create this new software category, we really believe and employee experiences we've been validated in the market that this is the right.

Khurram Parviz Sheikh: We've been validated in the market that this is the right offering. This is the right capability. Now we just have to deliver it, and we believe that we are at the tipping point of delivering the capabilities, getting customer adoption, and scaling to the next level. So, with that, that's all I have to say today. You know, we really believe that this is the company ready for the next phase of innovation.

Speaker Change: Offering this is the right capability now we just have to deliberate and we believe that we are at the tipping point of delivering the capabilities getting the customer adoption and scaling to the next level.

So with that that's all I had to Saturday.

So we really believe that this is the company is ready for the next phase of innovation as we like to say to the Sky and beyond. Thank you everybody would love to have.

Khurram Parviz Sheikh: As we like to say, to the sky and beyond, thank you, everybody. We'd love to have you connect with us on our next earnings calls, and we would welcome interactions with you. You can go to our website, www.cxapp.com, and we can share with you all the details about the offering that we did today in terms of the SkyView platform, as well as any other investor documents. Thank you very much. Have a great evening!

Speaker Change: Have you connect with US on our next earnings calls and we would welcome.

Speaker Change: Interactions with you you can go to our website www <unk> com and we can share with you all the details about the offering that we did today in terms of the start of new platform as well as any other investor documents. Thank you very much have a great evening.

Operator: Thank you. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.

Speaker Change: Thank you. This concludes today's conference and you may disconnect your lines at this time.

Speaker Change: You for your participation.