Q3 2024 CXApp Inc Earnings Call and Business Update
Greetings. Welcome to the CXAI 3rd Quarter 2024 Earnings Call.
Founder, Chairman, and CEO of CXAPP. You may begin.
Thank you, Operator.
And thank you, everybody, for joining the Corleone's call for CXAI, pronounced Sky. Joining me today is our Chief Financial Officer, Joy Pannugo.
We plan to discuss CXAI's financial results for the third quarter of 2024 and also provide an overall business update on our progress in shaping the future of work, creating transformative employee experiences.
By now, everybody should have access to our earnings press release, as well as our announcement of CXAI being available on the Amazon Web Services AWS Marketplace.
We have also filed our quarterly earnings report, or 10-Q, for Q3 2024 today. This information will also be found on our website, www.exaapp.com. Operator, we can move to Slide 2 and 3, please.
To dear shareholders, I am proud to share our Q3 2024 results and the amazing 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. It's not just about the work, it's about the people who do it, the places where they come together, and the things they need to succeed. CXAI, or what we call SCAI, redefines how we think about work, life, and the seamless interplay between the two.
I want to share with you a company snapshot of where we're at today.
We are an AI-first company that believes the employee is at the center of the multi-billion dollar growing workplace experiences market. And with our state-of-the-art Sky platform, we are creating a new category in software employee experiences.
We're headquartered in the San Francisco Bay Area where we have our key design and technology development resources. We also have satellite hubs in Toronto and Manila supporting global deployments in around 200 plus cities in 50 countries in nearly five continents.
Our customers are Fortune 1000.
companies headquartered in North America. But once they signed up with Sky, they eventually deployed to all their employee sites globally.
The reason why they chose SC&I is because we have the best and most advanced technology platform that's built on 37 file patterns, 17 of them which have been issued.
This substantial intellectual property not only establishes our company as a technological frontrunner, but also secures our position as a pioneer in the industry.
This platform has been developed in collaboration with leading AI companies in the tech ecosystem in Silicon Valley.
We're excited to partner with the leading cloud providers like Google Cloud and Microsoft Azure and today we announced our collaboration with Amazon Web Services AWS which will allow us to scale our business to the next level.
A key differentiator to our business is that we have strong security and compliance credentials globally and that is the reason you see so many logos from regulated industries.
They use sky because they know they can trust us with their data and provide enhanced employee experiences in a secure and reliable environment
So, the company is in a strong position today, the earnings release is out, I'm going to talk about the market next, so operators you can move to slide 5 and on to slide 6 as well.
As you think about the market, I think the biggest
Item in the news has been the return to office. RTO has been a big topic. At the same time, employee engagement has been super important as well.
and most recently Amazon CEO Andy Jassy sent a letter to his employees with a mandate for a full five days return to office RTO mandate beginning January 2025. There have been many CEOs falling suit as well as many others doubling down on their remote first mandate.
Speaker Change: This data that we show here from FlexIndex shows that although there has been an increase in the RTO mandates, most companies still offer work location flexibility.
Speaker Change: Gallup has actually created an engagement survey called the Gallup Q12, a survey of 12 questions that ask employees about performance, commitment to their organization, and business metrics.
Speaker Change: Employee engagement trends are significant because they link to many important performance outcomes crucial to organization leaders like employee retention, customer service, safety incidents, quality of work, and profitability.
Speaker Change: According to Gallup, not engaged or actively disengaged employees account for approximately $1.9 trillion, again $1.9 trillion in lost productivity nationally.
Speaker Change: And if you look at the chart that I show here, the trends are still on low engagement both in North America, but this is around a global phenomena.
Speaker Change: And as Gallup has measured the productivity of employees and really advanced organizations that have got high employee engagement, that number has to be around 70%. So we're way off, orders are mainly off on the average in terms of employee engagement.
Speaker Change: And this is probably the main reason why CEOs like Andy Jassy are asking their teams to come back to the office. His memo actually outlined three things driving the decision. Culture, cost, and innovation.
Speaker Change: Culture is key to the success of any organization. Culture is what defines a group of people, how they work together, and ultimately defines their identity.
Speaker Change: The fact that culture is challenged in the new normal of hybrid work is an interesting paradox. By pure definition, we have always had remote workers, all not in the headquarters of the company.
Speaker Change: As companies grow, they grow their base of employees everywhere. So the notion of the new normal where the people in the same city are remote because they are not in the office every day, like every other remote not-in-the-same-city worker.
Speaker Change: is is is is interesting. The sweet sweet must start thinking differently how to create the culture of one team everywhere. The fact that someone is in the same city but not coming to the office every day should not prevent them to be part of the overall culture.
Speaker Change: The new culture is created with a combination of digital tools tied to the places where people work to create a pervasive engagement environment and letting the bonds build naturally.
Speaker Change: Even with Amazon's amazing market cap and profitability, the market demands that the C-suite continue to look at sustained growth and profitability.
Speaker Change: Real estate and human capital are two big cost items for any organization and seeing less than 50% Occupancy reports or less than 33% employee engagement analytics is not pleasant reading to a senior executive or their boards
Speaker Change: To manage cost efficiently and track employee productivity, occupancy reports or user surveys are inadequate.
Speaker Change: What is needed are AI-enhanced analytical tools that not only provide historical actual reports, but also allow managers to forecast their enterprise usage as well as reimagine the workplaces to meet their key performance indicators.
Speaker Change: This is a big, big problem and this is across all organizations. That's why we're so excited about the solution cycle we have.
Speaker Change: Technology has enabled people to be able to connect virtually from anywhere, anytime and provide in-moment feedback. Yet we all know that even with all these technology advancements, for a team to gel and create amazing products, it is super critical to meet and work in person.
Speaker Change: We need that face-to-face interaction but with a new set of engagement tools for this new workplace age. The employees need tools that will allow them to be empowered and engaged to work from anywhere like how the smartphone enabled a new way of interactions between humans.
Speaker Change: And we need the managers and employers to have similar tools that allow them to guide and nurture their employees in friendly environments.
Speaker Change: So I'm going to next talk about how Gartner, next chart operator please, is talking about this now as the next hype cycle.
Speaker Change: And as you know, Gartner is famous for, you know, looking at technology in advance. Gartner has created now a hype cycle for digital workplaces.
Speaker Change: Sky has been mentioned by Gartner as a key technology leader in this ecosystem with numerous technologies from workplace experience apps to generative AI tools to augment a reality cloud to indoor location services that are all in our Sky platform that are on various slopes of this hype cycle.
Speaker Change: It's interesting when you read this hype cycle, it's obvious this is not something 10 years away. This is something within the next 2 to 5 years.
and this is transformational.
Speaker Change: Even Gartner's accepted that and as you look at the capabilities that our company provides for the markets we're serving. This is transformative this is
Speaker Change: existential for some of these companies. So hybrid work is here to say improving the experience of employees in the office or away from the office is paramount and we've got the technology capabilities around it. So this is where Operator, next chart please. Next slide please.
Speaker Change: We are really focused on the AI piece of it. When we took the company public a year and a half ago, it was obvious that we were focused on Sky as being the AI transformational platform.
Speaker Change: And now the world is seeing that AI is coming into its next incarnation with AI agents that operate autonomously, making decisions and taking actions without human intervention. Agents just don't give answers, they can also take action.
Speaker Change: Agentic AI's ability to take action autonomously has the potential to help CIOs realize their vision for generative AI to increase productivity across the organization.
Speaker Change: I'm showing a chart here from Gartner, the survey of 78 leading CIOs on the benefits to the organization using generative AI, and two of the top four are squarely tied to our space, increased employee experiences and productivity.
Speaker Change: AI has transformed 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.
Speaker Change: We have been strong believers in this technology and now proud to be the first in our industry to offer the solution to our customers
Speaker Change: We firmly believe the future work will be based on agentic AI as it will drive outcome-based solutions than just assistance. Autonomous AI agents must be trustworthy given their potential role in automating mission-critical business processes.
Speaker Change: Enterprise will only deploy AI agents unless they're reliable, trustworthy, and secure and that is why we built Sky. Next chart operator.
Speaker Change: So I want to talk about why our products and capabilities are really
Speaker Change: transformational here. The Sky technology platform represents a shift towards an AI-centric approach in workplace innovation.
Speaker Change: Sky seamlessly integrates customer experience, CX, with artificial intelligence, AI, focused around the employee to deliver solutions that transform the way work happens, making workspaces more intuitive and efficient, leading to happier and more productive employees.
Speaker Change: We have built Sky as an AI native solution, grounds up, anchored on our mobile-first, cloud-first architecture. We have walked into our solution as a platform that solves problems for both employees and employees as they navigate their work lives.
Speaker Change: So if you look at this architecture diagram, I have tried to simplify it as we redesigned it as an end-to-end data architecture, and I want to walk you through the key components of the capabilities.
On the left, as you start from the Sky Apps,
These include applications that work on all operating systems.
from
Speaker Change: Apple's iOS, to Google's Android, to any web-based solution that can reside on the smallest screens of a phone or a watch to the largest screens of a kiosk. We are truly multi-OS.
Speaker Change: These applications are all designed with AI capabilities to improve the user experience and automated workflows for the most productive and engaging actions and outcomes.
Speaker Change: The next box that we have is the brains behind sky platform resides in what we call sky BTS Aka behind the scenes where rule engines are established and content deliveries managed securely for all functions
Speaker Change: The ability for managers to streamline their operation digitally with natural language-based commands and customize it for their locations is groundbreaking and transformational.
And last but not least, the third...
Speaker Change: of the wheel is the SkyView. SkyView is a generative AI-based analytics platform designed to revolutionize the workplace environment, allowing organizations to analyze large datasets, generate actionable insights, and make real-time decisions.
Speaker Change: All of these products are connected together in a secure enterprise environment that provides continuous feedback and enhancement provide unmatched experiences for the enterprise.
Speaker Change: All the Sky products that you see here are hosted on all major cloud platforms with modern AI infrastructure powering our customers with best-in-class cloud capabilities including proactive monitoring, security, privacy, reliability, and automation.
Speaker Change: And today's announcement with us being, you know, collaborating with AWS allows us now to be on all three cloud providers. We've had deployments on Google Cloud and Azure and now we're gearing up to be deploying on AWS, the largest cloud provider.
By the way, we're deploying all of these
Speaker Change: with the safeguards and guardrails to prevent agents from hallucinating in production environments.
Entertainment
Speaker Change: health care, financial services, consumer and tech. And these are big giants in the Fortune 1000. We've been working with them closely to provide these end-to-end solutions. And it's so satisfying to see this now coming to reality.
Next slide, operator.
Speaker Change: So let me delve a little deeper into what are these experiences and some updates on the capabilities and availabilities of these offerings.
Speaker Change: So if you look at the left, you see the screen, the Sky app screen, and you see the home screen of a typical Sky application. It's an intuitive screen anchored on the map.
Speaker Change: of the location allows the user to be one click away from any actions and with our agentic AI solutions one voice or text command away from actions. So make it very simple, very intuitive, very easy to use.
Speaker Change: And the fourth pillar of that is really, you know, providing that consistent personalized workflow-specific experience across mobile and web powered by over a hundred plus integrations with enterprise backend systems.
Speaker Change: It managed the complexity in the back with the SkyBTS, providing users with a clean, easy-to-navigate, context-specific UI to complete their tasks.
The next...
Speaker Change: experience is really through the spatial intelligence. Spatial intelligence is a key part of Sky's technology stack, focused on optimizing physical spaces and enhancing interactions within the workplace, providing contextual awareness.
Speaker Change: The third part of these experience solutions is the AI experiential analytics. The use of AI to derive insights into employee engagement and workplace utilization is a core component of SC&I, emphasizing the value of data in making decisions as well as measuring productivity.
Speaker Change: 5 you had its first paid customer this quarter and is now generally available to all our existing clients or all excited about stability
Speaker Change: And I'm really proud of the engineering team for delivering this solution on schedule to our first customers and deploying it. And all our customers are excited about it because absolutely this is super critical for their business operations.
Speaker Change: And for all new customers coming on Sky, SkyView is being packaged together with the applications. So as you go acquire the Sky platform, analytics comes with it.
Speaker Change: And finally, you know, as we look at our more advanced capabilities with generative AI
Speaker Change: Generative AI in Sky is really tied to boosting efficiency and productivity by enabling voice and text-activated tasks like scheduling meetings with a simple command and features like search and discovery.
Speaker Change: Leveraging the most advanced multimodal LLMs, we are adding responsible, secure, and reliable Gen-AI capabilities through a retrieval-augmented generation, RAG, model that uses internal enterprise data to support intelligent planning and user interaction through text, speech, and video.
Speaker Change: This streamlines administrative duties, driving efficiency and convenience for employers as well as personalization for on-demand knowledge augmentation.
Speaker Change: and I'm going to have the operator now switch to a video that I want to show a generative AI video to you guys of some of the capabilities we have and operator you can start the video now
Speaker Change: Please guys, I have an unexpected client call in at least 3 years and 10 minutes. Need a meeting room nearby immediately. Let's find the closest available space.
Khurram Sheikh, Kins Tech
Speaker Change: As you can see there are multiple actions that are being done simultaneously to get to the final result which is going to be setting a meeting just in time with people that were
Speaker Change: not available earlier but could be found through our system and be able to find the location, you know, invite the people and automatically navigate you to the location as well as put the schedule on your calendar. All that was done through our
Speaker Change: Generally, I application and just to just if you were paying attention as you saw the first command was not in
Speaker Change: In clear English, in terms of the command, you saw that it showed three years versus three guests, but the system, the LLM, was smart enough to understand that you meant three guests. It was smart enough to understand the preferences of the individual. It got the actions done a couple of clicks away or a couple of voice commands.
Speaker Change: and this is the beauty of generative AI in our market. So I'm super excited about these kind of applications that are gonna come through. Operator, we can go back to slide 13.
Speaker Change: So, that's one of the key capabilities that we're launching with our customers.
Speaker Change: The next one has been on Skyview and Spatial Intelligence, and this is a chart of a building
Speaker Change: One of our floors in India, one of our customers or
Speaker Change: trial customers, and it's showing that you can see the number of buildings and you can see the number of bookings, sorry, in a building. These Manhattan's look like little buildings, but they're actually showing the number of
Speaker Change: bookings being done. As you can see that, you know, this is a fully occupied space.
Speaker Change: The colors represent the number of bookings done, and this is over a week period.
Speaker Change: And the beauty of this is when somebody sees this chart, first of all, they get a spatial view of where things are happening in the space. But then, with our SkyView analytics engine, we can give you much more insights into what's going on.
Speaker Change: why what are the spaces being preferred, who's preferring them, why are they choosing some things, why certain days are more peak than others, and these are the kind of insights that allow managers as well as
Real Estate
Speaker Change: teams and human resources teams understand the behavior, what's driving it, and based on those behaviors, they can start changing some of those rule engines.
Speaker Change: So this is super exciting. I think, you know, all our customers are having great fun playing with our tools now. They're creating new reports, and every day we're getting new and new insights for different locations, because every location is different. And that's the need for the market. Today, the BI tools in the market just give you statistics and numbers and are very much
Speaker Change: non-contextually aware. This gives you contextual awareness. And secondly, it gives you not just insight, but if you look closely on, I showed the October peaks, it tells you what days specifically where RTU was implemented or was successful and why was it not successful. So, giving you answers and giving you actions after that is super, super important.
Speaker Change: All right. Operator, we can go to the next video, which I'm going to show a new product that we're announcing today, which we've been working very closely with our customers. It's called the SkyKiosk. And I'm going to let the video play, and then we'll talk about it.
Speaker Change: This is in our office in San Ramon, this is our headquarter, so we're using our own technology in our own location.
Khurram Sheikh, Kins Tech
Bye.
And there you go. You can.
Speaker Change: Have a room booked in a few clicks and you can be on your mobile phone ready to go to the right destination.
So
Speaker Change: SkyKiosk is our interactive digital signage built on the same core principles of Sky. It allows employees to view real-time room, desk, and space availability to book a space in a few clicks. You saw how our employee just, you know, just in time saw a place, figured out he wanted it, and would be able to invite other folks but also connect with them, connect with the system to book a room, and then it takes out all the friction.
Speaker Change: was able to put it on her phone and move on. So, move on to the place.
agentic in notion.
Speaker Change: You know, we are also looking at SkyKiosk for notifications like traffic, weather, events.
Speaker Change: on a big screen and it allows one of the other key attributes of the solution has it has support for accessible mode ensuring all interactive interface elements are within ADA compliant ranges which is becoming a really important part
Speaker Change: you need to have SkyKiosk to get you engaged to the first point of entry into a building. You can get full visibility of your spaces, of events happening, and then you can take it on your mobile phone. So we see this as a companion to our existing products.
Super excited about it. We work with
Speaker Change: existing customer to work with them, to make it the anchor customer, they're stepping up and deploying this, and every other customer of ours is really wanting this, and so we see this is a huge opportunity for us.
before here, but also in 2025.
Speaker Change: So, I want to close this section with just to go back over to slide 15.
Speaker Change: to just, you know, as you've seen all these demos, all these capabilities, all the markets.
Speaker Change: dimensions, why do people choose sky, you know, and I really look into three main items. Number one,
We have a great UXUR.
It's been a great user experience.
Speaker Change: Great integrations and the workflows that create this great, you know content and capability every loves our Applications and they love using it
Speaker Change: Secondly, we can work complexity into productivity. Enterprises are complex beasts, lots of different integrations, lots of different security requirements, lots of different overhead.
Speaker Change: in terms of their architectures, but we simplify that into automated workflows. We maintain the enterprise grid security, and we become the cluster advisor. We really like the fact that we can provide those recommendations.
Speaker Change: And last but not least, we deliver now amazing insights with SkyView.
Speaker Change: SkyView is really driving them to understand better what is actually happening and how they can improve that and with all the full platform capability of Sky, SkyBTS and SkyView, it provides them AI powered actions and predictable outcomes.
Speaker Change: So we believe that these things are also going to be great for the employee because they will also understand what's the value of their Stabilities, so that is all about the market. I'm going to now focus on Q3 so operator people go to slide 16, please
And move to 17.
Speaker Change: And before we go into the full financial results and the press releases out, the earnings releases out, the 10-Qs out there, the most important, significant thing this quarter is this is our best financial quarter ever. We've had the highest stats metrics.
Speaker Change: Our subscription to one-time revenue ratio is the highest ever, 88%.
Speaker Change: While we've been maintaining healthy growth models of 80% and net-net, we have an 18%
Speaker Change: growth in recurring revenue. So congratulations to our team for working really hard to get those. Thank you to all our great customers who've been supporting us through this process, but this has been a banner quarter for us.
Second big highlight is we're on the AWS Marketplace.
Speaker Change: I think with our marketplace on Google last quarter, which was a significant achievement for the team, this is another milestone we've hit, and we're really excited about working with the AWS team to launch Sky on it. So that has been a good milestone.
Good, good job.
Good achievement.
Speaker Change: The next is, we've been working on the new Skype platform that I've told you about for
Speaker Change: since the second quarter here and I'm happy to report now that we have successfully delivered the first end-to-end AI-based SkyPilot platform to a leading financial service customer this quarter. This is an important milestone on the path to general availability of the solution to all existing and new customers.
Speaker Change: So great achievement there. And then Skyview, as you mentioned earlier, has gained traction with the first paid customer, making general availability for all our clients and significant opportunity for growth.
Speaker Change: And I showed you the Sky Kiosk. Next quarter, we'll show you Sky BTS that is already deployed, but it is a super-secret source that we're implementing, but we're going to show you that next quarter. And these new products are really letting us go to the next phase.
Speaker Change: All right, with that, I'm going to now transition to my new partner, Joy Banugo, who joined us as our CFO, and she's going to go through the financial results.
Operator, if you could move to slide 18, sorry.
yeah
Speaker Change: We're seeing an increasing demand for our AI-powered solutions, particularly agentic AI capabilities that are reshaping workplace experiences.
Speaker Change: Our focus on subscription-based revenue, supported by our investments in these advanced AI features.
Speaker Change: is fostering a sustainable, predictable financial model aligned with our long-term growth.
Speaker Change: As Khurram mentioned, we have had the best financial results to date. This quarter has highlighted our commitment to operational excellence, effective cash management, and the pivots necessary for sustained success. Let's walk through these exciting results.
Speaker Change: then diving to more financial details quarter over quarter and then the specific details in the 10-Q year year over year. This particular slide shows how
Speaker Change: Our financial performance over the past year shows our commitment to building a more stable, predictable, and growth-oriented business model.
So first, if we look at revenue, as Khurram mentioned,
Speaker Change: Revenue increased 7% from $1.77 million in Q3 2023, up to $1.89 million in Q4 2020.
Speaker Change: 2024. Recurring revenue, which is really important to note, has also increased 8% up to 88% from 80% in previous years.
Speaker Change: previous year. So what the company has been focused on is moving away from professional services, one-time contracts to recurring three-year multi-annual, didn't have to be three-year, but multi-year contracts.
Speaker Change: Furthermore, I talked about that already, our NRR stands at 106%, which is a significant increase.
Speaker Change: from previous year, about a 43% increase year-over-year, indicating strong client retention.
client retention and upselling success.
Speaker Change: This metric reflects the trust our clients place in our solutions and the value we continue to deliver, fostering deeper relationships and expanding our revenue potential. This also piggybacks on the concept that Khurram has talked about in previous quarters.
Speaker Change: on land and expand and shows our clients are sticking with us and buying more products and hopefully we'll continue to see that as we move into more AI features.
Speaker Change: Furthermore, and very important to note, we achieved a 22% reduction in non-GAP op-ex, decreasing from 4.1 million in Q3 2023 to 3.239 million in Q3 2024.
Speaker Change: This reduction is attributed to cost-cutting measures, including workforce optimizations and a more focused marketing strategy, without compromising our R&D investment.
Speaker Change: As mentioned before, this reflects our disciplined approach to optimizing expenditures while continuing to support critical areas that foster innovation and growth.
Speaker Change: Our investments in R&D, particularly in AI-driven solutions, remain a top priority, allowing us to stay ahead in delivering value-added technology to our clients while maintaining a lean approach in other expense areas.
Speaker Change: Furthermore, and probably most notably, is our cash-based losses narrowed by 43%, which is tremendous.
Speaker Change: Q3 2023 cash-based loss was $2.36 million and narrowed down to $1.324 million in Q3 2024.
Speaker Change: Overall, our disciplined cost control and cash flow management has brought us significantly closer to cash flow positivity.
Speaker Change: underscoring the strength of our financial strategy. Looking ahead, we remain focused on expanding our subscription base, deepening partnerships, and maximizing value in a commitment to profit profitability.
Speaker Change: Next, I'd like to discuss more. Operator, you can move to the next slide.
Speaker Change: I'd like to discuss more just a little bit about expense management. There's not a slide on this, but just to discuss it as we talk about how OPEX continues to decline.
Speaker Change: Expense management will remain central to our strategy to achieve cash flow break-even, balancing rigorous cost control with strategic investments in product development. That will be a big focus for us.
Speaker Change: This approach ensures we continue to drive future profitability while sustaining our competitive edge.
Speaker Change: Our disciplined resource allocation enables targeted investment in high impact areas such as AI, R&D, and product innovation, reinforcing both our financial resilience and commitment to delivering cutting-edge solutions.
Speaker Change: Now we'll talk about quarter over quarter in a bit more detail. As previously mentioned, both quarter over quarter and year over year results increased. So I covered a little bit of this already, but let's go into a bit more detail as you'll see this in the 10-Q.
Speaker Change: Revenue increased from $1.76 million to $1.89 million, about a 7% increase.
Speaker Change: Gross profit increased and loss from operations narrowed from $3.65 million to $3.32 million.
Speaker Change: We have also been able to hold gross margin study at about 80% and this will continue to remain one of our core metrics as we saw on the previous slide.
Speaker Change: Notably, if you look at total operating expenses without any context, the total op-ex seems high, particularly G&A.
Speaker Change: However, we want to just mention, if you dig a bit more into GNA, there's about 900K of non-cash stock-based comp in that number. So adjusting for that would give you a much lower GNA number.
Speaker Change: Our focus will continue to be leveraging our strategic investments to drive growth while maintaining strict cost discipline.
Speaker Change: This approach supports our trajectory towards achieving cash flow breakeven and reinforces our resilience in a very competitive and growing market.
Speaker Change: So now I'll talk about year-over-year growth, which we talked about a little bit, but let's dive into a bit more detail as you'll also see this in our 10Q.
Speaker Change: Our revenues grew by 7% year-over-year, increasing from $1.77 million in Q3 2023 to $1.89 million in Q3 2024.
Speaker Change: As mentioned, this increase reflects our ongoing traction and growth in our current customer base.
Speaker Change: Despite revenue growth, our total operating expenses dropped by 14% from $5.64 million down to $4.85 million.
Speaker Change: This decline highlights our continued commitment to cost-efficiency, especially in areas like sales and marketing, as you can tell, were significantly reduced.
Speaker Change: As a result, we achieved a 21% reduction in our operating loss, improving from a loss of $4.22 million or $4.23 million in Q3 2023 to $3.3 million this quarter.
Speaker Change: This decrease demonstrates our successful focus on discipline spending alongside revenue growth.
Speaker Change: Lastly, our growth profit improved by 8%, reaching $1.52 million, showing that our revenue growth and cost management are both contributing to
Speaker Change: In summary, the progress we've made over the past year, and quartered over quarter, is a testament to the soundness of our strategy.
Speaker Change: With AI at the core, CXAPP is poised to lead transformation in the workplace experience technology, delivering intelligent, outcome-based solutions that meet the evolving needs of modern enterprises. Operator, next slide.
Peace.
Speaker Change: So this slide, Khurram will talk a little bit about this as well, but I'd like to just make a couple of notes about this. I'm really excited about our cloud partnerships and being listed on both AWS Marketplace and on Google Marketplace. I actually worked at Google, so my background at Google Cloud gives me a first-hand understanding of the strategic advantages that major cloud providers offer through their marketplaces.
Speaker Change: I've seen the impact that advanced infrastructure and robust AI tools can have on solutions, scalability, and cost efficiency for our clients. I'm confident that these two partnerships will drive AI's continued growth and help us deliver even greater value.
to our clients.
next
Speaker Change: Thank you, Joy, and Joy's been great to joining us, not only helping us on the finance side, but given her background with Google Cloud has really been instrumental in moving forward in this direction. So, when we think about the overall landscape, I think the cloud partners are strategic to us. The reason is because we host our applications on the cloud, our customers are all cloud-based.
Speaker Change: and it is a natural extension of their enterprise environment with Sky.
So, it is super important, and I think...
Speaker Change: This was something that we've been working on and we're very proud that we now will have deployments on all the three cloud providers from a hosting side. I think that is super important. Some of the use cases I shared with you
are all.
Speaker Change: and when you become a must-have, then you need heightened quality, reliability, and security, and this is what we get with our partnerships with the cloud providers.
Speaker Change: And now with the multi-cloud capability, our customers can choose whichever cloud provider they want to work with us and get the same level of scalability and security and monitoring that they expect.
I think that's super important.
Speaker Change: The other thing for us as a business, it's important to get cost efficiency. As you know, with AI-based solutions, cloud consumption becomes a key metric. And we want to make sure we're efficient in that sense. So this is where having multi-cloud capability gives us that cost efficiency.
The cloud providers are our best partners because
not only from, you know, what it takes to...
Speaker Change: to build the application, but what it takes to get the agreements in place, the MSAs in place, and to get the overall engagement certified, it takes a lot of effort and being a small
Speaker Change: company, it takes a lot of bandwidth on our site. So if we can leverage the marketplaces...
to onboard employee aid.
That's great, that helps us.
Speaker Change: And also, it helps us in terms of scalability, scaling those customers to the next level. So we think it's a natural fit. We are partnering with all of the cloud providers. We are really happy with our partnership with Google Cloud. And we are excited that we have these new cloud providers supporting us.
Speaker Change: So, again, more to come in the coming quarters in terms of the immediate benefits for us are the ability to get our cost structure in line, improve our...
you know, AI capabilities and provide the security and
and monitoring capabilities that are super critical for our business.
Speaker Change: and then partner with them as we scale up our customer base.
Speaker Change: I'm going to ask the operator to move to the last slide.
Speaker Change: So this is our summary slide and we'll have some of the some questions have come in so we'll have those And be present well, and maybe we should go to some questions first before we finalize So I think we have a couple of questions here there's one question from Dennis Cupertino at biotech Dennis
Great question, Dennis. Yes.
Speaker Change: New Manman has really impacted growth at Sky, you know, joy coming on board has been a really breath of fresh air for me to help with in terms of the financial strategy, but also partnership with.
the Google Cloud providers.
Speaker Change: We've had a lot of new talent come into the company since we went public, so there has been new talent.
Speaker Change: But I am super excited about also bringing your talent on board.
Speaker Change: as you grow the company across the board and you know, we really are
Speaker Change: working together really well. So Joy, you want to add something to that? I think just joining at an exciting time and seeing all the work the team is doing behind AI. There's a funny picture I have of Khurram on one side and the team on the other, kind of talking about the app and the analytics, and it's just very exciting to see. So I'm excited about the growth that we'll see from this area.
Yep, yep.
All right, I have one other question from Max Gerber.
question is could you partner with Palantir to implement AIP?
Speaker Change: And if I understand correctly, AIP is the Artificial Intelligence Platform from...
Palantir.
Speaker Change: That's a great suggestion, Max. I have not thought about it because we really are not working in the government sector as yet.
We're with commercial customers, but
We know some of the folks at Palantir will definitely...
Speaker Change: at the same time, we do believe that there is an interesting opportunity there, and we will definitely reach out and see what we can do there. But our core, going back to our core, as I said, why do people buy Sky is that we have a great UI, we have amazing insight, and we have a generator-based solution that really takes in all the –
Speaker Change: customer experience, employee experience, right? And for that, we need enterprises who are willing to engage to allow the employee to have those experiences. So part of the battle is mostly allowing, you know, the leading employers who are willing to provide that flexibility to their employees.
Speaker Change: So if that's happening in those spaces, we'll definitely be there, but right now our focus is to scale up within the commercial segment.
Speaker Change: I think and then I have one more question from Jack Cordero at the Maxim group.
Jack Cordero: Can you detail how your partnership with Google Cloud is progressing?
Speaker Change: And so, on that maybe I'll start and then Joy can jump in. You know, we've had really great...
Speaker Change: working sessions and meetings with the Google team. They have really helped us get the message out to all their client bases. We're working with all the ISV channel partners. We've been invited to a lot of Google Cloud conferences. So we're really starting that engagement process. So that's happening on the go-to-market side and on the product side. I think you're going to see a lot of new innovations in the coming months coming in that are powered through Google Cloud's AI capabilities. I won't name them right now, but you will be seeing those capabilities being implemented. Skyview is also implemented with Google Cloud's partnership as an example.
Speaker Change: And then there are other features that we are deploying that are really going to leverage all the innovation that the Google Cloud team is doing. So, that relationship is working very well. We actually have Google Cloud.
Speaker Change: representative in our offices nearly every day. There's a lot of collaboration going on, a lot of engagement, and we're really excited that Google is working with us so closely.
Speaker Change: for us to continue to grow through our cloud partnerships and we'll continue to work on this in the future.
Speaker Change: Okay, good. I think those are the questions we had. So I'm going to jump to the last slide here, which is Why Sky? And I want to recap the investment highlights I see unfolding here shortly.
Speaker Change: CHI continues on its business transformation journey to an AI native SAS model with continued positive trending of key SAS metrics.
Speaker Change: We are excited to have achieved significant milestones in the product delivery to meet our customers' expectations that has resulted in continued growth for the past year leading to our best financial quarter.
Speaker Change: The amazing innovations from our team with our analytics platform SkyView and the unique SkyKiosk position us well for exceeding our customers' expectations to provide the best employee experience solution in the market.
Speaker Change: The future of work is one of the biggest issues of our century and every single enterprise globally is looking to find solutions for the digital workplace and workforce
Speaker Change: And so, you know, we are super excited that with the team we have, with the continued growth we're seeing, with our customer base, and with the partnerships we're doing in Silicon Valley, that we will be able to deliver this new software category of employee experiences.
Speaker Change: SkyScan is uniquely positioned to lead the category and shape the employee and workplace experience landscape given the ongoing digital transformation of nearly all enterprises globally.
Speaker Change: And as we like to say to the sky and beyond. Thank you everybody and look forward to the next earnings call. Thank you