Transcript: CXApp Q2 2026 Earnings Conference Call

CXApp (NASDAQ:CXAI) released second-quarter financial results and hosted an earnings call on Thursday. Read the complete transcript below.

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View the webcast at https://event.webcasts.com/starthere.jsp?ei=1772246&tp_key=a3b9300aa0

Summary

CXApp reported a transformative Q2 with a 79% revenue growth from $950,000 in Q1 to $1.7 million in Q2, driven by the Engine Room acquisition.

The company emphasized the strategic importance of CXApp 2.0, which focuses on enhancing enterprise AI applications from workplace context to personal and business growth intelligence.

CXApp 2.0 is now in deployment, and the company has secured significant multi-year contracts with Fortune 500 clients, illustrating strong enterprise retention and new customer wins.

The Engine Room acquisition added $8 million in revenue and $1.6 million of adjusted EBITDA, providing CXApp with mid-market distribution channels and cross-selling opportunities.

Management is focused on scaling recurring revenue, leveraging synergies from the Engine Room acquisition, and targeting break-even by the second half of 2027.

CXApp's AI-powered platform aims to reduce operational friction in enterprise environments, focusing on user experience and seamless integration of workplace solutions.

The company plans to expand its market presence through strategic partnerships, including a significant role for Google Cloud in supporting its infrastructure and marketplace distribution.

Full Transcript

Karim, CEO

With Zoe, which I'm hopefully you're going to enjoy her perspective and we're close, so it's going to be a packed agenda. I know a lot of you have been sending some questions. We'll take some questions in the Q&A section as well, so I appreciate that. So with that, let's get going with the business. So let's talk about our Q2 earnings and as I said earlier, the three themes. Number one, Engine Room is transformative. Number two, CXApp 2.0 is real, is available.

And third, we're now seeing a clear operating model for translating growth into operating leverage and ultimately profitable growth. And we at CXApp are building the agentic AI operating layer. So before we go into the business numbers, let me talk to you guys about the—just make sure you have the disclaimer slide on what are the forward-looking statements. Make sure you read the safe harbor. Please review the safe harbor non-GAAP disclosures in today's presentation and our SEC filings for the applicable risk assumptions and reconciliations.

We will be filing the 10-Q tomorrow and so you can read that when you get that. So let me talk about, you know, the company we have today, right? And the company we have today is pretty amazing. We are deployed globally around 200 plus cities with more than 60 plus customers now supporting a large installed base of users. We operate inside demanding enterprise environments where security, privacy, reliability, integration are not optional, they're necessary.

This matters because our AI strategy starts from something valuable: enterprise trust and real operating context. Context is very important. We aren't beginning by building an AI application and trying to figure out where it fits. We already operate inside the enterprise. We understand people, places, workflows and enterprise systems. And CXApp 2.0 is about making that context increasingly intelligent and actionable. So we're headquartered in the San Francisco Bay Area.

As you know, we have teams in Toronto and Manila. And now we're excited to welcome the Australian team which is headquartered out of Melbourne, but they're all across Australia as well in New Zealand. We're excited to have them on board, and this gives us the global coverage. We have around 70 team members now globally and they're all working hard in making AI successful in the enterprise market that we're in. Before we get to the numbers, let me just give you context of where we've been and where we're going.

So CXApp 1.0 established the enterprise foundation. It showed us that we have great software, workplace software that has people and place intelligence. We have Fortune 500 customers. They have high-trust, high-complexity deployments. This remains an important part of business. We made some significant strides in the last two quarters. Chris is going to talk about those customer case studies and stuff, but it's been amazing there. But CXApp 2.0 really expands that opportunity.

We're moving primarily from understanding places, which is really the Flow product, which is where and how people work, to person, which is what we're calling Beat—what an individual and team need to accomplish and what should happen next in your life as a worker. Now we're moving with Engine Room into business: how companies acquire customers, convert demand and grow. That business context is significantly strengthened by Engine Room. As you know, underneath those experiences is the same CXApp agentic platform.

The strategy for me here is very straightforward: proven enterprise technology, mid-market distribution, prioritize AI and scale recurring revenue. We're going to run that flywheel cycle because we've got now an agentic platform that we can leverage across multiple verticals. And more importantly, we now have a new distribution mechanism through Engine Room. So this is the transformation I'm talking about. This is what we're executing on and we're super excited about this opportunity.

So let me go into the business for this quarter and what happened this quarter. So this is a pretty exciting time for CXApp. As you can see in our highlights for the quarter, there are six main highlights, but the biggest one is the Engine Room transaction. It is transformative. I'm going to talk more about it in detail, but it really did change the revenue trajectory for the company, and more importantly, quarter-over-quarter increase of probably 79% revenue growth from $950,000 in Q1 to approximately $1.7 million in Q2.

The more important thing is what sits underneath that growth. Enterprise retention remains strong. Two major Fortune 500 customers renewed their relationship with CXApp. In enterprise software, renewals matter enormously because they value the product. After the initial sale, customers that continue to choose CXApp. We also added a significant new win in the financial services sector. This is a three-year multimillion-dollar recurring revenue deal.

It went through a very competitive RFP. We're super excited to have that customer on board and they're scaling with us beginning this quarter, and it's a really, really important win for the team. And it's one for two reasons. First, it demonstrates continued demand from highly sophisticated, regulated customers. Secondly, these are the types of customers where CXApp 2.0 can expand over time across additional modules, users and AI capabilities. The other big achievement for this quarter is we moved CXApp 2.0 into deployment.

That's a big win for us. The progression is win, deploy, adopt, expand—exactly what we want to replicate with 2.0. Really what we get is an agentic AI platform that allows a user to navigate their workplace, navigate their work and navigate their experiences across the whole enterprise. That's very exciting. Our customers, the reason why they're selecting us is because we have CXApp 2.0. The wins we got, the renewals we got are all because of CXApp 2.0.

And as you know, during the quarter we completed the Engine Room transaction. So for Q2 we only have one month because it was the month of June that Engine Room is part of the revenue. And it's been an amazing one month because they've continued to get new clients, they've got double-digit growth, they're going through this annual process where they've got commitments from existing clients. So it's been really good. And so all of these six factors combined really have been super successful for the company.

I want to congratulate the team on the job well done, and it builds the momentum, it strengthens the foundation for CXApp 2.0 and our scale growth moving forward. So let me tell you a little bit about Engine Room and what better than just to roll a video? So, operator, if you can roll the— All right, cool. That's pretty exciting. So when I talk about Engine Room, I talk about it as being transformative, and as you can see from the video, it's pretty exciting stuff they do and they've been at it for 13 years and they've made amazing progress in getting clients and making sure that they have really solid footing. So let me tell you why this is transformative. Engine Room does not simply add revenue; it changes the starting point for CXApp.

Engine Room brings more than $8 million of revenue, approximately $1.6 million of adjusted EBITDA, a highly recurring revenue profile and more than 50 mid-market customer relationships. But strategically, three things matter even more for me. Number one, distribution. CXApp historically sold into large enterprises through an enterprise sales process. Engine Room gives us trusted relationships with dozens of mid-market businesses. That gives us a much faster proving ground and future distribution channel for CXApp AI products.

Number two, business context. As I said earlier, CXApp already understands workplace and employee context and that's one of our moats and differentiation. Engine Room brings customer acquisition, performance marketing and growth data that allows CXApp 2.0 to expand from understanding how people work to understanding how businesses grow. Number three, cross-sell. We can introduce CXApp capabilities into Engine Room's customer base and we can introduce Engine Room's growth capability into CXApp's enterprise products.

The combined company has an enterprise anchor, a mid-market growth engine and a shared agentic AI platform. And the combination moves CXApp to more than $12 million of annualized revenue scale. This acquisition created scale. Our job now is to turn that scale into operating leverage. So I'm super excited about this. I think this is the right move for the company. It positions us ready for the growth engine that we've been talking about, the double-digit growth.

It gives us that flexibility in terms of having, you know, the ability to innovate in a very interesting market—Australia. I'll talk more about that in the investor forum we will have. We'll go more deeper into it. But I just want to share this story with you and share with you that this has been an amazing, amazing transaction for us. So with that I want to move on to the financials for Q2. You know, I'm going to turn it over to Melissa to walk through the quarter in more detail.

As you listen to the financial results, I would focus on one important relationship: how rapidly the revenue base is changing relative to the cost structure. Melissa, all yours.

Melissa, CFO

Thanks, Karim. So the quarter-over-quarter comparisons demonstrate that step change is taking place in the business between Q1 and Q2. Revenue has increased approximately $950,000 in Q1 to $1.7 million in Q2, representing, as Karim previously mentioned, a 79% sequential growth. Our annual recurring revenue has increased from $3.6 million to $11.5 million. Oh, one second. We've jumped. Let me just find that slide again. Sorry about that. Net revenue retention has increased from approximately 98% to 99.3%, continuing to demonstrate our strong retention across installed bases. Total assets increased from approximately $33 million to $36 million and our cash EBITDA improved from approximately negative $3 million in quarter one to negative $2.68 million in quarter two. EPS was approximately negative $0.50 compared with negative $0.09 in Q1.

So the key takeaway quarter over quarter is that the revenue base increased substantially while cash EBITDA improved modestly. We're still investing in integration and development of the combined businesses, but the operating model is beginning to show greater scale. The year-over-year comparison also shows meaningful progress. Revenue increased approximately 42% from $1.2 million in Q2 of 2025 to $1.7 million this quarter. ARR increases from $4.5 million to, again, the $11.5 million, an increase of approximately 156%.

Net revenue retention increased by more than 5 percentage points to approximately 99.3%. Assets also increased 22% from $29.6 million to approximately $36 million. Cash EBITDA was approximately negative $2.7 million, which is a neutral position compared to a year ago. And EPS has improved from approximately negative $0.16 to negative $0.10 between the two years. The most significant change in the financial profile is therefore the scale of the recurring revenue base while we continue to manage investments required to support integration and future growth.

And now let me put this cost structure into perspective. Total operating expenses increased approximately $275,000 quarter over quarter, or 5.6%. However, we do need to compare that with the approximately 79% sequential revenue growth. The increase in operating costs was driven primarily by the Engine Room acquisition and associated operating activity. Importantly, these Q2 numbers do not yet reflect the benefit of the operating synergies we are implementing as we integrate the businesses.

Our focus moving forward is straightforward: grow revenue faster than expenses. We expect to accomplish that through shared functions, tighter operating discipline, productized implementation, increasing automation, and a higher recurring software contribution. That operating leverage is central to the financial strategy for the combined company. And I'll turn it back to Karim now.

Karim, CEO

Thank you, Melissa. I apologize, I was on mute. This was a really great quarter. As you can see, we are finally showing the value of our technology platform, but also the Engine Room acquisition position. But I want to put in perspective on what I see the value of this company as we move forward. And this valuation is based on numbers that we get from KeyBank, which does a monthly survey on software benchmarks and looks at all the recurring revenue-based businesses and software businesses.

So as I think of our business now, it is an AI-powered software business that is at much larger scale. And the scale, as you know, last quarter we were at a million a quarter. This quarter we are now $1.7 million a quarter. And with the full Engine Room integration we will be hitting $3 million a quarter, or $12 million annualized, by next quarter. And that shows real growth as well as shows real momentum and scale. And based on that, when you think about that business and you think about that software business with the metrics we have, you know, just on a conservative basis, it's a 9.7x multiple, right?

That's more on next 12 months revenue. I'm just saying that revenue we have now, we will have now by Q3. So to me, we're at a very attractive stock price right now given where we're at in terms of the valuation that we should command. I do believe that we will continue to perform and, given our double-digit growth strategy, we believe by second half of 2027 we will be growing and getting to the breakeven point. And that's where our focus is. Our focus is really to get to that level and you can see the metrics based on that.

This is all illustrative, by the way. This is not a valuation guidance. I'm just taking industry benchmarks and showing you what the value of this company is. And the fact that we've now built that agentic platform, that R&D expense has been done and now it's about growth and distribution. And this is where we did the Engine Room transaction and this is where we feel very strongly about the growth and scale of the business. You know, can we sustain this growth?

Can we increase software mix? Can we translate into greater revenue scale? Absolutely. And that's where, you know, the two businesses have been complementary. But we're going to help each other scale up faster. Now let me talk about, you know, probably one of the most important charts in the slide deck here: it's about the path to break even, right? And again, this is a directional operating framework, not specific financial guidance. The Engine Room acquisition gives us a combined revenue of more than $12 million.

From here there are several identifiable levers. First, organic growth: continue expanding the CXApp enterprise business and Engine Room's customer base. That's obvious. Second is cross-sell: introduce additional CXApp modules into existing enterprise customers. Chris is going to talk a lot about that today. Number two is introduce CXApp generative AI products into the Engine Room's mid-market customer relationship, though that's the second cross-sell that we think is very important.

Thirdly, increase software monetization. We'll talk about Flow, we'll talk about Analytics Events, and our emerging personal execution capabilities called Beat. Increase our opportunity to generate recurring software revenue from the same platform. And fourth, prioritize that mid-market motion for mid-market customers. We don't want to recreate a long enterprise implementation. Our objective is to standardize the products, standardize the connectors, faster provisioning, and lower cost to serve.

Fifth, operating leverage. We now have opportunities to share infrastructure, technology, corporate functions, and delivery capabilities across a much larger revenue base. That's the synergy that Melissa talked about. The operating model we are working towards is characterized by, number one, double-digit revenue growth, which is part of our strategy as well as what Engine Room is already on; number two, recurring revenue more than 95%; gross margin above 70%; software mix above 95%; increasing revenue per customer. We're already at $150,000 to $200,000 per client per year, which is really great. And a disciplined expense growth, which now we can do with the larger scale. If we execute against those levers, we believe there's a credible path towards break even in the second half of 2027, followed by profitable growth. So I want to now close with why CXApp? Why do you want to continue to invest and be part of this journey?

Why is this moment different for CXApp? Reason number one, Engine Room is transformative. It immediately increases our revenue scale. It gives us profitable operating capability and, perhaps more importantly, it gives CXApp a mid-market distribution engine that we did not previously have. Reason number two, CXApp 2.0 is now in production. This is no longer simply a roadmap or an AI narrative. We are ready now to deploy this across our clients. We've been successful in the demonstrations and prototypes and getting it through our clients.

They're going through a lot of validation. But now it is launching, it is launching live with a new client. It's also launching live with existing clients. And now we have these new enterprise logos signing multi-year agreements. They would not be signing multi-year agreements with us unless they knew that the roadmap and the product we have is going to be long-lasting and for the future. And we are expanding the platform from workplace intelligence to personal execution, which is Beat, as well as the growth intelligence, which is Engine Room.

And reason number three, the financial model is becoming more scalable. Q2 revenue increased approximately 79% sequentially while operating expense increased approximately 5.6%. That does not mean the work is finished—far from it. But it demonstrates the opportunity for operating leverage as we integrate the businesses, grow recurring revenue, and prioritize more of what we offer. So with that I'm going to look into some questions that have come in.

Let me see. Okay, question number one. Good question. How much cash do you have? What are your liabilities after the purchase of Engine Room? I'm going to have Melissa take that.

Melissa, CFO

Thanks, Karim. So our cash as of 30 June 2026 is $11.7 million. Most importantly, the acquisition costs have been—acquisition costs related to Engine Room have been largely paid and any subsequent funds owing on the acquisition of Engine Room are tied to an earn-out model.

Karim, CEO

I don't know. That's good. So I think just to be clear, you know, the Engine Room acquisition was 65% cash and the rest was in earn-out. So the team is focused on—it's a two-year earn-out with growth factors in revenue specifically. So that's going to earn out itself. So we have no other liabilities on Engine Room except the earn-out. And overall, as you can see, the asset base has increased and it has been a very successful integration up to now.

So Okay, next question I see is, how quickly should shareholders expect the Engine Room acquisition to be reflected in CXApp's reported revenue? Mel, you want to take that?

Melissa, CFO

Yeah. So we've actually already captured one month of combined revenues, that being the month of June. We will be able to demonstrate next quarter, so Q3, the full combined impact over the three months of that acquisition and the combined revenue.

Karim, CEO

Okay, I think the next question was one more question. What do you think of the revenue growth over the next 12 months? So look, I gave you some illustrative graph on our potential. As you know, we are focused on double-digit growth. We really believe that the scale we're getting with Engine Room, the wins we have with our existing enterprise business and new logos coming in that are multi-year, multi-million-dollar contracts, we're pretty, pretty positive on that.

And we're also positive on Engine Room because they've also increased their—they've increased their revenue profile, the number of clients, and their annuals process has been super successful. So anyway, we are pretty positive on that. I think our goal is, like I said, is to have break even by second half of 2027 if we execute our plans that we have and the growth vectors that we're working on. I'm pretty confident in that. And we're also focused on expense management and, you know, with agentic AI, we're leveraging AI across our enterprise.

All our functions are using AI so we're seeing a lot of efficiency there. As you can see in terms of our team members, we're very cost efficient. And so I'm pretty positive that in the next 12 months we will achieve much higher growth and we will get to the breakeven target that we have. So. Okay, we're running to the end of the call here, so thank you everybody, I appreciate it. We're going to take a brief pause and we'll join you back in 60 seconds or so for the investor forum.

Thank you. All right, it's 2:30pm Pacific, 5:30pm Eastern. Welcome to the investor forum. Thank you. For people who joined the earnings call a few minutes ago, we're going to be more strategic here, more product focused, really talk to you about the products, the business, the customers, the things underneath the hood that we're working on, and show you the path that we believe is going to be super successful for CXApp. I think we shared the agenda before. I'm going to start off with the strategic view of the business and more strategically thinking about where we're at, where we're going.

And then the team is going to tell you how we're doing, what we're doing, what we plan to do next, and then we'll end up with a very interesting fireside chat. Thank you for being here. And we wish to do this next time live in person, but we're going to do the best to do these demonstrations and these discussions on the webcast. Number one, I want to start with something I believe very strongly. I've been involved in lots of technology transitions.

I was involved in the first mobile phone, I was involved in the first 4G network, was involved in the first Wi‑Fi systems, and then I was involved in 5G and cloud, and all these interesting technology developments that have happened. And I believe we are at the beginning of another major technology transition in enterprise software. What I mean by that is CXApp started by solving a very real problem, how people interact with the workplace. That happened after the pandemic.

As you know, COVID created this hybrid environment. What we have built underneath that experience is becoming much bigger than a workplace application. We have enterprise integrations, we have proprietary context, we have AI orchestration, we have data, and we have security and trust. Now we're bringing all these assets together into CXApp 2.0, an agentic AI operating layer. Our strategy has three priorities. Number one, reposition CXApp around this agentic operating layer, which I talked about, is the context layer.

Second, use Engine Room to give us immediate scale, mid‑market distribution, and a much larger customer base. And thirdly, prioritize what we learn into repeatable vertical AI solutions. This is not simply an evolution of our product. I believe it can be an evolution of the company. We're going to talk about that. We're going to go through some real strategic focus on why we're doing this. Let me explain why the timing is important in the industry right now.

Enterprise software is evolving as we speak. The first generation of enterprise software created systems of record. Then SaaS and analytics gave us applications, dashboards, and visibility. But visibility is no longer enough. The next generation of enterprise software is about action, about getting stuff done. Basically, AI agents will increasingly understand context, make recommendations, coordinate workflows, and actually complete outcomes. That is the layer I want CXApp to own.

Not another chatbot, not another dashboard, not another AI feature added onto an application. The operating layer between the enterprise systems, its data, its people, and the actions that need to happen next. Employees want fewer applications, executives want decisions rather than more dashboards, and mid‑market businesses want practical AI that produces value today without having to assemble teams of AI engineers to build it themselves. This is the opportunity that we are designing CXApp around.

We're building the agentic AI layer for enterprises to work and grow. And that is our focus. Let me put it into a little bit more detail and show you what I mean by that. This slide shows me where we came from and where we're going. We started with Place. Flow understands where and how people work — workplaces, spaces, resources, presence and experiences, and maps and locations. Now we are moving into Person with Beat. Beat is about personal and team execution.

What do I need to accomplish? What has changed? What matters most right now? What should happen next? How am I going to become more productive? Eventually, what can the platform safely do for me? Right. In an enterprise you want to be in a secure environment. You want to be able to get your stuff done. Now we're adding Business through Engine Room. How does the company find customers? How does it convert demand? Where is the marketing working? Where is it not working?

What is the revenue being lost? All those questions need to get answered, and what action should happen next to grow the business? So think about what we're assembling. Place gives us workplace context. Beat gives us personal and team context. Engine Room gives us customer and growth context. Underneath all these three is one shared CXApp platform. It senses, it prioritizes, it acts, it verifies, and critically it learns, and also it gets it done.

We're about the outcome business. We're about context — not just another insight. Context should lead to an outcome. And this is what we're focused on in really creating those amazing outcomes for our clients. So next I'm going to talk about the market, right? So, you know, this is studies taken from one of the vendors, Grand View Research. And, you know, you look at the market surrounding this strategy. Amazing. We're participating in three large categories that are all growing: digital workplace platforms, enterprise agentic AI, and now marketing automation and growth intelligence.

The individual market growth shown here are significant, but the bigger number is the compounding effect — it's a 75x compounding effect of growth over the next couple of years into 2030. It is not claimed that our addressable market sometimes becomes 75%, but the opportunity for us is 75x. So we're not exposed to only one category; now we're exposed to three categories. We sit in the intersection of workplace intelligence, agentic AI, and business growth intelligence.

My conviction is that the intersection matters because enterprises don't ultimately buy AI because AI is interesting. They buy it to make employees more productive, make better decisions, reduce costs, and grow revenue. These are precisely the outcomes that these three businesses allow us to attack together. So let me talk about what are we building, and we spend a lot of energy and time with our Silicon Valley team, and as we integrate our folks in Australia, they've also been thinking about it.

And the reality is all great minds think together, and we've had a great interaction with our teams. This gets to the heart of what we're building. Across the top, you see the context domains — the work intelligence, the place and person, the growth intelligence, the business, and the future verticals that we can add over time. But I want you to focus on what's underneath. This is the CXApp agentic platform. The philosophy is simple: understand the context, recommend the action, get the right approval, complete the outcome.

As I mentioned in previous events, Bond is our agentic engine. Bond is a multimodal, multi‑agent orchestration system that provides the agentic execution capability. Cortex provides intelligence — context, knowledge graphs, personalization, analytics — and we surround that with the requirements enterprises actually care about. They care about identity, they care about auditability, they care about human control, they care about connectors, they care about governance, they care about all the things that are important to make an enterprise successful.

That's why we have designed this for the enterprise. We've designed it with all those controls, and we also integrate with all our partners, all our cloud partners. As you know, we have a strong relation with Google Cloud, also partnering with AWS, and we have also one of our clients using Azure. So we are multi‑cloud. We have access to all their models, all their information, and we're using the best‑in‑class technology to deliver this agentic operating layer.

And the most important part of that discussion is we're not betting CXApp on one foundational AI model. Models will change, models will get cheaper, models will become more powerful. Our value is the enterprise context, orchestration, permissions, actions, and outcomes layer from these models. That's why I call it the operating layer. The model can provide intelligence. CXApp makes that intelligence useful inside the enterprise. We are the outcomes, we are the actions, and that's what we're focused on.

Another key part of this, as we looked at Engine Room and other opportunities to partner with folks, is that this architecture that we built gives us tremendous leverage. We don't have to build a completely different technology stack every time we enter a new use case. The same orchestration layer can support workplace agents, can support growth agents, analytics agents, automation agents, and eventually industry‑specific agents. A meeting agent and an attribution agent may solve very different customer problems, but underneath they need many of the same capabilities.

They need the data, they need the context, they need the permissions, they need the workflow orchestration. They need auditability and the ability to complete work in the system where that work belongs. That is where I believe the leverage comes from. One platform, many specialized agents, real business outcomes. The more repeatable those agents become, the more efficiently we can take them to the mid‑market. So that's where we're really focused on — we built a really strong technology architecture, and now we're looking for, with that amazing product, we're looking for the distribution model.

And this is where our new friends at Engine Room come in. As I think about Engine Room, I think I mentioned it in the earnings call, but I want to reiterate it is strategically super important for us. It is simply not an acquisition that added revenue. Engine Room changes how we can take CXApp to market. CXApp gives us the enterprise anchor technology proven in complex environments. Engine Room gives us a mid‑market customer base, recurring revenue, commercial data, and people who understand how to drive measurable business outcomes.

Australia gives us an excellent launch pad. We can launch, learn, and scale. We can work directly with businesses in trades and field services, construction, automotive, healthcare, professional services, and manufacturing. These are incredibly important parts of the real economy. A plumber doesn't need another chatbot. A construction company doesn't need another AI demonstration. A healthcare operator doesn't need another dashboard. They're very practical folks.

They need more customers, they need faster response, they need better scheduling, they need lower acquisition cost, they need higher employee productivity, they need better visibility into what is driving revenue. This is where practical vertical AI becomes incredibly powerful. Engine Room gives us more than 50 customer relationships and a recurring revenue foundation. Our objective is to identify the workflows and repeatedly create value, prioritize them on the CXApp platform, and distribute them more broadly.

Services help us discover the problem. Software gives us the scale. So this is why I'm super excited about Engine Room. It's getting us a head start into the mid‑market strategy that we've had. We're working closely with them this quarter to start identifying customers. There's already been a lot of great interest, and as we get Flow and Beat and Events and other products that Chris is going to go through, there's a huge opportunity to leverage that channel.

All right, so next let me talk about a little bit more detail about the combined platform, right. You know, all of these strategies and these product visions ultimately have to translate into economics. And I'm going to go a little bit more deeper — I know I went a little bit on the earnings call — but the acquisition gave us the scale. It gave us that $12 million in revenue. Now CXApp 2.0 has to give us operating leverage. Today we have that combined revenue north of $12 million.

We have enterprise customers on the CXApp side. We're growing those customers. We have those 50 mid‑market relationships through Engine Room. We have recurring revenue, we have data, we have distribution. The next phase is about pulling four levers. Number one lever is grow and expand existing businesses. And both businesses are really working really well. The enterprise business is expanding, and Engine Room customer growth is happening. Secondly, cross‑sell and distribute across the combined customers.

That's job one, and we're doing that right now as we speak. Third is the exciting part of prioritizing the AI and new modules — increasing the software component of our revenue, which is already 95%, but now growing it in the new AI economy. And fourth, training the operating leverage as the company scales. And we talked about it's already starting to show the signs in Q2 here. This means that ultimately revenue should grow faster than the infrastructure required to support it.

Our ambition is very clear: higher recurring revenue, higher software mix, higher gross margins, more revenue per customer, and a path towards break‑even and then profitable growth. So the acquisition created the scale, the platform has to create the leverage, and that's what we're focused on executing. And I'm pretty excited that this is a path that we're on. As I said on the earnings call, we have all those metrics. We're diligently working on them.

As part of the integration, I'm showing some directional synergy targets that the team has. We're already realizing some of those synergy targets in the second half this year. Next year we believe there will be more, not only on cost synergy, but also revenue synergy. And then finally the flywheel effect with the CXApp 2.0 product will really implement much higher growth factors here. All of this is great plans, but none of it really happens unless I have a great team to execute.

I'm super excited to introduce some of the team members here. We're working on a very lean operating model. Chris is running enterprise business in North America for us. Adam is taking on Australasia as well as the Engine Room business. And then Melissa has stepped up as being our interim CFO. We're also proud to have a global CTO team that brings together technical leadership across Silicon Valley, Canada, Australia, and Southeast Asia. And that is important.

AI innovation is global. Our customers are global. Our engineering capability should be global as well. This structure is designed around speed, accountability, and execution. We don't want any unnecessary organizational layers. We want talented people close to the customers globally, close to technology, and close to the results. That's where we believe we have a huge opportunity. And so, anyway, I'm super excited to introduce the team. So I'm going to transition now to Chris, who's going to talk about the North American enterprise business.

Chris, go ahead.

Chris Wiegand, General Manager, North America

Well, thank you, Karim, and welcome all. Chris Wiegand, and I'm General Manager in North America. I'll let you know, I am an entrepreneur at heart and I couldn't tell you how excited I am about this whole AI transformation. It's truly changing things, as I'm sure you have in your personal life, but especially in the workplaces. And what's also exciting, just on the tail of that, we've had the best year we've ever had. We've signed the largest deals.

I'm going to take you through. We've got our 2.0 product deployed and working. We've got a new module I want to tell you about in our events. And then Karim also told you a little bit about the new product Beat. So Karim's been telling you all about strategy and what our vision is. What I want to do for the next 20 minutes, I'm going to tell you through what's happening on the ground, how are we doing our business, what are the customers all about?

And most importantly, we've got some live videos that we've recorded to show you the product itself. And then we're going to go through and talk about, you know, what's the rest of the year look like and how are we going to do it? Okay, so what I really want to emphasize here is, you know, there's not names on the page, but these are the largest and biggest companies in the world. Some of them, they're leaders in their space. And I'll tell you this, they have gone through super diligent, super diligence, we'll call it.

These are some of the toughest RFPs and diligence processes you can go through. And that's how it should be. Right? We're working with very secure, complex environments. And so by these customers doing this, they've really gone out to market. They have the resources, they can choose whoever they want to. And by sandbox trials, by many, many questions and answers and meetings, we've come out on top. So that's the pattern I really want you to know is that we keep winning in the regulated environments, the enterprise environments.

And these are again some of the toughest places to get your products deployed. I'll take you through from left to right here. One of our biggest wins this year is a top financial institution. They are actually global. They've got dozens of sites around the world, thousands of users that are going to be coming online. This is actually more than a 12-month pursuit. And again they went out to market and CXApp came out on top. Next we have a global asset manager.

So we're closing this right now. They're starting at the end of this year so there's going to be a quick turn on their implementation. Again, five-figure number of users, very similar use cases in terms of what they're doing. And again they're starting with an entire population that we're going to go live with. Next is a leading US insurer. I'm going to spend a little bit more time on this because it's going to tell you about how we deploy. This is an interesting customer for many reasons.

One, it's really our bridge to the mid market. It's a few thousand users. We're still in an enterprise environment but this is how we really took our product and decided and learned how are we going to productize this? So we're configuring, not making custom code. I'm going to talk more about that. And they're going to go live in September. They've got a brand new headquarters and we're in deployment testing for that right now. And then let's not forget our amazing install base.

We've got enterprise customers today that are choosing to stay with us. Same rigorous environments. We had one of our largest financial services customers renew. We had our largest media and entertainment company. They renewed and expanded. And so where is this all going? This is all leading to more revenue. That's the goal. And so not giving you guidance, but directionally the new customers are coming online. The things that we're not even seeing yet in terms of revenue, it's about a third uplift.

So that's pretty significant when you think about it. And in addition to the other things I'm going to talk you through here. All right, so validation is really the key here, you can go win these deals, but you have to deliver them. And that's really what our customers are expecting is exactly what we're doing. So this is the company I'm going to take you through sort of a quick timeline of how we're delivering for this leading US insurer. And again, it's a brand new headquarters for them.

So it starts out we have an enterprise agreement and this is very detailed scope of work. We understand exactly what we're delivering, how we're going to do it, and then we go and build it. So with that we have integrations into their core systems. Remember, the core value of what we do here in CXApp is we're taking disparate systems and we're putting it all into one cohesive system that an employee can just get what they need quickly and easily.

You're going to see that in the demo. Now we're in testing so we deployed 2.0 to them. We've got most of the integrations done with a brand new headquarters. As you can imagine, there's things that are staged. So right in the next 30 days we've got really important next steps in terms of finalizing testing. But I can tell you the client is extremely happy. We're right on schedule and then we're going to scale that goes live to the population. There's a few really important points I want you to remember here.

This is our point that we've really transitioned from custom code. This is not custom development for a customer. This is configuration, which means it goes faster. This is how we're going to deploy to the mid market as well. We've also, if you've been on our earnings calls before, we've talked about how we're moving away from the big one-time upfront fees and campus fees to per-user software. The market is demanding value-based pricing and value comes from people using the product.

So when we deploy it, we expand it through utilization and through people actually adopting the product. So we've got a common goal with our customers to get everybody using it so they realize value, we realize revenue. Again, a key message here is that we've taken what we've learned in the enterprise, the really complicated environments and we're taking that into more deployment and into a repeatable scalable model that I'll talk you through a little bit further here.

What I want to also as I'm going to introduce you to the products and Karim has already, I want to highlight a point that we've proven ourselves in the enterprise and that's revenue. That's great. But what it's also doing is it's giving us the ability to productize what we've done and go down market. So I'm going to work through, you know, the product that is out there today, Flow, the ones that our customers are using to book spaces, to wayfind, to interact, to get news.

This is what's out there, that's what's Flow. And we've got this transition now that we've built 2.0 to transition those customers and new customers onto that. All the data that they're creating goes into SkyView. This is not just dashboards. And this is going to be one of the demos as well. You're going to see it's taking that operational data and turning it into insights. That's really exciting. Next, Events module. This is a brand new product.

It's coming out in just a few weeks. We'll be GA in September and we've solved a major industry problem. And I bet you everybody who works in enterprise is going to recognize this right away. I'm not going to talk about it now because I've got a couple of minutes. I'm going to just go into more detail on that then. Karim had also told you about new product Beat coming. Beat is really this tool that keeps everything on track, starting with the personal level.

This is a productivity tool, I'll tell you that. People working in companies today are overwhelmed with the number of messages they're getting. They've got systems for Jira, Slack, Teams, they've got things coming at them, there's duplication all over the place and it becomes anxiety. They don't know what to do next. So we've created a system that keeps everything moving, keeps you prioritized on what's most important next, and also prepares or does the work for you to keep the team moving.

So stand by for that one that's coming in Q4 and we'll certainly tell you all about that as soon as it's live. What I also want to make sure that we recognize is that we've got the same agentic platform driving all of this. So underneath all of this is a Sky agentic platform. So this is the thing that's going to really, as you can see here, sense, prior—like what's the proximity, what's happening, what's the priority—act, meaning do something for you.

That's what agentic means. It's not just giving you a message and reminding you, it's actually in a lot of cases executing on something and then verifying. So it might give you a plan and you can approve that plan. So what we're going to do now, we're going to go into two videos. They are live demos of both Flow that we'll call it this the know-me scenario. This is an employee's view of how they're going to go with their day. You're going to hear me talking conversationally with the platform to do several use cases.

That's about two or three minutes. And then we're going to transition to the next video which is View, our SkyView analytics. And this is from the manager's perspective. So they're going to be there asking the strategic and insights that they want to get out of the data that they have. So with that, David, if you wouldn't mind, let's go to the videos and I'll see you all back in about five minutes. Okay. I'm so glad everybody got to see that. And I get excited every time I get to demo.

That certainly feels like we've got the hotcakes. I say that because this is how people want to work. They don't want the friction of having to dive into stuff. And even if you make something super easy and user friendly, you'd rather ask it through a conversation—parking lot—that I'm going to move on to events. This is our newest module. What we see on the screen here looks like chaos because it is. This is what people are living in the enterprise environments when they're talking about managing events.

I'm not really referring to thousands of people at a large public event. Yeah, those are confusing too. But that's not what we're doing here. What we're doing is we're helping people manage events that are happening at the workplace. They happen every single day. And all of our customers, both mid level and in the enterprise, they're going to be all-hands calls, they're going to be sales kickoffs, they're going to be training events. And this is really managing the part that you need a room that you can't request yourself.

It's not a reservable space. And so for the people that manage this on the other side, the admins, they're dealing with everything you see on the screen, they're going to get a calendar invite or request, they're going to get an email, they're going to have to open up a ticket in the catering system or even just send an email. They're going to have to send an email or a ticket to security and AV and all of these things. And not to mention, this is not just one room in one place.

This is happening potentially around the world in ten or more places. And they have specific requirements for every location. What happens is that the event changes, things keep on piling up and there's somebody there and when we talk to them, they're literally in tears almost because it's so stressful. We're working with somebody that we're going to launch right now. And their quote was, I am the integration layer. They said there is no system that brings it all together, which is great news for us because we have done that now and I believe that nobody has done this before because they don't understand corporate workspace like we do.

We've got robust rules, we already have the user interface, we've already got the integration. So we are so far ahead of that. And so what we leave people with in this current state is high risk. You've got things that have to happen on time. It's like a wedding, right? There has to be food, there has to be a room, there's executives involved, there's maybe external customers. So it's really high-stakes, high-risk stuff. So what we've done to answer that, we've got it all into one workflow.

This is all one orchestration. You start with the user requesting everything they need. They can see what's available, they can request what they want. In terms of space, catering, AV, it doesn't mean they're going to get it. It has to be approved. So there's an approval workflow which is the real key here. It's going to send automatic workflows for approval to the various departments that need to approve it. And at the end of the day, you've got one system here that's wrapping all that up.

So this is super exciting for us because it's an add-on, not just for our customers. We have today we're going to market with this as a standalone as well. And we've got campaigns that are starting right now, full demand campaigns. We're also leveraging the Engine Room's platform that will help us even further promote this. So talk more about that in just a second. But as you can tell, I'm very excited. And so if there's a slide here or a message that I want you to take away today, it's really this.

It's the enterprise market for us has proven our model, it's proven our technology. We know we have product-market fit, we know we can operate in very complex environments. It's now the mid market, the scales and I want to be really clear about something. We are not leaving the enterprise market. We've got great customers and we're going to continue. I'm sure we're the best in the world when they go looking for it. But as I described, it's a grueling process.

It takes a while but when you win, you win big. So what we've done here is we're taking everything we've learned in enterprise, we've productized it and we're going to now take this to market and deploy it in a rapid provisioning. Okay, so this means that the connectors, as Karim described, they're preconfigured, they don't have to be built out, they're going to be dropped, plug and play basically. And then we have opportunities we've never had before.

This is truly different. We have Engine Room as their customer base. So they've got growth-minded customers that this would apply to as well, the products that we're talking about. Not only that, we've got their technology to super promote from a lead generation perspective that we've never had before. We've got resellers that are signed up and ready to go for this and we've got our marketplace partners where somebody's going to be able to go into the marketplace where they're already buying software, AWS or Google, buy it, start using it.

So the time to value is extremely fast which of course is going to result in scale. So an important point about this is that we're not just recreating what we did in the enterprise and doing it down market. That would mean, you know, hey, we're just doing smaller deals and more of them and the same hard way. It's not that. We have productized what we're doing. We can do it fast, we can do it easy and that's what's going to allow us to scale up. Okay, so what I wake up and think about every day, here's our operating principles.

And you know, the same goes for Adam who's running Australia. We now have one P&L. We've got the same set of metrics, you know, for the board and for all of us shareholders, you know, EBITDA growth, bookings, revenue growth, scale. And the way we do that and the way that we're going to do that in our business here is we gotta deploy. So we are mid-flight, we've got huge projects going. They're getting deployed flawlessly. We're getting them out there.

That's the number one goal. All those customers I mentioned to you, they're going to get out there. And what does that mean? That means we're going to start generating recurring revenue as soon as they're out and being used. We've got adoption. So I mentioned to you events, literally everybody we talk to, they have this problem and it's a burning problem. So we believe that we're going to do a lot of upsells with our existing customers. We're also going to do, as I mentioned, a standalone product.

But some of our customers, most of our customers, are still on our previous platform and it represents a great opportunity to enrich their experience. But also for upsells and add-ons. So things like agentic AI and other modules like the events and other things that they may not have today, those represent opportunities to increase revenue at the base. Then we're talking about major expansion. This is what I get really excited about. We have everything I just talked about.

We've got pipeline deals for enterprise, we've got add-ons, but we've got this new productivity tool at the employee level that will go up and down market. This is something that's going to apply, the product Beat, for enterprise customers. It's going to apply for mid market. It's going to help people do their jobs better and teams deliver which is going to really result in expansion for us. All of that combined by Q4, we're going to have a new cohort of revenue.

These are customers that we don't have today. They will be generating new recurring revenue and that's the goal here. All right, so to wrap things up for me, two Engine has just become one. I think that's really what Karim has been talking about today is that we are one company and we are way better for it. What we've learned in the enterprise we're now taking into the mid market. I mentioned to you that Engine Room already has customers today that are going to be great candidates for us.

We're going to use their tools to grow. Really the whole second part of the flywheel here is Engine Room. I think a really important message we also want to get through to everybody today is that we now have a common backbone, the Sky Agentic AI platform. Although servicing very different use cases and workflows, we are leveraging a low-cost model through bonding cortex that allow us to deliver maximum value to our customers. And so I'm going to turn it over to Adam here in just a second.

And this is great news for us as a company. It's such a lift because Adam already has scale, he's already got profitable growth and he's got a great product. So I'm excited to turn it over to Adam. Adam.

Adam Laurie, General Manager, Australia

Thanks, Chris, I appreciate that. And a big hello from Australia to everyone joining us from around the world. My name is Adam Laurie and I'm the co‑founder of Engine Room and now General Manager of CXApp's Australian operations. Speaking personally, Engine Room has been such a major part of my life for more than 13 years, so I'm really excited today to have the opportunity to introduce it to all CXApp shareholders and people on this call for the first time.

So the purpose of today: I want to bring you into the world of Engine Room, show you what we've built, why it works, give you an understanding of what CXApp has acquired, and, most importantly, to showcase the opportunity we have to build something collectively bigger together. Okay, so what's our purpose and what are we here to achieve as a business? We use data, digital, and AI effectively to enable smarter decisions and unlock greater growth potential for our clients.

That's what we do. We are revenue generators—profitable revenue generators—for our clients, and that's why they utilize what we provide. We're an established business and we have a very strong, proven track record. We're Australian‑based; we serve businesses across the Australasian marketplace. At this point in time, we have a 13‑year history, first established back in 2013. We're multi‑award‑winning across multiple facets including performance, innovation, and, most importantly for any business, our people.

What we do as a business: we're fully integrated growth marketing solutions designed to capture high‑intent demand and drive sustainable profitability—drive growth—for our clients. So we have three major divisions: we have our martech platform, which we'll go through shortly; fractional CMO; and then marketing as a service. What problem do we solve? And everything that we do always comes back to the genesis of what's our purpose and what problem are we solving for a business—so why do they want to spend with us?

A business these days has difficulty building a cost‑effective and scalable customer acquisition engine. And without customers, businesses obviously struggle with growth. They have difficulty measuring marketing ROI and demonstrating commercial impact. They have disconnected business, customer, and digital data that don't communicate and don't speak. And they have a failure to convert knowledge, data, and AI into a commercial advantage. And that's the problem that we solve.

We create growth marketing solutions that transform these strategies into measurable, scalable, and profitable outcomes. We build cost‑effective acquisition engines for our clients. We deliver clear, measurable ROI and commercial performance insights. We uniform data strategy and execution into a single source of truth. And we transform the knowledge and data into a sustained commercial and competitive advantage for them. The key is also what we do—and just as importantly, what we don't do.

So in the world of digital execution, there's two primary markets: there's awareness and there's intent. Awareness is when I am not aware or I'm not thinking about making a transaction or purchasing, but I might be induced by a commercial or something to think about it. We don't focus on that market; we focus on the intent market for our clients. Those are people who are actively already out there looking for a product and service that our client provides.

And we do that because that's the most profitable part of a market that the customer can access. They're high‑intent customers, they're not necessarily discount‑orientated, and they're high‑converting—and that's the market that we focus on for our customers. Also very measurable because it's towards the end of their journey. Why do customers choose us? We have proven results in delivering for over 13 years now. We have cutting‑edge technology that powers smarter, data‑driven decisions.

We have solutions that show substantial and measurable ROI. We have a fully integrated end‑to‑end solution profile, and we have unmatched in‑house expertise and support. So if we look at the martech platform that I touched on, which forms the foundation of everything that we do and is so critical to our success: our technology is designed to empower marketers, owners, and advisors to make data‑driven decisions that optimize growth and drive success.

We effectively have three main parts to our platform: we have Strategize, Analyze, and Optimize. And they're all meant to be interlinked to form a cohesive end‑to‑end solution. The purpose of Strategize: where are we going? What's the purpose of what we're doing here? So we have context, set the direction, define objectives. Analyze: how are we performing, measure and understand performance, maximize opportunities, identify risks. And then Optimize: what should we do next?

What are the actions that will drive improvement and gain me a commercial advantage. Those three parts are all important because ultimately, if you don't have all three parts, then you're going to be missing out on a key part of growth. Each module that we then build within the platform has a specific application within those sectors, and we have a whole host of different modules. We won't go into detail today, but they have very specific applications that we can call and draw on as required when we're engaging with our clients or the clients who are working through the platform.

So what's important to understand about how we utilize AI and how our technology gains a commercial advantage. LLMs understand language—we all know that. The key with the Engine Room platform is it teaches AI to understand the business. And that's the key difference. To do that, we really have to base our AI in a strong foundation. So what we do is we bring in core parts of data of a business: we bring in their business aspects—what their goals, objectives are, what their brand identity is.

We bring in their customers—understand the target market, understand how they're trying to engage with them, understand their commercial advantages. We bring in information in relation to the competitors—what the market's doing. And then we bring in, obviously, information in relation to their individual performance. That forms that framework for us. And then when we are driving through AI, it gives us the foundation to effectively produce stronger outcomes and stronger recommendations.

You'd know that when you're using a lot of tools out in the marketplace, the AI may be very generic in nature. They'll basically say these two businesses, because they're in the same sector, want the same things—but they really don't, because they're all individual businesses who have different needs, different competitors, different sectors, different profit margins, etc. And without that context, it's going to be lower quality insights and lower quality information.

Us grounding it in this real core knowledge database enables our customers to gain a significant commercial advantage. The other thing important is that when we're using AI, it's a continuous learning application. We store all this data, and every month that we're storing this data for our clients, we are improving the functionality and the output of what it can deliver. So it's a living, breathing learning tool that enables us to continuously move forward with our clients.

And that's a really important part—both the knowledge center and the time a