CXApp Q3 2026 Earnings Call Transcript

CXApp (NASDAQ:CXAI) reported third-quarter financial results on Wednesday. The transcript from the company’s third-quarter earnings call has been provided below.

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Summary

CXApp reported sequential revenue growth from $950,000 in Q1 to $3 million in Q3, with a corresponding reduction in cash EBITDA losses from $3 million to $1.7 million.

The company aims for positive operating cash flow by Q3 2027, driven by revenue expansion, AI-enabled efficiency, and disciplined cost management.

Recurring revenue grew significantly, comprising 93.68% of total Q3 revenue, providing a stable foundation for future growth and cross-selling opportunities.

CXApp is focusing on agentic AI execution capabilities across various workflows, with products like Beat targeting enhanced productivity for software teams.

The company has a conditional 90-day standstill agreement with Avondale Capital and a Share Purchase LEAP program to support shareholder value.

Expansion efforts include leveraging Engine Room’s mid-market distribution and launching new products like Beat, with a full commercial launch planned for January 2027.

CXApp is confident in achieving its financial targets without additional financing, supported by a current cash reserve of over $9 million.

Full Transcript

Khurram Sheikh (Founder, Chairman & CEO)

Expertise and growing intelligence capabilities. And we see a significant opportunity from aligning common technology and infrastructure, enterprise-grade security, cloud foundations, product delivery, and AI-enabled operations. Some of those operating synergies are still being realized. That work is ongoing. As you know, we closed the Engine Room deal the first week of June, so it’s been four to five months of intense work to bring it all together.

But we’re still working on the synergies and improving the operating systems together. But on top of this foundation, we are building agentic AI execution capabilities across workspace, AI Flow Beat, and specialized industry workflows. Our ambition is to help organizations move from information and insights to completed work and measurable outcomes. The combination creates three opportunities. Number one, a broader addressable market through mid-market distribution and vertical expansion. A capital-efficient model with improving operating leverage.

And finally, an agentic operating layer that helps large and small enterprises get work done across people, locations, data, and tools. We provide that context, we provide that intelligence that differentiates us from everybody else in the marketplace. We are all doing this because we are targeting positive operating cash flow in Q3 2027. That target depends on continued revenue expansion—what we’ve shown already the last two quarters—execution of our efficiency initiatives, which we’ve also demonstrated, and disciplined use of cash. But Q3 gives us encouraging evidence of progress. I would call this an inflection point for the company. Super proud of the results, super proud of the work that the team has done to get us here.

All right, let me talk about the financial results and double down into the numbers to get a better perspective of what has happened and what we are doing. So a sequential financial trend puts the change that has happened in perspective. Revenue, number one, progressed from approximately $950,000 in Q1 to $1.69 million in Q2 to approximately $3 million in Q3. Again, this step up includes the timing of our Engine Room acquisition and the full-quarter benefit in Q3.

So it’s a great achievement. As you can see, the trend line is very encouraging and we believe that this is the trend we’re going to continue on. Cash EBITDA losses moved in the opposite direction: approximately $3 million in Q1, $2.7 million in Q2, and $1.7 million in Q3. This is the combination we want investors to focus on—a larger revenue base accompanied by a significantly lower cash EBITDA loss. Our loss per share also improved quarter over quarter on the share basis shown in the deck.

While quarterly results will not necessarily move in a straight line, we believe this trajectory demonstrates the operating leverage we are working to build. Our objective is straightforward: grow revenue faster than the cost required to support it. We are using AI-enabled workflows, a more efficient delivery model, and tighter cost discipline to pursue that goal. Let me delve deeper on the revenue side to talk a little bit more about the quality of the revenue. In Q2, approximately $1.56 million of revenue was recurring, representing 91.91% of total revenue. In Q3, recurring revenue grew to approximately $2.815 million, or 93.68% of the total. That represents about 81% sequential growth in recurring revenue and an improvement of 177 basis points in the recurring mix. For us, the point is not just that recurring revenue is high; it is that recurring customer relationships give us a foundation from which to expand product adoption, introduce more specialized AI workflows, and pursue cross-selling opportunities. No recurring model is immune to renewals, budget cycles, or execution risk, but we believe this revenue composition gives CXApp greater visibility as we scale and helps create the potential for stronger operating leverage over time.

So one of the things as we think about moving forward is, with this great revenue, with this high-quality revenue growth, when are we going to be profitable? So let me walk you through now what I believe is one of the most important parts of our story—our path to profitability. As you can see, we have demonstrated meaningful progress in the last two quarters. What gives us confidence is that we now have two very clear drivers to continue this trajectory.

The first is revenue growth. We are targeting approximately 4 million in quality revenue by Q3 2027, representing about 33% growth from our 20 Q3 2026 level. We believe this growth can come from expanding our existing enterprise relationships, cross-selling our AI solutions, and leveraging Engine Room’s mid-market distribution capabilities. And that’s something—as you’ve seen the last couple of quarters—we’ve demonstrated that growth. The second driver is AI-enabled operating efficiency.

We are targeting more than 700,000 in additional quality cost efficiencies through AI automation, shared technology infrastructure, streamlined delivery, and greater operating discipline. We’ve been working closely with our partners at Google in streamlining our cost structure with GCP, as well as all the other services and software that are needed to allow our solutions to scale. And I’m very happy to report that we’ve found more efficiencies in that partnership with them and more to come on that in the coming quarters.

So when you combine all of this stuff, this is where our business model becomes particularly compelling. We are building a capital-efficient AI software business where revenue can scale without requiring a proportional increase in operating costs. As you grow revenue and improve margins while reducing our cost structure, we believe we can generate increasing operating leverage. Our target is to achieve positive cash EBITDA and positive operating cash flow by Q3 2027.

We have sufficient cash reserves today and do not need additional financing to reach this target. Our focus, again, is not simply on growing a larger company; it is also building a scalable, financially sustainable, and ultimately profitable AI software business. Let me talk about capital structure. We recognize the importance of protecting shareholder value while maintaining enough flexibility to execute our business plan. In October this year we announced a conditional 90-day standstill agreement with Avondale Capital, which is one of our investors, designed to provide greater predictability around specified equity issuance activity during the standstill period. It is important to be clear that the arraignment is conditional and temporary, and underlying financing obligations remain outstanding.

Our board also authorized the Share Purchase LEAP program up to $1 million. This is an authorization, not a commitment to repurchase a fixed number of shares. Any purchases will be evaluated against liquidity, operating needs, market conditions, and applicable restrictions. We have been in a quiet period since we announced this authorization. After announcing our results and our 10-Q is filed, our quiet period will be over. This cooperation reflects our confidence in the long-term prospects of CXAI and our belief in the business we are building.

Our objective is straightforward: grow the business, improve operating efficiency, exercise discipline in capital allocation, and create sustainable long-term shareholder value. We believe these actions, combined with our improving operating performance, reinforce our commitment to that objective. Let me now focus on the market opportunity ahead of us. So this is one of the most exciting aspects of our business—the significant market opportunity emerging around agentic AI and why CXApp is well positioned to participate in it. We are witnessing a fundamental shift in how businesses adopt artificial intelligence. AI is rapidly becoming part of everyday business operations, but there’s still a significant gap between using AI and actually integrating AI into workflows to deliver measurable business outcomes.

For example, the research highlighted on the slide shows that 76% of small businesses are already using AI, yet only 14% have fully integrated it into their core operations. At the enterprise level, adoption of AI agents is accelerating, and increasingly organizations are moving beyond experimentation toward real deployment. This is exactly where we believe the next major opportunity in AI lies—not simply in building larger models or more computing infrastructure, but in helping businesses turn AI capabilities into real productivity, better decisions, revenue growth, and measurable returns.

And this is where CXApp is uniquely positioned. We have three complementary growth opportunities. First, our enterprise workplace business gives us an established foundation of blue-chip customers where we can expand our AI-powered workplace intelligence and automation capabilities. Second, Engine Room extends our reach into the mid-market, bringing established customer relationships, growth intelligence, and distribution capabilities across industry verticals.

And thirdly, Sky Beat—I’m super excited about it, it’s getting launched this week—represents our expansion into agentic workflow execution, initially targeting software teams and helping turn AI intelligence into real work getting done. What makes this especially compelling is the opportunity to bring these capabilities together through a common technology foundation. We believe this creates a powerful growth flywheel—more customers, more specialized solutions, greater cross-selling opportunities, and stronger operating leverage as we scale.

Importantly, ours is a capital-efficient, software-led strategy. We are focused on delivering the business outcomes that make AI infrastructure valuable, rather than building that infrastructure ourselves. Our ambition is to establish CXApp as a category leader in the emerging market for outcome-driven, vertical agentic AI, and we’re on a great path towards that. Let me talk about Beat, which is a product that we are launching this month in beta users right now, and this is a good example of how we think about agentic AI execution. Because everybody is talking about agentic AI—agentic AI is really tailored toward the modern enterprise with really great context which provides really reliable outcomes, and I think that’s the true differentiation. Our first use case that we built is focused on the software developer or project manager in an engineering organization.

So instead of requiring a team member to start every task from scratch, Beat is designed to prepare the next step on work already waiting for them: code reviews, tickets, follow-ups, and requests. The user remains in control—nothing is posted, sent, or changed without a person reviewing and approving the action. This is important because enterprises want the productivity benefit of AI while retaining trust and oversight. Beat is designed to work within tools teams already use, including collaboration and development workflows.

So if you use Jira or GitHub or Slack or Google Workspace or other tools in your enterprise and your work is getting queued up, Beat helps streamline and automate those workflows, making it massively efficient to get stuff done. We first tried it with our own team. They proved it to themselves that they’re super efficient now in getting stuff done faster and better. And now we’re sharing with a limited set of beta users in California and other parts where we have networks.

And then we’re planning to launch this into the commercial space in January 2027. So we’re doing a lot of testing, we’re getting a lot of good customer feedback. We believe that products like Beat can extend our role from providing workplace technology intelligence to helping teams complete real work. And that is where we see meaningful long-term opportunity. And as we head into Q4, it’s already a period of very active customer and industry engagement. During October alone, our team participated in six industry events across New York, San Francisco, Los Angeles, and Chicago. These included SF Tech Week, WorkTech, CoreNet Global, and customer-focused meetings with partners and enterprise prospects. The conversations reinforce several themes: buyers want agentic AI that moves beyond pilots into production—we have that.

They want workplace data tied to real estate and operating decisions—we have that. They want less friction for employees and measurable time saves—we have that. And they increasingly prefer an integrated operating layer over more fragmented point solutions—we have that. That is the reason why you saw those three Fortune 500 deals in the last quarters that we won. These are the large who don’t want point solutions; they want solutions that integrate and provide viable outcomes.

That’s why CXAI. And, as we said, growth with Engine Room building repeatable solutions that are going to go after industry verticals and create those solutions. Our last pit stop for this month: we have IFMA facilities event in Anaheim where we are hosting a thought leadership seminar. All of these engagements create opportunities to strengthen relationships, demonstrate our platform, and qualify, and we’ve got a really good level to some positives in the coming quarters.

Here, side of the ocean, Engine Room is creating a complementary commercial engine. In Australia and in the trades-oriented mid-market, the team has been running a customer education webinar series focused on practical business outcomes, including how completed jobs can become marketing assets and how businesses can measure return from their marketing investments. There’s a big event coming up in November—next week, actually. Engine Room is participating in Symposium in Sydney, including a sponsored product demonstration, and next after that, The Business Show in Australia.

These are relevant environments to demonstrate the value of growth intelligence and vertical agency solutions to prospective customers. For CXApp, this is about more than a second geographic market. It is a channel and a vertical market foundation into which we can introduce specialized AI capabilities over time. That is an important part of the growth cycle we are working to create. I am looking forward to the progress and success there. We are tailoring the solutions to certain verticals—our must-have for all solutions and offerings—and we’re looking forward in the coming weeks.

I want to start closing by talking about our overall platform—not only the technology platform, the engine, but now we support the type of one that becomes—even today—supports deployments across more than cities with more than 6,5 continents, own over 1 million users as shown in the chart. Our headquarters is in the San Francisco Bay Area with delivery and operating capabilities that include Toronto, the Philippines, and now Engine Room operations in Melbourne.

We have approximately 60 and a growing portfolio of proprietary intellectual property, including agentic AI. As you know, we filed a lot of patents around that, and that is going through the disclosure process as we speak. At the same time, enterprise trust, security, and responsible delivery remain central to our approach. That is why enterprises like us, that is why they work with us, and that is why we’re really destined to be the modern enterprise agentic AI platform.

And we believe this combination—enterprise experience, integrated global delivery, and a more focused team—gives us a practical foundation to scale software and services without building capital-intensive AI infrastructure ourselves. Let me close our prepared remarks with why we believe this is an important moment for CXApp. It’s an inflection. First, the operating inflection is becoming visible. Q3 increased 77% sequentially to approximately 3, while activity loss decreased more than $1 million, or 37%. We are showing higher revenue and lower losses at the same time. Second, we are building on a capital-efficient, software-led model. More than 94% of our revenue is recurring.

We tend to leverage existing cloud and AI infrastructure instead of investing in the kind of massive compute buildout required elsewhere in the economy. Thirdly, we believe we have the ingredients for a growth flywheel. Enterprise renewals and the multiyear financial services demonstrate demand and market. Engine Room expands our mid-market distribution and vertical relationships. Specialized AI workflows create opportunity to deepen those relationships and improve unit economics as the business scales.

And fourth, we have clear operating objectives to reach positive operating cash flow in the third quarter of 2027 through revenue expansion, AI-enabled efficiency, and disciplined execution. We have the products, the team, and the financial runway to achieve that target. Our conviction is stronger because it rests on operating progress. We can see stronger scale, a more recurring revenue base, improving efficiency, and an expanded commercial platform.

Q2 was about establishing scale. Q3 was about demonstrating operating progress. Q4 is about execution, and 2027 is about converting that progress into more sustainable financial performance. We believe CXApp has the opportunity to build a category leader in outcome-driven vertical agentic AI. We are focused on earning that position one customer outcome at a time. Thank you to our customers, our team, and our shareholders for their continued support.

With that, I welcome questions from the audience. I know we’ve got a couple things coming online here. Okay, great. Let me see the top here. When will the buyback shares commence? Good question. As I mentioned, we have got the board authorization. We have been going through a quiet period, and as soon as we’re done with filing the 10-Q and our earnings call, which is today, we will be evaluating those options, and we will be in the clear to go do those purchases if we decide to do that.

Next question is, what are the key assumptions behind your target of achieving positive operating cash flow by Q3 2027? Can the company reach this milestone without additional equity financing or shareholder dilution? So, as we speak today, we have north of $9 million in the bank. We have enough cash runway for up to six quarters. And given the plan that I’ve shared with you, I think we can achieve this goal of getting to be cash flow positive by Q3 2027 without any additional financing or shareholder dilution.

From that perspective, no additional financing is needed. At the same time, we always look at opportunities for growth, and we will continue to do that, but from an organic growth—we don’t need any more cash infusion right now. All right. I think those are the questions I see. Yep. All right. Well, thank you for joining the call. Really appreciate the interest in CXAI. We are looking forward to our Q4 results and numbers coming forward. We’re super excited about the opportunity. We made great progress in Q3. Thank you for being a shareholder with CXAI. We look forward to sharing the updated results for us for Q4 in the coming year, and then we may be doing some demo announcements as well as showing the products and doing part showcases in the coming weeks and months.

We’ll keep you posted on LinkedIn as well as other media platforms—X and others—and we look forward to sharing our future progress. Thank you everybody.

OPERATOR

This concludes today’s call. The replay will be available on CXAI’s website soon. Thank you for your participation. You may now disconnect.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company’s SEC filings and official press releases. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.