CXApp Inc.

Good afternoon, everyone, and thank you for joining us for our Q2 Earnings Call Investor Forum. I want to start a little differently today. Q2 fundamentally changed the trajectory of Sky. For the last several years, we have been building, improving our technology inside some of the world's most demanding enterprises. We built trust, we built proprietary workplace intelligence, and we built the foundation of a GenTech AI platform. Now we're entering the scaling phase. And this is where I want to do things a little different this quarter. But I want to also tell you as investors, the three things I want to take out of today's meeting. Number one, Engine Room transforms our scale and gives us something strategically critical. Mid-market distribution. Secondly, Sky 2.0 has moved from strategy into production. And third, we now see a much clearer operating model for translating growth into operating leverage and ultimately profitable growth. To do that, I have a very extensive agenda for today. I'm excited to have our leadership team join us. and I'm Khurram Sheikh, I'm the Chairman and CEO of CXAI. And with me today, I'll have Chris Wiegand, who's our General Manager of North America, talking about our enterprise business and the scale we're getting there. Our newest leader, Adam Laurie, who's the General Manager of Australia, previously the Managing Director of Engine Room, will be with us as well. and my new partner, Melissa Podruzny, who stepped up to be the interim CFO after the transaction. She was leading the finance function at Engine Room. So, Melissa, welcome. And last but not least, we'll have an industry expert guest, Zoe Chen. Zoe is very well respected in the industry and we love to hear her views on the human experience in AI. So with that, let me show you the agenda for today. We're going to first have the Q2 earnings call. Melissa and I will take that and we'll run you through the financials. We'll run you through what were the wins, what happened this quarter, what is our outlook for the quarter and for the future. Then we'll adjourn around 5.30. We'll take an intermission. We won't actually adjourn, but we'll just take a little break if we end early or we'll transition directly into our investor forum. And the investor forum will really focus on, number one, from my perspective, the vision and what do I think about Sky 2.0 and the agenda enterprise? What's the market? What's the opportunity? Where we're at and where we're going? Then I'm going to hand over to Chris to talk about North America, the customers, the product, and the growth. I'm going to go more detail on the product side there. And then Adam will talk about the Australasian opportunity that he sees, the mid-market scale, what he's been winning and continues to win as we speak this quarter, and what his future path is. and then we'll round up with Fireside Chat with Zoe, which hopefully you're going to enjoy her perspective and we'll 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, Sky 2.0 is real, is available. And third, we're now seeing a clear operating model for transcending growth into operating leverage and ultimately profitable growth. And we at Sky 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 is, what are the forward-looking statements, make sure you read that. 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 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 Sky 2.0 is about making that context increasingly intelligent and actionable. So we're headquartered in 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 as New Zealand. We're excited to have them on board. And this gives us the global coverage. You know, 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. So before we get to the numbers, let me just give you context of where we're being and where we're going, right? So Sky 1.0 established the enterprise foundation. It showed us that we have great software, workplace software that has people in 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 Sky 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. And 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. and any of those experiences is the same sky agenda platform. The strategy for me here is very straightforward. Proven enterprise technology, mid-market distribution, prioritized AI and scale recurring revenue. We're gonna run that flywheel cycle because we've got now an agenda 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 CXCI or Sky. As you can see on, sorry, as you can see on our highlights for the quarter, the six main highlights, but the biggest one is the engine room transaction. It is transformative. I'm gonna talk more about it in detail, but it really did change the revenue trajectory for the company. and more importantly, quarter of a 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 Sky. In enterprise software, renewals matter enormously because they validate the product after the initial sale. customers that continue to choose Sky. We also added a significant new win in the financial services sector. This is a three year multi-million 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 the beginning of this quarter. And it's a really, really, important win for the team. And it's won for two reasons. First, it demonstrates continued demand from highly sophisticated, regulated customers. Secondly, these are the types of customers with Sky 2.0 can expand over time across additional modules, users and AI capabilities. The other big achievement for this quarter is we moved Sky 2.0 into deployment. And that's a big win for us. And the progression is win, deploy, adopt, expand exactly what we want to replicate. And with 2.0, really what we get is an agentic air platform that Allows a user to navigate their workplace, navigate their work, and navigate their experiences across the whole enterprise. And that's very exciting. And our customers, the reason why they're selecting us is because we have Sky 2.0. That's the wins we got. That's the renewals we got are all because of Sky 2.0. And as you know, during the quarter, we complete 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 annuals 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 Sky 2.0 and our skill 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 video. 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 Sky. 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. Sky historically sold into large enterprises through an enterprise sales process. Engine Room gives a structured relationship with dozens of mid-market businesses. That gives us a much faster proving ground and future distribution channel for Sky AI products. Number two, business context. As I said earlier, Sky already understands workplace and employee context, and that's one of our moats in differentiation. Engine Room brings customer acquisition, performance, marketing, and growth data. That allows Sky 2.0 to expand from understanding how people work to understanding how businesses grow. Number three, cross-sell. We can introduce Sky capabilities into Engine Room's customer base. And we can introduce Engine Room's growth capabilities into Sky's enterprise products. So the combined company has an enterprise anchor, a mid-market growth engine, and a shared agentic AI platform. And the combination moves Sky to more than $12 million of analyzed 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 digital growth. It gives us that flexibility in terms of having the ability to innovate in a very interesting market, Australia. I'll talk more about that in the investor forum. We will go more deeper into it. But I just want to share the 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. 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.

Thanks, Khurram.

So the quarter-over-quarter comparisons demonstrate that steps 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 Khurram previously mentioned, a 79% sequential growth. Our annual recurring revenue has increased from $3.6 million to $11.5 million.