[Management View]
CXApp reported significant progress in Q2 2025, achieving meaningful ARR expansion through renewals with two Fortune 1,000 clients, including its largest-ever renewal with a Fortune 50 company. Subscription revenue now constitutes 96% of total revenue, reflecting a successful transition to a higher-margin recurring revenue model. The company emphasized its focus on AI-driven workplace solutions, including the Sky platform, which integrates spatial intelligence, experiential analytics, and Agenda AI for enhanced employee experiences.

[Outlook]
Management provided a positive outlook, highlighting plans to scale deployments globally, expand strategic partnerships, and continue investing in R&D to drive innovation. The company aims to deepen penetration in the employee experience market, leveraging its AI capabilities and partnerships with Google Cloud, design-build firms, and real estate companies.

[Financial Performance]
CXApp reported steady revenue of $1.22 million for Q2 2025, consistent with the prior quarter despite macroeconomic headwinds. Gross margin improved to 86% from 80% YoY, driven by the subscription revenue mix. EPS improved to negative $0.16 per share, showing progress both QoQ and YoY. Operating expenses increased due to R&D investments, while G&A costs decreased QoQ.

[Q&A Highlights]

Question 1: How is Sky differentiating itself from larger AI competitors in the enterprise engagement space? What specific areas are driving your competitive advantage?
Answer: Sky delivers enterprise-scale AI solutions validated in live workplace environments, enabling advanced capabilities like AgenTick AI-based behavior analytics and intelligent employee experience orchestration. A key differentiator is the continuous feedback loop from enterprise clients, ensuring innovations directly address market needs. Localization, contextual awareness, and integration of multiple functionalities into a unified experience further set Sky apart. Additionally, its Bay Area location allows for agility in responding to evolving needs, while larger competitors often face slower adaptation cycles.

Question 2: Are there any strategic partnerships or integrations in the pipeline that could meaningfully accelerate market penetration over the next twelve months?
Answer: CXApp is actively partnering with design-build firms to integrate solutions at the planning stage of workplace projects, business process automation providers to embed capabilities into workflows, and global real estate firms for active referrals. The company also collaborates with technology ecosystem partners and cloud providers like Google Cloud, leveraging Gemini 2.5 for advanced automation and analytics. Existing client references remain a key driver of market penetration, supported by relationships with senior executives across HR, IT, and real estate functions.

[Sentiment Analysis]
Management conveyed optimism and confidence in the company’s strategic direction, emphasizing innovation and client collaboration. Analysts appeared engaged, focusing on differentiation and growth opportunities. The tone was constructive, with questions centered on competitive advantages and strategic partnerships.

[Quarterly Comparison]
| Metric | Q2 2025 | Q1 2025 | Q2 2024 |
|-------------------------|-----------------|-----------------|-----------------|
| Revenue | $1.22M | $1.22M | N/A |
| Gross Margin | 86% | 88% | 80% |
| EPS | -$0.16 | -$0.18 | N/A |
| Subscription Revenue | 96% of total | N/A | 87% of total |

[Risks and Concerns]
1. Macroeconomic headwinds could impact enterprise spending and ARR growth.
2. Increased operating expenses, particularly in R&D, may pressure profitability in the short term.
3. Dependence on strategic partnerships, such as Google Cloud, introduces risks related to external collaboration.
4. Competitive pressures from larger AI players and emerging startups in the employee experience market.

[Final Takeaway]
CXApp demonstrated strong execution in Q2 2025, achieving ARR expansion and advancing its transition to a subscription-based revenue model. The company’s focus on AI-driven workplace solutions, supported by strategic partnerships and client collaboration, positions it as a leader in the employee experience market. While macroeconomic challenges and competitive pressures remain, CXApp’s innovative product offerings and disciplined financial management provide a solid foundation for future growth. Investors should monitor the company’s ability to scale deployments and maintain its competitive edge in a rapidly evolving market.