CXApp Inc. Class A Common Stock 2026 Q2 Earnings Call

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 and 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 agentic AI platform. Now we're entering this scaling phase. This is where I want to do things a little different this quarter. I want to also tell you, as investors, the three things I want to take out of today's meeting. Number one, EngineRoom 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. I'm Khuram Sheikh, I'm the Chairman, CEO of CXAI. 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 EngineRoom, will be with us as well. My new partner, Melissa Podruzny, who stepped up to be the Interim CFO after the transaction. She was leading the finance function at EngineRoom. Melissa, welcome. Last but not least, we'll have an industry expert guest, Zoe Chen.

Zoe's very well respected in the industry and would love to hear her views on the human experience in AI. 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. 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. 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 agentic enterprise, what's the market, what's the opportunity, where we're at, and where we're going.

Then I'm going over to Chris to talk about North America, the customers, the product, and the growth, and then go in more detail on the product side there. 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. Then we'll round up with a fireside chat with Zoe, which I'm hoping you're going to enjoy her perspective. We'll close. 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. I appreciate that. With that, let's get going with the business. Let's talk about our Q2 earnings.

As I said earlier, the three themes, number one, EngineRoom is transformative. Number two, SKY 2.0 is real and is available. Third, we are now seeing a clear operating model for translating growth into operating leverage and ultimately profitable growth. We at SKY are building the agentic AI operating layer. 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 that, the safe harbor. Please review the safe harbor and 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, so you can read that when you get that. Let me talk about the company we have today. 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 are necessary. This matters because our AI strategy starts from something valuable, enterprise trust, and real operating context. Context is very important. We are not 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. SKY 2.0 is about making that context increasingly intelligent and actionable. We are headquartered in San Francisco Bay Area. As you know, we have teams in Toronto and Manila. Now we are excited to welcome the Australian team, which is headquartered out of Melbourne, but they are all across Australia as well as New Zealand.

We are excited to have them on board, and this gives us the global coverage. We have around 70 team members now globally, and they are all working hard making AI successful in the enterprise market that we are in. Before we get to the numbers, let me just give you context of where we have been and where we are going. SKY 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. We have high trust, high complexity deployments. This remains an important part of the 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 has been amazing there. SKY 2.0 really expands that opportunity.

We are moving primarily from understanding places, which is really the Flow product, which is where and how people work, to person, which is what we are calling Beat, what an individual and team need to accomplish, and what should happen next in your life as a worker. Now we are moving with EngineRoom into business, how companies acquire customers, convert demand, and grow. That business context is significantly strengthened by EngineRoom, as you know. Underneath those experiences is the same SKY agentic platform. The strategy for me here is very straightforward. Proven enterprise technology, mid-market distribution, prioritized AI, and scale recurring revenue. We are going to run that flywheel cycle because we have got now an agentic platform that we can leverage across multiple verticals. More importantly, we now have a new distribution mechanism through EngineRoom. This is the transformation I am talking about.

This is what we're executing on, and we're super excited about this opportunity. Let me go into the business for this quarter and what happened this quarter. This is a pretty exciting time for CXAI or SKY. As you can see on our highlights for the quarter, there's six main highlights. But the biggest one is the EngineRoom 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. More importantly, quarter-over-quarter increase of approximately 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 have continued to choose SKY. 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. They're beginning this quarter, and it's a 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 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.

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, 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. As you know, during the quarter, we completed the EngineRoom transaction. For Q2, we only have one month, because it was the month of June, that EngineRoom 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. It's been really good. All of these six factors combined really have been super successful for the company.

I want to congratulate the team on a job well done. And it builds the momentum, it strengthens the foundation for SKY 2.0 and our scale growth moving forward. Let me tell you a little bit about EngineRoom, and what better than just to roll a video? Operator, if you can roll the video. All right. Cool. That's pretty exciting. When I talk about EngineRoom, I talk about it as being transformative. 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. Let me tell you why this is transformative. EngineRoom does not simply add revenue.

It changes the starting point for SKY. EngineRoom 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. Strategically, three things matter even more for me. Number one, distribution. SKY historically sold into large enterprises through an enterprise sales process. EngineRoom 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 is one of our moats in differentiation. EngineRoom brings customer acquisition, performance, marketing, and growth data. That allows CXAI 2.0 to expand from understanding how people work to understanding how businesses grow. Number three, cross-sell. We can introduce SKY capabilities into EngineRoom's customer base, and we can introduce EngineRoom's growth capabilities into SKY enterprise products.

So the combined company has an enterprise anchor, a mid-market growth engine, and a shared agentic AI platform. 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. I am super excited about this. I think this is the right move for the company. It positions us ready for the growth engine that we have been talking about, the double-digit growth. It gives us that flexibility in terms of having the ability to innovate in a very interesting market, Australia. I will talk more about that in the investor forum.