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CXAI
Earnings call · Jun 2026 (Q2 FY26)

CXApp Q2 FY26 earnings call CXAI

Aug 13, 2026 Source

Executive summary

CXApp Inc. Q2 FY26 — EngineRoom Acquisition Transforms Revenue Scale and Operating Model

CXApp's Q2 FY26 results highlight a transformative period, primarily driven by the EngineRoom acquisition which significantly scaled annualized revenue to over $12 million and established a mid-market distribution engine. The company is focused on leveraging this new scale to achieve operating leverage and profitable growth, with a clear path towards breakeven by the second half of 2027. CXAI is transitioning from a workplace software company to a scaled Agentic AI platform, with new products like Sky 2.0 and Events module now in production.

Highlights

5

  • Revenue increased 79% sequentially to $1.7 million in Q2 FY26.

  • Annual Recurring Revenue (ARR) increased 156% year-over-year to $11.5 million.

  • Net Revenue Retention (NRR) improved to 99.3%, up over 5 percentage points year-over-year.

  • EngineRoom acquisition immediately added over $8 million in revenue and $1.6 million in adjusted EBITDA, establishing a mid-market distribution channel.

  • Secured a new 3-year, multi-million dollar recurring revenue deal in financial services and renewed two major Fortune 500 customers.

Concerns

3

  • Cash EBITDA remained negative at approximately $2.68 million in Q2, despite revenue growth, as the company invests in integration and development.

  • EPS was negative $0.10 in Q2, compared to negative $0.09 in Q1 and negative $0.16 in Q2 FY25.

  • Operating expenses increased 5.6% quarter-over-quarter, driven by the EngineRoom acquisition, though revenue grew significantly faster.

Guidance & targets

CategoryTargetConfidence
Quarterly Revenue
$3 million
high materiality
High
Annualized Revenue Scale
$12 million
high materiality
High
Breakeven Point
Breakeven
high materiality
High
Recurring Revenue Percentage
More than 95%
medium materiality
Medium
Gross Margin
Above 70%
medium materiality
Medium
Software Mix
Above 95%
medium materiality
Medium
Revenue per Customer
Increasing
medium materiality
Medium
Revenue Growth
Double-digit growth
high materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
North America Enterprise
This segment has proven the company's model and technology in complex, regulated enterprise environments. New customer wins and renewals are expected to drive significant revenue uplift not yet fully reflected.
New customer wins: Top financial institution (global, dozens of sites, thousands of users)New customer wins: Global asset manager (5-figure users, starting end of year)New customer wins: Leading U.S. insurer (few thousand users, going live September)Renewals: Largest financial services customerRenewals & Expansion: Largest media and entertainment company
—1/3 uplift (expected from new customers)——
Australasia / EngineRoom
EngineRoom provides immediate scale, a mid-market distribution channel, and a profitable operating capability. It focuses on high-intent demand and measurable ROI for clients across diversified industry sectors. The acquisition provides a launchpad for Sky's AI products in Australia.
Customer relationships: >50 mid-market customersAverage client yield: ~$200,000 per annumRecurring revenue profile: 93%Average client tenure: >4 years
>$8 million (annualized)Consistent profitable growth (over 5 years)—~$1.6 million (Adjusted EBITDA)

Orderbook & backlog

Recurring Revenue Deal Multi-million dollar Q2 FY26

3-year term, new deal in financial services sector.

Product announcements

ProductTypeDetails
Sky 2.0milestone
Events modulelaunch
BEATroadmap

Deals & partnerships

EngineRoom Acquisition of a growth marketing solutions business based in Australia, providing mid-market distribution, customer relationships, and profitable operating capability. 65% cash, rest in 2-year earn-out

The EngineRoom acquisition was completed, with one month of its revenue included in Q2. The remaining payment is tied to a 2-year earn-out based on revenue growth. It brings strategic advantages in distribution, business context, and cross-selling opportunities.

Top financial institution New 3-year recurring revenue deal for Sky 2.0 deployment. Multi-million dollar 3 years

A significant new win in the financial services sector, secured after a competitive RFP. This 3-year multi-million dollar recurring revenue deal is scaling with CXAI starting in Q3. It involves thousands of users across dozens of global sites.

Global asset manager New customer contract for Sky 2.0 deployment.

A new global asset manager customer is closing their deal and will start implementation at the end of the year, involving a 5-figure number of users.

Leading U.S. insurer New customer contract for Sky 2.0 deployment in a new headquarters.

This customer, with a few thousand users, represents a bridge to the mid-market, as the product is configured rather than custom-coded. They are in deployment and testing for a September go-live in their new headquarters.

Largest financial services customer Renewal of existing relationship.

One of the largest financial services customers renewed their relationship, demonstrating continued product validation.

Largest media and entertainment company Renewal and expansion of existing relationship.

The largest media and entertainment company renewed and expanded their relationship, indicating strong product performance and customer satisfaction.

Risks & headwinds

Continued Investment in Integration and Development Short-term (Q3 FY26 and beyond)

Cash EBITDA improved modestly from negative $3 million in Q1 to negative $2.68 million in Q2, despite 79% sequential revenue growth.

Mitigation:Focus on growing revenue faster than expenses through shared functions, tighter operating discipline, productized implementation, increasing automation, and higher recurring software contribution.

Operating Expenses Growth Relative to Revenue Ongoing

Total operating expenses increased approximately $275,000 (5.6%) quarter-over-quarter, compared to 79% sequential revenue growth.

Mitigation:Implementing operating synergies from the EngineRoom integration, aiming for disciplined expense growth and operating leverage to ensure revenue grows faster than expenses.

Path to Breakeven Until H2 2027

EPS was approximately negative $0.10 in Q2, compared with negative $0.09 in Q1. Breakeven is targeted for H2 2027.

Mitigation:Executing on organic growth, cross-selling, increasing software monetization, prioritizing mid-market motion, and achieving operating leverage to reach profitable growth.

What to watch in Q3 FY26

Full EngineRoom Revenue Impact

Q3 FY26
Current 1 month of EngineRoom revenue included in Q2 FY26
Target Full 3-month combined revenue impact

Why it matters

This will demonstrate the full scale and immediate financial benefits of the EngineRoom acquisition on the company's top line.

Yes. So we've actually already captured 1 month of combined revenues to that being the month of June. We will be able to demonstrate next quarter, so Q3, the full combined impact over the 3 months of that acquisition and the combined revenue.

Q&A highlights

How much cash does the company have, and what are the liabilities after the EngineRoom acquisition?

Cash as of June 30, 2026, was $11.7 million. The EngineRoom acquisition costs have been largely paid, with remaining funds tied to a 2-year earn-out model based on revenue growth, with no other liabilities.

“So our cash as of 30 June 2026 is $11.7 million. Most importantly, the acquisition costs have been -- acquisition costs related to EngineRoom have been largely paid. And any subsequent funds owing on that -- on the acquisition of EngineRoom room are tied to an earnout model.”

asked by Unknown Analyst · answered by Melissa Podruzny

2 min read 6 chapters

Detailed narrative

EngineRoom Acquisition Impact

The EngineRoom acquisition is described as transformative, immediately adding over $8 million in annualized revenue, approximately $1.6 million in adjusted EBITDA, and more than 50 mid-market customer relationships. Strategically, it provides a faster distribution channel for AI products, expands business context from workplace to customer acquisition and growth, and enables cross-selling opportunities between Sky's enterprise and EngineRoom's mid-market bases. The combined company now has an annualized revenue scale of over $12 million.

Sky 2.0 and Agentic AI Platform

Sky 2.0 is now in production, moving from vision to commercial execution. It's an Agentic AI operating layer designed to understand context, make recommendations, coordinate workflows, and complete outcomes, moving beyond traditional dashboards. The platform integrates workplace (Flow), personal/team execution (BEAT), and business growth (EngineRoom) contexts, leveraging a shared Agentic platform for sensing, prioritizing, acting, verifying, and learning. The company emphasizes its focus on outcomes rather than just insights.

Market Opportunity and Strategy

CXAI is participating in three large categories: digital workplace platforms, enterprise Agentic AI, and marketing automation/growth intelligence, with a combined market opportunity described as 75x growth by 2030. The strategy focuses on pushing Sky as an Agentic operating layer, using EngineRoom for immediate scale and mid-market distribution, and prioritizing repeatable vertical AI solutions. The company believes this intersection matters because enterprises buy AI to make employees productive, reduce costs, and grow revenue.

Product Development and Innovation

The company is building a technology architecture with 'Bond' as its Agentic engine for multimodal orchestration and 'Cortex' for intelligence, context, and analytics. This architecture is designed for leverage, supporting various agents (workplace, growth, analytics, automation) from a single platform, enabling efficient scaling to the mid-market. The new Events module, launching in September, addresses a major problem in managing workplace events by integrating various event-related tasks into one workflow. The BEAT product, a personal productivity tool, is also slated for Q4.

Path to Profitable Growth

The path to breakeven by H2 2027 involves pulling four levers: organic growth in both Sky enterprise and EngineRoom's customer base; cross-selling Sky modules into EngineRoom's base and vice-versa; increasing software monetization (Flow, Analytics, Events, BEAT); and prioritizing mid-market motion with standardized products and lower cost-to-serve. The company also aims for operating leverage through shared infrastructure, tighter operating discipline, and increased automation, targeting double-digit revenue growth, over 95% recurring revenue, over 70% gross margin, and over 95% software mix.

Competitive Moat

CXAI's competitive moat is built on its proven technology in complex enterprise environments, proprietary IP around context and spatial awareness, cost-effective LLM utilization, and a focus on delivering Agentic solutions that perform actions rather than just providing information. The company highlights its ability to deploy in tough, regulated environments and its unique understanding of corporate workspace. The user experience and viral adoption within organizations are also key differentiators, with products designed for rapid deployment and value realization.

AI-generated summary of the company's earnings call. Not investment advice.