CXAI

Greetings. Welcome to the CXAI first quarter 2026 earnings call. I will now turn the conference over to your host, Khurram Sheikh, Chairman and CEO. You may begin.

Thank you, John. Good afternoon, everyone, and thank you for joining CXAI's Q1 2026 earnings call. I'm also joined on the call by our CFO, Joy Mbanugo. This quarter represents an important step forward for SKY or CXAI. We're not simply building workplace software. We are building an AI-driven orchestration layer for the modern enterprise. The enterprise workplace is changing quickly. Companies are looking for platforms that can connect employees, spaces, assets, services, workflows, and data into one intelligent system. This is exactly where SKY is positioned. Our message today is clear. Enterprise demand is increasing, our product roadmap is accelerating, our monetization model is expanding, and we believe SKY is positioned to convert that demand into recurring margin-protected revenue growth. With that, I'm gonna start going through the disclaimer slides. You know, please, I wanna remind everybody that today's presentation includes forward-looking statements.

These statements are based on current expectation and assumptions and are subject to risks and uncertainties. Please review our SEC filings for a complete discussion on those risks. Next one. We will also reference certain financial information, including non-GAAP measures and market data. We believe these metrics help investors understand our operating performance and the direction of the business, they should be reviewed together with our GAAP results and public filings. By the way, we have also filed our 10-Q for Q1, you should be able to see that, you know, in parallel to this presentation. Let me start with the scale of Sky or CXAI today. We are deployed across more than 200 cities, over 50 countries, and 5 continents, reaching more than a million users.

We have a global operating footprint, a strong IP foundation, and a team that remains heavily focused on product and engineering, with more than 70% of our team in R&D. That is important because enterprise AI is not just about launching an assistant. It requires secure deployment, trusted integrations, global scalability, support infrastructure, and domain-specific intelligence. Our installed base and global platform footprint create a foundation for future expansion. We believe growth can come from new enterprise wins, renewals, user expansion, analytic modules, integration, AI consumption, and the launch of Sky, our flagship agentic AI solution. You're gonna hear about that today, I just wanna recap that we are still doing really well with all our customers. We're growing, and it's been a really exciting quarter. Let me forward to the next slide where we talk about our mission.

Our mission is really to power the AI orchestration layer for the modern enterprise. As you know, we've been talking about people, places, and things for a while, and I know that the team has seen a lot of growth in the way our customers are responding to our vision. Our mission becomes more and more important every day as we work with our clients. Today I wanna launch this new mission, which is really at the heart of where our agentic AI solution drives. SKY connects people, places, assets, workflows, and enterprise context into one intelligent platform. That means the workplace is no longer just a static environment. It becomes a system that can understand, decide, and act. This is the evolution from workplace experience to workplace intelligence.

We've seen that now with Gartner recognizing us as one of the leaders in in workplace in-industry and calling us the workplace visionary leader. I think that's testament to the team's strategy and vision, but now also the execution. We believe the future of enterprise work will be shaped by platforms that can connect context with action. SKY is being built for that future. As we become more deeply embedded into enterprise workflows, we believe our revenue opportunity expands beyond software licensing into workflow automation, AI usage, analytics, and recurring integrations. Let me show you a video that describes the user experience and why we think SKY is gonna be that operating layer for the enterprise. Okay, great. Hopefully the people on the webcast could hear this.

Then the folks on the phone, you're gonna get the video as part of the recording when we get out there. You know, as you can see, Sky is all about the user experience. You know, we really focus on that. The workplace experience needs to become more intelligent, more personalized, and more automated. That's our mission. Employees wanna know where to work, who is nearby, what resources are available, and how to get things done quickly. Sky brings that together through one intelligent interface. What matters most is what happens behind the scenes. Identity, maps, reservations, wayfinding, services, analytics, integrations, and now agentic AI. We do all of that. We do all that heavy lifting to make the user experience simple and contextual. This is why we believe Sky will become an operating layer for the enterprise work. That's our focus.

The more workflows we connect, the more value we deliver, and the more opportunities that we have to expand revenue per customer over time with this strategy. Let me talk about the market. You know, we believe the timing is right right now. Sky sits at the convergence of two major growth markets. Number 1, the digital workplace platforms, and secondly, the enterprise AI assistants and agents. Digital workplace platforms are projected to grow significantly through 2030, and enterprise AI assistants and agents are projected to grow even faster. Sky plays across both markets. We play at the intersection of these. On one side, we support workplace orchestration, platform adoption, mobile and web experiences, maps and reservations. On the other side, we are building embedded AI task agents, workflow automation, and the Sky agentic layer. This convergence is what creates the opportunity.

We're not trying to be a generic AI company. We are applying AI to a specific enterprise problem, making the workplace intelligent, automated, and operationally efficient. That market convergence supports a large revenue opportunity for Sky, from enterprise SaaS today to AI-native licensing, analytics, consumption, and platform expansion over time. This, I believe, is a compounded 30x plus opportunity for us. Not happening 10 years from now, happening in the next couple of years. We're super excited about this space, and this has been validated through our work with Gartner and all the other analysts who are watching this industry and now are really calling it a, you know, a new Magic Quadrant for this market, which is a validation of the space frame and a huge market opportunity for all of us. Let's talk about Q1. What happened in Q1?

It was a very breakout quarter for us. We had a lot of great wins. I wanna highlight the key highlights from this. Number one, we delivered on $1.4 million in bookings, which included two large renewals of existing clients and one new client has also been onboarded. This represents, you know, an increase from last year, also it's the starting point of the strategy that we articulated in our last earnings call. More importantly, we have added more than $5 million in new deals, full contract value across three enterprise deals. These are three-year term deals with large enterprises in financial services markets that are really at the leading edge of innovation, they have selected us for a multi-year contract. This is super exciting.

I know that we talked about this in our last earnings call, that we've been working really hard in different RFPs and different pipeline opportunities. Those pipelines have become real, and real meaning that they're being deployed now. In terms of why we won these things, we won it because we had our agentic AI solution. I'm gonna talk more about that in detail. The Sky Sandbox is what our clients have been testing with, which includes our agentic AI platform, as well as our Sky 1.0 platform. Those deployments are happening with not only the existing clients, but more importantly, the new clients, as well as the pipeline of clients.

Those 3 clients came in, they did their RFPs, they had our responses, they did the product across vendors, across the ecosystem, and they tried Sky Sandbox, and they've said, "We love it. We think it's the best thing out there." Now they're onboarded with us and working with us to scale up their systems. I think that's been a significant win for us, and I applaud our sales team and our product team and our engineering teams who are really working hard to make it happen. I'm super proud of them, and I think this is a testament of the capability of the team as well as the capability of the product. Next, we can talk about SkyView.

As you know, and we'll talk a little bit more about our partnership with Google Cloud, but we have built it as a platform that will allow for analytics to be agentified, and that means that you ask a question, you get a result and an answer pretty quickly. Google has also appreciated the partnership with us. We made a press release on that. I'm gonna talk more about how we're actually engaging with Google to make it successful, but we are one of the leading vendors working with Google in making this happen using their Looker platform. Lastly, we were recognized by Gartner, as I mentioned, as a visionary in the Magic Quadrant for Workplace Experience Applications. This is a new Magic Quadrant that has been officially launched by Gartner.

It was the first one out there, and we've been working with the analysts for the last couple of years on our vision and our strategy of how we think agentic AI is so critical to this market. I think it's a testament of the recognition, but also it just shows that we are really driving the innovation in the industry, and we're super proud of that recognition. The key point in all of this is the enterprise demand we have been discussing is now showing up in real customer activity. Renewals, new wins, multi-year commitments, AI pilots, and analytic opportunities. Bookings and TCV are important leading indicators. Revenue recognition follows deployment, implementation, user adoption, expansion. While Q1 revenue reflects timing, the forward-looking opportunity is increasingly supported by enterprise commitments. Well, the next question is: Why did they choose us?

You know, why did they choose Sky? In my view, we bring five capabilities together. First, agentic AI. Our platform is designed to understand workplace context and automate intelligent actions. Second, any workspace native. We work across the tools employees already use, whether it's Microsoft 365, Google Workspace. We are compliant to all of them. We connect with all of them, and we make it so easy to connect with all the bookings and calendars and maps and wayfinding in one experience. Third, one platform, every surface. We deliver a consistent experience across mobile, web, kiosk, and signage. No matter where you're at, you will see similar kind of experience with Sky. Fourth, spatial intelligence. Our mapping and wayfinding capabilities create a real-world context for the enterprise.

Our One Map Experience and all the immersive spatial layer of access we have provides that contextual awareness, provides that intelligence, provides that mode for the agentic solution that makes it super different and super unique to anything else out there. Finally, and most importantly, we are enterprise-ready. We're built with security, compliance, support, and global deployment. For these large enterprises to select us is not only a testament of our product, but our stability and our reliability of our solution and the fact that we meet the difficult requirements that large enterprises have. It's not easy, and this is where when we look at the competition, we are heads and shoulders above of them because of all these five things together. This is why these customers choose Sky. We're not offering a single-point solution.

We are offering integrated platform that connects the enterprise workplace into one intelligent operating system. That's why my belief becomes stronger and stronger every day as I see these clients going through multiple RFPs, multiple product evaluations, understanding all the different options out there, and then selecting us because we have the full solution. We have that capability, and we're growing more and more in that capability day in, day out. Next, I wanna talk a little bit about, you know, when you think about all of this, you kinda say, "Well, what does this mean long term?" Well, long term, what it means is we are the vertical AI for the office. Sky's platform is purpose-built for the office environment, where employees, visitors, facilities teams, and enterprise systems interact every day.

By connecting workplace data and workflows, Sky enables organizations to deliver more personalized experiences, improve utilization, reduce friction, and create a more responsible and responsive physical workspace. We believe, you know, we strongly believe the next phase of workplace technology will be defined by AI that understands context, where people are, where resources are available, which systems need to be coordinated, and how the office can adapt in real time. Sky's agentic AI capabilities are being developed to help automate routine workplace tasks, surface recommendations, orchestrate integration, and improve the employee and customer experience across complex enterprise environments. In a nutshell, what that means is the broader the platform value, the greater the potential multi-year renewals, larger deployments, integration fees, AI monetization, and expansion modules. When our— as you saw the video, when Maya's out there, she's using it every day for all the things.

It may be a small thing for you, but it may be great for her. It may be somebody else has a different use case. All these use cases combined make it a day in the life of a user that's so connected to their enterprise, they can't let go. That's what we're seeing with our clients that are scaling up. They see that connectivity. They see the secret glue that connects them together to make sure that they're using this every single day, and that's what we aim for. That's why. The analytics show us all the value of that. That's where the next piece comes in, which is, you know, behind our Q1 wins. I'm gonna run this quick animation to show you some of the data set that we collect.

As you can see, our partnership with Google is a major validation point for SkyView and our analytics strategy. The quote from Sean here at Google Cloud highlights the importance of embedded Looker as a scalable API-first data layer across our clients. This allows us to deliver real-time insights at enterprise scale and create the foundation for AI-powered analytics and conversational intelligence. You ask a question, you get an answer. You go deeper, you ask a second question, it goes deeper. You wanna show, you know, a dashboard that you wanna create, it can create it for you. You can create a visualization. You can create a report. You can create an animation. You can create everything you want within the data set that's provided and within the context of what's valuable to you.

At the end of the day, all of this enterprise AI needs enterprise data. Without trusted data, AI remains generic. With real workplace data, location intelligence, usage patterns, and operational signals, AI becomes actionable. That is the strategic value of SkyView, and analytics can become a meaningful expansion layer. Customers increasingly want predictive insights, utilization intelligence, real estate optimization, and AI-driven recommendations. We believe these capabilities support higher value pricing and expanded customer relationships over time. That's kinda like, you know, my view of how the market is expanding, how our customer wins are happening, how we're going forward. Let me turn it over to my colleague, Joy, to talk about the financial highlights. Joy?

Thanks, Khurram. I'll walk through our Q1 2026 financial performance and do some comparisons to previous quarter. Starting with revenue, we delivered $950K in total revenue for the quarter compared to $1.02 million in Q4. While this represents a slight decline, I want to provide context here. The quarter-over-quarter decrease reflects the timing of new deal closures and the revenue recognition pattern of our enterprise contracts, which I'll get into more detail in upcoming slides. What's really encouraging is our subscription revenue mix, which improved to 98% of total revenue, up from 96% in Q4. This demonstrates the continued strength and predictability of our recurring revenue model. Gross margin came in at 83% for the quarter compared to 87% in Q4.

This slight compression reflects some incremental infrastructure investments we made to support our agentic AI rollout and support our Google Cloud partnership. We expect gross margin to stabilize in the 80%-ish range as we scale these new capabilities and continue to invest in cutting-edge Google products. On the balance sheet side, cash increased to $12.3 million, up from $11.1 million at the end of Q4. This improvement came despite increased expenses in operating activities, reflecting a better working capital management and timing of customer collections. Finally, earnings per share improved to negative $0.08 per share compared to negative $0.13 in Q4. This 38% improvement reflects both the operating leverage we're achieving and the normalization of expenses, which we'll get into in the next slide. If we can move to slide 12.

Now let's dig into our operating expense story because this is where the discipline in our execution, one area in the discipline in our execution, really shows. Total operating expenses declined by $1.87 million or 27.6% quarter-over-quarter. The critical context here is in Q4, we took a $2.15 million non-cash goodwill impairment charge. When you exclude that one-time item, our underlying expenses actually increased only by $278K or 6%. I'll walk through the key items here. Research and development was essentially flat at $1.5 million, up just $10,000. This stability reflects our strategic choice to maintain our innovation pipeline while operating efficiently.

Our R&D team is now 70% of our total headcount. We're continuing to invest in agentic AI capabilities that are differentiating us in the market. Sales and marketing decreased by $79K or 16% down to $413K. This reduction came from optimizing our digital marketing spend and focusing our outbound efforts on higher probability enterprise opportunities. We're seeing much better conversion rates with this very targeted approach. G&A expenses increased by $347K or 17.6% to $2.3 million. This increase was driven by three specific factors: audit and compliance-related costs, legal expenses related to strategic partnerships and negotiations, and costs tied to overall governance enhancements.

These are foundational investments in our infrastructure as we prepare for our next phase of growth, and we hope to see the payoffs of these investments in future quarters. Amortization of intangibles remained flat at $683K, consistent with what we outlined last quarter. The bottom line here is that we're managing our expense base very tightly while making targeted investments in the areas that drive long-term value, innovation, partnerships, and governance. Let's move to the revenue slide. Let's talk a little bit about the forward momentum in the business, which Khurram alluded to earlier, which we're really excited about. As we talked about, this is our reset, and so we're really excited about our future and where we're headed. Even though revenue was down, our bookings tell a different story, and as we've said consistently, bookings are a leading indicator for this business.

Q1 bookings came in at $1.4 million, up 12.5% year-over-year compared to $1.25 million in Q1 2025. More importantly, we closed 3 enterprise deals with 3-year terms representing approximately $5 million in total contract value. These aren't transactional deals. These are strategic multi-year commitments from organizations continuing to bet on CXApp as their workplace experience platform. Breaking that down, we signed 1 new logo and renewed 2 large existing customers, both of which we hope to continue to expand their deployments with new offerings. These renewals are particularly significant because they validate both our product market fit and our ability to deliver ongoing value. Our NRR improved to 98% in Q1, up 12 percentage points year-over-year from 86% in Q1 2025.

This is a really critical metric because it shows that our existing customer base is not only staying with us, but they're expanding their usage of the platform. That's a really good growth story from previous years. Now, the real story here is the operational drivers. We beat our own internal bookings forecast by 19%, and we're a little ahead of plan. This outperformance comes from three sources. First, our agentic AI capabilities are starting to resonate with enterprise clients. We have five Sky Sandbox deployments live with enterprise clients now. These aren't pilots; these are production implementations where customers are seeing real productivity gains. Second, the Google Cloud partnership is creating a differentiation flywheel.

Google published a case study on our Looker integration. As Khurram mentioned, Sean Zinsmeister, their Director of Product Management for Data Cloud, specifically called out our differentiated approach to embedding Looker as a scalable API-first data layer. That validation from a tier 1 hyperscaling is opening doors with enterprise clients who wanna know that their platform is built on best-in-class infrastructure. Third, also as Khurram mentioned, our Gartner recognition as a visionary in enterprise workplace Magic Quadrant has given our sales team incredible air cover in competitive evaluations. The key takeaways here are we have leads, we have ongoing leads that are turning into bookings, which revenue trails behind that. We expect to see the impact of the increased bookings in the upcoming quarters.

The Q1 bookings momentum we generated, especially the new 3-year enterprise commitment, sets us up for revenue growth as these contracts convert and as we continue to expand within our installed base. We're building a high-quality pre-predictable revenue engine, and the foundational work we've done on product differentiation, strategic partnerships, and customer success is now translating into commercial traction. We can move to the next slide. We are building, as we said, we're building for the agentic era, and the new contracts that we landed have come from our focused efforts in marketing and some of the changes we've made from an implementation standpoint, changing our pricing, and not necessarily abandoning the SaaS model, but thinking more about the future and what agentic AI looks like for our enterprise clients.

Because of that, we're focused on maximizing revenue growth, continuing to control our costs, and protecting our margin. Khurram, back to you.

Thank you, Joy. As Joy alluded to, the new deals we have are built on this new, you know, pricing and monetization model, and we have purposely designed it with our clients in a way that it's scalable, it's repeatable, but more importantly, it protects our margins and it helps us scale with agentic AI. Very proud of the work the team had done on this, and I think it's a testament that these new clients have come on with this new structure, which I think is going to be, as Joy said, maximize our revenue growth, but also manage our costs efficiently in the new AI agentic world. You heard about, you know, SaaS is under threat. Well, our solution is actually really full AI native now.

It has the cost structure implemented upfront so that we get our cost back, but more importantly, it scales with AI usage and consumption. Let me move to the next slide to our roadmap and to tell you the story of where we're headed, what we're doing now, and where the success has been super beneficial for us. Number one, you know, Sky 1.0 is our core enterprise platform. It supports the install base, existing ARR that you see, the renewals, and add-on modules. You know, that's our base platform, that's our foundation, and that's there. All the new clients we have been signing up to Sky 2.0. They're day one starting with the 2.0 agentic AI operating layer. It is designed to capture agentic growth inside large enterprises through AI assistance, workflow intelligence, AI consumption, and expansion.

These clients didn't come in just on 1.0. They have signed up to 2.0. We're focused on delivering that in the June timeframe. It's still on schedule, but the sandboxes have been tested, the validation has happened. The product is being deployed by them in this quarter, so we can launch it with their customer base. As I said in previous calls, they do one or two campuses, and then they scale to 100. All of these clients have done it purposely to design there so they can scale to those, you know, 50 to 100 campuses or global access for them, for all the employees. This has been a Herculean effort from my team, and I'm pretty proud of it.

The beauty of it is we're the first ones that provide this agentic AI system, and that's why we filed the IP on it. The patents were filed. You know, we are pretty much a leader in both the, you know, orchestration layer of AI, but also the recommendation engine, the BOND and CORTEX that I mentioned last quarter. Those patents are going through their provisional process, and we will be filing their definitive on them as well. That provides us really a moat and something that's unique that nobody else in the industry has. That is our growth engine for now. This is for large enterprises. This is what 3 new clients have had. This is what the pipeline of new clients, the sandboxes that Joy mentioned, are all testing that.

Now we have a repeatable system where we can test with these clients, we can show them the capability, and they can scale up with us. The third thing that we've been working on in parallel has been our Sky or Sky squared or just Sky, if we make it easy. This is our disruptive mid-market expansion platform. It is designed for rapid deployment, channel distribution, marketplace availability, and broader market reach. That is something that is designed really for the small/medium enterprise. It is something that we have really worked on with our team to focus on kind of companies like our size that wanna have a solution because they face the similar problems of workplace experience and engagement among the employees. We're happy to share that we are making strong progress on that.

We launched the pilot in our campus here in San Ramon. Now we're working closely with our channel partners, including Google and AWS. We're gonna put it onto the Google Marketplace and AWS Marketplace this quarter. That's gonna be exciting. We also believe that there's other channel partners that wanna engage with us because this is a huge opportunity for growth. The mid-market is our disruptive scale platform. It's very frictionless, very simple, very easy, but very powerful in terms of that personalized experience. When we think about all of these three things, these are the three things that are the key pillars of Sky, and they will continue for the growth. The existing will continue. Those customers will move to 2.0.

The 2.0 customers may even use Sky for some of their applications, but there's gonna be a big roadmap for Sky 2.0 in terms of its agentic capabilities. Sky is gonna really drive into the mid-market. You know, we believe that the combination of enterprise expansion and mid-market scale is what gives us confidence in our long-term growth model. When we talk about the growth, the 30X+, this is all driven by this. Let me close with why we believe Sky is entering an important inflection point. First, enterprise demand. Q1 showed that large customers are making real commitments to AI-powered workplace transformation. Second, agentic OS for the workplace. Sky is evolving from a workplace application into an operating layer for people, places, assets, workflows, and context. Third, AI-native monetization.

Our model is built around implementation, licenses, integrations, and AI consumption, creating multiple revenue streams. Fourth, dual growth vectors. Sky 2.0 supports large enterprise expansion, while Sky opens the door to mid-market and channel-led growth. Fifth, solid financial foundation. We have a high recurring revenue mix, 80% plus gross margin profile, stronger cash position, and disciplined operating focus. In my view, Q1 was about proof. Proof that enterprise demand is real, proof that our platform strategy is aligned where the market is going, proof that our monetization model is designed for the AI era, and proof that Sky is positioned to convert enterprise AI demand into recurring margin-protected revenue growth. We are focused on execution, customer expansion, product innovation, and building durable shareholder value. Thank you to our customers, partners, employees, and shareholders for your continued support.

With that, I'm gonna open up the question for question and answers. I know that, Joy, you've seen some questions come up.

Yes.

Happy to respond to some questions here.

Yep. The first question we have is, do you believe it is possible to regain compliance organically? Also, how is CXAI 2.0 coming, and will cash flow positive come in 2026? I'll take part of this, and then, Khurram, hand it over to you. We do believe that it's possible to regain compliance organically, and we are feverishly working on that. I think Khurram gave you the roadmap to CXAI 2.0. It's coming along really well, and you'll see that out in the marketplace in the upcoming weeks, months. Positive cash flow, we're not gonna give any guidance, but we are always working towards positive EBITDA, and that is, you know, one of the goals we'd like to achieve, but can't give any solid guidance there. Khurram, you wanna add anything?

No, that was very good. I would just say that when we think about the business, we are trying to scale up organically and inorganically as well. We are looking at different options and different ideas to scale up. I think the fact that we have a CXAI 2.0 platform is great news because now there are a lot of people coming to us with partnership opportunities and things. You will be seeing more from us on that side because now with the platform working and deployable and gonna be on Google Cloud Marketplace and AWS Marketplace, I think you're gonna see a lot more opportunities. We are actively pursuing that. To answer the first question, yeah, absolutely.

We feel that we're gonna work very hard. Today's results hopefully demonstrate that we are on the right path to scale up. Hopefully, that will lead us to get back into compliance before our September deadline.

Khurram, I think the next one's for you, but I'll read it. Do the current impending patents granted infringe on already existing businesses? This is a multi-part question. Does the company plan to license the software to competitors in the space? With the June rollout, will the software have capabilities to integrate with government agencies?

Wow. Those are three great questions. I'll take one at a time. On the first one, I would say we have our attorneys Have done the filing. They will actually look at naturally if there's any infringements. We believe that we are not infringing on anybody. We don't know if anybody else is infringing us. We do believe we have a moat and we have something unique and different that nobody else has. We're gonna get those patents, you know, filed, provisional filed, get them definitive. In terms of licensing to competitors, look, we're always open to that. I think it's early days in the agentic AI world. I think our the reason why we filed also is given these impending agreements with our clients. It's super important to get those out there.

You're gonna see large multinational companies using the agentic AI solution from Sky. I think that will definitely create a buzz in the marketplace, and we'll hopefully see that product launch here in the coming weeks and months. That is the plan there. With the June rollout, you know, the software, naturally we are building it as universal solution that can be implemented by any enterprise, including government. We have not focused on the government market as yet, but I think with the approach that our team is having with channel partners, absolutely we will be looking into that opportunity. We will also look into international opportunities as well. There's a huge potential of other things, but our first focus was to get the product working as we described our vision. I think we're super close there.

We've got the sandboxes. We're going to be doing the final implementation. More importantly, we have really large U.S.-based clients that are now adopting it and going to be deploying it very soon. I think we're on the right path, but absolutely we're going to be focused on not only the licensing opportunity, but also the access to other verticals besides the work vertical that we're entering. Joy, do you have other questions?

Yeah, we have a couple of questions on revenue, but I think we already answered them about recurring revenue.

Yeah.

We've talked about the $5 million in bookings and, you know, just what we expect to see from a pacing standpoint from revenue. I don't think we need to go back over those questions. There's a question on can you detail I think the question is really can you detail a little bit about our partnership with Google Cloud?

Yeah. No, that's a great question. Look, there's two sides of the Google Cloud partnership. The first is on the product side. As you mentioned, we've been working very closely with them to build that agentic AI platform for analytics using their Looker platform. We have access to all the Looker code, and we've integrated all of that into our platform, and that provides us the engine for our application. Also with the Gemini and the Vertex AI systems, we have access to all of those. Naturally, end-to-end, we can use the full Google solution. We're not exclusive to that. There are other people that could do it, but we have implemented in a way that I think is unique and is differentiated as Google put it freshly out, did a case study.

They believe that we've kind of implemented in a very intelligent way. That product partnership is really going well and continues to go well. I think the other side of the equation is, you know, with helping and using Google and their workforce to help us with the go-to-market and to really launch the new Sky product, which is really more, you know, something that can be for the small minor enterprise. It's self-serve, easy to use. That is gonna be the exciting part this quarter as we launch it on that. Overall, I think, as you can see, Google is investing heavily in enterprise AI, so we get the value of that. We're also proud to be partners with them in looking at the next generation of AI systems.

We're working very closely with the IP that we have, with the patents we have on that solution, leveraging their infrastructure. There's a lot that can be done, but right now the idea is to really drive innovation and get it to the next level of deployment. I think you probably saw that Google Cloud announced when they made our announcement is at Google Cloud Next in Las Vegas, and they made a bunch of announcements there in terms of their investment in enterprise AI. All in all, it's a very good partnership, and I'm hopeful that we're gonna create more value for both companies.

Naturally, we're the smaller guy, but we leverage them. They're also excited about working with us just because we are at the leading edge of innovation in our space.

Thanks, Khurram. I think we have one more question. What are your expectations for the upcoming quarter? I don't know if we said at the beginning of the call, but we don't give guidance. We don't give revenue or bookings guidance. This is very directional, but we expect to see, just the, you know, the results of the team working really hard, onboarding new customers and just more progress with CXAI 2.0 and just our agentic platform. Khurram, you wanna add anything?

That's right. Yeah. I think the only thing I would add there is that, you know, we've been sharing with you a lot of information regarding this quarter anyway. I mean, when you say upcoming quarter, you mean this quarter that we're in. We're super busy with the, you know, with the, with the new clients that we've onboarded, and we're working with them on getting their application working, as well as the CXAI 2.0 and the CXAI (Sky), you know, deliverables we have. The team is very focused on that. It's a busy time at Sky, and I think the good news is there's a lot of enterprise demand coming. You know, there's a lot of, you know, interesting use cases coming on board.

I think we're super excited to convert all of these opportunities into real revenue and show the growth in the coming quarter. I think you can expect hopefully good news from us in terms of execution and delivery in the coming weeks and months here. Okay. I think that's all the questions we have. I want to thank everybody for joining the call. Thanks for your interest in Sky, we look forward to the next quarter's call, and hopefully we'll be keeping you updated as new things happen. You know, we're really focused on execution, and we hope to deliver on the things we mentioned in our call today. Thank you so much for your time, and take care. Bye.

This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.

Good day everyone, and welcome to the CXApp fourth quarter 2025 earnings call. At this time, all participants are placed on a listen-only mode. You can submit a question at any time by clicking on the Ask Question button on the left side of your screen. Type your question into the box and hit Send button to submit your question. It is now my pleasure to hand the floor over to your host, Khurram Sheikh. Sir, the floor is yours.

Thank you, Matthew. Good afternoon, everyone, and thank you for joining CXApp fiscal year 2025 earnings call. I'm joined today by our Chief Financial Officer, Joy Mbanugo. I am Khurram Sheikh, Chairman and CEO of CXApp. Before we begin, I want to frame today's discussion. 2025 was a year of deliberate transformation. 2026 is our year of AI-driven acceleration. Today, we will walk you through what we accomplished, where the market is heading, and why we believe 2026 represents a true inflection point for CXAI. As you know, you pronounce it SKY. With SKY, we are moving beyond simple workplace apps to an autonomous agentic platform that redefines the employee experience. Let me start by directing your attention to our Safe Harbor statement over the next few slides. Please read at your leisure once you have the slide deck. All right.

For those newer to the Sky story, let me give you a quick snapshot of who we are. CXApp trades on Nasdaq under the ticker CXAI. We're headquartered in the San Francisco Bay Area with offices in Toronto and Manila, giving us a global engineering and delivery footprint. Sky is a global AI-native workplace experience platform deployed across 200+ cities, 50+ countries, with over 1 million+ users. We built this with a lean and highly technical team with over 70% focus on R&D, which is critical given our pivot into agentic AI. Importantly, we now have 39 patents filed, including a new provisional filed on agentic AI just recently, and we're really proud of that filing because it is a landmark in our space. Then we already have 18 granted patents. This patent portfolio is not...

It is a meaningful competitive moat. This is not just a product company. This is becoming a defensible AI platform company. We maintain enterprise-grade compliance with ISO 27001, SOC 2, and GDPR certification. This is a global enterprise-ready platform with the security credentials that Fortune 500 procurement teams aspire to. Very proud of that. Very proud of the accomplishment of the team over the last year, and we're gonna share with you what this three-year transformation has been about and why this is, you know, a really great point for our investors to understand what is really happening in the market. I want to start with the market. You know, why is this timing right for Sky, right? We are seeing a fundamental market shift in enterprise workplace technology. Three forces are converging simultaneously. First, hybrid workplace orchestration.

Fortune 500 enterprises are actively procuring unified platforms that consolidate desk booking, room booking, parking, dining, and attendance into a single workflow. They want calendar and HR system integration with AI-driven smart booking. The days of cobbling together five or six point solutions are ending. Secondly, AI and specifically agentic AI have moved from nice to have to require or must-haves. Enterprise buyers are now mandating AI agents with three-year roadmaps. They want conversational assistance, proactive suggestions, auto routing, and AI-enhanced incident reporting. This is not a future requirement. This is the current RFPs today. This is why we're seeing this good momentum because we've seen a lot of RFPs from large enterprise that are exactly what we've been working on. Thirdly, you know, we have started our journey with indoor intelligence and IoT, the Internet of Things.

Enterprises want interactive maps with real-time occupancy data from IoT sensors, wayfinding, colleague finders, and visitor management with multimodal physical and access control. That kinda gives us a new advantage in terms of the AI world. It gives us that localization and edge experience. Sky, CXAI, sits at the intersection of all these three trends. We're not chasing the market. The market is coming to us now, and that's why we see as way different from 2025. Now, what is happening with agentic AI and the defining trend there? Let me put some numbers behind the AI opportunity. By the end of 2026, Gartner estimates that 40% of enterprise apps will feature task-specific AI agents, up from less than 5% in 2025. This is an 8x increase in a single year, and workplaces identifies as a primary deployment domain.

Booking, service requests, contextual suggestions. This is exactly what we built. The AI agent market currently sits at $7.8 billion and is projected to reach $52 billion by 2030. Gen AI model spending alone is growing at north of 80% in 2026. On the adoption side, 88% of organizations now report a regular AI use in at least one business function. Enterprise software spending is up to around 15% year-over-year, driven primarily by AI investment. The validation from Fortune 500 buyers is clear. They now require AI agents, conversational assistants, and AI roadmaps in their procurement decisions. They are specifying exactly what Sky does. As you all know, we didn't pivot to our AI. We've been building towards this for years. The market has now validated our thesis. What I see is this is really a platform shift.

Agentic AI is becoming the control layer of enterprise software, and Sky is positioned directly in that layer at the intersection of workflows, data, and physical environments. You heard at GTC, Jensen talked about physical AI. We are the physical AI for that workplace environment. I'm super excited about the direction the market is heading and what we've been accomplishing over the last two years with our agentic AI platform. You know, it's interesting, when I've been working with our sales team on all the different opportunities that come in, it is super interesting to watch that, you know, our competition is actually no longer there because with our agentic platform, our clients are coming to us saying, "This is what we actually want.

We want you to be successful and build it for us." All the new clients coming in are asking for agentic AI as critical, as part of their roadmap. Without it, they will never deploy a solution, and the existing customers are naturally evolving to this very rapidly. Let me summarize also what has been the strategic transformation in 2025, and what did we actually do? We executed a comprehensive strategic transformation built on four pillars. First, we focused on high quality recurring revenue. We made a deliberate decision to prioritize subscription revenue over one-time services and implementation fees. That shift shows up clearly in the numbers, which our CFO, Joy, will walk through shortly. Secondly, we implemented an AI-driven cost structure. As you know, we have a partnership with Google where we are implementing a lot of the GCP-based solutions.

We're a big AI, you know, user. We're using Gemini. We're using, you know, all the different tools out there with different providers. I won't name all of them because some of them may be upset that we're not using them, but we're using a number of those guys. It's all driven towards productivity and to drive operational efficiency, reduce cloud costs, and automating the processes that previously required manual effort. That AI-driven cost structure is across all our functions, be it engineering, be it sales, be it marketing. That has resulted in, as you've seen the numbers, a much reduced cost structure for us. Thirdly, and most importantly, we built our platform from the ground up as an AI-native Sky platform. This wasn't a bolt-on. We'll talk about BOND and CORTEX. They were our key orchestration and intelligence layer solutions.

They are designed from day one as core platform components, not afterthoughts. Fourth, we balanced short-term impact with long-term scalability. Yes, revenue declined in 2025, and we're transparent about that, but the revenue we have today is dramatically higher quality, and the platform we built positions us for sustainable, scalable growth in 2026 and beyond. You know, I'm gonna talk a little bit more about the impact of all of that to our clients and to, you know, the end market. This slide illustrates the fundamental transformation we made in how our product delivers value. 'Cause a lot of the customers ask the question, "So what? Why is this so important to me? What's the ROI? What's the value?" Given all the, you know, information out there on AI and agentic AI, all the promises we made, why is our solution relevant?

This is where we wanna show you what the legacy systems are and what our system. We're gonna describe those systems in detail later, but I wanna show the value and outcome, right? You know, if you look at the legacy world, workplace tools required multiple clicks, manual configuration, fragmenting analytics across different tools. That's what most of our competitors still offer, right? With our AI platform, we replace those pain points with four core capabilities. BOND and CORTEX replaces multi-click workflows with instant actions and autonomous workflows. SkyView replaces static analytics with real-time insights that produce actionable outcomes. Our One Map Experience engine replaces fragmented tools with a single source for all workplace data and actions. Finally, our zero-touch deployment replaces months of manual configuration with site deployments and, measured in days now versus months. This is an incremental improvement.

This is a category shift from SaaS tool to intelligent AI platform, and it's the reason enterprises are choosing Sky over legacy alternatives. That's been deliberate from us in terms of our design, our capability, and how we've thought about making this system frictionless for our clients. I'm gonna pause now and turn it over to the CFO, Joy Mbanugo, to go through the financial results, and I'll be back with the strategic implications for 2026. Joy, over to you.

Thank you, Khurram. Let me walk you through the financial results for fiscal year 2025. I want to start by framing how we think about the past year. As Khurram mentioned, fiscal year 2025 was a year of intentional and strategic reset. We made very deliberate decisions to exit lower quality revenue, transition the platform from SaaS to AI, and build a more durable foundation. Those decisions had a short-term cost, and you'll see that impact in the top line. The underlying health of the business has improved meaningfully, and I want to walk you through exactly why. Starting with the headline numbers on slide 10, total revenue came in at $4.6 million, compared to $7.2 million in the prior year. I'll address the decline directly in a moment, but first let me highlight what moved in the right direction.

Subscription revenue now represents 98% of total revenue, up from 87% a year ago. That shift matters because subscription revenue is recurring, predictable, and very high margin. It's the foundation that every AI, before it was SaaS, and it's the foundation that every AI company wants to be built on, and we're essentially there. Gross margin expanded to 87%, up five points from 82% in 2024. That improvement came from disciplined cloud cost management and platform efficiency gain. It demonstrates the operating leverage in our model. We ended the year with a really healthy cash balance of $11.1 million as of December 31, strengthened by various capital raises throughout the year, and that gives us a real runway to execute for the rest of this year. We have enough cash to cover our expenses for the next six quarters.

On a per-share non-GAAP basis, our diluted earnings per share was negative $0.58, improving from last year, which was negative $1.20. Yes, revenue declined, but the business that remains is fundamentally stronger than what we started the year with. Can we go to the next slide? Now I'll go line by line on the P&L, so you have a more robust picture of what happened over the last year. Revenue was $4.6 million, down 36% year-over-year. This reflects three things, the exit of non-core and low-margin contracts and professional services, customer churn during our platform transition, and reduced bookings during the positioning period. We expected some of this decline, and it's the cost of doing the reset correctly.

Cost of revenues dropped 55% from $1.3 million to $578,000. That decline significantly outpaced the revenue decline, which is exactly what drove the margin expansion. We became materially more efficient at delivering the product. Gross profit was $4.4 million at 87% gross margin, up five points, sorry, year over year. For context, that puts us in best in class with other companies in this area. This is a structural improvement, not a one-time event. Now on to operating expenses. Total OpEx was $21.6 million, up 10% from $19.6 million. I want to be direct about what drove that. R&D modestly increased by 4%, but that was intentional, and we will continue to invest in R&D while we continue to invest in AI and improve the product.

We believe that this investment is what's going to position us for double-digit growth in 2026. Sales and marketing was cut by a significant 36% as we used AI in our marketing efforts and made our go-to-market motion leaner, more targeted in enterprise sales approach. G&A increased 10%, and part of that is restructuring related. We're actively managing this down this year. The most important part in OpEx is the goodwill impairment of $2.1 million. This is a non-cash accounting charge. It does not reflect cash outflow. It does not affect operations, and it's not recurring. It is the primary reason that OpEx increased year-over-year. Excluding that item, our operating cost base was essentially flat. Loss from operations was $17.6 million.

Adjusted for the goodwill impairment of $2.1 million, the underlying operating loss was approximately $15.4 million, roughly in line with the prior year, even as we continue building this platform. Now let's walk through the EBITDA bridge. If we can go to the next slide, please. Going through EBITDA and adjusted EBITDA, this is really important because this shows where some of the operational improvement comes from. Starting at a net loss of $13.5 million for the year is already a meaningful improvement from $19.4 million of last year. Adding back interest, taxes, depreciation, we arrive at EBITDA of -$10 million compared to -$15.6 million EBITDA in 2024. That is a 35% improvement year-over-year.

This is a number I would point you to as the clearest measure of our operational progress in 2025. The trajectory is definitely trending in the right direction. Now, adjusted EBITDA came in at -$9.8 million compared to -$8.3 million in 2024. I'm gonna address this directly because on the surface it could look like a step backwards, and I don't want that to go unexplained. The entire difference comes down to one line, our change in fair value of derivative liabilities. If you remember from last year, this is related to our convertible notes. In fiscal year 2024, this line item was a +$3.2 million, and it flattened adjusted EBITDA. In 2025, it flipped to a -$4.5 million.

That is a $7.7 million non-cash swing driven entirely by mark-to-market accounting on derivative liabilities. This has zero impact on our cash position, zero impact on our operations. It is purely an accounting timing item. If you strip that one item out, adjusted EBITDA improved year-over-year. The other adjustments are pretty straightforward. Stock-based comp, $2.8 million. The $2.1 million of goodwill impairment we already discussed, and smaller items that net close to zero. The real punchline is that our $11.1 million cash balance more than covers our cash-based operating loss. We have the necessary runway to execute, and the hard part of this transition is behind us. If you remember last year, we ended with a significantly lower cash balance, and so we're starting off 2026 very, very strong.

Now let's talk about pipeline and sales momentum, which is really exciting to discuss. As Khurram mentioned earlier, I think if we were at this time last year, we had momentum, but the momentum we see now as enterprises move towards agentic AI is really exciting. Even at CFO conferences and other tech conferences, you can see the excitement and the flurry of activity as people think about moving away from pure SaaS platforms and look into adopting agentic AI. Where does that leave us as we head into 2026? The pipeline is growing. We are seeing expansion activity within existing enterprise customers. Accounts that have been on the platform are now asking for more. We are seeing new vertical opportunities that we're not pursuing 12 months ago, and we are seeing early signs of acceleration in bookings.

In Q4 2025, we had really strong bookings, and that has really continued into this year. On the market signal side, three things stand out. First, enterprises are consolidating, as you can see in the news. They're moving away from point solutions towards unified experience solutions. That is exactly what CXAI is. Sky is. The procurement conversations we are having today are fundamentally different from a year ago. Buyers are not comparing us to individual tools. They are evaluating us as a complete platform. Second, and very importantly, agentic AI has become a buying requirement. Executive buyers like CFOs and real estate, people that own real estate, are now specifying AI agents, conversational agents, and three-year AI roadmaps as a baseline requirement before they sign, before even having a conversation. We have built exactly that.

The platform we spent rebuilding is what enterprise procurement teams are now asking for by name. Third, this is the one that gives us the most confidence. Customers are telling us that they need our agentic capabilities to make their final buy decision. That is a closing signal. That is pipeline converting. 2025 was a strategic reset. 2026 is where that investment pays off. With that, I'll turn it back to Khurram, who will go through the rest of the presentation.

Thank you, Joy. Let's talk about 2026 outlook. Looking ahead to 2026, we expect AI-driven acceleration to deliver double-digit growth. Let me outline the four pillars of our outlook. First, our agentic AI platform, BOND plus CORTEX, is in market now and is generating a lot of enterprise interest. As I said, all the RFPs we responded to, all the wins that we're getting in this quarter and the coming quarter are all driven because customers have tested and validated and understood that what we have as our roadmap is the right thing. This is our primary growth engine for 2026 is because of that differentiation. Secondly, we expect large enterprise wins and a strong pipeline conversion. As Joy mentioned, we've been involved with a lot of these RFPs for a while.

I think it's very competitive, and the competition is not just smaller companies. They're also looking at much larger enterprises that are looking into solutions in our space. The good news is we are winning, and we're winning big in terms of these client opportunities. I'm very hopeful on that. The deals that are in our funnel today are larger and more strategic than they were ever before. The reason is because agentic AI is so critical to an enterprise. It is not a senior manager-level decision. This is a C-level decision at the CIO, the CTO, the CHRO, the head of real estate, and even the CEO of the company. This is, you know, sacrosanct for them. That's why they're deliberately taking the time to test it, to validate.

They do the RFP, and then they show up in our labs, Sky Labs here in the Bay Area, and they're wowed by our engineers and our team. They go back and tell the procurement guys, "We need to get Sky." That's what's happening. I'm super excited about that, super confident we're gonna achieve those large enterprise wins. They take a little longer, but they're for the long run. Thirdly, strategic partnerships, and particularly in vertical AI. You know, this is creating new distribution channels for us. We'll talk about our TouchSource partnership. You know, that alone gives us access to over 11,000 digital directory deployments. Huge opportunity for us to partner with them and to scale our business through those distribution channels.

We'll talk about more in the coming weeks and months, but that is super exciting one for us right now. Fourth, we are committed to sustainable high-quality revenue growth. We will not sacrifice the quality of our revenue base to chase top-line numbers. Growth will come from subscription expansion, not one-time fees. We stay with that philosophy. I think with the agentic AI world, the monetization mechanism changing too from not just pure subscription, but also for outcome-based. We're super excited about those opportunities, especially with the new clients who are coming with a fresh perspective of the market. The 2025 reset is behind us. We enter 2026 with a stronger product, cleaner revenue, better margins, and a validated market demand.

That to me gives me confidence and hope that we're gonna be super successful in 2026. Let me talk about some of these elements in more detail, and I'll start with the product roadmap. You know, this is a clear evolution and revolution from Sky. Sky 1.0 is our current platform. That's what all our current clients have. It's a single code base delivering space booking, navigation, enterprise SSO integrations, and a full mobile app experience. This is what's in production with everybody, and this is still gonna be around for a long time because it's the basis. It gives us a strong leverage in terms of building Sky 2.0, which is our major evolution, and it's gonna be released here in June 2026 with our new clients, as well as the existing clients who are upgrading there.

This includes our behind-the-scenes, access control and content management system, plus our One Map engine, delivering a unified One Map Experience. It has the agentic AI interface powered by BOND and CORTEX, achieves full web parity with our mobile experience and enables zero-touch campus deployment. Sky 2.0 is the version that unlocks our next phase of enterprise adoption. All the new clients I talk about are getting Sky 2.0. They're already having their sandboxes. They're doing their first MVP deployments, and by June, they will be launching their campuses, their first deployments with that. This is gonna be the growth engine for all the new clients and then the existing clients are all wanting to upgrade to Sky 2.0. A huge opportunity for us. This has been in the making in the last 12 months.

Looking further ahead, our future vision is Sky Sky. What I mean by that is tongue-in-cheek. It's really the full agentic AI-driven user experience with predictive intelligence. You know, it includes reactive and generative UIs, zero-friction onboarding, and also enables a new segment. Besides the large enterprise, it enables mid-market expansion. This is where the platform really goes, and this is where the opportunities with the distribution partners, with what we mentioned TouchSource earlier in terms of certain vertical markets, is huge opportunity. This is now in MVP right now in our labs, in our Sky labs. So, if you're in the Bay Area and you wanna play with Sky Sky, come talk to us. We'll give you access. We're testing it in our labs. We're gonna go to certain, you know, initial clients locally here.

This we think is a big opportunity for us in both 2026 and 2027. Building for the future already. By the way, we're just not building features. We're building a platform that gets smarter and more autonomous with every single deployment. This platform is solid. It's very exciting. We just also filed our provisional patent, a broad patent on agentic AI. You know, I've got the number in there. I'm gonna talk about in the next slide about the agentic AI platform, but it really is, you know, a landmark in our industry, and we're very excited about it. We're gonna have multiple filings beyond this. I wanna go under the hood. Since we filed the IP, the patent provision is there.

I wanna go under the hood and tell the world what we actually have done and what our very strong technology team here in Sky Labs has accomplished. You know, one of the things on the left you see is our unified data fabric. This is the ingestion layer that connects IoT sensors for occupancy data, calendar systems for scheduling, enterprise systems like HRIS and IT, and spatial data from maps and navigation. This is kinda combining all the integrations we do, and now we're gonna connect them all together. That data flows into our intelligence and orchestration layer, which has two engines. CORTEX is our intelligence engine. It handles predictive analytics, natural language processing, context understanding, and intelligence extraction. BOND is our agentic partner. It provides autonomous orchestration, proactive recommendations, task execution, and multi-system control.

Think of BOND as a multi-agent solution that allows multiple agents to work together, orchestrate, and then with CORTEX, knowing the personal recommendations, the preferences, the things that matter contextually, and making the right decision. What we do is something super unique that nobody else does because we take into account what's really happening in the campus, in the site, at edge AI, what is happening within the enterprise, and we stay within the enterprise. That is really the core of our IP and patents and what we believe is gonna unlock a lot of shareholder value. On the right, you see the actionable outcomes this produces. This is what our clients want, this is what our users want. Smart navigation and way finding, instant booking of rooms, desks, and services, workforce analytics for real-time decision support, space optimization with automated utilization management, and proactive context-aware alerts.

This is where the world is headed. This is what they want. We are gonna be delivering this very soon to all our clients. The key insight here is that we are transforming passive data into proactive operational force multipliers. This is not a dashboard, it's a system that takes action on behalf of the enterprise, and that's the core of agentic AI. Let me talk about this, another pillar, which is really our strategic partnerships. We believe this is gonna be transformative for our distribution. Our partnership with TouchSource is a joint marketing, sales, and product strategy that extends and also embeds Sky's agentic AI as the intelligence layer for TouchSource's existing base of over 11,000 digital directory deployments. We've signed an MOU; we've signed a marketing and co-selling agreement with them.

We're super excited working with the team, and we've already got some really key targets lined up. This partnership really extends our workplace AI capabilities from enterprise offices into physical commercial real estate, lobbies, common areas, healthcare facilities, retail spaces, and mixed-use properties. The verticals we're targeting together include enterprise office, healthcare, retail, and these mixed-use properties. Each of these represents a significant expansion of our addressable market. What makes this partnership compelling is the math. TouchSource already has 11,000+ deployed screens. We're providing the AI intelligence layer that makes those screens dramatically more valuable. This is a capital-efficient growth channel. As you recall, we also have a product, the CXAI Kiosk, that we're selling into our enterprise clients, the large clients, and all of them are wanting to have, you know, the ability to scale that.

Knowing that we're the software layer, TouchSource already has those kiosk capabilities in different form factors with the hardware sizes and with the different media players. It's a really great partnership, and we hope to sell both ways, meaning that we're enabling the agentic AI orchestration layer to those kiosks. Vice versa, we're also partnering with them to deploy their kiosks in our enterprise environments, where every single floor needs multiple of them. There's a huge expansion opportunity. The teams are working very closely. We're gonna start, you know, giving you updates on this partnership, but this is really a very interesting model for us and allows us to go beyond indoor campus environments that we've been in, but to get to a larger piece of the puzzle.

With the, you know, CORTEX BOND-based agentic AI platform, this is gonna be much, much simpler and easier for us to do than what we'll be doing for our enterprise clients. All right. Let me just bring it all together in terms of a summary of what we just shared with you. You know, when we think of the bigger picture, the product market fit is confirmed now. Fortune 500 enterprises requirements now match Sky's capabilities precisely. AI and agentic AI have moved from optional to mandatory in procurement. No longer it is like, "Oh, maybe we'll check this out." It is becoming the right standard, and it is becoming critical. Anybody who doesn't have it is not gonna be part of these discussions.

This is where, like I said at the start, we see ourselves really ahead of the competition in our space, and even the big guys that are playing the space do not have the capability we have. Secondly, our addressable market exceeds $100 billion, spanning digital workspace platforms at $77 billion with a 20% CAGR and AI assistants at $3.35 billion going to $21 billion at a 45%+ CAGR. The timing could not be better. 40% of enterprise apps are adding AI agents in 2026. That is from Gartner. They're really on top of it, and they feel like this is where every app has to go. Enterprise software spending is also increasing north of 15% year-over-year. Hybrid work is permanent now.

It's no longer a transition. It is there, it is gonna be there, and the platform consolidation is accelerating. In a nutshell, 2025 reset is complete. 2026 is about scaling the platform and tapping the opportunity. While we believe Sky is positioned at the center of agentic AI, enterprise workflows, and physical space intelligence, and we're excited about what's ahead, our foundation is stronger than it has ever been. We have a differentiated AI platform, and we are entering the next phase of growth. This is the right company in the right market at the right time. Okay. Let me go to some Q&A. Joy, do you wanna check if there are any questions?

Yes.

From the audience?

Yep. Absolutely. I think we have a good handful of questions. I think I'll start with questions around our stock, 'cause there seem to be quite a few. There's one on, are you in danger of being delisted? The second one related to stock is, what is your timeline on becoming compliant once, and what is the action plan? I'll take the first part of it, Khurram, if you wanna take the second part. First, we did receive a delisting notice from Nasdaq, but we received an extension, and we have until September. We do plan on being compliant before September. There are multiple ways we can get there, but we believe we'll get there through growth. Khurram, you want to add anything?

Absolutely. Look, we are very focused on that. When Nasdaq gave us the extension, they understood that we have met all the requirements for listing except the bid price. All the other requirements are met in terms of shareholder equity, in terms of market cap, in terms of other requirements that Nasdaq has. The only requirement is the bid price. We believe that given that we are severely undervalued, and we believe that, you know, with the results we're going to be demonstrating to the market in the coming months and the momentum we have with our wins as well as our agentic AI platform, we believe that we can meet that level. Then we also have mitigating factors, so we will be compliant much before our September date.

That is our goal, and our board is fully committed to that, so.

Okay, next question. What can investors look forward to from the company in the near future? I'll take the first part of it again, and Khurram, if you want to take the second part. From a growth standpoint, like we mentioned, we're not given specific guidance, but directionally, we expect to grow in the double digits, and we're already seeing great momentum with landing new customers and new logos for 2026.

No, absolutely. You know, we made the press release. I think in Q4, we had five large, you know, clients renew in the fourth quarter. All those clients are also expanding with agentic AI this year. Joy mentioned we've got the 20+ in the pipeline. We believe, you know, we're closing deals. There are things in contract right now. There are three in contract with us right now, and there are other deals coming our way. We're pretty excited about, you know, moving them from pilots and, you know, initial discussions to now contracts and hopefully scale deployments in 2026. It's a pretty exciting time in the company, and our team is fully focused on executing those contracts and making sure they deliver.

I think, you know, if we deliver, you know, even a small percent of those, we're gonna hit the double-digit number. I think, we believe that that is very realistic, and we believe there'll be more happening hopefully in the coming weeks and months as these customers go from their pilots to their, you know, first deployment, so.

Next question, Khurram. I'll punt this over to you. How do you plan on setting yourself apart from other AI companies?

That's a great question. You know, in our space, if you look at our landscape, there's a lot of companies that have been around for a while in the space management and other space. That market is getting commoditized, and those companies are really, you know, at a very low margin. Secondly, you see people that have built apps. As you see, the SaaS model is under threat. When you think about agentic AI, there are only a handful of companies that actually can do it. I think the large AI companies are focused on horizontal solutions, you know. We believe we are a vertically integrated solution that is very tied to campus environments, campus intelligence, intelligent AI systems inside buildings, and that's where we have the big moat.

Our BOND and CORTEX is designed to provide the same level of agentic interface that you see in the horizontal apps, but in a more vertically integrated way with the security and privacy that are needed by our clients. As a reminder, most of our clients are large financial guys. They are not gonna, you know, they don't compromise on security and privacy. I think that is core part of our offering and core part of our IP, and that sets us apart, right? When I look at the competition, I think it's more about, you know. Actually, competition is good, but I feel like we've got a significant advantage over others.

Even when winning these RFPs, we have very large companies competing with us that don't have the depth of the capability that is required by the client. I think that is my focus is really that differentiation. You will see more and more filings on the patents as we move forward, as we started implementing these solutions. It's gonna be a competitive space for sure, but it's gonna be a much growing space because now these clients are looking at full transformation across the whole enterprise. They're not looking at just the space booking function or the desk booking function. They're looking at everything they do inside the enterprise and in a hybrid fashion. We provide that solution today, and we're gonna grow that capability over time.

Okay. The last two questions are sort of related on deal size and revenue growth, so I'll ask the longer one. Can you contextualize the double-digit growth target relative to 20+ customer pipeline? How much conversion that would imply? How much is new customers versus expected expansion? Was there a total of five major customer renewals in 2025, more or less? And for renewal contracts, how much do you see ARR increasing on average? I'll take some of this, Khurram, and if you wanna take the second half.

Sure.

There were more than five renewals in 2025. How much is new versus expected expansions? I think we expect more growth on the new logo side just because we haven't seen it. I think healthy on the expected expansions. Renewal contracts, how much do you see ARR increasing? Hard to tell right now. We have large renewals that happen Q1 and then, you know, more throughout the year, so don't have that exact figure at the moment. Khurram, if you wanna take the double-digit growth relative to the 20+ customer pipeline. Do you wanna take that?

Yeah, absolutely. As Joy said, we don't just have five. We have five customers renewing in Q4. We've had many more renewals than that. I think on the deal size and the, you know, it depends on clients, you know. A lot of our clients start with, you know, a couple $100,000 and then go to higher. Think of that as the baseline. A lot of our clients, as you know, are in this. They're doing this as strategic move, you know. This is through RFPs and a lot of diligence. From their perspective, this is a multimillion-dollar opportunity or multimillion-dollar value of a contract, but it's over a number of years. We believe the starting point is there, but they're making long-term decisions.

They're doing, you know, these deals are three-year deals. You know, they're three-year commitments, okay? They're not just a single year, let's see what happens. These folks are really wanting to do multi-year deals. I think that's the exciting part. But on deal size, yeah, it depends on the client. You know, if our client has 100+ campuses, you can imagine that's gonna be much larger than somebody who has 10. The interesting piece I would tell you is, and this goes back to our product capability and others, is a client that has, you know, around 10,000 employees, not the 50,000, 100,000, but they also do around 10,000 events.

They're super excited about our Agentic AI event module because they want to now create events on demand and have all these different events. From that customer, you know, you potentially even have more revenue just from the events module than the employee engagement module. There's a lot of opportunity in the growth of these businesses because Agentic AI is going across all their different functions, whether it's space management, whether it's event management, whether it's food ordering. We see this as even a bigger opportunity, but again, you know, we're starting off on a good piece, and now we just need to, you know, make sure that we can execute and deliver and get these customers onboarded as soon as possible.

I see a very bright future for Agentic AI across different dimensions of our space, so.

That was the last question.

Okay. Great. Well, thank you everybody for joining our call. Joy and I are super excited to be hosting it today. We will look forward to future discussions. We are gonna have our Q1 earnings call coming up. We're gonna have our annual shareholder meeting. We're gonna be super proactive out there. We were a little bit, you know, under the cover because of the 10-K, had to be filed and with the IP and patents. Now that we filed those, 10-K, is available, you can go read it. The patent has been issued. We're gonna be super vocal in the market, and we look forward to sharing with you the positive news on our upcoming deployments, and we look forward to hosting the next earnings call in the next, I think 30 to 45 days, but we'll keep you posted.

Thank you everybody.