CXApp Inc. (CXAI) Q1 2025 Earnings Report, Transcript and Summary

Greetings. Welcome to the CXApp First Quarter 2025 Earnings Call. [Operator Instructions]. Please note, this conference is being recorded. I will now turn the conference over to your host, Khurram Sheikh, Chairman and CEO. You may begin.

Thank you, operator. Good afternoon, everybody. I'm joined by our CFO, Joy Mbanugo as well on this call, and we are both excited to share with you our earnings for the first quarter of 2025. We will also provide an overall business update on our progress in shaping the future work and creating transformative employee experiences with our state-of-the-art CXAI pronounced SKY platform. By now, everyone should have access to our earnings PR announcement as well as the 10-Q that we are filing with the SEC. This information will also be found on our website www.cxapp.com or www.cxai.ai. I'm going to go through the next couple of slides, which are the disclaimer slides, which you can read at your own leisure. Okay. Dear shareholders, the CXAI platform anchored on customer experience CX and artificially intelligence AI is the most advanced technology solution transforming people, places and things in the workplace. We are solving the biggest problems in our industry post the pandemic, to return to office, RTO, and employee engagement. And as we've been saying since the start of the company post IPO that we are shaping the future work. The start of 2025 has been very interesting. Technology giants like Amazon, Salesforce and Dell have called all employees or specific teams back to the office 5 days a week, which has reignited conversation about how and where people can best do their work. Even companies that don't have a 5-day RTO plan, see their leadership wanting employees to spend more time together. Sergey Brin, co-founder of Google, said the company could lead the industry in artificial general intelligence, when machines match or become smarter than humans if employees just worked harder. He said in a memo that was viewed by the New York Times, "I recommend being in the office at least every weekday." He added that 60 hours a week is the sweet spot of productivity and the registered employees who work on Gemini, Google's lineup of AI malls and applications. As leaders, we see firsthand that the workplace is undergoing one of the most significant transformations in decades. Hybrid work is in the trend, is the new operating model and the stakes are really high. And yet many organizations are still trying to manage it with legacy and disconnected systems. The reality is clear mandates alone won't bring employees back, spaces alone on foster collaboration, amenities alone won't guarantee engagement. The organizations that will thrive are those that we think the workplace experience fundamentally and holistically to meet new expectations and business needs. Business leaders like Amazon CEO, Andy Jassy, say that in-office work offers a level of energy, collaboration and speed that is missing when employees work from home. Executives that Dell echoed this in a memo calling all sales staff back to the office full-time stadium. All data shows that sales teams are more productive in on-site. Similarly, although leadership in Microsoft and Google have ruled out 5-day RTO mandate anytime soon, the productivity caveat is hard to ignore. In a hybrid world, yesterday solutions create today's gaps. Conference room sit empty while desk neighborhoods overflow and no one knows why, underutilized spaces. Leaders lacked real-time visibility into how people work, collaborate and engage disconnected leadership. Without intuitive, seamless experiences, employees feel friction, leading to disengagement, quiet creating or attrition, employee frustration. And the root of it is a lack of actionable insights. We can't measure what we can't see. Leader need systems that don't just connect devices, they need to connect people to meaningful experiences using intelligent insights to optimize space based on real user patterns personalize the employee journey in real time, anticipate needs instead of reacting to frustrations. And that's what CXAI does, and we do it with Agentic AI. So we are CXAI, we're shaping the future of work, and we're excited to share with you the progress we made in our journey. So I'll go to the next slide to talk about the company. I do that every quarter because I want to make sure we give you updates that allow you to see what the progress we're making. And there are a lot of common things to. We are still headquartered in San Francisco Bay Area, were regional tech hubs globally. The global presence and diversity of experience gives us a leading edge as we shape the future of work everywhere. Of the 70 plus team members of CXAI more than 70% are engineers, and we have doubled the staff in Silicon Valley focused on building Agentic AI solutions and maintaining our technology and product leadership. We believe the employees at the center of this multibillion-dollar growing workplace experiences market, and we are creating a new category in software employee experiences. The CXAI platform is based on 39 filed patents with 17 of them already granted. This substantial intellectual property not only establishes our companies the technological front runner, but also secures our position as the pioneer in the industry. We have 2 new patents published this quarter. Both are tied to spatial intelligence, which we'll talk about later as we are investing in that technology. We're proud to have some of the largest logos of the world as our customers. that are the leading edge of the employee experience transformation. And our focus is the technology. The technology is the transformation factor. One of the key differentiators of our business is that we have strong security and compliance credentials globally. We have both ISO 27001 and SOC 2 compliance certifications. And that is the reason why you see so many logos from regulated industries. They use CXAI because they know they can trust us with their data and their enterprise security goals. As I mentioned earlier, we have a global team. The team is located in the Bay Area, in Canada, Toronto and in Manila with other contracted workers globally. And the reason for that is also to leverage the fact that we are deploying right now in with the small scale we're at in 200-plus cities in 50-plus countries in 5 continents. That gives us the diversity of experiences and relationships as well as users and the users is a key part of this equation as we move forward. We also, in the last year, built a culture of CXAI that innovation focused with 3 core values, purpose, passion and positivity. We are passionate about solving the big problem in the future work using AI, and we are super positive about creating a new paradigm of digital transformation of the enterprise focused on employee experiences. Our large enterprise customers are mainly divided to the following top 5 verticals: financial services, technology, media and entertainment, health care and consumer. We are proud to have some of the largest logos on the world as our customers that are the leading edge of workplace transformation. And when you talk to our clients, they're all at the C level, they are CIOs, their head of workplace experiences, they're CROs and some of them are actually the CEOs of these companies have taken upon themselves to drive this transformation. So we're super excited to work with them. And these customers are sophisticated buy the technology solutions and do not compromise on quality, performance, security, reliability, scalability and actually the technology road map. So as I think about 2025 and we -- the management team and the Board sat to build our 2025 plan, we said what are the top 3 priorities for 2025. And we've got a lot on our plate, a lot of things we can do better, but the 1 most important thing is customer success. And customer success is not just about getting customer contracts, but really about user engagement and adoption. We see that we are focused on the gain the life of user as these large clients and how those user experiences will make them more productive, save time and engage with their fellow employees. So for us, we're working on great features that are must-have features. We already have a lot of them in place, but we're constantly evolving those -- that technology road map. And more importantly, we're getting this immersive engagement with these employees who want to use CXAI every day, all the time on all the things that matter for their work. Now how do you make that all happen? Well, there's a lot of solutions out there in the marketplace. They have not been successful and mentioned at the start about the disconnected systems, but we're building an Agentic AI solution. The Agentic AI is going to be the way humans interact and collaborate with AI is a dramatic leap forward with the Agentic AI. The Agentic AI system understands what the goal or vision of the user is and the context of the problem they are trying to solve and then it takes access to solve the problem versus just assistance, design thinking into the journey of a user or drive to gain the life of user into actionable outcomes. So that's what we're doing. We're building automated workflows. You'll see some examples that are show today of some of the progress we made. We saw it in the last quarter when I showed you the Agentic booking example. And more importantly, we're trying to build a platform that becomes a trusted adviser for our customers. And our customers are not just our large enterprise, it is the end user, the employees of these large companies. And last but not least, the big differentiation that we provide is spatial intelligence, providing those contextual insights using our 2D and 3D technologies as well as our AI-based application platform to allow for AI-powered action and predictable outcomes. It's really focused on analytics that will provide more value to the end user. So from a big picture, when we think about 2025, we focus the engineering team on driving these key initiatives, technology lifters and ultimately, our sales and customer success team are driving that user adoption and user engagement, which we think is going to make this product so sticky that will be indispensable for the employees. So let me talk about what are those employee experiences and what makes it really distinguished. So when we think about employee experiences, the first thing that comes to mind is what is the platform that you built and how you built it, right? And the CXAI platform, as we've talked about, is AI native is the first mobile and cloud-based technology platform in this space. We've thought about it from the end user is not just an application but a platform and we think about the 3 different pillars that make up the CXAI platform. One pillar is the CXAI Apps. The CAI Apps are based on Android, iOS and web applications, but we're building them to be not only multi-OS, but also multi-device all the way from your watch, to your smartphone, to your laptop, to your desktop and also need 2 kiosks and larger devices. and we've got it now in place with a lot of our clients. Now in order to make this application intelligent and smart, we got to have a rule engine. We got to have something that prides content and price access control and decision, that's the brains of our system. That's the CXAI BTS. And then coming out of this are all the great insights and analytics and recommendation that CXAI VU our analytics platform. So this trifecta create that end-to-end platform that provides the best-in-class employee experiences. And with our partnership with our cloud providers, as you know, we've had a great relationship with Google for a number of years. We are a strategic partner at Google, where we have signed agreements with both Microsoft and Azure platform, which we've deployed and with AWS. We were planning to work with them on a deployment, but we are multi-cloud, and we are enabling the capability from the device to the cloud for our clients. So our clients use us as the -- you could call it the Intel Inside for their application or you could call it the apple outside, but we are providing the end-to-end application that our clients use, but they're using their own branding, their own content to drive it, but with inside trying the brains behind the solution. So with that platform of mind, you can say, well, you've got a great technology, what problem are you solving? And so I'm going to share a slide that our friends at Gartner put together, they did an assessment of what is the motivation to return to office. And return to office is one of the biggest issues of our century, I would say, every single enterprise globally is looking to find solutions for the digital workplace and workforce. Both leaders of enterprises and employees are navigating unchartered waters related to hybrid work in the post-pandemic and encountering significant challenges. Company C-suite want employees back in the office to be more productive, engaged in the corporate environment and better utilize the workspace. Employees, on the other hand, want flexibility to work from their home or the office and have a high expectation when it comes to having easy access to their workplace tools, finding information and ability to collaborate with peers from anywhere. So if you look at this chart, it's kind of obvious that employed -- why do employees want to come back? They're not just coming back because it is a mandate, they're coming back because they want to reconnect with their -- and collaborate with their fellow employees, they want to have face time with there senior leaders, they want to be able to connect with their environment and their colleagues. That is the real reason why they want to come back or they have a desire to come back. And we need a solution to that. And that is where we have built this end-to-end platform. I'm going to give you a little bit more detail on it on the left, you'll see the immersive UI that we have that has 1 click away to make an action, you have a very immersive mapping technology capability that allows you to connect inside the building to any place, any location, navigate as well as click on to book things and drive engagement. But end-to-end, we provide this full solution. The key part of the application is all these integrations that we do with the enterprise tools and services into 1 application platform, allowing employees 1 seamless experience to connect to anything they do in their workplace. We also do that with 2D and 3D mapping technologies enhanced by AI to put intelligent interaction with space and things. And like I mentioned, the CXAI VU is the experiential analytics that provide you insight but what needs to get done and how and how would you make it happen. So -- and then finally, to top it off, is gender automating all these workflows to provide with natural language command a trustful domain, so you can provide any question you have, you get an answer. Any action you want, you get it done any meeting you want to change? Any booking you want to redo anything you want to connect with multiple folks from outside inside the organization, we're going to do that with Agentic AI. The first 3 pillars are deployed with global customers today. I'm proud to say we are the best in class. But I'm more excited about the Agentic AI because that's going to be groundbreaking and transformational to the whole workplace. So, let me talk about what do people do when they come back to the office. What are the main things they're like doing? And this is another Gartner chart, so it's not just from what we see, we'll show you what we see. But this is what Gartner collected the data from lots of different vendors in the space and as well as clients. And the biggest issue when you want to come back to the office is, can I find a space where I can sit? Can I get a desk? Can I get a meeting room? Can I connect with all the people that are in the office? Can I do any coordination, collaboration? And with AI can I have a virtual assistant that can actually help me get my stuff done? All those things have an increased demand and as I said earlier, with the start of 2025, there has been a renewed interest because there are mandates that are driving it, but also I think there's interest among the younger generation to be more social, to be more connected with their workplace. So I'm going to show you so what do we see at CXAI. We've been working with all these clients. We have more than 1 million plus users globally out there that use our product. And when you think about -- actually, I skipped to slide early, let me go back to Slide 12 here that talks about space utilization analytics. The biggest problem is space, right, initially in these markets because you got to think about how you're going to utilize the space. So this example shows you gas bookings. We can show you how test were booked, whether they were booked in advance, how far in advance would the booked and what is the booking ratio and what is the cancellation ratio, a lot of interesting statistics and then the insights that come out of it. So very obvious, people are coming mostly on Tuesdays, Wednesdays and Thursdays, and Monday is kind of coming back a little bit, but mostly Tuesday, Wednesday and Thursday and it drops off very quickly on a Friday. But then it's interesting to see that even with this planning capabilities, there's a lot of just-in-time booking, like people are booking within the hour to get a desk or a room. And we're being able to connect with their fellow employees or with a set of meeting. So just having that mobile connectivity, and this is why our CXIA Kiosk having at the front of your office so you can walk in, click 1 button and get a desk, click a button get a room and click a button and know where your colleagues are at. It is immensely useful and this is where a lot of people are trying to use that technology and capability as they build these return to office initiative because without that technology, people are lost, people don't know what to do and people get disorganized. So this is super interesting. And as you can see the data here, there's a lot of activity happening, a lot of usage happening with application because people do need spaces and spaces is the primary factor for this market initially. But as people get used to being in the space, working with the space, they also need to connect with their fellow employees, also when you connect with their internal systems and be able to be productive. So one of the key features. This is a chart showing the usage of our product, they're different days of different applications. Where do they go on the app, you'll see a small purple knob here, so in colleague booking which is become immensely useful now because if I coming the office next week on a Tuesday, it'd be great that my friend Jack is there, and my other mentor, John is going to be there as well. And so I will actually try to be there. So colleague booking and visibility has become a key feature that we've been able across our client base is super successful, super useful. You've got to enable your privacy, but a lot of people enable that and allow you to see their calendar and where they are. So those kind of features are driving more app utilization and usage analytics. It also shows behavior, and we can show behavior, app interaction not only on a daily basis but on an hourly basis. And every single interaction you do we can document it, we just show the gain the life of user as they progress through their work life. We can also show you location based, as you can show on the lower chart, people in one part of the world are really active, where in the other part of the world people are not active on the app. There may be reasons because they need desk booking more or they don't have a need for desk booking or they don't have a need for the app itself. But our job is to provide the tool kit and capability, and we find that different use cases that are useful for different places. So this one, I want to give you a flavor of the progress we're making in terms of having the technology available, but also the insights now and collecting the data has been super useful for us because this drives our product road map. This drives our innovation cycle. And this drives actually our engagement with our clients. They love the fact that we have these data sources and fusion of the data of what they're seeing from the employees, but also from the things and the places it prices really amazing insights. And I'll show you an example what we can do with AI now with that. So the next one, this is all great charts, great data, but what could I do more with this with the AI? What could find inside that will be mind boggling? Well, I'm going to give you an example here of our CXAI VU Smart Expert, and it's going to show you that as an example, I want to -- I don't want to go through 500 charts. I would like to ask a question. I'm the person responsible for return to office. I want to see the booking counts before and after the 4-day RTO policy came in or I am a space of person. I want to know how many desks are utilized? And which desks were utilized more than others over the past 3 months? And if I'm the HR person, I want to see how frequently people are using the app or doing what kind of sessions they're doing, what kind of things they're interested in. And then if I'm figuring out what office space needs to be in different locations. I want to see what the patterns are. So a lot of questions in my mind, right? And I don't want to go through a big BI tool that spend hours going through data sets and then thinking on what it is. I want to ask a question. So we're going to show how you ask a question, get an answer. I probably made a slow so that we can move -- we can show the results. So here, you'll see a chart that shows bookings. It looks flat across the whole time frame, but insights are inside. The insights are what is changing? Well, in this case, desk bookings were significantly higher than room bookings and parking reservations were even higher. So it shows a strong preference for individual workspaces. Similarly, what desks are more utilized than others? And then can you show me some regional preferences, location preferences, we can show you heat map. So a heat map that shows that people would like to be their satellite or would like to be in a quite zone or where they would think that amenities are closed by -- so those are special insights with our technology and our capability and our application platform, we can provide those insights, and that's what gets people very exciting. Example is the 4T policy influencing booking patterns. Well, we can figure out what days bookings were higher and where days of people who are coming in or not. What are the peak days. As I mentioned earlier, we see Tuesdays, Wednesdays and Thursdays are the highest, but then there's more insights underneath that. But more importantly, once you have all this data and you see all these interesting insights, you can also then do forecasting and start providing regular updates and regular models to do predictive analytics. That's the holy grail we fuel because with these data sets, you can actually organize not only your organization with your culture. And that's why we're really excited about using this capability to enhance the user experience. So let me talk about Agentic AI. And as we said earlier, Agentic has been our focus from the start. We're not about providing AI just for the sake of AI, but really collaborative AI agents that allow you to take multiple workflows and provide really amazing insights. So -- to achieve this is a Gartner chart, by the way, that shows how Agentic AI is progressing. As you know, it used to be AI assistants and co-pilots. but now we talked about collaborative AI agents that take multiple workflows and allow them to come together to actionable outcomes. So to provide this level of autonomous decision-making and action, Agentic AI relies on a complex ensemble of different machine learning, natural language processing and automation technologies. And Agentic I focus on completing actions and outcomes versus just assistance like a trusted adviser that is proactive insightful in access of problem. So I'm going to issue an example. Last quarter, I showed you the Agentic booking. We've been working on lots of different use cases. I'm going to show you an example of Agentic workshop. A lot of our clients are talking about having to set up events or workshops within their community or their office environment and they have to do a lot of coordination. They like to not only be able to book a place, find the right people to come, but also invite visitors as well as regular employees and then also order food. How can you do that and I'm going to show you how we can do that in a New York minute here. So, as you can see, in a very short period of time, you could do multiple workflows coming together. This means that multiple agents are collaborating together. But more importantly, you've got what you wanted. You wanted a meeting set up with your CEO. You didn't have to give your name. You could find who the CEO is. You could find who the right contact would be invited to the meeting and then you wanted to not only host them, find a room that accommodate them, but also order refreshments and make sure that it's tied to their preferences. So you could look at their profiles and look at what food process they have and then provide the necessary arrangements and be all done within a minute and they will all get notifications on their e-mail in the calendar. And even if they want navigation, we could provide that. I don't want to add too many workflows. But the idea is we make complex things very simple. And this thing -- these things happen every day at every enterprise where I go and meet customers, they can't get meetings done on schedule. They can't get things organized. It takes a lot of time and effort and there's a lot of frustration. With this Agentic solution, we're going to minimize that. We're going to make it seamless and easy to do. We do it well today with our apps, but we're now going to make it even, even super easy and super productive with these genetic solutions. So now I'm going to talk about our Q1 product and customer highlights, and then we'll have Joy walk us through the financials. So Q1 -- the start of 2025 has been an interesting one, as I said earlier, RTO is a big theme with a lot of clients as well as a lot of new clients that we're working with. But we hit all our business objectives for the Q1. We have 3 large Fortune 500 expansion renewals. Expansion renewals means they actually signed up for more than the last year's renewal and are expanding not only in campuses, but more importantly in new features and capabilities are the things that I talked about, engagement, community, getting mobile aberration or finding mission-critical things like emerging notifications or critical notifications we call them. So -- there's a lot of new capabilities that people are signing up to and they're seeing the adoption uses. That's where they expanded. So we're excited about that expansion this quarter. We also talked about last quarter the 1.5 platform that was deployed with a large financial customer. That customer has actually now deployed this with the full suite of products, including CXAI VU and CXAI BTS and also has done a renewal. So we're excited that they have liked the technology platform deployed in the first market and are launching multiple markets with new capabilities. Last quarter, I had mentioned about the single cold-based CXAI 1.0. That is now available to all our clients. But more importantly, this quarter, we are now -- we have implemented CXAI VU analytics for all those clients. So all the data sets I showed you the statistics, every single open of client that capability now in all of their campuses. So that's a big accomplishment from the engineering team and also from our customer success team that's working closely with those clients. Sky Kiosk is a game changer. As I mentioned earlier, we had our first deployment in Silicon Valley with a large technology company that really wanted to implement an RTO policy and they said, "Hey, in order to get employees engaged in using the tools and capabilities, let's put it in the front office, front lobby. They walk in the door, they can see where rooms are available, we're desks are available, where people are available and 1 click away from an action and get it on their mobile app. We've done that very elegantly with a solution that's web-based, that can be connected at any touchscreen device. And now after the first successful deployment, we're getting multiple engagement from all our clients globally. And so this is going to be a big expansion opportunity as we roll out CXAI Kiosk. And I also mentioned last quarter about CXAI Localization, which was really using a partnership with Google to do translation for our apps as well as other localization features, and we deployed that with a large entertainment customer. And now we're planning to deploy again with CXAI 1.0 with all our existing clients. I think this is a great feature because everybody wants localize information, localized insights -- and so that's been super successful, too. So all in all, I would say, from a product customer, we are making a lot of great progress. And the Agentic AI is in trials with the first internally. We're trialing it ourselves in our labs here in San Ramon and Palo Alto, and then we're going to be doing more and more trials with our clients moving forward. So with that, I'm going to move to the results for two I'm going to ask our CFO, Joy, to kick over and share with the results. Over to you Joy.

Thank you, Khurram. If we could go to the next slide, I'll walk us through our Q1 results, starting with headline metrics, then dive into operational details, dive into our income statement and conclude with our overall liquidity position, which is pretty strong. We're happy to report. While we have seen some expected pressures, the underlying improvement in our margins and continued cost discipline are driving meaningful progress. So Khurram, as you mentioned in the previous slide, we did have 3 large logos that increased their expansion and pushed ARR up 130% of the original contract value, which is clear validation of our platform stickiness and our team's focus on customer success. These include Fortune 500 customers in financial services and tech verticals who have expanded their footprint with this and continue to expand their footprint with this. Subscription revenue, a huge increase here from Q1 2024, where we're at 87%, up to 99%, and -- which shows our overall commitment to recurring revenue, not certain that it will be this high every quarter, but we do expect to concede like we did in previous quarters, a continued increase in subscription revenue compared to onetime revenue. Again, gross margin, an increase in gross margin and just our overall discipline in costs and increased up to 88% from 82% from Q1 2024. Cash OpEx, we reduced cash operating expenses by $300,000 year-over-year despite absorbing onetime costs, which will go into and to the next slide. And then we're happy to report our earnings per share has increased from negative $0.34 up to negative $0.08 from Q1 2024. So overall, just great highlights for Q1 2025. And we can move to the next slide and dive into a little bit more detail on our income statement. So we did have a decline in revenue, which we want to talk about because I know we may get some questions on this. The decline mainly came from 2 of our large customers who traditionally would have been Q1 renewals, but we pushed them to Q4 renewal. So if you remember, we had a pretty steady -- steady state and solid Q4. And so those 2 -- that increase of that solidness that you saw in Q4 were from those 2 clients that renewed in Q4 instead of Q1. So this is a timing shift and not a decline necessarily in anything else. We are seeing resilience in gross profit despite lower revenue, continue to have 80% margins. As we've discussed, our partnership with cloud -- Google Cloud, he's been looking to reduce our cloud costs and we saved $177,000 year-over-year. And again, the subscription-based revenue increased our margins. Overall, operating expenses increased a little bit, and we'll dive into that. So research and development declined slightly. Marketing year-over-year had a steep decline, some of that sales and marketing sign personnel and other spend as we continue to focus on R&D in just developing the product in Agentic AI. We did have an increase in G&A year-over-year, but that was related to onetime costs for professional services fees and new hires. Our operating loss continues to narrow and it widened a little bit, but remember, this is without $600,00 revenue. So this just shows our cost structure is holding firm during this transition. So let's move to the next slide, where we'll talk a little bit about our liquidity and our overall cash position because I don't have questions that came up in our last earnings call. So overall, net cash used in operating expenses decreased from $979,000 from $2.7 million in Q4 2024 and this just reflects our tighter control on working capital and our discipline as we lower overall cash burn. Secondly, I'd like to discuss liquidity. Our cash balance, as you'll see, because the -- our Q was just released, you can go have a look. Our cash balance, we ended the quarter at $3.98 million, but what you'll see in the subsequent events is that we drew on -- we entered into a new note -- a new convertible note where we have access to $20 million and on April 8, we drew down about $4 million of that $20 million. And so with just that in place in the previous convertible note that we entered into last year, we have $20 million -- access to $20 million. And so we have more than 18 months of liquidity at our current operating run at least 18 months, if not more. So we also -- with our filing today and our filing of the K have become S3 eligible. So overall, these results reflect our focus on 3 strategic priorities that Khurram laid out earlier, our customer success, deeper AI adoption and analytics usage and just the stickiness of some of our product capabilities and new features and new offerings like our Kiosk. Every renewal, every cost decision and every platform investment is mapped to these goals. To tie it all together, one, revenue decline was timing related and not structural. Our margins hit high records through operational rigor, which will continue throughout the year, we continue to keep costs under control despite onetime expense hit and our cash position is strong and we have multiple levers to pull to continue growth. So with that, I'll turn it over to Khurram. And if there are any questions, put them in the chat, and we'll answer.

Thank you, Joy. So let's just summarize why CXAI? And I think the first piece is, I'll talk about the financial performance, too, because I think we have hit a corner here where we're now moving from the traditional old model to the new model. But first of all, I want to be clear with everybody CXAI is more than an app. It's a platform to create workplaces that are as dynamic, versatile and remarkable as the people that have it them. We're not just enhancing how work gets done, reimagining it for a brighter, more connected world. With CXAI, you just don't build a work for you culture with a culture, shape a community and architect the future Because at the end of the day, without the employees, there is no work, no office, no culture. Let's put the employee first together and watch everything else falls into place. That's been our focus. And now with our CXAI platform solution anchored in AI, we're poised to provide that capability to all our clients. Now when you think about our business, I think it's amazing that we've gone from -- I think at some point, we were like when we first acquired the business, it was 70% or less recurring revenue. This quarter, we hit 99%, which is kind of amazing. We weren't targeting to be 99%, but it's just the fact that both of our customer success teams as well as our engineering team have done a great job of creating the products that are more recurring revenue and our customers have adopted them instead of getting onetime professional fees, they're like, yes, we'll take that feature because we want it every year, and we want to be providing you advanced capabilities on that. So I think that's a real positive and then as Joy mentioned, with the cost structure improvement is because of our partnership with Google Cloud, where we can scale very profitably on this because as we go with AI, we go with more data sets and others, we need a low-cost solution that scales and this is where you're seeing the benefit of that gross margins going from, I think, 78% at some point, 1.5 years ago, now all the way to 88%. And along with that, we have great clients that love working with us, and we're working with CIOs at all these companies as well as the Head of Workplace experiences, and they're looking to move the needle in a direction where AI becomes the key enabler for all these different opportunities. So we're excited working with our clients. I think we're design thinking with them on all these new applications, and you're going to see a lot of new applications coming out in the coming months. And our business is global, although we sell only in the U.S., we're deployed globally. We have no impact to tariffs or other issues, but we are deployed globally. So I want to rest assured that we're not impacted by any of the situation that's happening in the financial markets right now, but we are naturally cognizant of the fact that enterprises are looking to cut their spend and be more productive, and we enable that. We enable an ROI that lets them provide a solution that is cost effective, but more importantly, impactful across the whole organization. So that's why there's not a demand pull here in terms of people are looking for solutions there. Today, we had our Annual Shareholder Meeting. I'm excited to announce that 2 of our directors, Camillo Martino and Shanti Priya got reelected. We're really blessed to have a really strong Board that has been supporting this effort for the last couple of years, and they come together as innovators as pioneers, but also more importantly, at mentors to help me and the management team scale the company. So we're really excited about having that camaraderie and having that push and pull of innovation. And last but not least, we're in Silicon Valley, we're working with the biggest disruptors in the market. We have told you about our Google partnership. It not only enables us on the cost side for our cloud management, but also in terms of innovation side in getting access to the latest tools and technologies. I mentioned to you guys earlier that we are a strategic partner level. And I know today, Google announced a number of new AI tools in Gemini and other capabilities. We have access to all those tools. We're first in line to get access to those and so we're partnering with them. When you think about CXAI VU View, when you think about Agentic AI, we are definitely partnering with Google and their capabilities. We're not building everything from scratch, but we are building something that's differentiated unique that we believe nobody else in the market has and that's called employee experiences. We're creating a new software category. We're really excited. And with that, I'd open up to any questions you have. But I want to just end by saying we are really destined for lot of success here because the opportunity is huge. There's a lot of fragmented competitors out there, and we have a singular vision to create the best employee experience for all employees. So Joy, do we have any questions from the webcast or?

We do and I'll take a couple of them. So on some of these can be -- some of the answers to these questions can be found in the -- the 10-K -- sorry, the Q, but what is the current shares outstanding? It's on our balance sheet, it's about $19.8 million. There's a question, how much total debt is currently outstanding when including the $4 million draw on Avondale on April 8? I think if we take all of that together with our previous note in our warrants, I think we're at about $10 million, but I'm doing it off the top of my head. There's another question, will you guys ever plan on -- I think the question is, will we share who our clients are? I think we've done some case studies in the past, probably prior to me joining and to the extent that we can. But as you can imagine, with some of the return to office Snap and other things going on, some of our clients value their confidentiality. But to the extent we can in the future, we absolutely will.

Joy, you want to jump in there. Actually, on CXApp -- Joy I just want to jump in there. On cxapp.com, you can see those clients. So if you go on there, I'm proud of all of them, so I don't want to take one name on the other, but most of our clients are on the website, and you can easily look at them up. But they're in 5 categories that we talk about in technology, in entertainment, in financial services, in health care and in consumer. We have some of the biggest logos in the world. They're all on our website, and we're collaborating with them. So -- but some of them, as Jay said, are careful about what we share about what they're doing for obvious reasons, but they're all excited to be using the CXAI platform.

Thanks, Khurram. One more -- we have two more questions. One I'll answer and then one, I'll give over to you, Khurram. After from Maxim after soft Q1 revenue results, do you expect total revenue growth or subscription revenue growth year-over-year in '25 versus '24. As you know, we're not giving any official guidance. So that's the aim, but don't want to give any official guidance at the moment. And then our last.

Yes. The only thing I would add to that, Joy -- is just to add to that is that we are driven by ARR growth, right? That's our main initiative, and that's why you're seeing the focus on recurring repeatable multiyear contracts. Our strategy is working out. There is some short-term revenue disruption to that. But I do think that, that is the right thing to do for a SaaS AI-based company because it provides a stickiness that Joy mentioned, it provides the road map, and these customers do not want to go change out every month. They want to have a long-term plan for scale up, right? They experiment first with a couple of sites. We've seen a lot of them come to us after they go to a competitor and find out, "hey, it's not exactly what you told me." So -- but we are retaining large clients who believe in the vision of employee experiences globally and finding those genetic solution. I think those are the customers that I am most proud of I don't want to be involved with customers who are just looking for a point solution. We're not a planning solution company, we're a platform company. And so I think that's the differentiation we have and as we move forward, recurring revenue is our focus. So as you see the growth, our gross nature revenue, actually, there will be revenue recognition around that, but we can't assume -- we're not motivated by just getting onetime revenue. We're more award by getting recurring repeatable revenue.

Yes. And we have one more question. I think you answered the second half of the question, but 3 large customer renewals. Does this include the 6 renewals mentioned in 2024, I'm assuming the question is coming from Q4 of 2024. And the answer is no, these are new renewals. So when we talk about renewals in any period, we're talking about renewals in that particular period. So no, this is 3 in addition to the 6 that we mentioned last quarter. And then the question on subscription revenue, Khurram already answered that question.

Yes. No. So just to be clear, as Joy mentioned, some of those clients that renewed in Q4, in 2024, they actually were delayed in their renewals. So that's why we had to book them in Q1. This year, they were on schedule and they got it done in Q4. So those 6 renewals happened in Q4. These are 3 additional renewals that were scheduled for Q1 and are done on schedule, right? And as we said, they've also been expanding, and so they're excited about expanding with us. So yes, these are independent. And as you can see, with budget cycles, a lot of these companies have fiscal quarters, some have end of the year quarter, so we have to deal with large enterprises that actually want to work with us, but they have to work with their policies. So that's why this gap that you see the revenue is really because of the timing of the renewal, nothing to do with revenue shortfall us. But I think that as we move forward, we're going to get a regular stream as they scale up, and our goal is to really scale them up to the next level in terms of expansion and the repeatability. And I think this is where as we get the first 2 permits out, they want to go from 2 sites to 100 sites. And for a large company like any of these enterprises going to 100 sites is a huge endeavor and for us also is a huge endeavor. So we're planning them now so that we can do renewals hopefully in 1 quarter. So we don't have renewals in multiple quarters and then we can really get this thing scaled up, so we have repeatability and then we can add new features as they renew. So I think this is the change out from the old model to the new model.

These are all the questions.

Right. Any more questions, Joy? Or do you think this is enough for us?

That's enough.

Yes. Okay. Great. Well, I want to close by saying thank you, everybody, who's waited for us for the annual shareholder meeting. We really appreciate it. We've got all of the resolutions done, which is a good testament of the conference the investors have in us. and the Board has and the management team here to deliver. We're excited about the opportunity. I will repeat that we are transforming this industry and in transformation, disruption happens. So we're ready for disruption. We're ready to make it happen. And we're super excited that our customers are believing in us, and I'm more excited that our employees are really delivering on all 4 cylinders and all these targets. So look forward to sharing with you the next quarter results. In the meantime, you will be hearing from us as you make advancements in our product development. Thank you so much. Have a great evening.

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