CXApp Inc.
Q1 2024 Earnings Call Transcript

Published: 23 May 2024

[Operator:]

Good afternoon, and welcome to the CXAI Q1 2024 Earnings Conference Call. [Operator Instructions] And now I would like to turn the conference call over to Mr. Khurram Sheikh, Chairman and CEO of CXApp Inc. Please go ahead, sir.

[Khurram Sheikh:]

Thank you, operator, and thank you, everyone, for joining the quarterly earnings call for CXAI. I plan to discuss CXAI's financial results for the first quarter of 2024. I will also provide an overall business update on our progress in shaping the future of work, including transformative employee experiences using AI technology. By now, everyone should have access to our earnings PR announcement as well as our new product launch in collaboration with Google Cloud. We'll also be filing our annual 10-K for 2023 shortly. All of this information will also be found on our website, www.cxapp.com. And now I'm going to go through a couple of disclaimer slides. You can read them at your leisure. And we'll get to our first slide about the company and what we're doing. Dear shareholders, I'm super excited to share our Q1 2024 results and the incredible progress we have made in shaping the future work. At the heart of CXAI lies a simple yet powerful belief, put the employee first and everything else follows. It's not just about the work, it's about the people who do it, the places where they come together and the things they need to succeed. CXAI redefines how we think about work life and the seamless interplay between the two. And we do all of this using the latest AI technology. We're super excited about this opportunity here. So let me give you a little quick snapshot of where we are now as a company this quarter. We are headquartered in the San Francisco Bay Area with regional tech hubs globally. The global presence and diversity of experience gives us a leading edge as we shape the future work everywhere. Of the 80 team members at CXAI -- we like to call CXAI as Sky, more than 2/3 are engineers, and we have doubled the engineering staff over the course of the last year at the same time as reducing overall operating expenses efficiently. AI is changing the world, and we are an AI-first enterprise software company. We believe the employees are the center of this multibillion-dollar growing workplace experiences market, and we're creating a new category in software, employee experiences. The CXAI platform is based on 37 filed patterns with 17 of them already granted. This substantial intellectual property not only establishes our company as a technological front-runner, but also secures the operation as a pioneer in the industry. This platform has been developed in collaboration with leading AI companies in the tech ecosystem in Silicon Valley, and we're super excited to be partnering with Google Cloud as we scale our business to the next level. We have -- we are proud to have some of the largest logos of the world as our customers that are the leading edge – they are the leading edge of workplace transformation, more than 20 of Fortune 1000 companies who are scaling with us with new deployments globally every day. And as you see on the chart, one of the key differentiators for our business is that we have strong security and compliance credentials globally. And that is the reason you see us with so many logos from regulated industries. They use CXAI because they know they can trust us with their data and their enterprise security and compliance. If you look from our last presentation, we've grown to now 60 countries, we're in 200-plus cities, we're globally deployed, we're shaping the future of work as we scale this business. So now let me talk about our mission statement, as you know, which we've been saying since we took the company public last year. The CXAI platform is anchored on the intersection of customer experience, CX and artificial intelligence, AI, providing digital transformation of workspaces for enhanced experiences across people, places and things. That has been a mission for us, and that is what's driving our journey of transformation. And the journey as we talked on our last call, has really been through a transformation of our business model and our technology platform. Our technology platform is state-of-the-art, anchored on AI, and that is what's driving all this innovation. And the transition empowers us to deliver a unified work experience through our workplace SuperApp. By leveraging AI, we can personalize the user experience, automate tasks and provide valuable data-driven insight to our customers. The shift towards the platform model that you see in 2024 plus with the recurring revenue stream, positions CXAI for long-term sustainable growth. Ultimately, it's a win-win for both CXAI and our customers. We gain scalability and efficiency while our customers benefit from platform that leverage the software capabilities at scale as well as provide more engaging productive work experience. So, as you look at this chart, you can see the trajectory of where we started and where we're at today. I'm very proud to say the team has delivered on a number of initiatives that have made this possible both on the technical side as well as the business side. More importantly, our customers are adopting this strategy of a SaaS platform with micro services of data analytics that's core and to the offering. And finally, it's based on value-based pricing, which is really resonating with our customers as they look at the net scaling of their business. So, when we thought about what are we going to do in 2024 -- the Board and I have discussed what are the key objectives of the company moving forward. And since we focused on AI, that was our initial raising the flag that we are the leaders in AI. We really focus on that AI-first technology and business model because it really revolutionized that employee experience segment. When we think about employee experiences, we think about consolidating all the tools in the mobile-first Work SuperApp, streamlining the workflows, boosting efficiency and productivity. Our AI-powered approach goes beyond basic automation. It is designed to create an intuitive and personalized work experience of reducing friction in promoting employee collaboration, key factors for driving engagement, affinity and productivity. So that's been our first [ case ]. Let's get this AI-first technology business model right. And I'll talk about that later as well. Secondly, with a great set of customers that we had in 2023, we want to grow those existing customers and build new Fortune [ 100 ] customers to scale. That has been a key initiative, and we're making a lot of progress, as you see in the Q1 results. This has been our largest growth in NRR, and this is because of a lot of these customers have stepped up and doubled down with us. Thirdly, we wanted to have launched the CXAI platform to our key customers. The CXAI platform is built on AI-first, we're deploying our first new Fortune 1000 customers this summer and it's going on track really well. So very proud of that achievement. And then what today we announced is our AI-based analytics product. This has been launched in consult with Google Cloud, collaboration with that. And it's really a revolutionary product. I'm going to talk a lot more about it later, but this is a key achievement for the team. And last but not least, we have been focused on strategic partnership. You saw the announcement with Google last quarter, actually last month in April. And since then, we made rapid progress in terms of launching our first product with them, but also with the broader ecosystem in Silicon Valley and the world, we are working with the best and brightest AI technologists and partners to bring this capability to the workplace experience market. So, I'm really excited that we're making a lot of strides in creating this category-leading segment for employee experiences. That to us is the first in the market. So, you may ask, what is the solution, what is the key -- what are the key parts of the solution that differentiates us from the rest because a lot of people have been talking about AI experiences. Let me talk about the employee experience solution. This is at the intersection of CX and AI. These are features that power you to think about the life of an employee or a user across the [ day ] and what we can do for them. The first one, the most important one is this AI experiential analytics. The use of AI to derive insight into employee engagement and workspace utilization is a core component of CXAI, emphasizing the value of data and making decisions as well as measuring productivity. And we're going to talk a lot about that later in the presentation. The second pillar, of course, is our workplace SuperApp, which we've already deployed with tens of customers and also deployed globally in hundreds of locations. This is a central platform that integrates various workplace functionalities, reflecting CXAI's emphasis on a unified mobile-first approach to workspace technology. Our key differentiator is spatial intelligence. That's the key part of CXAI's technology stack, focusing on optimizing physical spaces and enhancing interactions within the workplace to location-based technologies, providing contextual awareness. This is the way we differentiate among any other booking engine that's out there. And finally, Generative AI. Everyone's been talking about Generative AI for the last year, we're actually implementing it right now in our platform, both on the back-end side as well as the front-end side. GenAI and CXAI boost efficiency and productivity by enabling voice and text activated tasks like scheduling meetings with simple command and features like search and discovery. This streamlines administrative duties, driving efficiency and convenience for employees as well as personalization for on-demand knowledge augmentation. You're going to see a lot more of these applications in the coming months as we launch the full CXAI platform, but this is the cornerstone of the differentiation and the growth for the company. So, let me talk about from the business side or from the customer side, why is this so important? Why is this really relevant to an enterprise? The reason why it's important is the world has changed. The world has changed dramatically in terms of how the modern workforce operates. Society as a whole is redefining what it means to be productive, engaged and fulfilled professionally. The future of work is not place dependent. It's happening in a space of endless possibilities with technologies enabling work and life to be blended, integrated seamlessly and augmented with intelligent personalization and employees are at the center of this universe. When you look at our [ CXAI Octagon ], employees are at the center of that. The future is here. The future is now. It is being led by the CXAI platform focused on transformational employee experiences. CXAI is just not a SuperApp, it's a catalyst for transformation. Businesses that employ CXAI, unlock the potential for a more efficient, collaborative and engaged workforce. In doing so, they set the stage for a future where work truly knows no bounds. We have [indiscernible] our solution as a platform that solves problems for both employees and employers as they navigate their work life. And we have built it grounds-up, anchored on artificial intelligence. AI is transformative to the future of work, creating massively scalable offerings that create the flywheel effect of automating the workflows, driving engagement, enabling collaboration and productivity, leading to immense affinity in the employer-employee relationship. We've been strong believers in this technology and now to be the first in our industry to offer solutions to our customers. And who are those great customers [ are for us]. Now our primary business is a SaaS platform that we to sell to enterprise customers as an annual subscription for 2 to 5 years. Today, customers deploy our cloud-hosted software across their enterprise campuses to allow employees to connect with their workplace for a myriad of use cases, examples being guest room booking, collaboration, navigation, food ordering and internal communications. Our large enterprise customers are mainly divided into following top 5 verticals

[Operator:]

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