CXApp(CXAI 0.92%) reported fiscal Q2 2025 (period ended June 30, 2025) earnings on August 11, 2025, highlighting flat revenue of $1.22 million, gross margin improved to 86%, and significant expansion in annual recurring revenue (ARR) from large Fortune 1,000 renewals. This summary analyzes CXApp's operational performance, strategic client adoption trends, and financial discipline driving long-term positioning in the workplace experience software sector.
ARR renewals drive CXApp subscription margin gains
Subscription revenue as a share of total revenue rose from 87% to 96% year-over-year. The CFO also confirmed a quarter-over-quarter increase in negative EPS and a year-over-year increase in cash on hand, with gross margin at 86% despite higher R&D expenditure.
"Subscription revenue made up 96% of total revenue compared to 87% just a year ago, showing our progress toward a higher margin recurring model. Gross margin improved to 86% from 80% last year even as we invested heavily in R&D to accelerate ARR growth. EPS also increased from last quarter and from last year up to negative 16¢ per share, but that's an increase quarter over quarter and year over year. We're also happy to report that cash on hand as of today, year over year, has increased."
— Joy Mbanugo, CFO
A higher proportion of recurring revenue and improving margins, despite increased investment, directly strengthen both CXApp's financial resilience and long-term operating leverage, as evidenced by subscription revenue comprising 96% of total revenue and gross margin improving to 86%.
Fortune 50 client expands CXApp Sky platform
Two major enterprise renewals included the largest ARR renewal in company history, with a Fortune 50 customer piloting global platform expansion and full adoption of CXApp's advanced features. Management noted site usage exceeding 150% at some deployments, a phenomenon attributed to both RTO (return-to-office) mandates and the platform's role as a draw for offsite employees.
"We had our largest ARR renewal with a leading Fortune 50 client who is now planning to expand globally to all sites as well as adopt all of the groundbreaking capabilities on the Sky platform. They want it all as they want all the employees to experience the magic of Sky. We are seeing more than a 150% plus usage at some of their sites, primarily driven by the mandate for RTO as well as the ease of using capabilities of the Sky platform. You may ask, can you have a 150% plus usage? Well, it's pretty simple. Not only everybody who's supposed to come to the office comes to the office, but also they're getting people from out of site, out of state, or out of city coming in because the headquarters is an important place to be."
— Khurram Sheikh, Chairman & CEO
The ability to drive both global platform adoption and elevated site engagement among blue-chip enterprises substantiates CXApp’s strategic value proposition and stickiness among high-value clients.
CXApp launches predictive analytics for workspace efficiency
The company deployed a new predictive model leveraging Google AI infrastructure, with early deployment at client campuses enabling real estate cost savings, such as $300,000 for one campus, increased employee productivity, and up to 75% savings on underutilized spaces for a client case study. These capabilities are layered atop existing spatial analytics and automation tools.
"Looking at that, we've created this very accurate prediction model. We think it's more than 90% accuracy on it, but we've been able to showcase to our client really three major business impacts. Number one is real estate optimization. If you look at the number of desks that were wasted or were never ever utilized, we've got a metric on what the cost per desk per day is. We've realized that for that campus alone, there's a $300,000 cost savings in there, which is significant for a campus. If you can predict or know that these desks were going to get canceled anyway or these rooms were not going to get booked, you don't need to, you need to give it to somebody else to use, or you don't need to even have those rooms or desks. Technically, employee productivity, we've seen that the number of hours that we can save an employer, the team, it's in the thousands of hours per year that we can save in terms of their lack of productivity because they're spending time trying to book and rebook and cancel. The auto release feature enables that easily for them. Lastly, when you have these cancellations late in the time before the day comes, people are not utilizing those resources because it's too late to come back. Given that our algorithm can show you that these things will be released sooner, could be canceled sooner, we've shown that you can have a 75% savings of the underutilized spaces, which is significant because this means that somebody who wanted to come to the office can now be at the office and somebody who wasn't going to come was actually let go earlier. Very interesting model that we built with our team. We're building these kinds of models on top of the Google AI infrastructure that will allow really value-based insights and outcomes to our clients, which is exactly what they're looking for. Super excited about this development."
— Khurram Sheikh, Chairman & CEO
Delivering tangible cost and efficiency metrics by operationalizing AI-driven predictive analytics enhances CXApp's differentiation in a contracting, competitive enterprise real estate technology market.
Looking Ahead
Management did not provide formal quantitative revenue or profitability guidance for upcoming quarters. However, the company confirmed the rollout of SkyBTS and SkyView analytics features across all clients next quarter, in addition to expanded strategic partnerships with cloud providers and ecosystem integrators targeting further Fortune 1,000 adoption. Leadership highlighted ongoing innovation investments and referenced an upcoming Q3 earnings call in November for further strategic and financial updates.
