10-K: CXApp Reports 36% Revenue Drop, Nasdaq Delisting Threat Looms

CXApp Inc. reported a 36% revenue decline and a $13.473 million net loss for 2025, while facing a Nasdaq delisting notice for its stock price.

Summary

• CXApp Inc. reported a net loss of $13.473 million for the fiscal year ended December 31, 2025, an improvement from a $19.408 million net loss in 2024.
• Total revenue decreased by 36% to $4.583 million in 2025, down from $7.142 million in 2024, primarily due to customer churn in healthcare and retail verticals and a strategic de-emphasis on lower-margin professional services and hardware.
• Subscription revenue, as a percentage of total revenue, increased to 98% in 2025 from 87% in 2024, reflecting a strategic shift towards a SaaS-based business model.
• Gross margin improved by 500 basis points to 87.4% in 2025, driven by the optimized revenue mix and cost efficiency initiatives.
• Operating expenses increased to $21.582 million in 2025, up from $19.598 million in 2024, including a $2.148 million goodwill impairment charge.
• The company's cash and cash equivalents increased to $11.101 million in 2025 from $4.880 million in 2024, and working capital shifted from a $4.496 million deficit in 2024 to a $7.075 million surplus in 2025.
• CXApp received an extension from Nasdaq until September 7, 2026, to regain compliance with the minimum $1.00 bid price requirement.
• The company raised approximately $15.990 million in net proceeds from convertible debt agreements with Avondale Capital, LLC in 2025 and an additional $648 thousand from an at-the-market equity offering.
• A new Securities Purchase Agreement with Avondale Capital, LLC was entered into on March 27, 2026, for up to $40 million in Pre-Paid Purchases, with an initial principal amount of $1.050 million.
• A legal matter originating prior to December 31, 2025, was settled in February 2026 for $65,000, with the related accrual recorded in the 2025 financial statements.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a company facing significant financial challenges, including declining revenue and Nasdaq compliance issues, despite positive shifts in gross margin and recurring revenue mix. The reliance on dilutive financing and goodwill impairment are major concerns.

Positives

• Net loss improved by $5.935 million, from $19.408 million in 2024 to $13.473 million in 2025.
• Gross margin significantly improved by 500 basis points, from 82.0% in 2024 to 87.4% in 2025, reflecting a successful shift to a higher-margin SaaS business model.
• Recurring subscription revenue increased to 98% of total revenue in 2025, up from 87% in 2024, indicating a more predictable revenue base.
• Cost of revenue decreased by 55% to $0.6 million in 2025, exceeding the 36% revenue decrease, demonstrating improved cost discipline and scalability.
• Sales and marketing expenses decreased by 36% ($1.2 million) to $2.1 million in 2025 due to organizational restructuring and reduced program spending.
• Cash and cash equivalents increased to $11.101 million in 2025 from $4.880 million in 2024.
• Working capital shifted from a deficit of $4.496 million in 2024 to a surplus of $7.075 million in 2025.
• Other income (expense) showed a significant improvement of $10.360 million, moving from a $6.302 million expense in 2024 to a $4.058 million income in 2025, primarily due to a reduction in the change in fair value of derivative liabilities.
• Successfully remediated previously identified material weaknesses in internal control over financial reporting as of December 31, 2025.
• Entered into a new Securities Purchase Agreement with Avondale Capital, LLC for up to $40 million, providing significant potential future funding.
• Announced a strategic partnership with TouchSource in February 2026, expanding market reach for AI and workplace intelligence platform.
• Continued investment in AI-powered Augmented Reality (AR) capabilities, AI-based analytics, and CXAI Agentic AI offerings.
• Intellectual property portfolio includes 37 filed patents, with 17 granted.

Negatives

• Total revenue decreased by 36% ($2.6 million) to $4.583 million in 2025 from $7.142 million in 2024.
• Subscription revenue decreased by 28% ($1.7 million) due to customer churn in healthcare and retail verticals.
• Professional services revenue decreased by 91% ($0.7 million) and hardware revenue decreased by 79% ($0.1 million).
• Operating expenses increased by $1.984 million to $21.582 million in 2025.
• Incurred a goodwill impairment charge of $2.148 million in 2025, indicating that the carrying amount of goodwill exceeded its estimated fair value.
• Loss from operations increased by $3.836 million to $17.577 million in 2025.
• Net cash used in operating activities increased to $10.381 million in 2025 from $7.325 million in 2024.
• The company has a history of operating losses and its continuation is dependent on attaining profitability and raising additional capital.
• Received a Nasdaq delisting notice on September 11, 2025, for failing to meet the minimum $1.00 bid price requirement, with an extended compliance period until September 7, 2026.
• Future equity offerings will be dilutive to existing stockholders.
• The company's market capitalization of approximately $22.9 million as of June 30, 2025, is relatively low.
• The company relies on a limited number of key customers, with the top three accounting for 40% of gross revenue in 2025, posing concentration risk.

Risks

• History of operating losses and no assurance of achieving profitability or raising additional financing.
• Difficulties in managing growth due to the need to increase organization size and integrate acquisitions.
• Dependence on experienced and skilled personnel; intense competition for talent.
• Inadequate protection of intellectual property rights could lead to loss of revenue and harm operations.
• Volatile market price of common stock and warrants.
• Changes in accounting principles or their interpretation may adversely affect reported results.
• General economic and political conditions (recessions, interest rates, trade wars, tariffs, pandemics, acts of war or terrorism) may adversely affect results.
• Failure to meet Nasdaq continued listing standards could lead to delisting, reduced liquidity, and litigation.
• Future equity issuances could dilute existing stockholders.
• Contract disputes or litigation can be costly and time-consuming.
• Failure to control expenses or effectively manage growth could negatively affect profitability.
• Rapidly evolving technology landscape requires constant innovation; failure to anticipate and respond could erode competitive position.
• Risk of damages from claims of wrongful use or disclosure of trade secrets by employees.
• Loss of key research personnel or their work product could hamper commercialization.
• Proprietary software is protected by common law copyright, not registered, potentially offering narrower protection.
• Reliance on third-party technology licenses; loss or inability to maintain upgrades could cause delays.
• Could incur substantial costs in protecting proprietary software technology.
• Could be subject to claims of infringing intellectual property rights of others.
• No current plans to pay dividends; returns limited to stock value appreciation.
• If securities analysts do not publish research or publish inaccurate/unfavorable research, stock price and trading volume could decline.
• Sales of substantial amounts of common stock in the public market could adversely affect market price.
• Anti-takeover provisions in organizational documents could delay or prevent a change of control.
• Charter designates Delaware Court of Chancery as the sole forum for certain actions, potentially limiting stockholders' ability to choose a favorable judicial forum.
• Requirements of being a public company increase costs and distract management.
• Revenue forecasting is uncertain, and failure to meet forecasts could result in stock price decline.
• Goodwill or amortizable intangible assets may become impaired, requiring significant charges to earnings (already occurred in 2025).
• Failure to maintain effective internal control over financial reporting could lead to inaccurate or untimely financial reporting.
• Internal system or service failures could disrupt business and impair ability to provide services.
• Digital threats such as cyber-attacks, data protection breaches, computer viruses, or malware may disrupt operations.
• Integration of artificial intelligence into product offerings and operations could result in reputational or competitive harm, legal liability.
• Use of open-source technology may create risks of security weaknesses.
• Delays in customer budget processes could delay purchases of products and services.
• Reliance on a limited number of key customers; loss of one or more could adversely affect operating results.
• Need to reduce prices to remain competitive in a highly competitive market could adversely affect results.
• Failure of products to satisfy customer demands or achieve market acceptance could adversely affect results.
• Possibility of future tariffs, trade protection measures, import or export regulations.
• Inability to develop new products or enhance products to keep pace with rapidly changing technology.
• Risks and uncertainties associated with joint ventures, teaming, and other arrangements.
• Exposure to numerous federal, state, and foreign legal and regulatory requirements; violations could harm business.
• Global events (e.g., military conflicts, political instability, pandemics) and other general economic factors may impact results.
• International business exposes the company to geo-political and economic factors, legal and regulatory requirements, and public health risks.
• Difficult conditions in the global capital markets and the economy generally may materially adversely affect business.
• Changes in U.S. administrative policy, including trade agreements and tariffs, could adversely affect financial performance.
• Expansive, broadly defined, and rapidly evolving government regulation and enforcement of data practices and data tracking technologies.
• Evolving and changing definitions of Personal Information and Personal Data may limit or inhibit business expansion.

Future Outlook

The company plans to expand its AI-native capabilities, integrating agentic AI for desk booking, advanced analytics, and seamless integrations with key enterprise platforms to position CXApp as the go-to solution for hybrid workplace management. It aims to expand into new vertical markets like corporate real estate, healthcare, financial services, and technology enterprises, and strengthen channel partnerships with cloud providers and IT integrators. Management believes the global employee experience and workplace technology market will grow at a CAGR exceeding 20%, and CXApp's AI-driven platform offers differentiated capabilities for agile decision-making in distributed workforces. The company expects to maintain or improve gross margins by focusing on subscription-based recurring revenue, platform scalability, and infrastructure optimization, positioning for profitability as it returns to revenue growth.

Management Comments

• Our leadership team remains committed to balancing innovation with financial discipline, ensuring that CXApp is positioned for long-term profitability and strategic growth.
• By leveraging our AI-driven platform and expanding our enterprise footprint, we aim to deliver scalable, data-driven solutions that address the evolving needs of hybrid workplaces.
• Management believes that we must continue to dedicate a significant number of resources to research and development efforts to maintain a competitive position in the market.
• Management believes that these investments in research and development will maintain the Company's competitive position and create opportunities for long-term growth.
• Management believes that the Company's focused investments in R&D innovation, combined with its disciplined approach to sales and marketing efficiency and operational management, position the Company to scale its AI-native offerings while driving long-term operating leverage and improved unit economics.
• Management believes that the Companies current liquidity position is sufficient for the next twelve months, including under the SPA with the Streeterville Capital, LLC, and Avondale Capital, LLC.
• Management continues to implement expense-management initiatives and working-capital optimization measures and expects to use financing sources that are reasonably accessible to support operations.
• Based on current cash balances, expected collections, and managements cost-management actions, the Company believes it has sufficient liquidity to meet its working capital needs and other operating requirements for at least the next 12 months from the issuance date of the financial statements and thereafter for the reasonably foreseeable future.

Industry Context

StockSavvy.ai notes that CXApp operates in the rapidly evolving employee experience and workplace technology market, which is projected to grow at a CAGR exceeding 20%. The company's strategic shift towards an AI-powered SaaS platform aligns with broader industry trends emphasizing hybrid work enablement, data-driven decision-making, and employee-centric technology. While the market is highly competitive with established enterprise software vendors (e.g., ServiceNow, Microsoft, Cisco) and specialized SaaS providers (e.g., Envoy, Modo Labs), CXApp aims to differentiate through its AI-driven automation, advanced analytics, and seamless integrations. The focus on reducing app fatigue and providing a "Workplace SuperApp" addresses a key challenge in fragmented workplace technologies.

Comparison to Industry Standards

• CXApp's gross margin of 87.4% in 2025 is exceptionally strong, comparable to leading pure-play SaaS companies which often boast gross margins in the 70-90% range (e.g., Microsoft's commercial cloud gross margin is often cited in the high 60s to low 70s, while some specialized SaaS firms can exceed 80%). This indicates a highly efficient software delivery model.
• The company's recurring subscription revenue at 98% of total revenue is a very high standard for SaaS businesses, demonstrating strong revenue predictability, similar to mature SaaS leaders like Adobe or Salesforce, which have very high recurring revenue percentages.
• The reported net loss of $13.473 million on $4.583 million in revenue indicates significant unprofitability, which is common for growth-stage technology companies investing heavily in R&D and market expansion, but contrasts with profitable industry giants.
• The goodwill impairment charge of $2.148 million suggests challenges in the valuation of past acquisitions or a decline in the company's market prospects, which is a red flag compared to companies with stable or growing goodwill values.
• The Nasdaq minimum bid price non-compliance is a significant concern, placing the company in a precarious position compared to well-established public companies that consistently meet listing requirements.

Management Changes

Corporate Governance

Legal Proceedings

• Not currently subject to any material legal proceedings, nor is any material legal proceeding threatened against the company or its officers/directors.
• A legal matter originating prior to December 31, 2025, was settled in February 2026 for approximately $65,000, with the related accrual recorded in the 2025 financial statements.

Related Party Transactions

• Entered into a Separation and Distribution Agreement, Employee Matters Agreement, Tax Matters Agreement, and Transition Services Agreement with Inpixon in connection with the business combination. These agreements govern the allocation of assets, employees, liabilities, and tax responsibilities between CXApp and Inpixon post-separation.

Stakeholder Impact

• Shareholders face potential for significant dilution from ongoing and future equity financings (convertible debt conversions, ATM offerings). The risk of delisting from Nasdaq could severely impact liquidity and stock price. Goodwill impairment indicates a reduction in asset value.
• Employees may be impacted by workforce realignments and cost optimization initiatives, though the company aims to attract and retain top talent. Stock-based compensation is a key part of their compensation.
• Customers are targeted with a strategic shift to a pure SaaS model and focus on AI-powered solutions, aiming to enhance their experience and operational efficiency. Customer churn in certain verticals indicates some dissatisfaction or budget constraints.
• Creditors/Lenders are involved in convertible debt agreements that provide financing but also carry risks related to conversion terms and the company's ability to meet obligations. The new $40 million SPA with Avondale Capital provides continued access to capital.

Next Steps

• Regain compliance with Nasdaq's minimum $1.00 bid price requirement by September 7, 2026.
• Continue to implement cost reductions and expense-management initiatives.
• Focus on customer retention through enhanced customer success programs.
• Increase enterprise adoption of its AI-powered workplace experience platform.
• Expand recurring subscription revenue to drive sustainable long-term growth.
• Advance AI-driven product development, including agentic AI and predictive analytics.
• Expand into new vertical markets (corporate real estate, healthcare, financial services, technology).
• Strengthen channel partner ecosystem (Google Cloud, Amazon, workplace technology providers).
• Build AI-enabled sales and marketing strategies.
• Seek stockholder approval for Pre-Paid Purchases in excess of the Exchange Cap every 90 days until obtained.

Key Dates

Recommendation

StockSavvy.ai recommends "Sell" due to several critical concerns highlighted in the filing. The company faces significant financial distress, evidenced by a 36% revenue decline, persistent operating losses, and a substantial goodwill impairment charge of $2.148 million in 2025. The Nasdaq delisting notice for failing to meet the minimum bid price requirement poses an immediate and severe threat to the stock's liquidity and market value. While the shift to a high-margin SaaS model and improved gross margin are positive, they are overshadowed by declining absolute revenue and increasing cash burn from operations. The reliance on highly dilutive convertible debt and at-the-market equity offerings for liquidity suggests ongoing financial vulnerability, making the stock a high-risk investment with significant downside potential.

Keywords

AI-powered solutions, Employee experience, Workplace management, SaaS platform, Corporate real estate, Location intelligence, Hybrid work, Digital transformation, SEC filing, Financial reporting, Goodwill impairment, Nasdaq listing, Convertible debt, Capital raise, Cybersecurity, Intellectual property, CXApp Inc.