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. .

financial services, technology, media and entertainment, health care and consumer. We have crowds some of the largest logos of the world as our customers that are at the leading edge of the workspace transformation.

We have a healthy distribution across all verticals, and we see the adoption trend developing from technology sector-focused companies to the larger Fortune 100 portfolio. Our customers are sophisticated buyers of technology solutions and do not compromise on quality, performance, security, reliability, scalability and of course, technology road map.

So, as you can see, we've kept increasing the logos that are adopting the CXAI platform. We're also increasing the value of the different technology aspects in their platform.

We're working very closely with them on the analytics platform that you'll see that is driving immense affinity, immense data sets that are helping them be more productive in their work experience. So that's kind of like an overview of where we are at, what we've accomplished and things we're doing overall from a product and business side.

But let me talk about the financial results of this quarter. So, this slide highlights several key metrics demonstrating our continued momentum in Q1 from last year. Let's take a closer look at each of the metrics. Between January 1 and March 31, 2024, we had a record increase in net retention rate, NRR to 108%.

That was accomplished primarily by renewing, expanding 7 of our largest Fortune 1000 customers across all 5 verticals. These large renewals are very important because this signals to the market that these customers are now ready for the scale-up.

In ARR annual renewals, that's north of $2 million, which is a significant part of our ARR portfolio, so very, very happy with that. And we're also happy that these customers are now looking at the CXAI platform and the CXAI VU, which is the analytics platform we're going to talk about as the next-generation platform they want to scale up to.

The other more important metric for a SaaS business is the subscription-based revenue.

And I'm happy to report that our subscription-based revenue for this quarter was 87% of the total revenue, a metric which has been trending upward quarter after quarter, and this quarter marked the highest ever in our history, increased 6 points from the last quarter.

This is because of the -- the work we've been doing on the planning of the business in terms of working with our customers to provide value-based solutions, recurring solutions and then minimizing project work, which traditionally has been done in a manual way but automating those tasks using AI technology has really helped us get to this really high subscription to onetime revenue number, and I'm really proud of the team hard work in achieving that.

The other metric that we've been trending upward is the gross margin. The gross margin was 82% for this quarter, which is higher than the previous quarters and it's inching up and up.

We're all in the right direction, all tied to the fact that we're getting more subscription revenue, we're getting less onetime revenue, and we're also increasing the profitability of the company towards that.

And part of all of this is really driven by our land and expand strategy, which continues to be a key contributor to growing subscription revenues with our existing customer base.

And with the new CXAI VU analytics product offering, we are looking to ramp up these product expansions, which will really increase the ARR, the NRR and also the gross margin. And lastly, we've been super focused on creating value for our investors.

And for that sense, we're really focused on optimizing the operational cost structure, leveraging our investments in AI and headcount rationalization which we did for -- in late Q4 and Q1, resulting in a net north of 20% operating expense reduction from Q4 '23 to Q1 '24.

This was done as part of our plan to really scale up the business in 2024 with a much lower cost structure. Looking ahead, I'm very confident that our increasing ARR bookings, strong customer acquisition and focus on [ suppression ] revenue will drive sustainable growth.

We're committed to continuously innovating the CXAI platform and delivering value to our expanded customer base. All right. So that's our financial information for this quarter. Let me talk about the exciting new announcement that you probably have seen has hit the press announcing CXAI VU and we pronounce it as Skyview.

So, it's been an extension of our CXAI platform. It is the AI-based analytics platform for employee experience. It is the world's first in this area, we're really proud of the revolutionary work we've done to enable this. And I really want to commend the Google Cloud team that's really supported us in this effort.

It's been at breakneck speed in terms of getting the platform up and running. And now it's in beta with lots of great customers who are working with us day in day out, and we want to launch this at the end of Q2 for general availability.

And what does the CXAI VU platform do? So, the CXAI VU platform is actually revolutionizing the workplace environment by measuring work efficiency and providing actionable insights, driving employee engagement, collaboration and productivity. So let me give you a little flavor of what that means and the key attributes that we focus on.

And the interesting thing is we actually worked with our customers pretty closely over the last year in building this platform, which came from a lot of interaction with our customers.

The CXAI VU platform is really driven towards providing the first piece of space optimization, really playing those spatial analytics that allows you to understand the key space utilization data, including heat maps and historical trends, which are instrumental in optimizing workspaces and resource allocation becomes the most efficient workplace business planning tool out there.

The next thing that's important is what are people doing with the app and in the workplace? And with our platform, we can trace usage of application function utilized by the users to gain valuable insights on user behavior, which will drive engagement and productivity.

And also, integrations with corporate infrastructure that tells you what kind of technology assets that people use and how they use it, gives a really good profile of how the enterprise is working. More importantly, when you look at all these pieces together, it provides a comprehensive view of the enterprise.

The data that we use from our integrations as well as the data we're getting from space and people information is driving these actual outcomes, which are really data driven.

And this makes life very easy for enterprise manager, workplace experience manager or an IT manager to really decide and even an HR manager to decide what is really happening and what can we do to make things better? And last but not least, the most cool thing about this is the predictive analytics.

This is part of the tool that really reimagines the whole enterprise with customizable dashboards, you can create your own dashboard and make -- get key predictions for KPIs with a very intuitive user interface. I'm going to show you a quick slide view of that. But this is kind of like the 4 cornerstone pillars of our analytics platform.

And it's really driven by this -- by our customers who really wanted to see what are we actually doing with the app, what is the real value of the app. So let me talk about a little bit on some examples of this platform. So, the first chart will show you a little bit when you enter the platform, you get this global view of the work experience.

This shows you a global view of the campuses around the world. So, you kind of have the tip of your fingertips, the ability to see what's happening in different regions of the world, whether you're in Dubai or you're in Singapore or you're in L.A.

or New York, you can actually see what the utilization per region is, what the bookings have happened, what things are happening in different markets or what functions have been utilized, that gives the enterprise manager a really sky view of their world.

And as we move forward, we talk about what is most important to them, right? And one of the things is the workspace optimization to see how many bookings are happening, what is the trend line between different years or different months as well as different spaces in different locations.

So, this gives you a very good view of [ technical ] analysis of the data, the data sets out there. From one point, you can scroll in and you can change the filter to allow you to give you different insights.

So, this gives really a tool that allows a workplace experience manager to really drive optimization of their assets and drive efficiency and productivity of those assets. The next exciting part is employee engagement.

And this is where it gets very exciting whereas -- and we will optimize the solution so that as a workplace manager or workplace experience manager, you can actually profile yourself and see what things are important to you. You can understand what events are happening at different places in your organization.

You can see the trends in terms of who's coming in, who's coming out, what are they doing, what features in the app they are using and really understanding what integrations are they using.

Are they using a locker? Are they using the food service that you offer or other amenities you offer? So, it gives you a holistic view of what people are doing, why they're doing it, what matters to them, what's most important.

And this is being driven by our largest customers who are actually using our app for really things that are mission-critical. And mission-critical is ordering lunch every day. Mission-critical is getting to the office on time, mission-critical to find a parking spot, mission-critical is to get home at a reasonable time.

And mission-critical is to get your work done faster, better and cheaper. This is all happening because now we can tell you exactly what the friction points are for the users, what are they liking, what are they not liking, what's going to make them more productive. This is simply awesome.

And if we get to play with the tool, we're going to do some demos of this as we launch it with our customers on our next calls, and you'll see how powerful this is in terms of providing that intuitive nature.

And to that goes to my next chart on the data-driven piece, right? The fact that now you can have opinions on what's right, what's wrong, why is this market working this way. You can actually get real data sets to understand what are the critical things. You can compare data sets between different locations.

You can also decide what active users are using, where they're using it, and fusing that data will give you actionable insight, meaning that once you know that how many people are actually coming into the office, how many people are actually using the product, how many people are actually being productive in some of the work function, you can fuse the data together to create more actionable insights.

And this is all data-driven. So that way, there's no opinions on whose site is better or whose campus has got better amenities, it all will show up very clearly on where the decisions are to optimize, to improve, to enhance the workspace and also the employee engagement.

And lastly, the way we've thought about all of this stuff is really to make it in the in the hands of the employer to really decide how they want to create their own dashboards. People talk about lots of different dashboards, but we talk about just create your own dashboard, which is the interactive predictive analytics.

You can ask a question and you get an answer that satisfies your question and gives you insights on what else could you have been asking or what else do you see in that.

We're using the latest GenAI models for this, and we're creating really all these questions coming at a native language and create these custom dashboards containing ready relevant information. And using these predictive analytic capabilities, you can estimate the potential impact on future programs.

But this is really the most advanced solution out there that provides that intuitive user experience. So, all of these tools are really cool, and they are getting deployed with our customers who are embracing them because without this, there's no real value for the full app.

Unless you have the analytics tied together, you can't really realize the full value of the workplace experience. So let me talk about our friends at Google, who've been partnering with us and really has been a great experience working with them most prominently because they are the leaders in the AI infrastructure space.

And when you think about that, it's not just the Google Cloud capability, it's also these other capabilities that I mentioned in the slide in terms of providing these different user interaction, whether it's through voice or images or other sources, whether it's natural language processing to really understand user intent and deliver more relevant and personalized results.

Location is super important to us. As you know, we are this spatial intelligence company. We provide really good location data inside the enterprise, but a lot of things around the enterprise or rare enterprise.

So, we provide that full location intelligence, what we call it places and things and the regional variations, localization around different markets. We've got a really great platform play with Google on that, that's really helping. One of the key things of our business has always been about integrations.

We do around 100-plus integrations with different customers. With Google's API management platform, we're able to do those integrations much, much faster, think about months become days, and we can also enable a lot more applications around it. So, this is a key differentiator for us compared to our competition.

And lastly, but not least, all our major customers really care about security. Security is a prime factor for the reason why they chose us. And so, for us to be at the top of the league on security is super important. And that's why we're leveraging all the features on the Google Cloud platform for security and compliance.

And last but not least, believe it or not, this business is getting to become not just a nice to have but a must have. And when you have a must have business, you need high reliability, high quality, high availability. And our customers are demanding that.

Our customers are not happy if they can't order something on the app because they're depending on it. So, we have to provide those really high levels of reliability and quality and availability.

And this is where really partnering with Google's AI infrastructure has really helped us in enabling that, and we really are looking forward to driving more and more innovation with this AI infrastructure. So anyway, let me close off by talking about why we are important, why CXAI, why you as an investor should think about it.

Number one, AI is changing the world. You're seeing that in every segment. I think in our space, AI is not just the future, it's present right now. And with our solution, we're going to be transformational to the market. We have a patented leading-edge enterprise AI SaaS platform, the first in the world.

Very proud of that, and we're going to launch it in the summer after our first deployment with all our existing customers. And this existing customer base is growing. It's very strong, very loyal to us and willing to go scale up to the next level.

Most importantly, when you think from an AI perspective, we've got diversified deployments globally in 60 countries and 200 plus cities. Those data sets are precious because they give you real data set that allow these AI models to perform better and provide better training and better outcomes. That's what our customers want.

They just don't want AI for the sake of AI. They want AI to create actionable results that will be meaningful to their business. We believe we are delivering that with this new CXAI VU platform as well as overall CXAI platform. We are an innovation team were based on Silicon Valley; our heritage is about transformation.

We're super excited about this area. We're super excited about the challenges we see in the market. But more importantly, we have an experienced management team and our Board is very focused on delivering value to our investors. And we're not going to do everything ourselves. We're partnering with leading innovators.

You've seen the Google Cloud announcements. You will see further announcements with other folks in the coming months and years, and we are working very closely in the whole ecosystem to find the best-in-class provider. And lastly, as I started, this journey a year plus ago when we took the company public, we want to create this new software category.

We really believe in employee experiences. We've been validated in the market that this is the right offering, this is the right capability. Now we just have to deliver it. And we believe that we are at the tipping point of delivering the capabilities, getting the customer adoption and scaling to the next level.

So, with that, that's what I have to say today. We really believe that this is -- the company is ready for the next phase of innovation. As we like, to say to the CXAI and beyond, thank you, everybody. We'd love to have you connect with us on our next earnings call, and we would welcome interactions with you.

You can go to our website, www.cxapp.com, and we can share with you all the details about the offering that we did today in terms of the CXAI VU platform as well as any other investor documents. Thank you very much. Have a great evening. Bye. .

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