Company: CXAI
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0001829126-25-006141
Chunk: 67

Company: CXApp Inc.
Filing Date: 2025-08-13
Form: 10-Q
Item: Part I, Item 2
Chunk 67
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-based Software as a Service (“SaaS”), as well as from the design, deployment, and implementation services provided through its enterprise applications platform. For the three months ended June 30, 2025, total revenue was $1,223 thousand, compared to $1,766 thousand for the three months ended June 30, 2024. The decrease of $543 thousand, or approximately 31%, was primarily attributable to a decline in non-recurring Professional Services revenue.

The reduction in Professional Services revenue reflects the Company’s strategic transition to a full SaaS delivery model, with a focus on recurring, high-margin revenue streams. Professional Services generally relate to implementation, customization, or integration services that are customer-specific and non-recurring in nature.

Subscription-based revenue comprised approximately 96% of total revenue for the three months ended June 30, 2025, compared to 85% for the same period in 2024, representing an 11-percentage point increase in revenue mix. This shift in revenue composition is consistent with management’s strategy to drive predictable recurring revenue and improve gross margin over time.

Gross Margin

Cost of revenues includes the direct costs to deliver the services, including labor and overhead. Cost of revenues was $171 thousand for the three months ended June 30, 2025, compared to $353 thousand for the three months ended June 30, 2024. The gross profit margin was 86% for the three months ended June 30, 2025, compared to 80% for the three months ended June 30, 2024. The decrease in cost of revenues of approximately $182 thousand, or approximately 51.55%, for the comparative periods ended June 30, 2025 and June 30, 2024, was attributable to a reduction in professional services-related costs, as well as lower hosting and infrastructure expenses for cloud services.

Operating Expenses

Operating expenses consist primarily of research
and development (“R&D”), sales and marketing, and general and administrative (“G&A”) costs. For the three
months ended June 30, 2025, total operating expenses were $5,163 thousand, compared to $5,063 thousand for the same period in 2024,
representing an increase of $100 thousand.

This increase was primarily driven by a $462 thousand
rise in R&D expenses, reflecting increased investment in platform enhancements, including those related to the Company’s strategic
relationship with Google. These efforts include development of deeper integrations with Google Workspace and