Earnings Call
CXApp Inc. (CXAI)
Earnings Call Transcript - CXAI Q3 2024
Operator, Operator
Greetings, and welcome to the CXAI Third Quarter 2024 Earnings Call. Please note this conference is being recorded. I will now turn the conference over to your host Mr. Khurram Sheikh, Founder, Chairman and CEO of CXApp Inc. You may begin.
Khurram Sheikh, CEO
Thank you, operator, and thank you, everyone, for joining the quarterly earnings call for CXAI, pronounced Sky. Joining me today is our Chief Financial Officer, Joy Mbanugo. We plan to discuss CXAI's financial results for the third quarter of 2024 and also provide an overall business update on our progress in shaping the future of work and creating transformative employee experiences. By now everyone should have access to our earnings press release as well as our announcement CXAI becoming available on the Amazon Work Services, AWS Marketplace. We have also filed our quarterly earnings report, our 10-Q for Q3 2024 today. This information will also be found on our website, www.cxapp.com. Operator, we can move to Slide 3 and 2 please. These are disclaimer slides. I'll let the folks on the call read at their leisure, and we want to make sure we give those disclaimers before we get into the main section. Operator, please go to Slide 4. To dear shareholders, I'm proud to share our Q3 2024 results and the amazing progress we have made in shaping the future of 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, or what we call Sky, redefines how we think about work, life, and the seamless interplay between the two. I want to share with you a company snapshot of where we're at today. We are an AI-first company that believes the employee is at the center of the multibillion-dollar growing workplace experiences market, and with our state-of-the-art Sky platform, we are creating a new category in software employee experiences. We're headquartered in the San Francisco Bay Area, where we have our key design and technology development resources. We also have satellite hubs in Toronto and Manila, supporting global deployments in around 200 plus cities in 50 countries across nearly five continents. Our team of 80 innovators globally today at Sky are primarily engineers, but all our colleagues are great collaborators and design thinkers that are creating the next generation of experiences for employees worldwide. Our customers are Fortune 1000 companies headquartered in North America, but once they sign up with Sky, they eventually deploy to all their employee sites globally. The reason why they choose Sky is that we have the best and most advanced technology platform that's built on 37 filed patents, 17 of which have been issued. This substantial intellectual property not only establishes our company as a technological frontrunner but also secures our position as a pioneer in the industry. This platform has been developed in collaboration with leading AI companies in the tech ecosystem in Silicon Valley. We're excited to partner with the leading cloud providers like Google Cloud and Microsoft Azure, and today we announced our collaboration with Amazon Web Services, AWS, which will allow us to scale our business to the next level. A key differentiator to our business is that we have strong security and compliance credentials globally, and that is the reason you see so many logos from regulated industries; they use Sky because they know they can trust us with their data and provide enhanced employee experiences in a secure and reliable environment. So the company is in a strong position today. The earnings release is out. I'm going to talk about the market next. So, operator, if you can move to Slide 5 and on to Slide 6 as well. As we think about the market, I think the biggest item in the news has been the return to office. RTO has been a big topic, while at the same time employee engagement has been super important as well. Most recently, Amazon CEO, Andy Jassy, sent a letter to his employees with a mandate for a full five days return to office RTO mandate beginning January 2025. There have been many CEOs following suit, as well as many others doubling down on their remote-first mandate. This data that we show here from Flex Index shows that although there has been an increase in the RTO mandates, most companies still offer work location flexibility. No matter what side of the RTO debate you belong to, there's overwhelming evidence that employee engagement is still at its lowest since the pandemic and continues to be a significant challenge for any organization, large or small. Gallup has actually created an engagement survey called the Gallup Q12, a survey of 12 questions that ask employees about performance, commitment to their organization, and business metrics. Employee engagement trends are significant because they're linked to many important performance outcomes crucial to organizational leaders, like employee retention, customer service, safety incidents, quality of work, and profitability. According to Gallup, not engaged or actively disengaged employees account for approximately $1.9 trillion—again, $1.9 trillion—in lost productivity nationally. And if you look at the chart that I show here, the trends are still on low engagement—this is showing North America, but this is around a global phenomenon. As Gallup has measured the productivity of employees and really advanced organizations that have high employee engagement, that number is around 70%. So we're way off; orders remain off on the average in terms of employee engagement. And this is probably the main reason why CEOs like Andy Jassy are asking their teams to come back to the office. His memo outlined three things driving the decision: culture, cost, and innovation. Culture is key to the success of any organization. Culture is what defines a group of people, how they work together, and ultimately defines their identity. The fact that culture is challenged in the new normal of hybrid work is an interesting paradox. By pure definition, we have always had remote workers not in the headquarters of the company. As companies grow, they expand their base of employees everywhere. So the notion of the new normal, where the people in the same city are remote because they are not in the office every day, like every other remote worker not in the same city, is interesting. The C-suite must start thinking differently about how to create the culture of one team everywhere. The fact that someone is in the same city but not coming to the office every day should not prevent them from being part of the overall culture. The new culture is created with a combination of digital tools tied to the places where people work to create a pervasive engagement environment and letting the bonds build naturally. Even with Amazon's amazing market cap profitability, the market demands that the C-suite continues to look at sustained growth and profitability. Real estate and human capital are two significant cost items for any organization, and seeing less than 50% occupancy reports or less than 33% employee engagement analytics is not pleasant reading for a senior executive or their board. To manage costs efficiently and track employee productivity, occupancy reports or user service are inadequate. What is needed are AI-enhanced analytical tools that not only provide historical actual reports but also allow management to forecast their enterprise usage and reimagine the workplaces to meet their key performance indicators. This is a big, big problem across all organizations. That's why we're so excited about the solution cycle we have. Technology has enabled people to connect virtually from anywhere, anytime, and provide in-the-moment feedback. Yet we all know that even with all these technological advancements, for a team to gel and create amazing products, in-person interaction is critical. We need that face-to-face interaction, but with a new set of engagement tools for this new workplace stage. Employees need tools that will allow them to feel empowered and engaged to work from anywhere, just like how the smartphone enabled new ways of interactions between humans. We need the managers and employers to have similar tools that allow them to guide and nurture their employees in friendly environments. So I'm going to next talk about how Gartner, next chart operator please, is addressing this as the next hype cycle. Gartner is well-known for looking at technology in advance. Gartner has created a hype cycle for digital workplace infrastructure and IT operations, which focuses on Generative AI-based applications that take center stage in this digital workplace infrastructure. Sky has been mentioned by Gartner as a key technology leader in this ecosystem, with numerous technologies ranging from workplace experience apps to Generative AI tools, augmented reality clouds, and indoor location services that are all part of our Sky platform. These technologies are on various slopes of this hype cycle. It's interesting when you read this hype cycle; it's obvious this is not something 10 years away. This is something that will occur within the next two to five years, and this is transformational. Even Gartner has acknowledged that, and as you look at the capabilities that our company provides for the markets we're serving, this is transformative—this is existential for some of these companies. Hybrid work is here to stay; improving employee experiences in the office or away from the office is paramount, and we've got the technology capabilities around it. So this is where, operator, next chart please, next slide please. We are really focused on the AI piece of it. When we took the company public a year and a half ago, it was clear that we were focused on SKY as the AI transformational platform. Now the world is seeing that AI is coming into its next incarnation with AI agents that operate autonomously, making decisions and taking actions without human intervention. Agents don't just provide answers; they can also take action. Agentic AI's ability to take actions autonomously has the potential to help CIOs realize their vision for Generative AI to increase productivity across the organization. I'm showing a chart here from Gartner, based on a survey of 78 leading CIOs on the benefits to the organization using Generative AI, and two of the top four benefits are squarely tied to our space: increased employee experiences and productivity. AI is transformative for future work, creating massively scalable offerings that create a flywheel effect of automating workflows, driving engagement, enabling collaboration, and productivity, bringing immense affinity in the employer-employee relationship. We have been strong believers in this technology and are now proud to be the first in our industry to offer the solution to our customers. We firmly believe the future of work will be based on Agentic AI as it will drive outcome-based solutions rather than mere assistance. Autonomous AI agents must be trustworthy, given their potential role in automating mission-critical business processes. Enterprise will only deploy AI agents if they are reliable, trustworthy, and secure, and that is why we built SKY. Next chart, operator. So I want to discuss why our products and capabilities are really transformational here. The SKY technology platform represents a shift towards an AI-centric approach in workplace innovation. SKY seamlessly integrates customer experience, CX, with artificial intelligence, AI, centered around the employee to deliver solutions that transform the way work happens, making workspaces more intuitive and efficient, leading to happier and more productive employees. We have built Sky as an AI-native solution from the ground up, anchored on our mobile-first, cloud-first architecture. We have architected our solution as a platform that solves problems for both employees, and employers as they navigate their work lives. Looking at this architecture diagram, I've simplified it as we redesigned it to be an end-to-end data architecture, and I want to walk you through the key components of our capabilities. On the left, as you start from the Sky apps, these include applications that work on all operating systems, from Apple's iOS to Google's Android to any web-based solution that can reside on the smaller screens of a phone or a watch to the larger screens of a kiosk. We are truly multi-OS. These applications are all designed with AI capabilities to improve the user experience and automate workflows for the most productive and engaging actions and outcomes. The next box that we have is the brains behind the Sky platform, which resides in what we call Sky BTS, AKA Behind the Scenes, where rule engines are established, and content deliveries are securely managed for all functions. The ability for managers to streamline their operation digitally with natural language-based commands and customize it for their locations is groundbreaking and transformational. Last but not least, the third leg of the wheel is Skyview. Skyview is a Generative AI-based analytics platform designed to revolutionize the workplace environment, allowing organizations to analyze large datasets, generate actionable insights, and make real-time decisions. All of these products are connected in a secure enterprise environment that provides continuous feedback and enhancement, providing unmatched experiences for the enterprise. All the Sky products you see here are hosted on all major cloud platforms with modern AI infrastructure powering our customers with best-in-class cloud capabilities, including proactive monitoring, security, privacy, reliability, and automation. Today's announcement of our collaboration with AWS allows us now to be on all three cloud providers. We've had deployments on Google Cloud and Azure, and now we're gearing up to deploy on AWS, the largest cloud provider. By the way, we're deploying all of these with the safeguards and guardrails to prevent agents from hallucinating in production environments. We're making this a true enterprise environment solution, and this is where working with the likes of Google, Amazon, and Azure has been really important for us. Plus, all this innovation of Sky has been done with our large customers. As you know, our customers are from five major verticals: entertainment, healthcare, financial services, consumer, and tech, comprised of major giants in the Fortune 1000. We've been working with them closely to provide these end-to-end solutions, and it is satisfying to see this now coming to reality. Next slide, operator. Let me delve a little deeper into what these experiences are and provide updates on the capabilities and availabilities of these offerings. On the left, you see the screen displaying the Sky app and the home screen of a typical Sky application. It's an intuitive screen anchored on the map of the location that allows the user to be one click away from any actions. With our Agentic AI solution, it is one voice or text command away from actions, making it very simple, intuitive, and easy to use. The first pillar is really providing that consistent, personalized workflow-specific experience across mobile and web, powered by over 100 integrations with enterprise back-end systems. It manages the complexity in the back with the Sky BTS, providing users with a clean, easy-to-navigate context-specific UI to complete their tasks. The next experience is really through spatial intelligence. Spatial intelligence is a key part of Sky's technology stack, focused on optimizing physical spaces and enhancing interactions within the workplace, providing contextual awareness. Sky provides unique intelligent interaction capabilities by combining 2D and 3D mapping, mobile positioning, and IoT technologies, combined with pre-trained AI models facilitating in-the-moment experiences to delight our customers. The third aspect of these experience solutions is AI Experiential Analytics. The use of AI to derive insights into employee engagement and workplace utilization is a core component of Sky, emphasizing the value of data in decision-making and measuring productivity. Skyview acquired its first paid customer this quarter and is now generally available to all our existing clients who are all excited about its capabilities. I'm incredibly proud of the engineering team for delivering the solution on schedule to our first customers; our customers are excited about it because it is super critical for their business operations. For all new customers coming on board with Sky, Skyview will be packaged together with the applications. So as you acquire the Sky platform, analytics comes with it. Finally, as we examine our more advanced capabilities with Generative AI, this aspect is tied to boosting efficiency and productivity by enabling voice and text-activated tasks, such as scheduling meetings with simple commands, alongside features like search and discovery. Leveraging the most advanced multimodal LLMs, we are adding responsible, secure, and reliable GenAI capabilities through a Retrieval Augmented Generation (RAG) model that uses internal enterprise data to support intelligent planning and user interaction via text, speech, and video. This streamlines administrative duties while enhancing convenience for employers and providing personalized on-demand knowledge augmentation. I would like to have the operator now switch to a video that showcases our Generative AI capabilities. Operator, you can start the video now. As you can see, there are multiple actions being performed simultaneously to achieve the final result, which will be setting a meeting just in time with people who were previously unavailable but could be found through our system. The system automatically finds the location, invites the people, and navigates you there while also putting the schedule on your calendar. All this was done through our Generative AI application. Just if you were paying attention, you'll note that the first command was not articulated clearly in terms of language; it incorrectly stated three years instead of three guests. However, the system, powered by our LLM, was smart enough to understand you meant three guests. It executed actions in a few clicks or voice commands. This demonstrates the beauty of Generative AI in our market. I'm super excited about these upcoming applications. Operator, we can revert back to Slide 13. So that's one of the key capabilities we're launching with our customers. The next one has been about Skyview and Spatial Intelligence. This chart shows a building floor in India, one of our trial customers, displaying the number of bookings—these little buildings represent bookings done over a week period. The beauty of this is, when someone examines this chart, they not only get a spatial view of where activities are happening in the space but with our Skyview analytics engine, we can provide deeper insights into what is occurring—what spaces are preferred, who prefers them, and why certain days peak. This insight enables managers, real estate teams, and human resources teams to understand the behaviors and drivers, allowing them to adapt accordingly. This is genuinely exciting because all our customers are enjoying experimenting with our tools, building new reports, and we receive fresh insights daily since different locations have distinct needs. Currently, the BI tools in the market only yield statistics, being non-contextually aware, whereas ours offer contextual awareness. Additionally, it not only presents insights but, if you closely observe the October peaks, it indicates the specific days when the RTO was successfully implemented and which weren't, providing answers and actionable recommendations—this is tremendously valuable. All right. Operator, we can proceed to the next video, which will feature a new product we are announcing today that we'll be working closely with our customers on, called the Sky Kiosk. I'll let the video play first, and then we can discuss it. This is at our office in San Ramon, representing our headquarters, where we are utilizing our own technology. There you go, you can reserve a room in just a few clicks, ready to head to your destination. The Sky Kiosk functions as interactive digital signage built on the same core principles of Sky. It permits employees to view real-time room, desk, and space availability with ease to secure a space in moments. You saw how our employees, just in time, identified a room, decided to book it, and could invite others too—connecting with the system to make all those arrangements seamlessly. She can obtain a QR code on her phone and move on. This system eliminates friction and is very agentic in nature. We are also considering Sky Kiosks for notifications regarding traffic and weather events on a larger screen, ensuring that all interactive interface elements comply with ADA standards—a critical aspect in modern offices. Walking into many of my customer offices, the first thing you need is a Sky Kiosk to engage with as a point of entry into a building. You can gain comprehensive visibility of your spaces and the events taking place, allowing you to proceed to your mobile phone easily. We view this as a companion to our current products and are greatly enthusiastic about it. We are collaborating with existing customers to serve as anchor clients and everyone else is eager to implement it. We see this as a significant opportunity for us in Q4 and 2025 as well. I want to conclude this section by returning, operator, to Slide 15, to highlight—a recap of why people choose Sky—based on the demonstrations, capabilities, and market dimensions shown. Firstly, we offer a great user experience (UX/UI), exceptional integrations, and workflows that create compelling content and capabilities; everybody loves using our applications. Secondly, we transform complexity into productivity. Enterprises are complex, having multiple integrations, various security requirements, and considerable overhead regarding their architectures, yet we simplify that into automated workflows while preserving enterprise-level security—becoming a trusted advisor. Last but not least, we provide remarkable insights with Skyview. Skyview is driving organizations to better understand what actually occurs and how they can enhance their operations; with the complete platform capabilities of Sky, Sky BTS, and Skyview, we deliver AI-powered actions and predictable outcomes. We believe these elements benefit employees by highlighting the value of their capabilities. That is all about the market. I'm going to now focus on Q3. Operator, if you can go to Slide 16, please, and move to Slide 17. Before delving into the detailed financial results—the press release is out, the earnings release has been issued, the 10-Q is accessible—but the most significant takeaway this quarter is that this is our best financial quarter ever. We achieved the highest SaaS metrics; our revenue was $1.9 million. Our net retention rate exceeded 106%, and our subscription to one-time revenue ratio reached its highest at 88%, while we sustained a healthy gross margin of 80% with an 18% growth in recurring revenue. So congratulations to our team for their hard work achieving this landmark. Thank you to all our wonderful customers for their unwavering support during this journey; this has been a banner quarter for us. The second major highlight: we are now on the AWS marketplace. Following our previous quarter's launch on Google Marketplace—an important milestone—we are thrilled about collaborating with the AWS team. We have worked diligently on the new Sky platform since Q2, and I'm happy to report that we have successfully delivered the first end-to-end AI-based Sky pilot platform to a leading financial services customer this quarter. This is a crucial milestone as we work towards general availability for all existing and new customers. A great achievement there. Skyview, as I mentioned earlier, gained traction with our first paid customer, making general availability accessible for all our clients, creating significant growth opportunities. I also showcased the Sky Kiosk; next quarter we will unveil Sky BTS, which is already deployed but is currently a super-secret initiative we plan to present then. These new products propel us into the next phase. With that, I will transition to my new partner, Joy Mbanugo, who joined us as our CFO, to take us through the financial results.
Joy Mbanugo, CFO
Thank you, Khurram. I'm delighted to join the company at such an exciting time. As CXApp transitions to an AI-native SaaS model, we are observing increased demand for our AI-powered solutions. Operator, if you can move to slide 18, sorry. Yes. We're witnessing an increasing demand for our AI-driven solutions, particularly Agentic AI capabilities that are reshaping workplace experiences. Our emphasis on subscription-based revenue, supported by our investments in these advanced AI features, is cultivating a sustainable and predictable financial model aligned with our long-term growth. As Khurram mentioned, we have achieved the best financial results to date. This quarter has underscored our commitment to operational excellence, effective cash management, and the pivots necessary for sustained success. Let's discuss these exciting results. First, I'll provide an overview of all the slides. I will go through approximately four financial results slides. First, I'll focus on the change in SaaS metrics year-over-year, then dive into more financial details quarter-over-quarter and finally, specific year-over-year details. This particular slide illustrates that our financial performance over the past year reflects our commitment to building a more stable, predictable, and growth-oriented business model. First, if we examine the revenue, as Khurram mentioned, it increased by 7% from $1.77 million in Q3 2023 to $1.8 million in Q3 2024. Recurring revenue, which is crucial, has seen an 8% increase up to 88% from 80% in the previous year. The company has focused on transitioning from one-off professional services contracts to recurring contracts, often spanning three years. Additionally, our NRR stands at 106%, reflecting an approximately 43% year-over-year increase, indicating strong client retention and upselling success. This metric signifies the trust our clients place in our solutions and the value we continue to provide, fostering deeper relationships and expanding our revenue potential. This also ties back to Khurram's previous discussions regarding the land-and-expand strategy. It demonstrates that our clients are remaining loyal and purchasing more products as we continue to roll out AI features. Moreover, it's important to note that we achieved a notable 22% reduction in non-GAAP OpEx, falling from $4.1 million in Q3 2023 to $3.239 million in Q3 2024. This reduction is a result of cost-cutting measures, including workforce optimizations and a more focused marketing strategy without compromising our R&D investments. This reflects our disciplined approach to optimizing expenditures while continuing to support critical areas that foster innovation and growth. Our investments in R&D, especially in AI-driven solutions, remain a top priority, enabling us to stay ahead in delivering value-added technology to our clients while maintaining a lean approach in other expense segments. Furthermore, and likely most notably, our cash-based losses narrowed by an impressive 43%, transitioning from a Q3 2023 cash-based loss of $2.36 million to $1.324 million in Q3 2024. Overall, our disciplined cost control and cash flow management have brought us significantly closer to cash flow positivity, underscoring the strength of our financial strategy. Looking ahead, we remain focused on expanding our subscription base, deepening partnerships, and maximizing value while committing to profitability. Next, I'd like to discuss expense management. While there is no slide on this, it's crucial to acknowledge that expense management will continue to be central to our strategy aiming for cash flow break-even while balancing strict cost control with strategic investments in product development. This will remain a major focus for us. This approach guarantees that we continue to drive future profitability while upholding our competitive edge. Our disciplined resource allocation allows targeted investment in high-impact areas, such as AI, R&D, and product innovation, reinforcing both our financial resilience and our dedication to delivering cutting-edge solutions. I'll move on to the quarter-over-quarter details. As previously noted, we observed both quarter-over-quarter and year-over-year improvements. I covered some of this already, but let’s delve a bit deeper as you will see it in the 10-Q. Revenue rose from $1.76 million to $1.89 million, marking a 7% increase. Gross profit improved, and the loss from operations narrowed from $3.65 million to $3.2 million. We maintained our gross margin at approximately 80%, which will remain one of our core metrics as illustrated on the previous slide. Notably, while total operating expenses may appear high without context, particularly G&A, it's worth mentioning that approximately $900,000 in stock-based compensation is included in that total. Adjusting for this gives a much lower G&A number. Our focus will continue to be leveraging our strategic investments to drive growth while adhering to strict cost discipline. This strategy supports our trajectory toward achieving cash flow break-even and reinforces our resilience in a competitive and growing market. Lastly, I'll focus on year-over-year growth, which we touched upon lightly, but let's examine it in further detail, as you will also find this in our 10-Q. Our revenues grew by 7% year-over-year, climbing from $1.77 million in Q3 2023 to $1.89 million in Q3 2024. This revenue growth highlights our ongoing traction and expansion within our existing customer base. Even amidst this growth, our total operating expenses decreased by 14%, falling from $5.64 million to $4.850 million. This decline showcases our commitment to cost efficiency, especially in areas like sales and marketing, which see significant reductions. Consequently, we achieved a 21% reduction in our operating loss, improving from a loss of $4.22 million or $4.230 million in Q3 2023 to $3.3 million this quarter. This drop exemplifies our successful focus on prudent spending in conjunction with revenue growth. Our gross profit also improved by 8%, reaching $1.52 million, demonstrating that revenue growth and cost management are both contributing to a potential pathway towards profitability. In summary, the progress we've made over the past year and quarter indeed stands as a testament to the soundness of our strategy and the dedication of our entire team to achieving financial resilience. Looking forward, our commitment to Agentic AI, innovation, and cloud scalability significantly fortifies CXApp's position in the market, accelerating our path toward cash flow positivity. With AI at the core, CXApp is poised to drive transformation in the workplace experience technology space, delivering intelligent, outcome-based solutions that meet the evolving needs of modern enterprises. Operator, next slide. On this slide, Khurram touched on this earlier, but I would like to add a few notes. We are truly enthusiastic about our cloud partnerships, having listings in both the AWS Marketplace and Google Marketplace. My background at Google has given me firsthand insight into the strategic advantages these major cloud providers offer through their marketplaces. I have experienced how advanced infrastructure and robust AI tools can enhance solution scalability and cost efficiency for our clients. I am confident that these partnerships will propel CXAI's continued growth while allowing us to deliver even greater value to our clients.
Khurram Sheikh, CEO
Thank you, Joy. Joy has been a great addition, not only helping us on the finance side, but given her background with Google Cloud, has been instrumental in driving us forward. When we consider the overall landscape, the cloud partnerships are strategic to us. We host our applications on the cloud; our customers are all cloud-based, and it represents a natural extension of their enterprise environment with Sky. This is crucial. We have been diligently working toward this and are very proud to now have deployments across all three cloud providers from a hosting perspective. This is incredibly important. The use cases I shared earlier are based on real customer implementations; all these customers seek security and reliability. As we propel forward, certain features of Sky have become essential. Once you become a must-have, quality, reliability, and security become paramount; this is what we gain from our partnerships with cloud providers. Now with our multi-cloud capability, customers can choose whichever provider they wish to collaborate with while expecting the same level of scalability, security, and monitoring. This is vital. Additionally, for us as a business, achieving cost efficiency is crucial. With AI-driven solutions, cloud consumption becomes a significant metric, and we aim for efficiency in this regard. Achieving multi-cloud capability grants us that cost efficiency. Joy mentioned our go-to-market strategy is focused on recruiting various partners that can help Sky attain its heights. Cloud providers are our best allies, as onboarding large Fortune 1000 customers requires substantial effort—not just building applications but also negotiating agreements that need careful consideration. For a small company, it can consume a considerable amount of bandwidth. If we can leverage the marketplaces to onboard potential customers faster, that is fantastic—it aids us, while simultaneously facilitating scaling those customers up to the next level. We feel this alignment is a natural fit. We are collaborating with all of the cloud providers; we are thrilled with our partnership with Google Cloud and also excited about our new cloud providers’ support. So stay tuned for more developments in the coming quarters. The immediate benefits for us are correspondingly aligning our cost structure, improving our AI capabilities, providing security, and monitoring capabilities that are critical for our business while collaborating with these cloud providers as we scale our customer base. I will now ask the operator to present the last slide. This is our summary slide, and we'll also address any questions that have come in. Before we finalize, we may want to consider some inquiries first.
Dennis Copertino, Analyst
How has new management impacted growth at SKY?
Khurram Sheikh, CEO
Great question, Dennis. Yes, new management has genuinely impacted growth at Sky. Joy coming on board has been a fresh breeze for me, particularly concerning the financial strategy and her partnership with Google Cloud. We have welcomed several new talents into the company since we went public so there has indeed been a talent influx. I am super excited to bring on newer talent as we expand the company across the board, and we are collaborating effectively. Joy, would you like to add something?
Joy Mbanugo, CFO
I'm thrilled to have joined at such an exciting time and to witness all the hard work the team is doing around AI. Along with Khurram, I'm excited to see where our initiatives will lead us.
Max Gerber, Analyst
Could you partner with Palantir to implement AIP?
Khurram Sheikh, CEO
If I understand correctly, AIP refers to Palantir's Artificial Intelligence Platform. That's a great suggestion, Max. I have not considered it much, since we aren't currently focused on the government sector; we work with commercial customers. However, we're aware of some connections at Palantir and will definitely contemplate potential collaboration. Ideally, we want to remain committed to the commercial space and solutions that are available commercially. We are not pursuing any specific Defense Department contracts for the time being. That said, we perceive an intriguing opportunity here and will certainly explore it. However, as I stressed earlier, customers choose SKY because we deliver an exemplary UI, provide amazing insights, and offer a generative AI solution that truly incorporates all customer and employee experience aspects. Part of the challenge is facilitating the leading employers who are willing to offer their employees these engaging experiences. If that is ongoing, we will definitely be there. For now, our focus is on scaling within the commercial segment.
Jack Cordero, Analyst
Can you detail how your partnership with Google Cloud is progressing?
Khurram Sheikh, CEO
Sure, I'll start and Joy can follow. We've had productive working sessions and meetings with the Google team; they have significantly assisted us in reaching out to their client bases. We are collaborating with their ISV channel partners and have been invited to numerous Google Cloud Conferences. We are indeed starting to engage more deeply. On the product side, you'll observe several innovations rolling out in the coming months powered by Google Cloud's AI capabilities. I won't disclose specifics just yet, but you'll soon see these capabilities come to fruition. Skyview is already being implemented through our partnership with Google Cloud as one example. There are other features in the pipeline leveraging all the great innovation that the Google Cloud team has developed. This relationship is progressing quite well; we actually have Google Cloud representatives nearly every day in our office, enhancing collaboration and engagement. We’re extremely excited about how closely Google is working with us. Joy, do you want to add to that?
Joy Mbanugo, CFO
Yes, it's a fantastic opportunity for our clients hosted on Google Cloud to utilize some of their commitments. We are identifying opportunities in this area—not just for existing customers but for new clientele as well. There is a unique and tremendous opportunity for us to continue growing through our cloud partnerships, and we will strive hard to cultivate this in the future.
Khurram Sheikh, CEO
Okay, great. I believe those are the queries we've received. I'm going to proceed to the last slide, recapping the investment highlights I see forward. Sky continues its business transformation journey to an AI-native SaaS model, with ongoing positive trends in key SaaS metrics. We are thrilled to have achieved significant milestones in product delivery, meeting our customers’ expectations, which have resulted in consistent growth over the past year, culminating in our best financial quarter. The remarkable innovations from our team, particularly with our analytics platform Skyview and the unique Sky Kiosk, place us in a strong position to exceed customer expectations while delivering the leading employee experience solution on the market. The future of work is one of this century's key challenges, and every enterprise globally is seeking solutions tailored for the digital workplace and workforce. We are genuinely excited about what lies ahead, with our dedicated team, ongoing growth and expansive customer base, and the partnerships we’re forging in Silicon Valley, allowing us to introduce this new software category focused on employee experiences. Sky is uniquely positioned to lead this sector and influence the employee and workplace experience landscape as the digital transformation of enterprises continues worldwide. As we like to say, to the Sky and beyond. Thank you, everyone, and we look forward to our next earnings call.
Operator, Operator
This concludes today's conference call. Thank you, everyone, and we look forward to our next earnings call.