Netcapital's Q1 Fiscal 2025 Report: A Focus on Recovery and Growth
Netcapital Reports First Quarter Fiscal 2025 Financial Results
BOSTON, September 16, 2024 — Netcapital Inc. (Nasdaq: NCPL, NCPLW), a innovative player in the digital capital markets space, has announced its financial results for the first quarter of fiscal year 2025, which concluded on July 31, 2024. The company faced a challenging period as it dealt with a significant revenue decline.
Quarterly Results Overview
In a statement, Martin Kay, CEO of Netcapital Inc., expressed that the quarterly results were primarily affected by a decrease in revenue from services exchanged for equity securities. However, Kay remains optimistic, emphasizing that the company is laying a solid foundation for future growth opportunities. In May 2024, they announced the application for broker-dealer registration through their subsidiary, Netcapital Securities Inc., aiming to create an expanded revenue base. This move positions them to benefit from Reg A+ and Reg D offerings through the Netcapital platform.
Launch of Secondary Trading Platform
In addition to their registration efforts, Netcapital launched a beta version of a secondary trading platform via Templum ATS for a select group of users in July 2024. This initiative could potentially enhance liquidity for investors purchasing stocks through the company’s funding portal, as they gain access to secondary trading options.
Financial Highlights
The financial metrics from the first quarter show a revenue downturn, with a 91% decline year-over-year, totaling approximately $142,227 compared to $1,519,809 from the same period last year. Total funding portal revenues, including listing and portal fees, dropped around 62% to $142,056. The company reported an operating loss of $2,508,237, a significant increase of 235% compared to the previous year’s loss of $749,020. Furthermore, the net loss escalated to $2,527,170 from $491,655 observed in the first quarter of fiscal 2024, marking an alarming increase of 414%.
Cash Position
Despite these challenges, as of July 31, 2024, Netcapital maintains a cash reserve of $855,181, which will serve as a cushion for ongoing operations and future growth initiatives.
Investor Conference Call Details
In light of these financial results, Netcapital will host an investor conference call on September 17, 2024, at 11:00 a.m. ET. Interested participants can join the call by dialing 844-985-2012 or 973-528-0138 and using the conference entry code 844301.
About Netcapital Inc.
Netcapital Inc. is a financial technology company offering a scalable technology platform designed to empower private companies to attract capital via online services. They also provide private equity investment opportunities through their registered funding portal, Netcapital Funding Portal, Inc., which operates under the oversight of the U.S. Securities & Exchange Commission (SEC) and is a member of FINRA, the national securities association.
Frequently Asked Questions
What were the primary revenue drivers for Netcapital in Q1 2025?
The decrease in revenues was primarily from the services provided in exchange for equity securities, and total funding portal revenues significantly dropped as well.
What steps is Netcapital taking to enhance its revenue?
Netcapital is pursuing broker-dealer registration through its subsidiary, allowing it to engage in additional offerings which could enhance its revenue streams.
How does the secondary trading platform work for investors?
The secondary trading platform launched via Templum ATS provides liquidity options for investors who have purchased stock through the Netcapital funding portal.
How does the company's financial position look at the moment?
As of July 31, 2024, Netcapital had cash and cash equivalents amounting to $855,181, offering some financial stability despite operating losses.
When is the next investor call scheduled?
The next investor conference call is set for September 17, 2024, at 11:00 a.m. ET, where further details about the company's progress will be discussed.
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