Netcapital Inc (NCPL) Q4 2024 Earnings Call Highlights: Navigating Revenue Declines and ...

GuruFocus News
3 min read

In This Article:

  • Revenue: Decreased by 42% to $4,951,435 in fiscal 2024 from $8,493,985 in fiscal 2023.

  • Consulting Services Revenue: Dropped by 52% to $3.44 million in fiscal 2024 from $7.1 million in fiscal 2023.

  • Portal Fees Revenue: Increased by 109% to $874,368 from $418,513 in fiscal 2023.

  • Cost of Revenues: Increased by 27% to approximately $108,000 in fiscal 2024 from approximately $85,000 in fiscal 2023.

  • Unrealized Loss: Approximately $2.7 million in fiscal 2024 compared to unrealized gains of approximately $1.9 million in fiscal 2023.

  • Impairment Loss: Recorded at $1,048,430 in fiscal 2024.

  • Operating Loss: $3,442,388 for fiscal 2024 compared to operating income of $2,271,876 for fiscal 2023.

  • Net Loss: $4,986,317 for fiscal 2024 compared to $2,954,972 for fiscal 2023.

  • Loss Per Share: $0.41 in fiscal 2024 compared to earnings per share of $0.63 in fiscal 2023.

  • Cash and Cash Equivalents: $863,182 as of April 30, 2024.

  • Average Amount Raised Per Offering: Increased to $280,978 from $128,170 year over year.

  • Number of Successful Offerings: Increased from 50 to 53.

Release Date: July 30, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • The average amount raised in an offering on the Netcapital Funding Portal increased significantly from $128,000 to $280,000 year over year.

  • The total number of successful offerings on the platform increased from 50 to 53.

  • Revenue from portal fees more than doubled, increasing by 109% year over year.

  • Significant deals were closed by issuers, including Avadain and EarthGrid PBC, totaling almost $8 million.

  • Netcapital introduced a 1% fee on equity raised by issuers, earning equity securities from 30 clients.

Negative Points

  • Revenues for fiscal 2024 decreased by 42% to $4,951,435 compared to the previous year.

  • Consulting services for equity securities saw a significant drop, decreasing by 52% to $3.44 million.

  • An unrealized loss of approximately $2.7 million was recognized in the value of equity securities.

  • An impairment loss of $1,048,430 was recorded due to the devaluation of intangible assets.

  • The company reported an operating loss of $3,442,388 for fiscal 2024, compared to an operating income in the previous year.

Q & A Highlights

Q: Hi. Good morning. Just a question on portal fees and the growth there. What initiatives are you doing to maintain and/or increase that growth? A: Martin Kay, President, Chief Executive Officer, Director: We are focusing on increasing the number of issuers on our platform and ensuring their success. This involves innovating our connections with new companies and leveraging digital marketing to engage communities. We are also targeting larger issuers as we move into the Reg A+ business.

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