Netcapital Inc (NCPLW) Q2 2025 Earnings Report

Netcapital Inc (NCPLW) reported a challenging QQ2 2025, characterized by a stark revenue decline and a substantial burn on operating activities. Revenue for the quarter stood at 170,528 (USD) with a gross profit of 150,747, but the company incurred total operating expenses of 2,353,178, resulting in EBITDA of -2,202,031 and a net loss of -2,220,501. The quarterly results yield an EBITDAR of -12.91% and an operating income of -2,202,431, underscoring a cost-heavy environment that has not yet translated into meaningful revenue scale. EPS came in at -2.34 for Q2, reflecting heavy dilution risk and a negative earnings trajectory that magnifies the equity burden on existing shareholders.

From a balance sheet perspective, Netcapital maintains a substantial asset base (total assets of 41.94 million) and a solid stockholders’ equity position (about 37.40 million), with intangible assets accounting for a meaningful portion of non-current assets (approximately 14.72 million). The company’s liquidity profile remains modest, with cash and cash equivalents of 1.35 million and a current ratio of 0.351, signaling working capital tightness. The company financed part of its ongoing cash burn through equity issuance (common stock issued of 1.98 million) and corresponding financing activity, which provides near-term liquidity but introduces further dilution risk for existing holders.

Operationally, Netcapital continues to invest in platform infrastructure and regulatory/compliance capabilities aligned with its SEC-registered funding portal (Netcapital.com). While the gross margin remains robust at about 88.4%, the revenue decline and outsized operating costs imply that current scale is insufficient to achieve profitability. Absent a material improvement in top-line funding activity or a meaningful reduction in operating expenses, the path to profitability remains uncertain in the near term. Investors should closely monitor the trajectory of funding volumes on the platform, cost containment efforts, and any new strategic partnerships or product developments that could drive revenue growth while moderating burn.