Executive Summary
Netcapital's QQ1 2026 results show meaningful top-line momentum in portal-fee driven revenue, underpinned by a single issuer that accounted for about 73% of quarterly revenue and catalyzed a roughly $5 million raise between March and May 2025. Revenue for the quarter ended July 31, 2025 reached $190,058, up about 34% YoY per management commentary, while gross margin remained extremely robust at 96.1% (gross profit of $182,649 on $190,058 revenue). Despite the top-line strength, the company recorded a substantial operating loss of approximately $3.28 million and a net loss of about $3.64 million for the quarter, translating to an EPS of -$1.27. Cash and cash equivalents stood at roughly $4.6 million as of July 31, 2025. Management framed the results within a strategic pivot toward a scalable, tech-enabled platform with a broader fintech ecosystem play, emphasizing growth initiatives in blockchain, crypto, and digital assets, as well as a dedicated game advisory board.
Key takeaways: (1) The core business demonstrated portal-fee growth of >30% signaling scalable revenue generation, (2) The leap in gross margin suggests the revenue mix remains skewed toward low incremental-cost portal activities, but (3) continued operating losses and a modest liquidity runway create a near-term need for capital or improved operating efficiency. Management did not provide formal numerical guidance for FY2026, but signaled a strategic shift toward a more scalable, asset-light platform and new advisory initiatives in crypto/DeFi and gaming to augment long-term growth. Investors should monitor issuer diversification, the pace of non-issuer revenue mix, and the funding runway as the company executes its strategic plan.
Key Performance Indicators
QoQ: 24.48% | YoY:-45.26%
QoQ: 25.51% | YoY:132.97%
QoQ: -94.24% | YoY:-111.59%
QoQ: -21.14% | YoY:-39.72%
QoQ: 19.11% | YoY:-477.27%
Key Insights
Revenue: $190,058 for Q1 FY2026, up ~34% YoY from $142,227 in Q1 FY2025. Gross Profit: $182,649; Gross Margin: 96.10%.
Operating Income: -$3,278,239; EBITDARatio: -17.25%; EBITDA: -$3,278,239.
Net Income: -$3,642,052; Net Income Margin: -19.16%; EPS: -$1.27; Weighted Avg Shares: 2,873,379.
Liquidity: Cash and cash equivalents ~ $4.6 million as of July 31, 2025.
Expense structure: General and Administrative expenses ~$1.568 million; Selling and General Administrative ~$1.580 million; Other expens...
Financial Highlights
Revenue: $190,058 for Q1 FY2026, up ~34% YoY from $142,227 in Q1 FY2025. Gross Profit: $182,649; Gross Margin: 96.10%.
Operating Income: -$3,278,239; EBITDARatio: -17.25%; EBITDA: -$3,278,239.
Net Income: -$3,642,052; Net Income Margin: -19.16%; EPS: -$1.27; Weighted Avg Shares: 2,873,379.
Liquidity: Cash and cash equivalents ~ $4.6 million as of July 31, 2025.
Expense structure: General and Administrative expenses ~$1.568 million; Selling and General Administrative ~$1.580 million; Other expenses ~$1.880 million; Depreciation & Amortization ~$8.87k. Interest expense: -$36,067.
Concentration: 73% of quarterly revenue generated by a single issuer, which raised ~ $5 million during the period (Mar–May 2025).
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
190.06K |
-45.26% |
24.48% |
| Gross Profit |
182.65K |
132.97% |
25.51% |
| Operating Income |
-3.28M |
-111.59% |
-94.24% |
| Net Income |
-3.64M |
-39.72% |
-21.14% |
| EPS |
-1.27 |
-477.27% |
19.11% |
Management Commentary
Themes from management commentary and Q&A:
- Strategy and revenue mix: Martin Kay highlighted a pivot to a scalable core business with portal-fee growth of more than 30%, signaling progress toward a more sustainable, high-margin services model beyond equity-based consulting.
- Strategic initiatives: Kay announced the formation of a crypto advisory board to guide integration of blockchain, digital assets, and DeFi with traditional finance, as well as a game advisory board to accelerate ecosystem growth. These initiatives are positioned as long-run catalysts for Netcapital’s fintech ecosystem leadership.
- Execution and outlook: The management emphasis was on execution, innovation, and the expansion of the private-market opportunity through tokenized/digital asset services and advisory capabilities. No formal numeric FY2026 guidance was provided; the tone suggested balance between near-term losses and longer-term scalable growth.
"Revenue and portal fee growth of more than 30% highlights the solid performance of our core business."
— Martin Kay
"We established a crypto advisory board composed of accomplished industry leaders to guide our efforts in integrating blockchain, digital assets, and crypto with traditional finance."
— Martin Kay
Forward Guidance
No formal numeric guidance was issued for FY2026 on the earnings call. Management signaled a strategic shift toward a scalable, tech-enabled platform and broader fintech ecosystem (including blockchain, digital assets, and DeFi opportunities) along with engagement through advisory boards. Key factors to monitor include:
- Issuer diversification: dependency on a single issuer for ~73% of quarterly revenue represents concentration risk; tracking the mix of issuers and retention of non-issuer revenues is critical.
- Path to profitability: continued negative EBITDA and net income with high SG&A and other expenses; any meaningful reduction in operating losses or improvement in gross margin would materially alter risk/reward.
- Execution of crypto/DeFi initiatives: progress and monetization of crypto advisory and blockchain services; regulatory clarity and partner acceptance will influence the pace of monetization.
- Liquidity runway: current cash ~ $4.6 million; sustaining operations or securing additional capital will be pivotal if quarterly cash burn persists.
- Customer and product expansion: growth in the Netcapital Funding Portal usage, new issuers, and cross-selling of advisory services to broaden revenue base.