Executive Summary
Netcapital Inc (NCPL) reported QQ2 2025 revenue of $170,528 thousand with a gross margin of 88.4%, but the quarter remains unprofitable at the operating level and on a net basis. Total operating expenses surged to $2,353,178 thousand, driven by elevated SG&A and platform-related investments, resulting in an operating loss of $2,202,431 thousand and a net loss of $2,220,501 thousand. Despite the heavy losses, the company generated financing proceeds of $1,979,000 thousand to fund ongoing burn, leading to a net cash increase of $491,558 thousand for the quarter and a cash balance of $1,346,739 thousand at period end. The balance sheet shows a strong equity base ($37,406,323 thousand) and substantial intangible assets ($14,715,267 thousand) along with sizable long-term investments ($25,598,341 thousand), indicating a platform-building, long-horizon value proposition rather than near-term profitability. Liquidity metrics are tight (current ratio 0.35), reflecting the ongoing burn and working capital dynamics, though debt levels remain modest (total debt $500,000 thousand). The year-over-year revenue decline (~94.5%) contrasts with a modest QoQ rebound (~+19.9%), underscoring the company’s dependency on a volatile private fundraising market and the need for meaningful monetization of the Netcapital platform. Management commentary (where available) would be focused on platform expansion, onboarding automation, and strategic initiatives to monetize services; however, the transcript data is not provided in the input. Investors should consider NCPL as a growth-stage fintech with high implied upside tied to private markets normalization but substantial near-term risk from operating losses and liquidity dynamics.
Key Performance Indicators
QoQ: 19.90% | YoY:-94.52%
QoQ: 14.20% | YoY:-95.12%
QoQ: 12.19% | YoY:-262.01%
QoQ: 12.13% | YoY:-319.66%
QoQ: 54.12% | YoY:-1 214.29%
Key Insights
Revenue: $170,528; YoY: -94.52%, QoQ: +19.90%
Gross Profit: $150,747; YoY: -95.12%, QoQ: +14.20%
Operating Income: -$2,202,431; YoY: -262.01%, QoQ: +12.19%
Net Income: -$2,220,501; YoY: -319.66%, QoQ: +12.13%
EPS: -$2.34; YoY: -1,214.29%, QoQ: +54.12%
Gross Margin: 88.40%
Operating Margin: -12.92%
Net Margin: -13.02%
EBITDA: -$2,202,031; EBITDA Margin: -12.91%
Weighted Avg Shares (Basic & Diluted): 947,459 thousand
Free Cash Flow: -$1,487,447 thousand
Cash from Operating Activities: -$1,487,...
Financial Highlights
Revenue: $170,528; YoY: -94.52%, QoQ: +19.90%
Gross Profit: $150,747; YoY: -95.12%, QoQ: +14.20%
Operating Income: -$2,202,431; YoY: -262.01%, QoQ: +12.19%
Net Income: -$2,220,501; YoY: -319.66%, QoQ: +12.13%
EPS: -$2.34; YoY: -1,214.29%, QoQ: +54.12%
Gross Margin: 88.40%
Operating Margin: -12.92%
Net Margin: -13.02%
EBITDA: -$2,202,031; EBITDA Margin: -12.91%
Weighted Avg Shares (Basic & Diluted): 947,459 thousand
Free Cash Flow: -$1,487,447 thousand
Cash from Operating Activities: -$1,487,442 thousand
Cash at End of Period: $1,346,739 thousand
Total Assets: $41,937,918 thousand
Total Liabilities: $4,531,595 thousand
Total Stockholders’ Equity: $37,406,323 thousand
Current Ratio: 0.351x
Debt (Total): $500,000 thousand
Interest Coverage: -229.40x
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
170.53K |
-94.52% |
19.90% |
| Gross Profit |
150.75K |
-95.12% |
14.20% |
| Operating Income |
-2.20M |
-262.01% |
12.19% |
| Net Income |
-2.22M |
-319.66% |
12.13% |
| EPS |
-2.34 |
-1 214.29% |
54.12% |
Key Financial Ratios
operatingProfitMargin
-1292%
operatingCashFlowPerShare
$-1.57
freeCashFlowPerShare
$-1.57
Management Commentary
No earnings call transcript provided in the input. Consequently, no management quotes or thematic extracts can be cited from the call. Typical themes that would be expected in management commentary for a quarter like QQ2 2025 include platform monetization plans, user growth, regulatory and compliance developments, cost-control initiatives, and capital-raising dynamics. If a transcript becomes available, the highlights would likely cover progress on revenue diversification (beyond primary funding portal activity), progress on onboarding automation and regulatory workflows, and updates on strategic partnerships or product enhancements that could drive longer-term monetization.
Forward Guidance
No formal forward guidance is disclosed in the provided data. Given the current quarter’s operational burn and the reliance on financing activity to fund operations, a cautious outlook would emphasize the need for tangible monetization milestones for the Netcapital platform (e.g., increased deal flow, higher average deal sizes, expanded investor base, or successful roll-out of advisory services). In a scenario where revenue accelerates meaningfully (e.g., mid-teens to low-twenties QoQ growth) while operating costs stabilize or grow at a slower pace, NCPL could approach breakeven or modestly positive EBITDA in a future quarter. Key factors to monitor include: (1) platform monetization progress and take rate on funding portals, (2) growth in advisory services revenue, (3) changes in fundraising market conditions for private companies, and (4) ability to raise additional capital at favorable terms. Investors should watch for management commentary on unit economics, cost discipline, and any mention of runway length under current cash burn assumptions.