Executive Summary
Netcapital Inc (NCPLW) reported a material top-line decline in QQ1 2025, with revenue of $142,227, down 93.03% year-over-year and 59.03% quarter-over-quarter. Despite a high gross margin of 92.8% driven by a relatively small cost of revenue ($10,220), the company generated a substantial operating loss of $2.508 million and a net loss of $2.528 million, resulting in an EPS of -$5.10 for the quarter. EBITDA stood negative at $2.508 million, and EBITDA margin remained deeply negative at approximately -17.63%. These results culminated in negative free cash flow and a challenging liquidity position, underscored by a current ratio of 0.27 and cash on hand of $855 thousand at period end.
Key Performance Indicators
QoQ: -59.03% | YoY:-93.03%
QoQ: 123.83% | YoY:-93.47%
QoQ: -61.89% | YoY:-4 903.21%
QoQ: 3.05% | YoY:-844.13%
QoQ: -2 218.18% | YoY:-14 266.67%
Key Insights
Revenue: $142,227 in QQ1 2025, down -93.03% YoY and -59.03% QoQ. Gross Profit: $132,007; Gross Margin: 92.8%. Operating Income: -$2,508,237; Operating Margin: -17.64%. Net Income: -$2,527,170; Net Margin: -17.77%. EBITDA: -$2,507,837; EBITDA Margin: -17.63%. EPS: -$5.10; Weighted Avg Shares: 495,319. Cash Flow from Operations: -$1,963,645. Free Cash Flow: -$1,963,645. Balance Sheet: Total Assets $41.44m; Total Liabilities $3.93m; Shareholders’ Equity $37.51m. Liquidity: Current ratio 0.269; Qu...
Financial Highlights
Revenue: $142,227 in QQ1 2025, down -93.03% YoY and -59.03% QoQ. Gross Profit: $132,007; Gross Margin: 92.8%. Operating Income: -$2,508,237; Operating Margin: -17.64%. Net Income: -$2,527,170; Net Margin: -17.77%. EBITDA: -$2,507,837; EBITDA Margin: -17.63%. EPS: -$5.10; Weighted Avg Shares: 495,319. Cash Flow from Operations: -$1,963,645. Free Cash Flow: -$1,963,645. Balance Sheet: Total Assets $41.44m; Total Liabilities $3.93m; Shareholders’ Equity $37.51m. Liquidity: Current ratio 0.269; Quick ratio 0.269; Cash ratio 0.249. Leverage: Debt $2.42m; Net Debt $1.56m; Debt/Equity ~0.0645. Notable Intangibles: Intangible assets $14.72m; Long-term investments $25.58m.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
142.23K |
-93.03% |
-59.03% |
| Gross Profit |
132.01K |
-93.47% |
123.83% |
| Operating Income |
-2.51M |
-4 903.21% |
-61.89% |
| Net Income |
-2.53M |
-844.13% |
3.05% |
| EPS |
-5.10 |
-14 266.67% |
-2 218.18% |
Key Financial Ratios
operatingProfitMargin
-1764%
operatingCashFlowPerShare
$-3.96
freeCashFlowPerShare
$-3.96
Management Commentary
Note: No earnings call transcript was provided in the accompanying data. Management quotes and thematic color from QQ1 2025 were not available in the material supplied. In the absence of direct transcript insights, the analysis relies on 10-Q quantitative disclosures and the implied strategic positioning of Netcapital’s fintech funding portal.
Forward Guidance
There is no formal forward guidance disclosed for QQ2 2025 or beyond in the provided materials. Given the llow revenue base, the company would need a material lift in fundraising activity or a substantial reduction in fixed costs to meaningfully move toward profitability. Investors should monitor: (1) fundraising velocity on Netcapital’s platform and any monetization milestones (fees, premium services, advisory/valuation offerings), (2) cost containment versus revenue scale (SG&A as a percent of revenue), (3) liquidity runway and potential access to additional financing, and (4) regulatory developments affecting private capital markets and online funding portals.