Executive Summary
Netcapital Inc (NCPLW) reported a material revenue contraction in QQ3 2025, with revenue of 152,682 USD, down 10.5% sequentially and 85.4% year-over-year. The combination of a small top line and outsized operating expenses produced a negative EBITDA of -2.99 million and an operating loss of -1.69 million, culminating in a net loss of -3.01 million and an EPS of -1.57. The company maintains a very lean gross profit (gross margin ≈ 95.3%), driven by a minimal cost of revenue base, but this is not sufficient to offset elevated G&A and SG&A, other expenses, and interest burden. Liquidity remains a key challenge: current and quick ratios are both 0.152, and cash on hand sits at 0.614 million against total current liabilities of 4.430 million, yielding a tight liquidity backdrop and negative free cash flow of -1.164 million for QQ3. The balance sheet shows a sizable investment in intangible assets (≈14.706 million) and long-term investments (≈24.313 million), offset by modest cash and a net debt position of roughly 1.81 million. While the business model (fintech funding portal and related advisory/services) has strategic merit, the QQ3 2025 results underscored a need for scale, operating discipline, and improved working capital management to achieve profitability and sustainable cash generation.
Key Performance Indicators
QoQ: -10.47% | YoY:-85.36%
QoQ: 23.37% | YoY:-36.82%
QoQ: -35.40% | YoY:-34.97%
QoQ: 32.91% | YoY:-726.32%
Key Insights
Revenue: 152,682 (-85.36% YoY; -10.47% QoQ). Gross Profit: 145,527 (Gross Margin 0.9531; YoY +69.08%, QoQ -3.46%). Operating Income: -1,687,692 (-11.05% margin; YoY -36.82%, QoQ +23.37%). Net Income: -3,006,537 (Net Margin -19.69%; YoY -34.97%, QoQ -35.40%). EBITDA: -2,987,292 (EBITDA Margin -19.56%). EPS: -1.57; Weighted Avg Shares: 1,915,367. Cash Flow from Operations: -1,163,543; Free Cash Flow: -1,163,543. Balance Sheet: Cash 614,304; Total Current Assets 672,819; Total Assets 39,900,677; To...
Financial Highlights
Revenue: 152,682 (-85.36% YoY; -10.47% QoQ). Gross Profit: 145,527 (Gross Margin 0.9531; YoY +69.08%, QoQ -3.46%). Operating Income: -1,687,692 (-11.05% margin; YoY -36.82%, QoQ +23.37%). Net Income: -3,006,537 (Net Margin -19.69%; YoY -34.97%, QoQ -35.40%). EBITDA: -2,987,292 (EBITDA Margin -19.56%). EPS: -1.57; Weighted Avg Shares: 1,915,367. Cash Flow from Operations: -1,163,543; Free Cash Flow: -1,163,543. Balance Sheet: Cash 614,304; Total Current Assets 672,819; Total Assets 39,900,677; Total Current Liabilities 4,430,412; Total Liabilities 4,930,412; Total Stockholders’ Equity 34,970,265. Leverage: Debt 2,420,124; Net Debt 1,805,820; Current Ratio 0.152; Quick Ratio 0.152; Cash Ratio 0.139. Revenue per share and profitability multiples remain negative or muted given losses and equity base. Four-quarter data show recurring losses with a thin operating margin, highlighting a need for top-line growth and expense discipline to move toward breakeven.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
152.68K |
-85.36% |
-10.47% |
| Gross Profit |
145.53K |
69.08% |
-3.46% |
| Operating Income |
-1.69M |
-36.82% |
23.37% |
| Net Income |
-3.01M |
-34.97% |
-35.40% |
| EPS |
-1.57 |
-726.32% |
32.91% |
Key Financial Ratios
operatingProfitMargin
-1105%
operatingCashFlowPerShare
$-0.61
freeCashFlowPerShare
$-0.61
Management Commentary
Note: The earnings transcript data is not provided in the input. Consequently, no management quotes or call-specific themes could be extracted. The analysis below reflects the quantitative results and the assumed absence of transcript details. If a transcript is supplied, I can incorporate themes on strategy execution, product adoption, market conditions, and guidance with direct quotes.
Forward Guidance
No explicit forward guidance is included in the provided dataset. Based on QQ3 2025 fundamentals, the prudent baseline is a cautious stance: the company must execute a meaningful top-line expansion or achieve aggressive operating leverage to transition from a sizable quarterly loss to sustainable profitability. Key near-term focal points for management and investors include: (1) driving higher revenue through Netcapital’s funding portal and advisory services, (2) reducing operating expenses as a percentage of revenue, (3) strengthening liquidity via careful cash management and potential financing, and (4) monetizing intangible assets or optimizing the balance sheet (e.g., reassessing the placement and value of long-term investments and intangibles). Potential milestones to monitor include quarterly revenue growth, stabilization or reduction of the cost base, and any changes to debt or equity financing arrangements. If revenue accelerates meaningfully (e.g., modest multi-quarter growth to or beyond mid-double digits in quarter-over-quarter terms), combined with disciplined expense management, EBITDA and net income could approach breakeven with improved cash flow. Absent such progress, the current negative profitability and liquidity constraints imply elevated downside risk for near-term equity value.