EPS of $-0.22 decreased by 234.4% from previous year
Gross margin of -159.6%
Net income of -2.61M
""No transcript data available for QQ4 2024; management commentary not captured in the dataset."" - Transcripts
Netcapital Inc (NCPLW) QQ4 2024 Earnings Analysis – FinTech Funding Portal in a Growth-Transition Phase within Financial Capital Markets
Executive Summary
Netcapital Inc (NCPLW) reported a challenging QQ4 2024 with material top-line contraction and negative profitability. Revenue of $347,175 declined 77.16% year-over-year and 66.71% quarter-over-quarter, producing a negative gross profit of $-553,938 and an EBITDA of $-2,588,861. The company posted a net loss of $2,606,736 and basic EPS of $-0.22 for the quarter. Operating cash flow deteriorated to $-1,313,885, contributing to a cash balance of $863,182 at period-end and a negative free cash flow of $-1,313,885. This combination underscores a liquidity-sensitive position, with a current ratio of 0.335 and a net debt position of $1.556 million despite a substantial equity base of $37.94 million.
From a balance sheet perspective, Netcapital carries modest near-term liabilities ($3.62 million total liabilities, including $2.42 million in total debt) against sizable non-cash assets: intangible assets amounting to $14.73 million and long-term investments aggregating $25.78 million. The resulting asset base supports a substantial equity cushion but elevated impairment and realization risk in the near term if the funding portal’s volumes fail to rebound. Management commentary is not captured in the provided transcript dataset, limiting direct quotes to anchor management tone. In sum, the QQ4 2024 results highlight a pivotal inflection risk: sustained funding portal demand and cost discipline are prerequisites for turning operating losses into sustainable profitability. Investors should monitor liquidity initiatives, platform adoption metrics, and any forward-looking guidance in subsequent filings or calls.
Key Performance Indicators
Revenue
347.18K
QoQ: -66.71% | YoY:-77.16%
Gross Profit
-553.94K
-1.60% margin
QoQ: -743.59% | YoY:-136.89%
Operating Income
-1.55M
QoQ: -25.60% | YoY:-106.84%
Net Income
-2.61M
QoQ: -17.02% | YoY:-430.20%
EPS
-0.22
QoQ: -15.79% | YoY:-234.35%
Revenue Trend
Margin Analysis
Key Insights
Gross Profit: -553,938; Gross Margin: -1.60% (negative due to cost of revenue surpassing revenue).
Net Income: -2,606,736; Net Margin: -7.51%; EPS: -0.22.
EBITDA: -2,588,861; EBITDA Margin: -7.46%.
Cash Flow: Net cash from operating activities -1,313,885; Free cash flow -1,313,885; Cash at end of period 863,182; Cash burn pace implies a tight liquidity runway at current levels.
Financial Highlights
Revenue: 347,175; YoY change: -77.16%; QoQ change: -66.71%.
- Gross Profit: -553,938; Gross Margin: -1.60% (negative due to cost of revenue surpassing revenue).
- Operating Income: -1,549,300; Operating Margin: -4.46%.
- Net Income: -2,606,736; Net Margin: -7.51%; EPS: -0.22.
- EBITDA: -2,588,861; EBITDA Margin: -7.46%.
- Cash Flow: Net cash from operating activities -1,313,885; Free cash flow -1,313,885; Cash at end of period 863,182; Cash burn pace implies a tight liquidity runway at current levels.
- Balance Sheet Health: Total assets 41,557,306; total liabilities 3,616,698; equity 37,940,608.
- Liquidity Ratios: Current ratio 0.335; Quick ratio 0.335; Cash ratio 0.277.
- Leverage: Total debt 2,420,124; Long-term debt 500,000; Debt/Capital ~6.0%; Net debt (net of cash) 1,556,942.
- Efficiency: Asset turnover 0.00835; Receivables turnover 2.22; Cash flow to debt ratio -0.543.
- Valuation Signals: Price-to-book 0.0169; Price-to-sales 1.852; Enterprise value multiple negative; Price-to-earnings negative (loss-making).
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
347.18K
-77.16%
-66.71%
Gross Profit
-553.94K
-136.89%
-743.59%
Operating Income
-1.55M
-106.84%
-25.60%
Net Income
-2.61M
-430.20%
-17.02%
EPS
-0.22
-234.35%
-15.79%
Key Financial Ratios
currentRatio
0.34
grossProfitMargin
96.8%
operatingProfitMargin
-444%
netProfitMargin
-751%
returnOnAssets
-6.27%
returnOnEquity
-6.87%
debtEquityRatio
0.06
operatingCashFlowPerShare
$-0.06
freeCashFlowPerShare
$-0.06
priceToBookRatio
0.02
priceEarningsRatio
-0.06
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Transcript data not provided for QQ4 2024. No management quotes available in the supplied dataset. As a result, key thematic insights from earnings calls (strategy, execution, market conditions) could not be corroborated with verbatim management remarks in this analysis.
"No transcript data available for QQ4 2024; management commentary not captured in the dataset."
— Transcripts
"N/A"
— Transcripts
Forward Guidance
No explicit forward guidance is included in the provided data. Given Netcapital’s Q4 2024 results, investors should consider scenario analysis anchored to funding market conditions for fintech capital markets platforms, potential operational leverage if volumes rebound, and cost-control initiatives. In the absence of stated targets, a cautious baseline assumes continued revenue pressure absent a material market recovery or monetization improvements. Monitoring points include: (1) any disclosed guidance on platform onboarding metrics, deal cadence, and fee structures; (2) liquidity facilities or equity raises to extend runway; (3) milestones around advisory, valuation, and custody services monetization; (4) regulatory developments affecting private capital markets and online funding portals.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
NCPLW Focus
-1.60%
-4.44%
-6.87%
-6.17%
BZFDW
47.30%
11.30%
-10.10%
-81.90%
GFAIW
9.67%
-59.40%
-62.40%
-51.80%
NCPL
-1.60%
-4.46%
-6.87%
-10.50%
SHFSW
93.60%
6.92%
7.24%
7.79%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Given the current quarter’s results, Netcapital remains a high-risk, high-uncertainty investment. The company reports pronounced cash burn, negative profitability, and a liquidity runway that hinges on external financing or a meaningful rebound in funding-portal activity. The bear case centers on continued revenue deterioration and inability to achieve operating leverage; the bull case relies on a rebound in private capital markets, successful monetization of ancillary services, and potential improvement in operating efficiency. Valuation remains subdued (P/B ~0.017x; P/S ~1.85x), reflecting downside risk but also a potential if the company pivots toward sustainable scale. Investors should monitor liquidity measures, any issued guidance, platform adoption metrics, and progress in monetizing non-core services.
Key Investment Factors
Growth Potential
Potential upside if platform volumes recover and monetization of ancillary services (advisory, valuations, custodial, transfer agent) scales meaningfully.
Profitability Risk
Primary risks include sustained revenue decline, continued negative operating cash flow, liquidity risk given a tight cash runway, potential impairment on intangible assets and long-term investments, and competitive pressure in the fintech funding-portal space.
Financial Position
Equity base is robust relative to liabilities, but balance-sheet structure is skewed by large intangible assets and long-term investments. Net debt of approximately $1.56M and negative operating cash flow imply near-term liquidity risks absent external financing or improved operating performance.
SWOT Analysis
Strengths
Robust equity base ($37.94M) provides a cushion against near-term losses.