Nextech3D.AI Corporation (NEXCF) Earnings Call Transcript & Summary

Well, good afternoon, everyone, and thanks very much for joining us. I'm Steve Darling from Proactive here at our Worldwide Studios in Vancouver. Joining you for another live stream event this time with Nextech3D.ai and their CEO, Evan Gappelberg. And the company reporting recently their financial numbers, which showed some of the best numbers they've seen in quite some time, especially as far as the fourth quarter is concerned, year-long thing. In fact, our best strongest quarterly performance since the restructuring began from the company a few years ago. So let's bring in the CEO of the company, Evan Gappelberg, to join us. Evan, good to see you again. Thanks for being with us on this live stream.

Thanks. Great. Great to be back with you, Steve.

Yes. So the numbers really jumped out off the page right off the bat about revenue that you had in the [whole] and also the margins and all that. We'll get into all that as well as we continue along here. But first, just overall, talk about where the company was to where you are today. It has a bit of a transition for sure.

Sure. Steve, the simplest way to say it is this. We are now a very different company than we were 12 months ago. We've restructured the business. We've lowered the cost base. We've moved heavily into software, and we've integrated AI across our event tech platform. And now the numbers are starting to show that transformation. In Q4, we showed 200-plus percent year-over-year growth with a terrific growth of our gross profit up 275% year-over-year and gross margins above 90%. But the key message, the key message is revenue is scaling, margins are steady at above 90% and our operating losses have come down. In fact, we would have been profitable if we didn't have some one-time charges. So the numbers are super, super strong. And if there's 3 numbers I want investors to remember, Steve, it's number one, 200-plus percent Q4 growth year-over-year; number two, 90-plus percent gross margin; and number three, 101% sequential revenue growth from Q3 2026 to Q4. That is, to me, the biggest sign that things are starting to accelerate quite rapidly. And that's really what investors should focus on is that this isn't just growth. This is acceleration. And really, the most important part of this, Steve, is we did not need to sacrifice margin to get here. Gross margin remained above 90%. That is not an easy thing to do. You're in business, Steve, I'm in business. Anyone that's in business, having a 90% gross margin is very, very hard to achieve and even harder to maintain. So the story is very clear. higher revenue, higher software margins and lower cost structure. That is what a platform business is supposed to look like, Steve.

So Evan, let's talk about the revenue first in Q4. You mentioned grew 3x your revenue, 216% is the actual official number. You said over 200%, so I'll give you 216%. Tell me a little bit about how the acceleration happened. What were the things that you needed to do in order to see that acceleration in Q4?

Look, it's very simple. The revenue engine is improving. We had a lot of customers, but they were buying in a way that was kind of hurting our revenue. We figured out how to, A, increase prices without losing customers; that's like one clear way to generate additional revenue. But also we're signing multiyear deals. Now multiyear deals are way more valuable than a 1-year annual transaction. And so we're getting clients to sign multiyear deals, which means if you think about our business, if you were going to buy our business from us and all of our business was annual, you wouldn't know who's going to sign up next year and the year after that. But if you were going to buy our business from us, and I said to you, Steve, we have 3-year contracts with all of our customers, you know how much you're going to generate next year and the year after that. So multiyear contracts are a key piece to that. And then the last piece, Steve, is we made some key acquisitions, Eventdex and Krafty Labs. And so those acquisitions are starting to now pay dividends for our shareholders. But again, the main story is the revenue engine is improving. The margin profile has dramatically improved and the cost structure is dramatically leaner, which I could give all credit to AI and to our CFO, Anum, who really has leaned out our company.

Yes. Operating expense is down quite significantly, in fact, and that is a big reason why you were able to bring the loss down as well, which I think is really important for investors to understand as well. So can you talk to me a bit about just that cost savings? And I know this has been going on more than just the last couple of months. This has been a process over the last few years.

Yes. I mean, cost savings are in the rearview. Again, we're not focused on cost savings anymore. We've achieved that goal, check the box. We really worked hard on that for multiple years. But I think the main event and the main question for our investors is where are we going, right? Like what's the big picture here? And so if you think about that, Steve, AI is not a niche anymore. It's becoming an operating layer for Nextech and really all businesses globally. If you look at AI, I mean, it's exploding, right, in usage. And we're part of that story. AI is just going to continue to grow. There's really no end in sight. But if you think about it, a company that's able to harness the power of AI like Nextech is a company that I think is going to grow very, very fast and again, with a low-cost basis for doing business. The second thing for investors to really look at is events. The global event industry is enormous. So you're talking about a multitrillion-dollar rapidly scaling AI industry that we're a part of. And a $1 trillion rapidly scaling event industry that we're a part of. Event industry is going to grow by about $1 trillion. It's $1 trillion today. It's going to get to $2 trillion by 2030. And so think about what I'm saying. We sit at the intersection of 2 very large, very fast-growing markets: AI, which is probably the biggest technology shift of our entire lifetime, bigger than the Internet, really just -- I can't imagine anything that's going to be bigger. And events, which is a $1 trillion global industry now being digitized for the first time in 50 years. This is really the opportunity that Nextech is taking advantage of, and this is really what investors should pay attention to.

There's obviously some questions that are popping up. So I'll ask them as we go along the way. And one is about where the company sits financially, and I'll just read it, 91% margin, strong cash flow. Are you looking at any capital raises this year? Have you gotten to that point yet?

No, we are not looking at capital raises. In fact, if you look at the past year or even 2 years, we haven't done any real capital raises. We don't plan on doing capital raises. We worked so hard to get here where we can actually fund our business ourselves from the cash that our business is generating that we do not plan to raise any money. I mean the hard part here was the restructuring, right? I mean we made difficult decisions. We had to let a lot of good people go. We reduced costs, we refocused the company. We moved away from lower-margin work, and we committed to software and this AI platform strategy. And now you're seeing the results, the impact. And so that's really very -- it's a feel good story for -- really for me and for -- it should be for our shareholders as well.

Let's talk about the point where you're able to get your margins over 90%, which is quite significant in a company like yours as a SaaS company. So can you talk to me a bit about the process there? Are you as razor thin as you're going to get on margins? Because over 90% is really quite an accomplishment. That's a lot of opportunity there for revenue in the future.

Yes. I mean we really weren't if you think about it, there's not much more room for us to squeeze out of our business, right? We already squeezed $0.90 plus -- I think we're at $0.92 of every dollar hitting our bottom line. So there's only $0.08 going of every dollar. I mean it's hard to fathom that things are going to get better. But look, think about it like this. It used to take us a team of 20 developers to run our platforms to run our businesses. And now we're down to really 3 key developers. And so that is the story that we've been able -- and that's not isolated to just developers. If you think of a customer success team, you think of AI being able to answer customer questions 24/7, 365 no sick days, no getting pregnant and having baby day, weeks or months. I mean the cost of doing business with technology has always been quite attractive. But now AI has just taken it all into overdrive. And that's why everybody is investing trillions of dollars into AI. It's not a Nextech story. I mean, look at all these companies like Oracle is laying off 30%, 40% of their workforce, Meta is laying off 20%, 30% of their workforce, Microsoft is laying off 20%. It's not because times are bad. It's because times are good. And they're just able to run the business with less overhead, with less human cost. And for us, a lot of our previous business with Amazon, Steve, as you remember, used to be 3D modeling. And 3D modeling, even though we pushed real hard on the AI piece of that, we still needed to set up a business in India. We still needed lots and lots of human capital in addition to the AI to finalize and perfect the 3D model. And so that no longer exists. Now it's just software. We've built the platforms. So when we spin up a new event, all we're doing is programming the software to deliver the event the way that the customer wants it, but the platform is already built. The cost is already sunk. Sure, we're always developing new technology, but the cost to develop new technology has also plummeted. It has absolutely plummeted. It used to take us 6 months or 12 months to build something new. Now it takes a couple -- and it used to take a team of 20 or more. And now it takes us a couple of weeks to be able to build something, which is mind-boggling, right? And we're able to do that because the AI is doing 80% to 85% of the programming, Steve.

Yes. Evan, there's another question here that I want to show, and this one is about how many customers expand beyond their initial deployment in your land and expand strategy. And I bring this one up because I think that's an important because you had talked in the past about a lot of these contracts at the beginning are sort of show-me contracts, see what happens. But the plan is to try and convert those into more expensive contracts and really longer term as it goes on, right?

It is. It is, and it's starting to happen now. Let's keep in mind, we built the platforms, we restructured. We got our costs down. We raised prices without losing clients. We made acquisitions. All those things happened in 2026. In 2025, rather. In 2026, we've been starting to do the hard work of developing relationships and upselling and cross-selling, but we really needed enterprise sales expertise. And so we've just recently hired 2 key players from Cvent, which is the multibillion-dollar biggest event tech company on the planet. And they -- the 2 sales execs, one had spent 8 years there, the other one spent 3 years there. They wrote the book on sales for Cvent. And now they are building our book at Nextech. And what's happening instantly is our deals are going from, let's call it, $5,000 deals, which everyone knows is quite low to now, we're negotiating multimillion dollar deals, not one, but multiple. And it's just beginning, meaning these Cvent execs only started with us in the last 30 days. They're bringing their relationships and the event business is all about relationships. They're bringing their book of business that they've built over a decade. And that's why our business is really set to explode, Steve.

Yes. Evan, talk to me a little bit about the acquisitions that you mentioned. You mentioned Krafty Lab, obviously, and the Eventdex is the other one, I believe you mentioned. And the -- talk to me a bit about how those work within what you're doing, the ecosystem there and their books as well that they brought with them and how you're sort of able to generate new list? Because I know you had hired some Vice President of Sales, like you've got people that are trying to take all those books, put them together and then move forward.

Yes. So think about it like this. There's really 2 platforms. One is event tech for live expos and conferences and trade shows. That's the Map D, Map Dynamics, does the exhibitor floor plan maps, and then you have Eventdex, which does the attendee registration, ticketing, badging, AI matchmaking, the app, et cetera. When you combine it into one platform, which is what we've done, you now have a full end-to-end solution that competes with the $1 billion Cvent that competes with the biggest companies in the industry. Very few companies actually have a full end-to-end solution. In fact, a lot of the big companies contract to us for our mapping solution. They don't have maps. They don't have floor plan maps. Don't ask me why, but they don't. So they come to us and we wholesale to them, which is fine. So that's one part of our business, that end-to-end solution. The Krafty Labs piece is another platform that is experiential. It's team building. So that platform has over 150 different experiences, whether it's a trivia game where you have different groups from a corporation like Google or Microsoft or Meta who are our customers competing on Trivia or whether they're doing some kind of candlemaking event, some Krafty kit, maybe it's a coffee tasting, maybe it's a charcuterie board tasting and you have a live host. So if you think about that, that platform is adjacent to the live events. But what's happening now is we're starting to integrate. We're starting to merge them all into one platform so that you can have sponsorships at the event that include these experiences, a coffee tasting sponsored by Google, right? So now all of a sudden, there's this whole additional revenue stream that we're starting to build. We need to see. And there's some really, really exciting news coming, Steve, about a new product that we're going to be launching into the events industry using Krafty's current tech, but bringing it into the live expo conference center market. And we think there's the potential for disruption where nobody has really done what we're about to do for the event industry. And so stay tuned for that. We're not going to reveal it here, but it's coming.

Okay. All right. There you go. Maybe you can do the Taylor Swift, Travis Kelce wedding to start it. That would be something. So there we go. Everyone is talking about that. All right. Let's ask -- this is a good question, too. Blockchain ticketing, we talked about that in the platform. Tell me a little bit about the updates on that one.

Yes. I was just on a call with a partner who is connected to the blockchain events industry. So if you think of blockchain ticketing, think about all the blockchain events that are going on worldwide. There's an opportunity for us to be their blockchain ticketing supplier for blockchain events. It's obviously a natural -- it's a multimillion dollar opportunity, and we think we're the only company in this space that can deliver on that. So, yes.

Okay. Another one here. Looking back a year from now, what operational metrics, not the share price because you really don't control how the share price works? And there's a couple of other mentions about share price. And there's not much you can really say about the market is the market, right? But what do you think investors will say is the real turning point here for the company?

So investors should know, I'm not going to say buy now. That's not my role, right?

Yes.

What I would say is this, this is the moment to pay attention. Because the company investors are looking at today is not the same company they saw 12 months ago, even 3 months ago. And really, again, I'm going to go back to the numbers, 200-plus percent Q4 year-over-year revenue growth, 90-plus percent gross margins, 275% gross profit increase. Operating losses are at the lowest they've ever been. We've never had such low losses. Really, we were profitable. So if you think about what I'm describing, the question for investors should be pretty obvious. If AI is reshaping enterprise software globally and events are becoming more digital globally, more data-driven, more automated, where does a high-margin AI event tech platform fit in, right? And so we think that we fit perfectly, and we think that we're going to just continue to grow and scale our business. Look, investors need to remember, the old story was restructuring. The new story is scaling. The old business, too much cost. I'm the first one to admit that. But the new business is software margins, 90%. The old business was way harder to scale. The new business is platform-driven. The old story, fixing. I come on, we're fixing. The new story is about growth, leverage, execution. That's why I'm so excited, Steve, I think we're still very, very early. I mean the stock price hasn't even moved today. It shows that investors are asleep at the switch, but that is the opportunity. These things typically turn on one press release, one announcement of one new deal that's a $1 million deal and all of a sudden, the stock takes off.

Yes. How do you attract new people with interest in the company? Who are you looking at? You mentioned you've got all these new opportunities with Krafty and other ones like that. So are you now -- when you go out and are on the road and visiting people and stuff, you're seeing new people that you're talking to about seeing what the company is up to and how they would like to help support it?

So are we talking about investors or...

New investors, new people that are interested in understanding what the company is, how you've made changes because a lot of people may look at a back story, as you mentioned, and said, we've been restructuring all that. But as you were pointing out or at least trying to point out to people that this is a story that's now building from this point on. So how do you get that message out to people who may not know that much about the company?

It's a good question. So everybody that's paying attention should know been there, done that, been there, done that, meaning I already built Nextech into the stock was a $10 stock trading millions of shares a day. So I already have the playbook we're going to be executing, meaning what it requires me to do is first have some numbers, right? First, have the product, the numbers, the pitch deck, the presentation, something to stand on. I don't -- I'm not going to go on to road shows. I'm not going to give investor conferences unless there's something to actually talk about. It's not about the sizzle. It's about the stake. And so now we have the stake, right? Now we have it. We have the numbers that we can walk into a room and start showing around. So that's really all it comes down to is, first, you got to have something to really show people. And the second thing is to just break out the playbook and start doing conferences and start doing presentations, which is going to gear up very, very rapidly from this point going forward.

Yes. So then on that, when you say show people, so is that consecutive to continue with numbers like this at a consecutive every time you're releasing financials, you're showing the revenue increasing. I mean you're not going to get to the point where you're seeing the kind of numbers you saw now. I mean I'd love to for sure. But is that what you mean when show people is just continue to execute on what you've seen in Q4 and year-end and move forward?

I mean we don't see any end in sight in terms of the growth. So we think that quarter after quarter, we're going to be able to deliver and year after year, as far as the eye can see, there's nothing that's really blocking us from growing very, very rapidly into a much, much bigger company. And so if I think about that market opportunity, it's very, very large. Again, AI is estimated to become the biggest technology ever. I can't even put a number on it. And if you think about the events industry, again, it's a global industry that's over $1 trillion industry today. So we're not going to capture the whole market, but we're focused on very specific opportunity, AI, automation, registration, ticketing, mapping, engagement, analytics, all into one event operating system. And as we execute on that, we think it's worth billions. I mean there's no reason why this can't scale into very, very big numbers. So I don't see anything blocking us, Steve, from growing very quickly. And this first release of 200% growth, but more importantly, the sequential 100% growth from Q3 to Q4 is really just the tip of the iceberg for our business.

Okay. What's your pipeline looking like this year? I know that we met your -- you hired a new Vice President of Sales, I think it was. And so tell me a little bit about he's integrating into the company and what he sees moving forward as far as pipeline is concerned.

Yes. So look, we have $1 million-plus, it might be $1.5 million contract that's working its way through contracting. It's not signed, sealed, delivered, but this is a relationship that our new enterprise sales leader brought with him, and they are engaged. They've met multiple times in person. They're going to continue to meet until the deal is closed. And I'm actually going to be flying out to meet them and celebrate the closing of that deal. But that's one there's going to be a parade of these hundreds of thousands and million-dollar deals. And let's be clear, these are not one-off events. These are multiyear contracts, 2-year, 3-year, 4-year contracts. And again, those are very, very valuable, way more valuable than a 1-year contract, which historically has been our business. And so yes, I mean, if you think about it, Steve. We did almost $1 million in Q4, and now we have one deal that is looking like it's going to be even bigger than our Q4 number as a whole.

Okay. A couple of minutes left here, Evan, just I thought I'd give you an opportunity to just give some final thoughts about everything we've talked about so far. And I know that you've seen some of the questions that have been coming in from people. And so just some general thoughts about where you are and really where you're going.

Yes. I mean, look, Steve, the answer is very simple. The business has been reset. The cost structure is very low. Our margins are very high. The platform is built. The costs are sunk. The revenue is now showing sequential acceleration, right? Q3 -- Q2 to Q3 sequential growth was 20% -- from Q3 to Q4 sequential growth was over 100%. That's not incremental. That's exponential. That's why it matters. That's what matters. And so we're not promising anything. What we're saying is the financial results are starting to show the transformation people, they constantly bash because I'm a positive-minded CEO, and I speak in a positive tone. But the numbers are super, super positive. Like putting aside me, if you just look at these numbers, these are very, very positive numbers for a public company. And if you start to project forward and you say, "Hey, well, if they went from $500,000 to $1 million from Q3 to Q4 using round numbers. And if they're able to go from $1 million to $2 million, and then if they're able to go from $2 million to $4 million, wow, the numbers get really big, really fast. And that's really what investors should be thinking about. I'm not promising 100% growth sequentially forever. But what I'm saying is that we've done it once, yes, the odds are, we're going to do it again. And when you think about having enterprise sales guys that we've never had before with a platform that's built with high margins, all this leads to profitability, all this leads to potential uplisting, all this leads to a re-rating of the stock and a much higher share price in the future. We've done the hard work of transforming the business. Now the focus is on execution, scale and turning Nextech, which is an AI-powered event platform into a much, much larger company, Steve.

All right. Evan, we'll leave it there. Thank you so much. Great to catch up with you again, and we look forward to our next conversation, okay?

Thanks, Steve.

All right. There is Evan Gappelberg, the CEO of Nextech3D.ai. And I'm Steve Darling here in Vancouver. Thank you so much for joining us for another live stream event, and we'll see you down the road.