Netcapital Earnings Call: Blockchain Pivot Amid Revenue Slide

Netcapital Inc ((NCPL)) has held its Q2 earnings call. Read on for the main highlights of the call.

Netcapital’s Earnings Call Balances Bold Blockchain Pivot With Stark Revenue Realities

Netcapital Inc.’s latest earnings call painted a mixed picture: management projected confidence about a strategic pivot toward blockchain and tokenized assets, while investors voiced clear unease over sharp revenue declines, persistent operating losses, and the rationale behind recent acquisitions. Overall sentiment leaned cautiously optimistic about long-term potential but was clouded by serious short-term financial pressures and questions about execution.

Strategic Pivot to Core Fintech Platform and Blockchain

Netcapital outlined a major shift back to its core fintech platform and its licensed broker-dealer as the foundation for future growth, with a heavy emphasis on blockchain integration and tokenized assets. Management framed this as a return to the company’s strengths, aiming to build high-margin, technology-driven revenue streams rather than relying solely on traditional portal fees. The broker-dealer arm is expected to enable more sophisticated offerings, particularly in the private markets, and to support the expansion into tokenized securities—an area the new CEO, Rich Wheeless, portrayed as a key differentiator in a crowded capital-raising landscape.

Improved Loss Per Share Despite Weak Top Line

One of the few clear financial bright spots was the substantial improvement in loss per share, which narrowed from $2.34 in Q2 FY2025 to $0.44 in Q2 FY2026. While the call did not detail all the drivers behind this change, the improvement suggests progress in managing certain costs and capital structure, even as overall losses persisted. For investors, this metric signals that, at least on a per-share basis, the company is moving in a more disciplined direction, though the underlying business remains far from profitability.

Steep Revenue Decline Raises Investor Concerns

The most troubling headline number was the sharp revenue drop, from roughly $170,000 in Q2 FY2025 to about $51,000 in Q2 FY2026, largely due to a fall in portal fees. This contraction underscores the fragility of Netcapital’s current revenue base and raises questions about demand on its existing platform while it executes its strategic pivot. For shareholders, the decline undercuts the short-term investment case and heightens the urgency for the new blockchain and tokenization initiatives to begin generating meaningful revenue.

Operating Losses Remain Stubbornly High

Netcapital reported an operating loss of approximately $2.1 million for the quarter, only a modest improvement from the $2.2 million loss a year earlier. The limited progress on reducing operating losses highlights the challenge of funding an ambitious strategic transition with a shrinking revenue base. Despite some cost discipline, the company remains in a heavy investment phase, and the path to a more sustainable cost structure was not clearly defined on the call—something that risk-focused investors will likely continue to scrutinize.

Shareholder Skepticism Over Recent Acquisitions

Participants on the call raised pointed questions about the company’s recent acquisitions, particularly Rivetz, which required a significant issuance of shares. Some shareholders questioned whether the acquired assets have tangible value, especially given perceptions that certain acquired businesses are no longer operationally relevant. This skepticism reflects broader concerns about capital allocation and dilution, and whether past deals align with the new strategic focus on blockchain and tokenized assets.

Efficiency and Headcount Under the Microscope

Investors also pressed management on employee efficiency, highlighting the mismatch between the current headcount and the very low revenue figures. The lack of a clear answer on whether staffing levels will be adjusted in line with revenue pressured the credibility of management’s cost-control narrative. As Netcapital looks to scale higher-margin businesses, investors will likely watch for concrete steps to align operating expenses, including headcount, with the company’s actual revenue-generating capacity.

Forward-Looking Guidance and Strategic Outlook

Looking ahead, Netcapital’s guidance focused less on precise financial targets and more on strategic direction. The company ended the period with about $1.7 million in cash and cash equivalents, giving it some runway but little margin for prolonged underperformance. CEO Rich Wheeless highlighted the goal of building high-margin revenue streams from blockchain-based and tokenized assets and emphasized future contributions from Reg A transactions through the broker-dealer subsidiary, which has yet to produce revenue. Management signaled that these new initiatives are expected to drive growth and eventually improve profitability, though timelines and specific milestones remained high-level, leaving investors to weigh the promise of the strategy against current financial strain.

In summary, Netcapital’s earnings call showcased an ambitious pivot toward blockchain and tokenized assets that could reshape its business model, but this vision is emerging against a backdrop of declining revenue, persistent operating losses, and investor doubts over past acquisitions and cost structure. The story now hinges on execution: whether the company can convert its strategic narrative into real, scalable revenues before its financial flexibility narrows further.