Netcapital reported QQ2 2026 revenue of $51,076 thousand, a sharp YoY decline of 64.09% and a QoQ drop of 73.13%. Despite the steep top-line compression, gross profit remained very robust at $49,199 thousand, yielding a gross margin of approximately 96.3%, which signals a high-margin revenue base underpinning the business model. The company continued to incur meaningful operating losses, with operating income of -$2,119,457 thousand and a net income of -$2,129,489 thousand, resulting in an EPS of -$0.44. The EBITDA figure stood at -$2,119,457 thousand and the EBITDARatio is reported at -41.50%, underscoring a burn through fixed operating costs in the near term.
The quarterly YoY improvement in operating income (+15.5%) and net income (+15.74%) alongside a double-digit negative margin is indicative of a cost structure that does not scale proportionally with revenue, leading to deleveraging of profitability as activity slows. QoQ improvements in operating income (+35.35%) and net income (+41.53%) suggest some sequential leverage from the cost base, yet the magnitude of the losses remains material relative to the revenue base. With no formal earnings guidance disclosed for QQ2 2026, investors face uncertainty around whether the current cost base can be reined in as fundraising activity stabilizes or improves.
Key takeaway: Netcapital exhibits a high gross-margin, software-enabled services model that, in the near term, burns cash due to fixed operating costs and a softer fundraising environment. The path to profitability hinges on sustainable revenue growth, disciplined cost control, and scalable monetization of its advisory and valuation services as the private capital markets cycle normalizes.