DENVER, Colo. (247marketnews.com) -- Gaxos.ai (NASDAQ:GXAI) is putting up numbers that are increasingly difficult for the market to ignore. The company reported record second-quarter revenue of approximately $2.46 million, up 35.8% sequentially from $1.81 million and a stunning 1,337% from $0.17 million in the year-ago quarter. Just as important, revenue growth is beginning to outpace the company's spending growth: advertising and marketing expense rose approximately 13.5% sequentially to $3.14 million, while revenue jumped more than twice as fast.
That improving efficiency is one of the most important pieces of the story. Gaxos says revenue generated per advertising dollar increased approximately 20%, from $0.65 in the first quarter to $0.78 in the second. Advertising and marketing expense also fell from representing roughly 153% of revenue to approximately 128%. While the company is still spending more on advertising than it generates in quarterly revenue, the direction is what matters: the gap is narrowing as the business scales. Gaxos also reported GAAP net income of $241,056, or $0.02 per share, although that result primarily reflected a gain from the sale of gaming assets and should not be viewed as evidence that the core business has already reached sustainable profitability.
Gaxos is simultaneously simplifying its portfolio. During the quarter, the company completed the sale of substantially all of its gaming assets, including its mobile-game portfolio and Gaxos Gaming Labs, to Game Foundry AI, receiving 2.2 million shares of Game Foundry AI valued at approximately $1.76 million for transaction purposes. Gaxos retains a 19.99% interest in America First Defense.AI, giving investors additional exposure to a defense-technology business developing counter-UAS and robotic platforms. Meanwhile, Gaxos continues developing AI applications through Gaxos Labs and health and wellness offerings through its majority-owned RNK Health subsidiary.
The balance sheet provides another piece of the setup. Gaxos ended June with approximately $11.44 million in cash and short-term investments, compared with $11.71 million at March 31. The company also raised approximately $1 million of net proceeds through its ATM program during the second quarter, while reporting that no additional ATM shares were issued between July 1 and August 12. As of August 12, Gaxos had 10,744,634 shares outstanding. That capital position gives the company room to continue investing in customer acquisition, products and growth initiatives, although investors should continue watching future financing activity and share count.
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