How're we doin'? Finance Edition

It’s June and it’s time to check-in on our budget! A mid-year budget check-in is important because it helps us understand how we are performing against the budget and assumptions we had at the start of the year. Six months in, we have actual data to show us what is really happening and that can inform what decisions we need to make on spend and investments going into the second half of the year.

Bottom line: We’re in a good financial position at mid-year. We’re tracking ahead of our revenue targets, expenses are under control, and we have a healthy 15-month runway.

Revenue: Meeting Expectations

Where we stand: $796K earned through June (49.6% of annual plan of $1.6M)

• We are 1% ahead of where we planned to be at mid-year, but year over year, we are flat on overall revenue versus the same period in 2024.
• A key driver pushing us ahead of plan is the NYSERDA Data project subscription, which adds $200K annually ($50K per quarter). This revenue is a welcome monthly addition to our revenue, as it had not been included in the plan at the start of the year.

What’s working:

• Subscription revenue remains our revenue foundation with a $1.46M annual run rate.
• The new NYSERDA contract is bringing in predictable quarterly revenue.
• Collections efficiency - our invoices have been paid to us on-time, except for an outstanding $5K from Urban American and an initial delay from Willdan at the start of the year.
• Churn rate is low, with only one customer (7.69%) having churned this year - this churn rate aligns with the 4%-8% average monthly churn for early stage B2B SaaS companies and is well below the 10%-15% annual churn benchmark.

What needs attention

• Transaction fees are behing target (currently 6% of $178K annual plan).
• It is important to note that we removed the monthly target for transaction fees during the 1H of 2025, due to the unpredictability of project close dates. At this point, we do expect most transaction fees to come in by the end of Q4.

Expenses: Disciplined and Efficient

Spending Wisely: $997K spent through May (37.7% of annual plan).

• Our expenses are currently at 74% of the budget for 1H 2025 and on track to come in under budget for the first half of the year.
• Overall expenses are relatively flat versus the same period in 2024, with the exception being how we spend our money - there was a 68% reduction (-$237K) in consultant spending year over year ($110K vs. $347K) and increased spend in Product R&D salaries, insurance and IRA contributions.

Salary & Team

• Payroll remains our largest investment at ~$140K/month (80.7% of expenses).
• Payroll efficiency is running at $797K or 73.87% of first-half salary budget and is 35.09% to the annual plan.
• We are currently under budget on salary due in part to unused intern budget since January.

Cash Flow & Runway: Healthy Position

Our net burn is improving - as of today, the 3-month average net burn (accrual-basis) is $54,857

• The net burn has been trending down since February, thanks to new subscription revenue (see above) as well as recent one-time boosts from NYSERDA set-up fees ($40K) and a SAFE grant payment ($150K).
• We’ve reduced our net loss by $40K or 18.5% over the same time period in 2024 (-$176K vs. -$216K) - this means we are losing less money and a positive result of our learning and optimizing how we spend.

Runway is 15 months of operating capital as of June 1.

• As a reminder, for a startup at our stage, a healthy runway is 12+ months, which we have maintained for the past three months.
• Our runway provides some flexibility for investment in growth opportunities such as strategic hiring or initiatives, as long as we can maintain discipline with our spend and continue to bring in additional revenue.

What this means for Cadence OneFive

At mid-year, we are exhibiting operational efficiency, doing more with less (see 68% consultant savings while maintaining operations) and under budget performance creates some flexibility for potential growth opportunities.

Looking ahead: We’re evaluating scenarios for the second half of the year, including the impact of potential new revenue opportunities on the strategic investments we can make in our team and technology. A look ahead at the second half of the year will be coming up but in the meantime, don’t hesitate to leave your questions in the Slack thread !

• Erika

PS from Bomee:

I just wanted to add that watching Marc do the demo really brought it home for me that we need to make the site feel a little bit perkier and faster. I’m really happy about the caching improvements and even the spinners—which I will fully admit I was wrong to oppose! Rock on!

Metrics

Traction

• Unique Buildings: 6,648 (May, +300 MoM)
• Annual Run Rate: $1.46M

Financials

• Monthly net burn (accrual basis): $54,857 (3-month avg, -28.59% MoM)

• Year-to-last-month net burn (cash basis): $75,214 (-8.87% MoM)

• 2025 Transaction fees to date: $9,355

• Outstanding invoices as of today: $277,975 (+$40K WoW or +16.8%)

  Run Rate and Net Burn metrics have been updated for May.

Development

• Bug Count (P-0 and P-1): 9

Last Week’s Highs and Lows

• CONGRATS to Maks and family on the arrival of the little guy! (Is his middle name Momentum?) (BJ)
• The NYCA interview and demo! (JB)
• We made the building page faster for the demo. It was a little bit of a scramble to figure out how to get caching working, but totally worth it. Kudos to Chuck and François!
• So many days of socializing–the Urban Green Council event on Monday and then two days of The Clean Fight summit. Some of the participating solution providers really liked Momentum and seem to want the advanced search feature. There’s a chance we can get a little money from The Clean Fight to give them access. (JB)
• We (and our users) found two non-trivial bugs that lingered multiple months last week: wrong AMEEP points and GHG limits, with in both cases poor baton passing Calc Service -> Momentum. (FH)
• Maks got us to Laravel 12 on dev, so we’ll be running the current version for the first time in a while – we skipped right over v11, which had some major changes. (BJ)

Any missing highlights? Please share in Slack comments.

Crow’s Nest

Looking out for icebergs: What are the risks on the horizon that we’re watching for and navigating around?

Jason’s List

Carryovers:

• Local politics The federal picture certainly isn’t good, but we also have some local political risk on the horizon. There’s a big NYC election coming up this fall (with the primary in a few weeks!) There’s a lot of belief that if Cuomo becomes the mayor, Local Law 97 would face some serious setbacks—maybe even go away. It looks like DC is close to delaying its building performance standard BEPS, which isn’t great.

• NYC Accelerator and ConEd Recompete These are both big contracts with outsized impacts on revenue and product roadmap. Both interviews are done now, and eager to hear back.
• Balancing new feature development with cleaning up debt We have a lot of new features to build, but also a lot of legacy code debt that can make adding those features take longer than it otherwise should. How much time do we spend pushing new features out to the door to keep current and potential clients happy vs. time spent getting our codebase cleaned up so we can move faster in the future.
• Portfolio/program reporting Users want the ability to look at groups of buildings in our software, whether it’s looking in their own collections for buildings that meet certain criteria or looking at trends across projects in a program. We haven’t done anything in this vein yet, but we’ll need to start. But like François above, we need to figure out how to keep users in Momentum, pulling them out of their spreadsheet comfort zone.

François’ List

• Shipping small, often, well, and safe: I don’t think anybody feels great yet about where we are right now (at least Momentum side, the hardest side). But there’s real progress on testing speed, coding and PR best practices, involving Jeff early and often, and navigating long-term branches, all while pleasing the SOC-2 gods. Let’s keep at it, we’re almost there!
• Growing the team: the “$2.5M demo” is not only motivating on its own, it also re-opens the door to hiring. Let’s prep for it, so that we can identify the right skills, attract the right candidates, and welcome them efficiently. Ahead of permanent hires, and to flex our onboarding muscles, could it make sense to get help from consultants for Laravel expertise, or interns for testing help?
• Automated Testing: I’m convinced that reliable tests that run quickly and reflect our users’ experience are table stakes to move faster and with more confidence. Are we going to find the bandwidth to get this party going?

Erika’s List

• Priority this week and a crow’s nest item are the budget scenarios for 2H 2025 and beyond - this will support strategic decision-making and we’re at the point where we have enough information to start thinking things through and planning ahead. I have been pushing it back to get other things completed but it is time.

Bomee’s List

• Getting Marc a product he can sell Program-Projects for KC3/ConEd pilot
• Team dynamics We’re still gelling, and we’re having more of the the conversations we need to have. Really thought last week’s staff meeting and brown-bag discussions were good for us.
• Cash. We have a net burn that we need to minimize. If we win these RFPs, we can make strategic investments!
• NYCA and ConEd Recompete – Interviews are done and we’re waiting for (hopefully) two big yes’es.
• Political and economic uncertainty in the US, including NYC elections.

Marc’s List

• Headwinds for any kind of decarbonization work that makes buildings less affordable to operate
• Our revenue opportunities are very concentrated – we will need to eventually diversify
• Can’t just wait for the dust to settle on the big RFPs – need to be making purposeful progress with existing and new customer/user engagement.

On Deck for This Week

• We’re putting the finishing touches this week on another NYC procurement, this time for HPD (with KC3 as the prime) (BJ)

• I’ll be meeting with CPC and Bright Power to discuss the later phases in the CFHF workflow. We hope to figure out ways to help the program move faster, which might include some more standardization across the engineering partners. Who doesn’t love standardization? (JB)

• I’ll be pitching Cadence OneFive at a JLL Foundation event this Wednesday. We are not raising money now, but this is an opportunity to get in front of investors, and thank JLL for their support. (FH)

• I’m hoping that the next couple days of testing dev are uneventful and we can get a nice FAT release out on-time-ish! (BJ)

• Kate 360 (MZ)

• Real estate customer successs backlog with Related and First Service that has taken I had to deprioritize with all the NYCA interview stuff last week (MZ)

• Budget scenarios (see crow’s nest) (EP)

• Here’s what’s on the Company Radar

Upcoming Release

Our next release is this coming Wednesday, and this will be release 96.

In release 95, we started improving the user experience by making things faster, particularly on the buildings list with some improved caching for calc-service. We are going to make it even nicer in 96. Our 130 commits address:

• Laravel 12!!!
• Back end work to support client needs: new measures for L+M, and owner- vs. tenant-paid heating for Related
  • New Heat Pump Measures: Added Ground Source (GSHP) and Air-to-Water (AWHP) heat pump support
• Enhanced Search & Export: Faster search with new data export capabilities for HPD and progress indicators
• CPC Project Features: New construction and compliance phase date tracking
• Bug Fixes: Resolved JavaScript errors, address handling issues, and improved automated testing

We’ve been honing in on details of how the project feature needs to work, particularly the bid form generation and contractor bid. It’s been a lot of discussion, but I think it’ll pay off in making sure what we build actually meets our needs. Moving bugs to the left!

Please Leave Feedback

Please note your reaction to this update in the Slack channel. It helps us to know what is resonating, what is unclear, etc. Thanks!

• What are your highlights / low-lights?
• Did we miss a highlight? Something else you want to react to?