Banzai International, Inc.

Welcome to the Bonsai fourth quarter and full year 2024 financial results and business update conference call. A question and answer session will follow the formal presentation. As a reminder, this conference call is being recorded. Before we begin the formal presentation, I would like to remind everyone that statements made on this call and webcast may include predictions, estimates, or other information that might be considered forward-looking. While these forward-looking statements represent our current judgment on what the future holds, they are subject to risks and uncertainties that could cause actual results to differ materially. We are cautioned not to place undue reliance on these forward-looking statements, which reflect our opinions only as of the date of this presentation. Please keep in mind that we are not obligated publicitating ourselves to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events. Throughout today's discussion, we will attempt to present some important factors relating to our business that may affect our predictions. You should also review our most recent Form 10-K and Form 10-Q for more complete discussion of these factors and other risks. particularly under the heading risk factors. A press release detailing these results was issued this afternoon and is available in the investor relations section of our company's website, bonsai.io. Your host today, Joe Davey, Chief Executive Officer, and Alvin Yip, Chief Financial Officer, will present unaudited results of operations for the fourth quarter and full year ended December 31st, 2024. At this time, I will turn the call over to Bonsai Chief Executive Officer Joe Davey.

Thank you, and good afternoon, everyone. I am pleased to welcome you to Bonsai's fourth quarter and full year 2024 financial results conference call. Just go ahead and flip to the next slide here. Sorry. We are seeing an acceleration of growth at Bonsai with the fourth quarter showing significant pro forma revenue growth. This is driven by the recently closed acquisitions of Vadello and Open Real, as well as continued strong performance for our products. For the full year 2024, total revenue on a consolidated pro forma basis was $16.7 million, which represents a 267% annual growth compared to Bonsai's standalone revenue in 2023. Videlo's next-generation video creation, editing, and marketing suite and OpenReel's digital video creation platform combined to add approximately $13 million in revenue that enabled us to greatly exceed our previously announced 2024 guidance of $10 million. We are also making continued progress towards the closing of the acquisition of Acton Software, which is projected to increase revenue by $27 million for the full year 2025 on a pro forma basis. Importantly, we recently paid off $20.3 million of debt, which fully satisfies outstanding debt obligations to key vendors and will deliver a material benefit to net income and shareholders' equity for 2025. We have continued to drive growth with the addition of 1,300 customers through December 2024, Bonsai now serves a customer base of nearly 90,000 customers, many of which are top tier enterprises that rely on our technology to succeed. I will begin with a brief overview of Bonsai for those of you that are newer to the story and touch on the market opportunity and the long-term vision. I will then cover some highlights from 2024, including updates on each of our products and our go-forward strategies. And I'll just point out that this presentation is being run on Demio, which is a Bonsai product. And the of myself and Alvin were created using Create Studio, which is another Bonsai product. So I hope everybody enjoys using a couple of Bonsai products today. At Banzai, we're building a platform of AI-powered marketing solutions that make our customers' lives 10 times faster and easier. Our products enable our customers from small businesses to large global enterprises to target, engage, and measure both new and existing customers more effectively. We're focused on the rapidly growing global MarTech market driven by digital transformation, heightened demand for personalized experiences, and the proliferation of automation and AI. Marketers in the modern age must grapple with a vast and complex network of vendors. Our core product suite addresses the issue of disjointed customer experiences and messy data by centralizing essential tools in one place, Bonsai. We're continuing to bolster our family of products by acquisitions, positioning us strongly for capitalizing on industry consolidation. Before we delve deeper into updates for each of our individual products, I'd like to cover some key highlights for 2024 and subsequent period. First off, our 2024 pro forma revenue in total was $16.7 million, exceeding our previous guidance of $10 million by 67% and representing 267% annual growth. In the first quarter of 2025, we completed a $20.3 million debt repayment ahead of schedule, which fully satisfied our outstanding debt obligations to several key vendors. We're extremely pleased to deliver this improvement on the balance sheet, which will also create a material benefit to net income for 2025. We achieved annual recurring revenue of $6.8 million in the fourth quarter. This represents a 54% annualized ARR growth rate compared to Q3 2024. Full year 2024 adjusted EBITDA was negative $6.5 million, which represents a $5.4 million improvement from full year 2023 EBITDA of negative $11.9 million. We acquired Videlo, a technology provider of video hosting and marketing suite for businesses, and OpenReel, a leading digital video creation platform. We signed a definitive agreement to acquire Acton Software, an enterprise marketing automation platform provider, which is projected to increase full year 2025 revenue by $27 million on a pro forma basis. We grew our customer base from 2,700 customers at the end of 2023 to over 90,000 as of March 31st, 2025. We launched Create Studio 4.0, which is the latest version of Create Studio's award-winning video creation app. developed by the recently acquired Videlo. Finally, we launched Curate, an AI-powered newsletter platform designed to streamline content creation and audience engagement for organizations of all sizes. As we look at our long-term vision, we are building an AI-powered platform that provides marketing teams with the data, analytics, and integrated applications they need to win. We are consolidating mission-critical subscale MarTech products within the key themes which we'll call our four horsemen of marketing technology. Attracting leads, engaging them through content, gathering and enriching data to drive business intelligence, and measuring results to improve operations. All products that we have built, will build, or acquire will fit into this framework, which simply put, is focused on delivering more customer value over time. Through March 31st, 2025, Bonsai achieved a milestone in debt repayment under our September 2024 restructuring plan. Now that we've repaid, we've now repaid $20.3 million of liabilities under that plan. This will impact both stockholders' equity and net income in 2025. And this is a very meaningful milestone for the company and positions us for future financial strength. Moving on to our products. In 2024 and Q1 2025, we completed the acquisitions of OpenReel and Videlo. These products will be operated under a consolidated video business unit within Bonsai that is focused on helping marketers leverage video to engage their leads and customers more effectively. This consolidated business had pro forma revenues of $16.7 million in 2024, which represents 267% growth compared to Bonsai standalone in 2023. I'll pause here and I'll point out that this slide, the scene that you're seeing here, are assets from Create Studio. Our Videlo subsidiary makes Create Studio, a leading product for creating 3D Pixar-style videos quickly and easily. It includes over 1,000 prebuilt assets customers can leverage in their projects and has over 85,000 customers as of March 31st, 2025. Videlo also includes products for video marketing, live images, and royalty-free audio. In February, we launched Create Studio 4.0, the latest version of the award-winning video creation app developed by our Videlo subsidiary. The Videlo business delivered $6.1 million in revenue and $1.5 million in net income in 2024. Meet OpenReel. Our open real product enables customers to capture create and edit brand compliant production ready videos. It enables remote capture from any device and AI powered editing to streamline customer workflows. The open real business has over 650 mid market and enterprise customers and delivered $6.3 million in revenue and point $1 million in net income in 2024. And finally, Demio. We're continuing to see traction with Demio, our AI-powered webinar platform, which you're all joining us on today. We've made enhancements to the platform's integration with HubSpot, Salesforce, and Pardot to offer advanced contact management, UTM tracking, and seamless data synchronization at both the session and contact levels. Demeo has an industry-first feature, event insights, pre-event analytics delivered to your inbox, tracking registrations, cancellations, room size alerts, peak days, and top channels. This empowers Demeo users to make data-driven decisions and maximize attendee engagement to better leverage everyone's time. Our AI moderator to Demeo, powered by our own LLM custom designed to this purpose, allows our customers to train in AI to join their webinars to assist their attendees. Demeo is built to empower marketers to streamline their webinar management and marketing efforts, ultimately leading to better business decision making and higher ROI for our customers. In January 2025, we announced a definitive agreement to acquire Acton Software Inc. Acton is a leading marketing automation platform provider. It's expected to be accreted to Banzai's overall revenue and net income in 2025. This acquisition is subject to the satisfaction or waiver of closing conditions and is still in progress. Curate, which we launched late last year, is a groundbreaking AI-powered newsletter platform that writes and grows itself. Leveraging OpenAI's GPT-4.0 to automate the newsletter creation process, Curate writes relevant branded articles that resonate with target audiences. Newsletters are a key modern engagement tool for businesses to highlight their brand for their existing and prospective customers, but they currently require significant time and resources to create and maintain. Curate was made to take down the cost and effort for our customers to create high-quality newsletters by 90%. And this is a really cool product, by the way. If you're interested in the demo, send me an email after the end of this and I'll make sure it happens. Driven by our acquisitions, we've substantially scaled our customer base to over 90,000 customers while retaining leaders from various industries. Some of our key customers and partners include Cisco, Adobe, Thermo Fisher Scientific, Microsoft, Dell, Capital One, RBC Global Asset Management, among thousands of others. We serve a variety of industries, including healthcare, financial services, e-commerce, technology, and media in over 90 countries. We're continuing to focus on targeting the mid-market and enterprise segment while still supporting small businesses. We're taking a disciplined approach to focus on acquiring stickier, higher value customers. Bonsai continues to be focused on our strategy of building and buying new products across four key areas, attracting leads, engaging content, tracking, and intelligence. We feel these areas are key to marketing success both now and in the future for our customers. Our growth strategy is centered around our secret sauce, our land and expands model. The land phase is securing a customer for one Bonsai solution based on their needs at the time. With the variety of complimentary tools that are now in our product suite, we can then upsell that customer to increase NRR or the expansion phase. We're targeting a 10% cross sale rate per business unit in 2025. Our vision is to build a moat in two key areas, integrations and AI enablement. By combining multiple products on a single platform, we can simplify customers workflows and deliver on our brand promise of 10 times faster and easier solutions. Long term, we believe AI enablement will be key to marketing success. We believe that adding more products with more data will enable us to deliver more powerful AI features over time. Our business model is based on a flywheel where great products lead to growing customer usage, which then drives additional data and content on our products. This data and content enables us to create additional high value or create additional customer value through integrations, automations and AI features. Over time, we believe that this flywheel will be key to driving customer expansion and the continued organic growth of our business. We see an enormous potential for long-term value creation by scaling via strategic acquisitions in addition to organic growth. We're taking a diligent approach to evaluating potential candidates that can align with the key themes of Bonsai's AI-driven platform. Again, attracting leads, engagement, data, and intelligence. The opportunity for Bonsai is twofold. First, increase our product capabilities by acquiring strategically aligned products that serve our core customer base. And second, by accelerating our path to profitability and scale, and hopefully to benefit from multiple expansion along the way. I will now turn the call over to Alvin Yip, Interim Chief Financial Officer, to discuss our financial results. Alvin? Thank you, Joe.

Hi, everyone. So I'm going to do a financial summary on the Q4 and the 12-month full-year financial. Total revenue for the fourth quarter of 2024 was $1.3 million compared to $1.1 million in the fourth quarter of 2023. However, we believe the non-GAAP matrix annual recurring revenue, or ARR, is more meaningful in evaluating the company's performance ARR was $6.8 million for the fourth quarter of 2024 and represents a 46% increase from the fourth quarter of 2023. Gross profit for the fourth quarter of 2024 was $0.9 million. compared to 0.8 million in the fourth quarter of 2023. Gross margin was flat at 71% in the fourth quarter of 2024 compared to 71% in the fourth quarter of 2023. Total operating expense for the fourth quarter of 2024 were 4.8 million compared to 4 million in the fourth quarter of 2023. Net loss for the fourth quarter of 2024 was $7.8 million, compared to a net loss of $6.4 million in the fourth quarter of 2023 year. Non-GAAP adjusted EBITDA for the fourth quarter of 2024 was $1.44 million, reflecting a net loss of $7.9 million before changing the value adjustment of common stocks warrant issued, Goodwill and other bivocated embedded derivative liabilities for a total of $4.2 million, loss on extinguishment of debt and other expenses for $2.3 million, and is a sequential improvement of $0.03 million compared to the adjusted net loss of 1.47 million for the third quarter of 2024. This represents an annualized improvement of approximately 0.12 million. Non-GAAP adjusted EBITDA had a loss of $1.44 million for the fourth quarter of 2024, reflecting a sequential increase of approximately $7.8 million in earnings when compared to a loss of $9.2 million for the fourth quarter of 2023. This period-over-period increase in earnings is primarily attributed to The company overall cost cutting effort made in general and administrative marketing and technology expenses and represents an annualized improvement to adjusted EBITDA of approximately 31 million. Total performer revenue for the full year 2024 was $16.7 million compared to the $4.6 million in the prior year, reflecting a sequential increase of approximately $12.1 million in earnings. Gross profit for the full year 2024 was $13.6 million compared to $3.1 million in 2023. Growth margin was flat at 81% in the full year 2024, compared to 68% in 2023, reflecting a sequential increase of approximately 13%. Cash and cash equivalents total $1.1 million on December 31, 2024, as compared to $4.3 million on September 30, 2024, and $2.1 million on December 31, 2023. I will turn the call back to Joe for some closing remarks. Thank you, everyone.