Banzai International, Inc.

We appointed Dean Ditto as Chief Financial Officer, bringing over 30 years of experience as a strategic financial leader with a track record of implementing critical business initiatives that drive profitable growth at both public and private companies. We also appointed Michael Kurtzman as Chief Revenue Officer, veteran revenue and -to-market executive to scale Bonsai's leading video engagement, production and webinar solutions. Our customer base expanded to over 140,000 total customers and we secured expanded agreements with RBC Capital Markets and other prominent enterprises for OpenRio. This reflects our strategy of expansion in the enterprise and an example of one of the key sectors where we're providing value. We entered 2025 with a key set of strategic priorities and we're making meaningful progress on our goals. First, we've rapidly paid down and converted debt in recent quarters and intend to opportunistically continue reducing balance sheet leverage. Our existing lenders are receptive to conversions and early pay down provisions. Organic growth and expense management have provided an opportunity to continue improving the company's cash position. Second, M&A continues to be an important piece of our growth strategy. We follow a well-defined, repeatable process that ensures every M&A opportunity is approached with precision and best practices. This process starts with smart target identification, focusing only on opportunities that align with our strategic vision. From there, we track every step with clear processes and milestone benchmarks. We apply a standard modeling and valuation method so we can accurately assess the upside and risks. Our due diligence is rigorous and designed to uncover both opportunities and potential challenges before we move forward. Importantly, we have the ability to close the right deals backed by thoughtful capital planning that ensures every acquisition strengthens our long-term position. Third, accelerating organic growth of our current lines of business, we brought in top talent, including a new chief revenue officer and key sales leaders. And we built an organizational structure that's engineered to drive new growth and unlock cross-selling opportunities across our product portfolio. Finally, leadership strength. This year, we've welcomed Michael Kurtzman as CRO, Dean Ditto as CFO, as I just mentioned, and most recently, Matt McCurdy as vice president of sales. These are proven leaders with the experience, discipline, and vision to help us capture the opportunities ahead. We have substantially scaled our customer base to over 140,000 customers, which covers some blue chip names across a variety of sectors. Some of our key customers and partners include RBC Global Asset Management, which we recently expanded our contract with, as well as Cisco, Adobe, Thermo Fisher Scientific, United Health, Hewlett Packard Enterprise, Capital One, and thousands of others. We serve a variety of industries, including healthcare, financial services, e-commerce, technology, and media, and we operate in over 90 countries. We remain focused on targeting the mid-market and enterprise segment while continuing to support our small business customers, and we're taking a disciplined approach to focus on acquiring stickier, high-value customers. Our flywheel business model continues to be at the center of our strategy. Developing great products leads to growing customer usage. This drives additional data and content on our products, which enables us to create additional value through integrations, automation, and AI features. We're building a moat in two key areas, integrations and AI enablement. Integrating multiple products into a single platform allows us to simplify our customers' workflows and deliver on our brand promise of 10 times faster and easier solutions. Continued investment in AI enablement will ultimately be key to long-term success. We believe that adding more solutions will, over time, expand the context available to us and will enable us to deliver more powerful AI capabilities. Our vision is to generate substantial long-term value by scaling inorganically in addition to the growth of our existing product. Our acquisition framework is centered around profitable businesses that align with Bonsai's target enterprise and mid-market customer profile and our data and AI-driven platform. We evaluate candidates on their ability to attract leads, engage, harness data, and intelligence, and measure results. The opportunity for Bonsai is twofold. First, to increase our customer success and to increase our product capabilities by acquiring strategically aligned products that serve our customer base. And second, by accelerating our path to profitability and scale and to hopefully benefit from multiple expansion along the way. I will now turn the call over to Dean Ditto, Chief Financial Officer, to discuss our financial results.

Thank you, Joe. Total revenue for the second quarter of 2025 was $3.3 million compared to $1.1 million in the second quarter of 2024. We believe the non-GAAP metric, Annual Recurring Revenue, or ARR, is meaningful in evaluating the company's performance. ARR was 12.6 million for the second quarter of 2025 and represents a 182% increase from 4.5 million in the second quarter of 2024. Gross profit for the second quarter of 2025 was 2.7 million compared to 0.7 million in the second quarter of 2024. Gross margin was 83% in the second quarter of 2025, which is an increase of 1,390 basis points compared to .1% in the second quarter of 2024. Total operating expenses for the second quarter of 2025 were $7.4 million compared to $4.1 million in the second quarter of 2024. The increase in operating expenses were primarily due to the additions of the OpenRio and Vadello businesses and overall operating expenses. Net loss for the second quarter of 2025 was 7.3 million. $7.8 million compared to a net loss of $4.0 million in the second quarter of 2024. For the three months ended June 30th, 2025, adjusted EBITDA was a loss of 1.5 million compared to a loss of approximately 1.5 million for the three months ended June 30th, 2024. Total revenue for the six months ended June 30th, 2025 was $6.6 million, which was an increase of 209% compared to the prior year. Total cost of revenue for the six months ended June 30th, 2025 was $1.2 million compared to $0.7 million in the second quarter of 2024. In the prior year quarter, which was an increase of 63%. The increase was less than proportional to the revenue for the corresponding period resulting in improved gross profit. Gross profit for the year ended June, or for the six months ended June 30th, 2025 was $5.5 million compared to $1.4 million in the prior year period. Gross margin was .5% in the first half of 2025 compared to .9% for the first half of 2024. Total operating expenses for the six months ended June 30th, 2025 were $15.1 million compared to $8.2 million in the prior year period. The increase in operating expenses was primarily due to the additions of the OpenRail and the Delo businesses and overall operating expenses. Net loss for the six months ended June 30th, 2025 was $11.4 million compared to $8.2 million in the prior year period. Adjusted EBITDA for the six months ended June 30th, 2025 was 3.7 million compared to adjusted EBITDA of 3.5 million for the prior year period. Net cash used in operating activities for the six months ended June 30th, 2025 was $9.0 million compared to $3.8 million for the six months ended June 30th, 2024. Cash totaled $2.3 million as of June 30th, 2025 compared to 0.7 million as of March 31st, 2025. I'll now turn the call back to Joe for some closing remarks.

Thank you, Dean. We're seeing solid revenue growth across our business at much higher gross margin. Operationally, we're in a great place as we're positioned for improved results in cash position in 2025. We've worked diligently to strengthen our balance sheet and stockholders' equity, increasing our cash and liquidity to advance long-term growth. Our debt facility is also available to support acquisitions and ongoing operations. We have an expanded suite of synergetic products that drive real value for our massive customer base and the right team to achieve our objectives. We're very focused on generating sustainable value for our shareholders, and I look forward to providing additional updates throughout the year. Thank you, everyone, for attending, and I would now like to answer your questions. And I'll just provide some instructions here if you wanna put questions in the chat, as I see some of you already have. We will mark those, we'll bring them up on the screen, and then either Dean or I will address them. So first question is from Howard at Taglich. Thanks, Howard. What is your sales cycle for mid-market and enterprise customers? When do you anticipate that your new team beginning to drive sequential revenue growth? Will you be able to continue reducing operating expenses sequentially over the next few quarters? That's a great question, thank you, Howard. We've seen the sales cycle can vary, especially depending on the size of the account. So we have some deals that we're in the works that we think are very, very meaningful potentially, but could be one year plus sales cycles. A lot of our mid-market sales cycle comes in between 30 and 60 days. And then obviously, we have a lot of customers that will also buy directly from us online. So maybe they'll buy self-serve, and then they'll upgrade over time, or maybe our account management team will get involved and help them upgrade over time. So that's, I think, a very meaningful, I think it's a meaningful shift to our business model from a year ago, we're now seeing much larger deals sitting in our pipeline. We're starting to see pipeline growth of those deals. And this is really why Michael is a part of the team now, and Matt and some of the other folks is really just to focus on driving that additional pipeline and driving additional organic growth. And we're really pleased with how that's going so far. When do you anticipate your new team beginning to drive sequential revenue growth? We'll see. I think the team is making progress on this already. Michael's been on board for a couple of months now, I think, so he's started to make some changes in the team. I think some of those things are starting to bear fruit. And I think he's doing everything he needs to be doing right now. So really supportive of the work that he's doing. Will you be able to continue reducing operating expenses sequentially over the next few quarters? Yeah, look, I think, maybe I'll let Dean chime in on this, but my view on this is even more important than operating expenses is, I think, cost of capital. And we definitely anticipate being able to bring that down. And I think that will make a direct bottom line impact. And probably will be the, from our perspective, we can reduce cost of capital. That's much better than reducing operating expenses. So I think we'd much rather like to see increase in net income coming from reduced cost of capital and revenue growth versus necessarily come from OpEx cuts at this moment. Dean, is there anything you wanna add to that?

Yeah, we just build on what Joe just said. As the company continues in its growth phase, I do think we'll very selectively add resources where we need to. I also think, yes, we are finding line items right now in our cost stack where we can continue to find efficiencies, especially with businesses that we've onboarded where we need to combine service providers and look for efficiencies there. So there certainly are opportunities and we're working very hard to achieve those.

Yeah, thanks, Dean. And thanks, Howard, really appreciate the questions. Here's a question from Jackson. I'm gonna pull this up on the screen. What's ARR growth normalized for each acquisition? I'll say we're targeting ARR growth in the 20 to 30% range over the next year normalized for acquisitions. So I think we may see it outpace that depending on what happens with acquisitions, but that's obviously gonna be lumpy, but we'll see. I think one of the reasons that we brought in, Michael and Matt is they both had experience taking businesses from the stage that we're at right now to the $100 million stage and doing that in a three to five year period. And so that's kind of what we're looking to do here. I think our internal target is to get this organically to $50 million in the next three years, but there's a lot of work that goes into that. There's a lot of work to be done. The team is definitely working on scaling, working on closing new relationships. Think if you look at the customer slide that we showed earlier, a lot of new logos on that slide compared to last quarter. So we wanted to highlight who some of those new customers are. So we're really excited about what the team's doing, but I think there's gonna be work going into this, but that organic growth is an important focus for us. So thank you for the question. Let me see, just going through questions here. So there is a question from Mohammed, can there be development and profitability with the urgent time? I think, first of all, absolutely. I think when you look at our adjusted EBITDA, which is basically in a sense, kind of the way that we look at kind of normalized cashflow, this was pretty flat from last quarter, and I think is getting pretty small. And so we think just a slight nudge up will get this into positive at this point. And Dean and I are working really hard on options for how to make that happen. And we think we have some good options there that we're pursuing right now. So we're excited to keep making progress towards that, and we'll keep you guys updated about that as we go. Thanks for the question. Here's a question from Patrick, total diluted shares. Patrick, I actually don't know the number off the top of my head. I would refer you to the 10Q, which has a complete breakdown of this embedded in it. Dean can maybe tell you if he has a better answer than that, but I know we have a breakdown of it in the 10Q.

Yeah, that 10Q is filed and available. So I would say take a look there, and certainly happy to follow up with any additional questions. I think we're just one on one.

Yeah, if you wanna reach out to, I'll just advance the slide here so you can see. If you wanna reach out to Chris Tyson here, there's their email address, it's our investor relations group. You have a specific question that doesn't get answered in the Q, let us know, and we can help you with that. Thank you for the question. And I think this is a follow-up question here from Patrick. So thanks, Patrick. So what's revenue retention on the two acquisitions? Have they driven any organic revenue on their own without counting the cross sales? So first of all, we've been acquiring new customers across both of these products. We're pleased with how that's going. I think as with anything in the recurring revenue business, takes time when a customer is acquired to then recognize that revenue and start to see that inflection take up. So hopefully we'll start to see that reflected more and more coming up. But I think again, with the revenue retention, I direct you to the 10 Q, but we feel pretty good about how it's going overall on manual basis. And I think especially in that core customer segment, we feel pretty good about it right now. And then here's a question from Paul. Thanks, Paul. So revenue is quite low with many customers. How do you drive revenue up significantly? You need to move forward quickly as your very low revenue stream and margins. Percentage increase cannot be considered yet. Stock with a reverse is very low on a 52-week range. So let me start from the end of that work backwards. First of all, I agree that the stock is very low on a 52-week range. I think it's low compared to comps in our space right now. And I think you look at all the progress we've delivered over the last year, you look at all the progress we've delivered to stockholders' equity, to revenue, to gross profit, et cetera. We intend to keep pushing up on that. And when you're on an elevator and you're trying to go from the basement to the 100th floor, you gotta go past the 10th floor on the way up there. And that's what we're doing right now. So I think we've made a lot of good progress over the last 12 months and some continued progress and even in the last quarter. And I think we're gonna continue to hopefully see that. So we appreciate everybody's support as a part of that, because I agree with you. I think that the stock is low on a 52-week range right now when you look at comps. To address your question on the margins, I am not sure I agree with you about the revenue being low on the margins. I think 83%, this is a 1% increase from last quarter. This is a close to 1,400 dips increase over the last year. So I think we've seen the margins improve pretty dramatically. I think margins in that range are pretty decent when you compare them to comps across the SaaS industry. I think we do expect to see those margins move up a little bit more maybe into the 84% range over the next couple of quarters. We'll see how that goes. But we're pretty happy with the margins as they are. Obviously, yeah, we want the revenue to keep increasing. So to answer your question about that, I think what we've seen over the last year in Q2, we've seen a surge of, we've seen many new kind of core customers come in, but we've also seen a lot of smaller ones come in. A lot of these small customers, the pattern is the customer might come in for a very small initial purchase price on a self-serve basis, and then they're gonna upgrade over time. They're gonna expand over time. And so our business model isn't just about that initial revenue that comes when we bring in a new customer. It's really about seeing those customers expand over time too. And we've got a pretty good playbook for how to do that. And I think Michael and his team are really focused on that right now. We've made a couple of key additions there that are just focused on driving customer expansion right now. So we're expecting to see, not kind of phase one is gotta plumb in. We call this the more beers and bigger bottles approach, but we wanna plumb in new customers and then over time see those customers grow. So we're seeing the customer number grow. That's great. We would hope that the customer expansion will follow that. So thank you for the question. I think we have time for one more question here, which is from Adam Dix. Thanks Adam. With such high profile clients and partners, do you foresee any additional expansion agreements like what we've seen with RBC? Is that something of focus at this time? I mean, absolutely it's a focus for us. I think customer expansion, both just from cross sales and also from adding new seats, adding new, upgrading users to higher tiers, all that is a big priority for our team, both customer marketing and account management. Michael has already gotten in there, started to do a lot of work on improving our processes there. Some of our processes were already really good. Some of them need some additional work. I think there's a lot of low hanging fruit for Michael in what he's doing. And that's exactly why we brought somebody like that on to help support that. So yeah, we hope to see more of those coming down the line and we'll see what happens. Thanks for the question. Okay. I'd like to thank everyone for joining the conference call today. Look forward to continuing to update you on our ongoing achievements, innovations and growth. If we were unable to answer any of your questions, please reach out to our IRFIRMZ group. Their information is on the screen here. They'll be more than happy to assist and direct those questions to us or answer them themselves if they can. Thank you very much.