Rezolve AI PLC

Good morning to everyone. Welcome to Resolve's first half 2025 earnings conference call. Leading today's discussion are Dan Wagner, Resolve's founder and CEO, and Rich Birchall, Resolve's CFO. Our first half 2025 earnings press release was issued earlier this morning and can be found on our Best Relations website. Today's discussion will include statements that constitute forward-looking information or forward-looking statements. These statements reflect management's current beliefs and expectations and are subject to a number of factors that may cause actual results to differ materially from those statements. These factors include but are not limited to those discussed in our SEC filings and our earnings release. These statements do not guarantee future performance and therefore undue reliance should not be placed upon them. We do not intend to update these forward-looking statements as a result of new information or future developments, except as required by law. Additionally, our discussion will include both GAAP and non-GAAP financial measures. These non-GAAP financial measures should be viewed in addition to, and not as a substitute for, resolves reported results prepared in accordance with U.S. GAAP. Non-GAAP financial measures referenced in today's call are reconciled to the most directly comparable GAAP measure in our SEC filing and our earnings release. For more information regarding definitions of our non-GAAP measures, please see our earnings release and SEC filing, which are or will be available on Resolve's Investor Relations website at investor.resolve.com and on the SEC's website at www.sec.gov. Finally, as a reminder, today's conference call is being recorded and the replay will be available on our investor relations website. At this time, I'd like to turn the call over to Dan.

Thank you very much, Michael, and thank you everybody for joining us today. Before we get into the results, I want to address something directly. In recent days, anonymous short sellers have attempted to spook genuine investors with publications that are libelous, misleading, and scurrilous in nature to the extreme. These so-called reports are nothing more than a collection of baseless allegations made by cowards who hide behind anonymous entities and cite anonymous sources. Nothing they publish is on the record. Nothing is validated. And because they refuse to stand behind their words, they cannot be held to account for their disgraceful actions. Let me be blunt. This is market abuse. It is designed with one objective. to take money out of the pockets of real investors by deliberately spreading false and alarmist narratives. It is shameful, it is manipulative, and it should be stamped out by the authorities. If there were a mechanism to hold these people legally liable, we would pursue it. Until then, the best response is what we are here to discuss today, facts, results, and the extraordinary progress Resolve has achieved. That is the truth and that is what investors deserve. So, this is an exciting time for Resolve as we find ourselves at the forefront of an AI revolution that is sure to transform online search and digital commerce, a market that in our view is well past its sell-by date. Our first half results not only beat expectations, but also allowed us to raise guidance to 150 million ARR for 2025 and set a new 500 million ARR target for 2026, the majority of which is contracted recurring revenue. With our market-ready AI-powered e-commerce solutions underpinned by our proprietary technology, we have seen growing momentum in our business throughout the year as the demand from enterprises to enhance the digital customer experience and drive both engagement and revenue growth continues to increase. While it feels like the momentum we've generated has been achieved overnight, given the scaled ramp in our business, it's important to highlight that the road has been anything but. Instead, today's success is based on our decades of experience in search, commerce, and payments that led us to found Resolve almost 10 years ago using a technology that few had heard of at the time. Before I dive into all of the exciting developments and milestones that we've achieved year to date, I think it's important to revisit our mission and our differentiated positioning that in our view places us as a leading enterprise solution in the e-commerce and retail marketplace today. As a brief recap, we founded Resolve in 2016 to address the very real problems of customer attrition and cart abandonment that have plagued the digital e-commerce experience. We recognized that companies were spending millions of dollars to drive consumer traffic to their digital sites only to have 7 out of 10 customers leave without buying a product, which is the exact converse of what happens in a physical store where 7 out of 10 customers do end up buying a product. So we set out to solve the issue of cart abandonment for enterprises, which we believe is based on the lack of knowledge available to consumers on a digital site as compared to when they interact with a great salesperson in a physical store. Over the last nine years, we built proprietary foundational large language model brainpower specifically for e-commerce and to create the best salesman on the planet we imbued our model with three fundamental skills or characteristics, deep product knowledge and domain experience, empathy and sales techniques. Because of our decades of experience and our background in the area of predictive text, which is based on probabilistic guesswork and serves as the basis of GenAI, we believe that AI technology would be prone to hallucinations or mistakes which we also knew would be exacerbated when using product catalogs. From our perspective, AI's propensity to hallucinate would be irreconcilable in enterprise e-commerce. And so we've taken a novel approach to solving this problem of hallucinations, which includes securing multiple patents that first enhanced the product catalog through creation of a rich probabilistic taxonomy structure, and second, employ a unique multi-step process to address customer queries in a way that prevents the technology from making a mistake. This week, our CTO, Dr. Salman Ahmad, and his team released a white paper showing Brainpower performing competitively with leading public models like GPT-4, Claude, and Mistral. In fact, outperforming them in empathy, contextual relevance, and retention-focused e-commerce use cases, all while delivering effectively zero hallucinations. After creating the best salesperson on the planet and solving the problem of hallucinations through our patented technology, we took the final step of productizing our tech into a set of off-the-shelf enterprise solutions, collectively known as the Brain Suite. In providing these details, I want to highlight the immense opportunity we believe that Resolve finds itself in today, an opportunity to upend the $30 trillion market in e-commerce and retail with a uniquely differentiated enterprise solution supported by proprietary technology built specifically for e-commerce, free from hallucinations, and available in a productized solution suite We are defining the indispensable infrastructure for the age of agentic commerce, offering enterprises a platform that is ready to support autonomous AI agents that can search, transact, fulfill, and personalize in real time, laying the foundation for the next era of enterprise commerce. With that background, I'd like to provide you with a brief recap of our business activity in the first half of 2025. followed by an additional commentary later in the call around how our business is trending as we head into the year end. On our last earnings call, I discussed the important actions we had taken in the back half of 2024 and early 2025 to put Resolve on a strong footing to grow revenue and acquire customers. Those actions included securing landmark partnerships with Microsoft, Google, and Tether, as well as strengthening our balance sheet by eliminating legacy debt and building cash through successive oversubscribed financings, ending September with approximately $230 million in cash. In the first half of 2025, revenue surged to 6.3 million, surpassing the 5.1 million analyst consensus and marking a more than 426% increase versus the prior year. Gross profit margin hit 95.8%, dramatically ahead of the 60-70% range expected by analysts. We also beat consensus on adjusted EBITDA, reporting a loss of just $17.7 million versus the $18.7 million expected. This balance sheet strength gives us the firepower to execute on strategic M&A, which expands our global footprint and provides significant upsell opportunities into the brain suite, cementing our leadership in a market that is rapidly scaling worldwide. These were crucial developments in establishing a solid foundation, allowing us to focus our efforts on scaling our organization and driving growth through the three main pillars of our go-to-market strategy, namely direct sales, partnerships, and acquisitions. We began the first half of 2025 with the acquisition of enterprise search company GroupBuy, which allowed us to acquire talent, including experienced salespeople, and to increase our roster of consumer brands in North America. As I previously mentioned, we believe that employing a greater roll-up strategy through acquisitions can accelerate customer adoption of our Brain Technology Suite, provide an opportunity to cross-sell our expanding tech and service offerings to global enterprise customers, and allow us to quickly expand into non-core geographies. The acquisition of GroupVai combined our strategic partnerships with Microsoft and Google, helped support early momentum in generating customer adoption with enterprise customers spanning the globe. The success of this strategy was immediately demonstrated by the multi-year agreement we announced with Mexican premier department store chain, Liverpool, for nearly $10 million per year. This upsell to an acquired customer exemplifies how our M&A strategy not only brings new enterprises into the Resolve ecosystem, but also creates immediate opportunities to expand revenue from those relationships. And so throughout the first half of the year, we continue to leverage our strategic partnerships and acquisitions while concurrently building our internal sales teams. Our approach proved successful and by mid-June we announced that we'd secured more than 50 enterprise customers and achieved 70 million in average annual recurring revenue from a standing start. We concluded a successful first half of the year with a major milestone, Resolve's inclusion in the Russell 2000 and Russell 3000 indices less than a year after we began trading on NASDAQ as a publicly traded company. In our view, Resolve's inclusion in the Russell indices served as a testament to the significant progress we made up to that point. We entered the back half of the year looking to build the momentum generated in early 2025 with a focus on driving scale and relentlessly executing across all three pillars of our go-to-market strategy. As a result, we have made significant progress in recent months that we believe will serve as a launchpad to accelerated growth. Some of those exciting developments have led to success in scaling the organization and up leveling talent, expanding our technology offerings and services, deepening and broadening out our partnerships to drive customer adoption and securing landmark capital raises to support future growth. Before elaborating on some of these recent developments, I wanted to briefly begin by mentioning a key milestone we recently celebrated, namely Resolve's one-year anniversary as a public company trading on NASDAQ. It was a landmark event for the company and our investors and a proud moment of achievement for many of the management team that have been on this journey with me for nearly a decade. Turning to business, one of our goals as we began the second half of the year, excuse me, one of the goals that as we began the second half of the year, was to drive organizational scale and up-level our talent through both acquisitions and organic hiring. We believe that this is a crucial element in executing on our go-to-market strategy as we look to rapidly expand our global footprint and establish a clear leadership position in AI-powered solutions for retail and e-commerce. Building on our successful acquisition of enterprise search company GroupVai, we recently acquired ViceSense, a single-wall-based AI retail tech company. This acquisition, small, enhances Resolve's engineering talent, expands our customer roster of globally recognized brands, and serves as a strategic hub with access to the Asian market. Additionally, we made a number of key hires in an effort to uplevel our talent throughout the organization, most recently announcing Crispin Lowry as our EVP of growth. Mr. Lowry, formerly of Microsoft and Google, is tasked with leading Resolve's global expansion efforts. We've also been keenly focused on expanding our enterprise-based solutions. And in recent months, we have announced a new vertical, our professional services division and the innovative technology visual search. Led by former Tata Chief Technology Officer Shovik Banerjee, our professional services vertical was launched in direct response to greater customer demand for support in integrating and optimizing Resolve's Brain Suite solution, as well as enhancing data around customer product catalogs. We also recently announced the launch of Visual Search, a new feature integrated into Resolve's Brain Suite that allows consumers to use images to engage with our conversational commerce solution to shop for similar items in an enterprise retailer's product catalog. We're excited to continue to bring new solutions to our enterprise customers, and though early, we are seeing great interest in both professional services and our Visual Search feature. Consistent with our professional services strategy, This division is also providing significant implementation resources to BrainSuite clients as they deploy our technologies at scale. Our growth is reinforced by partnerships with Microsoft and Google, which provide both global cloud infrastructure and extensive go-to-market resources. Microsoft and Google Cloud power our BrainPower LLM and commerce applications at enterprise scale, while they are co-sale programs accelerate our distribution to enterprises worldwide. While our primary focus remains on these partnerships, we continue to evaluate opportunities to broaden our reach with other platforms over time. Looking ahead, we are making significant progress this quarter on embedding digital asset capabilities into brain checkout, further cementing our leadership at the intersection of AI, commerce, and next generation payments. Following two oversubscribed financings totaling $250 million, we end September with $230 million in cash, an endorsement of institutional confidence, and a foundation for accelerated expansion. As a result of our successful efforts, we've achieved $90 million in ARR and quickly grown our total number of enterprise customers to more than 100 from the 50 plus we reported earlier in the year. Moreover, our expanding roster of enterprise customers increasingly includes globally recognized brands such as Ferrero, H&M, and Urban Outfitters. Even as our enterprise customer pipeline continues to build across an increasing array of verticals, including beauty, fashion, furnishings, and QSR. Overall, I couldn't be more pleased with the immense progress we've made and the milestones we've achieved thus far in 2025. From a standing start at the beginning of the year, we've generated growth that appears to be increasing in momentum. And as our recent capital raises show, we will look to build on that momentum to further accelerate customer adoption and revenue growth. While we've achieved so much in a short amount of time, I look forward to a strong finish to 2025 and believe that we are well positioned to build on our success in 2026. With our roadmap extending to a 500 million ARR exit in 2026 and with crypto capabilities on the horizon, Resolve is positioned to lead the next decade of commerce innovation with durable ARR growth, an expanding roster of enterprise customers, crypto-enabled brain checkout on the horizon, and brainpower validated as a safe, competitive, and reliable model for enterprise deployment. With that, I'm going to hand over to my CFO, Richard Burchill, who will take you through some of the numbers.

Thank you. Good morning to everyone joining the call. Dan has highlighted some of the many ways in which 2025 has been a transformative year for Resolve as we continue to build our customer base, strengthen our partnerships, and scale our organization. Accordingly, we continue to generate momentum across our business as we deploy our unique commerce-specific brain suite to drive our financial flywheel. This includes raising 2025 guidance to the minimum 150 million ARR after materially outperforming analysts' forecasts in the first half, delivering contracted subscription revenues, high gross margins, and a flexible cost base. Our brain suite is now agentic commerce ready, out of the box, giving enterprises the ability to deploy autonomous AI agents that can search, transact, fulfill, and personalize in real time. And we now also set the 2026 guidance at 500 million ARR. In today's discussion, I'll provide a recap of the first half of 2025 financial highlights, discuss the actions we've taken to further strengthen our balance sheet to support future growth, and provide an update on the full year 2025 financial outlook. Let me start with our first half of 2025 financial highlights. So after beginning 2025 from a standing start, we ended the first half of the year with revenues at 6.3 million, It is above the 5.1 million consensus estimates and a 426% increase year on year. We also beat consensus on adjusted EBITDA, reporting minus 17.7 million versus the minus 18.7 million expected. And this was driven by contracted subscription sales related to the licensing of BrainSuite products, namely search tools and geofencing software to our enterprise customers. Gross margins exceeded 95% as the majority of our revenues were derived from licensing of our cloud-based software solutions, and this demonstrates the powerful operating leverage generated by our SaaS-driven business model. Our net loss was $57.8 million, and these losses were largely driven by non-cash or one-time charges, with underlying monthly operating cash burn on a BAU basis at $2.6 million. which is in line with the guidance we gave in April. In addition to reviewing the financial results for the first half of the year, I want to take a moment to highlight the numerous actions that we've taken to continue to strengthen our balance sheet and our liquidity position as we scale operations to drive this growth. As I mentioned on our last owner's call, we ended the first quarter of 2025 in a position of financial strength after considering after taking considerable measures in the back half of 2024 and early 2025 to eliminate 91 million of legacy fixed-rate convertible debt related to the company's de-SPAC process, which completed with a resolved listing on NASDAQ in August 2024. As a result of those measures, we reported in April that the company's remaining debt was solely comprised of the 30 million traditional interest-bearing bank loan secured with Berenberg, and six million of convertible debt and promissory notes that would eventually be converted to equity. And I'm pleased to say that the majority of that has now converted. Following two financings in Q3, totaling 250 million, we ended September with approximately 230 million in cash on the balance sheet. And we've also reduced legacy debt balances, further simplifying our capital structure. This positions us to accelerate global sales expansion scale the organization, and pursue accretive acquisitions. Looking ahead, I want to provide our updated thoughts on the outlook for the year. We've already secured more than 90 million in ARR against our prior targeted guidance of 100 million ARR by year end. And given this momentum we're seeing in our business, we are now raising full year 25 guidance to a minimum of 150 million ARR exit rates And looking further ahead, we've set guidance for 2026 at 500 million ARR exit rates, reflecting strong demand momentum and pipeline visibility that we have. We expect cost growth, which is driven by headcount, marketing expense, and hosting costs to continue to increase in line with revenue as we scale the organization. However, we do believe there is an opportunity to drive growth by accelerating investment in our sales organization and broadening enterprise solutions to include professional services. We anticipate professional services having materially lower margins than those associated with our licensed SaaS business line, and those margins range from 18 to 45%. With professional services representing a more meaningful share of revenue going forward, This will result in lower gross margin as we move forward. And consistent with our professional services strategy, this division is also providing significant implementation resources to brain-sweet clients. And this allows us to deploy our technologies at scale. Our SaaS-driven businesses will continue to deliver world-class margins while professional services broaden our enterprise footprints. Overall, we remain excited about the growth trajectory of our business as Resolve AI cements its role as an indispensable infrastructure for agentic commerce and remains steadfast in our approach to prudently manage expense growth while executing our key strategic initiatives to drive this growth. And now let me turn you back over to Dan.