Banzai International Q1 2025 Earnings Call Transcript

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Provided by Quartr
May 15, 2025

There are 2 speakers on the call.

Operator

For, our products. We are seeing immediate results from having Vidello's next generation video creation, editing, and marketing suite and OpenReal's digital video creation platform in the Bonsai family of products. We achieved gross profit of $2,800,000 in the quarter, an increase of 297%. Gross margin expanded significantly year over year from 64.7% to 82.1%. A few more highlights.

Operator

We achieved annual recurring revenue of $14,900,000 in the first quarter. This represents a 268% annualized ARR growth rate compared to Q4 of twenty twenty four. Adjusted EBITDA was a $1,700,000 loss, which compared to a loss of $1,500,000 in Q1 twenty twenty four. Net loss improved by $4,000,000 compared to q four twenty twenty four. We acquired Vidello, a technology provider of video hosting and marketing suite solutions for businesses.

Operator

We signed a definitive agreement to acquire Acton Software, an enterprise marketing automation platform provider, which is projected to increase f y '25 2025 revenue by $27,000,000 on a pro form a basis and is subject to closing conditions. We completed a $20,300,000 debt repayment ahead of schedule in q one, which fully satisfied our outstanding debt obligations to several key vendors. We're extremely pleased to deliver this improvement in the balance sheet, which will also create a material benefit to net income for the full year 2025. Our customer base expanded to over 90,000 total customers. We launched Create Studio four point o, the latest version of Vidello's award winning video creation app developed by our Vidello subsidiary.

Operator

We secured expanded agreements with RBC Capital Markets and other prominent enterprises for OpenReal. This reflects our strategy of expansion in the enterprise and is an example of, one of the key sectors where we are continuing to provide, an increased value to customers. I just wanna highlight again the milestone we achieved in fortifying our balance sheet, which is the $20,300,000, debt we have repaid under our September 2024 restructuring plan. This has already delivered a meaningful impact to stockholders' equity with a $5,700,000 improvement in q one and positions us for financial strength going forward. Moving on to our products.

Operator

To date, we have consolidated three leading video assets within Bonsai, all of which help marketers leverage video to engage their leads and customers more effectively. These include our recently acquired OpenReal and Vidello businesses as well as our Demio product, which we are using to deliver this webcast. So if you, run webinars in your business, please check out Demio. Again, this is this consolidated, business delivered revenue of $3,400,000 in q one twenty twenty five, which was a 213% increase compared to, 2024. In January, we announced the definitive agreement to acquire Acton Software Inc.

Operator

Acton is a leading marketing automation platform provider. The acquisition is subject to closing conditions, but could grow Bonsai's pro form a consolidated revenue substantially in 2025. We have substantially scaled our customer base to now over 90,000 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 just expanded, as well as Cisco, Adobe, Thermo Fisher Scientific, Microsoft, Dell, Capital One, and thousands of others. We serve a variety of industries, including health care, financial services, ecommerce, technology, and media, and, we have customers in over 90 countries.

Operator

We remain focused on targeting the mid market and enterprise segment while continuing to support our small business customers. We are 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.

Operator

We are building mode in two key areas, integrations and AI enablement. Integrating multiple products on a single platform allows us to simplify our customers' workflows and deliver on brand promise on our brand promise of 10 times faster and easier solutions. Continued investment in AI enablement will ultimately be key to our 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 products.

Operator

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 strategy. 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 product capabilities by acquiring strategically aligned products that serve our core customer base. And second, by accelerating our path to profitability and scale and to hopefully benefit from multiple expansion along the way.

Operator

I will now turn the call over to Alvin Yip, interim chief financial officer, to discuss our financial results.

Speaker 1

Thank you, Joe. Hi, everyone, for joining the call. So for I I I would like to discuss our financial results for q one. And the total revenue for the February was 3,400,000.0 compared to 1,100,000.0 in the February. However, we believe the non GAAP matrix annual recurring revenue or ARR is more is a more meaningful in evaluating the company's performance.

Speaker 1

ARR was 14,900,000.0 for the February and represents a 268% increase from the February. Gross profit for the February was 2,800,000.0 compared to 700,000.0 in the February. Gross margin was 82.1% in the February, an increase of a hundred seventeen seventeen hundred basis point compared to 64.7% in the February. Total operating expenses for the February were $7,700,000 compared to $4,100,000 in the February. Excluding a $1,400,000 of onetime expenses related to acquisitions, Total operating expense total totaled at 6,300,000.0 in the first quarter and is an increase of 54% year over year.

Speaker 1

Net loss for the first quarter two thousand twenty five was 3,600,000.0 compared to a net loss of 4,300,000.0 in the February. For the three months end 03/31/2025, adjusted EBITDA was a loss of approximately 1,700,000.0, reflecting reflecting a decrease reflecting a decrease in the earning of approximately 300,000.0 compared to a loss of approximately 1,500,000.0 for the for the three months end 03/31/2024. This period over period decrease is primarily attributable to increased gain on extinguishment of liability offsetting by loss of issuance of term term looks and increased transaction related expenses. Now I'm going to turn the call back to Joe for some closing remarks. Thank you for everyone.

Speaker 1

Thank

Operator

you, Alvin. Before I close, I'd like to review our 2025 forecast for our consolidated business. Our pro form a revenue for full year 2025 is projected to be, $20,000,000 which would represent a 19% increase from full year 2024 actual revenue. Pro form a net income is projected to be 1,400,000.0 in 2025, reflecting our transition to be a profitable company on a GAAP basis. We are still seeing solid revenue growth across our business at a much higher gross margin.

Operator

Operationally, we're in a great position as we're positioned for cash breakeven operations in 2025. We have worked diligently to strengthen our balance sheet and advance towards profitability and long term growth. We have an expanding suite of synergistic products that drive real value for our massive customer base. Our business model, which is scalable and asset light, is positioned for triple digit revenue growth projection in 2025. We are focused on generating sustainable value for our shareholders, and I look forward to providing additional updates throughout the year.

Operator

Thank you, everyone, for attending, and I would now like to answer your questions. Operator? Let me see. I'm I'm gonna actually go through and and review the questions that are in the chat. So I'll just say if you have questions that you would like to ask, if you can submit them to the chat, that would be great.

Operator

We will see them come in here, and, we will address them. And I see a couple that have already come in, So I am going to start from the top and work my way down here. And I may loop in Alvin or or or Nancy as as we go. So first question is, can you share any updates on the expected timeline, for completion of the Acton acquisition? Also, how is the acquisition pipeline looking for 2025 given the macro uncertainty?

Operator

Are Are you seeing any signs of caution from your customer base in terms of marketing or demand generation budgets? Okay. Looks like that was marked as answered. So I will, try to, remember what the full question was. But, in summary, we we are, actively working on, the Acton acquisition.

Operator

That's about all I can say at this time, but we will continue to provide updates as we have them. And I I will just say that we are we are continuing to to move forward there. How is the acquisition pipeline looking for 2025? I'll just say from my perspective, I think it's looking great. We've obviously had a focus on, getting, you know, through the process here with Acton.

Operator

And so that has, you know, I would say, hasn't stopped us from pursuing additional, acquisitions, but certainly that's our priority right now. But I think there are a number of other attractive companies that have, you know, reached out to us or that we've we've reached out to, and we're continuing to see a strong pipeline of interesting acquisition opportunities that I think would be a great fit, for our business. And so, you know, although we can't provide any specifics around it right now, I'll just say, the the pipeline is looking really good, and, we're optimistic about what we'll be able to do with some of those additional, businesses. But as always, when you're looking at, acquisitions, you know, there there are no certainties, you know, around, will we be able to find deals that we love, you know, find businesses that we love, etcetera. But I think from a a macro standpoint, the the the there's definitely, you know, strong supply of companies that we're seeing, come into the market right now.

Operator

The second part of the question was around macro uncertainty. Are we seeing any signs of caution from our customer base in terms of marketing or demand generation budgets? I I would say it's quite the opposite. I I will tell you, I I don't I can't reveal the name of the customer. But in q one, we had a large enterprise that, had previously been on a, maybe one or two year, contract with us and renewed on a five year contract with us.

Operator

We're seeing many of our customers expanding or renewing on longer contracts, and I think, we're we're continuing to see strong demand. And we've been seeing strong demand both in new and in the upsell, side of things. So overall, I would say it's a very positive, environment right now. And I think this is really being driven, by you know, there there is macro uncertainty, but I think, you know, that macro uncertainty is leading companies to think about how they can be, more productive, more efficient, how they can, leverage technology to enable that. And, we are really well positioned to take advantage of that and to support customers in, in helping them make that transformation.

Operator

So I think it's actually a very exciting time. Everybody's trying to get more competitive and, you know, offer, you know, better level of service and a better level of communication with their customers, and and we're very well positioned to help with that. So thank you for the question. Let's see. Has the sales cycle changed with recent macro and tariff concerns?

Operator

Obviously, this is related to, the prior question. But I would say, no. We haven't really seen sales cycle change. We have seen some customers, especially larger customers moving to longer contract terms. This has been a positive thing for us.

Operator

There are, you know, opportunities here where we can, you know, lock in customers for two, three, five years. That, you know, provides obviously guaranteed revenue for us over that period of time. And, of course, it's, you know, beneficial to the customer as well because it gives them price certainty, which is something that they care a lot about right now. So, I I think that, you a lot of procurement departments are looking to lock in longer term agreements where they don't have to worry about, you know, potential, you know, inflationary pressures and things like that in the future. We we we like that because it gives us more certainty in terms of our planning and and everything going forward.

Operator

Thank you for the question. Let's see. This question, are there any plans to become breakeven or cash flow positive in q two? I will say, so there there are are not liquidity concerns, to answer your question. I think we're we're fine from that perspective.

Operator

A lot of our cash expenses in q one were, as we said, really one time expenses, mainly related to, you know, audit and legal expenses around, acquisitions. And as any of you who have been through this process know, it can be time consuming and cumbersome to, inexpensive to, to go through that process, but you only have to go through it once. And so, you know, now, of course, everything can be reviewed and audited And so that's much more efficient for us and, you know, dramatically dramatically brings that cost down for us. So I think we're we're you know, I won't comment as to I'll I'll stand by my prior statement that, you know, we're we're looking to, reach cash flow breakeven in 2025.

Operator

I I won't, give a specific commitment as to when, but I'll say, you know, we we did make a major, major improvement. I think if you look at net income and, in q one as compared to 2024 or as compared to 2020, for q four, both of those were major improvements. I think it was a $4,000,000 improvement. So huge improvement, there. And, we, you know, obviously, believe that we can continue, that trend.

Operator

So thank you for the question. Here's a question from Sandra. What conditions precedent remain to be satisfied to close the act on deal? It's really simple. It's, it's, you know, financing contingency.

Operator

We're working on it. We'll keep you guys updated, as we make progress on this. So, keep, keep an eye out for that. Here's a question. Would you consider AI acquisitions in EMEA?

Operator

Yes. And we we actually did make an acquisition, in EMEA. The Vidello business, as many of you know, is a London based business. And, you know, we're we're definitely open to other acquisitions. I think, actually, EMEA presents some really interesting opportunities because I think there are a number of companies you know, EMEA has historically just not benefited from as robust of a tech capital market as The US, frankly.

Operator

And I think, you know, from our perspective, that's a little bit of an advantage when you're there. You know, you can typically find, you know, at similarly attractive assets, similarly attractive products, really highly high quality products, high quality businesses. And sometimes the valuations can be a little bit more attractive, and sometimes the you know, that that makes for a better deal. So I think, you know, that was the case with Modelo, for example. We're really pleased by that.

Operator

So, yeah, we will we will, continue to look, at opportunities in EMEA. And, again, no not not making any commitments as to any future acquisitions, but definitely something we're looking at as part of our strategy. Thank you for the question. Let's see. You mentioned upcoming new partnerships at the last call.

Operator

Can you say something about it now? Yes. I will say we are we have signed partnership agreements with several groups this quarter. I think some of them are still to be announced, but we're really excited about the progress the team has made here. We're focusing on partner enablement right now.

Operator

We also have pending deals that we're working on with a couple of very large organizations kind of in the channel, you know, VAR distributor side of things. So we're really excited about the progress the team is making here. Lee Firestone is heading this up. He previously was the CEO of OpenReal. He's very focused on this.

Operator

I think Lee's doing a great job. I think the whole team is doing a good job supporting him. Nancy and her team have done a lot to support Lee in putting those agreements together. So, yeah, we're we're very excited to see how this works. And I think especially with the inclusion of Acton, you know, if and if and when that happens, I think we'll be really well positioned to be able to you know, I think Acton has a couple of really attractive channel partners they work with today that we'll be able to to then fold in.

Operator

And vice versa, we'll be able to take that product into our our new partner base. So I think this is a this this is a very high leverage activity, especially with a strategy like ours because, you know, you can, you can leverage those partners across a variety of different products. Kind of the more products you have, the more effective it can be. So we're we're really excited to see that, come together. It's still new for us.

Operator

You know, I would expect to see more progress on this. We'll we'll we'll put out updates on this as we're making progress that we can share publicly, but very excited about about what we've done so far here. So thanks. Let's see. Got a question here from from Ed Woo.

Operator

I think this is Ed Woo. It is. Hey, Ed. Ed asks, what is your AI strategy and benefits? Have you had to invest much more in r and d for AI in your products?

Operator

Give a couple I'll give a couple real concrete examples, Ed. So I think the the the the the way that we think about this internally is we think about, we we we call these Mario mushrooms. Okay? So I don't know if you've ever played Super Mario Brothers, but, you know, in Super Mario Brothers, you run around, you get the mushroom, you get bigger, you can jump higher, maybe you get one that lets you shoot fireballs. Maybe you get one that, you know, gives you the little raccoon tail and you can fly.

Operator

The there there's there's superpowers that you get as the user when you get that mushroom. And we think about our products in those terms. Right? What superpower does our customer get having that product? What does it enable them to do that they couldn't do before that helps them to be more effective in in in their strategy and growing their business?

Operator

And so, I mean, a great example of this is Indemio, the product we're using right now. We have a feature we rolled out last year called AI moderator that's been fantastic. This is something that comes with anytime you set up an on demand or automated webinar, you can attach an AI moderator to it. You can train that AI on your business, your presentation, you know, your you know, if you got a nonprofit, train on that. Whatever the context is, you can train that AI, and it will then be able to join the chat.

Operator

Anytime somebody joins that on demand webinar, whether it's four in the morning or whether it's, you know, two in the afternoon, anywhere in the world. And it will be able to chat with them, and it'll be able to talk to them in their language, and it'll be able to answer their questions about your business. And that's super powerful. So that's something that, you know, previously, you would have to have a team of salespeople to sit by and, you know, wait for people to join that, be able to access that. We actually just published a piece of content about this.

Operator

You can go to our YouTube channel and check it out from one of our customers. But it's it's been a super powerful thing for a lot of customers where they you know, I think the customer in question was a a company in the Midwest US, and, they used Demio for recruiting. And, previously, they were doing three live webinars a day. They were able to turn this into automated webinars that they could just run all the time, and they were able to have the AI moderator answer questions, and and, that tells them how they need to follow-up on stuff. And so, you know, it dramatically reduces the amount of time that they have to spend on this.

Operator

I mean, it takes it from hours and hours a day down to, you know, maybe fifteen minutes to twenty minutes a day to go just go through the leads, which is, you know, a tremendous superpower for that customer. Another great example is our Create Studio product. We just launched Create Studio four. It has a ton of AI features, AI voice generation, AI image generation, AI video generation. It will build you based on the description of what video you're trying to build.

Operator

It will pull scenes. It will build an entire thing for you. It will let you customize it, and then it will actually, you know, deliver a finished video that you can just take and publish. And that's just know, it's just incredible. You think about the the traditional barrier to creating and publishing video content can be days, weeks, months to to produce a piece of video content.

Operator

This allows you to do it in minutes. And that's just super, super cool, and it's a huge, superpower for our customers then to be able to do that. And we we like to think about this in terms of, you know, stuff that our customers maybe have always wanted to do, but they just couldn't do because they didn't have the ability to do it, with either their knowledge or their resources or their staffing or their time or whatever, the money that it costs or whatever. I mean, the the the Create Studio example is a great one because, you know, it can cost $20,000 to build a really high quality three d video. But using Create Studio, you can do it, you know, yourself.

Operator

You can do it very quickly. And, you know, it's only gonna cost you, $500 a year for an all access pass to Create Studio. So if you're in if you ever if you're interested in producing video, go check out createstudio.com and, and take take a look at that. Thank you, for the for the question, Ed. There's many, many more examples, but, you know, I I guess I should say one more thing about this before, before we wrap up because I think that's the last question we have.

Operator

You know, I my view of this, my vision of this is that I think AI is gonna completely eat marketing. I think AI is gonna gonna touch everything that can be done behind the keyboard and mouse in the next five years, but I think it will completely eat marketing. I think it's gonna permeate every aspect of marketing. So our ultimate vision of this is, you know, having the, tools that can create assets, can create email campaigns, can create videos, can create webinars, can create maybe ads and ad campaigns for you, landing pages, all this stuff, can optimize that, can test that, but can also put together a strategy for you. I think eventually, marketers will be able to come in and say, here's what I want to accomplish.

Operator

I wanna launch this new product to my existing customer base. You know, go pull my customer list. You know, write my emails for me. You know, build my webinar content for me. Set up my webinars, set up my schedule, run the webinars for me, you know, build videos, build my landing page, and it will be able to figure out which pieces of that you need to engage as part of your strategy.

Operator

And it'll be able to build out that content, and the marketer's job will really shift from being more of a creator and a a manager of all this stuff to being an editor. Right? Marketer will be able to go in and say, okay. Yeah. You know, here's what I wanna tweak about what this has produced for me.

Operator

And, you know, I wanna here's what I wanna do in terms of, you know, the business analysis, but they won't be so focused on on, you know, the the the details of the implementation itself. And I think that's gonna be extremely powerful because today, marketers get so much time sucked up by that implementation. And so our vision is we put more and more of these pieces together, so we integrate these pieces. It's gonna be to ultimately, you know, be able to, you know, leverage those tools as kind of you can think of this as like, the tentacles on an octopus, be able to go out and say, okay. Great.

Operator

You know, we can reach into the email platform. We can reach into the webinar platform, the video platform, you know, the the lead the lead database, the CRM, all these different tools. We can pull data down. We can push, assets back up. We can create campaigns.

Operator

We can do all this stuff. So, we we we're looking at all kinds of opportunities around that. Sometimes we're looking at businesses that already have in enabled some of this stuff. I think Acton's a great example. They've made huge progress on that.

Operator

Sometimes we're looking at, you know, businesses that maybe haven't enabled yet but have that piece. You know? Like, Demio is a good example that we bought Demio. Didn't have any AI features. We built those, but it had a great webinar platform.

Operator

So we knew we could take that core webinar platform and build some really powerful AI tools on top. Create Studio, same thing. You know, it had some, had AI voice maybe, but it didn't have all the video generation features and things like that that we launched last quarter. So, we're really excited, to, you know, continue this strategy because I think as we scale this up, the more solutions we get, the more problems we can solve, just the more powerful this is gonna be for our customers. So I I think it's gonna ultimately, I think it's gonna be huge.

Operator

And, you know, look, I think if you look at the financial results for last quarter, as Alvin said, you know, we're seeing a really strong, increase on just about everything. Pretty much every single member, improved last quarter. And, so, you know, hopefully, that gives our shareholders confidence, that we're heading in the right direction as a business, and, I think it gives certainly gives me that confidence. Got one last question here, from Van. Thank you, Van.

Operator

Any thoughts on share price? Yeah. Look. I have lots of thoughts on share price. I mean, I I think it continues to be detached from from, you know, the reality of this business, to be perfectly honest.

Operator

That's my personal opinion. Nancy probably won't like me saying that, but, you know, I think, you know, everybody's gotta make their own decision about what this is worth, but we certainly have, you know, a couple of analysts that seem to agree with us. I think Ed has a much higher price target on the business. I know that, Gao Xi has a much higher price target on the business. You know, to to be honest, I think, we're we're trying to just do what we can to help spread the word, make sure that people know that we exist, make sure that people understand our story.

Operator

I think that these q one numbers are obviously they're fantastic numbers. And, you know, hopefully, when these numbers get reflected, you know, I I I think, you know, a lot of people have been just looking at the trailing queues. And, you know, frankly, they didn't paint a very pretty picture. I think now we're starting to see that picture show up in the numbers, be reflected in the numbers. And I think it's a much prettier picture.

Operator

And so, hopefully, as we start and I think the analysts have known this for a couple of quarters because, you know, they're real smart people and they watch this. But I think, you know, now that the numbers are actually starting to get reflected and and look, this will just hopefully continue, throughout the year. But as the numbers are starting to get reflected, I think that, we will we will hopefully see, continued improvement here. So, you know, in in the in the you know, hopefully, that will be reflected in the share price, at some point. So, you know, you know, the the the market can be irrational.

Operator

That's just how it is. Stock markets are like that. And, you know, we wish we had control over that. But, I think, you know, what what we can do is just continue to put up better numbers. Again, every every single number in here is a huge, is a huge win over the year over year and the quarter over quarter pretty much.

Operator

So, you know, I think we're gonna just continue to deliver better results, and, and hopefully, we will, see that, you know, start to reflect soon. Alright. Not seeing any further questions. Let me go back to my script here. I'll I I wanna say thank you all for joining the conference call today.

Operator

I 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 IR firm, MZ Group. I will pull up their contact information here, Chris Tyson. Reach out directly to them, and they will be able to assist you. Thank you very much for joining the call today.

Speaker 1

Thanks, everyone.

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Banzai International Q1 2025
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