Banzai International Q2 2025 Earnings Call Transcript

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August 14, 2025

Key Takeaways

  • Positive Sentiment: Revenue surged 205% year-over-year in Q2 and annual recurring revenue grew 182% to $12.6 million, driven by Vidello and OpenReal acquisitions.
  • Positive Sentiment: Gross margin expanded to 83%, up 1,390 basis points year-over-year, reflecting improved operational efficiency.
  • Negative Sentiment: Net loss increased to $7.8 million from $4 million, while adjusted EBITDA loss remained at $1.5 million year-over-year, indicating ongoing profitability challenges.
  • Positive Sentiment: Cash on hand rose to $2.3 million and Bonsai secured an $11 million debt facility to support further acquisitions and operations.
  • Positive Sentiment: Leadership team strengthened with a new CFO and CRO, and customer base grew to over 140,000, including expanded enterprise agreements with RBC, Cisco, and Adobe.
AI Generated. May Contain Errors.
Earnings Conference Call
Banzai International Q2 2025
00:00 / 00:00

There are 2 speakers on the call.

Operator

Chief financial officer and like to welcome you to Bonsai's second quarter twenty twenty five financial results and business update conference call. A question and answer session will follow the formal presentation. And as a reminder, this conference is being recorded. Before we begin the formal presentation, I would like to remind everyone that statements made on the 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.

Operator

You are cautioned not to place undue reliance on these forward looking statements, which reflect our opinions only as of date of this presentation. Please keep in mind that we are not obligating ourselves to revise or publicly release the results of any revisions to these forward looking statements in light of new information or future events. Throughout today's discussion, we will attempt to present, 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 a 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 in, is available in the investor relations section of our company's website, bonsai.io.

Operator

Your host today, Joe Davey, chief executive officer, and I will present unaudited results of operations for the second quarter ended 06/30/2025. At this time, I will turn the call over to chief executive officer, Joe Davy.

Speaker 1

Thank you, Dean, and good afternoon, everyone. I'm pleased to welcome you to Bonsai's second quarter twenty twenty five financial results conference call. I'll begin with a brief overview of our business and market opportunity before delving into q two twenty twenty five financial and operational highlights. I'll then touch on some product and strategy updates. Our new CFO, Dean Ditto, will then review our q two twenty twenty five financial results before I close and open up the call for questions.

Speaker 1

For those new to our story, at Bonsai, we're developing a platform of AI powered marketing solutions that make our customers' lives 10 times faster and easier. Our products enable our robust customer base to target, engage, and measure both new and existing customers more effectively. Our focus is on the global Martech market, which is expanding rapidly due to increasing digital transformation, surging demand for personalized experiences, and the proliferation of automation and AI. These dynamics have created challenges for modern marketing teams, which must navigate the expansive and complex network of available tools. Our core product suite addresses the issue of disjointed customer experiences and messy data by centralizing all essential marketing tools in the Bonsai platform.

Speaker 1

We continue to expand our family of products through our target acquisition strategy, which positions us strongly for capitalizing on industry consolidation. Banzai continues to be focused on our strategy of building and buying products across four key areas, attracting leads, engagement, tracking, and intelligence. We feel these areas are key to marketing success both now and in the future. The second quarter was marked by continued operational momentum and substantial growth with revenue growing 205% year over year, driven by our Vidello and OpenReal subsidiaries and continued strong performance for our products. We're 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.

Speaker 1

We achieved gross profit of $2,700,000 in the quarter, a year over year increase of 267%, And gross margin expanded significantly year over year from 69.1% to 83. We achieved annual recurring revenue of $12,600,000 in the second quarter. This represents a 182% annual, annualized ARR growth rate compared to q two twenty twenty four. Adjusted EBITDA was a $1,500,000 loss, which compared to a loss of $1,500,000 in Q2 twenty twenty four. Our cash balance at the second quarter end increased to $2,300,000 and stockholders' equity increased to $3,200,000 We secured an $11,000,000 debt facility with an institutional investor to support acquisitions and ongoing operations.

Speaker 1

We appointed Dean Ditto as chief financial officer, bringing over thirty 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, a veteran revenue and go to market executive to scale Bonsai's leading video engagement, production, and webinar solutions. Our current our customer base expanded to over 140,000 total customers, and we secured expanded agreements with RBC Capital Markets and other prominent enterprises for OpenReal. 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.

Speaker 1

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 and a continues to be an important piece of our growth strategy. We follow a well defined, repeatable process that ensures every m and a opportunity is approached with precision and best practices.

Speaker 1

This process starts with 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.

Speaker 1

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.

Speaker 1

We have substantially scaled our customer base to over a 140,000 customers, which cover 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, UnitedHealth, Hewlett Packard Enterprise, Capital One, and thousands of others. We serve a variety of industries, including health care, financial services, ecommerce, 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.

Speaker 1

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 for long term success.

Speaker 1

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.

Speaker 1

First, 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.

Operator

Thank you, Joe. Total revenue for the 2025 was $3,300,000 compared to $1,100,000 in the 2024. We believe the non GAAP metric annual recurring revenue or ARR is meaningful in evaluating the company's performance. ARR was $12,600,000 for the 2025 and represents a 182 increase from $4,500,000 in the 2024. Gross profit for the 2025 was 2,700,000.0 compared to 700,000.0 in the 2024.

Operator

Gross margin was 83% in the 2025, which is an increase of 1,390 basis points compared to 69.1% in the 2024. Total operating expenses for the 2025 were $7,400,000 compared to $4,100,000 in the 2024. The increase in operating expenses were primarily due to the additions of the OpenReal and Videlo businesses and overall, operating expenses. Net loss for the 2025 was $7,800,000 compared to a net loss of $4,000,000 in the 2024. For the three months ended 06/30/2025, adjusted EBITDA was a loss of 1,500,000.0 compared to a loss of approximately 1,500,000.0 for the three months ended 06/30/2024.

Operator

Total revenue for the six months ended 06/30/2025 was $6,600,000, which was an increase of 209% compared to the prior year. Total cost of revenue for the six months ended 06/30/2025 was $1,200,000 compared to $700,000 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, excuse me, six months ended 06/30/2025 was $5,500,000 compared to $1,400,000 in the prior year period. Gross margin was 82 and a half percent in the 2025 compared to 66.9% for the 2024.

Operator

Total operating expenses for the six months ended 06/30/2025 were $15,100,000 compared to $8,200,000 in the prior year period. The increase in operating expenses was primarily due to the additions of the OpenReal and Videlo businesses and overall operating expenses. Net loss for the six months ended 06/30/2025 was $11,400,000 compared to 8,200,000.0 in the prior year period. Adjusted EBITDA for the six months ended 06/30/2025 was $3,700,000 compared to adjusted EBITDA of $3,500,000 for the prior year period. Net cash used in operating activities for the six months ended 06/30/2025 was $9,000,000 compared to $3,800,000 for the six months ended 06/30/2024.

Operator

Cash totaled $2,300,000 as of 06/30/2025 compared to 700,000 as of 03/31/2025. I'll now turn the call back to Joe for some closing remarks.

Speaker 1

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 and 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.

Speaker 1

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.

Speaker 1

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?

Speaker 1

Will you be able to continue reducing operating expenses sequentially over the next few quarters? That's a great question. Thank you, Howard. You know, we've seen the sales cycle can vary, especially depending on, the the size of the account. So, you know, we have, some deals that we're, you know, in the works that we think are very, very meaningful potentially, but could be, you know, one year plus sales cycles.

Speaker 1

A lot of our kinda mid market sales cycle comes in between thirty and sixty days. So, and then, obviously, you know, we have a lot of customers that will also buy directly from us online. So maybe they'll, you know, 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, so that's, you know, I think a very, meaningful, you know, 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.

Speaker 1

We're starting to see pipeline growth, of those deals. And, you know, this is really why Michael is a part of the team now and Matt and some of the other, you know, folks, is really just to focus on driving that additional pipeline and driving additional, organic growth. And, you know, we're we're really, pleased, with, you know, how that's going so far. When do you anticipate your new team beginning to drive sequential revenue growth? You know, we'll we'll we'll see.

Speaker 1

I think that the team is making progress, on this already. Michael's been on board for a couple of months now, I think. So he's he's starting to make some changes in the team. I think some of those things are starting to bear fruit. And and, you know, I think he's he's doing everything he needs to be doing right now.

Speaker 1

So really supportive of, 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, you know, maybe I'll let let Dean chime in on this, but, you know, my view on this is, even more important than operating expenses is, I think, cost of capital.

Speaker 1

And we definitely anticipate being able to bring that down, And I think that will make a direct bottom line impact and, you know, probably probably will be, the, you know, the the from from our perspective, we can reduce cost to capital. That's much better than reducing operating expenses. So I I think we'd much like to much rather like to see, you know, increase in net income coming from reduced cost to capital and revenue growth versus, you know, necessarily coming from you know, OpEx cuts at this moment. Dean, is there anything you wanna add to that?

Operator

Yeah. We just build on, what Joe just said. And and, you know, as the company continues in its growth phase, I 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 there certainly are opportunities, and we're working very hard to achieve those.

Speaker 1

Yep. Thanks, Dean. And thanks, thanks, Howard. Appreciate the questions. Here's a question from, Jackson.

Speaker 1

I'm gonna pull this up on the screen. What's ARR growth normalized for each acquisition? You know, I'll say, we're 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, you know, obviously gonna be, lumpy. But we'll see.

Speaker 1

You know, I think, one of the reasons that we brought in, you know, Michael and Matt is, you know, they both had experience taking businesses from the stage that we're at right now to the $100,000,000 stage and doing that in a three to five year period. And so that's kinda what we're looking to do here. You know, I think our our internal target is to get this organically to $50,000,000 in the next three years, but, you know, there's a lot of work that goes into that. And there's a lot of there's a lot of work to be done. You know, the team is definitely, you know, working on scaling, you know, working on on closing, you know, new relationships.

Speaker 1

I think if you look at the customer slide that we showed earlier, lot of new logos on that slide compared to compared to last quarter. So we wanted to highlight who some of those new customers are. So, you know, we're really excited about what the team's doing, but, you know, I think there's there's gonna be work, going into this. But, that that organic growth is an important focus for us, so thank you for the question. Let me see.

Speaker 1

Just going through questions here. So there is a question from Mohammed. Can there be development and profitability with the urgent time? I think you know, first of all, absolutely. I think when you look at our our adjusted EBITDA, which is basically, in a sense, kind of the way that we look at kinda normalized cash flow, you know, this was, pretty flat from last quarter, and I think, it is is getting pretty small.

Speaker 1

And so we think, you know, just a a slight nudge up, we'll get this, into positive at this point. And and Dean and I are working really hard on options for for how to make that happen. And we think we have some, 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 as we go. Thanks for the question.

Speaker 1

Here's a question from Patrick. Total diluted shares. You know, Patrick, I I actually don't know the number I would refer you to the 10 q, which has a a complete breakdown of this, embedded in it. You know, Dean can can maybe tell you if he has a better answer than that, but, I know we have a breakdown of it, in the in the 10 q.

Operator

Yeah. Yeah. That 10 q is filed and available. So I I would I would say take a look there and, certainly happy to follow-up with any additional questions, one on one.

Speaker 1

Yeah. If you wanna reach out to, I'll 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 as our investor relations group. If have a specific question that that doesn't get answered in the queue, let us know, we can help you with that. Thank you for the question.

Speaker 1

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 own without counting the cross sales? So so so first of all, that you know, we we've been acquiring new customers, across both of these products.

Speaker 1

We're we're pleased with how that's going. I think, you know, as with anything in the recurring revenue business, you know, it takes time when a customer's acquired to then recognize that revenue and start to see that inflection, tick up. So, you know, hopefully, we'll start to see that reflected more and more, coming up. But, I think, again, with the revenue retention, I would I'd direct you to the to the, you know, 10 q, but we 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 pretty good about it right now.

Speaker 1

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 you're very low revenue stream and margins.

Speaker 1

Percentage increase cannot be considered yet. Stock with the reverse is very low on a fifty two week range. So we start from the back let me start from the end of that and work backwards. First of all, I agree that the stock is very low on a fifty two week range. I think it's, you know, I think it's, you know, low compared to comps, in our space right now.

Speaker 1

And I think, you know, 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 to gross profit, etcetera. You know, we we intend to, you know, keep pushing, pushing up on that. And, you know, when when you're on an elevator and you're trying to go from the basement to the Hundredth Floor, you know, you gotta go past the Tenth 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 twelve months and some continued progress even in the last quarter, and I think we're gonna continue to to hopefully see that. So, you know, we we appreciate, you know, everybody's support as a part of that because I agree with you.

Speaker 1

I think that the I think that the stock, is is low on a fifty two week range right now when you look at comps. You know, to address your question, on the margins, I I I'm not sure I agree with you about, you know, the the revenue, being low on the margins. I think the 82 I think, you know, 83%, this is a 1% increase from last quarter. This is a, you know, close to 1,400 bps, increase over the last year. So I think we've seen the margins improve pretty dramatically.

Speaker 1

I think margins in that range are are, you know, pretty pretty decent when you compare them to comps, across the SaaS industry. I think we do expect to see those margins, you know, move up a little bit more maybe into the, you know, 84% range, you know, over the next couple of quarters. We'll see how that goes. But, you know, we're we're pretty happy with the margins as they are. Obviously, yeah, we want the revenue to to keep increasing.

Speaker 1

So, you know, to answer your question about that, you know, I think what we've seen over the last, you know, in q two, we've seen a surge of, you know, we've seen, you know, many many, new kinda 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, you know, the customer might come in for a very small initial purchase price on a self serve basis, and then they're gonna, you know, upgrade over time. They're gonna expand over time. And so, you know, our our business model isn't just about that initial revenue that comes when we bring in a new customer. It's really about, you know, it's really about, seeing those customers expand over time too.

Speaker 1

And, we've got a pretty good playbook for how to do that, and I think Michael and his team are 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 we're expecting to see, you know, not you know, kind of phase one is gotta plumb in, you know we we call this the more beers and bigger bottles approach. But, you know, we wanna we wanna plumb in new customers and then and then over time, see those customers grow. So, you know, we're seeing the customer number grow.

Speaker 1

That's great. You know, we would hope that the that the, customer that, you know, that the 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.

Speaker 1

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, you know you know, absolutely, it's a focus for us. I think, you know, customer expansion both just from cross sales and also from adding new seats, adding new you know, it's you know, upgrading users to higher tiers, All that is 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.

Speaker 1

Some of our processes were already really good. Some of them, you know, need some additional work. You know, I think there's a lot of, I think there's a lot of low hanging fruit for Michael, in in what he's doing, and that's exactly why we brought somebody like that on to help support that. So so so, yeah, we we we hope to see more of those, coming down the line, and and, you know, we'll see what happens. Thanks for the question.

Speaker 1

Okay. You know, 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 IR firm, MZ Group. Their information is on the screen here.

Speaker 1

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.

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