Banzai International, Inc. Class A Common Stock 2026 Q2 Earnings Call

You too, Parabolic's second quarter financial results and business update conference call. A question and answer session will follow the formal presentation. Just as a reminder, this conference is being recorded. Before we begin the formal presentation, I would like to remind everyone that statements made on this call and webcast may include predictions, estimates, or other information that might be considered forward-looking. While these forward-looking statements represent our current judgment on what the future holds, they are subject to risks and uncertainties that could cause actual results to differ materially. You are cautioned not to place undue reliance on these forward-looking statements, which reflect our opinions only as of the date of this presentation. Please keep in mind that we are not 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 related to our business that may affect our predictions. You should also review our most recent Form 10-Q and Form 10-K for a more complete discussion of these factors and other factors, particularly under the heading Risk Factors. A press release detailing these results was issued this afternoon and is available in the investor relations section of our company's website, ir.banzai.io. Your host today, Joe Davy, Chief Executive Officer, and I will present the results of operations for the second quarter of 2026. At this time, I will turn over the call to Parabolic's Chief Executive Officer, Joe Davy.

Thanks, Dean. Good afternoon, everyone. I am pleased to welcome you to Parabolic's second quarter 2026 financial results conference call. Let me flip to the next slide here. I will begin with a brief overview of our business and our market opportunity before delving into financial and operational highlights. I will then touch on some product and strategy updates. Our CFO, Dean Ditto, will then review our second quarter 2026 financial results before we open the call for questions. For those of you new to our story at Parabolic, we build agentic applications that power the future of business. This was reflected in a recently announced rebranding that basically just demonstrates our belief that the future of enterprise software is going to be agentic applications that are net beneficiaries of AI transformation. Our focus is on building, acquiring, and investing in those businesses. Today, we have five products in that offering lineup.

Demio, which is our webinar and virtual event platform. You are using it right now. One of the most powerful features of Demio is AI Moderator. OpenReel, which is our AI-powered remote video production platform, primarily for enterprise. Fantastic product for video capture and editing. CreateStudio, which is our 3D video creation and animation platform, and for which we recently announced some new leadership that we are really excited about. Superblocks, which is our AI agent for building and hosting websites and landing pages. If you go to our website, parabolic.io, you can see that was built using Superblocks. Finally, ConnectAndSell, which is our newly acquired AI sales acceleration platform. Our vision is to build, buy, and invest in companies with high potential to be transformative in the agentic application landscape.

And what we mean by that is we want to look for undervalued businesses, B2B customer bases with real customers with durable revenue. We are looking for things that ideally are already leveraging AI, but maybe that have not communicated that well to the market, or where we can bring more AI into that product. So either adding an agent, adding AI into data analytics. There's a variety of ways that we apply this. And then ultimately scaling. Our goal is to, of course, grow these businesses once we own them, and ultimately to see the aggregate business grow. I will just add that as a part of this vision, we are also looking at the potential of investing in other projects where we think they are well-suited to be successful in this space as well.

In July, we closed the acquisition of the assets of ConnectAndSell, Inc., which is an AI-powered sales enablement platform. They primarily serve B2B organizations in financial services, healthcare technology. The acquired business is expected to increase Parabolic's annual revenue by approximately $15 million when it's fully realized. We expect the acquisition to boost Parabolic's revenue to approximately $27 million in total on an annualized basis. This is a very meaningful acquisition for us. Obviously bakes in meaningful growth for 2026 and 2027. The ConnectAndSell business has a high gross margin of approximately 86%, about 250 enterprise customers, and they also have 10 issued and pending patents. ConnectAndSell's AI-powered platform is designed to improve seller productivity. It helps sales teams spend more time in live conversations with qualified decision-makers, and it uses quite a bit of data and AI to do that.

The company has enormous, maybe the largest set of such data in the industry and has a very extensive set of AI features that can help optimize when conversations should take place, whom with, et cetera. The acquisition extends Parabolic's platform from our businesses prior to this, were mainly focused on marketing engagement. This extends us into outbound sales execution. We think that there are cross-sale opportunities here for an end-to-end go-to-market solution, and we are really excited about that, and the team is working on that. We believe the addition of ConnectAndSell strengthens our position as a provider of integrated marketing and sales technology solutions, while creating those meaningful cross-sale opportunities across our now expanded customer base. So of course, we have added their customers and vice versa. They now have access to our large customer base as well.

The transaction also furthers our strategy of building a broader platform of agentic application solutions. ConnectAndSell has a highly complementary sales acceleration capability, and we expect it will extend Parabolic's platform, and create additional opportunities for customer expansion across that. The acquisition closed on July 2nd, so the results are not reflected in the second quarter. They will contribute meaningfully throughout the rest of this year. So we will see those reflect in Q3 and Q4, and then obviously for the full year in 2027. Our focus is on the global market for agentic applications. This is the fastest-growing segment of the B2B market right now. Enterprises are shifting from traditional SaaS and isolated AI tasks to autonomous goal-driven workflows. And Parabolic is positioned to be a leader in this market segment.

These dynamics have created challenges for modern teams, mainly because they have to navigate through a variety of complex integrations, data integration to get value out of their AI. Many of those platforms where their data lives or business tools they are using were built before the advent of AI, so they lack those capabilities. We are going to continue to expand our family of products through our targeted acquisition strategy over time, and we think this is going to position us strongly for capitalizing on industry consolidation in the enterprise B2B space. Some financial highlights. Revenue was $2.3 million in the second quarter, compared to $3.1 million in the same quarter of 2025. I think we have shared in the past that the majority of this change was due to a lot of non-recurring revenue that we let trail off.

We feel actually that the operating results for our core business were fantastic. During this quarter, we did see some encouraging leading indicators in our pipeline that we think will drive future revenue, and we saw bookings grow in Q2 versus Q1. Margins remained very strong. We saw a lot of improvements to our core business. Net loss improved 41% compared to the net loss of $8.4 million reported in Q1. Cost reduction actions contributed to this improvement. Operating expenses were reduced by $1.7 million compared to Q1, and by $1.2 million compared to Q2 2025. I think I am very pleased with the results of the team to be able to show bookings growth in a quarter where we had a very strong improvement to both OpEx and net income. I think that is just a lot of operating discipline.

Our business is not impacted by strong seasonality, and for that reason, we measure performance off on a run rate basis. Again, Q2 revenue was $2.3 million, down about 16% from Q1 due to a one-time non-recurring revenue that we saw in Q1. We have really continued strengthening the balance sheet by reducing debt and improving stockholders' equity. We believe this puts the company in a much stronger position for strategic growth in the future. Stockholders' equity was $12.2 million on June 30th, which is an all-time high for the company. We also reached a customer base of over 150,000 total customers who have purchased or subscribed to Parabolic products. The ConnectAndSell acquisition adds 250 customers, which might sound small compared to 150,000, but they are very meaningful. They are enterprise customers and that is very critical to our strategy. Net dollar retention is a leading indicator that we monitor closely.

For our core customer segment, the net dollar retention rate reached 91% in the second quarter, which is an all-time high and a strong indication of a robust customer upsell and retention pipeline. Our funding partners continue to share our vision. Subsequent to the end of the second quarter, we closed an additional tranche of $1.1 million from our existing $11 million facility to support acquisitions and ongoing operations. During the second quarter of 2026, we reduced costs in areas such as professional fees and other administrative expenses. In May, we announced our cost management plan. Actually let me flip over, well, we can stay here. We announced a cost management plan where we expect to see improvements to areas such as professional fees and administrative expenses. While these actions are complete, we are just now starting to see the results materialize.

We expect they will fully materialize in the third quarter of this year. In July, we closed the acquisition of ConnectAndSell that we spoke about today already. In November 2025, last year, at the end of last year, we acquired privately owned Superblocks. We have made a lot of improvements to that product, and we are really excited about how that is shaping up as well. We entered 2026 with a clear set of strategic priorities. We have made meaningful progress on these goals for Parabolic, and they really have not changed. Furthering our fortress balance sheet initiative, we have rapidly paid down and converted debt in recent quarters. We intend to opportunistically continue to strengthen our balance sheet. Our stockholders' equity is an all-time high of $12.2 million, up from $8.1 million on December 31, 2025. This reflects substantial improvements that we have made to the balance sheet.

We have continued to execute a focused strategy to expand our capabilities through targeted acquisitions. OpenReel, Vidello, Superblocks, and now ConnectAndSell. This expands our ability to support customers across digital engagement lifecycle. We are very excited to see how that plays out in terms of cross-sale over the next year. We have also maintained an active pipeline of potential acquisitions, and we look at areas where we have strong sector experience, obviously, and we can leverage our AI platform capabilities to add value to those businesses and accelerate them. Recent balance sheet improvements will obviously further enable us to grow in this way, as we maintain operational discipline and focus on efficiency and the path to sustainable profitability. We are also accelerating organic growth of our current lines of business. We expect financial services and healthcare to be large customer verticals for Parabolic as we look ahead.