Banzai Q1 2026 Earnings Call - Debt Paydown and ConnectAndSell Acquisition Anchor Growth Strategy

Dean Ditto, Chief Financial Officer, Banzai: I’m Dean Ditto, Chief Financial Officer, and would like to welcome you to Banzai’s first quarter 2026 financial results and business update conference call. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. Before we begin the formal presentation, I’d 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. 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 re-release the results of any revisions to these forward-looking statements in light of new information or future events. Throughout today’s discussion, we’ll attempt to present some important factors related to our business that may affect our predictions. You should also review our most recent Form 10-Q and our Form 10-K 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 available in the investor relations section of our company’s website, banzai.io. Your host today, Joe Davy, Chief Executive Officer, and I will present results of operations for the first quarter of 2026. At this time, I’ll turn the call over to Banzai’s Chief Executive Officer, Joe Davy.

Joe Davy, Chief Executive Officer, Banzai: Thank you, Dean. Good afternoon, everyone. I’m pleased to welcome you to Banzai’s first quarter 2026 financial results conference call. I’ll begin with a brief overview of the business and market opportunity before delving into financial and operational highlights. I’ll touch on some product and strategy updates. Our CFO, Dean Ditto, will then review our first quarter 2026 financial results before we open the call for questions. For those of you new to our story at Banzai, 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 offerings consist of Demio, our webinar and virtual event platform with AI moderation, OpenReel, our enterprise AI-powered remote video production platform, Create Studio, our AI-powered 3D video creation and animation platform, Superblocks, an AI agent for building and hosting websites and landing pages, and ConnectAndSell, a proposed acquisition of an AI sales acceleration platform. We’ll share a little bit more on that in a minute. 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. Enterprise marketers use an average of 120 marketing tools.

Our core product suite addresses the issues of disjointed customer experience and messy data by centralizing essential marketing tools in the Banzai platform. We continue to expand our family of products through our targeted 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 first quarter remained relatively flat compared to Q4 2025. Revenue was $2.7 million, which on a run rate basis from the prior quarter was relatively flat. During the quarter, we did see encouraging leading indicators in our pipeline that will drive future revenue, and I want to highlight that margins remained consistent.

Our March revenue showed an 11% increase versus February within the quarter, which is also promising. Net loss was $8.4 million for the quarter, and adjusted EBITDA loss was $1.9 million for the quarter. Our business is not impacted by strong seasonality, and for that reason, we measure performance on a run rate basis. Q1 2026 revenue decreased 4% from the prior quarter ending December 31, 2025. I’m proud of the team’s efforts to continue strengthening Banzai’s balance sheet. We continued to reduce debt in the first quarter. We believe this puts the company in a stronger position for future strategic growth.

Stockholders’ equity remained at $8.1 million as of March 31, 2026. We reached a customer base of over 150,000 total customers who have purchased or subscribed to Banzai products. Our funding partners continue to share Banzai’s vision. We closed an additional tranche of $2.3 million in debt in February as part of our $11 million debt facility with an institutional investor to support acquisitions and ongoing operations. During the first quarter of 2026, we reduced costs in areas such as professional fees and other administrative expenses. I’m excited to share that management has begun implementing additional cost management actions that we believe will materially reduce operational costs on an annual basis.

We will track and report these savings in future announcements. Please stay tuned for that. In March, we previously announced the proposed acquisition of ConnectAndSell, a sales acceleration software provider that will strengthen and broaden our marketing and sales software platform with an established revenue-generating business, which I will go into more detail on shortly. In November, we acquired privately held Superblocks, an agentic AI platform for developing and hosting launch-ready SEO-optimized websites, which is very exciting for those of us who are playing with that product every day. In March, we previously announced a non-binding letter of intent to acquire the assets of ConnectAndSell Inc, an AI-powered sales enablement platform serving B2B organizations across financial services, healthcare, technology, and other industries. This proposed acquisition is expected to increase Banzai’s annual revenue by approximately $15 million.

The ConnectAndSell business has a gross margin of 86%, approximately 250 enterprise customers, and has had 10+ patents issued and pending. The two companies have executed a non-binding letter of intent, as I mentioned, and continue to negotiate material terms of the transaction. Since the transaction is subject to execution of a definitive agreement and closing conditions, we cannot estimate the closing date at this time, but we will keep you updated as we make progress on that. ConnectAndSell’s AI-powered platform is designed to improve seller productivity by helping sales teams spend more time in live conversations with qualified decision-makers. The acquisition would add sales acceleration capabilities to Banzai’s platform and expand the company’s ability to support customers across a broader portion of the revenue generation process.

We believe the addition of ConnectAndSell would strengthen our position as a provider of integrated marketing and sales technology solutions while creating meaningful cross-sale opportunities across both companies’ customer bases. The transaction would also further Banzai’s strategy of building a broader platform of practical revenue-generating business-critical solutions. ConnectAndSell has a highly complementary sales acceleration capability and would expand Banzai’s platform across more of the go-to-market process and create additional opportunities for customer expansion. Let’s see. In November, we acquired the assets of privately held Superblocks, an Agentic AI platform for developing and hosting SEO-optimized websites, landing pages, registration pages, and more. This advances our vision of building the AI platform for marketing. The Superblocks platform allows marketers to easily create and host websites, landing pages, and simple web applications using conversational AI.

Basically, instead of talking to a designer and a web developer, you talk with our AI, and it builds your website just like they would. Building well-designed functional landing pages and websites have traditionally required teams to use rigid template-based site builders or possess extensive web development experience. Superblocks AI agent builds beautiful brand-compliant web assets quickly for businesses, marketers, and creators. Using the platform’s AI agent, users can describe what they want in natural language. The AI generates the user interface functionality and hosts the application for them. The integration of Superblocks into our platform will allow existing customers to build custom registration pages, event pages, video hosting pages, and more with ease, adding to our growing AI-powered SaaS platform of solutions. A new version of Superblocks featuring AI-powered starting point templates is launching soon.

These templates allow our users to create new websites for a variety of use case, from polished starting points. I’ve tried it and it’s awesome. We entered 2026 with a clear set of strategic priorities. We’ve made meaningful progress on our goals to position Banzai for sustainable long-term growth. Furthering our fortress balance sheet initiative, we’ve rapidly paid down and converted debt in recent quarters. We intend to opportunistically continue strengthening our balance sheet. Banzai stockholder equity remained at $8.1 million as of March 31, 2026, reflecting the substantial improvements that we’ve made. We continue to execute a focused strategy to expand our capabilities through targeted acquisitions focused on profitable AI-aligned businesses that add differentiated functionality, accelerate distribution, and strengthen our AI roadmap.

Since December 2024, we’ve closed three significant acquisitions: OpenReel, Vidello, and Superblocks. Actually, I should say we’ve closed three acquisitions. I’m not sure we’d consider all of those to be significant, you know, in the traditional definition. In addition, we recently announced an agreement to acquire ConnectAndSell, expanding our ability to support customers across the digital engagement life cycle from acquisition and conversion through content creation, engagement, and performance measurement. We also maintain an active pipeline of potential acquisition opportunities across key industries where we have strong sector expertise, and we can leverage our AI platform to add value and strategic operational acceleration. Recent balance sheet improvements will further enable new growth as we maintain operational discipline and a focus on efficiency in the path to sustainable profitability. We’re also accelerating organic growth of our current lines of business.

Healthcare is one of our largest customer verticals and represents a key area of focus for Banzai as we look ahead. We serve more than 250, you know, enterprise and mid-market healthcare and medical technology customers. BFSI, healthcare, and medical technology companies. BFSI, by the way, is banking, financial services, and insurance, for those of you all who aren’t part of our team and don’t use that acronym every day. These companies operate in highly specialized and regulated environments that demand precision targeting, compliant engagement, and measurable outcomes.

Our platform is designed to support these requirements through AI-enabled targeting, data-driven engagement, performance measurement, and helping teams move faster with fewer resources. Frankly, we think being in these industries provides us with a bit of a moat, because it is harder for new entrants to come in to spaces traditionally that have, you know, stringent compliance and regulatory environments. We believe the opportunity ahead remains significant as BFSI and healthcare organizations continue to invest in digital transformation and AI-enabled marketing solutions. We’re deepening our relationships within the healthcare industry while continuing to execute across all of our verticals. With this in mind, we’ve been working diligently on ISO 27001 certification in order to meet the security requirements of our current and target core customers. We expect to complete and obtain ISO 27001 certification by the end of Q2 2026.

I’ll just do a quick aside here and say that that’s very important for us strategically, we think because that enables us to access a new segment of customers that require that. We do think that will open up the market for us and allow us to move faster with some sales opportunities. We’ve substantially scaled our base of customers who’ve used Banzai products to over 150,000 customers, which include blue-chip names across a variety of sectors. Some of our key customers and partners include Amazon, Dell, Salesforce, Aflac, Thermo Fisher Scientific, RBC, Fitch Group, thousands of others. We serve a variety of industries, including healthcare, financial services, e-commerce, technology, media, and we have customers in over 90 countries.

We remain focused on targeting the mid-market and enterprise segment while continuing to support small business customers through our self-serve options. We’re taking a disciplined approach to focus on acquiring stickier higher value customers. The 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 2 key areas, integration and AI enablement. Integrating multiple products on 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 over time will expand the context available to us, which will enable us to deliver more powerful AI capabilities. Finally, a continued focus on M&A. Our vision is to generate substantial long-term value by scaling inorganically in addition to growth of our existing products. Our acquisition framework is centered around profitable businesses that align with our 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 Banzai is twofold. First, to increase our product capabilities by acquiring strategically aligned products that serve our core customer base. Second, by accelerating our path to profitability and scale. Hopefully, we will benefit from multiple expansion along the way as we do this.

I will now turn the call over to Dean Ditto, Chief Financial Officer, to discuss our financial results.

Dean Ditto, Chief Financial Officer, Banzai: Thank you, Joe. Total revenue for the first quarter of 2026 was $2.7 million, which was a decrease of 20% compared to the first quarter of 2025. This was due to some one-time CreateStudio revenue in Q1 of 2025. On a run rate basis compared to Q4 of 2025, revenue was relatively flat. Gross profit for the first quarter of 2026 was $2.2 million, compared to $2.8 million in the first quarter of 2025, which was a decrease of 22%. Gross margin remained relatively stable at 80.7% in the first quarter of 2026. Total operating expenses for the first quarter of 2026 were $8 million compared to $7.7 million in the first quarter of 2025.

Our operating expenses increased primarily in people expenses, which reflects the cost and the investment that we made in expanding the leadership team and some key go-to-market roles in sales and marketing. This was offset with significant reductions in professional fees and some other marketing expenses and administrative expenses. Net loss for the first quarter of 2026 was $8.4 million, this is compared to $3.6 million in the prior year quarter, which was a 131% decline. I will mention that the prior year quarter contained a one-time non-cash gain that was the result of negotiating reductions in SPAC related costs. On an adjusted basis, the first quarter 2025 loss would have been $7.9 million, which compares to our Q1 2026 loss of $8.4 million.

For the first quarter of 2026, adjusted EBITDA was a loss of $1.9 million, which was a modest decline compared to the loss of $1.7 million in the first quarter of 2025. Net cash used in operations for the first quarter of 2026 was $5.5 million, compared to $5 million for the first quarter of 2025. Cash totaled $0.1 million as of March 31st, 2026, compared to $0.3 million as of December 31st, 2025. During the first quarter of 2026, we continued to fund our operations through a combination of equity and debt financing, and most notably closed an additional tranche of convertible debt totaling approximately $2.3 million, and raised an additional $3.3 million of equity.

We’ve continued to strengthen the balance sheet, which is in line with our strategic priorities, and stockholders’ equity remained at $8.1 million as of March 31st, 2026. From a financial and strategic perspective, our plan going forward is to reduce debt through cash payments and selective conversions, and to operate in a very cost efficient manner. We believe these actions position Banzai for strategic growth and provide value both to the business and to the shareholders. Now I will turn the call back to Joe for some closing remarks.

Joe Davy, Chief Executive Officer, Banzai: Thank you, Dean. In summary, we’re seeing a solid, you know, revenue across our business at a much higher gross margin than we have historically. Operationally, we’re positioned for improved results and stronger cash position throughout 2026. We’ve worked diligently to continue executing the plans we previously communicated to advance long-term growth. Our debt facility is also available to support acquisitions and ongoing operations if needed. We have an expanding suite of synergistic products that drive real value for our massive customer base and the right team to achieve our objectives. We’re focused on generating sustainable value for our shareholders, and I look forward to providing additional updates throughout the year, especially on some of the things that we discussed today. Thank you everyone for attending, and I will now open it up to questions.

Just so you know, the way this works, if you put your questions in the chat, we’ll be able to see them here and I’ll be able to respond to them. We got an awfully quiet.

an awfully quiet audience today. This is unusual. You guys have a lot of questions. We’ll give it 30 more seconds. Okay. First question, "What does the pipeline of M&A targets look like, and have valuations changed recently?" I would say, first of all, there’s a really strong pipeline of M&A targets. I obviously can’t speak to specifics at this time, but we have, you know, we’re very, very focused on ConnectAndSell right now. We do have a number of other really interesting opportunities that we’re looking at. We have seen valuations, you know, looking, in our view, pretty attractive. Our hope is that we’ll be able to get, you know, several of these executed by end of 2026.

Certainly our hope is that, you know, we’ll, you know, work very hard to get ConnectAndSell done by then. No, it’s not a promise, but I think, you know, hopefully we’ll be able to do that. You know, overall, I would say it’s looking like a very, very good environment for M&A, Ed, and we’re very focused on that as a strategy still, because we think that’s gonna be You know, our, our ambition here is to, you know, scale this business to, you know, $100 million, $500 million, $1 billion in revenue, right? We don’t just wanna stop at You know, obviously we’ve scaled it substantially in the, you know, in 2025. We wanna continue doing that.

You know, without getting into specifics of timing, you know, it’s always an unknown, you know, how these things play out from a timing standpoint. Look, I mean, I think our ambition is really clear, is to, you know, is to grow this into a very, very large company quickly and we see a lot of opportunities to do that. I’ll just leave it at that. Okay. Got one last question here. "Are you seeing any change in enterprise martech spending? Any big changes in sales cycles or delays in closing time?" This is a great question. I would say, we’ve seen some acceleration of pipeline in Q1 and Q2. I, you know, take that as a positive.

You know, as a, as a CEO, that’s probably the number one thing that I look at, is how much pipeline are we generating, how much are we closing, et cetera. I think that’s been, you know, seen a bit of an uptick. In terms of sales cycles, I, you know, I can say some of the new demand gen things that we started doing in late Q4, we saw closes on those in Q1. That’s very promising. Have continued to see some new customer closes in Q2. That’s, you know. We really like that. As we mentioned earlier, we saw an 11% uptick in revenue from February to March within Q1. I think that’s also a positive sign that things are kind of moving in the right direction, you know.

Sometimes when you do acquisitions, I’ll just go on a little tangent here ’cause I’m not getting a lot of questions, I’ve been told that I love the sound of my own voice. I don’t know if that’s true, I do think it’s a helpful thing to clarify is that, you know, when you’re doing an acquisition, a lot of times, you know, there’s a period of time after that acquisition closes where efficiency slows down in terms of a lot of things, sales and marketing sometimes is one of those things. You know, new websites have to be rolled out, new sales and marketing playbooks have to be rolled out, comp plans have to be restructured.

You know, we brought in new leadership, teams have been retrained, we’ve hired some new people, we terminated some folks. I think there’s always that kind of shuffle that occurs, and I’m really proud of how our team has been able to get the OpenReel business, for example, stabilized in 2025, and hopefully, you know, moving in the right direction for us, so we can see some meaningful growth in 2026. Hopefully, you know, as we get through 2026, we’ll see that accelerate.

I would say that’s really the probably the crux of it is there’s always a bit of a, you know, you know, boa constrictor, you know, and swallows the goat, and it’s gonna take a little while to digest before you can move on to the next thing. You know, we have experienced a little bit of that, but I think we’re definitely moving in the right direction there. I’m personally very optimistic about how the team is doing right now. I think that’s it for questions for today. Look, I wanna thank everybody for joining today. I look forward to continuing to update you on our ongoing achievements, innovations, growth.

If we were unable to answer any of your questions, please reach out to us through our IR website, or better yet, you can reach out to Dean Ditto. You can contact him through the IR website, and we’ll be happy to address any other questions that you might have or follow up on anything. All right. Thank you very much.

: Thank you.