Banzai International - Earnings Call - Q4 2024

Transcript

Operator (participant)

Welcome to the Banzai Fourth Quarter and Full Year 2024 Financial Results and Business Update Conference Call. A question-and-answer session will follow the formal presentation. As a reminder, this conference call 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. We 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 revision to these forward-looking statements in light of new information or future events.

Throughout today's discussion, we will attempt to present some 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 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 hosts today, Joe Davy, Chief Executive Officer, and Alvin Yip, Chief Financial Officer, will present unaudited results of operations for the fourth quarter and full year ended December 31, 2024. At this time, I will turn the call over to Banzai Chief Executive Officer, Joe Davy.

Joe Davy (Founder and CEO)

Thank you and good afternoon, everyone. I am pleased to welcome you to Banzai's Fourth Quarter and Full Year 2024 Financial Results Conference Call. We just go ahead and flip to the next slide here. Sorry. We are seeing an acceleration of growth at Banzai, with the fourth quarter showing significant pro-forma revenue growth. This is driven by the recently closed acquisitions of Vidello and OpenReel, as well as continued strong performance for our products. For the full year 2024, total revenue on a consolidated pro-forma basis was $16.7 million, which represents a 267% annual growth compared to Banzai's standalone revenue in 2023.

Vidello's next generation video creation, editing, and marketing suite, and OpenReel's digital video creation platform combined to add approximately $13 million in revenue that enabled us to greatly exceed our previously announced 2024 guidance of $10 million. We are also making continued progress towards the closing of the acquisition of Act-On Software, which is projected to increase revenue by $27 million for the full year 2025 on a pro-forma basis. Importantly, we recently paid off $20.3 million of debt, which fully satisfies outstanding debt obligations to key vendors and will deliver a material benefit to net income and shareholders' equity for 2025.

We have continued to drive growth with the addition of 1,300 customers through December 2024. Banzai now serves a customer base of nearly 90,000 customers, many of which are top-tier enterprises that rely on our technology to succeed. I will begin with a brief overview of Banzai for those of you that are newer to the story and touch on the market opportunity and the long-term vision.

I will then cover some highlights from 2024, including updates on each of our products and our go-forward strategy. I will just point out that this presentation is being run on Demio, which is a Banzai product. The view here of myself and Alvin were created using Create Studio, which is another Banzai product. I hope everybody enjoys using a couple of Banzai products today.

At Banzai, we're building a platform of AI-powered marketing solutions that make our customers' lives 10 times faster and easier. Our products enable our customers, from small businesses to large global enterprises, to target, engage, and measure both new and existing customers more effectively. We're focused on the rapidly growing global Martech market, driven by digital transformation, heightened demand for personalized experiences, and the proliferation of automation and AI.

Marketers in the modern age must grapple with a vast and complex network of vendors. Our core product suite addresses the issue of disjointed customer experiences and messy data by centralizing essential tools in one place, Banzai. We're continuing to bolster our family of products via acquisitions, positioning us strongly for capitalizing on industry consolidation. Before we delve deeper into updates for each of our individual products, I'd like to cover some key highlights for 2024 and the subsequent period.

First off, our 2024 pro-forma revenue in total was $16.7 million, exceeding our previous guidance of $10 million by 67% and representing 267% annual growth. In the first quarter of 2025, we completed a $20.3 million debt repayment ahead of schedule, which fully satisfied our outstanding debt obligations to several key vendors. We're extremely pleased to deliver this improvement on the balance sheet, which will also create a material benefit to net income for 2025. We achieved annual recurring revenue of $6.8 million in the fourth quarter. This represents a 54% annualized ARR growth rate compared to Q3 2024.

Full year 2024 adjusted EBITDA was negative $6.5 million, which represents a $5.4 million improvement from full year 2023 EBITDA of negative $11.9 million. We acquired Vidello, a technology provider of video hosting and marketing suite for businesses, and OpenReel, a leading digital video creation platform. We signed a definitive agreement to acquire Act-On Software, an enterprise marketing automation platform provider, which is projected to increase full year 2025 revenue by $27 million on a pro-forma basis. We grew our customer base from 2,700 customers at the end of 2023 to over 90,000 as of March 31st, 2025.

We launched Create Studio 4.0, which is the latest version of Create Studio's award-winning video creation app developed by the recently acquired Vidello. Finally, we launched Curate, an AI-powered newsletter platform designed to streamline content creation and audience engagement for organizations of all sizes. As we look at our long-term vision, we are building an AI-powered platform that provides marketing teams with the data, analytics, and integrated applications they need to win.

We are consolidating mission-critical subscale Martech products within the key themes, which we will call our four horsemen of marketing technology: attracting leads, engaging them through content, gathering and enriching data to drive business intelligence, and measuring results to improve operations. All products that we have built, will build, or acquire will fit into this framework, which simply put is focused on delivering more customer value over time.

Through March 31, 2025, Banzai achieved a milestone in debt repayment under our September 2024 restructuring plan. Now that we've now repaid $20.3 million of liabilities under that plan, this will impact both stockholders' equity and net income in 2025, and this is a very meaningful milestone for the company and positions us for future financial strength. Moving on to our products.

In 2024 and Q1 2025, we completed the acquisitions of OpenReel and Vidello. These products will be operated under a consolidated video business unit within Banzai that is focused on helping marketers leverage video to engage their leads and customers more effectively. This consolidated business had pro-forma revenues of $16.7 million in 2024, which represents 267% growth compared to Banzai standalone in 2023. I'll pause here and I'll point out that this slide, the scene that you're seeing here, are assets from Create Studio.

Our Vidello subsidiary makes Create Studio, a leading product for creating 3D Pixar-style videos quickly and easily. It includes over 1,000 pre-built assets customers can leverage in their projects and has over 85,000 customers as of March 31, 2025. Vidello also includes products for video marketing, live images, and royalty-free audio. In February, we launched Create Studio 4.0, the latest version of the award-winning video creation app developed by our Vidello subsidiary. The Vidello business delivered $6.1 million in revenue and $1.5 million in net income in 2024.

Meet OpenReel. Our OpenReel product enables customers to capture, create, and edit brand-compliant, production-ready videos. It enables remote capture from any device and AI-powered editing to streamline customer workflows. The OpenReel business has over 650 mid-market and enterprise customers and delivered $6.3 million in revenue and $0.1 million in net income in 2024.

Finally, Demeo. We're continuing to see traction with Demio, our AI-powered webinar platform, which you're all joining us on today. We've made enhancements to the platform's integration with HubSpot, Salesforce, and Pardot to offer advanced contact management, UTM tracking, and seamless data synchronization at both the session and contact levels. Demio has an industry-first feature, event insights, pre-event analytics delivered to your inbox, tracking registrations, cancellations, room size alerts, peak days, and top channels.

This empowers Demio users to make data-driven decisions and maximize attendee engagement to better leverage everyone's time. Our AI moderator to Demio, powered by our own LLM, custom designed to this purpose, allows our customers to train an AI to join their webinars to assist their attendees. Demio is built to empower marketers to streamline their webinar management and marketing efforts, ultimately leading to better business decision-making and higher ROI for our customers. In January 2025, we announced a definitive agreement to acquire Act-On Software. Act-On is a leading marketing automation platform provider. It's expected to be accretive to Banzai's overall revenue and net income in 2025. This acquisition is subject to the satisfaction or waiver of closing conditions and is still in progress.

Curate, which we launched late last year, is a groundbreaking AI-powered newsletter platform that writes and grows itself. Leveraging OpenAI's GPT-4o to automate the newsletter creation process, Curate writes relevant, branded articles that resonate with target audiences. Newsletters are a key modern engagement tool for businesses to highlight their brand for their existing and prospective customers, but they currently require significant time and resources to create and maintain. Curate was made to take down the cost and effort for our customers to create high-quality newsletters by 90%. This is a really cool product, by the way. If you're interested in a demo, send me an email after the end of this and I'll make sure it happens.

Driven by our acquisitions, we've substantially scaled our customer base to over 90,000 customers while retaining leaders from various industries. Some of our key customers and partners include Cisco, Adobe, Thermo Fisher Scientific, Microsoft, Dell, Capital One, RBC Global Asset Management, among thousands of others. We serve a variety of industries, including healthcare, financial services, e-commerce, technology, and media in over 90 countries. We're continuing to focus on targeting the mid-market and enterprise segment while still supporting small businesses. We're taking a disciplined approach to focus on acquiring stickier, higher-value customers.

Banzai continues to be focused on our strategy of building and buying new products across four key areas: attracting leads, engaging content, tracking, and intelligence. We feel these areas are key to marketing success both now and in the future for our customers. Our growth strategy is centered around our secret sauce, our land and expands model. The land phase is securing a customer for one Banzai solution based on their needs at the time. With the variety of complementary tools that are now in our product suite, we can then upsell that customer to increase NRR or the expansion phase. We're targeting a 10% cross-sale rate per business unit in 2025.

Our vision is to build a moat in two key areas: integrations and AI enablement. By combining multiple products on a single platform, we can simplify customers' workflows and deliver on our brand promise of 10 times faster and easier solutions. Long term, we believe AI enablement will be key to marketing success. We believe that adding more products with more data will enable us to deliver more powerful AI features over time. Our business model is based on a flywheel where great products lead to growing customer usage, which then drives additional data and content on our products. This data and content enables us to create additional high value or create additional customer value through integrations, automations, and AI features.

Over time, we believe that this flywheel will be key to driving customer expansion and the continued organic growth of our business. We see an enormous potential for long-term value creation by scaling via strategic acquisitions in addition to organic growth. We're taking a diligent approach to evaluating potential candidates that can align with the key themes of Banzai's AI-driven platform. Again, attracting leads, engagement, data, and intelligence. 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, and hopefully to benefit from multiple expansions along the way. I will now turn the call over to Alvin Yip, Interim Chief Financial Officer, to discuss our financial results. Alvin?

Alvin Yip (Interim CFO)

Thank you, Joe. Hi, everyone. I am going to do a financial summary on the Q4 and the 12-month full year financial. Total revenue for the fourth quarter of 2024 was $1.3 million compared to $1.1 million in the fourth quarter of 2023. However, we believe the non-GAAP metric, annual recurring revenue or ARR, is more meaningful in evaluating the company's performance. ARR was $6.8 million for the fourth quarter of 2024 and represents a 46% increase from the fourth quarter of 2023.

Gross profit for the fourth quarter of 2024 was $0.9 million compared to $0.8 million in the fourth quarter of 2023. Gross margin was flat at 71% in the fourth quarter of 2024 compared to 71% in the fourth quarter of 2023. Total operating expense for the fourth quarter of 2024 were $4.8 million compared to $4 million in the fourth quarter of 2023. Net loss for the fourth quarter of 2024 was $7.8 million compared to a net loss of $6.4 million in the fourth quarter of 2023.

Non-GAAP adjusted EBITDA for the fourth quarter of 2024 was $1.44 million, reflecting a net loss of $7.9 million before changing the value adjustment of common stocks warrant issued, goodwill, and other bifurcated embedded derivative liabilities for a total of $4.2 million. Loss on extinguishment of debt and other expenses for $2.3 million and is a sequential improvement of $0.03 million compared to the adjusted net loss of $1.47 million for the third quarter of 2024. This represents an annualized improvement of approximately $0.12 million. Non-GAAP adjusted EBITDA had a loss of $1.44 million for the fourth quarter of 2024, reflecting a sequential increase of approximately $7.8 million in earnings when compared to a loss of $9.2 million for the fourth quarter of 2023.

This period-over-period increase in earnings is primarily attributed to the company's overall cost-cutting efforts made in general and administrative marketing and technology expenses and represents an annualized improvement to adjusted EBITDA of approximately $31 million. Total performer revenue for the full year 2024 was $16.7 million compared to the $4.6 million in the prior year, reflecting a sequential increase of approximately $12.1 million in earnings.

Gross profit for the full year 2024 was $13.6 million compared to $3.1 million in 2023. Gross margin was flat at 81% in the full year 2024 compared to 68% in 2023, reflecting a sequential increase of approximately 13%. Cash and cash-equivalents totaled $1.1 million on December 31, 2024, as compared to $4.3 million on September 30, 2024, and $2.1 million on December 31, 2023. I will turn the call back to Joe for some closing remarks. Thank you, everyone.

Joe Davy (Founder and CEO)

Thank you, Alvin. Hopefully, everybody can see why we were so excited to share this update with you all. Before I close, I'd like to review our 2025 forecast for our consolidated company to include OpenReel and Vidello. I'll give the disclaimer that this is a forecast and we like to be transparent here, but as was said at the beginning of the call, this is a forward-looking projection and may change, and we are not required to disclose those changes if they occur.

As you all know, we have taken the approach of trying to be transparent to the market, and that's why we wanted to share this today. Our pro-forma revenue for the full year of 2025 is projected to be just shy of $20 million, which would represent a 19% increase from full year 2024 actual revenue. Our pro-forma net income is projected to be $1.4 million in 2025, reflecting our transition to be a profitable company on a GAAP basis, which is something that we're very excited about.

In summary, with a fortified balance sheet, a massive customer base, and an expanding product suite, we're making steady progress towards profitability and long-term growth. Something I would like to note is our minimal exposure to geopolitical and tariff risk that is impacting many global businesses at the moment. We have an asset-light, scalable business model, and as such, we're projecting substantial revenue growth in 2025. Apologies for that.

We are consistently evaluating potential value-added acquisition opportunities that can further accelerate our growth. We're well positioned for success as we execute on our strategic initiatives, and I look forward to providing additional updates in the months to come as we work on building long-term value for our shareholders. Thank you, everyone, for attending, and I would now like to answer your questions. Operator?

Operator (participant)

Currently, do not see any in the chat. Okay, we got one coming in. We've got a couple coming in. What are your top strategic priorities for 2025 to maximize the value of OpenReel, Vidello, and Act-On? And how will these drive long-term shareholder value? How do you see Banzai's expanded portfolio positioning the company against competitors in the marketing technology space?

Joe Davy (Founder and CEO)

Okay. First of all, thank you for the question. Our number one strategic priority is to integrate these products so they work seamlessly together, so a customer that uses one of those products can utilize any of the other ones. I think that this is basically the way I think about this is really simple, right? A customer comes to us on one of these products, they typically have a very specific problem to solve. Customers in the marketing world, they're not looking for tools, they're looking for marketing enablement.

They're looking to solve a problem within their business, and they're looking for a specific solution to that problem. Over time, though, those customers tend to have additional problems. The analogy I love here is get a customer in one door, just like you're at a stadium, get a customer in one of the entrances, but once they're in the stadium, you can sell them the same beer and hot dogs and pizza everywhere in the stadium.

That's basically our approach to integrating these products. We want the products to work together smoothly so that it's really easy for customers to go buy that extra hot dog or go buy that extra beer. That's really what our focus is right now technically. I would say from a business standpoint, this is really about operationally getting those teams to work together well.

In other words, integrating the different product teams, integrating the different customer success teams, sales teams, marketing teams so that we can kind of go to market with a single voice so we can upsell customers in a cohesive way. We think that a lot of the growth and the value of this strategy really comes from customer expansion and upsell over time. I think the key is making the products work well together and then making our teams work well together to go take those products to our customer base. That's a high level. I hope that answers your question.

Let's see. I'm just going to go through these kind of one by one. This question, when would 2025 Q1 results come out? Right now, we're expecting Q1 results to be out on May 15th, 2025.

Alvin Yip (Interim CFO)

Correct.

Joe Davy (Founder and CEO)

This question from Sandra Gale, are you closing on Act-On soon? I can tell you, Sandra, we're actively working on this. Obviously, can't give a specific date as to when that will be complete, but I can tell you that we're making meaningful progress towards that, and we will keep you updated. Let's see. I've got a question here about when do we expect the value of the stock will return to the old value? I think that's a really great question. I think that there have been a lot of factors impacting the stock price in the last few months.

I would say probably the number one factor impacting the stock price in the last month and a half has been just the general kind of market chaos that has impacted everyone. Hopefully, what we'll see is as people start to realize, investors start to realize that our business is not really impacted by any of these potential tariffs, that we have really minimal exposure to that, and also that I think we potentially stand to do really well in an environment where customers are trying to do more with less, trying to get more efficiency out of limited marketing dollars, trying to fight for every dollar of revenue.

I think a lot of customers turn to better marketing technology to enable that. Our hope is that the market will kind of recognize the value that we've already created through these acquisitions. I think that we'll start to reflect the benefit of some of these acquisitions more in our GAAP financials starting in Q1. We reflected it just in a very, very small way in Q4, but I think we'll have a more full recognition of that in Q1, and then probably an even more full recognition of it starting in Q2.

I think we'll start to see that phase in, and hopefully that will be viewed positively by the market. Our view is that we're working really hard to get the stock price back up to the levels that it's been at, and we're certainly doing everything that we can to make that happen. Thank you for the question. I always appreciate the tough ones. Let's see.

Here's a question. How's the market traction been for Reach 2.0? Can you share metrics around usage growth or new customers added for Reach 2.0 since launch? Can you comment on the acquisition pipeline or leading plans to continue? I'll just go ahead and say this is about five questions in one, but I'll just try to run through them pretty quickly. First of all, market traction for Reach 2.0 has been good. These customers tend to be larger customers than the average Demio or Create Studio customer. There are fewer of them, but they're bigger. We've also seen some cross-sales. We've seen existing customers utilizing Demio, for example, starting to utilize Reach 2.0. That's been really great.

I don't think we've shared any specific metrics around the breakout of customers or anything like that, but I can say we've been relatively pleased with the early results. I think the product is working really well for a number of the customers that are using it. That's really the bellwether for any new product coming to the market, is can you get customers that really love the product? In terms of the acquisition pipeline, look, what I'll say here is we're very focused on Act-On right now, and that's our number one priority.

Obviously, that's a huge transformative acquisition for the business. I can't comment on any specific companies that we're looking at or talking to, but I can say we're receiving new opportunities coming into the pipeline almost every day, at least every week. It's definitely a focus of ours, and we're seeing some really attractive assets on the market right now. I think there's going to be, hopefully, some interesting stuff that occurs there over the rest of this year, 2025. The plan is to continue with the acquisition strategy in 2025. Obviously, we are focused on organic growth as well.

We have got an operating business that we are growing organically, adding new customers, cross-selling, and then we are also looking at things that are value-added to our customer base. One of the key things that we are always looking at is basically, do we think this is going to create shareholder value or not? I have heard comments from people about dilution and things like that. We are always focused on anytime we buy an asset, we think we are getting more than we are paying for it. We think that it is a one plus one equals three, and then our job is to run it well.

In terms of Q4 net revenue retention, I can say I do not think we disclosed a specific number, but I can say that Q4 net revenue retention hit a historic high. We saw very strong retention and expansion in Q4 compared to prior periods. In terms of traction in specific verticals, I would say the ones that stand out to me as being the interesting opportunities right now are things like healthcare, financial services, insurance. We're seeing a lot of customer inbound, a lot of traction in those areas. We're also seeing opportunities with things in the data center space, the cloud space.

I don't think we're not a business that's really built on going after any specific vertical. We're a very diversified business, but I think there's a lot of opportunities in those areas. We are looking at, are there specific things that we can go after in a specific vertical, specific use case for that vertical that we can build and we can own and be better than anybody else in that space? That's a big focus of ours right now. Thank you for the questions.

Okay, this is a good one. How's the integration with the new acquisitions going? I'll say I've already addressed the Act-On question, so I won't touch that one again, but I'll say the integration is going really fabulously, in my opinion. I think the teams are getting along really well. I've been really impressed by how quickly everyone has started thinking of themselves as part of Team Banzai. We've already got customer cross-sales with every product, I think. Maybe there's one that's pending right now on a kind of enterprise deal.

We've already got a big pipeline for cross-sales across all the products, starting to see the first deals close. Product integrations are in the works. Product management is starting to think about this as a single video business unit, and that's going really well. I think with Act-On, we're thinking about that as a kind of a separate business unit, a marketing automation business unit that will expand the capabilities beyond that when it closes. That is really exciting. Thanks for the question.

Let's see. Edward asked, I think we've kind of already touched on this, but I think one important question here is, will you need to focus on integrations of the three recent acquisitions first before you pursue new ones? I'll say, first of all, like I said, we're actively working on getting Act-On closed, but I think the way that the integrations have gone, we've been really, really pleased with them. We do not foresee integration being a major barrier to doing additional acquisitions. I think we've got a great playbook for this. We've done a number of these now. We're starting to build a muscle around this.

I think we could easily go do a couple more this year and continue to see some of that scale. Again, hopefully find some of these opportunities that are profitable, growing, have great products, sticky customers. The number one thing that we look at is, does this solve a new problem for our customer base? That's definitely still a focus for us. Thank you for the question.

Okay, this question, how's the launch of Curate and Reach 2.0 performed? I mentioned a little bit about Reach 2.0. I'll say this is asking about Curate as well. I'll say I believe we've got something like, I mean, Curate, first of all, launched, I think, just at the end of Q3 or the beginning of Q4. This is a pretty new product for us. I think I want to say this launched in October or November. This is pretty new for us. I think we've already got 12 or 13 workspaces live on this now. We're starting to see a lot of traction with Curate.

We've made a lot of improvements to the product based on initial customer feedback and stuff like that, starting to get customers live on it. I think it's going really well. I think our sales team is continuing to field interest around it. One thing that's been really interesting is we've seen a lot of customers that want to buy several of these products together. We've had a lot of opportunities come up for things like Demio, Reach, and Curate as a single bundle. I think that's going to be really interesting. Thank you for the question.

Patrick says, for the coming year, adding in the first quarter acquisition of Act-On, I see revenues of $50 million and share count of 50 million. Can you please comment on this? I would say, look, directionally, that's probably about right. I think that you can work backwards in terms of your math to figure out what an appropriate share price would be under that. I think it's probably north of where it is right now.

We've seen companies like Adobe that are trading for, I want to say, the last I looked at it was trading for about a 9.8 times revenue multiple. There are definitely businesses in this space with very attractive revenue multiples. Hopefully, we'll start to realize a multiple more in that range. I think we shared earlier that we see gross margin definitely improving this year.

I would say gross margin will probably be north of 80% for the year or at least in that range. We are looking at positive net income for this year, hopefully. I think Act-On is accretive to all of those things. It will add to revenue, it will add to net income, and it will probably contribute positively to gross margin as well once that closes. Thank you for the question, Patrick.

Do I think the stock price will go up with the 2024 earnings? I certainly hope so. It certainly looks like it has today. That is positive. Hopefully, it continues to go up. Thank you for the question. I certainly think pretty much everything in our Q4 in 2024, there is a lot of positive news here to digest for the market. I think we've made huge progress on a number of different fronts: cleaning up the balance sheet, improving the efficiency of the business, growing the top line, all of those things. At the end of the day, I don't control the stock price, unfortunately. I wish I did.

I can control, do we run a good business and do we build a good business over time? Myself and the rest of the team, we're really just focused on every day trying to get more efficiency, get the balance sheet stronger, look at interesting businesses that we think strengthen our overall business. That's our goal. I believe over time that will build a stronger business, and hopefully, that will be reflected in our stock price. Thank you for the question.

Okay, here's a question. What have you seen in terms of web traffic and sales for Q1 2025? I can say, first of all, we've got a lot of websites because each of our products tends to sell through its own website. We have a website for OpenReel, a website for Create Studio, a website for Demio. I don't know that I can comment specifically on web traffic, but what I can comment on is I think we saw really strong efficiency numbers in Q1.

We launched a new website for the OpenReel business. That's gone really well since launch. We launched a new version of our Create Studio product, Create Studio 4. That had a tremendous sales response. We've continued to see just a steady increase in efficiency of ROAS and sales efficiency for that product. I think Q1 was generally very positive. We're looking forward to sharing the Q1 numbers in about a month. Thank you for the question.

The question is, for Act-On, would you expect that to be in Q1? If it closes sooner, it would be on Q2. The way GAAP accounting works is the financials of the acquired company are only integrated in post-closing. Our Q4 only included just a sliver of OpenReel because it was closed, I think, 13 days prior to the end of the quarter. We're expecting those results will be realized fully in Q1. In Q1, we closed on Vidello. We're going to recognize two months of that in Q1. If we close Act-On, let's say we close Act-On tomorrow.

I'm not saying that's going to happen, but I'm saying let's say we did, then it would only be from April 16th onward that we would include it. That would be included in Q2. Just to clarify, that's more of a GAAP accounting issue, but I think we're going to see the acquisition financials integrated more in Q1, probably more in Q2, and hopefully onward from there. Thank you for the question.

Let's see. This is a great question. Have you noticed any big change with lead times for sales cycles, signing new customers? Are CTOs and marketing departments more cautious about entering, acquiring, renewing new enterprise software? I will say, I'll just give you a couple of anecdotes here. Our velocity right now is well, well, well below our target, which is a good thing, right? Velocity means how long does it take us to close a customer? We're beating that velocity target on every product line, I think, right now.

I'll also say we're not seeing, I don't think we're seeing customers being more cautious. I actually think we're seeing the opposite. We're seeing customers that are locking in longer-term contracts to secure larger discounts. I can say we just signed a five-year contract a couple of weeks ago. I don't think I can disclose what customer it was with right now, but we signed a five-year contract with a customer that's a meaningful revenue to the company. They were able to lock in a discount over that period of time, which is good for them.

We were able to lock that customer in for five years, which is obviously good for us. We've signed a number of these multi-year renewals in the last 90 days. I think we're looking to do more of that. In a lot of cases, customers are looking to lock in longer-term cost savings and use that as an opportunity. I think when you've got a mission-critical product, customers aren't, it's not as much of a question of the renewal or not.

A lot of times, it's a question of what's the structure that's going to be most efficient for them in terms of the value. We can do something where we get the customer a little more value by offering them a multi-year contract. I think that benefits both us and the customers. We like those situations. Thank you for the question.

Why do all these acquisitions not translate into the share price increasing? I mean, that's a fantastic question. Again, I wish I knew why the share price, the market has not responded better to a lot of the news that we've put out. I think the news we put out is phenomenal. I think you can go to PitchBook and you can look up what companies are transacting at. I think the last number that I saw was the average acquisition was something like 4.8x next 12-month revenue. So far, next 12-month revenue is $20 million.

You could infer that that would put us somewhere in the $90-$100 million range in terms of what somebody would be willing to pay for the company today. Now, I'm not saying that's the case. I'm not saying that we're looking to sell the company. We're not because I think we have a lot more value that we can create here. I do think the share price right now is silly.

Hopefully, the market will start to recognize and start to price in some of the huge milestones that we've achieved in the last 90 days. Frankly, that's one reason that we're really excited to get this report out because I think putting out 2024 helps. I think putting out Q1 will help. Really, I think hopefully the market will continue to respond. Thank you for the question.

Here's a question from Van. Is Banzai open to the possibility of being acquired by some large-cap Martech company? What's your opinion on the likelihood of that happening? You also mentioned hard work on showing profitability. Is it realistic for investors to expect that? If so, when do you think that you could deliver on that promise? Thanks. This is a great question, Van. Thank you.

Let me start with the first one. I kind of just addressed this, but frankly, I would say we have been approached by a couple of folks. I'm not saying whether anything has come of that. They were very casual conversations. I would say definitely our view is that there's more value still for us to create in this business. I think we're very, very focused on continuing to scale the business up, continuing to execute. I think this business is even more valuable when we get to $100 million or $200 million or $500 million in revenue. Right now, our heads are down.

We're very focused on trying to get to those milestones, very focused on trying to close Act-On, very focused on trying to look at the opportunities beyond that, continue to manage the business well, continue to grow organically, all of that. Right now, we're just very focused on our knitting. I think there may be opportunistic things that happen in the future, but can't really comment on that very specifically right now. Definitely appreciate the question. I think we'll see what happens.

If we create a really valuable business, I think as a general heuristic I've always had in my life, I think you create a valuable business, there's people that want to own that business. I'll just kind of leave that at that. Your second question here is about profitability. I think as we said earlier, we are forecasting to show profitability in 2025. I think I can't comment on exactly when that's going to happen, but I think I'll just say we think that we're going to reflect a lot of the benefit of the acquisitions and other things that we've done strategically, the debt repayments, things like that.

A lot of that will be reflected in Q1. I think it'll be more fully reflected in Q2. Hopefully, as those things start to more fully reflect, the business will get more profitable. I think that people will hopefully be pleased with the financial results we deliver this year. At the end of the day, profitability is the result of having a great business that's operated efficiently. Having great products, great customer relationships, great processes, great discipline. That's really where our head's at right now is working on that. I believe that that will show up in terms of profitability over time in the business. Thanks for the question.

Finally, question here from Mohammad. How do you react on tariffs? I will say just objectively, I personally, I'm a fan of free trade. I don't think that tariffs are good for free trade. I'm a fan of entrepreneurship. I'm a fan of innovation. I'm a fan of people being able to sell their products to customers that find them most valuable. I'm a fan of open markets. In general, I'm not a huge fan of tariffs. I also studied economics in college. I think you're hard-pressed to find a lot of economists who are big fans of tariffs. All that being said, I don't think the tariffs really impact our business.

As I said earlier, I think there is a potential that they could create a positive tailwind for us if customers decide that they need to get more efficiency in their marketing, if they decide that they need to leverage more AI, that they need to leverage more automation to gain that efficiency. Look, I think that could benefit us potentially. Our products are not really the kind of products that are subject to tariffs. Most of our customers are in the U.S. anyways. I think it is not really probably a huge concern for us.

I do not think we do not really right now, the tariffs seem like they are mainly going to end up being between the U.S. and China as things stand today, although things have been changing fast. It is a dynamic environment. The Chinese market is not an important market for us as a business as it stands today. I do not really see the tariffs impacting our business adversely at all. I appreciate the question. It is something that we are getting asked about from time to time because people are curious about it and they are wondering what is going on. Thank you for asking. I hope that was helpful.

I believe that is all the questions. I will just say thank you all for joining the conference call today. I look forward to updating 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, who would be more than happy to assist. With that, you can see their contact information on the slide that's on the screen here.

By the way, this scene is a scene that's available in Create Studio. If you want to go build 3D videos for your own business, go check out Create Studio, createstudio.com. Okay. That's my last shameless plug. Wouldn't be a good CEO if I wasn't selling you guys a little bit, taking every opportunity I can to sell software. Thanks so much for joining. We appreciate it. We will look forward to the next call.

Alvin Yip (Interim CFO)

Thank you, Joe. Thanks, everyone.