Rezolve Ai Investor Day: Financial Overview - REZOLVE AI PLC

Good afternoon everybody and thank you for staying with us. It's been a great morning hopefully. I think it's great to see the amount of turnout from everybody and the fact that you guys are all staying. But my name is Arthur Yao, I'm the Chief Operating Financial Officer and with me is Kate Goosen who is our Deputy CFO. She's also the CFO of Result Reward Business. We spent this morning discussing the market opportunities, the products, our partners, and our technology. This investor day is really for our investors, analysts, partners, to really get to know the rest of the Resolve leadership team. Some of you may probably know Dan and myself, but this is probably the first time you started the Engage with Lawrence, Michelle, David, David, Shovig, James, Kate, I think these are the people that really does the hard work that delivers these results. We have this amazing team behind us that you guys probably have heard about but never seen. So I think this is a great chance for you to be able to meet with these individuals, talk to them, engage with them. I miss Naga as well. So again, this is the team that really has really created and been able to deliver the results that what K&I are going to do is just represent the results that they have delivered to, okay? So we don't actually do the hard work. We just consolidate all the hard work that's been done, okay. So this afternoon, K& I'm going to go show you three things. What have we built today? What it earns? And how do we get this business to profitability? So let me begin with a journey, okay, because I think as some of you have been with us and some investors I was just for the first time meeting was telling us they'd been with us for a year, two years. So this journey started, you know, when we started 2025, we have very little revenue. And, you Know, in the first half, we basically deliver 6.3 million. And in the second half, 40.5. So for the total year in 2025, We had 46.8 million. And then in just the 90 days, that's the first quarter of this year, we deliver 60 million. which is more than we delivered the entirety of last year. And in the first half, we delivered $130.8 million, which is almost a 2,000% year-over-year growth. So we started in 2025 with limited revenue and a very unique technology with 30-plus patents. And we set out to build this hyper-growth company. And I think a lot of you may have heard, we're going to exit $100 million ARR, then became $150 million ARRR, and 200 million AR you know so we had a vision for this business of creating this hyper growth company and in the last 18 months we've delivered on this promise right so by these numbers alone you'll see that so our customer base has gone from a little over 100 to now over a thousand we have built a distribution network with Microsoft, Google, TCS and Tech Mahindra and now MasterCard that we just announced and you know what we have done is we've crazy this just revenue at this order on sitting on this base of installed base of 10% growth is really an operating platform and the last two years was really about building this platform okay so now you know it is the foundation of what we call winning the enterprise so we have this set of customers that we We really need to land, we've landed, now we need to expand and deepen. So deepening a relationship costs us only a fraction of what it takes to win it. So now the opportunity is in front of us to really capitalize on these thousand plus customers to really deepen and expand and take forward our entire tech stack. Now I'm going to turn to Kate to discuss the number in detail. Thank you, Arthur. Hi, everyone. and I've spent the better half of the last 20 years working with large global businesses and helping them scale multinationally. I wanted to go a little bit behind the headline numbers that you're all probably familiar with and really tell a story of the headline versus underlying numbers because they're the two halves of the same story. So the key numbers that I want you to remember from this page. Number one, the H-1 2026 GP of $63.9 million versus the GP for the same period in 2025 of $6 million. The other number I want you to remember is the reported operating loss. So if you scroll through 181 pages of the SEC filing, you will see the operating loss of $128.1 million. However, the number I really want you to remember is the H1 2026 adjusted EBITDA of negative 32.6 million, right? And by the way, as a reminder, for 2025, that number was negative 17.7 million. What is behind this reported loss, which seems very high? Well, actually, 41.5 million of it is share-based compensation. And you know how you're able to meet and hear from so many talented people here this morning? It's because of the share-base compensation, because that's how companies of our size can attract the type of talent that we attract. The other number that's part of this loss is 20.4 million of depreciation and amortization. I want you to know and remember that neither one of these metrics takes a single penny out of the business, meaning it's not cash, it does not decrease our profitability. I think that's an important point to remember as we think about how did we scale as a business, right? The other thing that my adjusted EBITDA number doesn't include are the costs that are associated with putting this enterprise together. That includes the fundraising fees, the costs at go with completing M&A processes, litigation settlements, acquisition integrations, we're an acquisitive business, office moves, and removal of duplicative roles. All of these things are finite and they're one time. They do not represent the recurring business that we run every day. So as a result, I want you to remember the adjusted EBITDA margin of negative 24.9 million. I want to point out that that is already 256 percentage points better than the same adjusted EBITDA margin that were reported in H1 of 2025. Please remember this number because I will come back to it in a little bit as we proceed. So while the loss, the adjusted EBIDDA loss in absolute dollars is bigger than what it was a year ago, as a percent of revenue, it is tremendously more narrow. more narrow. And that's how a business of this scale is going to grow, right? This is exactly the trajectory that you expect and you probably want when you're looking at a scaling business of our size. We are growing our revenues against a stabilizing and largely fixed cost base. There are a few points on the balance sheet that I actually wanted to touch upon. Number one is that by the time we exited june 2026 we had 100.5 million of cash including some restricted cash the reason we call out that number is because i cannot use of it all of it right away towards my full operating model i still use it towards some of my operations but there is a restricted limitation to what i can do with this cash the other bit that i wanted to touch upon on the the balance sheet is actually the share buyback program. And this is an important point. We're a NASDAQ listed company and in all the U.S. listed companies, if you want to do a share buy back, well, frankly, you just do a shared buyback. However, we are a scaling enterprise global business, stabilizing and growing our presence in the U S. However as far as the regulators are concerned, we're an Englishman in New York. And as a result, I have to abide by the laws of the United Kingdom, where I need to declare and get approval from the regulatory agencies and the court that if I want to do a share buyback program, it has to be approved. You probably saw this morning, it was approved by the court. So now if we choose to do share buybacks in the next period if the market conditions are favorable now we can do so as as we scale we wanted to have multiple ways of addressing the market when we need to I'm gonna hand it back to Arthur to talk about how we came together okay thanks Kate it is worth for us to sort of look at from our business from the outside you know we actually instead of just the us talking about ourselves we have a lot the analysts actually who cover us in the room here today. So we have six analysts that cover us and all of which gives us a buy or a strong buy rating with an average price around $10 a share. So this really shows that there is a market confidence in our O4 business. So, you know, but before we talk about turning to profitability, I want to set up where our business stands today. We really spent the last two years building the core assets for our growth. So So we have built a go-to-market organization where, and I've talked about this in some of the other discussions, where we've hired a set of sales market and some of the leaders here today as part of those hiring. We train with in-market, with infield, a go to market organization. We have four or five of the largest hyperscalers in the world as partners, as the distribution partners for us. We have the service partners that we're looking to transition a lot of our lower margin business into, so therefore we can focus on our core SaaS revenue. We have more than a thousand enterprise customers as our install base, where it's really about land expand and deepen. And we have created this agentic infrastructure layer to support our entire product stack. And this agent layer, which has only recently we started to potentially look at opportunity license so you know we really have good created this huge asset set okay that took the last two years of building so that we therefore we can grow at this with a high growth company as well as being a profitable company because we've had invested heavily to build these assets in the last two years okay so with this in place I'll let Kate talk about our path to profitability which is critical for how we will need to become a profitable business okay thank you Arthur can you guys hear me without the great mic oh the mic is for them the this that's for the got it thank you okay so as a lot of you probably have seen we've announced a few weeks ago our path to get to profitable operations. So what I'm going to address today is how we're planning to get there. As you probably all know, there are two levers that any company has at its disposable to get to profitability. Lever number one, growth margin, and that is what do we sell? Lever number two, operating costs, how efficiently we sell it. These are different parts of the income statement, but they actually lead us to the same place, and that place is profitability. So I'm going to start by talking about lever number one, which is gross margin. Our current gross margin is at 48.9%, and those of you who cover software probably will say, hey, that's low. Well, actually, we're at the moment a much more than just a pure software business. We've acquired Reward in February in 2029. Reward is a loyalty business that carries structurally lower margins at the gross profit level. And we're also a professional services organization. We have 700 people who are currently preparing customer catalogs. That also inherently carries a lower margin in its structure. Our cost core software margin, however, is at 90% or above. And this revenue mix is actually moving in the favorable direction for us in the coming months and in the upcoming years. As we sell more software, as we realize more recurring platform and licensing fees, resolve margin starts to rise. As these services become a larger share of the total product suite, again, the blended margin again goes up. In addition, and this is important, and you've heard from TCS, who is one of our key partners, our services organization is moving to our partnerships and integrations. Our partners are going to start driving implementations while we will supply the technology. a structural margin improvement for the long term. Now I'm going to talk about lever number two and that is operating cost efficiencies which we've announced a few weeks ago. What that means is that we're not going to stop investing but it means that we are going to start focusing on removing some of our duplicating and underused assets and spend. Once that is fully implemented we expect circa 60 million of annualized benefit to our p l how are we going to get to some of these initiatives that that that we hope drive this number one is going to be around uh cloud and tech capacity number two we're gonna get rid of um some of the duplication from the acquisitions that we've made. I already talked about office and surplus space. We're going to focus on ROI-based marketing. You know, our customers, retail, is looking for ROI- based marketing. Well, guess what? We're gonna look to get the same. And again, we're gonna be more selective about the future acquisitions that we make. As we pursue these actions, we also expect that our one-off costs are going to start falling away, such as fundraising fees, litigation settlements, integration fees, restructuring costs. These are real costs, but they're not part of my recurring, ongoing spend. These Are the real costs that are finite, and we expect them to start decreasing. When we bring the two levers together, we get to a rising gross margin, and we get to falling operating leverage. Where do they meet? They meet at an improving adjusted EBITDA and break-even profitability. So coming back to 24.9% of adjusted EBIDDA margin, the actions I just described close the gap. And over the next 12 months, we expect to get to break even adjusted EBITDA, so an improvement of 24.9% margin by the time we exit H1 2027. These actions are actually going to set us on a path towards recurring operating cash outflows in the vicinity of circa 20 million in the second half of 2027 I want to reinforce and this is important that this plan, this profitability plan, does not in any way jeopardize or implicate our investment for growth. We will continue investing in Resolve Pay, Resolve Reward, Brainpower, Underlying Infrastructure, Resolve Insight, and Resolve Commerce. So to reiterate everything that I've just said, right, our GP optimization and our decrease in operational cost initiatives help us to compound our fifth priority which is a resolved margin. We're scaling and becoming more profitable. It's profitable revenue against optimized fixed cost base. Each incremental deployment, and this is important, each incremental deployment that we do, it's going to cost us less than the prior one and that is how we're going to optimize our operating leverage. I'm going to I'm going to hand it back to Arthur to bring it all together for us. Okay. Wow. Okay. Thank you. So we're nearing the end. Okay. So let me bring it altogether for today's whole session. In the last 18 months, we went from 6 million in the first half of 2025 to 130.8 million in the the first of half of 2026, from 100 enterprise customers to well over 1,000. And onto one platform that's distributed by five of the largest technology companies on the planet. You know, I want to reiterate the 60 million annual cost reduction that we have set out because this is a very important action that we're taking. And it is based upon a lot of deep analysis of our organization. And to achieve that, you know, we reiterate what Kay said. We have to, you now, achieve the synergies from all the different acquisitions that we have acquired, optimize our cloud costs because of some of those acquisitions as well, consolidate offices, which we've already started doing in London and certain other places, reduce our legal and acquiring fees, and then as she said, focus on high ROI marketing. And these five areas are actually all within our control, and we've only executed in many of those areas already. And that will then result in an adjusted EBITDA positive exiting first half of 2027. We have proven that we have the ability to build a hyper-growth company. Now we're going to prove to you that we can build a profitable growth company. The expensive part of building this company is behind us, and the most valuable part is in the future. So with that, thank you everybody for coming, and we're gonna go to Q&A next. Thank you.