Good day, and thank you for standing by. Welcome to the Rezolve AI Second Half and Full Year 2024 financial review and 2025 Business Update Conference Call. All participants are in a listen-only mode. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Michael Guido, VP of Invest Relations. Please go ahead.

Thank you, Sharon. Good morning to everyone in the US and good afternoon to everyone in Europe. Welcome to Rezolve's 2024 earnings conference call where we will be discussing our second half and full year 2024 financial results, as well as providing a 2025 business update. Leading today's discussion are Dan Wagner, Rezolve's Founder and CEO; and Rich Burchill, Rezolve's CFO. We previously reported our 2024 financial results and issued an earnings release on those results, as well as a year-to-date 2025 business update on Thursday, April 24. The earnings release and SEC filings can be found on our Investor Relations website. Today's discussion will include statements that constitute forward-looking information or forward-looking statements. These statements reflect management's current beliefs and expectations and are subject to a number of factors that may cause actual results to differ materially from those statements. These factors include, but are not limited to, those discussed in our SEC filings. These statements do not guarantee future performance, and therefore undue reliance should not be placed upon them. We do not intend to update these forward-looking statements as a result of new information or future developments, except as required by law. Additionally, our discussion will include both GAAP and non-GAAP financial measures. These non-GAAP financial measures should be viewed in addition to and not as the substitute for Rezolve's reported results prepared in accordance with U.S. GAAP. All non-GAAP financial measures referenced in today's call are reconciled in our annual report on Form 20-F for the fiscal year ended December 31, 2024, to the most directly comparable GAAP measures. For more information regarding definitions of our non-GAAP measures, please see our end report on Form 20-F for the fiscal year ending December 31, 2024, and earnings release, which are both available on the Investors section of our website at www.rezolve.com and on the SEC's website at www.sec.gov. Finally, as a reminder, today's conference call is being recorded and the replay will be available on our Investor Relations website. At this time, I'd like to turn the call over to Dan Wagner.

Thank you, Michael. And good morning and good afternoon to everybody. I'm excited to welcome you to our first earnings call as a publicly traded company. Going public is a significant achievement for Rezolve. And I wanted to take a moment first to thank our team for their hard work and their dedication as well as our investors for their support as we look to revolutionize the e-commerce experience for consumers worldwide. As I reflect on where we find ourselves today, I believe it's important to highlight that our journey is the culmination of decades of experience our team has dedicated to advancing search, commerce and cloud technologies. In fact, throughout our careers, we have a long history of being at the forefront of technological change and developing innovative solutions that have created value for merchants and consumers alike. I'd like to briefly highlight some of those achievements to provide greater context for why we believe we're well positioned to successfully level up commerce in a meaningful way. Early in my career, I led a team that created the first commercial online information platform, years before the concept of the World Wide Web was put forward and as a result, we were required to build our own search technologies, our own commerce technologies, as well as our own data centers, because none of those things existed prior to us creating our platform. We operated that business ultimately in 192 countries, taking payment in a variety of ways and licensed our search technology to companies such as IBM, Microsoft and Fujitsu amongst others, eventually selling that business to Thompson, now Thompson Reuters, in 1999. By which time, we had become the global market leader. And this experience resulted in me and my team becoming quite a debt at both search and…

Good morning, everyone, and thank you for joining us on our first earnings call. Just to reiterate what Dan has said, we're excited to be a public company and looking forward to engaging with our shareholders, as well as the greater investment community on a consistent basis moving forward. Let me start by saying Rezolve's business of delivering software as a service supports a powerful financial model for us that is simple, scalable and highly flexible. We generate contracted recurring subscription revenue by licensing our BRAiNPOWA suite of products to retailers and e-commerce customers. And as we scale the business, this powerful model is supportive of both high gross margins and a cost base that is extremely flexible and we can flex with demand. With that being said, there are several key topics we'd like to review today, including the brief recap of our 2024 financial results, highlights of the actions we have taken to strengthen the financial position of Rezolve, as well as some thoughts on business outlook for 2025. Recapping highlights of the second half of 2024, we entered the public markets after completing our DESPAC transaction in August. We strengthened our balance sheet by clearing convertible debt instruments resulting from that transaction in addition to raising additional capital. We signed landmark partnerships with Microsoft and Google, thereby establishing a solid foundation to drive online growth. Let me begin briefly by speaking about 2024 financial results. So we ended 2024 with revenue of $188,000 resulting primarily from ancillary business activities. On non-operating expenses or non-cash operating expenses, those including stock-based compensation, advisors fees, paid with shares, depreciation and amortization for the full year 2024, totaled $28.9 million. As a frame of reference, headcount drives approximately 50% of these cash operating expenses, with approximately 75% of that headcount focus…

Thanks, Rich. So we entered 2025 with a solid foundation that we believe well positions the business to acquire enterprise customers and drive revenue growth. And early developments year-to-date have demonstrated clear business momentum as we successfully execute on our go-to-market strategy. Some of our early successes include the completion of key strategic acquisition, the growth of enterprise customers adopting our AI-powered solutions, and the build out of our customer sales pipeline. To begin, we recently announced the strategic acquisition of GroupBy, a leader in enterprise search, product discovery, and merchandising solutions. This acquisition enhances Rezolve's sales force, expands our customer footprint in North America and deepens our commercial relationships with some of the most recognized brands who will gain access to our AI commerce driven solutions. We view this acquisition as part of a greater roll-up strategy that we believe will accelerate enterprise customer adoption of our Brain Commerce technology suite. Turning to our expanding roster of customer partnerships, we believe that the early momentum we've seen in customer adoption has been supported in large part by our strategic partnerships with Microsoft and Google, as well as our strategic acquisition of GroupBy. These enterprise customers include recognized brands across the globe, such as BJ's Wholesale Club, Phoenix Suns, KFC, and Ace Hardware in the United States. Cole Supermarkets in Australia, and more recently, Mexico's premier department store chain, Liverpool, with whom we recently announced a multi-year agreement at nearly $10 million a year. Moreover, we've been encouraged by the commercial improvements our retail partners are experiencing, including stronger customer conversion rates, higher average order values, as well as greater omni-channel adoption with increased usage of services like Click and Collect. This early momentum in customer adoption and in our product solutions ability to drive positive outcomes for commerce has…

Thanks, Dan. Prior to our call, we asked participants, both including analysts and investors, to submit questions that they would like ask to management. We have organized those questions around a few major topics, many of which were asked by multiple participants. So, let's move to the Q&A portion of our call.

Our first question comes from Mike Latimore of Northland Securities and is related to the recently announced Liverpool deal. His first one is for you, Dan. Can you provide additional detail as to how the Liverpool deal came about and to what extent GroupBy and Google played a role in that process? And can you elaborate on any terms of the deal?

Yes, of course. I just want to say that we are thrilled to announce our landmark deal with Liverpool, Mexico, the country's premier department store chain on April the 15th. We believe the deal demonstrates the ability of our product suite to deliver tangible positive results to our enterprise customers, driving higher engagement, greater conversion and increased revenue. In terms of economics, these deals are typically two to three years and this multi-year deal specifically delivers nearly $10 million annually, which is greater than the average deal size we anticipated in previous internal estimates. The Liverpool deal is emblematic of the success in our go-to-market strategy, as Liverpool, which was a customer previously of GroupBy for some of its services, was upsold to our Brain Commerce product solution, which includes the SEO studio, a product which was developed in collaboration with Google by Rezolve. Would you like some more color on that?

Great. Thanks, Dan. In terms of just terms of the deal, effective day is that deal live today?

Yes. The deal is live today with the SEO Studio and is being enhanced with other -- We're working on other projects together with the people. I was just there actually last week with the management in Mexico City.

Perfect. Thank you. Our second question comes from Yi Fu Lee of Cantor and is focused on Rezolve's sales pipeline. This one again is for you, Dan. Can you elaborate on the progress you are seeing in the sales pipeline and how each of your go-to-market strategies, including your partnerships with Microsoft and Google, are contributing to that process -- to that progress. And secondly, where are you seeing the most traction?

So we are seeing traction across all three areas of our go-to-market strategy, in both direct sales, partnerships, and through our acquisition. In addition to our early success in customer adoption and usage, we continue to gain momentum in our go-to-market strategy across the board. While we continue to build our direct sales team, which will be a focus of investment for us throughout 2025, we are seeing significant progress in our sales pipeline from our partnerships, notably those with Microsoft and Google, as well as our strategic acquisitions, namely GroupBy. In terms of our partnerships with Microsoft and Google, we continue to see growth in terms of the number of potential enterprise customers and importantly the average size of those potential accounts. So we had originally forecast or estimated that our customers would drive around $1 million per annum in revenue for the company. Each customer would be about $1 million a year customer. But as you can see from the win with Liverpool, that customer is a 10 times of that estimate. So you can see that the value of these customers have the potential to be significantly greater than we originally expected. And although it's been quite recent since our strategic acquisition of GroupBy, it has provided for direct access to an established customer base that's resulted in accelerated opportunities to upsell Rezolve suite and of course again that was highlighted by the announcement with Liverpool. Though it's early, the momentum we've generated so far gives us enormous confidence that our premier partnerships and acquisition strategy have provided the launch pad for our business to drive customer adoptions. Do so at an accelerated rate and at a greater deal size than previously estimated. And we believe that our strategy now is starting to really show that it is founded on quality common sense and can be built on moving forward.

Great. Thanks Dan. Our next question comes from Tom Forte of Maxim and is a continuation of that go-to-market strategy theme related specifically to partnerships, Dan. On this question, can you provide additional detail as to how Microsoft and Google are marketing Rezolve the potential enterprise customers and driving client wins? And what is that sales cycle look like?

Well, obviously, the sales cycle will change on a per customer basis. Sometimes it can take a number of months and sometimes it can be quite accelerated into a matter of weeks. But in terms of how Microsoft and Google are marketing Rezolve, they're both doing it in a very similar way. And they both see Rezolve as a platform that enhances the stickiness of their services to their customers, their large customers. So right now, both of them are offering incentives to their customers to use committed contractual funds to buy Rezolve and it would decrement those committed funds that they have to Microsoft and Google. So if a customer has a $10 million a year contract with Microsoft to provide services, if they spend any dollars with Rezolve, those come off a dollar to dollar from their commitment to Microsoft. That's great for us, of course. And we don't pay Microsoft or Google any commission. As I said before, this is strategic for them because they want Rezolve as a product in their cloud services to create that stickiness with their customers because it, obviously, ties those customers in long-term to that platform. They're also incentivizing their sales organization by providing sales incentives and also if they make sales Rezolve to respective Google or Microsoft customers, it counts towards their sales quota. So they're incentivized to sell our products as if they are Microsoft/Google products. And as a result of those factors, you've got like a double whammy. You've got the sales organization incentivized to sell our solutions and you've got the customers incentivized to buy our solutions because it comes off their commitment. And of course, it's a sexy product. It's a compelling product that has a product suite that has a real measurable ROI output. And so for all of those things -- for all those reasons, we see really good engagement from both the partners and really good engagement from their respective customers.

Excellent. Thanks for that additional color, Dan. I want to switch gears a little bit here. Our next question comes from Scott Buck at HC Wainwright and focuses on the topic of M&A. This one is again for you, Dan. Dan, can you walk us through your target criteria when evaluating M&A opportunities? And secondly, can you discuss your approach when funding M&A transactions in terms of cash versus equity?

So first of all, I mean, any target must fit with our model, must be part of -- must be additive to our proposition. Now some acquisitions are going to be geographic, where we might find an organization that has -- that provides maybe a site search, a bit like GroupBy in Spain, for example, right? And by acquiring that company, we not only get customers who are on the horse and cart, we would argue, versus the Model T4 that we're offering, that we can very quickly upsell to our solution. But we can do so in a very easy, elegant way as an upgrade to their existing solution. It also gives us presence in a market that we do not currently operate. It gives us people on the ground, all those kind of things. And given that we are looking to become the global market leader, we want to do that in an accelerated way. Acquiring businesses in different territories gives us a footprint in markets, which otherwise we wouldn't get to for some period of time. We prefer, obviously, to go for [indiscernible] customers that have established businesses. There are situations where we might find companies that have compelling technology that will be additive to what we're doing. We have not as yet seen anyone -- we've not made any acquisitions in that area, but it's possible. And thirdly, we may make talent acquisitions where we bring on organizations that have large AI or natural language processing developers and that will then quickly give us the resources that we need that we would otherwise have to go and source in the market which is more costly and more time consuming. Is that -- would you like me to cover anything else, Michael?

Yes, just in terms of the second part to that question, in terms of funding the transactions. And your thoughts on that.

Yes I mean, look, we don't want to use cash because we don't we don't want to use the valuable cash we're using to fund our business. And so, the GroupBy acquisition was done using our paper, we paid a very -- what we felt that was a very fair price, $55 million, and we paid it in equity at about $3 a share. So, from a purchase price, we felt we got good value. And from an equity -- from the cost of our equity, obviously we think our equity is depressed, was depressed at $3, is even more depressed currently. So we don't -- we're not very comfortable about using our valuable equity for acquisitions right at this time. However, we're still keen to carry through our strategy. So I would answer by saying that, we will use cash where the cash is not too meaningful, because we don't want to sell equity or use equity at these levels. But equity is the resource that we have the capacity to utilize, mindful of course of the impact it has on a shareholder dilution.

Excellent. Thanks, Dan. Thanks for that color. Our next question comes from Rohit Kulkarni of ROTH Capital Partners and focuses on Rezolve's competitive advantage. Dan, can you discuss the factors that underpin the advantage Rezolve's proprietary LLM has versus AI solutions available in the marketplace today?

Yes, so AI solutions, so there is this idea of boiling the ocean, that many AI players have this concept of, let's absorb everything that's out there and be the expert on everything. And then when people ask us a question, we'll be able to answer that. That's kind of the fundamental LLM proposition today. Now we were very familiar with how GenAI came about, the algorithms and so on, as I mentioned before with my background. And so, when we started this approach in 2016, we had one objective to create a vertical LLM, to create something very specific that would allow us to solve a very specific problem. So we didn't come at this by saying -- we didn't come at -- we didn't come at this by saying, we have a bag of cement and a pane of glass, and here you are customer, go and build yourself a skyscraper. We came out saying that we're going to provide a skyscraper, right? And offer apartments in that skyscraper. So we wanted to provide a solution to our customer's problem. And right now, the majority of AI technologies out there are building blocks that are provided to customers to build on. And the customers don't -- I don't believe, fully understand what they have to build, how to build it, and what skills they need to do it, how long it's going to take, and so on and so forth. So we set out to do a number of things. First of all is to create a language model that was sophisticated in sales. And we had to deal with some challenges there because product catalogs have got a greater propensity to what's known as hallucinate or drift. And so, we wanted to solve that problem. And an…

Excellent, Dan. Thanks for that color. I want to move to the financial model and outlook. And we've received a number of questions for our CFO, Rich, which are, I would say, almost universal amongst analysts, with the first regarding expense growth. And Rich, I know you've touched on some of these, but maybe you could dive a bit more. The question is, as you scale the organization and ramp revenue throughout the year, can you discuss the areas of investment and levels of increased expense needed to support this growth?

Yes, sure. So just -- I mean, just to reiterate, we are highly elastic. We've spent several years flexing our cost base, and I would say we're pretty good at it. So as the underlying business continues to gain traction and grow, we will see some costs of sales increases along with sales and marketing expense as we grow those teams to generate sales. But it is important to reiterate that we do not see any meaningful step change in any of our cost buckets. So we will grow costs, but we'll grow costs in line with revenue. And we expect to scale relatively quickly, given the operational leverage inherent in the business model, and thus believe we are both well positioned from a liquidity standpoint to get through this initial startup period that we're in and that we feel relatively -- we feel will be relatively brief prior to achieving breakeven which we expect to do at the -- at or around the $80 million to $90 million ARR level.

Perfect Rich. And that sort of our last question here that dovetails into our last topic, which is, again, something that was highly requested, which is related to the profitability outlook. You've touched on this a little bit, Rich, but just to put a finer point on it. Question is, Rich, given that your SaaS business model should have a significant amount of operating leverage, how are you thinking about the level of annual recurring revenue at which the company is able to achieve operating profitability? Now, I know you've mentioned this, Rich, but maybe if you could put a finer point on this as well.

Sure. So the SaaS model certainly puts Rezolve in a good position to achieve break-even profitability with -- from relatively modest growth or modest revenue should I say. Achieving profitability which we view as a measure of adjusted EBITDA, is what we think is the first of multiple milestones, which we'll accomplish over the 12 to 24 month period. As I've mentioned, we expect to reach just an EBITDA break even at the $90 million level. We have initially targeted $100 million, but given the flexibility we have in our cost base we are confident that we will do it at $90 million. Now just to caveat that that breakeven will depend on sales mix, direct versus channel partners, etc and also will be contract specific. But at this juncture, we believe that $90 million ARR is a sensible number to pin breakeven on.

Excellent, Thanks for those comments, Dan and Rich. And thanks for the answers to your questions. I also want to thank everyone for joining this call. We really appreciate you taking the time to being with us today. Please feel free to reach out, contact us with any questions. We look forward to speaking with you all again in the near future. Thank you.