Rezolve AI PLC (RZLV) Earnings Call Transcript & Summary

Good day to everyone. Welcome to Rezolve's Second Half and Full Year 2025 Earnings Conference Call. Leading today's discussion are Dan Wagner, Rezolve's Founder and Chief Executive Officer; and Arthur Yao, Rezolve's Chief Operating and Financial Officer. Our second half and full year 2025 earnings press release was issued earlier this morning, Eastern Time and 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 and earnings release. 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 a substitute for Rezolve's reported results prepared in accordance with U.S. GAAP. Non-GAAP financial measures referenced in today's call are reconciled to the most directly comparable GAAP measure in our SEC filings and earnings release. For more information regarding definitions of our non-GAAP measures, please see our earnings release and SEC filings, which are or will be available on Rezolve's Investor Relations website at investor.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.

Thank you, Michael, and good morning, everybody. 2025 was the year Rezolve AI stopped being a player in AI and became the essential logic of global commerce. We have moved past the experimentation phase. Today, Rezolve is live production-grade infrastructure operating at a global scale. To understand the scale of our execution, look at where we started. We entered 2025 as a newly listed company with limited revenue, less than 100 employees and no offices. At that time, I told the market we would target a $100 million ARR exit. Today, we are announcing that we have shattered those targets. We exited 2025 with a record December monthly recurring revenue of $19.4 million, establishing an exit annual recurring revenue of $232.8 million, more than double our original guidance. We now operate out of 32 offices globally with a world-class team of over 1,000 employees. Our platform is live and scaling across more than 950 enterprise customers. We delivered $46.8 million in total revenue for the year, driven by an explosive 543% growth in the second half. It is critical to understand the dual engine driving our trajectory. Our explosive growth is underpinned by a disciplined roll-up strategy of legacy enterprise search and commerce companies. Through the strategic acquisitions of Groupby, Crownpeak and most recently, Reward, we have systematically captured the enterprise discovery and transaction layers. These acquisitions were transformational building blocks, contributing nearly $90 million to our $232 million ARR exit and allowing us to seamlessly transition, established legacy customer bases onto our high-margin Agentic architecture. However, the vast majority of our momentum is purely organic. By leveraging our base of over 950 enterprise customers, our direct sales efforts and strategic partnerships with Microsoft and Google are delivering explosive performance and high-value contracts. This hybrid approach, combining strategic consolidation with massive organic scale is exactly what drove our exit ARR of $232 million and $46.8 million full year revenue result and provides the foundation for global dominance. Our success is built on a superior technological foundation. Our proprietary LLM, brainpowa, is purpose-built for commerce and engineered for zero hallucination. In head-to-head benchmarking, brainpowa consistently outperforms general purpose models in SKU-level precision and determinism in commercial output. The technical lead is why we command a 90% plus core software margin and enterprise trust our engine because it's built for execution, not just conversation. Furthermore, we are executing the most significant AWS playbook of the AI generation. Through the acquisition of Subsquid, SQD, we have secured a proprietary distributed blockchain database that removes our dependence on third-party ledgers. We are deploying this internally to power our 112.7 billion API calls today with a clear path to commercialize this decentralized database architecture for the broader enterprise market tomorrow. The reason we are moving so aggressively is because of a fundamental shift in the Internet. We are moving from a world of manual search to a world of agents. Today, a consumer visits 1 or 2 digital sites to find a product. Tomorrow, AI assistants like Siri, Gemini and ChatGPT will shop on behalf of the consumer, querying hundreds of stores simultaneously. This will trigger a 100x explosion in transaction volume and API activity. Rezolve is the toll booth for this surge. We are already seeing the first waves. We have noticed a 20% uplift in traffic to customer sites that we believe is directly attributable to agentic activity. We are executing this from a position of unrivaled financial strength. We have secured over $750 million in total funding, including our oversubscribed $250 million raise this past January. It is important for our shareholders to know that the company has 0 requirement for additional operational equity to execute its 2026 mission. We are fully funded and our cash reserves provide more than sufficient runway for the day-to-day operations and organic growth. We enter 2026 with unprecedented visibility, underpinned by a $232 million contracted revenue base. On the back of this momentum, we are upgrading our 2026 revenue guidance to $360 million. This represents a 7.5x growth over 2025, and we view it as a conservative baseline. I'll now hand over to Arthur Yao to take you through the financial details.

Thank you, Dan. Rezolve reported $46.8 million in 2025 GAAP revenue, materially outperforming market consensus. The 543% sequential acceleration in the second half reflects the transition of our enterprise customers from integration into live production. Our exit velocity is exceptional. We delivered $19.4 million in December monthly recurring revenue, implying a $232.8 million ARR run rate. This is supported by the $232 million contracted revenue base Dan mentioned, providing high conviction visibility into our 2026 targets. While group GAAP gross margin was 66%, our core software margins remain elite at over 90%. As software-related revenue becomes a larger share of our mix, we anticipate blended margins to expand significantly, highlighting the operating leverage inherent in our model. I want to highlight the structural efficiency of our growth. While we reported a net loss of $101.4 million for the year, it is crucial to note that we only burned $34.2 million in cash. The remainder was driven by noncash balance sheet adjustments. More importantly, we have already validated the fundamental profitability of our model. In December 2025, Rezolve achieved positive adjusted EBITDA for the first time. This proves that profitability is a lever we fully control as we scale. Looking ahead to 2026, I want to be clear, we could be profitable today if we choose to be. However, we do not expect to push for full year profitability in 2026 because we are making the deliberate strategic choice to prioritize aggressive investments in our global sales organization and market expansion. We are investing from a position of strength to capture the massive structural shift toward a agentic commerce. As Dan emphasized, we entered 2026 in our strongest ever capital position. With over $750 million in total funding secured, we are fully funded for our 2026 objectives. We do not intend to raise new equity for operational needs. Use of equity going forward will be restricted to high-value, profitable acquisitions such as reward, which bring immediate self-financing revenue to Rezolve. We are guiding to $360 million in GAAP revenue for 2026, a targeted ARR exit rate of $500 million. Now back to Dan for closing remarks.

Thanks, Arthur. So in summary, 2025 was the inflection point. 2026 is about capturing the Agentic explosion. We have built the infrastructure powering the Agentic commerce revolution and the essential logic that makes for the future of global commerce possible. Before I open the floor for questions, I'd like to point everybody to the special annual report we have produced, which is available via a link in the press release of today's results. We produced this report to give greater understanding to our strategy and the future potential of the company. I would encourage you all to take a moment to download that PDF. And now I'd like to open the floor for questions, and thank you all very much for joining.

[Operator Instructions] And we are going take our first question, and it comes from the line of Thomas Forte from Maxim Group.

Great. So first off, Dan and Arthur, congrats on a very strong 2025. I have one question, one follow-up question. So Dan, I would really appreciate your thoughts on the following. At the industry level, it seems like there are large AI market participants that are learning that retail e-commerce is a more challenging opportunity to capitalize on than they may have initially anticipated. What are the implications of that for Rezolve AI?

Thanks, Tom. You're absolutely right. What we're doing isn't easy. And it took us nearly 10 years to get to the point where we are today in perfecting the ability to deal with the complexities of commerce in an AI world, in an Agentic world. The main issue is that commerce isn't easy in that it's made up of so many different moving parts from inventory to product database movements to payments, to merchandising and much more. And Rezolve having been previously in previous lives, running e-commerce systems at scale. We understand the complexity, and we understood them when we started in 2016, the foundation of Rezolve. So we approached this from the very beginning as a method of solving many of the issues that commerce and e-commerce systems face and improving the way in which they can operate today. So we believe that we have a 10-year lead on everybody else. And having done that, I think we're starting to see the fruits of that effort coming through in the numbers.

Excellent. And for my follow-up, can you provide your current thoughts on your strategic partnership with Tether to enable consumers to purchase merchandise with stablecoin, Bitcoin and cryptocurrency in general?

Yes. So we believe that Rezolve Pay is one of the most exciting developments in the business. It doesn't represent revenue in the current numbers, but we believe that it is one of the major drivers for the future. We believe that stablecoins like Tether provide a better way to convert in the Agentic world. And that is not only because of the instant settlement and the design of the infrastructure to support interactions with agents, but also because merchant -- the way we're proposing to introduce this for merchants is that there is no fees associated with their adoption of this new payment method. And of course, we're in a very good place with 950 large enterprise customers to start the deployment of it. So we expect to see some momentum in Rezolve Pay this year, and we're extremely excited about its potential over the coming years.

And the next question comes from the line of Brian Kinstlinger from Alliance Global Partners.

Solid year. Can you talk about the sales cycle and how it's changed as the company has demonstrated more success? I think the press release said AI adoption has gone from 18 months to 4 to 6 weeks. Is that describing the average new customer acquisition time line in the recent months?

Yes. We have different products, Brian, and some of them can be deployed very, very fast and some take a little bit longer. But the time line typically now is 4 to 6 weeks up to 3 to 6 months depending on the level of solution that the merchant wants to take on. But we can get going straight away.

Okay. Great. And then the $500 million run rate guidance and the $360 million in guidance for the year in GAAP revenue, does that include additional M&A? And then maybe if you could touch on how you think about the mix today versus the mix, say, a year from now of services versus software?

So the $360 million of EBITDA guidance for the full year 2026 does not include new acquisitions. That is what we have today plus organic momentum. Obviously, if we make acquisitions, we are likely to increase guidance. The mix is still 1/3, 1/3, 1/3, where really 2/3 you could argue is organic, given that 1/3 of it is partnership deals, 1/3 of it is organic sales, and you could lump those 2 together. And then another 1/3 is M&A.

Now we're going to take our next question. And the question comes from the line of Michael Latimore from Northland Capital Markets.