Financial Officer. I would like to welcome you to Parabolics second quarter financial results and business update conference call. A question and answer session will follow the formal presentation. And just as a reminder, this conference 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. You are cautioned not to place undue reliance on these forward-looking statements, which reflect our opinions only as the date of this presentation. Please keep in mind that we are not obligating ourselves to revise or publicly release the results of any revisions to these forward-looking statements in light of new information or future events. Throughout today's discussion, we will attempt to present important factors related to our business that may affect our predictions. You should also review our most recent Form 10-Q and Form 10-K for a more complete discussion of these factors and other factors, 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, ir.bonsai.io. Your host today, Joe Davey, Chief Executive Officer, and I will present the results of operations for the second quarter of 2026. And at this time, I will turn over the call to Parabolix Chief Executive Officer, Joe Davey. Thanks, Dean.

Good afternoon, everyone. I'm pleased to welcome you to Parabolic's second quarter 2026 financial results conference call. Let me flip to the next slide here. I'll begin with a brief overview of our business and our market opportunity before delving into financial and operational highlights. I'll then touch on some product and strategy updates. Our CFO Dean Ditto will then review our second quarter 2026 financial results before we open the call for questions. for those of you new to our story at Parabolic we build agentic applications that power the future of business this was reflected in a recently announced rebranding that basically just demonstrates our belief that the future of enterprise software is going to be agentic applications that are net beneficiaries of AI transformation and our focus is on building acquiring and investing in those businesses Today, we have five products in that offering lineup. So Demio, which is our webinar and virtual event platform, you're using it right now. One of the most powerful features of Demio is AI moderation. Open Reel, which is our AI-powered remote video production platform, primarily for enterprise.

Fantastic product for video capture and editing.

Create Studio, which is our 3D video creation and animation platform, and for which we recently announced some new leadership that we're really excited about. Superblocks, which is our AI agent for building and hosting websites and landing pages. If you go to our website, parabolic.io, you can see that was built using Superblocks. And finally, Connect and Sell, which is our newly acquired AI sales acceleration platform. So our vision is to build, buy, and invest in companies with high potential to be transformative in the kind of agentic application landscape. And what we mean by that is we want to look for undervalued applications and businesses B2B customer bases with real customers with durable revenue. We are looking for things that ideally are already leveraging AI, but maybe that, you know, have not communicated that well to the market or where we can bring more AI into that product. So either adding an agent, adding, you know, AI into data analytics. There's a variety of ways that we apply this. and then ultimately scaling. Our goal is to, of course, grow these businesses once we own them and ultimately to see the aggregate business grow. And I'll just add that as a part of this vision, we're also looking at at the potential of investing in other projects where we think they're well suited to be successful in this space as well. In July, we closed the acquisition of the assets of Connect and Sell Inc., which is an AI-powered sales enablement platform. They primarily serve B2B organizations in financial services, healthcare, technology. The acquired business is expected to increase Parabolix annual revenue by approximately $15 million when it's fully realized. We expect the acquisition to boost Parabolix revenue to approximately $27 million in total on an annualized basis. So this is a very meaningful acquisition for us, obviously bakes in meaningful growth for 2026 and 2027. The connect and sell business has a high gross margin of approximately 86%, about 250 enterprise customers, and they also have 10 issued and pending patents. Connect and Sell's AI-powered platform is designed to improve seller productivity. It helps sales teams spend more time in live conversations with qualified decision makers, and it uses quite a bit of data and AI to do that. The company has enormous, maybe the largest set of such data in the industry and has a very extensive set of AI features that can help optimize when conversations should take place, whom with, et cetera. The acquisition extends Parabolix platform from our businesses prior to this were mainly focused on marketing engagement. This extends us into outbound sales execution. We think that there are cross-sale opportunities here for an end-to-end go-to-market solution, and we're really excited about that, and the team is working on that. We believe the addition of Connect and Sell strengthens our position as a provider of integrated marketing and sales technology solutions while creating... Those meaningful cross-sale opportunities across our now expanded customer base. So, of course, we've added their customers and vice versa. They now have access to our large customer base as well. The transaction also furthers our strategy of building a broader platform of agentic application solutions. Connect and Sell has a highly complimentary sales acceleration capability, and we expect it will extend Parabolic's platform and create additional opportunities for customer expansion across that. The acquisition closed on July 2nd, so the results are not reflected in the second quarter. They will contribute meaningly throughout the rest of this year, so we'll see those reflect in Q3 and Q4. and then obviously for the full year in 2027. Our focus is on the global market for agentic applications. This is the fastest growing segment of the B2B market right now. Enterprises are shifting from traditional SaaS and isolated kind of AI tasks to autonomous goal-driven workflows. And Parabolic is positioned to be a leader in this market segment. These dynamics have created challenges for modern teams, mainly because they have to navigate through a variety of complex integrations, data integration to get value out of their AI. And many of those platforms where their data lives were built before the advent of AI. So they lack those capabilities. We are going to continue to expand our family of products through our targeted acquisition strategy over time. And we think this is going to position us strongly for capitalizing on industry consolidation in the enterprise B2B space. Some financial highlights. Revenue was $2.3 million in the second quarter compared to $3.1 million in the same quarter of 2025. I think we have shared in the past that the majority of this change was due to a lot of non-recurring revenue that we let trail off. We feel actually that the operating results for our core business were fantastic. So during this quarter, we did see some encouraging leading indicators in our pipeline that we think will drive future revenue. And we saw bookings grow in Q2 versus Q1. Margins remained very strong. We saw a lot of improvements to our core business. Net loss improved 41% compared to Thank you for joining us. I'm very pleased with the results of the team to be able to show bookings growth in a quarter where we had a very strong improvement to both OPEX and net income. And I think that's, you know, just a lot of operating discipline. Our business is not impacted by strong seasonality, and for that reason, we measure performance often on a run rate basis. Again, Q2 revenue was $2.3 million, down about 16% from Q1 due to a one-time non-recurring season. We have really continued strengthening the balance sheet by reducing debt and improving stockholders' equity. We believe this puts the company in a much stronger position for strategic growth in the future. Stockholders' equity was $12.2 million on June 30th, which is an all-time high for the company. We also reached a customer base of over 150,000 total customers who have purchased or subscribed to Parabolic Products. The Connect and Sell acquisition adds 250 customers, which might sound small compared to 150,000, but they're very meaningful. They're enterprise customers, and that's very critical to our strategy. Net dollar retention is a leading indicator that we monitor closely. For our core customer segment, the net dollar retention rate reached 91% in the second quarter, which is an all-time high and a strong indication of a robust customer upsell and retention pipeline. Our funding partners continue to share our vision. Subsequent to the end of the second quarter, we closed an additional tranche of $1.1 million. from our existing $11 million facility to support acquisitions and ongoing operations. During the second quarter of 2026, we reduced costs in areas such as professional fees and other administrative expenses. In May, we announced our cost management plan. And actually, let me flip over. We can stay here. We announced a cost management plan where we expect to see improvements to areas such as professional fees, administrative expenses. And while these actions are complete, we're just now starting to see the results materialize. We expect they'll fully materialize in the third quarter of this year. Again, in July, we closed the acquisition of Connect and Sell that we spoke about today already. In November 2025, at the end of last year, we acquired privately owned Superblocks. We've made a lot of improvements to that product, and we're really excited about how that's shaping up as well. We entered 2026 with a clear set of strategic priorities. We've made meaningful progress on these goals for Parabolic, and they really haven't changed. Furthering our Fortress Balance Sheet initiative, we have rapidly paid down and converted debt in recent quarters. We intend to opportunistically continue to strengthen our balance sheet. Our stockholders' equity is an all-time high of $12.2 million, up from $8.1 million on December 31, 2025. So this reflects substantial improvements that we've made to the balance sheet. We've continued to execute a focused strategy to expand our capabilities through targeted acquisitions. Open Reel, Videlo, Superblocks, and now Connect and Sell. This expands our ability to support customers across digital engagement lifecycle. And we're very excited to see how that plays out in terms of cross-sale over the next year. We've also maintained an active pipeline of potential acquisitions. We look at areas where we have strong sector experience, obviously, and we can leverage our AI platform and capabilities to add value to those businesses and accelerate them. Recent balance sheet improvements will obviously further enable us to grow in this way as we maintain operational discipline and focus on efficiency and the path to sustainable profitability. We're also accelerating organic growth of our current lines of business. We expect financial services and health care to be large customer verticals for Parabolic as we look ahead. These customers operate in highly specialized and regulated environments that demand a lot of precision, compliance, measurable outcomes. And our products are designed to support these requirements. And we're continuing to drive improvements across the entire platform. With that in mind, we've been working very diligently on ISO 27001 certification and as of right now, we expect to obtain ISO 27001 certification by the end of Q3 2026. and not for nothing, but that will also unlock some operational, some additional operational cost savings for us. In November, we, as I mentioned, we acquired the assets of privately owned Superblocks. This is an agentic platform for developing and hosting SEO optimized websites, landing pages, registration pages, and more. This advances our vision of building the AI platform for marketers. Superblocks platform allows marketers to easily create and host websites, landing pages, simple web apps, and does it using conversational AI. We now support unlimited Fable 5 as a part of that. So if you're looking to build a website, go take a look at it. Maybe we can help you out. The Superblocks AI agent built beautiful brand compliant web assets quickly for businesses, marketers, and creators. Users can describe what they want in natural language. The AI then generates the user interface, the functionality, and hosts the application. And the integration of this into our platform will allow customers of our existing products to build things like custom registration pages, event pages, video hosting pages with ease and adds to our platform. A new version of Superblocks featuring starting point templates launched recently. And you can go see those templates on the website. You can also publish them if you create a great one. These templates allow our users to create new websites for a variety of different use cases from polished starting points. And I think they're a fantastic way to get something done very quickly. So we've substantially scaled our base of customers who've used Parabolic products to over 150,000 customers. This includes blue-chip names across a variety of sectors. Recently, we've added RingCentral. Intuit, Oppenheimer, SAP, additional logos you might recognize, Sage, PwC, Ernst & Young, Shopify, Ingram Micro, CapTrust, KPMG. We serve a variety of industries, including healthcare, financial services, e-commerce, technology, and media. and we have customers in over 90 countries. And again, as mentioned earlier, Parabolic had a 91% net dollar retention rate indicating very strong customer satisfaction and repeat usage. Our flywheel business model is really at the center of our strategy. Developing great products leads to growing customer usage. And for agentic applications, usage drives additional data and content on the products, which allows us to create additional value for customers. We're really building a moat in two key areas, integration so we can bring in more customer data for them and AI enablement to make better use of that data. Integrating multiple products on a single platform allows us to simplify our customers' workflows and ultimately deliver value to them. In terms of our acquisition strategy, our vision is to generate substantial long-term value by scaling inorganically in addition to organic growth from our existing products. And our acquisition framework is centered around profitable businesses that align with Parabolic's target enterprise and mid-market customer profile. and our data and AI-driven platform. We evaluate potential acquisition candidates on their ability to, we think, be winners in the long-term AI transformation that's taking place. The opportunity here is twofold. First, to increase our product capabilities by acquiring strategically aligned products that serve our core customer base and, you know, again, drive cross sale. And second, by accelerating our path to profitability and scale and hopefully to benefit from multiple expansion along the way. I think there's a lot of opportunity for that right now. Our recent track record includes four successful acquisitions, so Open Real, Vadello, Superblocks, and most recently, Connect and Sell. I'll now turn the call over to Dean Ditto, who's our Chief Financial Officer, to discuss financial results. Dean?

Great. Thank you, Joe. Total revenue for the second quarter of 2026 was $2.5 million. for the second quarter of 2025. Gross profit for the second quarter was $1.8 million, which was also a decrease compared to the same quarter in 2025. As previously discussed, gross margins have remained at a robust level and fairly stable. Our gross margin in the second quarter of 2026 was 80.2%. Total operating expenses for the second quarter of 2026 were $6.2 million. This is a 16% improvement over the second quarter of, or the three months ended June 30th for 2025. and operating expense segments such as professional fees and marketing and some other administrative expenses have been reduced, partially offset by people expenses, which we've talked about in earlier calls where the company has added key positions to drive the business forward. and these cost reductions are the result of the action plan that we announced in May. And we expect to continue seeing improvements in cost levels throughout the remainder of this year. Net loss for the second quarter of 2026 was $5 million compared to 7.1 million in the prior year quarter. This is a 37% improvement. driven primarily by the lower operating expenses that we just spoke about. For the second quarter, adjusted EBITDA was a loss of 1.7 million compared to 0.9 million in the second quarter of 2025. Now I'll turn to the year-to-date results. Total revenue on a year-to-date basis through June of 2026 is $5 million, which is a 24% decrease compared to $6.5 million for the year-to-date June 2025. This is primarily due to some one-time Create Studio revenue that was recognized in the first half of 2025 that is non-recurring. Gross profit for the year was $4 million. That's compared to $5.3 million for the year to date, June 2025, and represents a decrease of 25%. Again, our margins have remained quite strong at 80.5% compared to 82.2% for the first six months of 2025. Total operating expenses through June of 2026 were $14.2 million compared to 15.1 million on a year-to-date basis in 2025. Again, driven by lower professional fees and partially offset by people expenses. Net loss for the year to date, June 2026, for a year-to-date June 2025, or a 16% change. Both periods include non-cash gains related to a negotiated reduction in liabilities. And on a year-to-date basis in June, adjusted EBITDA was a loss of $3.5 million compared to $1.7 million for the six months ended We finished the quarter with $600,000 in cash compared to December 31st, where we had approximately $300,000. We have continued to strengthen our balance sheet in line with our strategic priorities. And I'm happy to report that stockholders' equity is at $12.2 million, which is an all-time high for the company. From a financial and strategic perspective, our plan going forward is to continue reducing cost in addition to the plan we announced in May. Management is committed to further cost reductions this year. And we believe that the new operating structure is going to help us continue driving improvements and Pipeline and revenue generation in a very cost efficient manner. So let's go to the next slide. Great, thank you. So in this slide, we're focused on 2026 operating expenses, Q2 versus Q1 on a run rate basis decreased 22%. Here you can see kind of the mix between expense categories, professional fees were down 51%, marketing 29, and people expenses excluding stock-based comp. So the $5.5 million is the cost reduction plan that we announced in May. Those actions have all taken place, and we expect that we'll see the full result of those in the third quarter results. Okay, if we could continue on. Financial Outlook. So we're estimating significant revenue growth in the second half of the year, driven by a forecasted 10% improvement in our legacy products, which is very much related to the rollout and the implementation of the operating model, as well as the addition of the connect and sell revenue, which is expected to contribute $6.5 million this year. As a result of those revenue improvements and cost reductions, we do expect to see a significant improvement, 50% in EBITDA from the first half of the year to the second half. And we also expect to see improvements in operating losses, which we expect to decrease by 40% from the first half to the second half. And these are driven by the cost reduction actions as well as the addition of the revenue that we just spoke about. Our expectation for 2027 is 50 to 55% growth in revenue driven by continued organic growth in our legacy products as well as the full year effect of the connect and sell business that we acquired. and through additional cost reduction actions, we also are expecting to see significant improvements in profitability throughout this year and into 2027. I will now turn it back to Joe for closing remarks. Joe, I think you may be on mute still.

Sorry about that. Trying to keep everybody from hearing my dog barking. Thanks, Dean. We're seeing solid revenue growth across the business at what we think are very... You know, frankly, very high gross margins. Operationally, we're positioned for improved results and much stronger cash position and hopefully, you know, much stronger shareholders equity, much stronger revenue. You know, just balance sheet in general. In 2026, we have worked really diligently to continue executing the plans we previously communicated to advance our long term growth. We also have a debt facility available to support acquisitions and ongoing operations. We have an expanding suite of synergistic products that drive real value for our very large customer base and I think we have a fantastic team to work on achieving these objectives and we're very focused on generating sustainable value for shareholders and we look forward to providing additional updates throughout the year as we do that. So thank you everyone for attending. And I think we're going to switch over to some Q&A now. So I'm going to see if we have any questions come through. If you have questions you would like to ask, you can put them in the chat on the right hand side of your screen and we will address them. So we'll just wait a minute to see if anybody wants to share anything.

We've got a really quiet audience.

We've got a question from Ed, which is, any more acquisitions in Pipeline? Ed, I wish I could answer that for you. I think we've got a rule around here, which is we're not going to talk about acquisitions going forward until we're ready to Ready to close on them. But I'll just say, as we mentioned earlier, we do have a robust process. And I'll say we're seeing a lot of attractive companies coming through right now. So I'll just leave it at that.

Okay, let's see.

Chris, any update on progress of the strategic alliance with Ingram Micro? Yeah, we announced this probably about a month or two ago. And sorry for being a little fuzzy on the date. This is super exciting. Basically gives us access to Ingram's very large sales network. I think we have some upcoming milestones with them. We will, I'd say so far, the team over there has been great to work with is what I've been hearing from our team at least. And We'll keep you guys updated as we're making progress on this. And, you know, hopefully this is a really, you know, really powerful channel for us. I think this has a huge amount of potential for the business. So something we're really excited about. Let's see, got a question on the quality of our sales pipeline. Yeah, thanks for that. I would say we've seen a very high quality sales pipeline. We've actually started to see, you know, we started to start deploying a couple of additional demand generation strategies recently. We have Matt McCurdy as the primary leader for that. I think he's done a phenomenal job. I think he's also, as Dean just pointed out, he's done a great job of doing it while bringing expenses down. And we've seen some of those initiatives that we kicked off in Q1 already turn into closed initiatives. Thank you so much for joining us. and the fact that it's probably the leading product in the industry in terms of product capabilities and so you know we just think helping them you know they already have a very you know strong pipeline at Connect and Sell just from you know people who have been successful customers of theirs in the past but you know obviously we think that's an area that we can help them with so we're working to make some investments in this and continue testing new channels and continue testing new strategies and so far I think it's it's going really well usually what you see is if you want to drive more pipeline your you know your marketing costs have to go up so that hasn't been the case for us this year which is good All right. Well, not hearing any more questions. Yesterday was my 10 year wedding anniversary. And so not hearing any more questions. I think we're going to wrap up here. I got to see my wife approximately 15 minutes yesterday because we were preparing for this.

So she's going to be happy to see me, hopefully.

We'll see. Thanks, everybody, for coming out and spending the time with us this afternoon. Thanks, Dean. And as always, if you have additional questions, reach out to Dean. His email is actually not on here, but I'll just tell you it's his first name dot last name at bonsai.io or parabolic.io.

OK, thanks a lot.

We'll talk to everybody. Bye bye.