Banzai International Inc (NASDAQ: BNZI) rallied more than 120% on Wednesday after announcing strategic initiatives it hopes will improve its net income by a whopping $13.5 million by early 2025.
The marketing technology company will lower its yearly operational costs by close to $10 million and cut other expenses as well by up to $3.6 million as part of the roadmap it laid out today.
Despite a sharp surge in Banzi stock price this morning, shares of the Washington-based company are still trading only at a fraction of the price at which they started in 2024.
Banzai stock could benefit from cost cuts
Banzai International said it will resort to several cost-cutting measures, including a 27% reduction in its workforce in pursuit of a significant boost to net income.
The Nasdaq-listed firm will provide career transition resources on top of comprehensive severance packages to the affected employees, as per its press release on Wednesday.
“Implementing these strategic initiatives, if fully achieved, will enable us to substantially extend our cash runway and invest in growth,” Joe Davy – the chief executive of Banzai told investors today.
The marketing technology company expects this workforce adjustment to cost $0.1 million in total.
BNZI plans on leveraging automation to lower vendor and legal/accounting costs to improve operational efficiency as well.
Banzai International disclosed these strategic initiatives shortly after closing a $5 million private placement under Nasdaq rules to bolster its cash stature.
The company counts notable names as customers, including Square, Thermo Fisher Scientific, and Hewlett Packard Enterprises.
Banzai disappointed in its fiscal second quarter
Banzai has secured an extension from Columbia Pacific Advisors on its long-term debt that will now mature on February 19th, 2027 instead of February 19th, 2025.
The interest expense is also now Payable-in-Kind rather than cash – a move that will result in a meaningful decline in cash expenses and may help BNZI eliminate $1.9 million in annual expenses if the debt if entirely converted to equity. According to CEO Davy:
We’re dedicated to managing costs without sacrificing growth. We are confident that this strategic realignment will strengthen our competitive position and contribute to our long-term success.
In August, the Nasdaq-listed firm reported 15 cents a share of loss on $1.07 million in revenue for its second financial quarter.
Analysts, in comparison, were 13 cents per share and $1.17 million, respectively.
Note that Banzai stock is not very widely covered by Wall Street analysts and it does not currently pay a dividend yield either.
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