Earnings call transcript: Brand Engagement Network reports Q2 2025 revenue surge

Brand Engagement Network Inc (BNAI) recently held its Q2 2025 earnings call, reporting a significant leap in revenue to $5,000 from zero in the same quarter last year. Despite this growth, the company’s stock faced a sharp decline, dropping 21.49% during open market trading, with shares closing at $0.4191. The market reacted to an earnings per share (EPS) of $0.02, which fell short of expectations, contributing to the negative sentiment. According to InvestingPro data, the stock has experienced high price volatility, with a significant 57.47% decline year-to-date and currently trades at just 35% of its 52-week high of $1.18.

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Key Takeaways

• Brand Engagement Network’s Q2 2025 revenue reached $5,000, marking a significant increase from the previous year.
• Operating expenses were reduced by 55.6%, contributing to a net income of $900,000.
• The company’s stock experienced a 21.49% decline post-earnings announcement.
• Strategic focus on AI solutions and global partnerships was highlighted during the call.
• Future guidance indicates a focus on commercial acceleration and product leadership.

Company Performance

Brand Engagement Network demonstrated substantial improvement in its financial performance for Q2 2025. The company posted a net income of $900,000, reversing a net loss of $3,000,000 from the same quarter in 2024. This turnaround was largely driven by a 55.6% reduction in operating expenses and other income of $3,700,000, primarily from a debt extinguishment gain. However, InvestingPro analysis reveals concerning fundamentals, with an EBITDA of -$25.09M over the last twelve months and a weak Financial Health Score, indicating potential sustainability challenges despite the recent improvement. The company’s strategic initiatives in AI solutions and international partnerships, particularly in the automotive and pharmacy sectors, were emphasized as key growth drivers.

Financial Highlights

• Revenue: $5,000, up from $0 in Q2 2024
• Net Income: $900,000, compared to a net loss of $3,000,000 in 2024
• Operating Expenses: Decreased 55.6% to $2,800,000
• Stockholders’ Equity: Increased 126% to $5,900,000
• Other Income: $3,700,000, primarily from debt extinguishment gain

Earnings vs. Forecast

Brand Engagement Network reported an EPS of $0.02 for Q2 2025. This result was below market expectations, contributing to a negative market reaction. The company’s revenue of $5,000, although a significant improvement year-over-year, was not enough to offset investor concerns about earnings performance.

Market Reaction

Following the earnings announcement, Brand Engagement Network’s stock price fell by 21.49%, closing at $0.4191. This decline reflects investor disappointment with the EPS results, despite the company’s revenue growth and cost management efforts. The stock is currently trading near its 52-week low of $0.231, indicating a challenging market environment. Based on InvestingPro’s Fair Value analysis, the stock appears slightly undervalued at current levels, though investors should note the company’s concerning current ratio of 0.19 and negative return on assets of -103.71%.

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Outlook & Guidance

Looking ahead, Brand Engagement Network is focusing on converting pilot programs into scalable commercial agreements. The company anticipates future growth driven by its emphasis on AI solutions and strategic partnerships. The next earnings call is scheduled for November 4, 2025, with an annual shareholder meeting set for November 26, 2025.

Executive Commentary

Acting CEO Tyler Luck emphasized the company’s commitment to transparency and growth, stating, "We see this as the start of a new chapter for BEN, one that’s built on transparency, accountability, and growth." He also highlighted the importance of data sovereignty, noting, "By focusing on brand-specific data sovereignty rather than broad web data, we enable authentic and reliable consumer interactions."

Risks and Challenges

• The company’s stock performance remains volatile, with significant declines posing a challenge to investor confidence.
• The competitive landscape in AI solutions and data sovereignty requires continuous innovation and differentiation.
• Economic uncertainties and market conditions could impact the company’s ability to achieve its strategic goals.

Q&A

During the earnings call, analysts inquired about the terminated Cataneo acquisition and the $5,000 revenue from an Armenian hospitality pilot. The company confirmed ongoing pilot programs across various sectors and a strategic shift from generative to agentic AI solutions.

Full transcript - Brand Engagement Network Inc (BNAI) Q2 2025:

Conference Call Operator: Good afternoon, and welcome to the Brand Engagement Network Inc. Second Quarter twenty twenty five Earnings Conference Call. Today’s call is being recorded. At this time, all participants are in a listen only mode. After management’s prepared remarks, we will open the call for question and answer session.

Before we begin, please note that during this call, our speakers may make forward looking statements regarding future results and performance. Please refer to the cautionary language included in BEN’s filings with the Securities and Exchange Commission included in their Form 10 ks and 10 Q for additional information concerning factors that could cause actual results to differ materially from those forward looking statements. I would now like to turn the call over to Tyler Luck, acting CEO and Co Founder of Brand Engagement Network. Tyler, please go ahead.

Tyler Luck, Acting CEO and Co-Founder, Brand Engagement Network (BEN): Thank you, operator, and thank you all for joining us today. I’d like to begin by addressing the timing of this report. While our Q2 ten Q filing was delayed, I want to be clear that this was not the result of negative financial performance. Instead, the delay reflected deliberate decisions to strengthen the company’s foundation. First, we focused on reducing ongoing expenses by negotiating with prior and existing vendors to ensure we operate with greater financial discipline.

Second, we made positive management changes, including reengagement with our trusted outside accounting firm that supported us from 2021 to 2024 while continuing with our independent audit firm. These steps required time, but were taken to build confidence in our financial processes. I’ve been with this company since day one. I know our technology, our customers, and our mission. And I can tell you that the entrepreneurial spirit at Bend is alive and strong.

Capital has always been a precious commodity, and we are treating it with the discipline and creativity that investors expect. I’d also like to highlight that our team in Seoul, Korea, today, our Korean Innovation Lab is home to more than 30 employees, and I’m incredibly proud of the work that they are doing to drive product innovation and client success. This team embodies the energy, expertise and commitment that defines BEN globally. In addition to these foundational efforts, I’m pleased to share some key milestones that underscore our progress in building partnerships and expanding our AI solutions. For instance, we entered a global partnership with Swiss Life, a process that began before our merger in March 2024.

The announcement in April 2025 marked an important milestone and as acting CEO, I had the opportunity to attend their global conference in London a few weeks ago. It was encouraging to see firsthand the positive feedback from attendees around the world. And we are focused on supporting their partners globally to benefit from the efficiencies of our conversational AI. We’ve also made strategic inroads in emerging markets, such as our entry into Mexico with a partner just over a year ago. And this decision aligns well with markets that prioritize data sovereignty, allowing us to test and refine our products, while positioning us for potential expansion and execution on our current pipeline.

In the pharmacy sector, our launch at a conference in Boston a year ago provided valuable market feedback on our AI solutions. We are pleased with the results so far, though as with any innovation in regulated industries, reviews take time as corporations are rightfully cautious of this new era. But these steps are setting a solid foundation for future developments. Looking at verticals like automotive, we see opportunities where AI can help build trusted consumer engagement, a long standing challenge in the industry. The integrations we’ve completed today position us well for initiatives we’re planning in the coming quarters.

And finally, with AI top of mind for many enterprises, it’s important to note that brands and regulated sectors approach new technologies with caution to avoid risks from inaccurate engagements. So this is where Ben’s emphasis on trusted data shines. By focusing on brand specific data sovereignty rather than broad web data, we enable authentic and reliable consumer interactions. These efforts reflect our commitment to delivering solutions that meet enterprise needs. And looking ahead, we’ve already scheduled our next earnings call on 11/04/2025, and our Annual Shareholder Meeting on 11/26/2025.

We see this as the start of a new chapter for BEN, one that’s built on transparency, accountability and growth. And with that, let me turn the call over to our CFO and COO, Walee Kiari, who will walk you through our financial performance.

Walee Kiari, CFO and COO, Brand Engagement Network (BEN): Thank you, Tyler, and good afternoon, everyone. Our Q2 results demonstrate significant progress in stabilizing operations as well as strengthening our financial position. By reducing expenses by over 55, we’ve gained greater flexibility to execute our strategy and accelerate growth initiatives in regulated industries. Looking ahead, we’re shifting our focus towards driving revenue growth, supported by a stronger foundation and the operational capacity to launch new customers more rapidly across our target verticals. As for financial highlights, I’ll mention a few revenue.

We did $5,000 of revenue in q two compared to none in q two of last year 02/2024, which reflects early traction in some of our conversation AI solutions. As far as operating expenses go, they’ve decreased, as I mentioned, by 55.6% to 2,800,000.0 for the quarter, down from $6,300,000 in the same quarter of 2024, which was driven by streamlined operations and strategic cost optimization. As for other income, plus $3,700,000 primarily from a gain on debt extinguishment of $4,000,000 which was partially offset by changes in the fair value of warrants. Net income, about $900,000 in Q2 of this year compared to a net loss of $3,000,000 in 2024. And our stockholders’ equity increased 126% to $5,900,000 from $2,600,000 at the year end 2024, which reflects improved financial health.

A detailed summary of Ben’s recorded financial results is included in the company’s Form 10 Q for the quarter, which ended 06/30/2025, which we have filed with the SEC. And with that, I’ll hand it back to the operator to begin our Q and A session.

Conference Call Operator: Thank you, Waleed. We will now begin the question and answer session. Your first question comes from the line of Jack Vanderhoeg with Maxim Group. Please go ahead.

Jack Vanderhoeg, Analyst, Maxim Group: In Tyler, welcome to the CEO role. I don’t believe we’ve spoken last quarter. So would love to get your just kind of thoughts on what you’re planning to focus on and if there’s any changes on the horizon. Just talk about your management style and what you’re focused on.

Tyler Luck, Acting CEO and Co-Founder, Brand Engagement Network (BEN): Hi, Jeff. Nice to meet you. Yeah. I we haven’t met before. So I I think it’s an exciting time to be reading Ben.

And I would say my focus is really on three core priorities. The first being execution and discipline, making sure we’re delivering against the commitments we’ve made to our customers and partners certainly our shareholders. I believe we have built a strong foundation and now it’s about consistent reliable delivery. And secondly, I’d say the commercial acceleration kinda translating the momentum we’re seeing into scalable revenue. That’s super important.

That means really tightening our go to market motion, deepening customer relationships, I’d say expanding our footprint in the verticals that we’re already winning. And third, being the also the chief product officer, I think it’s super important for our focus on product leadership. So continuing to push the boundaries of responsible, reliable AI engagement, and BEN’s technology has the potential to redefine how people really interact with brands, and, you know, we we intend to leave leave that that shift. So short, it’s about priority focus and forward motion, just really ensuring that Ben not only grows, but grows with purpose.

Jack Vanderhoeg, Analyst, Maxim Group: Okay. Great. I appreciate that. And maybe just a follow-up. Something that was kind of a major ongoing development was the pending acquisition of Cataneo, obviously.

I know that, that was terminated. And but just maybe can you just touch on what happened there? Or are you still working with them on other opportunities, maybe not M and A related, but just other business verticals and opportunities? Then also, is the media just can you touch on the media space maybe in general and how that fits into your focus going forward in terms of verticals?

Walee Kiari, CFO and COO, Brand Engagement Network (BEN): Jack, this is Lee. Good to hear from you. To answer your question, yes. We’re continuing to work with the team at CapNow. We still think that, you know, our partnership is strong.

And in effect, we’ve been working in the field together for quite some time now, and that’s the good momentum among our customers as well as potential customers. So we see that continuing. I had mentioned in past calls that the advertising side of the business, which is related to media, is is a very important pillar of this business going forward alongside automotive, health care, and financials, and we see that continuing. The the media space evolves probably the fastest. I think Tyler alluded to earlier the fact that some of the regulated industries by definition, and rightfully so, as Tyler mentioned, move much slower.

This is one that moves very, very fast. And so be nimble, through a combination of buy, build, partner approach, I think, is gonna be critical. There will be m and a, but there will always be both partnership opportunities in that space on a on an ad hoc basis, as well as aligning with our general strategy to keep rejuvenating the stack dedicated to technical stack, dedicated to the advertising space around AI. And, of course, under Tyler’s leadership continuing on the build side of the strategy by continuing to build our product, which have a common foundation, but find, different use cases across industry verticals.

Jack Vanderhoeg, Analyst, Maxim Group: Excellent. Okay. I I appreciate that, Wally. May maybe a follow-up too for you. The $5,000 revenue that came in the quarter, I’m not sure if this is not that I’m trying to parse that necessarily, but I would be curious to know, is this was this a pilot program?

And was it a series of customers? Just maybe walk me through that. And then what do you expect kind of going forward in terms of are there more revenue pickups like this one? Or is this a onetime development?

Walee Kiari, CFO and COO, Brand Engagement Network (BEN): Tyler, do you wanna take that one?

Tyler Luck, Acting CEO and Co-Founder, Brand Engagement Network (BEN): Yeah. So the the 5,000 relates to a pilot program for a client we are working with in Armenia relating to hospitality, customer service in the hotel sector, and we we expect this to be recurring.

Jack Vanderhoeg, Analyst, Maxim Group: Okay. Great. No. I appreciate that. And then just maybe a follow-up too.

Just all of the pilot programs you guys did you guys have had in the past over the last few years, A lot of them sound pretty promising, and they’ve been ongoing for a while. Maybe just to get a quick update on anything in the pharmaceutical health care space? Are these past pilot programs and collaborations, are they still ongoing? Or are we I guess, when do you determine if you’re moving forward and what to focus on? Because there’s quite a number of these.

I’m not sure how you’re tackling it anymore. So just an update on any of the prior pilots, just so we have a sense of where we’re headed.

Tyler Luck, Acting CEO and Co-Founder, Brand Engagement Network (BEN): Yes. So I would say all of our pilots are moving forward. I think initially when we started to take them on, we were really more perhaps in the generative AI space and naturally as any business, you know, come to ask what what is the ROI on this. And so that’s when we have started to move more into the agentic AI or at least a a combination. So every AI pilot that we are building and deploying needs to have, you know, measurable impact.

And so really the next phase, which most, if not all, that are progressing is really about converting these pilots into scalable recurring relationships. And we’re moving in that direction with momentum. And I’d say we expect to share more detailed results of those programs formalized into commercial agreements in the near future ideally.

Jack Vanderhoeg, Analyst, Maxim Group: Okay. Fantastic. Well, I appreciate the color, guys. I’ll I’ll hop back in the queue. Thank you.

Tyler Luck, Acting CEO and Co-Founder, Brand Engagement Network (BEN): Thanks, John.

Conference Call Operator: That concludes the q and a session. I will now turn the call back over to Tyler Luck for closing remarks.

Tyler Luck, Acting CEO and Co-Founder, Brand Engagement Network (BEN): Thanks, operator. To close, I want to emphasize once again that BEN is really regaining its entrepreneurial momentum. We are disciplined, focused and committed to creating value for our shareholders through strategic partnerships, market expansions, and innovative AI solutions. We look forward to updating you again on our upcoming November 4 earnings call for q three results, and we invite you to join us at our Annual Shareholders Meeting, scheduled for 11/26/2025. Thank you everyone for your time and continued support.

Conference Call Operator: Thank you. That wraps up today’s call. Transcripts of this call will be posted on Ben’s Investor Relations website. We appreciate your interest in the Brand Engagement Network Inc.

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