WM Technology (MAPS) 16 Mar 232022 Q4 Earnings call transcript

Thank you for standing by. Welcome to the WM Technology, Inc. Fourth Quarter 2022 Earnings Conference Call. [Operator Instructions] As a reminder, today’s program is being recorded. And now I would like to introduce your host for today’s program, Greg Stolowitz, Vice President of Investor Relations.

everyone. Hi, us our joining quarter XXXX to results. today for fiscal discuss fourth Thanks

Executive and Doug Lee have Chair, We our Francis; today. with our us Arden CFO,

By along with earnings supporting slide to also have our the now announcement on website This is our Relations Investor deck. everyone should announcement. access

and about variety They These some this not statements uncertainties During statements guarantees we'll of are strategies beyond outlook, of forward-looking make business call, performance. subject are a to and risks including future are control. which statements our long-term of goals. our

in actual forward-looking differ Our could materially results from expectations reflected any statements.

For required website these please important law. specifically factors refer statements as obligation risk and well discussion in factors on that results, SEC risks or to our update website actual available as in We filings the our a by release. and important today’s earnings to the disclaim as other of Relations could discussed intent Investor other any forward-looking SEC's affect our except

For recent maybe call the listening topics please SEC archived the XXXX. was March to held on announcements have benefit this related and most Since refer or replay XX, made so recorded of company's the webcast, we to press may and the releases discussed, those then, filings. to who

entirety but replay our be Investor this an on GAAP call, be measures Relations Our from of during our to Also presentation non in accordance in hours. as a call this should is Relations GAAP. in website Reconciliation will it available audio financial substitute measures our webcast And GAAP. be measures accordance few And results Investor website. a information on can finally, website. being and available with prepared isn't in to, found these financial GAAP non-GAAP to addition These financial not in its earnings we'll for discuss with certain in information the considered prepared

Doug. over I'd With the turn like call to to that,

joining thanks Greg, and for Thanks, us. everyone

year expected. we our while in to markets. by We million double in clients despite where versus year adjusted revenue, in $X QX came our results $XX grew quarter in be Further, QX the end million in cash, posted fourth challenges last we paying Our with ended million $XX free. and debt digits continuing EBITDA

In far at team's getting still place. team is to revenue culture the right back the back we're my progress there first was while and of do, quarter we confident stabilizing our our profitability. in focus the have are helm, made pleased to so And strategy and we've with driving operating and work

and the eating new over deal capital we environment. companies, across and high from in a facing slow we of slowing The growth, of the thriving fear regulation, frozen headwinds with limited all products, additional market. and a rollout combined with on of is to country, The is many are black lack industry as licenses minds. into folks Inflation is government, taxes power. center of current banking, higher of facing access the cannabis commoditization challenges cannabis is government recession markets, levels support of front the and looming Like consumer business cost a spending capital

need in be all to to companies one continues of when best Cannabis consumers. that know right acquire now. Weedmaps can ways they're letting and they targeted engage And cannabis us the the help community get active

our activations digital, of integrated can traffic hyper approach omni-channel community street in-store clients. events, for Our local engagement create and

like clients, engagement of offline, user or the users, in our online meaningful value, times our send these. especially each that Given to nature creates we whether

Weedmaps, associate engage cannabis. our to and their focusing back getting how of on front plant making been brand we the help want roots culture we've and given with shape alike retailers and brands center, and the to As both

in story key with been from industry the our legalization our safe pursuit and great. partners of And we're plans outreach making to has cannabis The access. tell

a for be may XXXX the growth a have XXXX difficult and to in maximize and foundation clear lay what We healthy and opportunities beyond. our plan

As I mentioned last quarter, the key for is XXXX us in focus.

focused delivering value with and growth. of and clients, a our three users, experience of sustainable goal undeniable are our all doing with marketplace to on We profitable that things:

First what on plant. of our Weedmaps marketplace. and the back what by special We're we do and celebrating the best getting magic roots culture to of the made weed

the We cannabis. will of create differentiated nature craft content showcasing

We will and terpenes. about genetics conversation elevate the

the This terpene by with THC and by highlighting across fallacy. Through levels. will example, equates best benefit than differences across to marketplace we cannabinoid cultivators the scientists and story country differentiated high to expert showcase engaging will we're brands that breeders just offering other eliminate the products our Weedmaps. weed retailers educational help and For the Weedmaps the content on and micro tell THC through

a cannabis We're find effects Dr. create continue Bonni former cannabis. and with to and also Director to content Goldstein, the treat therapeutic of conditions help leading our safe engaging users for has on place for be physician and Medical to serious educational historically been will cannabis to wellness, and ailments. Weedmaps

by We're across [indiscernible] our experience more shopping enhancing platform. our also users to and make improve our intuitive taxonomy, working search search our of the results to

right leverage will personalized our purchase from toward user first-party drive data journeys better and making We our more user our experiences to influence the clients.

the building datasets all reinforcement been and user rise data the continue historically and tools. the marketplace a by privileged we will source first-party differentiating cannabis, large learning own, on content, in AI things position of that has Weedmaps language experience reputation and modeling in sit our and authoritative We XXXX. that given for

returns. expand in our decisions. expanding our high our local giving logic We more we'll users the on categories, We're our and up solutions ways advertising for ad search undeniable mid they show our on our product regional experience. across more to funnel Next, drives focus reach to clients improve clients that impact intent to value offerings our give delivering our to clients plan where purchase their options

SaaS for added value deal extensions clients. features to -- our to utility and prove clients on We're to have users to differentiated integrating in and as types create and flight marketplace reach value. to of our seeking We more projects users solutions our our provide new working

make to will for Weedmaps local brand merchandise onboard, their Weedmaps we easier tech so to exclusive appreciation stories. clients of stack, it and of tell the grow collaboration activations, and with and clients regardless retailer [ph] drops our our they brand their with tours, will own power support integrate leverage We can

focus we'll profitable Finally, on growth. sustainable driving and

spend while in we we Rather prioritize to non-marketplace approach market we the offerings. newer and We a some our of We'll will to improve. our investments. growth markets evaluate disciplined back of will all solutions, be on these clients focus when what control how preparing size than one fits while be markets, can accelerate product solutions against pulling fit

the We've driving on of already and the removing the sales savings. year, was ahead our running. restructured focus everything hit the of we excess layers of we done start drive processes, and that difficult mentality operating to already across as as We'll that do. ground heavy management workplace changing We the work way company, lifting, a we this lean so that and simplifying can

what finish the a XXXX. to hard in of mindset our work have the year in up several line Productivity and success ourselves months, with round doing is last proud I'm no set effort accomplished that's XXXX. for and over our teams

for search and to now, will to The put I hand I working our in brief decided I continue industry. CEO hold also the continue and to on and on successive being. Arden, Before call our for the have driving our with will as team a growth want provide in senior I and time Deeply for drive our profitable Board Weedmaps, leaning the part pace update leadership invested and do to we leadership.

It's with and always the know dawn. is on. to how showcase and and the a our And industry products vision, knowhow leverage the coming exciting darkest cannabis insight know willingness Weedmaps deep leverage data to will only And where believe but not take to back. into challenging, the industry acquire technology. that supply future it those keep marketplace customers, though the XXXX to we the the that will them plant, of and Real have chain how for We that knowledge we bright to is of before be headed.

believe the brand, the stage Weedmaps power then take this of legalization chain within when all of value priorities, cannabis next We our front these Weedmaps were through growth. of against the marketplace focus industry the our in across the is It's and strength value truly opportunity with and Until users executing if from time broader great as we that continue position leading leadership our capture to like position we'll and and arrives. a clients. signed our segments of

over With Arden. that, I'll to it turn

and everyone Doug, Thanks, to call. today's on hello

$XX at second drive guidance. growth resulting Our came consistent actions fourth heading revenue, expectations the we with for quarter. revenue in QX total performance the had we decline reflected into a the in and quarter prior to on quarter our throughout profitability took the X% half million

QX adjusted EBITDA million. was a positive $X

to by EBITDA to took impacted reduction continues provision expected. EBITDA we doubtful the actions QX adjusted these be Adjusted our for narrow these was the charges cost we we charges saw million, non-cash prior as in reflecting $X throughout While quarter. accounts,

to continues our continue base. by spend to by we impacted and growth driving expand clients, headwinds, are which be our While client reduced of market levels

by dollar consistent signs prior hold by levels level XX% clients, is versus retention And stabilization, net existing to Our clients grew with continuing year. the seeing paying spend our looking last at quarter. we're of that when with

of XX% which revenue continues our be in QX the California, quarter. QX within retention dollar prior expanded net region at to versus largest Our

layers QX teams, last of [indiscernible] operating access the a management rationalize eliminating adjusted million centralized adjusted reduction sales new EBITDA and and of structure. within company our a a OpEx marketing in year. versus areas cross favor of our functional across We reflected in X% number reducing $X

development and against severance along million versus result, by stock-based the we which related $XX with charges. We allowance charge, increasing is non-recurring The headcount the for took reported XX% a quarter. a net payments loss reduction our of marketing with in and tax valuation executed deferred compensation to associated declined with in other along quarter, approximately product the and $X which $XX non-cash XX% includes a as we adjusted sales bulk which XX% with a of million year. the is assets, by during G&A million last Our

free liquidity recent these earnings year with XX-K. security More the and our $XX deposits. will in our the cash continue our debt position. feel banking are in Form We of be monitoring to comfortable is light charges our with information on events, close closely available comfortable our release situation of be In we're in cash, and with million and

relationships Bank Bank. not Valley or direct did Silicon have exposure We with any or Signature

presentation Our Class was calculation of posted details to the share to our share XXX earnings end the count million classes net count share adjusted fully Relations quarter. well classes of A Investor share A V at as provided of our site. and EBITDA reconciliation the across as diluted our in loss are our and

as management access material IT certain reported in in our internal have release, noted XX-K, and our Lastly, controls over our systems related change Form general we on user a weakness to our financial our that a begun are deficiencies, have reporting. I remediation and relevant audit of you can in already to result as a efforts. identified no tell we've these been misstatements

that headwinds impacting our marketplace, our outlook, to on navigate According help will value continued profitability us confident skilled the client markets. our sharp market through and the focus we're end

of expand a to ongoing expect across markets our per given our as across declines opportunities also several we the base of expect result markets. continued see, our pressures paying see on to We the revenue end but client client skilled

revenue providing in and full we current be adjusted not headwinds EBITDA. or the these general on Given macro uncertainties year guidance environment, will

our We million to will given quarter QX QX down seasonality is QX $XX lowest the versus at which related slightly be holidays. expect revenue, seasonally

we and On of double-digit line with we create public and more adjusted where consistent back to profitability, of XXXX. after EBITDA prior flow flow We're We our in platform And go regions that's adjusted then. transaction, and with QX and have regardless presence cash expanded sight investment. end expect year were closed a client capabilities took to OpEx margins already where with level market run accelerating yesterday, during rate to base in dynamics. starting were we cash an this we positive clear a actions positive we of

how based don't achieve is growth invest our growth on our and will significant priorities. investments We anticipate to trending

capacity the will approximately million us we We see investments. give To into that we DA QX fund end, continued achieve will EBIT as growth ramp holiday. also opportunities to $X which investments heading be XXX productivity expect adjusted to

and costs termination the headcount given half sight cash be on flow And already positive to that clear this first the this in reductions will delivering related year new commitment and With achieved against we've have line focus by last investments. to took approach continue year. that we the impacted [Indiscernible] said, take we of cost quarter. to severance will are reductions the to committed remaining we driving

team XXXX. I Doug and to thank ongoing want our as closing, for In leadership in get Weedmaps at going we his

a as XXXX our be a at As priorities. we Doug noted, will year remember drive to focus

up the open now call Let's questions. for

And our Canaccord. first DJ from question Instructions] of comes from Hynes [Operator the line

please. question Your

Hey nice margin guys, really for progress so thanks taking in questions. implied QX front and the Arden, and in QX. what's the

financial think step And can about it more as aspirationally areas Are taking you there, profile about we're specific discipline? As turning back? of dials are where back is where historical get the that to? you we there we think based calculated is get think the to more broad business, a

question. that for thanks [Indiscernible] Yes. that. Appreciate

flow, our cash how business gone acceleration I generative. your supports, cash don't accelerating ends when couple being able generation cover cycles we've We a investment, in fully -- about the And after business inheritive talked let of So, know of been inherently past that model things, of questions. me and flow investment the that to model right. we've shortly kind through our kind show if

when back last in went fiscal we So -- through acceleration went investment an year. XXXX,

these I XXXX, to to can't We able flow you're of to last the any as reason that's actions EBITDA levels. of up hit quarter. QX ourselves lot coming generate, off we to back referenced, fiscal referencing, ground in the heels started set course lot we and heavy we a done why the what We think over over were that. there's we've those when see cash running the so. took of lifting, that a the of We think year. Obviously, get the don't You'll do Doug difficult

find the do leanly terms there's I'd say: and opportunities, we general Come of kind January let's operate in and across of of a, second productivity where find your around, question mindset company. these a

as took that I created. eliminated very we of characterize with lot we layers excess infrastructure reductions a lot management of said, certain had that that is: we QX a in those being around Now, the were surgical cost areas, what And areas. of kind a, and

at And a So we our go-to-market the company, ability orgs looked [technical we're have to if of the functional difficulty] of at other areas slowing really you created speed teams. investment, a which move lot where teams cross the at candidly number our they kind to to. across then of it's get we've that accelerated wanted

of align been lot with And a so what we've we go-to-market done our resources near-term. is in opportunity of the to that kind smarter market kind round, the pruning see

certain haves, need And then to on that the margin, I'd nice this say that of this were not necessarily to in there areas in environment. but were have kind area

took try working And could, so again, get more we see our hard at look a were to and where productivity. redundancy how to we teams remove

Yes, yes.

got it. Okay, just then a And follow-up. as

for really client over about that see level what monthly do the think a budgeting guess we how So I that floor and might of 'XX? internally question for at revenue playing you in course thinking is modeling you And metric? are like, the

number. against nuanced. is theory, right. Yes, expect say healthy I I is, your in would us, continuing we regions, DJ see like in to And pressure because with to we a see answer guess much, so And too question, expand to we're dynamics, bit when new to grow that marketplace why not that number the to continue we're dealing for that

we're those our as in versus to expanding in lower tend spend be levels past, And we talked regions. about as the new regions, skilled

Colorado, continues quarter-over-quarter third-party decline that have basis. this specifically scaled we're to Oklahoma, end market with last for continues decline, to markets, as as in talked that issue few folks the the seen data, on quarters, GMV a across is Now, a environment, about we having our California,

look it's data you better so at year-to-date been down XXXX, to in of part sequentially the far, QX the If date for the period.

states, of and And so is how Colorado. planning markets that outside trends these only of though, Oklahoma across clients. skilled mindful levels paying plan our or of those of grow three in healthy skilled say trends, demand in we're the terms terms also I seeing those dynamic of What spend very amongst regions. seeing states healthy will we're but against demand base, remodeling out your client not ability California, and to We're very our

our clients, the on what client get specifically health outside us, it's read opportunity. that as those does still touching it's focus and a to got those for of eyes because just three obviously but in So as after to around mean? tone states, getting states We've our of that usual go three business

for Okay, the you color. got Thank it.

And our question comes from the Carter Instructions] line you. Stifel. Thank [Operator of next Andrew from

please. question Your

Hey, afternoon. thank you. Good evening. Good

charges? needs, terms cash seeing versus cash $X ask the So kind think number, of the $X in adjusted first quarter class? is cash million of would if help question due basis? the in the burn the there's the of I much much and million on anything what I Or the on you're in was left was How to how distributions kind understand charges cash given us cash go shareholder on special

yes. Yes,

one. Andrew, I that take can So

So a things. couple

we So the that QX. costs the charges, still in earlier as referenced related call, some to residual have we on reduction we took efforts cost cash

filed hit So took. our last half. reductions of we the we we talked, in The first aka severance that or headcount related, the quarter, the in will those bulk charges

we out [indiscernible] our course about $XX December, of paid we million charges when over just So of we've thought talked cash the QX. under

a still we averaging But been a [indiscernible] have quarter about around so. some or tax distributions, go. to distributions tax quarter buck, question On residual have of those, at cost our your a

liquidity movement fully say like. thought the are And and and cash front. severance the we've to that -- in have very so will planning expect our the in that charges left that through much terms on don't near-term is, and we What of go management I

base line the California, clear have on position. very our on the in we a level mentioned, where feel liquidity regardless sized our Oklahoma. touched we of that we're comfortable dynamics with flow, We've you these towards of seeing other Colorado, And happened states. cost I've as cash of sight generating some positive at And, what call, in

obviously second web armed might platform of of kind your the is base? down themselves. of sense have Okay, third-party draw back the the [indiscernible] to kind you're look to question value. board disclosed, pretty MAU teams function what's be But and the still we also similar of in you’re but metrics, in of markets the a what know, to accelerated so shows at time I on evaluating part also, that, be kind That significantly going your has with something sales year-to-date.

can on So you're anything do think sides help of you the at right level? that? Behind demand obviously. the generation investing And you the both funnel, that

take Doug. hired is a absolute This will on recently I Yes, that. We CMO is Pro that. who new an

the been in. But across digging So but health metric we're pressure best of see our markets absolute doubt in the marketplace, board, we've tough. that the there's dialing reflects the still is on are There's end to what no again, the marketplace.

We there what are it. used of is kind which at feeling tell of story. Weedmaps, to the But do we are plant great pockets

within us and features Goldstein make are So Dr. we some we opportunistic. moves, these in that category of lower discussed, then have that the with other penetrate these that we really funnel. like moves funnel feel the like new can wellness and allows health to based of we And top

there's So think again, But have we coming slot question enough get movement. no pressure. here. is there's can we nope, positive up We

strategic can't I cash going given not a you advantage of the I'll a control being have back of rewarded the remaining But and efficient. if Got take it. the a there think think the being that, more capital of thesis guess in to others. lot if realized play a kind got you're most And value about insight, Go options efficient is market. public it you've kind flow ask just capital see and this for original do if you're cannabis of platform, than is you and was question, step of you you transaction, and Public Final the this

anything, I'd to just on So any commentary love that. hear

reason. that Andrew. on public went can executing on start plan. obviously one, I we're for answer Listen, a We the Yes, focused

that what able executing from We to to like. business focused ability have environment. what of we're Obviously, and our tough I'll benefited it's we and can story model markets control leave us, tell it being the capital control, against is on kind the we have. showcase the plan And we at a externally But the for that.

on. it pass I'll enough. Fair

of And line question [Operator you. Thank the Champion from Callahan our next from comes PSC. Instructions] Tom

question Your please.

on Hi, thanks. is the for question. Tom. Jim for This Thanks taking

the there's doubtful kind you've I been you've first, some so with with. of And had business? of like So four Can how takeaways, year. getting accounts about we company Arden, as talk I dealing I macro guess coming learned of keeps back the And you kind challenges balance just kind through one Doug, of curious guess months for you've the allowance us lot the about with it back that what of so been far for up, a involved now. you're think of your of through biggest seems and one the cadence the for you. for Thank

Yes.

challenging a sure. market-by-market really It's a Doug, and is state-by-state this it But really is market, that's story. So, for

getting on talking folks, really I'm the lot budgets thing story. are come brand as in of to a to and that because Weedmaps, their up compressed they're So the tell is, reading industry, one there out does

build relationships in bring East elusive because of to that the with back old as well, Coast, company we've us. been the able the exciting the in on gang and a brands to of kind So little some MSOs been has some were

how back is as be the to the and learn search goal that we integrations hope focusing really And of think doing cannabis our how the our our is to our content, now markets. really help will truth state source really be the really thought we right all for to developing that, way. on help And for So, in really folks kind we're the to search. of pros around, the state and used marketplace, from through leader. bringing that's and our data we consume to We're drives Weedmaps cannabis industry. what data which

of that, supply most I've full takeaway it's main have from the were already advice the given technology. But gotten of beyond since And is We tough. kind and knowledge counsel chain. folks we that

needed. So, the is the that's just main support takeaway, again,

start And even about was We call second expected the we you bad to touching debt Listen, bad the debt have kind normalizing over expense our it's on I had, and or to just course around gross, of Yes. three right, November still mentioned $X in they states, continue AR call over vigilant the end the that and out go, remain market way trending and are those elevated in quarter, we as we again, declines, it in XXXX. you're with before, collections very did million. question only of to not did QX in growth. be

buckets, But a ageing how we've moving various is AR done lot. through

We do lot control. control. to operationally what a I said, Like we can continue to

we relationship. accountability of that big in was quite of starting our terms moves that successful account they're of made lot because put year into the teams, the managing our One hands client collections the the back a to of of

that. So we're good, stemming good, some seeing of good results out

gentlemen, participation the ladies in for program. you, conclude does Thank today's and your conference. This

You may disconnect. Good day. now