WM Technology (MAPS) 9 May 232023 Q1 Earnings call transcript

Good day and thank you for standing by. Welcome to the WM Technology, Inc. Q1 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. Instructions]. [Operator that being advised conference today's be recorded. is Please

hand over Investor to would Greg now speaker conference to like ahead. of I your the today, Please go Stolowitz. Relations, VP

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

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

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

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

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

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

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

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

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

hello joining Greg, us to Thanks, today. and everyone

for good free before revenue a year's had expectations positive EBITDA beat making adjusted our headcount to reduction. flow and We payments related last and first generated quarter. We cash

While we the year, I for believe We in the March do, delivering back path. that on profitable key our right said driving quarter all we in areas. is clients marketplace, growth. focus our in progress us sustainable work have we focus value on more to are the first made and three this to

as orders engagement expand data. tagging accurate algorithms on models brand drive been more On conversion personalized user includes our experiences sort using add-to-cart search experience. deploying AI-driven able of This user personalized matching results, our marketplace, we've for to language more in and personalized we're user first-party drive that to new menus users efforts. been catalog affinity better based products and better to We've through product our see and recommendations product our as relevant With information brands, recommendations. to product more well product

regions with Xx by on an client first major field street and which have clients on-the-ground our activation value have our our delivering expand clients, and their actively a teams cadence marketing On the across impact. our helping phase We've reach of been teams, weekly presence are of end-market and executing increased our to events.

setting most for only industry placing quarter, just users for the efforts allows rolling engage with the important arguably imagery the orders. QX tone have We've to communicate the our launched our to push users also hero begun along more with and give XXX in listing order which status to these to marketplace. this aid new We're the changes more in-flight We more clients out notifications the our ways on during new add clients is to with clients year. that redesign for

and last Appreciation surpassing a with in XXX in year's our promotions particularly value that We this each to what strategic X volume the resulted coupled years. proud rallied in our holiday. backyard teams number largest-ever of to I that the of call Days order and how for City celebration the but we've to activations I'll event reform, XXX have regional span for clients the to We called XX marketing here our Dispensary Boston event Kansas XXX itself The markets We many touch volume Deals single SoCal. I'm initiatives on support Retailer day, of tours that clients. a our of Day always from of over on around our seen integrated events the off our Albuquerque an campaign drive cannabis users. of to briefly kicked with

driving with, and on QX bore that profitable back we said we and in Finally, We I commitment. control operating growth, the control. what we'll how and can sustainable focus on of mindset invest March we're that fruit

transaction we go-public adjusted our XXXX. were operating under we Our for closed that OpEx when levels back was quarter in the to

Our we're teams where hiring we're productivity how fund discipline achieving to showing and are in investments.

as And did Our strategic at finding in despite I December. us the our as net hires the quarter ways said are termination back before payments from the headcount of cash start reductions to positive are declined call, headcount operate managers we flow making the during we free more leanly.

of taxes demand are that markets a we consumer way Taking dealing back, the seen while continue bring yes, crippling with regulatory licensed struggling and be a back of still lack a onset to licensed to since end to channels our challenged legalization, and help. step in federal haven't yes, clients

on we and the to I approach are our clients. continue But see in tremendous our opportunities taking marketplace and regions focused

feeling seeing strength bringing the in is which culture streets the bringing our back marketplace opportunity. the itself and us their of cannabis hometowns, of impact of more are clients Our

I'll Arden. it Now to over turn

our Thanks, Doug, and thanks, everyone, for joining call.

and cash to gave performance $XX at compares to expectation $XX residual adjusted QX headcount quarter on which QX $X our EBITDA was a first Our in compares that million the came as said, profitability. that revenue beat from the which to flow growth million, million, we And expectations the prior in we March. million had. reductions QX. we we positive positive expectation payments took in $X were Doug

marginally paying down base quarter, year. though versus last up Our XX% was last client versus

client continue is we're to new see billing due platform. masking We the issues, on that bringing licensees to churn which our

markets. marginally lower to versus of revenue was which reflects we our last per quarter, in client emerging levels per client mix spend in down our also higher have growth primarily Our as considerations dynamics regions, as which saw declines established opposed revenue

For example, revenue was last versus California flat in quarter. client per

QX marketplace of which of California, mix California in versus in QX share Our slight now in revenue. increase grew revenue for at itself XX% our a which drove QX, stands

our reduction encouraging that retention on and million see our year QX. adjusted to versus monthly last above net versus EBITDA quarter. a is XX% in back adjusted dollar revenue XX% subscription reduction reflected OpEx in $X also QX of was What's XXX% last

and Our is the we level in QX we QX XXXX, noted, prior platform. our our investment same build closed when as out where acceleration the at as go-public of adjusted were OpEx, to to QX fiscal Doug and transaction

We lesser across marketing sales declines in spend saw a the largest and extent and G&A. to

last and and Our XX% and versus year. marketing adjusted declined by G&A XX% sales

a related G&A $X accounts. adjusted to doubtful for includes charge provisions non-cash million Our

compensation, $X includes in net million loss other $X charges. quarter, $X along in non-recurring stock-based million in with which of a reported $X D&A, approximately million the for We million

is was million and year. charges last Form reduction in of Our $XX.X XX% More in QX, GAAP versus a OpEx, our and in XX-Q. be excluding on goods D&A, earnings cost our will these available information of release

headcount to $XX We closed the for we that quarter is QX which related million with the in cash, $X about after spoken million reductions accrued in previously. payments in we've

We continue and debt-free with our position. be to are liquidity comfortable

across count quarter. shares, end Class share diluted our XXX million and B at classes was fully Our of A the the

of classes in the share earnings Relations calculation and non-GAAP A well to share are our of results metrics as posted our nearest presentation reconciliation site. our GAAP provided the to count Investor as details

seeing approach the in the more teams outlook. dialogues opportunities premium to Turning base the initiatives weeks listing and grow across taking having, We're markets markets. rates recent and client in by regions our focused are to to our levels our emerging established encouraged drive a we're continued with with client our to these we're spend the fill tone

that environment. end broader across With we remain uncertainty also the licensed continued and macro about said, the given environment cautious markets

consistent planning if As QX. such, as we will with our be revenue QX are

in On support in $X area. the we the clients our have million and for investing holiday strategic marketing be expect XXX in of profitability, been EBITDA will selectively adjusted QX

We expect more half. our down to back investments will marketing the in ramp normalized second levels

last to the year. noted quarter, in as flow termination to for we expect also the as committed EBITDA QX. for margins But we're driving adjusted year low quarter, to we took noted demonstrated last reductions represent we will we and last and headcount positive cash As cash will be double-digit related the point QX quarter by in impacted continue a costs we remaining our

thank questions, for year. to plan continued our distance I we at for team our moats up thanks our it against open to our competition, Before on versus We're efforts. to Weedmaps employees' more and widening creating their the delivering want this focus

With that, let's questions. take

the [Operator William Carter first Stifel. from question Our comes line of you. Thank Instructions] of

is line Your now open.

for on Andrew is William. This Thanks.

mature is us from a kind a be kind of and guess spend sense delta the from of I thing, markets? how And a then to I average of new kind said at new much these wanted per would kind guess client markets? sense markets degradation looking kind the paying First of and what between is sequential ask of a I give kind coming that of then is mix give how of which market that you And cut better much off? the new of us Thanks. was Could mature client. probably the decline in within cutoff what's online market. came of

And Andrew, it's Arden Yes. here.

about mean when clarify, that assume I to you clients previously cut we say around what off, talked unpublished. we've you Just

right. That's Correct.

Yes. Yes.

give would which one we seen the of we've to think client relatively flat, let been that marginally is due quarter-over-quarter. you that removed paying our exactly have me churn issue, if way about up count it, some So to

number that's So point one.

course Point the number vast majority still last of from is, emerging over on look perspective again, at our not is a where, the would from and characterize we monetization. two as The we're as regions adds licensee if of scaling the of what client net kind we're penetrated regions. coming that quarter, you

impact one that of to the Listen, it a revenue mix. you touched then the client. on during to per point number think quarter-over-quarter asked around the question that three, paying but we we mix And decline the is saw about commentary, way on

that adds largely elevated are in the emerging in where For client mix, this had had more company meaning quarter dynamics than where spend We issues levels due client are churn regions the to billing revenue per we mature markets our average. the more was driven by higher. lower

what And quarter-over-quarter. saw you so that's

sales, of at that quarter, kind rate the on is then kind step-down but of is EBITDA the hold I'm the incremental kind gross step-down looking And margin related of assuming it rate. a to was the it. with of advertising say of did spend? all incremental at to And second of Got going EBITDA, the same in kind advertising, similar you

Yes.

the about it. So the constant to for we again, QX, that's Gross profitability, what be believe, margin adjusted right think QX. related versus should EBITDA pretty exactly to saw we the way in number rate,

product to We expect versus delta sales of on the G&A that we increase and the dev percent QX. relatively stay sales is a call. our and The marketing in constant highlighted as

seeing third-party of final And of on can on of All data. that really disclosed kind anything is top kind you kind kind us or give you metrics, that like rely on I then MAUs. through while. can front, your funnel know front? that Are we thinking one, of a stability one you in haven't any of the

start, well. may Yes, in and chime as I'll Doug

at primarily and say mid driving I'd focused is that what on listen, lower-funnel been the teams moment, have So conversion. our

doing those perspective, for so really a conversion. work from that is mid lower And strategy from map lot a of a the product content funnel strategy and marketing a we're road perspective, both perspective from optimizing

deal XXX So around, one of we conversion about promoting Deals. That for all XX were again, around to claims. example, things talked we driving was that holiday, the the Days of

are based kind we've of of quarters driving of So to stop. around and now, top it conversion flow really our in the perspective a marketing on But funnel, against ebb full how about that past, we're from a investing activity. as where efforts the talked are right tends funnel lot

Thank you.

Our comes Brett Knoblauch the Cantor of of next Fitzgerald. from question line

open. now is line Your

you taking my really I maybe into [indiscernible] appreciate last more had I optimistic in coming environment it, quarter a were, say second quarter, demand the Hi, guys. first you for as spoke would when results, you're guess XX, it. whole you XX than ago? Thanks days question. call about

maybe or you client ahead. do user Brett. environment, demand guess client demand, Yes, when demand the yes. or can address say on we And I mean you demand, Go both.

Sorry.

Yes.

client can demand. more so both, the on you address If

Yes.

So listen, that in of And about third-party states the of data, very We past have folks where headwinds. These talked two established some a dealing what mean tail of we be are do based say the California. in sets past markets bit Colorado. lot seen of talked that, different We've on to a it's business. have I'd continue about by markets. is, a sideways I we the as with

look So those the pretty steady for GMV two quoted decline. when third sequential just put that it will show at we've I most end you week-over-week year, this out data of licensed market, seen by states for that's that parties,

business, looked do some at where we footprint. we medical business being or any top Now of regulation. have us rec what a to where say where you would is, you I'd do states that with that -- said, form other we state has if our expect And the all there's regions

top states, have at are that a double you as dealing end But look market overall states we small digits, that we an still that's rapid base, given client kind kind have or up business sentiment a the number California about just a If a very are at or the triple what's impacting think our XX digits, states we of like on clip. states of a growing up that Colorado of demand. headwinds is we're Oklahoma. weighing with some And

have with across with front headwinds a you're to clients Weedmaps, or demand that are of dealing I'd platform even sure, for these need in our headwinds whether in consumer. anxious are not. of dealing I folks, listen, guess, get or that's the the board, market markets that desire be in to say given kind So more, on their their in the for just

that's So side. client on the

that while We demand think the we now a said say is user think side, we it's I'd cannabis on this consumer for for resilient. strong. very still

established pocketbooks how eye consumer our lot a of keeping happening a we're is that if headwinds what's be licensed much as consumer continues always to are lot we their for of in it that The hold to that across spend But and environment on non-licensed lies to there. allocated the channels question and data is course, Of of macro the on tracking, product. therein across the channels continues versus based to a seems of demand these because discretionary markets. the source risk

had it promotion. Okay. like for XX for Can color. Thank of you And quantify kind you're event over you period? Thank that help then just XXX maybe just you the the that seeing you've you on that percentage maybe your Deals kind of XX said saw Can from ago or largest you. year from Days, quantify, help was order volume. you growth XXX the

holidays. the terms prior Yes. XXX I'll call at about the this on of past talked take XXX a how in crack And that order metrics. volume for our eclipsed Doug

a we single-digit we in in company's of our campaign. big to year-over-year, double specifically were claims deal volume a Where up saw on percent into largest so increases were our also digits had we the in the the characterize deal Days year-over-year, due I'd a up it history. Deals order low as percent XX And basis. single area. well growth claims the day It's

for you today's your This this time, questions. conclude conference. the does program. I participation At see further Thank you. no Thank in

now disconnect. may You