WM Technology (MAPS) 8 Aug 232023 Q2 Earnings call transcript

Good day, and thank you for standing by. Welcome to the WM Technology second quarter earnings conference call.

[Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Greg Stolowitz, Vice President of Investor Relations. Please go ahead.

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

now access have Francis; supporting Hoitt CFO, By Doug Executive slide with should Duncan today. We Investor Chair, Interim deck CTO, on our Relations announcement our to earnings Grazier; our and us everyone and have website. Mary

and long-term a not we mind that in of will call, about guarantees this uncertainties, which Keep future forward-looking statements some to our are control. statements goals. are are business, risks and During beyond make outlook variety of performance strategies subject and of forward-looking our

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

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

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

non-GAAP accordance addition in but prepared to, not We prepared in substitute along considered in the measures GAAP. discuss measures information will accordance also financial those as financial be with GAAP. should Non-GAAP with for a

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to turning our Now results.

our the which quarter and over productivity few with reflects renewed continued are quarters. performance, our past We second pleased focus

For our cash and for revenue adjusted the EBITDA, second positive in a quarter generating from expectations operations. row, flow we while beat

of last $X increased million. In overall had had revenues not adjusted income million, $XX $XX QX, of balance for to of we headcount million have would related payments reductions. Our cash been net year's and EBITDA it

XX% was ago. year Our adjusted lower OpEx than a

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to, position. financial feel liquidity with speak and we will comfortable Mary As our

end what do, we to in While there be especially with to made, is continues market. more we pleased the challenging progress have are a

are improving delivering year, objectives quarters clients, on focused As our driving value profitable and this said sustainable X for now, growth. I marketplace to and we have our multiple

on the levels. which to to marketplace addition speak hyperlocal national deep, in we heavily clients, improvements, to we value are to, building will committed relationships investing in delivering On and impactful and

to activations ability a digital clients our are with how to on-the-ground our platforms We touch that excited cannabis field unique drive off-line value marketing built-in at with We our technology. points about. focused engaging the our our presence. promotional community on folks beyond broader with are believe something and and We know that to and combine multiple effective clients add ROI Weedmaps creates stores to is goes is our

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us it Finally, is and on on profitable continue to driving sustainable to savings. growth, critical focused be for

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search. believe with provide to company to back lean it I turn an I wanted Technologies over, first on update I the WM and is philosophy. a Before cannabis leadership operating

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and team turn want over thank member. I that, that, With each Duncan. to to For it every I'll

join the continuing in talk by our how our about overview competitive quarter scaling organization Thanks, Doug, I key evolved be of about some in years the XXXX and industry. platform I'm tech future some capable Weedmaps. in our of to we you initiatives and post-federal to most we Doug afternoon, advancements our technology set up excited a of are technology to talk efforts the product driving mentioned, the then and to see I our and to marketplace. the where lead as legalization to build technology technology brief of And will today WM start business. good we to to advantage important to joined how organization, a everyone. for want giving made discuss our a as recent specifically of technology has I past

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a underlying resilient, not those industry. To is the manner and also scalable do and we supports regional but the build experiences in this, cannabis us to enables complexities that deliver that technology requirements only durable, of the

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our of now financials. me Mary it to review a turn And let over for

earnings call. excited Technology I'm joining Thanks, be Duncan. my first WM to

as performance line May. million, adjusted to EBITDA the markets. at year's paying headcount million, that to both that we down QX average in We compares QX. $XX had. last And said, expectation less across and reductions. our second million payments X% emerging X,XXX on top growth came we able clients were revenue in flow which gave Our which related drive versus $X and positive was we before than QX, to in profitability. generated cash client compares beat quarter We expectation expectations making to mature million Doug new $XX $XX growth final monthly had QX

from churn as positive by delivery clients. net California, experienced other more collection platform markets. churn, growth clients However, economic stemming our California from client In saw that policies. facing wins clients these issues from implemented client billing were or removed facing we the Oklahoma in we specifically, headwinds emerging Overall, and offset we largely stringent we

lower our churn per by X% in by QX, largely paying in states, spend offset Revenue increased smaller, clients. driven from client was revenue QX, client up $X,XXX mature of

few previously onboard In decline last versus in markets in we XX% likely As client QX, on the stated, slightly was the quarter. per spend expect QX. quarters revenue in the platform. we have levels emerging our lower clients in XX% X% of California with do up revenue begin next we revenue down will client per as who represented of California, from

Our net on monthly retention quarter. revenue listings was XX.X% for dollar our the

QX. marketing marketing OpEx spend across saw declined versus versus of EBITDA last the in million reduction declines and reflected sales adjusted year, QX similar $XX to by adjusted largest a our XX% in last adjusted XX% and as We sales year.

G&A development Our respectively. adjusted product and XX%, adjusted declined by XX% and

will helped QX wage business QX provisions a includes adjusted to which to G&A a Relative for EBITDA the accounts. see our in did timing strong performance Our upside shift charge $X.X profile to and QX, our guidance, in efficiencies finding driven marketing across are line non-wage. financials. and by doubtful spend from top some our with QX noncash We our but QX continued we was adjusted million related margin in impact

policies which decline, to quarters. continues expense implemented have we few debt and bad over we the believe our past procedures Finally, reflects the

said, be investment-making beyond. focused This disciplined and QX our will decisions. Doug and are we we QX what is did what echo in doing on in To in

nonrecurring compensation, of $X along As $X by D&A, discipline, this million by net QX, was quarter XXX $X $X an our employees. million, X other in headcount We stock-based the just net charges. example in in million impacted of approximately with reported ending income million a in which grew with

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

in had last accrued quarter already to from related cash in reductions is with payments cash, $X.X headcount which we after $XX We for that million million year. closed the

all we we As point expect be the the related given made we QX of have previously our have low the headcount those year, will to position for reductions. payments stated, of cash now

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

and count XXX B GAAP of quarter. metrics Our of in to their million reconciliation results as classes non-GAAP share share presentation Investor A across provided and share our of Relations posted site. calculations Class to details was the our end classes well our share as at earnings our A are the count nearest the

also on auditors. our like independent I'd to update an provide

XXXX. the Tilly to Baker ending of XX, the our am December that second firm filing as the Board reported, quarter I auditor will longer previously following appointment as announce fiscal Form XX-Q. As registered new no serve the approved Adams our pleased Moss has accounting for the company's of public year independent

to Turning outlook. our

and for fronts, be these operational continue are progress increase We to right facing set our to GMV we for balance grow on term. fiscal both regulatory line, expect year and for the view up a of We challenges the guidance with and long multiple the support enforcement, 'XX decisions margin lack adjusted make priority our to EBITDA QX our in of said, margin near We to be such, With QX continue pleased some are and marketplace. the to partially the EBITDA largely committed well-known we On realistic be timing marketing. X aware adjusted our right by across and relative shift areas well flow growth. the and generating progress area. confident are investments the strategic, $X we as as WM planning QX. plan financial still and license making making activations technology we planning double-digit the additional for revenue the year $XX QX to will the quarter and both of our are across are state top we reasonable of acutely that focus previous to industry and driven for must expect we million including profitability, clients We be positive are are to spend to to remain and against prudently The cash in million. in investments to believe ones QX cash marketing the expenses and will make and as from of Weedmaps digital our

turn time, the operator this Q&A. At back for the I'll to over call

Instructions] Your [Operator from Andrew first of question Carter comes Stifel.

the lot I -- a from bump And quantify a client, Was wanted is? number of of kind moving start April the ongoing to know that I'll parts, there's to I you of net a there. was ask good good what's $X,XXX kind number? up? spending of could what kind that on but

I'd of the clients we our was it's seeing. increasing some we're that this, some especially churn commentary, lot tail. of larger beginning talked our Andrew, the say good obviously, saw the about in momentum, quarter in in for Greg. of the A spend. of really We

And of the lot and leaning clients. It with made of with working we were -- so of that. our policies a happy reflective was in

As just obviously, you the count forward, guide. per I we but our see look client. say flat, spend expect given be we're to churn going going client on we heard and the to impact go we're will relatively some that see growth, some to paying would offsetting

will QX. probably it be QX it of was versus what what in in we and saw more So QX reflective

this Doug. is And

as markets, Additionally, average lower. we go be at client the per emerging to spend the tends

that realize we'll of term. in some So near the

markets the the like ask profile than in a I'll more brands markets are so what different. where bit right is little spending The kind of retention, something of emerging selling net proposition emerging Perfect. a of established? Yes. retention because California, and kind now

retention state-by-state was have that saw, disclose. we're and retention or -- to markets. our I don't obviously, We just regional increase The specific Oklahoma. in net say in emerging obviously don't we California would a we net we continuing churn Yes. clients have

growth are emerging really of good levels states average spend average. our are in The the some obviously we're below above our mature seeing the So retention and markets.

average we those obviously they the develop to so as And but increase, low are those markets. continue in

these clients these outcome. we're implicates as market are to markets And health them long-term the with headwinds, of the emerging because facing really working develop the really

industry and where we can. we're being So again, our opportunistic supporting

I Can I'll days the it's kind be? the what the guess, under control it about sizably are you ask got like final where to continued to you question of it's would churn XX. you Or think is expect terms of within, have receivable, levels And I kind you what out to -- down there?

we've progress we receivables our Look, collection our and -- pretty good obviously on feel made Yes. policies.

implement holding implemented, have decisions slightly talked policies stringent on that. more some are our revenue continue We clients we Doug making commentary. and we're of his to about to the

feel Obviously, debt it's good bad we allowance position. still so a our is There are And out for unknowns coming known in down. there.

to clients we going has our about completely, say and the And working how good policy been how procedures, really internally so number feel we're the both we're that clear about and with in not we're trending. but

Your Fortune next Scott question MKM. comes ROTH from of

Nick on for This Scott. is

their to just First on on Can clients just client appetite seen the advertising. of invest comment one side. terms you from you've me, in for kind your what in of

behavior cash kind seen to macro Given the is spend past ROI shift the seen wondering if I'm changes on of client discernible in kind But compelling. difficult more Obviously, you've a just focus we've months? backdrop, the here preservation. offering X in and any of kind margins your of of

that state state. Obviously, varies Yes. to

So these is That state advantage definitely said, pressure of and on the there consolidating in own few being are general. opportunities. who taking story. across our are its players a each board feel budgets clients' We

those tight our data as increase California. relationships can you that see important because it's in places income get to like we for those folks with some us of did So in

So it really just a story. state-by-state is

cannabis color. announcement appreciate shutter second me, transactions. I Mastercard then on And Okay. from for the to of the just kind

there announcement? or puts the your off this And of any from any on that announcement. kind Just impacts seen side business have your and impacts takes from you client just

technology, built headwinds I stack. Mastercard obviously they'd it's some their we additional mean ability out know We as face. in there that companies that an assuming have continue Yes. industry, have to

be for them. will challenge a that So

dynamic. industry Our to used We're is this.

to be to another and deal this of imagine just out weave So with. is bob okay, clients definitely will our come and able most to that going have I pain but they're

conclude in this you Thank participation program. for today's conference. This does your

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