WM Technology, Inc. Reports Financial Results For Second Quarter 2024
The Company Reported Net Revenues of
“We are extremely pleased with our accomplishments this quarter, which reflect the hard work and dedication of our entire team,” said
“Our second quarter profitability and ending cash balance are a result of our continued focus to streamline operational processes and manage client collections,” said
Second Quarter 2024 Financial Highlights
-
Net revenues for the second quarter ended
June 30, 2024 were$45.9 million as compared to$48.4 million in the second quarter of 2023, representing a decline of 5% compared to the prior year period due to our clients continuing to face constrained marketing budgets, the ongoing price deflation in and consolidation of our industry, and the impact on revenue related to the sunset of certain products in the fourth quarter of 2023.- Average monthly paying clients(1) of 5,045, was down from 5,609 from the prior year period, largely due to the removal of paying clients from our platform who have become delinquent, the impact on client count related to the sunset of the aforementioned products, as well as expected client churn due to continued industry challenges, such as price deflation and ongoing consolidation.
-
Average monthly net revenues per paying client(2) increased to
$3,033 from$2,878 in the prior year period, due to churn of lower paying clients, including the clients using the aforementioned sunset products, which typically had a lower average selling price.
-
Net income was
$1.2 million as compared to$2.0 million in the prior year period. -
Adjusted EBITDA(3) decreased to
$10.1 million from$10.2 million from the prior year period. -
Total shares outstanding across Class A and Class V Common Stock were 152.4 million as of
June 30, 2024 . -
Cash increased to
$41.3 million as ofJune 30, 2024 , as compared to$34.4 million as ofDecember 31, 2023 .
Reconciliations of GAAP to non-GAAP financial measures have been provided in the tables included in this release.
______________________________
|
(1) |
Average monthly paying clients are defined as the average of the number of paying clients billed in a month across a particular period (and for which services were provided). |
|
|
(2) |
Average monthly net revenues per paying client is defined as the average monthly net revenues for any particular period divided by the average monthly paying clients in the same respective period. Average monthly net revenues per paying client is calculated in the same manner as our previously-reported “average monthly revenue per paying client,” and the description of the metric is being updated solely to clarify that it is calculated using net revenues. Average monthly net revenues per paying client has been retrospectively adjusted to reflect the restatement of previously reported net revenues. |
|
|
(3) |
For further information about how we calculate EBITDA and Adjusted EBITDA as well as limitations of their use and a reconciliation of EBITDA and Adjusted EBITDA to net income (loss), see “Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA” below. |
Restatement of Previously Reported 2023 Quarterly Net Revenues and Credit Losses
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||
|
|
Previously Reported |
|
Adjustment |
|
As Restated |
|
Previously Reported |
|
Adjustment |
|
As Restated |
||||||||
|
Net revenues |
$ |
50,852 |
|
$ |
(2,429 |
) |
|
$ |
48,423 |
|
$ |
98,859 |
|
$ |
(4,020 |
) |
|
$ |
94,839 |
|
General and administrative expenses |
$ |
19,208 |
|
$ |
(2,429 |
) |
|
$ |
16,779 |
|
$ |
41,708 |
|
$ |
(4,020 |
) |
|
$ |
37,688 |
|
Total costs and expenses |
$ |
47,069 |
|
$ |
(2,429 |
) |
|
$ |
44,640 |
|
$ |
99,224 |
|
$ |
(4,020 |
) |
|
$ |
95,204 |
|
|
Six Months Ended
|
||||||||||
|
|
Previously Reported |
|
Adjustment |
|
As Restated |
||||||
|
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: |
|
|
|
|
|
||||||
|
Provision for credit losses |
$ |
3,605 |
|
|
$ |
(4,020 |
) |
|
$ |
(415 |
) |
|
|
|
|
|
|
|
||||||
|
Changes in operating assets and liabilities: |
|
|
|
|
|
||||||
|
Accounts receivable |
$ |
(1,138 |
) |
|
$ |
4,020 |
|
|
$ |
2,882 |
|
Business Outlook
Based on information available as of
-
Net revenues are estimated to be approximately
$44 million .
-
Non-GAAP Adjusted EBITDA(3) is estimated to be approximately
$7 million .
The guidance provided above is only an estimate of what we believe is realizable as of the date of this release. We are not readily able to provide a reconciliation of projected Non-GAAP Adjusted EBITDA to projected net income (loss) without unreasonable effort. This guidance assumes that no business acquisitions, investments, restructurings, or legal settlements are concluded in the period. Our results are based on assumptions that we believe to be reasonable as of this date, but may be materially affected by many factors, as discussed below in “Forward-Looking Statements.” Actual results may vary from the guidance and the variations may be material. We undertake no intent or obligation to publicly update or revise any of these projections, whether as a result of new information, future events or otherwise, except as required by law.
Investor Conference Call and Webcasts
The Company will host a conference call and webcast today,
The Company has used, and intends to continue to use, the investor relations portion of its website as a means of disclosing material non-public information and for complying with disclosure obligations under Regulation FD.
About
Founded in 2008,
Over the past 15 years, the Weedmaps marketplace has become a premier destination for cannabis consumers to discover and browse cannabis-related products, access daily dispensary deals, order ahead for pick-up and delivery by participating retailers (where applicable) and learn about the plant. The Company also offers eCommerce-enablement tools designed to help cannabis retailers and brands reach consumers, create business efficiency, and manage industry-specific compliance needs.
The Company is committed to advocating for full
Headquartered in
Forward-Looking Statements
This press release includes “forward-looking statements” regarding the Company’s future business expectations which involve risks and uncertainties. Forward looking statements may be identified by the use of words such as “estimate,” “plan,” “project,” “forecast,” “intend,” “will,” “expect,” “anticipate,” “believe,” “seek,” “target” or other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, statements regarding estimates and forecasts of financial and performance metrics. These statements are based on various assumptions, whether or not identified in this press release, and on the current expectations of the Company’s management and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on by any investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the control of the Company. These forward-looking statements are subject to a number of risks and uncertainties, including the Company’s financial and business performance, including key business metrics and any underlying assumptions thereunder; market opportunity and the Company’s ability to acquire new clients and retain existing clients; expectations and timing related to commercial product launches; success of the Company’s go-to-market strategy; the Company’s ability to scale its business and expand its offerings; the Company’s competitive advantages and growth strategies; the Company’s future capital requirements and sources and uses of cash; the Company’s ability to obtain funding for its future operations; the impact of the material weaknesses in the Company’s internal controls and ability to remediate these material weaknesses in the timing the Company anticipates, or at all; the outcome of any known and unknown litigation and regulatory proceedings; changes in domestic and foreign business, market, financial, political and legal conditions; the effect of macroeconomic conditions, including but not limited to inflation, uncertain credit and global financial markets, recent and potential future disruptions in access to bank deposits or lending commitments due to bank failures and geopolitical events, including the military conflicts between
Use of Non-GAAP Financial Measures
Our financial statements, including net income (loss), are prepared in accordance with principles generally accepted in
To provide investors with additional information regarding our financial results, we have disclosed EBITDA and Adjusted EBITDA, both of which are non-GAAP financial measures that we calculate as net income (loss) before interest, taxes and depreciation and amortization expense in the case of EBITDA and further adjusted to exclude stock-based compensation, change in fair value of warrant liability, transaction related bonus, legal settlements and other legal costs, reduction in force, asset impairment charges, change in TRA liability and other non-cash, unusual and/or infrequent costs in the case of Adjusted EBITDA. Below we have provided a reconciliation of net income (loss) (the most directly comparable GAAP financial measure) to EBITDA; and from EBITDA to Adjusted EBITDA.
We present EBITDA and Adjusted EBITDA because these metrics are key measures used by our management to evaluate our operating performance, generate future operating plans and make strategic decisions regarding the allocation of investment capacity. Accordingly, we believe that EBITDA and Adjusted EBITDA provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management.
Each of EBITDA and Adjusted EBITDA has limitations as an analytical tool, and you should not consider any of these non-GAAP financial measures in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are as follows:
- although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
- EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs; and
- EBITDA and Adjusted EBITDA do not reflect tax payments that may represent a reduction in cash available to us.
Because of these limitations, you should consider EBITDA and Adjusted EBITDA alongside other financial performance measures, including net income (loss), our GAAP expenses, and our other GAAP results.
|
CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands, except for share data) |
||||||||
|
|
|
|
|
|
||||
|
Assets |
|
|
|
|
||||
|
Current assets |
|
|
|
|
||||
|
Cash |
|
$ |
41,292 |
|
|
$ |
34,350 |
|
|
Accounts receivable, net |
|
|
7,000 |
|
|
|
11,158 |
|
|
Prepaid expenses and other current assets |
|
|
5,547 |
|
|
|
5,978 |
|
|
Total current assets |
|
|
53,839 |
|
|
|
51,486 |
|
|
Property and equipment, net |
|
|
25,909 |
|
|
|
24,255 |
|
|
|
|
|
68,368 |
|
|
|
68,368 |
|
|
Intangible assets, net |
|
|
2,230 |
|
|
|
2,507 |
|
|
Right-of-use assets |
|
|
13,064 |
|
|
|
15,629 |
|
|
Other assets |
|
|
4,553 |
|
|
|
4,776 |
|
|
Total assets |
|
$ |
167,963 |
|
|
$ |
167,021 |
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|
||||
|
Current liabilities |
|
|
|
|
||||
|
Accounts payable and accrued expenses |
|
$ |
18,563 |
|
|
$ |
21,182 |
|
|
Deferred revenue |
|
|
5,844 |
|
|
|
5,918 |
|
|
Operating lease liabilities, current |
|
|
4,471 |
|
|
|
6,493 |
|
|
Tax receivable agreement liability, current |
|
|
1,455 |
|
|
|
122 |
|
|
Total current liabilities |
|
|
30,333 |
|
|
|
33,715 |
|
|
Operating lease liabilities, non-current |
|
|
24,632 |
|
|
|
26,550 |
|
|
Tax receivable agreement liability, non-current |
|
|
1,123 |
|
|
|
1,634 |
|
|
Warrant liability |
|
|
975 |
|
|
|
585 |
|
|
Other long-term liabilities |
|
|
1,714 |
|
|
|
1,386 |
|
|
Total liabilities |
|
|
58,777 |
|
|
|
63,870 |
|
|
Commitments and contingencies |
|
|
|
|
||||
|
Stockholders’ equity |
|
|
|
|
||||
|
Preferred Stock - |
|
|
— |
|
|
|
— |
|
|
Class A Common Stock - |
|
|
10 |
|
|
|
9 |
|
|
Class V Common Stock - |
|
|
5 |
|
|
|
5 |
|
|
Additional paid-in capital |
|
|
87,005 |
|
|
|
80,884 |
|
|
Accumulated deficit |
|
|
(62,562 |
) |
|
|
(64,518 |
) |
|
|
|
|
24,458 |
|
|
|
16,380 |
|
|
Noncontrolling interests |
|
|
84,728 |
|
|
|
86,771 |
|
|
Total stockholders’ equity |
|
|
109,186 |
|
|
|
103,151 |
|
|
Total liabilities and stockholders’ equity |
|
$ |
167,963 |
|
|
$ |
167,021 |
|
|
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except for share data) |
|||||||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
|
2024 |
|
2023 As Restated1 |
|
2024 |
|
2023 As Restated1 |
||||||||
|
Net revenues |
$ |
45,903 |
|
|
$ |
48,423 |
|
|
$ |
90,292 |
|
|
$ |
94,839 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Costs and expenses |
|
|
|
|
|
|
|
||||||||
|
Cost of revenues (exclusive of depreciation and amortization shown separately below) |
|
2,245 |
|
|
|
3,239 |
|
|
|
4,547 |
|
|
|
6,733 |
|
|
Sales and marketing |
|
11,069 |
|
|
|
12,567 |
|
|
|
20,703 |
|
|
|
24,627 |
|
|
Product development |
|
9,642 |
|
|
|
9,200 |
|
|
|
18,871 |
|
|
|
20,134 |
|
|
General and administrative |
|
18,529 |
|
|
|
16,779 |
|
|
|
35,055 |
|
|
|
37,688 |
|
|
Depreciation and amortization |
|
3,187 |
|
|
|
2,855 |
|
|
|
6,124 |
|
|
|
6,022 |
|
|
Total costs and expenses |
|
44,672 |
|
|
|
44,640 |
|
|
|
85,300 |
|
|
|
95,204 |
|
|
Operating income (loss) |
|
1,231 |
|
|
|
3,783 |
|
|
|
4,992 |
|
|
|
(365 |
) |
|
Other income (expenses), net |
|
|
|
|
|
|
|
||||||||
|
Change in fair value of warrant liability |
|
460 |
|
|
|
(1,045 |
) |
|
|
(390 |
) |
|
|
(320 |
) |
|
Change in tax receivable agreement liability |
|
(395 |
) |
|
|
(520 |
) |
|
|
(938 |
) |
|
|
(620 |
) |
|
Other income (expense) |
|
(60 |
) |
|
|
(235 |
) |
|
|
(460 |
) |
|
|
(681 |
) |
|
Income (loss) before income taxes |
|
1,236 |
|
|
|
1,983 |
|
|
|
3,204 |
|
|
|
(1,986 |
) |
|
Provision for income taxes |
|
42 |
|
|
|
— |
|
|
|
51 |
|
|
|
— |
|
|
Net income (loss) |
|
1,194 |
|
|
|
1,983 |
|
|
|
3,153 |
|
|
|
(1,986 |
) |
|
Net income (loss) attributable to noncontrolling interests |
|
478 |
|
|
|
757 |
|
|
|
1,197 |
|
|
|
(737 |
) |
|
Net income (loss) attributable to |
$ |
716 |
|
|
$ |
1,226 |
|
|
$ |
1,956 |
|
|
$ |
(1,249 |
) |
|
|
|
|
|
|
|
|
|
||||||||
|
Class A Common Stock: |
|
|
|
|
|
|
|
||||||||
|
Basic income (loss) per share |
$ |
0.01 |
|
|
$ |
0.01 |
|
|
$ |
0.02 |
|
|
$ |
(0.01 |
) |
|
Diluted income (loss) per share |
$ |
0.01 |
|
|
$ |
0.01 |
|
|
$ |
0.02 |
|
|
$ |
(0.01 |
) |
|
|
|
|
|
|
|
|
|
||||||||
|
Class A Common Stock: |
|
|
|
|
|
|
|
||||||||
|
Weighted average basic shares outstanding |
|
95,342,596 |
|
|
|
92,851,349 |
|
|
|
95,023,380 |
|
|
|
92,589,011 |
|
|
Weighted average diluted shares outstanding |
|
97,275,700 |
|
|
|
93,622,582 |
|
|
|
96,647,173 |
|
|
|
92,589,011 |
|
___________________________
1. For the three and six months ended
|
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) |
|||||||
|
|
Six Months Ended |
||||||
|
|
2024 |
|
2023 As Restated1 |
||||
|
Cash flows from operating activities |
|
|
|
||||
|
Net income (loss) |
$ |
3,153 |
|
|
$ |
(1,986 |
) |
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
||||
|
Depreciation and amortization |
|
6,124 |
|
|
|
6,022 |
|
|
Change in fair value of warrant liability |
|
390 |
|
|
|
320 |
|
|
Change in tax receivable agreement liability |
|
938 |
|
|
|
620 |
|
|
Amortization of right-of-use lease assets |
|
2,385 |
|
|
|
2,423 |
|
|
Stock-based compensation |
|
5,571 |
|
|
|
8,092 |
|
|
Gain on lease termination |
|
(109 |
) |
|
|
— |
|
|
Provision (benefit) for credit losses |
|
(616 |
) |
|
|
(415 |
) |
|
Changes in operating assets and liabilities: |
|
|
|
||||
|
Accounts receivable |
|
4,774 |
|
|
|
2,882 |
|
|
Prepaid expenses and other current assets |
|
328 |
|
|
|
1,623 |
|
|
Other assets |
|
123 |
|
|
|
41 |
|
|
Accounts payable and accrued expenses |
|
610 |
|
|
|
(12,880 |
) |
|
Deferred revenue |
|
(74 |
) |
|
|
406 |
|
|
Operating lease liabilities |
|
(3,543 |
) |
|
|
(3,056 |
) |
|
Net cash provided by operating activities |
|
20,054 |
|
|
|
4,092 |
|
|
|
|
|
|
||||
|
Cash flows from investing activities |
|
|
|
||||
|
Capitalized software and expenditures |
|
(7,140 |
) |
|
|
(5,806 |
) |
|
Net cash used in investing activities |
|
(7,140 |
) |
|
|
(5,806 |
) |
|
|
|
|
|
||||
|
Cash flows from financing activities |
|
|
|
||||
|
Repayments of insurance premium financing |
|
— |
|
|
|
(1,450 |
) |
|
Distributions |
|
(5,950 |
) |
|
|
(1,002 |
) |
|
Proceeds from repayment of related party note |
|
96 |
|
|
|
187 |
|
|
Tax receivable agreement payment |
|
(116 |
) |
|
|
— |
|
|
Taxes paid related to net share settlement of equity awards |
|
(2 |
) |
|
|
(1 |
) |
|
Net cash used in financing activities |
|
(5,972 |
) |
|
|
(2,266 |
) |
|
|
|
|
|
||||
|
Net increase (decrease) in cash |
|
6,942 |
|
|
|
(3,980 |
) |
|
Cash – beginning of period |
|
34,350 |
|
|
|
28,583 |
|
|
Cash – end of period |
$ |
41,292 |
|
|
$ |
24,603 |
|
___________________________
1. For the six months ended
|
RECONCILIATION OF NET INCOME (LOSS) TO EBITDA AND ADJUSTED EBITDA (Unaudited) (In thousands) |
|||||||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
|
|
(in thousands) |
||||||||||||||
|
Net income (loss) |
$ |
1,194 |
|
|
$ |
1,983 |
|
|
$ |
3,153 |
|
|
$ |
(1,986 |
) |
|
Provision for income taxes |
|
42 |
|
|
|
— |
|
|
|
51 |
|
|
|
— |
|
|
Depreciation and amortization expenses |
|
3,187 |
|
|
|
2,855 |
|
|
|
6,124 |
|
|
|
6,022 |
|
|
Interest income |
|
(40 |
) |
|
|
(12 |
) |
|
|
(51 |
) |
|
|
(12 |
) |
|
EBITDA |
|
4,383 |
|
|
|
4,826 |
|
|
|
9,277 |
|
|
|
4,024 |
|
|
Stock-based compensation |
|
2,752 |
|
|
|
3,709 |
|
|
|
5,571 |
|
|
|
8,092 |
|
|
Change in fair value of warrant liability |
|
(460 |
) |
|
|
1,045 |
|
|
|
390 |
|
|
|
320 |
|
|
Transaction related bonus (recovery) expense |
|
— |
|
|
|
(275 |
) |
|
|
— |
|
|
|
2,567 |
|
|
Legal settlements and other legal costs |
|
3,020 |
|
|
|
666 |
|
|
|
3,513 |
|
|
|
1,533 |
|
|
Reduction in force (recovery) expense |
|
— |
|
|
|
(264 |
) |
|
|
— |
|
|
|
201 |
|
|
Change in tax receivable agreement liability |
|
395 |
|
|
|
520 |
|
|
|
938 |
|
|
|
620 |
|
|
Adjusted EBITDA |
$ |
10,090 |
|
|
$ |
10,227 |
|
|
$ |
19,689 |
|
|
$ |
17,357 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240808256801/en/
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