WM Technology, Inc. Reports Financial Results for Third Quarter 2024
Net Income Increased 312% Year-Over-Year to
Cash Increased 31% from Year-End to
Adjusted EBITDA of
"Our third quarter results mark yet another consecutive period of strong financial performance and positive cash flow, underscoring the solid foundation our team has built," said
"The fundamentals of our business continue to strengthen, as evidenced by our eighth consecutive quarter of Adjusted EBITDA profitability," said
Third Quarter 2024 Financial Highlights
-
Net revenues of
$46.6 million increased from$45.9 million in the prior quarter and decreased from$46.7 million in prior year period. The decrease from the prior year period was due to the impact on revenue related to the sunset of certain products in the fourth quarter of 2023, partially offset by growth in certain products.- Average monthly paying clients(1) of 5,100 increased from 5,045 in the prior quarter and decreased from 5,414 in the prior year period. The decrease from the prior year period was primarily driven by the impact on client count related to the sunset of the aforementioned products, as well as the removal of clients from our platform who have become delinquent and expected client churn due to continued industry challenges, such as price deflation and ongoing consolidation.
-
Average monthly net revenues per paying client(2) of
$3,043 increased from$3,033 in the prior quarter and increased from$2,874 in the prior year period. The increase from the prior year period was due to sunset of certain products inDecember 2023 , which had lower average monthly spending clients.
-
Net income increased to
$5.3 million from$1.2 million in the prior quarter and net loss of$2.5 million in the prior year period. -
Adjusted EBITDA(3) increased to
$11.3 million from$10.1 million in the prior quarter and$10.7 million from the prior year period. -
Total shares outstanding across Class A and Class V Common Stock were 152.9 million as of
September 30, 2024 . -
Cash increased to
$45.0 million as ofSeptember 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. |
Business Outlook
Based on information available as of
-
Net revenues are estimated to be approximately
$46 million . -
Non-GAAP Adjusted EBITDA(3) is estimated to be approximately
$7 million .
The guidance provided above is only an estimate of what the Company believes is realizable as of the date of this release. The Company is 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. The Company’s results are based on assumptions that it believes 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. The Company undertakes 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.
Restatement of Previously Reported 2023 Quarterly Revenues and Credit Losses
The Company has restated its unaudited condensed Consolidated Statements of Operations for the period ended
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||||||
|
|
Previously
|
|
Adjustment |
|
As Restated |
|
Previously
|
|
Adjustment |
|
As Restated |
||||||||
|
Net revenues |
$ |
47,725 |
|
$ |
(1,038 |
) |
|
$ |
46,687 |
|
$ |
146,584 |
|
$ |
(5,058 |
) |
|
$ |
141,526 |
|
General and administrative expenses |
$ |
19,189 |
|
$ |
(1,038 |
) |
|
$ |
18,151 |
|
$ |
60,897 |
|
$ |
(5,058 |
) |
|
$ |
55,839 |
|
Total costs and expenses |
$ |
53,273 |
|
$ |
(1,038 |
) |
|
$ |
52,235 |
|
$ |
152,497 |
|
$ |
(5,058 |
) |
|
$ |
147,439 |
The Company has restated its unaudited condensed Consolidated Statements of Cash Flows for period ended
|
|
Nine Months Ended
|
|||||||||
|
|
Previously
|
|
Adjustment |
|
As Restated |
|||||
|
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: |
|
|
|
|
|
|||||
|
Provision (recovery) for credit losses |
$ |
4,862 |
|
$ |
(5,058 |
) |
|
$ |
(196 |
) |
|
|
|
|
|
|
|
|||||
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|||||
|
Accounts receivable |
$ |
262 |
|
$ |
5,058 |
|
|
$ |
5,320 |
|
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 a key measure 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) and our other GAAP results.
|
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||||||||
|
|
|
|
|
|
||||
|
Assets |
|
|
|
|
||||
|
Current assets |
|
|
|
|
||||
|
Cash |
|
$ |
45,043 |
|
|
$ |
34,350 |
|
|
Accounts receivable, net |
|
|
7,907 |
|
|
|
11,158 |
|
|
Prepaid expenses and other current assets |
|
|
6,409 |
|
|
|
5,978 |
|
|
Total current assets |
|
|
59,359 |
|
|
|
51,486 |
|
|
Property and equipment, net |
|
|
24,876 |
|
|
|
24,255 |
|
|
|
|
|
68,368 |
|
|
|
68,368 |
|
|
Intangible assets, net |
|
|
2,091 |
|
|
|
2,507 |
|
|
Right-of-use assets |
|
|
15,513 |
|
|
|
15,629 |
|
|
Other assets |
|
|
3,361 |
|
|
|
4,776 |
|
|
Total assets |
|
$ |
173,568 |
|
|
$ |
167,021 |
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|
||||
|
Current liabilities |
|
|
|
|
||||
|
Accounts payable and accrued expenses |
|
$ |
16,533 |
|
|
$ |
21,182 |
|
|
Deferred revenue |
|
|
5,765 |
|
|
|
5,918 |
|
|
Operating lease liabilities, current |
|
|
4,088 |
|
|
|
6,493 |
|
|
Tax receivable agreement liability, current |
|
|
1,396 |
|
|
|
122 |
|
|
Total current liabilities |
|
|
27,782 |
|
|
|
33,715 |
|
|
Operating lease liabilities, non-current |
|
|
26,912 |
|
|
|
26,550 |
|
|
Tax receivable agreement liability, non-current |
|
|
1,730 |
|
|
|
1,634 |
|
|
Warrant liability |
|
|
390 |
|
|
|
585 |
|
|
Other long-term liabilities |
|
|
1,764 |
|
|
|
1,386 |
|
|
Total liabilities |
|
|
58,578 |
|
|
|
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 |
|
|
88,762 |
|
|
|
80,884 |
|
|
Accumulated deficit |
|
|
(59,230 |
) |
|
|
(64,518 |
) |
|
|
|
|
29,547 |
|
|
|
16,380 |
|
|
Noncontrolling interests |
|
|
85,443 |
|
|
|
86,771 |
|
|
Total stockholders’ equity |
|
|
114,990 |
|
|
|
103,151 |
|
|
Total liabilities and stockholders’ equity |
|
$ |
173,568 |
|
|
$ |
167,021 |
|
|
|
|||||||||||||||
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
2024 |
|
2023
|
|
2024 |
|
2023
|
||||||||
|
Net revenues |
$ |
46,552 |
|
|
$ |
46,687 |
|
|
$ |
136,844 |
|
|
$ |
141,526 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Costs and expenses |
|
|
|
|
|
|
|
||||||||
|
Cost of revenues (exclusive of depreciation and amortization shown separately below) |
|
2,182 |
|
|
|
3,015 |
|
|
|
6,729 |
|
|
|
9,748 |
|
|
Sales and marketing |
|
9,671 |
|
|
|
11,544 |
|
|
|
30,374 |
|
|
|
36,171 |
|
|
Product development |
|
9,484 |
|
|
|
7,748 |
|
|
|
28,355 |
|
|
|
27,882 |
|
|
General and administrative |
|
16,494 |
|
|
|
18,151 |
|
|
|
51,549 |
|
|
|
55,839 |
|
|
Depreciation and amortization |
|
3,517 |
|
|
|
3,395 |
|
|
|
9,641 |
|
|
|
9,417 |
|
|
Asset impairment charges |
|
— |
|
|
|
8,382 |
|
|
|
— |
|
|
|
8,382 |
|
|
Total costs and expenses |
|
41,348 |
|
|
|
52,235 |
|
|
|
126,648 |
|
|
|
147,439 |
|
|
Operating income (loss) |
|
5,204 |
|
|
|
(5,548 |
) |
|
|
10,196 |
|
|
|
(5,913 |
) |
|
Other income (expenses), net |
|
|
|
|
|
|
|
||||||||
|
Change in fair value of warrant liability |
|
585 |
|
|
|
(460 |
) |
|
|
195 |
|
|
|
(780 |
) |
|
Change in tax receivable agreement liability |
|
(548 |
) |
|
|
(69 |
) |
|
|
(1,486 |
) |
|
|
(689 |
) |
|
Other income (expense) |
|
98 |
|
|
|
3,565 |
|
|
|
(362 |
) |
|
|
2,884 |
|
|
Income (loss) before income taxes |
|
5,339 |
|
|
|
(2,512 |
) |
|
|
8,543 |
|
|
|
(4,498 |
) |
|
Provision for income taxes |
|
21 |
|
|
|
— |
|
|
|
72 |
|
|
|
— |
|
|
Net income (loss) |
|
5,318 |
|
|
|
(2,512 |
) |
|
|
8,471 |
|
|
|
(4,498 |
) |
|
Net income (loss) attributable to noncontrolling interests |
|
1,986 |
|
|
|
(974 |
) |
|
|
3,183 |
|
|
|
(1,711 |
) |
|
Net income (loss) attributable to |
$ |
3,332 |
|
|
$ |
(1,538 |
) |
|
$ |
5,288 |
|
|
$ |
(2,787 |
) |
|
|
|
|
|
|
|
|
|
||||||||
|
Class A Common Stock: |
|
|
|
|
|
|
|
||||||||
|
Basic income (loss) per share |
$ |
0.03 |
|
|
$ |
(0.02 |
) |
|
$ |
0.06 |
|
|
$ |
(0.03 |
) |
|
Diluted income (loss) per share |
$ |
0.03 |
|
|
$ |
(0.02 |
) |
|
$ |
0.05 |
|
|
$ |
(0.03 |
) |
|
|
|
|
|
|
|
|
|
||||||||
|
Class A Common Stock: |
|
|
|
|
|
|
|
||||||||
|
Weighted average basic shares outstanding |
|
97,166,788 |
|
|
|
93,651,871 |
|
|
|
95,743,064 |
|
|
|
92,947,191 |
|
|
Weighted average diluted shares outstanding |
|
97,811,251 |
|
|
|
93,651,871 |
|
|
|
96,761,731 |
|
|
|
92,947,191 |
|
___________________________
|
(1) |
|
For the three and nine months ended |
|
|
|||||||
|
|
Nine Months Ended |
||||||
|
|
2024 |
|
2023
|
||||
|
Cash flows from operating activities |
|
|
|
||||
|
Net income (loss) |
$ |
8,471 |
|
|
$ |
(4,498 |
) |
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
||||
|
Depreciation and amortization |
|
9,641 |
|
|
|
9,417 |
|
|
Change in fair value of warrant liability |
|
(195 |
) |
|
|
780 |
|
|
Change in tax receivable agreement liability |
|
1,486 |
|
|
|
689 |
|
|
Amortization of right-of-use lease assets |
|
3,284 |
|
|
|
3,666 |
|
|
Asset impairment charges |
|
— |
|
|
|
8,382 |
|
|
Stock-based compensation |
|
7,172 |
|
|
|
10,389 |
|
|
Gain on lease termination |
|
(109 |
) |
|
|
— |
|
|
Discharge of a holdback obligation related to a prior acquisition |
|
— |
|
|
|
(3,705 |
) |
|
Provision (recovery) for credit losses |
|
(295 |
) |
|
|
(196 |
) |
|
Changes in operating assets and liabilities: |
|
|
|
||||
|
Accounts receivable |
|
3,546 |
|
|
|
5,320 |
|
|
Prepaid expenses and other current assets |
|
(439 |
) |
|
|
2,419 |
|
|
Other assets |
|
1,029 |
|
|
|
21 |
|
|
Accounts payable and accrued expenses |
|
(1,169 |
) |
|
|
(15,439 |
) |
|
Deferred revenue |
|
(153 |
) |
|
|
(167 |
) |
|
Operating lease liabilities |
|
(4,994 |
) |
|
|
(4,668 |
) |
|
Net cash provided by operating activities |
|
27,275 |
|
|
|
12,410 |
|
|
|
|
|
|
||||
|
Cash flows from investing activities |
|
|
|
||||
|
Capitalized software and expenditures |
|
(9,499 |
) |
|
|
(8,870 |
) |
|
Net cash used in investing activities |
|
(9,499 |
) |
|
|
(8,870 |
) |
|
|
|
|
|
||||
|
Cash flows from financing activities |
|
|
|
||||
|
Repayments of insurance premium financing |
|
— |
|
|
|
(1,450 |
) |
|
Distributions |
|
(7,250 |
) |
|
|
(3,233 |
) |
|
Proceeds from repayment of related party note |
|
286 |
|
|
|
286 |
|
|
Tax receivable agreement payment |
|
(116 |
) |
|
|
— |
|
|
Taxes paid related to net share settlement of equity awards |
|
(3 |
) |
|
|
(5 |
) |
|
Net cash used in financing activities |
|
(7,083 |
) |
|
|
(4,402 |
) |
|
|
|
|
|
||||
|
Net increase (decrease) in cash |
|
10,693 |
|
|
|
(862 |
) |
|
Cash – beginning of period |
|
34,350 |
|
|
|
28,583 |
|
|
Cash – end of period |
$ |
45,043 |
|
|
$ |
27,721 |
|
___________________________
|
(1) |
|
For the nine months ended |
|
|
|||||||||||||||
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||
|
|
(in thousands) |
||||||||||||||
|
Net income (loss) |
$ |
5,318 |
|
|
$ |
(2,512 |
) |
|
$ |
8,471 |
|
|
$ |
(4,498 |
) |
|
Provision for income taxes |
|
21 |
|
|
|
— |
|
|
|
72 |
|
|
|
— |
|
|
Depreciation and amortization expenses |
|
3,517 |
|
|
|
3,395 |
|
|
|
9,641 |
|
|
|
9,417 |
|
|
Interest income |
|
(280 |
) |
|
|
(11 |
) |
|
|
(331 |
) |
|
|
(23 |
) |
|
EBITDA |
|
8,576 |
|
|
|
872 |
|
|
|
17,853 |
|
|
|
4,896 |
|
|
Stock-based compensation |
|
1,601 |
|
|
|
2,297 |
|
|
|
7,172 |
|
|
|
10,389 |
|
|
Change in fair value of warrant liability |
|
(585 |
) |
|
|
460 |
|
|
|
(195 |
) |
|
|
780 |
|
|
Transaction related bonus expense |
|
— |
|
|
|
833 |
|
|
|
— |
|
|
|
3,400 |
|
|
Legal settlements and other legal costs |
|
1,172 |
|
|
|
1,470 |
|
|
|
4,685 |
|
|
|
3,003 |
|
|
Reduction in force (recovery) expense |
|
— |
|
|
|
(7 |
) |
|
|
— |
|
|
|
194 |
|
|
Asset impairment charges |
|
— |
|
|
|
8,382 |
|
|
|
— |
|
|
|
8,382 |
|
|
Discharge of a holdback obligation related to a prior acquisition |
|
— |
|
|
|
(3,705 |
) |
|
|
— |
|
|
|
(3,705 |
) |
|
Change in tax receivable agreement liability |
|
548 |
|
|
|
69 |
|
|
|
1,486 |
|
|
|
689 |
|
|
Adjusted EBITDA |
$ |
11,312 |
|
|
$ |
10,671 |
|
|
$ |
31,001 |
|
|
$ |
28,028 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20241112810827/en/
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