Q1 2024 ContextLogic Inc Earnings Call

Operator: Thank you for standing by, and welcome to ContextLogic's first quarter 2024 earnings conference call. During the program today, all participants are in a listen-only mode. As a reminder, today's program is being recorded. And now, I'd like to introduce your host for today's program, Ralph Fong, Director of Investor Relations.

Thank you for standing by and welcome to the context of Logics first quarter 2024 earnings conference call during the purchase.

Operator: Graham today, all participants are in a listen only mode. As a reminder, today's program is being recorded and now I'd like to introduce your host for today's program, Ralph Fong director of Investor Relations.

Operator: Okay.

Operator: Okay.

Ralph Fong: Thanks, Jonathan.

Ralph Fong: Good afternoon, everyone, and welcome to ContextLogic's first quarter 2024 update conference call. I'm Ralph Fong, Director of Investor Relations, and our chairman, Chairman and CEO, Rishi Bajaj, and our CFO, Brijesh.

Ralph Fong: Good afternoon, everyone and welcome to the context of logics first quarter 'twenty 'twenty conference call.

Ralph Fong: I'm, Rob song Director of Investor Relations.

Ralph Fong: Remarks on the call today are Jeremy.

Ralph Fong: Sure person and CEO received by Josh.

Ralph Fong: Our CFO.

Ralph Fong: The remarks made today may include forward-looking statements, including with respect to the recent asset sale to Q10 and related matters. Our actual results may differ materially from the results implied by these forward-looking statements if certain risks materialize or assumptions are perfectly correct. Overlooking statements are based on our current expectations and assumptions and involve risks and certainties that could cause actual results or events to be materially different from those anticipated. Additional information concerning factors that could cause actual results that differ materially from those in the forward-looking statements is, and will be, contained from time to time in our SEC filings, including on forms 10-Q, 10-K, and 8-Q.

Ralph Fong: Breakfast.

Ralph Fong: The remarks made today may include forward looking statements, including with respect to the recent sale to Q2.

Ralph Fong: Matters.

Ralph Fong: Our actual results may differ materially from the results implied by these forward looking statements certain risks materialize or assumptions perfectly correct.

Ralph Fong: Forward looking statements are based on our current expectations and assumptions and involve risks and uncertainties that could cause actual results or events to be materially different from those anticipated.

Ralph Fong: Additional information concerning factors that could cause actual results to differ materially from those in the forward looking statements are and will be contained from time to time.

Ralph Fong: Including on forms 10-Q10-K.

Ralph Fong: Any forward-looking statements that we make today are only as of today's date, and we undertake no obligation to update or revise any such statement as a result of new information, future events, or otherwise. Also, please keep in mind that included in the financial statements and management's prepared remarks during the call are both GAAP and non-GAAP financial numbers. A reconciliation of non-GAAP-to-GAAP results is included in today's earnings report, which you can find on our Investor Relations website and which is also filed with this earnings call. A replay of this call will be posted on our investor relations website. With that, let me now turn the call over to our CFO, Gurchis, to provide financial, Bread.

Ralph Fong: Hey.

Ralph Fong: Any forward looking statements that we make today are only as of today's date and we undertake no obligation to update or revise any such statements.

Gurchis: So no new information.

Gurchis: Future events or otherwise.

Gurchis: Also please keep in mind that included in the financial statements and management's prepared remarks. During the call are both GAAP and non-GAAP financial numbers metrics. A reconciliation of non-GAAP to GAAP results is included in today's earnings release, which you can find on our Investor Relations website, and which is also fine.

Ralph Fong: Yeah.

Gurchis: A replay of this call will be posted to our investor relations website with that.

Gurchis: Let me now turn the call over to Joe CFO purchased to provide financing.

Ralph Fong: Brett.

Brijesh: Thank you, Ralph. For this quarter, our financial presentation will be a little different. Our earnings press release describes our earnings for the first quarter. If you want additional details, I encourage you to review that release.

Gurchis: Thank you Ralph for this quarter, our financial presentation will be a little different.

Gurchis: Our earnings press release describes our earnings for the first quarter.

Gurchis: Additional details I encourage you to review that release.

Brijesh: However, all of the revenues and earnings disclosed in that release were generated by assets that we no longer own. H210 now owns those assets. Significantly, Q10 also has assumed substantially all of the liabilities associated with those, so instead of discussing historical results, I thought it would be more helpful to talk about our financial picture today. After the asset sale to Q10 closed on April 19th, ContextLogic had approximately $2.7 billion of NOL carry forwards and approximately $161 million in cash, cash equivalents, and marketable securities, which consist of government securities. Combined, this represents the net proceeds from the sale.

Gurchis: However, all of the revenues and earnings disclosed in that release were generated by assets that we no longer own Q.

Brijesh: <unk> 10 down to those assets.

Brijesh: Significantly she's had also has assumed substantially all of the liabilities associated with those assets.

Brijesh: So instead of discussing historical results.

Brijesh: We have no debt. We have gone from nearly 500 employees worldwide at December 31st to 12 full-time and part-time employees, including some temporary or contract employees. We are no longer liable for any of our old leases, including our former corporate headquarters in San Francisco. We have moved across the bay and are now leasing a small space in Oakland, with our workforce totally remote. So we are starting our next chapter on strong financial footing, which is intended to give us the flexibility to pursue strategic transactions that will utilize our assets. For additional information on that important topic, I will now turn the call over to ContextLogic's chairperson and CEO, Rishi Bajaj.

Brijesh: It would be more helpful to talk about our financial picture today.

Rishi Bajaj: After the asset sale to Q10 closed on April 19th contacts larger count approximately $2 7 billion NOL carryforwards.

Rishi Bajaj: At approximately $161 million in cash cash equivalents and marketable securities which consist of government securities.

Rishi Bajaj: Buying this represents the net proceeds from the sale.

Rishi Bajaj: We have no debt.

Rishi Bajaj: We have gone from nearly 500 employees worldwide at December 31 to 12, full time, and part time employees, including some temporary or contract employees.

Rishi Bajaj: We are no longer liable for any of our old leases, including our former corporate headquarters in San Francisco.

Rishi Bajaj: It moved across the bank and are now leasing a small space in Oklahoma with our workforce totally remote.

Rishi Bajaj: So we are starting our next chapter on strong financial footing.

Rishi Bajaj: Which is intended to give us flexibility to pursue strategic transactions that will utilize our assets.

Rishi Bajaj: For additional information on that important topic I will now turn the call over to context logics chairperson and CEO appreciate the judge.

Rishi Bajaj: Thank you, Brett. I would like to thank everyone for joining our first quarter 2024 update call. First and foremost, we are pleased to have completed the previously announced sale of the Wish e-commerce platform to Qtend. On behalf of the entire ContextLogic team, I would like to thank our stockholders for their support of this value-maximizing transaction. I would also like to thank our employees for their hard work and dedication.

Rishi Bajaj: Thank you Brett I would like to thank everyone for joining our first quarter 2024 update call first and foremost we are pleased to have completed the previously announced sale of the wish E Commerce platform to key talent.

Rishi Bajaj: Behalf of the entire content body team I would like to thank our stockholders for their support of its value maximizing transaction.

Rishi Bajaj: I would also like to thank our employees for their hard work and dedication.

Rishi Bajaj: With the transaction now behind us, we are excited to start this new chapter. We have begun reviewing strategic opportunities for the use of our post-closing cash. Looking ahead, our reconstituted board, along with our management team, will develop a process and procedure for evaluating alternatives for the use of our post-closing cash and reviewing, identifying, and executing strategic opportunities for the benefit of ContextLogic and its stockholders. Furthermore, as Brett noted, our overhead is very small.

Rishi Bajaj: With the transaction now behind US we are excited to start this new chapter we have begun reviewing strategic opportunities for the use of our post closing cash looking ahead, our reconstituted board along with our management team will develop a process and procedure for evaluating alternatives for the use of our post closing cash and reviewing identify exact and executing in St.

Rishi Bajaj: <unk> opportunities for the benefit of contents logic and its stockholders.

Rishi Bajaj: Furthermore, as Bret noted our overhead is very small simply put we expect contact larger tableau operating expenses and significant opportunities for value creation.

Rishi Bajaj: Simply put, we expect ContextLogic to have low operating expenses and significant opportunities for value creation. I'm energized by the opportunities ahead of us. We have the right strategy in place and an outstanding new leadership team to implement it. In sum, we have turned the page to begin a new chapter in the life of the company. We're excited about our future, and we look forward to updating you on our progress in a few months. Again, thank you very much for joining us today, and goodbye.

Rishi Bajaj: <unk> by the opportunities ahead of US we have the right strategy in place and an outstanding New leadership team to implemented in some we have turned the page to begin a new chapter in the life of the company. We're excited about our future and we look forward to updating you on our progress in a few months again. Thank you very much for joining us today and goodbye.

Operator: Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.

Rishi Bajaj: Yeah.

Speaker Change: Thank you, ladies and gentlemen for your participation in today's conference. This does conclude the program you may now disconnect good day.

Operator: Yeah.

Operator:

Operator: [music].