Q4 2024 PSQ Holdings Inc Earnings Call

Rachel Smith: Greetings and welcome to PublicSquare's fourth quarter and year end, 2024 Earnings Conference Calling Webcast.

At this time, all participants are only listening only mode.

Rachel Smith: If anyone should require operator assistance during the conference, please press star zero on your telephone keypad.

Rachel Smith: As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, William Kent, Senior Vice President of Corporate Affairs. Thank you and you may begin.

William Kent: Thank you Rob. Good afternoon everyone and welcome to PublicSquare's fourth quarter near in 2024 earnings conference call.

Speaker Change: Joining me today are Michael Seifert, Chairman and Chief Executive Officer, Bren Searle, Chief Financial Officer, and Deputy Wunderling, Chief Strategy Officer.

Speaker Change: Before we get started, we want to emphasize that the information discussed on this call, including our outlook, is based on information as of today, and contains forward-looking statements that involve risks, uncertainties, and assumptions.

Speaker Change: We undertake no duty or obligation to update such statements as the results of new information or future events. Please refer to today's earnings press release and our SEC filings, including our 2024-10K filed this afternoon for factors that may cause actual results to differ materially from our polar listing statements.

Speaker Change: We'd also like to point out that we present non-GAAP measures in addition to and not as a substitute for financial measures calculated in accordance with GAAP. I'll now hand the call to Michael. Michael, please go ahead.

Michael Seifert: Thank you, Will, and welcome everybody to our fourth quarter and year-end 2024 earnings call.

Speaker Change: Our many accomplishments in 2024 were significant and have positioned us incredibly well for future success. But before I go any further, I want to say heartfelt thank you and well done to our team for a successful and impactful 2024. I am convinced.

Speaker Change: that we have the best group of people on the planet to accomplish our vision. This is a team that is deeply committed to enhancing the lives of and providing value to our customers, merchants, and shareholders.

Speaker Change: Entering 2024, PublicSquare looked markedly different from where the business stands today.

for all intents and purposes.

Speaker Change: We had the marketplace, every life and a vision of introducing uncancellable to cure financial technology into the mix and what a difference a year makes, we have turned vision into reality.

Speaker Change: We've established a firm foundation for future success and I would like to share some of the notable accomplishments from this past year with you all today. To get started, we're going to look at the company overall.

in 2024.

Speaker Change: We experienced a very notable acquisition. We purchased Cordova in March of 2024 and in all equity transactions, bringing consumer finance products, including by now pay later, into our product offering.

Speaker Change: This acquisition was imperative to launch payments in late 2024, and is key to our broader financial technology strategy going forward, more on this in a minute.

Speaker Change: We strengthen our financial position through a number of strategic financing events, providing our company with the fuel needed to continue building and growing, while adopting a more mature capital structure.

Speaker Change: We streamlined operating expenses through a strategic restructuring, coinciding with the launch of the Financial Technology Division, putting us on a solid footing for growth while strategically investing in the areas of the business that will drive the most significant return on investment.

Speaker Change: and most notably, we accomplished everything I just highlighted while increasing revenue 4 times over the previous year and expanding our gross margin from 33% to 61% across the business.

Speaker Change: Now, driving a little deeper first, we're going to look at financial technology and I'll start with payments.

Speaker Change: We developed a fully cancel proof payment stack with advanced tokenization and secure wallet technology that protects customer data and provides peace of mind to the merchants, the business owners, within our ecosystem, by assuring them that their financial freedoms will never be infringed upon.

Speaker Change: We secured payment processing contracts in 2024 that could potentially result in over $1 billion in annualized GMV. And by the way, I'm very excited to share further progress on this front in a moment.

Speaker Change: Coming out of the gates, we prove to the market and the broader financial technology industry that we mean business by virtue of the fact that our first onboarded client to our payments platform was a hundred million dollar plus merchant.

Speaker Change: And if you know the world of financial technology at all, you know that to launch with a client of that size is extremely rare.

Speaker Change: In the by-now-pay-later business, during what was overall a credit-challenged year for many, we notably reduced our year-over-year delinquencies by 29 percent and our charge dropped by 27 percent.

Speaker Change: Our average order value in 2024 was $1,194, well in excess of our competitors in the

Speaker Change: When you combine our higher average order value, favorable merchant discount rate, lower delinquencies and lower charge-offs, our 2024 credit performance clearly exhibits that we have a better understanding of credit quality and a broader suite of credit offerings to meet consumer and merchant need than our competitors.

Speaker Change: Moving to the marketplace, we saw continued significant growth by refining our strategy as we headed into the end of the year.

Speaker Change: We focused on a more curated selection of products to target our core customers better and it worked. December 2024 brought the highest month ever for both order volume and growth sales, continuing the positive momentum built throughout the year.

Speaker Change: Specifically focusing on the holiday season, I.e. November and December , orders were up 34% year-over-year and conversion more than doubled even with significantly reduced marketing spend as we focused our financial investments on the launch of payment.

Speaker Change: We moved advertising on the marketplace from a flat fee to a self-service CPM model, reducing costs for our company, expanding our margins, and driving a more positive advertiser experience in the process.

Speaker Change: Over to the Brands division. Every life, our life-affirming baby care brand experienced 276% year-over-year revenue growth.

Speaker Change: This notable performance was driven by year-over-year subscriber growth of 76%.

Speaker Change: The expansion of the Every Life Ambassador Program to over 1,300 members, an increase of over 160% year-over-year. And by the way, just a note here, our ambassadors play a key role in driving brand awareness and customer engagement for the Every Life brand.

Speaker Change: helping to drive sales by sharing their personal experiences with every-life product and communicating their passion for our mission to their family, friends and community.

Speaker Change: In every life, we experience our first month of positive EBITDA in 2024, a major milestone for our brand. Growth in our nonprofit outreach program resulted in nearly a thousand partners at your end, a greater than 300% increase year-over-year.

Speaker Change: Notably, our annual revenue per employee was slightly over $1 million, well-outperforming our competitors. And finally, one of my favorite stats.

Speaker Change: 3,198,942 diapers and 2,614,560 wipes were donated in 2024 to parents in desperate need through our Buy for a Cause program.

Speaker Change: We launched complimentary products, including training pants and soaps and lotions which grew our share of wallet within our customer base and expanded the LTV of our customers. Finally, we saw our first month of over $1 million in every life sales in late 2024, a figure that has continued to grow monthly.

Now I want to turn to 2025.

Speaker Change: and simply put, we expect another monumental year for the company. While 2024 was focused on setting a foundation for scale, the launch of our FinTech division, and making a number of strategic investments in key areas of the business, 2025 is focused on monetizing our efforts from 2024.

Speaker Change: We expect more than double revenue year-over-year. We expect to reap the benefits of right-sizing our general and administrative and sales and marketing expenses, and we expect to significantly grow our gross merchandise volume, or GMV, for our payments business.

Speaker Change: Notably, today we are already at over 2.5 billion dollars in signed payments GMV, more than doubling where we exited 2024 only 10 weeks ago.

Speaker Change: So, how will we increase the monetization of our ecosystem in 2025? First, we expect to grow our payments business significantly. As I just mentioned, both in features were continuing to bring to market and the revenue associated with those crucial features we're providing to our merchants.

Speaker Change: For example, we recently announced the launch of our ACH processing product with a $200 million plus launch client.

We recently completed the launch of our automated onboarding functionality.

Speaker Change: which will serve as a crucial feature for our 80,000-plus marketplace small business owners who are looking for a quick and easy way to onboard to our payment stack, and we have begun to offer our buy now pay later and payment processing capabilities as a bundled product offering to our merchant.

Speaker Change: a first in the world of financial technology. We continue to see our sales pipeline exponentially grow and we are onboarding in a more efficient and expedient manner with each merchant we work with.

Speaker Change: We also expect to see growth in our credit business in 2025.

Speaker Change: We're advancing our credit business through a series of strategic product enhancements and initiatives, one of which is called Credit to O.

Speaker Change: Credit 2.0 initiative is a comprehensive upgrade to our product offering designed to not only meet but exceed industry standards and competitive benchmarks. We are strategically deploying capital to expand our margins, enhance cash flow efficiency, and build a robust consumer lending portfolio on our balance sheet.

Speaker Change: A key pillar of the strategy is lowering our cost of capital while strengthening risk management through AI-driven underwriting. These efforts position us for sustainable growth while improving profitability for the FinTech division.

Speaker Change: And when we talk about strengthening our capital structure and cost of capital, we have some exciting news. As of yesterday, we signed a letter of intent for a new asset-backed lending facility and a working capital line of credit provided by a trusted banking institution.

Speaker Change: We expect these moves will reduce our cost of capital by approximately 50 percent, demonstrating our financial strength and an increasing level of confidence from traditional financial institutions.

Speaker Change: A.I. is a critical component of our future credit strategy. Since 2022, we have been training A.I. models to refine credit risk assessment with great success. We continue to leverage A.I. to enhance underwriting, mitigate risk, and drive smarter lending decisions, and it's paying off for the company.

Speaker Change: By optimizing our product offerings, strengthening our capital structure, and deepening our AI integrations, we're positioning our credit business for long-term growth, improves margin, and risk management.

Speaker Change: Now moving to the marketplace in the lens of 2025. Our marketplace has three key goals for 2025.

Speaker Change: First, we're excited to leverage the synergies between payments and marketplace by onboarding the small businesses on our marketplace platform onto our payments platform and vice versa.

Speaker Change: Secondly, I'm very excited about this one, we are going to increasingly focus on and elevate our Made in America product assortment to satiate the desires of our customers looking to purchase Made in America goods.

Speaker Change: Support the small businesses who are putting in the hard work to manufacture their products in America and set ourselves up with a significant competitive advantage in an American economy that is increasingly embracing economic nationalism which we are highly in support of.

Speaker Change: We have always been a marketplace that prioritizes American-owned small businesses, the value of the life, liberty, and family, but we are going to take it even a step further.

Speaker Change: Made in America will actually become the primary differentiating factor of our marketplace in the near future. To the point where, in the coming months, we will exclusively showcase Made in America products and our shopping experience. And we are really excited to continually update our shareholders as we progress on this front.

Speaker Change: Finally, in the marketplace, we're going to continue building out our affiliate and ambassador programs further to meet the desires of our customers who are looking to spread the word about our marketplace and earn commissions as they tell their communities about their favorite products, fill our social media and digital advertising channels with shopper-generated content and help the company experience low-cost customer acquisition.

Speaker Change: In the Brands division, we expect revenue to grow significantly as we enhance our visibility and marketing of our core product lines of diapers, wipes and training pants, as well as recently launched adjacent verticals including soaps and lotions.

Speaker Change: We are grateful for the strong subscriber base we have built and the continued growth of our subscription program which provides recurring revenue for the company and an easy way for our customers to have our products automatically delivered to their door each and every month.

Speaker Change: We also expect to launch our previously announced Feminine Care line under the every life brand in the coming month. As we've gotten to know our customers, we've learned that the number one additional product category they are seeking is Feminine Care products.

Speaker Change: These are the Every Life customers. So because of that, Every Life Women has been highlighted as a clear next step for the brand as we seek to provide premium products that are clean for the entire family.

Speaker Change: There's a previously unaddressed audience of millions of parents who are looking for high quality, reliable, and clean essential products from companies who celebrate the miracle of every life. And we, at every life, are proud to be reaching that audience with our products, our ambassador community, our nonprofit programs, and our Buy for a Cause initiatives.

Speaker Change: So that was FinTech, Marketplace, and Brands. Finally, I want to touch on our expenses at the company.

Speaker Change: Regarding our expenses, we made a number of foundational investments in the business during 2024 and ultimately some significant changes to our organizational structure late last year as we launched our payment services to the market.

Speaker Change: The net impact of these changes will lead to lower operating expenses year-over-year for the company. And these reductions are even more impactful when juxtaposed with the revenue growth that we anticipate.

Trap Up

Speaker Change: FinTech has positioned exceptionally well to drive significant revenues in cash flow for the business.

Speaker Change: The marketplace is finding its sweet spot with our core customer base and setting up for an incredible second half of 2025 and beyond as we focus on the expansion of our Made in America product offering and our Brands Division continues to innovate and grow with increased product offerings and expansion into new markets.

Speaker Change: Our Management and Board of Directors see the potential of what we are building and we are locked in.

Speaker Change: After two successful financing rounds in Q4, raising a total of 41.6 million for the company before fees, we are better capitalized than ever, and have more than healthy enough of a balance sheet to achieve our significant growth goals while generating substantial profits in the near future.

Speaker Change: We know how to build for the next generation of commerce and are more confident in our business than ever.

To finish, our message to potential investors is simple.

Speaker Change: You can watch from the sidelines, or you can choose to be active participants in a growth story that we believe many are missing.

Speaker Change: To be more clear, we believe this will be one of the most significant growth opportunities the market has seen in modern memory, and we invite you to experience it with us.

Speaker Change: I will now turn the call over to our CFO , Brad Searle, to discuss some of our financial highlights from Folier 2024 and Q4 2024.

Brad Searle: Thank you, Michael, and good afternoon everyone. I'm honored to be with you today to discuss our fourth quarter and full year 2024 results.

Brad Searle: I'd like to present a few financial items, starting with Q4.

to $7.2 million compared to the 4th quarter of 2023.

Brad Searle: Breaking that down a bit, 3.5 million of this came from our Financial Technology or Fintech Marketplace Revenue was 0.6 million and every life generated 3.1 million of net revenue.

Brad Searle: Our overall gross margin was 61% in Q424 compared to only 38% in Q423.

For full year 2024, our results were as follows.

Brad Searle: We increase net revenue to 23.2 million, a 308% increase over 2023.

Brad Searle: of that Fintech was $10.1 million, and it's worth noting that this $10.1 million represents revenue from the acquisition date of March 13 through the end of the year.

Brad Searle: Kintek, Proforma Revenue, as if the acquisition had occurred on January 1st with 13 million.

Brad Searle: Marketplace Revenue was 2.9 million in Brands revenue and net of returns and discounts was 10.2 million.

Brad Searle: Consolidate NetRevenue, Proform of 4, the Cradova Acquisition, was 26.1 million, and finally full-year gross margin increased from 33% in 2023 to 61% in 2024.

Brad Searle: Moving on to cash, we ended 2024 with cash and cash equivalence of 36.3 million and 0.3 million unrestricted cash.

and 3,213,678 Class C common shares outstanding.

Brad Searle: The company had an outstanding principal balance of 3.8 million on its 10 million revolving line of credit as of your end.

Brad Searle: So those were some of our Q4 and full year 2024 financial highlights. Now let's move on to Q&A.

Speaker Change: Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star one in your telephone keypad. If you would like to withdraw your question, simply press star one again.

Speaker Change: and we'll pause for just a moment while we wait to queue up.

And we have no phone questions at this time.

Speaker Change: Let's thank you, Rob. We'll take some questions that have been submitted via the SAIT that platform at this moment.

Speaker Change: The first question that we got, I'll read it directly, tariffs are being imposed around the world are going to dramatically incentivize manufacturing and production in the United States. Considering your business model and target demographics, do you believe PublicSquare can become a competitive corestone in the marketplace like Amazon?

Great question. We absolutely believe that is the case.

Speaker Change: Put simply, we believe that tariffs are actually a great thing for our business. The global economy is changing for the better. There is a greater hunger than I've seen in my lifetime for America to prioritize American first.

Speaker Change: That means companies bringing their manufacturing back to our towns and consumers prioritizing American-made goods in their purchases from small businesses they can trust.

Speaker Change: So we're incredibly grateful to find ourselves at the forefront of this new American golden age and we believe we are set up to reap the benefits of the de-globalization in a way that far outpaces our competition.

Speaker Change: We're very excited about the future and we believe that every bit of the increasing America-first sentiment in our economy will only lead to a greater benefit for the movement that we are seeking to lead with our company.

Speaker Change: and we have a phone question from the line of Darren Aftahi from Roth Capital Partners. Your line is open.

Speaker Change: Make that up and then kind of a time frame for when that could actually manifest in Rebnew.

Speaker Change: Yeah, great question, Darren. Great to hear from you. So I will first talk about the types of merchants and then I'll talk about the general size of the merchants. So the merchants that make up the over two and a half billion in signed GMV today are largely representative of the Cradova and PublicSquare Existing Ecosystem.

Speaker Change: So, we have a large representation of firearms merchants. Obviously, the firearms industry is an industry that is near and dear to our hearts.

Speaker Change: and they have been rather frustrated historically with the existing payments options.

Speaker Change: They've really seen us as a safe haven and a provider of best-in-class technology that can honestly commit with a cancel-proof promise to protecting their economic liberty. So we've done very well in that space here in these early days.

Speaker Change: We also have many merchants from the public square community that have become awesome payments merchants for us in terms of signed GMV, some of which, this is a little bit more industry agnostic, so some of these are in the travel space.

Speaker Change: Others of these are in the consumer product space, but overall the size of these merchants varies.

Speaker Change: You know, our smaller merchants that are currently signed onto the payment stack are in that 1 to 5 million in annual sales range. And we have other merchants that are in the hundreds of millions and beyond.

So, we are...

Speaker Change: Also excited about the existing pipeline, that's the one other thing I'll add, Darren, is that the 2.5 billion that we have currently signed to date is fairly representative of what we believe will be our first 10-15 billion in pipeline.

Speaker Change: The good news here for us is that these merchants have been acquired with no customer acquisition costs. They already exist within our ecosystem.

Speaker Change: and so this real low-hanging fruit for us, we're looking forward to serving them. And in terms of timeline...

Speaker Change: We set on our Q3 earnings call that, with the shopping season coinciding with the launch of our payment stack, we were having great success with the signing of contracts, with new payments merchants, but the majority of the actual onboarding would take place in Q1 and Q2, and we reaffirmed that today.

Speaker Change: Q1 has been a tremendous onboarding quarter for us with this GMV, and Q2 will remain the same. So, we're really looking forward to the remainder of 2025 being an incredible fruitful year for investors to see the full impact of the revenue associated with the GMV we signed today.

Speaker Change: Great, that's helpful. And then a couple more. You talked about the integration of marketplace, merchants, and then onboarding to FinTech. I guess where are we in the curve in terms of...

Speaker Change: When that's going to occur, and if it's already in the process of occurring, how is conversion going?

Speaker Change: Yeah, great question. We are currently in the process as of about two weeks ago.

Speaker Change: So as about two weeks ago, the company began to court the marketplace merchant into the public square payments platform universe, and we have been met with overwhelming demand.

Speaker Change: So again, this is one of those topics we are excited for shareholders to see in the coming months and quarters, but we are already reaping the positive benefits of the synergies between our divisions.

Speaker Change: Nowhere greater than the topic we're discussing right now. Marketplace merchants have been hungering for a better payment solution.

Speaker Change: Many of our existing marketplace merchants are striped customers and they've been eager to leave both because they really appreciate the trust that has been established between PublicSquare the marketplace and their small business.

Speaker Change: and also because we're able to actually offer more competitive rates and something I want to highlight here is one of the reasons we're able to offer better rates overall across the FinTech business to our merchants is because of the bundled product nature between payments and by now pay later.

Speaker Change: given that the margin on the BNPL business is nearly 100% and can be a real serious casual generator for the business, it actually allows for us when we present this bundled offering to a merchant to get more aggressive with the rates on the payment processing side.

Speaker Change: So, having these levers to pull when we're interacting with a merchant of really any size is incredibly advantageous and allows for us to give lower rates than many of our competitors in either the payments or the by now pay later space respectively.

Speaker Change: So, Darren, I'll finish in answering your question with saying that our strategy for onboarding public-square marketplace merchants starts with the e-commerce businesses first. We are focusing on e-commerce.

Speaker Change: Consumer products focused businesses over the course of the next quarter and then we'll begin to expand out of that universe to more custom offerings where businesses might have a brick and mortar presence as well as an e-commerce store and then eventually to service-based businesses that are on the market place as well.

Speaker Change: Great. And then this last one for me with the more than doubling of revenue in 25. Can you just talk about relative mix and then I guess on the FinTech side just the relative mix of credit versus payments.

Speaker Change: Yeah, absolutely. I'll start there on the FinTech side. We anticipate that payments and credit will be roughly half and half.

Speaker Change: We anticipate that payments obviously will really begin to ramp from a revenue perspective.

Speaker Change: from Q2 on through the remainder of the year. And with Credit 2.0 that I mentioned earlier, we really anticipate that the second half of 2025 will be a shining six months for the Credit Business.

Speaker Change: We then going to the earlier part of your question anticipate that the overall mix in terms of revenue representation at the company will be ranked in this order. We believe that it will be payments in credit, vying for the lead, followed by the brands division and then the marketplace.

Speaker Change: That's right, thanks and tip of the hat for all the charity work you're doing for the community.

Speaker Change: Thank you, Darren. It's great to talk to you. Appreciate it.

Speaker Change: You are next question comes from a line of Barry Haimes from Sage Asset Management. Your line is open.

Barry Haynes: Thanks so much for taking my questions and appreciate all the good hard work and accomplishments in 2024.

Thank you.

Barry Haynes: The main question is, could you talk a little bit about the timing to get to free cash flow break even in the business and what has to happen in terms of revenues or any other way you'd like to characterize the progress to get from here to that point? Thanks so much.

Thank you. I appreciate it.

Barry Haynes: Yeah, I would answer this question by saying that we are wholly focused on positive unit economics for each of the divisions of our company in 2025 and so you heard my remarks earlier that we achieved our first month of even a positivity for the every life brand. These are milestones we really are hanging our hats on and are excited about that are driving us forward because when you pair that with the fact that our margin at the company has nearly doubled over the last year we're really excited about the

and Dr. Dan Minocation.

Barry Haynes: This year we see a pipeline in the FinTech business that is tremendous.

Barry Haynes: and so the thing I don't want to do is actually miss out on the opportunity to provide quality supply to the overwhelming demand purely for the sake of generating profits. I want to make sure that our long-term profitability outlook is as best as it possibly can be.

Barry Haynes: and so I'd say this year in 2025, we have the ability to break even from a cash flow positivity perspective. The question that we are asking is a management team and as a board of directors is what is the best utilization of our cash to ride that fine line between hyper focus on profitability and ensuring that we're able to grow to hit the milestones that we believe are at our doorstep and offered to the company in a very unique season. I think one thing and this is the last thing I'll say.

Barry Haynes: We came into 2025 feeling like we have a tremendous amount of wind in our sales.

Barry Haynes: Not just as a company, but even as a country. We feel like we have a unique moment in time to really go capitalize on the growth afforded to our company, get in our positioning in the market, and we do not want to miss that moment.

Barry Haynes: and so those are all the factors that we consider when we think about cash flow positivity for the company and we're excited to continually update shareholders as we grow closer to that milestone.

Barry Haynes: Great, one quick file up, if you were to look at Marketplace and the total amount of GMC that could be created if...

Barry Haynes: You know, in the hypothetical that all of them went with you guys just to get a feel for the potential market. Any way to characterize that? Thanks.

Speaker Change: Exist within our marketplace ecosystem as it stands today. And to be frank with you, we do not have that answer yet.

Speaker Change: for the GMV and Associated Revenue produced by our Marketplace Merchant community here in the near term. So I look forward to following up on this question and excited to provide more clarity on those numbers as we move forward.

Great, thanks so much. Appreciate it.

Thank you.

Will: And again, if you would like to ask a question, please press star one on your telephone keypad, but we'll turn it back to you for further submitted questions.

Will: Thanks, Rob. Next question that we received via SA Tech. I mentioned that these are in order of upvoted by shareholders, just so you understand how these questions are picked. Will PublicSquare be looking to hone in on more acquisition opportunities or partnerships with, uh...

Will: Payment Processors with the money used from the Director of Offering that you did in December and could you help outline utilization of those dollars.

Will: Yeah, great question. So I'll answer this in two chunks. First, I will say related to the use of proceeds from the over 30 million raised in December . We are really prioritizing our Fintech segment.

Will: We believe that the FinTech segment, as I've mentioned, has overwhelming demand and we want to ensure that we can keep up with that demand by producing quality supply that meets the moment.

Will: So that is the largest use of capital as we look into 2025. The second thing that I would say is that we're really looking to put our balance sheet to work.

Will: So, I mentioned this a bit earlier in our credit business, but we actually want to leverage our own balance sheet in our loan and lease portfolio to be able to drive a significant positive enhancements to the unit economics of our credit business.

Will: and we're really looking forward to that. And finally on the M&A piece...

I would say that we are always open.

Will: to M&A Activity as we move forward into the future and just a little bit of a...

Will: In terms of how we view product development as a company, any time that we have a new feature that we want to bring to the market in any of our respective divisions, we always ask the question, is it best to build this feature or buy this feature?

Will: So for example, when we knew we wanted to get into Fintech, when the merchants on our publicSquare marketplace had made it clear that they were looking for checkout solutions that were cancel proof.

We ask the question.

Will: Do we buy the Fintech segment, or do we build the Fintech segment? And where we land, it is actually a little bit of both. We purchased Cordova in an all-equity transaction in March of 2024, and that acquisition actually served as the foundation for the payment processing capabilities we built on top of that Cordova business.

Will: and so we're going to continue that attitude as we move forward in the future. We're always open to building and or buying related to any of the features we want to bring to the market in our product roadmap.

Will: The final thing that I will say is that we will enhance much of our creative marketing expenditures in the second half of 2025.

Will: Again, as I mentioned, with the unique season we find ourselves in as a company and as a country, we want to make sure that we are increasingly getting our message out and the quality of our products displayed and the stories of our business owners told. And we really believe that we've learned a lot about how to appropriately and effectively market this company with the highest return on investment. And we're going to leverage a lot of those findings in the second half of 2025 in our marketing spend.

Speaker Change: Thank you, Michael. Next question. One of the biggest cost drivers impacting margins and how do you plan on optimizing operational efficiency? I know we've covered some of this, Michael, but certainly some greater detail might be helpful.

Speaker Change: Yeah, very happy to. This is a great question. So, one thing I would recall from my statement earlier is the significant restructuring of the company that we conducted in the fourth quarter of 2024.

Speaker Change: This operational restructuring coincided with the launch of our FinTech segment and really streamlined our company for not only growth into the future, but also better operational efficiency in terms of our expenditures.

Speaker Change: For example, we do believe that our operating expenses will actually decrease year over year and we're excited that we feel like we've got the right team members in the right seats to be able to execute efficiently, moving forward not only through the remainder of 2025 but even to the years beyond.

Speaker Change: By division, you know, the Marketplace margin has increased significantly due to the restructuring of our ad platform, as I mentioned previously in this call, and not only has that improved our margin on the marketplace, it's actually helped us with customer acquisition cost on the merchant side as well, and it is better to the merchant experience, which we've appreciated greatly.

Speaker Change: The brand's margin is increasing steadily due to economies of scale and an increasingly favorable relationship with our suppliers.

Speaker Change: And then in the fintech side, you know, by now pay later is virtually a hundred percent margin.

Speaker Change: and the Payments Margin is a long game. The Payments Margin, as I expressed on the Q3 earnings call, will continually improve over time.

Speaker Change: just as a helpful reference point for investors as they are thinking about the revenue associated with the payments GMV.

Speaker Change: As a reminder, we anticipate that revenues for GMV fall between 1.9 and 2.3% of that GMV. So when we say things like two and a half billion...

Speaker Change: in potential annualized GMV, already under signed contract, the best way to get that revenue is take 1.9 to 2.3% of that GMV.

Speaker Change: and ultimately we're excited about some of the margin enhancements that we get to the payments business through the bundling of Binow pay later and the processing functionality, which we're excited to talk more about on future earnings calls.

Speaker Change: Excellent. Next question. Will PublicSquare be looking into accepting any cryptocurrency anytime soon?

This is the topic of the year. I love it.

Speaker Change: As a note, I am a big believer personally in cryptocurrency, but we don't take the topic lightly.

Speaker Change: We do believe non-traditional payment methods are going to take market share away.

Speaker Change: from Traditional Payment Rails, and we are positioning ourselves well for that future.

Speaker Change: but we would have nothing to announce today. So, absolutely, we're exploring, we're very intentional about our cryptocurrency strategy that we do plan to implement in the future, but in terms of driving down into any further detail there, we would not be prepared to speak about that today.

Speaker Change: Excellent. And our last minute question being a relatively new organization. What are the primary growth strategies for the next few years and what are the key initiatives to achieve profitability?

Speaker Change: Well, this is a great question. I would say a few things. First, I would say, obviously, we're looking forward to 2025.

Speaker Change: Guidance that we do anticipate that our revenue will more than double year over year between 2024 to 2025.

Speaker Change: and we believe that ultimately that revenue doubling will be driven by our Fintech segment. So in the near term, we really are leaning hard into Fintech, meeting the demand that is currently in our pipeline and ensuring that we can exercise the synergies between our divisions. We want our company between marketplace, Fintech, and Brands.

Speaker Change: to be a 1 plus 1 plus 1 equals 10 exercise.

Speaker Change: We believe that the best way we can operate our company moving forward is by playing to the strengths of each of these divisions in order that a rising tide would actually lift all both associated with our company. That's the first thing I'd say. The second thing I'd say is that...

Speaker Change: and you want to break it down by division a little bit more. I'd say that obviously the FinTech division, the name of the game and the near term, is go and meet the demand that's already been presented to us, both not only in signing these contracts, but in onboarding these merchants with efficiency and then actually earning that associated revenue with that GMV.

Speaker Change: But then in Marketplace, I would say we really have a long game strategy associated with Marketplace.

Speaker Change: We actually believe that the marketplace will be a very fundamental revenue and profit driver for this company long-term, and so the name of the game in this season for the marketplace is ensure that its brand identity is able to grow organically with as much of a community movement behind it as possible, and so that's really our focus, and I mentioned that earlier with some of the ambassador and affiliate programs we're bringing to market as well as the refined strategy around exclusively showcasing made in America products, which we're really excited.

about

Speaker Change: All of these essential goods for their children and for themselves, anything they put on their body or in their body they want to make sure that it is clean, that it is premium and that it is sourced from a brand that they can trust. And we really feel like that's where every life fits in. So every life launched as a baby care brand, we really anticipate that moving forward over the course of the coming year or two, every life will begin to become known as more of a holistic family brand.

which we're very much looking forward to.

Speaker Change: Thank you, Michael, and that ends our submitted questions. I'll hand it back to you for any closing remarks.

Michael Seifert: Awesome. Well, thank you, Will, thank you Brad, and thank you for all of our shareholders that joined us on today's call, and for the questions we received on the call-in features.

Speaker Change: I really appreciate everyone joining us this afternoon and we'd love the opportunity to speak with you today about where we've been and where we are going as we seek to accomplish our mission of building commerce for a better America.

Michael Seifert: We hope you all have a tremendous remainder of your Thursday afternoon and evening, and we look forward to speaking with you soon.

Michael Seifert: This concludes today's conference call. Thank you for your participation. You may now disconnect.