Q1 2025 WM Technology Inc Earnings Call
All participants will be in a listen only mode for the duration of the call.
Speaker Change: I would now like to turn the call over to turn the whole time anyhow director of Investor Relations.
Speaker Change: Good afternoon, and thank you for joining us today to discuss our first quarter 2025 results. We are joined by our CEO, Doug Francis our CFO Susan Eckert.
Speaker Change: By now everyone should have access to our earnings announcement is supporting slide deck on our Investor Relations website.
Speaker Change: During this call we will make forward looking statements about our business outlook strategies and long term goals.
Keep in mind that forward looking statements are not guarantees of future performance and are subject to a variety of risks and uncertainties some of which are beyond our control.
Speaker Change: Our actual results could differ materially from expectations reflected in any forward looking statements.
Speaker Change: For a discussion of risks and other important factors that could affect our actual results. Please refer to our SEC filings available on Sec's website, and our Investor Relations website.
Speaker Change: We specifically disclaim any intent or obligation to update these forward looking statements, except as required by law.
Speaker Change: For the benefit of those who may be listening to the replay or archived webcast. This call was held on May eight 2025.
Speaker Change: Since then we may have made announcements related to the topics discussed so please refer to the Companys. Most recent press releases and SEC filings.
Speaker Change: We will also discuss non-GAAP financial measures alongside those prepared in accordance with GAAP.
Speaker Change: non-GAAP financial measures should be considered in addition to but not as a substitute for the information prepared in accordance with GAAP.
Speaker Change: You can find a reconciliation of these measures to our GAAP results in our earnings presentation on our Investor Relations website.
Speaker Change: Finally, today's call is being webcast it from our Investor Relations website, and an audio replay will be available shortly.
Doug Francis: With that I will now turn it over to Doug.
Doug Francis: Thanks, Simon and thank you all for joining us today.
Doug Francis: Our first quarter results as we exceeded our Q1 guidance and grew revenue adjusted EBITDA and any cash on a year over year basis.
Doug Francis: Results reflect focused execution will continues to be a challenging environment for the cannabis industry.
Doug Francis: During our earnings call in March I expressed concern about the harm the regulators have been doing to the industry with the reaction and then effectiveness.
Doug Francis: Regulatory environment remains unchanged and the outlook for the cannabis industry remains challenged by over taxation and competition from unregulated.
Doug Francis: Some states have made overtures towards increased regulation on the parks ticketing hemp products.
Doug Francis: There hasn't been a lot of noise there has been little progress.
Unknown Executive: earnings conference call. All participants will be in a listen-only mode for the duration of the call.
In accordance with GAAP.
Doug Francis: In the last couple of months. We have also started facing a new source of merchandise from tariffs, which have the potential to increase our clients' operating path at a time when consumers are likely to be more price sensitive leading to further compression of already said margins.
non-GAAP financial Measures alongside those prepared in accordance with GAP. non-GAAP financial Measures should be considered in addition to, but not as a substitute for the information prepared in accordance with GAP. You can find a reconciliation of these measures to work at GAP results in our earliest presentation on our Investor Relations website.
Simon Yao: I would now like to turn the call over to your host, Simon Yao, Director of Investor Relations. Good afternoon and thank you for joining us today to discuss our first quarter 2025. We are joined by our CEO, Doug Francis, and our CFO, Susan Echard.
Doug Francis: While some in the industry are expressing optimism about the directional.
And finally, today's call is being webcasted from my professor relations website and an audio replay will be available shortly. With that, I will now turn it over to Doug.
Doug Francis: <unk> related to their current administration's view of candidates.
Unknown Executive: By now, everyone should have access to our earnings announcement and supporting slide deck on our investor relations website. During this call, we'll make forward-looking statements about our business outlook, strategies, and long-term goals. Keep in mind that forward-looking statements are not guarantees of future performance and are subject to a variety of risks and assertions. some of which are beyond our control. Our actual results could differ materially from expectations reflected in any forward-looking statement.
Doug Francis: When we see headlines and mixed signals and therefore operating with the assumption that there is no relief in sight in terms of federal regulation around taxes thinking.
Thanks Simon, and thank you all for joining us today.
Doug: We are proud of our first-core results as we continue our Q1 guidance and grew revenue with just the EBITDA and ending cash on a year-over-year basis.
Doug Francis: We're rescheduling. However, we remain hopeful that there will be movement and are ready to support the administration's effort when the time comes.
Doug: These results reflect focused execution and will continue to be a challenging environment for the cannabis industry.
Doug Francis: So Brazil was pulling report was clear the vast majority of Americans and both parties. One federal legalization. This is an 80 20 issue and hopefully the current administration takes the <unk> in the near term.
Transcription by CastingWords
Doug: During our earnings call in March, I expressed concern about the harm that regulators have been doing to the industry with their inaction and in effectiveness. The regulatory environment remains unchanged and the outlook for the cannabis industry remains challenged by over taxation and competition from unregulated. This is the end of the day.
Unknown Executive: For discussion of risk and other important factors that could affect our actual results, please refer to our SEC filings available on our SEC website and our investor relations website. specifically disclaimed any intent or obligation to update these four looking statements except as required by law.
Doug Francis: The commercial impact of these regulatory hurdles has magnified the existing market forces that are creating challenges for operators.
Doug Francis: In mature markets industry data continues to show a decrease in retail prices.
Unknown Executive: For the benefit of those who may be listening to the replay or archive webcast, this call was held on May 8, 2025. Since then, we may have made announcements related to the topics discussed, but please refer to the company's most recent press releases and SEC filings.
Doug: Some states have made overtures towards increased regulation in the toxicating hemp products, but while there has been a lot of noise, there has been little progress.
Doug Francis: When coupled with the lack of regulatory relief on operating cost leads to reduced cash flow for our clients ultimately decreasing their ability to borrow surfaces.
Doug: In the last couple of months, we have also started facing a new source of mercamage from tariffs, which had the potential to increase our client's operating top at a time when consumers are likely to be more price sensitive leading to further compression of already sent margins.
Doug Francis: While emerging markets have shown potential they remain subscale and the overall industry picture and their growth generally does not make up for the challenges in the more mature markets.
Unknown Executive: will also discuss non-GAAP financial measures alongside those prepared in accordance with GAAP. Non-GAAP financial measures should be considered in addition to but not as a substitute for the information prepared in accordance with GAAP. You can find a reconciliation of these measures to our gap results in our earnings presentation on our investor relations website.
Doug Francis: Against this backdrop I am pleased with how our team is executing.
Doug: Well, some of in the industry are expressing optimism about the directional.
Doug Francis: We remain disciplined and intentional on how we run the business keeping our cost structure lean focus on ROI driven investments. Thank you.
Doug: Signals related to the current administration view of cannabis. We only see headlines and mixed signals and therefore operating with the assumption that there is no relief and tight in terms of federal regulation around taxes, banking or rescheduling.
Doug Francis: Continuing to generate cash even as many in the industry face mounting challenges.
Unknown Executive: And finally, today's call is being webcasted from our FSO Relations website and an audio replay will be available shortly.
Doug Francis: We continue to grow our client base, especially in Underpenetrated markets, while helping existing clients better navigate today's dynamics.
Douglas Francis: With that, I will now turn it over to Doug. Thanks, Simon. And thank you all for joining us today. We are proud of our first quarter results as we exceeded our Q1 guidance and grew revenue, adjusted EBITDA, and ending cash on a year-over-year basis. These results reflect focused execution in what continues to be a challenging environment for the cannabis industry. During our earnings call in March, I expressed concern about the harm that regulators have been doing to the industry with their inaction and ineffectiveness. The regulatory environment remains unchanged, and the outlook for the cannabis industry remains challenged by overtaxation and competition from unregulated.
Doug: However, we remain hopeful that there will be movement and are ready to support the administration's efforts when the time comes.
Doug Francis: Our marketplace remains a vital resource for both consumers and businesses and we remain committed to delivering technology and data solutions that create transparency drive efficiency and unlock value across the ecosystem.
Doug: Tobrizio's polling report was clear. The vast majority of Americans in both parties want federal legalization. This is an 80-20 issue and hopefully the current administration takes the 80-year term.
Doug Francis: I'd like to highlight two areas that gives me optimism about our long term potential first our technology and product development organization has made meaningful progress with our new CTO in.
Doug: The commercial impact of these regulatory hurdles has magnified the existing market forces with their creating challenges for operators.
Doug: In the material market, industry data continues to show decreasing retail prices and that when coupled with the lack of regulatory relief on operating costs leads to reduce cash low for our clients, thus ultimately decreasing their ability to buy our services.
Doug Francis: In Q1, we focused on foundational improvements to our data infrastructure and automation, including better use of machine learning and AI.
Doug Francis: We also made significant headway in enhancing our product catalog taxonomy and search capabilities, which lay the groundwork for the next generation of our products and marketplace innovation.
Douglas Francis: Some states have made overtures towards increased regulation of intoxicating hemp products, but while there has been a lot of noise, there has been little progress. In the last couple of months, we have also started facing a new source of murkiness from tariffs, which have the potential to increase our clients operating costs at a time when consumers are likely to be more price sensitive, leading to further compression of already set margins. While some in the industry are expressing optimism about the directional signals related to their current administration's view of cannabis, we only see headlines and mixed signals and therefore operating with the assumption that there is no relief in sight in terms of federal regulation around taxes, banking, or rescheduling.
Doug: While emerging markets have shown potential, they remain sub-scale in the overall industry picture and their growth generally does not make up for the challenges in the more mature
Doug Francis: Second we restructured our marketing organization in Q1 and are beginning to see the early impact.
Doug Francis: The team is working to reconnect with our heritage as a brand synonymous with the cannabis culture and community.
Doug Francis: Great example, was our $4 20, Activations this year, which true to who we are and where we're headed.
Doug Francis: There's more work to do but I'm excited about what's coming from this group in the quarters ahead.
Doug: We continue to grow our client base, especially under penetrated markets while hoping existing clients that are navigate today's anonymous.
Doug Francis: We are building for the long term.
Doug Francis: And close to our customers operating with discipline and positioning ourselves to lead the as the industry matures with that I'll turn it over to Susan to walk through the financial results in more detail.
Doug: Our marketplace remains a vital resource for both consumers and businesses and we remain committed to delivery technology and data solutions that create transparency, privacy, privacy, and unlock value across the ecosystem.
Douglas Francis: However, we remain hopeful that there will be movement and are ready to support the administration's efforts when the time comes. Tabrizio's polling report was clear. The vast majority of Americans in both parties want federal legalization. This is an 80-20 issue, and hopefully the current administration takes the 80 in the near term. The commercial impact of these regulatory hurdles has magnified the existing market forces that are creating challenges for operators. In mature markets, industry data continues to show decreasing retail prices, and that, when coupled with the lack of regulatory relief on operating costs, leads to reduced cash flow for our clients, thus ultimately decreasing their ability to buy our services.
Susan Eckert: Thanks, Doug now turning to our financial performance.
Susan Eckert: First quarter revenue was $44 6 million roughly in line with the point $4 4 million reported in the prior year period.
. . . . .
Doug: I'd like to highlight two areas that give me optimism about our long-term potential.
Doug: First, our technology and product development organization has made meaningful progress of our new CTO. In Q1, we focused on foundational improvements to our data in infrastructure and automation, including better use of machine learning and AI.
Susan Eckert: The modest increase of <unk> $2 million or 1% was driven by growth in standard listings, which increased by <unk> 4 million and display advertising, which grew by nearly 8 million. These.
Doug: We also made significant headway in enhancing our product catalog, taxonomy, and search capabilities, which lay the groundwork for the next generation of ad products and marketplace innovation.
Susan Eckert: These gains were partially offset by $1 million decline in revenue from our featured NGL lifting.
Susan Eckert: This shift in product mix reflects broader trends, we're seeing in the business growth in standard listing is tied to our continued efforts to acquire new clients and Underpenetrated markets. While the declining featured end deal listing highlights the ongoing financial pressures limiting discretionary spend.
Doug: Second, we restructure our marketing organization in Q1 and are beginning to see the early impact. The team is working to reconnect with our heritage as a brand anonymous with the cannabis culture and community.
Douglas Francis: While emerging markets have shown potential, they remain subscale in the overall industry picture, and their growth generally does not make up for the challenges in the more mature market. Against this backdrop, I am pleased with how our team is executing. We've remained disciplined and intentional on how we run the business, keeping our cost structure lean, focused on ROI-driven investments, and continuing to generate cash, even as many in the industry face mounting challenges. We continue to grow our client base, especially in underpenetrated markets, while helping existing clients better navigate today's dynamic. Our marketplace remains a vital resource for both consumers and businesses, and we remain committed to delivering technology and data solutions that create transparency, drive efficiency, and unlock value across the ecosystem.
Doug: The great example was our 420 activations this year which felt true to who we are and where we're heading.
Speaker Change: Ross the industry.
Doug: There's more work to do, but I'm excited about what's coming from this group in the quarters ahead.
Speaker Change: These dynamics are also evident in our client and monetization metrics.
Doug: We're building for the long-term, staying close to our customers, operating with discipline and positioning ourselves to leave the industry and with that, I'll turn it over to Susan to walk through the financial as well as my detail.
Speaker Change: Average monthly paying clients for the quarter increased 5% year over year to 5179, driven by new client acquisitions in certain markets.
Speaker Change: However, average monthly revenue per paying client declined to 2871 and.
. . . . .
Thanks Doug, now turning to our financial performance.
Doug: First quarter revenue was $44.6 million, roughly in line with the $44.4 million reported in the prior year period.
Speaker Change: 2997 in the prior year, reflecting some pullbacks in more mature markets.
Speaker Change: This decline was primarily driven by persistent industry headwinds, including pricing pressures and consolidation, which continue to impact our clients marketing budgets. These challenges were partially offset by the contribution from newly acquired clients in certain markets.
Doug: The modest increase of 0.2 million or 1 percent was driven by growth in standard listings which increased by 0.4 million and display advertising which grew by 0.8 million.
Douglas Francis: I'd like to highlight two areas that give me optimism about our long-term potential. First, our technology and product development organization has made meaningful progress under our new CTO. In Q1, we focused on foundational improvements to our data, infrastructure, and automation, including better use of machine learning and AI. We also made significant headway in enhancing our product catalog, taxonomy, and search capabilities, which lay the groundwork for the next generation of ad products and marketplace innovation.
Doug: These gains were partially offset by $1 million to climb in revenue from our featured and
Speaker Change: Turning to our expenses GAAP, Opex, which includes cost of revenues and depreciation and amortization totaled $42 million in the first quarter.
Transcription by ESO. Translation by —
Doug: This shift in product mix reflects broader trends we're seeing in the business.
Doug: Growth and Standard Listings is tied to our continued efforts to acquire new clients in under-penetrated markets while the decline in featured and deal listings highlights the ongoing financial pressures limiting discretionary spend across the industry.
Speaker Change: This represents a $1 3 million or 3% increase over the prior year period.
Douglas Francis: Second, we restructured our marketing organization in Q1 and are beginning to see the early impact. The team is working to reconnect with our heritage as a brand synonymous with the Canada's culture and community. A great example was our 420 activations this year, which felt true to who we are and where we're heading. There's more work to do, but I'm excited about what's coming from this group in the quarters ahead. We're building for the long term, staying close to our customers, operating with discipline, and positioning ourselves as the industry matures.
Speaker Change: This reflects an increase of $2 9 million and general and administrative expenses, partially offset by lower sales and marketing and product development expenses.
Doug: These dynamics are also evident in our client and monetization metrics.
Speaker Change: The increase in G&A expenses includes 2 million of nonrecurring charges, which includes certain onetime legal expenses and severance associated with recent workforce reduction.
Doug: Average monthly paying clients for the quarter increased 5% year-over-year to 5179, driven by new client acquisitions in certain markets.
Speaker Change: Despite the modest increase in operating expenses net income rose to $2 5 million up from $2 million in the prior year period.
Doug: However, average monthly revenue per paying client declined to 2871 from 2997 in the prior year reflecting Ben pullbacks in more mature markets.
Susan Echard: With that, I'll turn it over to Susan to walk through the financial results in more detail. Thanks, Doug. Now turning to our financial performance. First quarter revenue was $44.6 million, roughly in line with the $44.4 million reported in the prior year period. The modest increase of 0.2 million, or 1%, was driven by growth in standard listings, which increased by 0.4 million, and display advertising, which grew by 0.8 million. These gains were partially offset by a $1 million decline in revenue from our Featured and Deal List. This shift in product mix reflects broader trends we're seeing in the business.
Speaker Change: The increase was primarily driven by mark to market adjustments on our warrants and higher interest income.
Doug: This decline was primarily driven by persistent industry headwind, including pricing pressures and consolidation, which continued to impact our clients' marketing budgets. These challenges were partially offset by the contribution from newly acquired clients in certain markets.
Speaker Change: Adjusted EBITDA for the first quarter was $10 1 million, which exceeded our expectations.
Speaker Change: The outperformance was driven by slightly higher than expected revenue as well as lower than anticipated expenses, primarily due to reduced advertising spend and wage related costs and our product development organization.
. . . . .
Doug: Turning to our expenses, Gap Apex, which includes cost of revenues and appreciation and to all the 42 million in the first quarter.
Speaker Change: We generated $1 3 million in cash from operations and ended the first quarter with a cash balance of $53 3 million.
Doug: This represents a 1.3 million or 3% increase over the prior year period, which reflects an increase of 2.9 million in general and administrative expenses partially offset by lower sales and marketing and product development expenses.
Susan Echard: Growth in standard listings is tied to our continued efforts to acquire new clients in under-penetrated markets, while the decline in featured and deal listings highlights the ongoing financial pressures limiting discretionary spend across the industry. These dynamics are also evident in our client and monetization metrics. Average monthly paying clients for the quarter increased 5% year over year to $5,179, driven by new client acquisitions in certain markets. However, average monthly revenue per paying client declined to $2,871 from $2,997 in the prior year, reflecting spend pullbacks in more mature markets. This decline was primarily driven by persistent industry headwinds, including pricing pressures and consolidation, which continue to impact our clients' marketing budget.
Speaker Change: This marks our seventh consecutive quarter of cash growth in line with the increase seen in Q1 of last year.
Speaker Change: With no debt on our balance sheet, we have the flexibility to make strategic investments in the business, while navigating the ongoing industry challenges.
Doug: The increase in GNA expenses includes 2 million of non-recurring charges, which includes certain one-time legal expenses and severance associated with recent workforce reduction.
Speaker Change: Our share count across class, a and B common stock was $154 4 million as of March 31 2025.
Doug: Despite the modest increase in operating expenses, net income rose to 2.5 million up from 2 million in the prior year period. The increase was primarily driven by Mark to market adjustments on our warrants and higher interest income.
Speaker Change: A reconciliation of non-GAAP metrics to their nearest GAAP result, as well as the details of our share classes and share count calculation are provided in our earnings presentation posted on our Investor Relations website.
Doug: Adjusted EBITDA for the first quarter was 10.1 million, which exceeded our expectations.
Speaker Change: Now turning to our financial outlook.
Doug: The outperformance was driven by slightly higher than expected revenue as well as lower than anticipated expenses, primarily due to reduced advertising spend and wage-related costs in our product development organization.
Speaker Change: We expect revenues for the second quarter to be approximately 45 million and non-GAAP. Adjusted EBITDA is estimated to be approximately $8 million.
Susan Echard: These challenges were partially offset by the contribution from newly acquired clients in certain markets.
Speaker Change: We are pleased with the progress made this quarter and we continue to execute our 2025 plans.
Susan Echard: Turning to our expenses, GAAP OPEX, which includes cost of revenues and depreciation and amortization, totaled $42 million in the first quarter. This represents a $1.3 million, or 3% increase, over the prior year period, which reflects an increase of $2.9 million in general and administrative expenses, partially offset by lower sales and marketing and product development expenses. The increase in GNA expenses includes $2 million of non-recurring charges which includes certain one-time legal expenses and severance associated with recent workforce reductions. Despite the modest increase in operating expenses, net income rose to $2.5 million, up from $2 million in the prior year period.
. . . . .
Doug: We generated 1.3 million in cash from operations and ended the first quarter with a cash balance of 53.3 million. This marks our seventh consecutive quarter of cash growth in line with the increase seen in Q1 of last year.
Speaker Change: With that I'll now turn the call back over to the operator to conclude our call.
Speaker Change: Thank you for your participation in today's conference. This does conclude the program you may now disconnect.
Doug: With no debt on our balance sheet, we have the flexibility to make strategic investments in the business while navigating the ongoing industry challenges.
Doug: A reconciliation of non-GAAP metrics to their nearest gap result, as well as the details of our share classes and share count calculation, are provided in our earnings presentation posted on our investor relations website.
Susan Echard: The increase was primarily driven by mark-to-market adjustments on our warrants and higher interest income. Adjusted EBITDA for the first quarter was $10.1 million, which exceeded our expectations. The outperformance was driven by slightly higher than expected revenue, as well as lower than anticipated expenses. primarily due to reduced advertising spend and wage-related costs in our product development organization. We generated $1.3 million in cash from operations and ended the first quarter with a cash balance of $53.3 million. This marks our seventh consecutive quarter of cash growth in line with the increase seen in Q1 of last year. With no debt on our balance sheet, we have the flexibility to make strategic investments in the business while navigating the ongoing industry challenges.
Now turning to our financial outlook.
Doug: We expect revenues for the second quarter to be approximately 45 million and non-GAAP adjusted Evada is estimated to be approximately 8 million
Doug: We are pleased with the progress made this quarter and we continue to execute our 2025 plans.
Doug: With that, I'll now turn the call back over to the operator to conclude our call.
Speaker Change: Okay.
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Susan Echard, Unknown Executive
Doug: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.
Transcript by Rev.com Page of
Susan Echard: Our share count across Class A and B common stock was $154.4 million as of March 31, 2025.
Susan Echard: A reconciliation of non-GAAP metrics to their nearest GAAP result as well as the details of our share classes and share count calculation are provided in our earnings presentation posted on our investor relations website.
Susan Echard: Now turning to our financial outlook.
Susan Echard: We expect revenues for the second quarter to be approximately $45 million, and non-GAAP adjusted EBITDA is estimated to be approximately $8 million. We are pleased with the progress made this quarter and we continue to execute our 2025 plan.
Unknown Executive: With that, I'll now turn the call back over to the operator to conclude our call. Thank you for your participation in today's conference. This does conclude the program.
Unknown Executive: You may now disconnect.
Dr. Francis, Susan Echard, Silver Spike Acq.
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Susan Echard, Unknown Executive
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