WM Technology, Inc. Q3 FY2024 earnings call

Doug's Statements

• Third quarter reflected another consecutive period of strong quarterly results with net revenues of $46.6 million, adjusted EBITDA of $11.3 million and cash of $45 million, eighth consecutive quarter of positive adjusted EBITDA profitability.
• Cannabis industry has regulatory uncertainty, including lack of progress on sensible regulation at state and federal level; uncertainty around incoming Trump administration's stance on rescheduling cannabis; intoxicating hemp facing delay in federal farm bill leading to states independently regulating.
• Company's goal is to focus on marketplace, be efficient, profitable, build balance sheet for future; 2025 plan to expand core marketplace vertically by adding new products/features and horizontally around hemp, seeds/homegrown, and hardware for cannabis.
• Doug assumed role of CEO to lead company into next phase.

Susan's Statements

• Q3 net revenues exceeded guidance and increased sequentially to $46.6 million; GAAP OpEx declined 21% vs prior year due to impairment charge last year and cost savings in various areas.
• Net income for the quarter was $5.3 million compared to a net loss of $2.5 million in Q3 last year; Q3 adjusted EBITDA $11.3 million, beat guidance; generated $3.8 million in cash, closed quarter with $45 million cash balance, debt free.
• Focused on adding new accounts, minimizing churn, and Q4 net revenues expected to be approximately $46 million, Q4 non-GAAP adjusted EBITDA approximately $7 million.

In the third quarter, net revenues were $46.6 million, adjusted EBITDA was $11.3 million, and cash was $45 million. Compared to the prior year, net revenues declined marginally due to lower spend on the featured listings product and the impact from products sunset in Q4 of last year. The decline was partially offset by growth in the standard listings product driven by continued new client growth. Q3 average monthly paying clients were 5,100, marking another consecutive quarterly increase in 2024 but was approximately 6% lower than the same period last year. The average monthly net revenues per paying client in Q3 increased 6% to $3,043 compared to the prior year period.

• Expect Q4 net revenues to be approximately $46 million.
• Expect Q4 non-GAAP adjusted EBITDA to be approximately $7 million.

• Cannabis industry regulatory uncertainty across state and federal levels, including lack of progress on sensible regulation and uncertainty around rescheduling cannabis.
• Intoxicating hemp facing delay in federal farm bill leading to states independently regulating, which may force states to ban hemp outright or fold it into existing cannabis models, affecting hemp businesses' advantages.
• Government reforms may not always benefit the industry as hoped and timeline for reforms is difficult to predict.