WM Technology, Inc. Q1 FY2026 earnings call

• Regulatory Milestone Update • The U.S. federal government rescheduled FDA-approved, state-licensed medical cannabis products from Schedule 1 to Schedule 3 under the Controlled Substances Act, which management calls an important milestone for the cannabis industry. • Broader federal rescheduling remains ongoing, with a DEA administrative hearing scheduled for June 29, 2026; the full impact of the current change will take time to unfold, and implementation details are still unclear. • Management does not expect the rescheduling to materially impact WM Technology's current operations, and views federal progress as constructive toward a more rational U.S. cannabis regulatory framework.

• Strategic Delisting from AdSense • WM Technology voluntarily delisted from AdSense as a strategic decision to gain greater flexibility to pursue opportunities across the cannabis ecosystem, as existing ad platform policies limit opportunities for cannabis-related companies. • The decision frees the company to deploy its balance sheet in two new priority areas: 1) investing in strategic clients and partner companies across the cannabis supply chain, and 2) expanding the technology platform into areas previously prohibited by platform policies. • Management plans to continue improving the core WeedMaps marketplace while expanding capabilities to serve the full cannabis ecosystem including retailers, brands, MSOs, and consumers.

• Operational Execution • Q1 2026 revenue came in line with expectations, marking another quarter of disciplined execution amid constrained industry conditions. • Client churn was concentrated in large, mature markets (California, Michigan, Colorado), driven by cannabis operator financial stress, business closures, and nonpayment; this churn was partially offset by new client growth in newer markets (New York, Mississippi). • The company maintained disciplined cost control for headcount, vendor spend, and discretionary expenses, partially offsetting a $3.9 million increase in provision for credit losses for delinquent accounts from struggling operators.

The provided transcript does not break out financial performance for discrete product segments, only reporting aggregate company-level results. Aggregate Q1 2026 total revenue is $43.6 million, a 2% year-over-year decrease and 1% sequential increase. Average monthly paying clients totaled 4,983, a 4% year-over-year decrease and 3% sequential decrease. Average revenue per paying client saw a marginal year-over-year increase, driven by positive mix effects from churn among lower-spend clients. Total operating expenses were $43.4 million, up from $42 million year-over-year. GAAP net income was $1.7 million, and adjusted EBITDA was $5.9 million. Net cash used in operating activities was $1.3 million, and ending cash and investments totaled $57 million.

• Management expects Q2 2026 revenue to decline sequentially from Q1 2026 by low single digits. This projected decline reflects continued client churn and account removals in mature cannabis markets, and a return to normalized client spend after the seasonal pre-4/20 holiday increase that boosted Q1 results.
• The company will maintain disciplined operational management while continuing to support clients and invest selectively against long-term strategic priorities.

• The broader U.S. cannabis operating environment remains difficult, with persistent industry headwinds including price compression from oversupply and competition, pressure on consumer discretionary spending, elevated tax burdens, limited access to capital, and ongoing regulatory uncertainty at both state and federal levels.
• These industry pressures negatively impact client budgets, client business stability, and the pace of growth investment by cannabis operators, leading to elevated client churn, nonpayment, and higher credit losses for WM Technology.
• Forward-looking statements are inherently uncertain, and actual results could differ materially from expectations due to unforeseen risks and factors outside the company's control.

No questions were asked or answered during the portion of the call provided in the transcript.