WM Technology, Inc. Q3 FY2024 earnings call

CEO's Statements

• Third quarter reflected eighth consecutive quarter of positive adjusted EBITDA profitability.
• Cannabis industry has regulatory uncertainty at state and federal levels. Federal election changes approach, but unclear if incoming administration will reschedule cannabis. Believes cannabis should be treated like wine.
• Industrial hemp has regulatory uncertainty with delayed federal farm bill, leading to states potentially banning hemp or folding it into cannabis models.
• Company plans to focus on marketplace, be efficient, profitable, build balance sheet, and play long game. Envisions expanding core marketplace vertically and horizontally into hemp, seeds/homegrown, and hardware for cannabis.
• CEO returned and will assume role of CEO to lead company into next phase.

CFO's Statements

• Q3 net revenues exceeded guidance and increased sequentially.
• Average monthly paying clients in Q3 were 5,100, consecutive quarterly increase in 2024 but down 6% y-o-y due to sunsetting products.
• Average monthly net revenues per paying client in Q3 increased 6% y-o-y.
• GAAP OpEx declined 21% y-o-y due to impairment charge last year, cost of revenue decrease, and lower sales and marketing and G&A.
• Net income in Q3 was $5.3 million vs net loss of $2.5 million in Q3 last year. Adjusted EBITDA was $11.3 million, beat guidance. Cash balance at $45 million, debt free.

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 featured listings product and impact from sunsetting products in Q4 last year. However, standard listings product saw growth driven by new client growth. Revenue contribution: standard listings product contributed positively due to new client growth, while featured listings product and sunset products had negative impacts.

Forward-looking Statements

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

Risks

• Cannabis industry regulatory uncertainty at state and federal levels, unclear timeline for reforms.
• Industrial hemp regulatory uncertainty due to delayed federal farm bill, leading to states independently regulating and potential bans or folding into cannabis models, which may impact hemp business advantages.