Announces First Quarter 2023 Financial Results
with Revenue of $48.0 million
WM Technology, Inc. (“WM Technology” or the “Company”) (Nasdaq:
MAPS), a leading technology and software infrastructure provider to
the cannabis industry, today announced its financial results for
the first quarter ended March 31, 2023.
“We are pleased with our Q1 results as they positively reflect
the strategic actions we have taken since November to improve our
bottom line,” said Doug Francis, Executive Chair of WM Technology.
“Our continued focus on our marketplace experience and commitment
to delivering value to our clients is generating business stability
despite end markets that remain challenged. While we still have
work to do, our return to positive adjusted EBITDA and operating
cash flows signal that our operational and financial position is as
strong as it’s been in some time. Lastly, I want to congratulate
and thank the entire Weedmaps team for the hard work throughout
this past 420 holiday. We saw our highest volume of orders placed
on the platform, which I believe further cements how critical
Weedmaps is to the success of our clients.”
First Quarter 2023 Financial Highlights
- Revenue was $48.0 million as compared to $57.5 million in the
first quarter of 2022 (“prior year period”).
- Average monthly paying clients(1) was 5,641, as compared to
5,026 from the prior year period.
- Average monthly revenue per paying client(2) was $2,837, as
compared to $3,810 from the prior year period.
- Net loss was $4.0 million as compared to net loss of $31.2
million from the prior year period.
- Adjusted EBITDA(3) was $7.1 million as compared to $(1.0)
million from the prior year period.
- Basic and diluted net loss per share was $0.03 based on 92.3
million of Class A Common Stock weighted average shares
outstanding.
- Total shares outstanding across Class A and Class V Common
Stock were 148.1 million as of March 31, 2023.
- Cash totaled $25.9 million as of March 31, 2023, with no
long-term debt.
Reconciliations of GAAP to non-GAAP financial measures have been
provided in the tables included in this release.
_____________________________
(1)
Average monthly paying clients are defined
as the average of the number of paying clients billed in a month
across a particular period (and for which services were
provided).
(2)
Average monthly revenue per paying client
is defined as the average monthly revenue for any particular period
divided by the average monthly paying clients in the same
respective period.
(3)
For further information about how we
calculate EBITDA and Adjusted EBITDA as well as limitations of
their use and a reconciliation of EBITDA and Adjusted EBITDA to net
(loss) income, see “Reconciliation of Net (Loss) Income to EBITDA
and Adjusted EBITDA” below.
April 20, 2023 (“420”) Highlights
- Over 30 in-market activations across 12 states supporting our
clients surrounding 420 and driving Weedmaps awareness
- “20 Days of Deals” initiative which drove traffic to our
platform while simultaneously elevating awareness and traffic to
our retail and delivery partners
- Innovative partnership with Jack in the Box promoting the
return of its Pineapple Express Shake across the Weedmaps
platform
- New weekly record for number of online orders and deals
claimed
Business Outlook
Based on information available as of May 9, 2023, WM Technology
is issuing guidance for the second quarter of 2023 as follows:
- Revenue is estimated to be consistent with the first quarter of
2023.
- Non-GAAP Adjusted EBITDA(1) is estimated to be approximately $4
million.
The guidance provided above is only an estimate of what we
believe is realizable as of the date of this release. We are not
readily able to provide a reconciliation of projected Non-GAAP
Adjusted EBITDA to projected net income (loss) without unreasonable
effort. This guidance assumes that no business acquisitions,
investments, restructurings, or legal settlements are concluded in
the period. Our results are based on assumptions that we believe to
be reasonable as of this date, but may be materially affected by
many factors, as discussed below in “Forward-Looking Statements.”
Actual results may vary from the guidance and the variations may be
material. We undertake no intent or obligation to publicly update
or revise any of these projections, whether as a result of new
information, future events or otherwise, except as required by
law.
Investor Conference Call and Webcasts
The Company will host a conference call and webcast today,
Tuesday, May 9, 2023, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern
Time) at https://edge.media-server.com/mmc/p/2eimzdir. A webcast
replay will also be archived at ir.weedmaps.com.
The Company has used, and intends to continue to use, the
investor relations portion of its website as a means of disclosing
material non-public information and for complying with disclosure
obligations under Regulation FD.
About WM Technology
Founded in 2008, WM Technology operates the leading online
cannabis marketplace for consumers together with a comprehensive
set of eCommerce and compliance software solutions for cannabis
businesses, which are sold to retailers and brands in the U.S.
state-legal and Canadian cannabis markets. The Company is driven by
a passion for the plant, and is on a mission to champion the truth
and stand with all who believe in open access to cannabis.
The Company’s technology addresses the challenges facing both
consumers seeking to understand cannabis products and businesses
who serve cannabis users in a legally compliant fashion. Over the
past 14 years, the Weedmaps marketplace has become a premier
destination for cannabis consumers to discover and browse
information regarding cannabis and cannabis products, permitting
product discovery and order-ahead for pickup or delivery by
participating retailers. Weedmaps for Business is a set of
eCommerce-enablement tools designed to help retailers and brands
get the best out of the Weedmaps’ consumer experience, create labor
efficiencies and manage compliance needs.
WM Technology holds a strong belief in the power of cannabis and
the importance of enabling safe, legal access to consumers
worldwide. Since inception, WM Technology has worked tirelessly,
not only to become the most comprehensive platform for consumers,
but to build the software solutions that power businesses
compliantly in the space, to advocate for legalization, social
equity, and licensing in many jurisdictions, and to facilitate
further learning through partnering with subject matter experts on
providing detailed, accurate information about the plant.
Headquartered in Irvine, California, WM Technology supports
remote work for all eligible employees. Visit us at
www.weedmaps.com.
Forward-Looking Statements
This press release includes “forward-looking statements”
regarding our future business expectations which involve risks and
uncertainties. Forward-looking statements may be identified by the
use of words such as “estimate,” “plan,” “project,” “forecast,”
“intend,” “will,” “expect,” “anticipate,” “believe,” “seek,”
“target” or other similar expressions that predict or indicate
future events or trends or that are not statements of historical
matters. These forward-looking statements include, but are not
limited to, statements regarding estimates and forecasts of
financial and performance metrics and projections of market
opportunity and market share. These statements are based on various
assumptions, whether or not identified in this press release, and
on the current expectations of the Company’s management and are not
predictions of actual performance. These forward-looking statements
are provided for illustrative purposes only and are not intended to
serve as, and must not be relied on by any investor as, a
guarantee, an assurance, a prediction or a definitive statement of
fact or probability. Actual events and circumstances are difficult
or impossible to predict and will differ from assumptions. Many
actual events and circumstances are beyond the control of the
Company. These forward-looking statements are subject to a number
of risks and uncertainties, including the Company’s financial and
business performance, including key business metrics and any
underlying assumptions thereunder; market opportunity and the
Company’s ability to acquire new customers and retain existing
customers; expectations and timing related to commercial product
launches; success of the Company’s go-to-market strategy; ability
to scale its business and expand its offerings; the Company’s
competitive advantages and growth strategies; the Company’s future
capital requirements and sources and uses of cash; the Company’s
ability to obtain funding for our future operations; the outcome of
any known and unknown litigation and regulatory proceedings;
changes in domestic and foreign business, market, financial,
political and legal conditions; risks relating to the uncertainty
of the projected financial information with respect to the Company;
future global, regional or local economic and market conditions
affecting the cannabis industry; the development, effects and
enforcement of and changes to laws and regulations, including with
respect to the cannabis industry; the Company’s ability to
successfully capitalize on new and existing cannabis markets,
including its ability to successfully monetize its solutions in
those markets; the Company’s ability to manage future growth; the
Company’s ability to develop new products and solutions, bring them
to market in a timely manner, and make enhancements to its platform
and the Company’s ability to maintain and grow its two-sided
digital network, including its ability to acquire and retain paying
customers; the effects of competition on the Company’s future
business; the Company’s success in retaining or recruiting, or
changes required in, officers, key employees or directors,
including the CEO transition; the possibility that we may be
adversely affected by other economic, business or competitive
factors; the possibility that the Company may be adversely affected
by other economic, business or competitive and those factors
discussed in the Company’s 2022 Annual Report on Form 10-K filed
with Securities and Exchange Commission (the “SEC”) on March 16,
2023 and subsequent Form 10-Qs or Form 8-Ks filed with the SEC. If
any of these risks materialize or these assumptions prove
incorrect, actual results could differ materially from the results
implied by these forward-looking statements. There may be
additional risks that the Company does not presently know or that
the Company currently believes are immaterial that could also cause
actual results to differ from those contained in the forward
looking statements. In addition, forward-looking statements reflect
the Company’s expectations, plans or forecasts of future events and
views as of the date of this press release. The Company anticipates
that subsequent events and developments will cause the Company’s
assessments to change. However, while the Company may elect to
update these forward-looking statements at some point in the
future, the Company specifically disclaims any obligation to do so,
except as required by law. These forward-looking statements should
not be relied upon as representing the Company’s assessments as of
any date subsequent to the date of this press release. Accordingly,
undue reliance should not be placed upon the forward-looking
statements.
Use of Non-GAAP Financial Measures
Our financial statements, including net loss, are prepared in
accordance with principles generally accepted in the United States
of America (“GAAP”).
To provide investors with additional information regarding our
financial results, we have disclosed EBITDA and Adjusted EBITDA,
all of which are non-GAAP financial measures that we calculate as
net loss before interest, taxes and depreciation and amortization
expense in the case of EBITDA and further adjusted to exclude
stock-based compensation, change in fair value of warrant
liability, change in tax receivable agreement liability,
transaction related bonuses, transaction costs, legal settlements
and other legal costs, reduction in force and other non-cash,
unusual and/or infrequent costs in the case of Adjusted EBITDA.
Below we have provided a reconciliation of net (loss) income (the
most directly comparable GAAP financial measure) to EBITDA; and
from EBITDA to Adjusted EBITDA.
We present EBITDA and Adjusted EBITDA because these metrics are
a key measure used by our management to evaluate our operating
performance, generate future operating plans and make strategic
decisions regarding the allocation of investment capacity.
Accordingly, we believe that EBITDA and Adjusted EBITDA provide
useful information to investors and others in understanding and
evaluating our operating results in the same manner as our
management.
Each of EBITDA and Adjusted EBITDA has limitations as an
analytical tool, and you should not consider any of these non-GAAP
financial measures in isolation or as a substitute for analysis of
our results as reported under GAAP. Some of these limitations are
as follows:
- although depreciation and amortization are non-cash charges,
the assets being depreciated and amortized may have to be replaced
in the future, and EBITDA and Adjusted EBITDA do not reflect cash
capital expenditure requirements for such replacements or for new
capital expenditure requirements;
- EBITDA and Adjusted EBITDA do not reflect changes in, or cash
requirements for, our working capital needs; and
- EBITDA and Adjusted EBITDA do not reflect tax payments that may
represent a reduction in cash available to us.
Because of these limitations, you should consider EBITDA and
Adjusted EBITDA alongside other financial performance measures,
including net loss and our other GAAP results.
Definition of Key Operating and Financial Metrics
- Average Monthly Revenue Per Paying Client: Average
monthly revenue per paying client measures how much clients, for
the period of measurement, are willing to pay us for our
subscription and additional offerings and the efficiency of the
bid-auction process for our featured listings placements. We
calculate this metric by dividing the average monthly revenue for
any particular period by the average monthly number of paying
clients in the same respective period. The calculation of monthly
revenue includes revenue from any clients that cease to be paying
clients during the applicable month.
- Average Monthly Paying Clients: We define average
monthly paying clients as the monthly average of clients billed
each month over a particular period (and for which services were
provided).
WM TECHNOLOGY, INC. AND
SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(Unaudited)
(In thousands, except for
share data)
March 31, 2023
December 31, 2022
Assets
Current assets
Cash
$
25,902
$
28,583
Accounts receivable, net
15,401
17,438
Prepaid expenses and other current
assets
6,866
8,962
Total current assets
48,169
54,983
Property and equipment, net
25,556
24,928
Goodwill
68,368
68,368
Intangible assets, net
9,784
10,339
Right-of-use assets
30,245
31,447
Other assets
8,504
8,970
Total assets
$
190,626
$
199,035
Liabilities and Stockholders’
Equity
Current liabilities
Accounts payable and accrued expenses
$
26,170
$
33,635
Deferred revenue
6,366
6,256
Operating lease liabilities, current
6,574
6,334
Tax receivable agreement liability,
current
500
—
Other current liabilities
98
98
Total current liabilities
39,708
46,323
Operating lease liabilities,
non-current
31,314
33,043
Tax receivable agreement liability,
non-current
100
500
Warrant liability
1,365
2,090
Other long-term liabilities
2,900
2,302
Total liabilities
75,387
84,258
Stockholders’ equity
Preferred Stock - $0.0001 par value;
75,000,000 shares authorized; no shares issued and outstanding at
March 31, 2023 and December 31, 2022
—
—
Class A Common Stock - $0.0001 par value;
1,500,000,000 shares authorized; 92,573,466 shares issued and
outstanding at March 31, 2023 and 92,062,468 shares issued and
outstanding at December 31, 2022
9
9
Class V Common Stock - $0.0001 par value;
500,000,000 shares authorized, 55,486,361 shares issued and
outstanding at March 31, 2023 and December 31, 2022
5
5
Additional paid-in capital
72,444
67,986
Accumulated deficit
(57,095
)
(54,620
)
Total WM Technology, Inc. stockholders’
equity
15,363
13,380
Noncontrolling interests
99,876
101,397
Total stockholders’ equity
115,239
114,777
Total liabilities and stockholders’
equity
$
190,626
$
199,035
WM TECHNOLOGY, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
(In thousands, except for
share data)
Three Months Ended March
31,
2023
2022
Revenues
$
48,007
$
57,452
Operating expenses
Cost of revenues (exclusive of
depreciation and amortization shown separately below)
3,494
3,740
Sales and marketing
12,060
21,882
Product development
10,934
13,090
General and administrative
22,500
29,055
Depreciation and amortization
3,167
3,945
Total operating expenses
52,155
71,712
Operating loss
(4,148
)
(14,260
)
Other income (expenses)
Change in fair value of warrant
liability
725
(18,219
)
Change in tax receivable agreement
liability
(100
)
—
Other expense, net
(446
)
(502
)
Loss before income taxes
(3,969
)
(32,981
)
Benefit from income taxes
—
(1,748
)
Net loss
(3,969
)
(31,233
)
Net loss attributable to noncontrolling
interests
(1,494
)
(17,340
)
Net loss attributable to WM Technology,
Inc.
$
(2,475
)
$
(13,893
)
Class A Common Stock:
Basic and diluted loss per share
$
(0.03
)
$
(0.19
)
Class A Common Stock:
Weighted average basic and diluted shares
outstanding
92,323,757
72,450,204
WM TECHNOLOGY, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Unaudited)
(In thousands)
Three Months Ended March
31,
2023
2022
Cash flows from operating
activities
Net loss
$
(3,969
)
$
(31,233
)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Depreciation and amortization
3,167
3,945
Change in fair value of warrant
liability
(725
)
18,219
Change in tax receivable agreement
liability
100
—
Stock-based compensation
4,383
7,517
Deferred tax asset
—
(1,748
)
Provision for doubtful accounts
1,951
2,759
Changes in operating assets and
liabilities:
Accounts receivable
86
(7,802
)
Prepaid expenses and other current
assets
2,447
1,617
Other assets
25
—
Accounts payable and accrued expenses
(5,417
)
3,132
Deferred revenue
109
(256
)
Net cash provided by (used in) operating
activities
2,157
(3,850
)
Cash flows from investing
activities
Purchases of property and equipment
(3,226
)
(4,201
)
Cash paid for acquisitions, net of cash
acquired
—
(713
)
Net cash used in investing activities
(3,226
)
(4,914
)
Cash flows from financing
activities
Repayments of insurance premium
financing
(1,450
)
(3,143
)
Distributions
(250
)
—
Proceeds from repayment of related party
note
88
—
Taxes paid related to net share settlement
of equity awards
—
(13
)
Net cash used in financing activities
(1,612
)
(3,156
)
Net decrease in cash
(2,681
)
(11,920
)
Cash – beginning of period
28,583
67,777
Cash – end of period
$
25,902
$
55,857
WM TECHNOLOGY, INC. AND
SUBSIDIARIES
RECONCILIATION OF NET LOSS TO
EBITDA AND ADJUSTED EBITDA
(Unaudited)
(In thousands)
Three Months Ended March
31,
2023
2022
Net loss
$
(3,969
)
$
(31,233
)
Benefit from income taxes
—
(1,748
)
Depreciation and amortization expenses
3,167
3,945
EBITDA
(802
)
(29,036
)
Stock-based compensation
4,383
7,517
Change in fair value of warrant
liability
(725
)
18,219
Transaction related bonuses
2,842
1,957
Legal settlements and other legal
costs
867
139
Reduction in force
465
—
Transaction costs
—
251
Change in tax receivable agreement
liability
100
—
Adjusted EBITDA
$
7,130
$
(953
)
_____________________________
(1)
Stock-based compensation expense is
recorded in the following expense categories on the accompanying
consolidated statements of operations for the three months ended
March 31, 2023 and 2022:
Three Months Ended March
31,
2023
2022
Sales and marketing
$
897
$
1,811
Product development
1,168
1,412
General and administrative
2,318
4,294
Total stock-based compensation expense
4,383
7,517
Amount capitalized to software
development
298
410
Total stock-based compensation cost
$
4,681
$
7,927
WM TECHNOLOGY, INC. AND
SUBSIDIARIES
SELECTED KEY OPERATING
METRICS
(Unaudited)
Selected Key
Operating Metrics
Three Months Ended March
31,
2023
2022
Average monthly paying clients
5,641
5,026
Average monthly revenue per paying
client
$
2,837
$
3,810
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version on businesswire.com: https://www.businesswire.com/news/home/20230509006204/en/
Investor Relations: investors@weedmaps.com
Media Contract: press@weedmaps.com
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