Announces Second Quarter 2023 Financial Results
with Revenue of $50.9 million, Net Income of $2.0 million and
Adjusted EBITDA of $10.2 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 second quarter ended June 30, 2023.
“Our second quarter results reflect the positive changes we have
made to our business over the past few quarters and our commitment
to returning to positive cash flow and Adjusted EBITDA,” said Doug
Francis, Executive Chair of WM Technology. “We continue to
strengthen our financial position, and we’re seeing the strategic
and operational changes we’ve implemented take hold, delivering
increased value to our stakeholders which in turn will generate
long-term, sustainable growth and profitability for WM Technology.
It’s imperative that we continue to develop and deliver valuable
products and services for our clients, ensuring Weedmaps is the
best destination for consumers to discover and order cannabis
through participating retailers. While there is more to do, I am
proud of the progress we have made to date.”
Second Quarter 2023 Financial Highlights
- Revenue was $50.9 million as compared to $58.3 million in the
second quarter of 2022 (“prior year period”).
- Average monthly paying clients(1) was 5,609, as compared to
5,537 from the prior year period.
- Average monthly revenue per paying client(2) was $3,022, as
compared to $3,509 from the prior year period.
- Net income was $2.0 million as compared to net income of $19.8
million from the prior year period.
- Adjusted EBITDA(3) was $10.2 million as compared to $(0.6)
million from the prior year period.
- Basic and diluted net income per share were both $0.01 based on
92.9 million and 93.6 million of Class A Common Stock weighted
average shares outstanding, respectively.
- Total shares outstanding across Class A and Class V Common
Stock were 148.9 million as of June 30, 2023.
- Cash totaled $24.6 million as of June 30, 2023, with no
debt.
Reconciliations of GAAP to non-GAAP financial measures have been
provided in the tables included in this release.
______________________________
- 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).
- 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.
- 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 income (loss),
see “Reconciliation of Net Income (Loss) to EBITDA and Adjusted
EBITDA” below.
Business Outlook
Based on information available as of August 8, 2023, WM
Technology is issuing guidance for the third quarter of 2023 as
follows:
- Revenue is estimated to be $47 million
- 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.
Independent Registered Accounting Firm
As previously reported, on June 8, 2023, the Company was
notified by Baker Tilly US, LLP (“Baker Tilly”), of its decision to
resign as the independent registered public accounting firm of the
Company due to staffing constraints within Baker Tilly. The
resignation is effective immediately following the filing of the
Company’s Quarterly Report on Form 10-Q for the quarter ended June
30, 2023.
On August 2, 2023, the Audit Committee of the Board of Directors
of the Company approved the appointment of Moss Adams LLP (“Moss
Adams”) as the Company’s new independent registered public
accounting firm for the fiscal year ending December 31, 2023. Moss
Adams’ engagement is effective immediately following the filing of
the Company’s Quarterly Report on Form 10-Q for the quarter ended
June 30, 2023.
Investor Conference Call and Webcasts
The Company will host a conference call and webcast today,
Tuesday, August 8, 2023, at 2:00 p.m. Pacific Time (5:00 p.m.
Eastern Time) at https://edge.media-server.com/mmc/p/55jhnmgv. 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 search; 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 income (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,
both of which are non-GAAP financial measures that we calculate as
net income (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, impairment loss, 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
income (loss) (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 income (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.
- 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)
June 30, 2023
December 31, 2022
Assets
Current assets
Cash
$
24,603
$
28,583
Accounts receivable, net
14,971
17,438
Prepaid expenses and other current
assets
7,690
8,962
Total current assets
47,264
54,983
Property and equipment, net
26,452
24,928
Goodwill
68,368
68,368
Intangible assets, net
9,243
10,339
Right-of-use assets
29,024
31,447
Other assets
8,391
8,970
Total assets
$
188,742
$
199,035
Liabilities and Stockholders’
Equity
Current liabilities
Accounts payable and accrued expenses
$
18,615
$
33,635
Deferred revenue
6,663
6,256
Operating lease liabilities, current
6,821
6,334
Tax receivable agreement liability,
current
400
—
Other current liabilities
98
98
Total current liabilities
32,597
46,323
Operating lease liabilities,
non-current
29,500
33,043
Tax receivable agreement liability,
non-current
720
500
Warrant liability
2,410
2,090
Other long-term liabilities
3,041
2,302
Total liabilities
68,268
84,258
Stockholders’ equity
Preferred Stock - $0.0001 par value;
75,000,000 shares authorized; no shares issued and outstanding at
June 30, 2023 and December 31, 2022
—
—
Class A Common Stock - $0.0001 par value;
1,500,000,000 shares authorized; 93,415,644 shares issued and
outstanding at June 30, 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 June 30, 2023 and December 31, 2022
5
5
Additional paid-in capital
76,351
67,986
Accumulated deficit
(55,869
)
(54,620
)
Total WM Technology, Inc. stockholders’
equity
20,496
13,380
Noncontrolling interests
99,978
101,397
Total stockholders’ equity
120,474
114,777
Total liabilities and stockholders’
equity
$
188,742
$
199,035
WM TECHNOLOGY, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
(In thousands, except for
share data)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Revenues
$
50,852
$
58,294
$
98,859
$
115,746
Operating expenses
Cost of revenues (exclusive of
depreciation and amortization shown separately below)
3,239
3,858
6,733
7,598
Sales and marketing
12,567
22,123
24,627
44,005
Product development
9,200
13,263
20,134
26,353
General and administrative
19,208
29,610
41,708
58,665
Depreciation and amortization
2,855
2,458
6,022
6,403
Total operating expenses
47,069
71,312
99,224
143,024
Operating income (loss)
3,783
(13,018
)
(365
)
(27,278
)
Other income (expenses)
Change in fair value of warrant
liability
(1,045
)
32,234
(320
)
14,015
Change in tax receivable agreement
liability
(520
)
—
(620
)
—
Other expense, net
(235
)
(678
)
(681
)
(1,180
)
Income (loss) before income taxes
1,983
18,538
(1,986
)
(14,443
)
Benefit from income taxes
—
(1,310
)
—
(3,058
)
Net income (loss)
1,983
19,848
(1,986
)
(11,385
)
Net income (loss) attributable to
noncontrolling interests
757
8,156
(737
)
(9,184
)
Net income (loss) attributable to WM
Technology, Inc.
$
1,226
$
11,692
$
(1,249
)
$
(2,201
)
Class A Common Stock:
Basic income (loss) per share
$
0.01
$
0.14
$
(0.01
)
$
(0.03
)
Diluted income (loss) per share
$
0.01
$
0.13
$
(0.01
)
$
(0.03
)
Class A Common Stock:
Weighted average basic shares
outstanding
92,851,349
86,425,352
92,589,011
79,476,383
Weighted average diluted shares
outstanding
93,622,582
87,230,850
92,589,011
79,476,383
WM TECHNOLOGY, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Unaudited)
(In thousands)
Six Months Ended June
30,
2023
2022
Cash flows from operating
activities
Net loss
$
(1,986
)
$
(11,385
)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Depreciation and amortization
6,022
6,403
Change in fair value of warrant
liability
320
(14,015
)
Change in tax receivable agreement
liability
620
—
Impairment loss
—
551
Stock-based compensation
8,092
15,611
Deferred tax asset
—
(3,058
)
Provision for doubtful accounts
3,605
4,691
Changes in operating assets and
liabilities:
Accounts receivable
(1,138
)
(13,612
)
Prepaid expenses and other current
assets
1,623
2,867
Other assets
41
(87
)
Accounts payable and accrued expenses
(13,513
)
8,851
Deferred revenue
406
(631
)
Net cash provided by (used in) operating
activities
4,092
(3,814
)
Cash flows from investing
activities
Purchases of property and equipment
(5,806
)
(8,554
)
Cash paid for acquisitions, net of cash
acquired
—
(713
)
Cash paid for acquisition holdback
release
—
(1,000
)
Net cash used in investing activities
(5,806
)
(10,267
)
Cash flows from financing
activities
Repayments of insurance premium
financing
(1,450
)
(4,289
)
Distributions
(1,002
)
(1,790
)
Proceeds from repayment of related party
note
187
—
Taxes paid related to net share settlement
of equity awards
(1
)
(13
)
Net cash used in financing activities
(2,266
)
(6,092
)
Net decrease in cash
(3,980
)
(20,173
)
Cash – beginning of period
28,583
67,777
Cash – end of period
$
24,603
$
47,604
WM TECHNOLOGY, INC. AND
SUBSIDIARIES
RECONCILIATION OF NET INCOME
(LOSS) TO EBITDA AND ADJUSTED EBITDA
(Unaudited)
(In thousands)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
(in thousands)
Net income (loss)
$
1,983
$
19,848
$
(1,986
)
$
(11,385
)
Benefit from income taxes
—
(1,310
)
—
(3,058
)
Depreciation and amortization expenses
2,855
2,458
6,022
6,403
Interest income
(12
)
—
(12
)
—
EBITDA
4,826
20,996
4,024
(8,040
)
Stock-based compensation
3,709
8,094
8,092
15,611
Change in fair value of warrant
liability
1,045
(32,234
)
320
(14,015
)
Transaction related bonus (recovery)
expense
(275
)
1,073
2,567
3,030
Legal settlements and other legal
costs
666
925
1,533
1,064
Reduction in force (recovery) expense
(264
)
—
201
—
Impairment loss
—
551
—
551
Transaction costs
—
—
—
251
Change in tax receivable agreement
liability
520
—
620
—
Adjusted EBITDA
$
10,227
$
(595
)
$
17,357
$
(1,548
)
______________________________
(1) Stock-based compensation expense is recorded in the
following expense categories on the accompanying consolidated
statements of operations for the three and six months ended June
30, 2023 and 2022:
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Sales and marketing
$
696
$
2,072
$
1,593
$
3,883
Product development
1,114
1,516
2,282
2,928
General and administrative
1,899
4,506
4,217
8,800
Total stock-based compensation expense
3,709
8,094
8,092
15,611
Amount capitalized to software
development
296
519
594
929
Total stock-based compensation cost
$
4,005
$
8,613
$
8,686
$
16,540
WM TECHNOLOGY, INC. AND
SUBSIDIARIES
SELECTED KEY OPERATING
METRICS
(Unaudited)
Selected Key
Operating Metrics
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Average monthly paying clients
5,609
5,537
5,625
5,282
Average monthly revenue per paying
client
$
3,022
$
3,509
$
2,929
$
3,652
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WM Technology (NASDAQ:MAPS)
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