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Share Name | Share Symbol | Market | Type |
---|---|---|---|
WM Technology Inc | NASDAQ:MAPS | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.3049 | 29.18% | 1.3499 | 1.28 | 1.35 | 1.47 | 1.01 | 1.04 | 4,502,825 | 01:00:00 |
Announces Third Quarter 2022 Financial Results with Revenue of $50.5 million
Chris Beals steps down; Doug Francis, co-founder, Executive Chair, and former CEO to lead in the interim
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 third quarter ended September 30, 2022 and a leadership transition to position the Company for its next phase of growth.
Third Quarter 2022 Financial Highlights
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, Adjusted EBITDA, and Adjusted EBITDA before Provision for Doubtful Accounts as well as limitations of their use and a reconciliation of EBITDA, Adjusted EBITDA and Adjusted EBITDA before Provision for Doubtful Accounts to net (loss) income, see “Reconciliation of Net (Loss) Income to EBITDA, Adjusted EBITDA, and Adjusted EBITDA before Provision for Doubtful Accounts” below.
Leadership Transition
The Company announced that Doug Francis, co-founder and Executive Chair, will be taking a more active role in leading the Company. Mr. Francis succeeds Chris Beals, who has decided to step down from his role as Chief Executive Officer and from the Board of Directors. Mr. Francis is the co-founder of WM Technology and the Executive Chair of the Board of Directors. He was previously CEO of the Company prior to Mr. Beals and has worked closely with the Company’s management team over the last quarter since being appointed as Executive Chair.
“WM Technology has evolved significantly since Justin and I co-founded the Company 14 years ago as a marketplace connecting Cannabis consumers and businesses. Today, we have one of the most comprehensive technology platform powering the industry with a data advantage that we believe is unparalleled,” said Mr. Francis. “While end-market conditions have been challenging, we can be executing at a higher level by getting more focused and streamlined. We have significant opportunities to expand our moats and build the future rails for the Cannabis industry while working to get back to our operating culture of driving profitable growth and cashflow. I look forward to working closely with our management team.”
“As the Company’s co-founder and former CEO as well as a pioneer in the Cannabis industry, Doug has the expertise and acumen to lead WM Technology as we conduct a search for the Company’s next CEO,” said Brenda Freeman, Lead Independent Director of the Board. “On behalf of the Board, we wanted to thank Chris for his service-to-date. The Board, Doug and WM Technology’s management team are committed to ensuring a successful transition, and we are fortunate to have a leader of Doug’s caliber to help ensure WM Technology continues executing its strategy and creating value for our shareholders.”
Fourth Quarter 2022 Business Outlook
Based on current business trends and conditions, we expect our revenue for the second half will be closer to the wide end of our guidance, which implies a year-over-year decline in the low double digit percentage area for fourth quarter revenue. We expect fourth quarter Adjusted EBITDA will be further impacted by provision for doubtful accounts, which we expect will remain elevated in the fourth quarter based on aging of our receivables though significantly lower than the third quarter.
The guidance provided above is only an estimate of what we believe is realizable as of the date of this release. This guidance assumes that no business acquisitions, investments, restructurings, or legal settlements are concluded in the quarter. 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.
Conference Call Details
The Company will host a conference call and webcast today, Monday, November 7, 2022, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). Participants may register for the call at https://edge.media-server.com/mmc/p/qp839exf. A live webcast of the call will also be available on the WM Technology investor relations website at ir.weedmaps.com.
Earnings Presentation Details
A presentation with information on our Third Quarter 2022 earnings results can be found at ir.weedmaps.com at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time).
About WM Technology
Founded in 2008, WM Technology operates a leading online marketplace with a comprehensive set of eCommerce and compliance software solutions sold to retailers and brands in the U.S. state-legal and Canadian cannabis markets. The Company’s mission is to power a transparent and inclusive global cannabis economy. We address the challenges facing both consumers seeking to understand cannabis products and businesses who serve cannabis users in a legally compliant fashion with our Weedmaps marketplace and WM Business software solutions. Over the past 14 years, we have grown the Weedmaps marketplace to 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. WM Business is a set of eCommerce-enablement tools designed to help our retailer and brand clients get the best out of their Weedmaps experience, while creating labor efficiency and managing their 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 2021 Annual Report on Form 10-K filed with Securities and Exchange Commission (the “SEC”) 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, Adjusted EBITDA, and Adjusted EBITDA before Provision for Doubtful Accounts, all 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, transaction related bonuses, transaction costs, legal settlements and other non-cash, unusual and/or infrequent costs in the case of Adjusted EBITDA. Adjusted EBITDA is further adjusted to exclude provision for doubtful accounts for the case of Adjusted EBITDA before Provision for Doubtful Accounts. Below we have provided a reconciliation of net (loss) income (the most directly comparable GAAP financial measure) to EBITDA; from EBITDA to Adjusted EBITDA; and from Adjusted EBITDA to Adjusted EBITDA before Provision for Doubtful Accounts
We present EBITDA, Adjusted EBITDA, and Adjusted EBITDA before Provision for Doubtful Accounts 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, Adjusted EBITDA and Adjusted EBITDA before Provision for Doubtful Accounts provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management.
EBITDA, Adjusted EBITDA and Adjusted EBITDA before Provision for Doubtful Accounts have limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are as follows:
Because of these limitations, you should consider EBITDA, Adjusted EBITDA and Adjusted EBITDA before Provision for Doubtful Accounts alongside other financial performance measures, including net income (loss) and our other GAAP results.
Definition of Key Operating and Financial Metrics
WM TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except for share data)
September 30, 2022
December 31, 2021
Assets
Current assets
Cash
$
34,170
$
67,777
Accounts receivable, net
16,642
17,550
Prepaid expenses and other current assets
11,201
13,607
Total current assets
62,013
98,934
Property and equipment, net
23,246
13,283
Goodwill
67,156
45,295
Intangible assets, net
10,597
8,299
Right-of-use assets
32,634
36,549
Deferred tax assets
186,287
152,097
Other assets
12,002
10,687
Total assets
$
393,935
$
365,144
Liabilities and Equity
Current liabilities
Accounts payable and accrued expenses
$
24,225
$
23,155
Deferred revenue
6,648
8,057
Operating lease liabilities, current
6,105
5,463
Other current liabilities
98
1,125
Total current liabilities
37,076
37,800
Operating lease liabilities, non-current
34,709
39,377
Tax Receivable Agreement liability
142,892
128,567
Warrant liability
6,855
27,460
Other long-term liabilities
3,366
—
Total liabilities
224,898
233,204
Stockholders’ equity
Preferred Stock - $0.0001 par value; 75,000,000 shares authorized; no shares issued and outstanding at September 30, 2022 and December 31, 2021
—
—
Class A Common Stock - $0.0001 par value; 1,500,000,000 shares authorized; 90,372,205 shares issued and outstanding at September 30, 2022 and 65,677,361 shares issued and outstanding at December 31, 2021
9
7
Class V Common Stock - $0.0001 par value; 500,000,000 shares authorized, 56,066,624 shares issued and outstanding at September 30, 2022 and 65,502,347 shares issued and outstanding at December 31, 2021
5
7
Additional paid-in capital
61,375
2,173
Retained earnings
54,004
61,369
Total WM Technology, Inc. stockholders’ equity
115,393
63,556
Noncontrolling interests
53,644
68,384
Total equity
169,037
131,940
Total liabilities and equity
$
393,935
$
365,144
WM TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except for share data)
Three Months Ended September 30,
Nine Months Ended September 30,
2022
2021
2022
2021
Revenues
$
50,500
$
50,884
$
166,246
$
138,969
Operating expenses
Cost of revenues
4,272
2,035
11,870
5,800
Sales and marketing
17,882
12,806
61,887
37,194
Product development
11,988
7,782
38,341
25,921
General and administrative
33,490
23,220
92,155
70,356
Depreciation and amortization
2,513
980
8,916
2,970
Total operating expenses
70,145
46,823
213,169
142,241
Operating (loss) income
(19,645
)
4,061
(46,923
)
(3,272
)
Other income (expenses)
Change in fair value of warrant liability
6,590
45,837
20,605
83,628
Other expense, net
(50
)
(300
)
(1,230
)
(6,341
)
(Loss) income before income taxes
(13,105
)
49,598
(27,548
)
74,015
(Benefit from) provision for income taxes
(2,641
)
393
(5,699
)
242
Net (loss) income
(10,464
)
49,205
(21,849
)
73,773
Net (loss) income attributable to noncontrolling interests
(5,300
)
28,370
(14,484
)
48,675
Net (loss) income attributable to WM Technology, Inc.
$
(5,164
)
$
20,835
$
(7,365
)
$
25,098
Class A Common Stock:
Basic (loss) income per share
$
(0.06
)
$
0.32
$
(0.09
)
$
0.39
Diluted (loss) income per share
$
(0.06
)
$
0.02
$
(0.09
)
$
(0.15
)
Class A Common Stock:
Weighted average basic shares outstanding
89,552,914
64,216,732
82,872,137
64,149,699
Weighted average diluted shares outstanding
89,552,914
68,304,372
82,872,137
69,950,141
WM TECHNOLOGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Nine Months Ended September 30,
2022
2021
Cash flows from operating activities
Net (loss) income
$
(21,849
)
$
73,773
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation and amortization
8,916
2,970
Change in fair value of warrant liability
(20,605
)
(83,628
)
Impairment loss
1,317
2,372
Stock-based compensation
17,250
23,625
Deferred income taxes
(5,699
)
1
Provision for doubtful accounts
14,867
3,015
Changes in operating assets and liabilities:
Accounts receivable
(13,125
)
(6,371
)
Prepaid expenses and other current assets
5,222
7,228
Other assets
(263
)
87
Accounts payable and accrued expenses
5,008
3,313
Deferred revenue
(1,505
)
2,495
Net cash (used in) provided by operating activities
(10,466
)
28,880
Cash flows from investing activities
Purchases of property and equipment
(13,135
)
(4,246
)
Cash paid for acquisitions, net of cash acquired
(713
)
(16,000
)
Cash paid for acquisition holdback release
(1,000
)
—
Cash paid for other investments
—
(3,000
)
Net cash used in investing activities
(14,848
)
(23,246
)
Cash flows from financing activities
Taxes paid related to net share settlement of equity awards
(13
)
—
Proceeds from the Business Combination
—
79,969
Repayment of note payable
—
(205
)
Distributions
(2,448
)
(18,110
)
Repurchase of Class B Units
—
(5,565
)
Repayments of insurance premium financing
(5,832
)
(3,707
)
Net cash (used in) provided by financing activities
(8,293
)
52,382
Net (decrease) increase in cash
(33,607
)
58,016
Cash – beginning of period
67,777
19,919
Cash – end of period
$
34,170
$
77,935
WM TECHNOLOGY, INC. AND SUBSIDIARIES
RECONCILIATION OF NET (LOSS) INCOME TO EBITDA, ADJUSTED EBITDA, AND
ADJUSTED EBITDA BEFORE PROVISION FOR DOUBTFUL ACCOUNTS
(Unaudited)
(In thousands)
Three Months Ended September 30,
Nine Months Ended September 30,
2022
2021
2022
2021
Net (loss) income
$
(10,464
)
$
49,205
$
(21,849
)
$
73,773
(Benefit from) provision for income taxes
(2,641
)
393
(5,699
)
242
Depreciation and amortization expenses
2,513
980
8,916
2,970
EBITDA
(10,592
)
50,578
(18,632
)
76,985
Stock-based compensation (1)
1,639
4,192
17,250
23,625
Change in fair value of warrant liability
(6,590
)
(45,837
)
(20,605
)
(83,628
)
Transaction related bonuses
1,039
—
4,069
1,550
Transaction costs
—
1,450
251
1,450
Legal settlements and other legal costs
2,148
—
3,212
—
Reduction in force
1,960
—
1,960
—
Warrant transaction costs
—
41
—
5,547
Impairment loss
766
—
1,317
2,372
Adjusted EBITDA
$
(9,630
)
$
10,424
$
(11,178
)
$
27,901
Provision for doubtful accounts
10,176
2,355
14,867
3,015
Adjusted EBITDA before Provision for Doubtful Accounts
$
546
$
12,779
$
3,689
$
30,916
______________________________
(1)
Stock-based compensation expense (credit) is recorded in the following expense categories on the accompanying consolidated statements of operations for the three and nine months ended September 30, 2022 and 2021:
Three Months Ended September 30,
Nine Months Ended September 30,
2022
2021
2022
2021
Sales and marketing
$
956
$
689
$
4,839
$
4,515
Product development
1,065
1,865
3,993
3,859
General and administrative
(382
)
1,638
8,418
15,251
Total stock-based compensation expense
$
1,639
$
4,192
$
17,250
$
23,625
WM TECHNOLOGY, INC. AND SUBSIDIARIES
SELECTED OPERATING KEY METRICS
(Unaudited)
Selected Key Operating and Financial Metrics
Three Months Ended September 30,
Nine Months Ended September 30,
2022
2021
2022
2021
Average monthly paying clients
5,576
4,444
5,380
4,194
Average monthly revenue per paying client
$
3,019
$
3,817
$
3,433
$
3,682
View source version on businesswire.com: https://www.businesswire.com/news/home/20221107006080/en/
Investor Relations: investors@weedmaps.com
Media Contract: press@weedmaps.com
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