Net Income Increased 312% Year-Over-Year to
$5.3 million
Cash Increased 31% from Year-End to $45.0
million
Adjusted EBITDA of $11.3 million Represents
Eighth Consecutive Quarter of Adjusted EBITDA Profitability
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, 2024.
"Our third quarter results mark yet another consecutive period
of strong financial performance and positive cash flow,
underscoring the solid foundation our team has built," said Doug
Francis, CEO of WM Technology. "In the two years since I returned
to lead the Company, first as its Executive Chair and now as its
CEO, we have become a much more focused organization. Our success
is a direct result of the team’s hard work, and with our increasing
cash and debt-free balance sheet, we are well-positioned to make
strategic growth investments in our people and marketplace as we
move into next year.”
"The fundamentals of our business continue to strengthen, as
evidenced by our eighth consecutive quarter of Adjusted EBITDA
profitability," said Susan Echard, CFO of WM Technology. "We are
also encouraged by the recent trend in revenue, despite the effects
from the strategic actions to sunset certain products last year. We
are excited to build on this positive momentum as we set the stage
for 2025."
Third Quarter 2024 Financial Highlights
- Net revenues of $46.6 million increased from $45.9 million in
the prior quarter and decreased from $46.7 million in prior year
period. The decrease from the prior year period was due to the
impact on revenue related to the sunset of certain products in the
fourth quarter of 2023, partially offset by growth in certain
products.
- Average monthly paying clients(1) of 5,100 increased from 5,045
in the prior quarter and decreased from 5,414 in the prior year
period. The decrease from the prior year period was primarily
driven by the impact on client count related to the sunset of the
aforementioned products, as well as the removal of clients from our
platform who have become delinquent and expected client churn due
to continued industry challenges, such as price deflation and
ongoing consolidation.
- Average monthly net revenues per paying client(2) of $3,043
increased from $3,033 in the prior quarter and increased from
$2,874 in the prior year period. The increase from the prior year
period was due to sunset of certain products in December 2023,
which had lower average monthly spending clients.
- Net income increased to $5.3 million from $1.2 million in the
prior quarter and net loss of $2.5 million in the prior year
period.
- Adjusted EBITDA(3) increased to $11.3 million from $10.1
million in the prior quarter and $10.7 million from the prior year
period.
- Total shares outstanding across Class A and Class V Common
Stock were 152.9 million as of September 30, 2024.
- Cash increased to $45.0 million as of September 30, 2024, as
compared to $34.4 million as of December 31, 2023.
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 net revenues per paying
client is defined as the average monthly net revenues for any
particular period divided by the average monthly paying clients in
the same respective period. Average monthly net revenues per paying
client is calculated in the same manner as our previously-reported
“average monthly revenue per paying client,” and the description of
the metric is being updated solely to clarify that it is calculated
using net revenues. Average monthly net revenues per paying client
has been retrospectively adjusted to reflect the restatement of
previously reported net revenues.
(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 income (loss), see “Reconciliation of Net Income (Loss) to
EBITDA and Adjusted EBITDA” below.
Business Outlook
Based on information available as of November 12, 2024, WM
Technology is issuing guidance for the fourth quarter of 2024 as
follows:
- Net revenues are estimated to be approximately $46
million.
- Non-GAAP Adjusted EBITDA(3) is estimated to be approximately $7
million.
The guidance provided above is only an estimate of what the
Company believes is realizable as of the date of this release. The
Company is 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. The Company’s results are based on
assumptions that it believes 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. The Company undertakes
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.
Restatement of Previously Reported 2023 Quarterly Revenues
and Credit Losses
The Company has restated its unaudited condensed Consolidated
Statements of Operations for the period ended September 30, 2023 as
follows (in thousands)
Three Months Ended
September 30, 2023
Nine Months Ended
September 30, 2023
Previously Reported
Adjustment
As Restated
Previously Reported
Adjustment
As Restated
Net revenues
$
47,725
$
(1,038
)
$
46,687
$
146,584
$
(5,058
)
$
141,526
General and administrative expenses
$
19,189
$
(1,038
)
$
18,151
$
60,897
$
(5,058
)
$
55,839
Total costs and expenses
$
53,273
$
(1,038
)
$
52,235
$
152,497
$
(5,058
)
$
147,439
The Company has restated its unaudited condensed Consolidated
Statements of Cash Flows for period ended September 30, 2023 as
follows (in thousands):
Nine Months Ended
September 30, 2023
Previously Reported
Adjustment
As Restated
Adjustments to reconcile net income (loss)
to net cash (used in) provided by operating activities:
Provision (recovery) for credit losses
$
4,862
$
(5,058
)
$
(196
)
Changes in operating assets and
liabilities:
Accounts receivable
$
262
$
5,058
$
5,320
Investor Conference Call and Webcasts
The Company will host a conference call and webcast today,
Tuesday, November 12, 2024, at 2:00 p.m. Pacific Time (5:00 p.m.
Eastern Time) at https://edge.media-server.com/mmc/p/fw2hcour. 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 Weedmaps, a leading
cannabis marketplace for consumers, as well as a broad set of
eCommerce and compliance software solutions for cannabis businesses
and brands in U.S. state-legal markets. WM Technology holds a
strong belief in the power of cannabis and the importance of
enabling safe, legal access to consumers worldwide.
Over the past 15 years, the Weedmaps marketplace has become a
premier destination for cannabis consumers to discover and browse
cannabis-related products, access daily dispensary deals, order
ahead for pick-up and delivery by participating retailers (where
applicable) and learn about the plant. The Company also offers
eCommerce-enablement tools designed to help cannabis retailers and
brands reach consumers, create business efficiency, and manage
industry-specific compliance needs.
The Company is committed to advocating for full U.S.
legalization, industry-wide social equity, and continued education
about the plant through key partnerships and cannabis subject
matter experts.
Headquartered in Irvine, California, WM Technology supports
remote and hybrid work for eligible employees. Visit us at
www.weedmaps.com.
Forward-Looking Statements
This press release includes “forward-looking statements”
regarding the Company’s 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. 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 clients and
retain existing clients; expectations and timing related to
commercial product launches; success of the Company’s go-to-market
strategy; the Company’s 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 its
future operations; the impact of the material weaknesses in the
Company’s internal controls and ability to remediate these material
weaknesses in the timing the Company anticipates, or at all; the
outcome of any known and unknown litigation and regulatory
proceedings; changes in domestic and foreign business, market,
financial, political and legal conditions; the effect of
macroeconomic conditions, including but not limited to inflation,
uncertain credit and global financial markets, recent and potential
future disruptions in access to bank deposits or lending
commitments due to bank failures and geopolitical events, including
the military conflicts between Russia and Ukraine and Israel and
Hamas and occurrence of a catastrophic event, including but not
limited to severe weather, war, or terrorist attack; 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
effectively anticipate and address changes in the end-user market
in the cannabis industry; the Company’s ability to develop new
products and solutions, bring them to market in a timely manner,
and make enhancements to its platform; the Company’s ability to
maintain and grow its two-sided marketplace, including its ability
to acquire and retain paying clients; 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; cyber-attacks and security vulnerabilities; the
possibility that the Company may be adversely affected by other
economic, business or competitive and those factors discussed in
the Company’s 2023 Annual Report on Form 10-K filed with the SEC on
May 24, 2024 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, transaction related bonus, legal settlements and other
legal costs, reduction in force, asset impairment charges, change
in TRA liability 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.
WM TECHNOLOGY, INC. AND
SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In
thousands, except for share data)
September 30, 2024
December 31, 2023
Assets
Current assets
Cash
$
45,043
$
34,350
Accounts receivable, net
7,907
11,158
Prepaid expenses and other current
assets
6,409
5,978
Total current assets
59,359
51,486
Property and equipment, net
24,876
24,255
Goodwill
68,368
68,368
Intangible assets, net
2,091
2,507
Right-of-use assets
15,513
15,629
Other assets
3,361
4,776
Total assets
$
173,568
$
167,021
Liabilities and Stockholders’
Equity
Current liabilities
Accounts payable and accrued expenses
$
16,533
$
21,182
Deferred revenue
5,765
5,918
Operating lease liabilities, current
4,088
6,493
Tax receivable agreement liability,
current
1,396
122
Total current liabilities
27,782
33,715
Operating lease liabilities,
non-current
26,912
26,550
Tax receivable agreement liability,
non-current
1,730
1,634
Warrant liability
390
585
Other long-term liabilities
1,764
1,386
Total liabilities
58,578
63,870
Commitments and contingencies
Stockholders’ equity
Preferred Stock - $0.0001 par value;
75,000,000 shares authorized; no shares issued and outstanding at
September 30, 2024 and December 31, 2023
—
—
Class A Common Stock - $0.0001 par value;
1,500,000,000 shares authorized; 97,376,026 shares issued and
outstanding at September 30, 2024 and 94,383,053 shares issued and
outstanding at December 31, 2023
10
9
Class V Common Stock - $0.0001 par value;
500,000,000 shares authorized, 55,486,361 shares issued and
outstanding at September 30, 2024 and December 31, 2023
5
5
Additional paid-in capital
88,762
80,884
Accumulated deficit
(59,230
)
(64,518
)
Total WM Technology, Inc. stockholders’
equity
29,547
16,380
Noncontrolling interests
85,443
86,771
Total stockholders’ equity
114,990
103,151
Total liabilities and stockholders’
equity
$
173,568
$
167,021
WM TECHNOLOGY, INC. AND
SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) (In thousands, except for share data)
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023 As Restated1
2024
2023 As Restated1
Net revenues
$
46,552
$
46,687
$
136,844
$
141,526
Costs and expenses
Cost of revenues (exclusive of
depreciation and amortization shown separately below)
2,182
3,015
6,729
9,748
Sales and marketing
9,671
11,544
30,374
36,171
Product development
9,484
7,748
28,355
27,882
General and administrative
16,494
18,151
51,549
55,839
Depreciation and amortization
3,517
3,395
9,641
9,417
Asset impairment charges
—
8,382
—
8,382
Total costs and expenses
41,348
52,235
126,648
147,439
Operating income (loss)
5,204
(5,548
)
10,196
(5,913
)
Other income (expenses), net
Change in fair value of warrant
liability
585
(460
)
195
(780
)
Change in tax receivable agreement
liability
(548
)
(69
)
(1,486
)
(689
)
Other income (expense)
98
3,565
(362
)
2,884
Income (loss) before income taxes
5,339
(2,512
)
8,543
(4,498
)
Provision for income taxes
21
—
72
—
Net income (loss)
5,318
(2,512
)
8,471
(4,498
)
Net income (loss) attributable to
noncontrolling interests
1,986
(974
)
3,183
(1,711
)
Net income (loss) attributable to WM
Technology, Inc.
$
3,332
$
(1,538
)
$
5,288
$
(2,787
)
Class A Common Stock:
Basic income (loss) per share
$
0.03
$
(0.02
)
$
0.06
$
(0.03
)
Diluted income (loss) per share
$
0.03
$
(0.02
)
$
0.05
$
(0.03
)
Class A Common Stock:
Weighted average basic shares
outstanding
97,166,788
93,651,871
95,743,064
92,947,191
Weighted average diluted shares
outstanding
97,811,251
93,651,871
96,761,731
92,947,191
___________________________
(1)
For the three and nine months ended
September 30, 2023, net revenues and general and administrative
expenses have been retrospectively adjusted to reflect the
restatement of previously reported revenue and credit losses. See
Note 2, “Summary of Significant Accounting Policies,” of Form 10-Q
for the period ended September 30, 2024 filed with the SEC.
WM TECHNOLOGY, INC. AND
SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) (In thousands)
Nine Months Ended September
30,
2024
2023 As
Restated1
Cash flows from operating
activities
Net income (loss)
$
8,471
$
(4,498
)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization
9,641
9,417
Change in fair value of warrant
liability
(195
)
780
Change in tax receivable agreement
liability
1,486
689
Amortization of right-of-use lease
assets
3,284
3,666
Asset impairment charges
—
8,382
Stock-based compensation
7,172
10,389
Gain on lease termination
(109
)
—
Discharge of a holdback obligation related
to a prior acquisition
—
(3,705
)
Provision (recovery) for credit losses
(295
)
(196
)
Changes in operating assets and
liabilities:
Accounts receivable
3,546
5,320
Prepaid expenses and other current
assets
(439
)
2,419
Other assets
1,029
21
Accounts payable and accrued expenses
(1,169
)
(15,439
)
Deferred revenue
(153
)
(167
)
Operating lease liabilities
(4,994
)
(4,668
)
Net cash provided by operating
activities
27,275
12,410
Cash flows from investing
activities
Capitalized software and expenditures
(9,499
)
(8,870
)
Net cash used in investing activities
(9,499
)
(8,870
)
Cash flows from financing
activities
Repayments of insurance premium
financing
—
(1,450
)
Distributions
(7,250
)
(3,233
)
Proceeds from repayment of related party
note
286
286
Tax receivable agreement payment
(116
)
—
Taxes paid related to net share settlement
of equity awards
(3
)
(5
)
Net cash used in financing activities
(7,083
)
(4,402
)
Net increase (decrease) in cash
10,693
(862
)
Cash – beginning of period
34,350
28,583
Cash – end of period
$
45,043
$
27,721
___________________________
(1)
For the nine months ended September 30,
2023, provision (recovery) for credit losses and change in accounts
receivable have been retrospectively adjusted to reflect the
restatement of previously reported revenue and credit losses. See
Note 2, “Summary of Significant Accounting Policies,” of Form 10-Q
for the period ended September 30, 2024 filed with the SEC.
WM TECHNOLOGY, INC. AND
SUBSIDIARIES RECONCILIATION OF NET INCOME (LOSS) TO EBITDA AND
ADJUSTED EBITDA (Unaudited) (In thousands)
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
(in thousands)
Net income (loss)
$
5,318
$
(2,512
)
$
8,471
$
(4,498
)
Provision for income taxes
21
—
72
—
Depreciation and amortization expenses
3,517
3,395
9,641
9,417
Interest income
(280
)
(11
)
(331
)
(23
)
EBITDA
8,576
872
17,853
4,896
Stock-based compensation
1,601
2,297
7,172
10,389
Change in fair value of warrant
liability
(585
)
460
(195
)
780
Transaction related bonus expense
—
833
—
3,400
Legal settlements and other legal
costs
1,172
1,470
4,685
3,003
Reduction in force (recovery) expense
—
(7
)
—
194
Asset impairment charges
—
8,382
—
8,382
Discharge of a holdback obligation related
to a prior acquisition
—
(3,705
)
—
(3,705
)
Change in tax receivable agreement
liability
548
69
1,486
689
Adjusted EBITDA
$
11,312
$
10,671
$
31,001
$
28,028
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241112810827/en/
Investor Relations: investors@weedmaps.com
Media Contract: press@weedmaps.com
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