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
- Revenue was $50.5 million as compared to $50.9 million in the
third quarter of 2021.
- Average monthly paying clients(1) was 5,576, as compared to
4,444 from the prior year period.
- Average monthly revenue per paying client(2) was $3,019, as
compared to $3,817 from the prior year period.
- Net loss was $10.5 million as compared to net income of $49.2
million from the prior year period.
- Adjusted EBITDA(3) was $(9.6) million as compared to $10.4
million from the prior year period. Prior to provision for doubtful
accounts (non-cash), Adjusted EBITDA(3) was $0.5 million
- Basic and diluted net loss per share was $0.06 based on 89.6
million of Class A Common Stock weighted average shares
outstanding.
- Total shares outstanding across Class A and Class V Common
Stock were 146.4 million as of September 30, 2022.
- Cash totaled $34.2 million as of September 30, 2022, 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, 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:
- although depreciation and amortization are non-cash charges,
the assets being depreciated and amortized may have to be replaced
in the future, and EBITDA, Adjusted EBITDA and Adjusted EBITDA
before Provision for Doubtful Accounts do not reflect cash capital
expenditure requirements for such replacements or for new capital
expenditure requirements;
- EBITDA, Adjusted EBITDA and Adjusted EBITDA before Provision
for Doubtful Accounts do not reflect changes in, or cash
requirements for, our working capital needs; and
- EBITDA, Adjusted EBITDA, and Adjusted EBITDA before Provision
for Doubtful Accounts do not reflect tax payments that may
represent a reduction in cash available to us.
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
- 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)
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
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