ContextLogic Inc. (d/b/a Wish) (Nasdaq: WISH), one of the
largest mobile ecommerce platforms, today reported its financial
results for the quarter ended June 30, 2022.
Second-Quarter Fiscal 2022 Financial Highlights
- Revenues: Revenues were $134 million, a decrease of 80% YoY
- Core Marketplace revenues were $54 million, down 86% YoY
- Product Boost revenues were $11 million, down 78% YoY
- Logistics revenues were $69 million, down 70% YoY
- Net Loss: Net Loss was $90 million, a 19% YoY improvement
- Net Loss per share was $0.13, compared to a loss of $0.18 per
share in the second quarter of fiscal 2021
- Adjusted EBITDA: Adjusted EBITDA was a loss of $58 million, an
improvement of 13% YoY
- Cash Flow: Cash flows from operating activities were negative
$67 million
- Free Cash Flow was negative $67 million, compared to negative
$205 million in the second quarter of fiscal 2021
“We remain laser focused on the transformation of our business
and have already made some significant improvements to the consumer
experience, delivery times, and customer service, which have led to
an increase in NPS scores and lower product refund rates,” said
Vijay Talwar, Wish CEO. “While we are not immune to changes in
consumer spending habits driven by macroeconomic factors, which
could impede our accelerated growth plans for the second half of
2022, we are confident in moving forward with our exciting new
initiatives, such as the rebranding of Wish and the relaunch of
Women's Fashion."
Third Quarter Fiscal 2022 Financial Guidance
- Adjusted EBITDA: Adjusted EBITDA is expected to be a loss in
the range of ($110) million to ($130) million.
Second Quarter 2022 Consolidated Financials
The following tables include unaudited GAAP and non-GAAP
financial highlights for the periods presented:
Revenue
(in millions, except percentages;
unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2022
2021
YoY%
2022
2021
YoY%
Core marketplace revenue
$
54
$
378
(86
)%
$
144
$
855
(83
)%
ProductBoost revenue
11
50
(78
)%
25
100
(75
)%
Marketplace revenue
65
428
(85
)%
169
955
(82
)%
Logistics revenue
69
228
(70
)%
154
473
(67
)%
Revenue
$
134
$
656
(80
)%
$
323
$
1,428
(77
)%
Other Financial Data
(in millions, except percentages;
unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2022
2021
2022
2021
Net loss
$
(90
)
$
(111
)
$
(150
)
$
(239
)
% of Revenue
(67
)%
(17
)%
(46
)%
(17
)%
Adjusted EBITDA*
$
(58
)
$
(67
)
$
(98
)
$
(146
)
% of Revenue
(43
)%
(10
)%
(30
)%
(10
)%
*Indicates non-GAAP metric. See below for
more information regarding our presentation of non-GAAP metrics in
the section titled: “Use of Non-GAAP Financial Measures.”
Forward Looking Guidance - Q3
2022
(in millions, except percentages,
unaudited)
We expect the following financial results
for Adjusted EBITDA in the period presented below:
Three Months Ended
September 30, 2022
Adjusted EBITDA*
$
(110
)
to
$
(130
)
% YoY
(267
)%
(333
)%
*Wish has not provided a quantitative
reconciliation of forecasted Adjusted EBITDA to forecasted GAAP net
income (loss) for total Adjusted EBITDA or to forecasted GAAP
income (loss) before income taxes for segment Adjusted EBITDA
within this earnings release because the company is unable, without
making unreasonable efforts, to calculate certain reconciling items
with confidence. These items include, but are not limited to:
stock-based compensation and income taxes which are directly
impacted by unpredictable fluctuations in the market price of the
company's Class A common stock.
Conference Call & Webcast Information
Information about Wish’s financial results, including a link to
the live webcast and replay will be made available on the company’s
investor relations website at https://ir.wish.com. The live
conference call may be accessed by registering using this online
form. Upon registration, all telephone participants will receive
the dial-in number along with a unique PIN number that can be used
to access the call.
Subsequent Event
On August 9, 2022, Wish announced the resignation of Piotr
Szulczewski from the Company's Board of Directors. Mr. Szulczewski
has served on the Company's Board since the Company’s inception in
July 2010. In conjunction with Mr. Szulczewski's resignation, the
Board of Directors has elected Larry Kutscher as an independent
director to the Wish Board. Both of these changes are effective
immediately.
Separately, Wish announced today that Mr. Szulczewski has
converted all of his high voting Class B shares into Wish Class A
shares. This decision simplifies the Company’s shareholding
structure, moving from a dual to single class structure. Mr.
Szulczewski’s share conversion establishes voting rights parity for
all Wish shareholders and reduces his outstanding voting rights
from approximately 62% to approximately 8%, not including options
that are immediately exercisable.
About Wish
Wish brings an affordable and entertaining shopping experience
to millions of consumers around the world. Since our founding in
San Francisco in 2010, we have become one of the largest global
ecommerce platforms, connecting millions of value-conscious
consumers to hundreds of thousands of merchants globally. Wish
combines technology and data science capabilities and an innovative
discovery-based mobile shopping experience to create a
highly-visual, entertaining, and personalized shopping experience
for its users. For more information about the company or to
download the Wish mobile app, visit www.wish.com or follow @Wish on
Facebook, Instagram and TikTok or @WishShopping on Twitter and
YouTube.
Use of Non-GAAP Financial Measures
We provide Adjusted EBITDA, a non-GAAP financial measure that
represents our net income (loss) adjusted to exclude: interest and
other income (expense), net (which includes foreign exchange gain
or loss, foreign exchange forward contracts gain or loss and gain
or loss on one-time non-operating transactions); provision or
benefit for income taxes; depreciation and amortization;
stock-based compensation expense and related payroll taxes; lease
impairment related expenses; and other items. Additionally, in this
news release, we present Adjusted EBITDA Margin, a non-GAAP
financial measure that represents Adjusted EBITDA divided by
revenue. The reconciliation between historical GAAP and non-GAAP
results of operations is provided below. Our management uses
Adjusted EBITDA in conjunction with GAAP and other operating
performance measures as part of its overall assessment of the
company’s performance for planning purposes, including the
preparation of its annual operating budget, to evaluate the
effectiveness of its business strategies and to communicate with
its board of directors concerning its financial performance.
Adjusted EBITDA should not be considered as an alternative
financial measure to net loss, which is the most directly
comparable financial measure calculated in accordance with GAAP, or
any other measure of financial performance calculated in accordance
with GAAP. We also provide Free Cash Flow, a non-U.S. GAAP
financial measure that represents net cash used in operating
activities less purchases of property and equipment. We believe
that Free Cash Flow is an important measure since we use third
parties to host our services and therefore we do not incur
significant capital expenditures to support revenue generating
activities. The reconciliation between net cash used in operating
activities and Free Cash Flow is provided below. Free Cash Flow has
limitations as an analytical measure, and you should not consider
it in isolation or as a substitute for analysis of our net cash
used in operating activities, which is the most directly comparable
financial measure calculated in accordance with GAAP, or any other
measure of financial performance calculated in accordance with
GAAP.
Forward-Looking Statements
This news release contains forward-looking statements within the
meaning of the Safe Harbor provisions of the Private Securities
Litigation Reform Act of 1995. All statements other than statements
of historical fact could be deemed forward-looking, including, but
not limited to, statements regarding Wish’s outlook including
expectations with respect to adjusted EBITDA and expectations
regarding new business strategies. In some cases, forward-looking
statements can be identified by terms such as “anticipates,”
“believes,” “could,” “estimates,” “expects,” “foresees,”
“forecasts,” “guidance,” “intends” “goals,” “may,” “might,”
“outlook,” “plans,” “potential,” “predicts,” “projects,” “seeks,”
“should,” “targets,” “will,” “would” or similar expressions and the
negatives of those terms. These forward-looking statements are
subject to risks, uncertainties, and assumptions. If the risks
materialize or assumptions prove incorrect, actual results could
differ materially from the results implied by these forward-looking
statements. Risks include, but are not limited to: our ability to
attract, retain and monetize users; risks associated with software
updates to the platform; the effectiveness of our CEO transition;
increasing requirements on collection of sales and value added
taxes; the success of our execution on new business strategies;
compromises in security; changes by third-parties that restrict our
access or ability to identify users; competition; disruption,
degradation or interference with the hosting services we use and
infrastructure; our financial performance and fluctuations in
operating results; pressure and fluctuation in our stock price,
including as a result of short selling and short squeezes;
challenges in our logistics programs; challenges in growing new
initiatives; the effectiveness of our internal controls; the
continued services of members of our senior management team; our
ability to offer and promote our app on the Apple App Store and the
Google Play Store; our ability to promote, maintain, and protect
our brand; legal matters; the ongoing COVID-19 pandemic; supply
chain issues; the impact of inflation; global conflicts, including
the Russian invasion of Ukraine; and economic tension between the
United States and China. New risks emerge from time to time. It is
not possible for our management to predict all risks, nor can we
assess the impact of all factors on our business or the extent to
which any factor, or combination of factors, may cause actual
results to differ materially from those contained in any
forward-looking statements we may make. Further information on
these and additional risks that could affect Wish’s results is
included in its filings with the Securities and Exchange Commission
(“SEC”), including its most recent Annual Report on Form 10-K and
Quarterly Report on Form 10-Q, and future reports that Wish may
file with the SEC from time to time, which could cause actual
results to vary from expectations. Any forward-looking statement
made by Wish in this news release speaks only as of the day on
which Wish makes it. Wish assumes no obligation to, and does not
currently intend to, update any such forward-looking statements
after the date of this release.
The unaudited financial results in this news release are
estimates based on information currently available to Wish. While
Wish believes these estimates are meaningful, they could differ
from the actual amounts that the company ultimately reports in its
Form 10-Q for the quarter ended June 30, 2022. Wish assumes no
obligation and does not intend to update these estimates prior to
filing its Form 10-Q for the quarter ended June 30, 2022.
A Note About Metrics
The numbers for some of our metrics, including MAUs and LTM
Active Buyers, are calculated and tracked with internal tools,
which are not independently verified by any third party. We use
these metrics to assess the growth and health of our overall
business. While these numbers are based on what we believe to be
reasonable estimates of our user or merchant base for the
applicable period of measurement, there are inherent challenges in
measurement as the methodologies used require significant judgment
and may be susceptible to algorithm or other technical errors. In
addition, we regularly review and adjust our processes for
calculating metrics to improve their accuracy, and our estimates
may change due to improvements or changes in technology or our
methodology.
ContextLogic Inc.
Condensed Consolidated Balance
Sheets
(in millions)
(unaudited)
As of June 30,
As of December 31,
2022
2021
Assets
Current assets:
Cash and cash equivalents
$
693
$
1,009
Marketable securities
254
150
Funds receivable
12
17
Prepaid expenses and other current
assets
41
48
Total current assets
1,000
1,224
Property and equipment, net
13
17
Right-of-use assets
11
18
Marketable securities
—
17
Other assets
4
7
Total assets
$
1,028
$
1,283
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable
$
54
$
67
Merchants payable
133
185
Refunds liability
9
23
Accrued liabilities
137
174
Total current liabilities
333
449
Lease liabilities, non-current
13
16
Total liabilities
346
465
Stockholders’ equity
682
818
Total liabilities and stockholders’
equity
$
1,028
$
1,283
ContextLogic Inc.
Condensed Consolidated
Statements of Operations
(in millions, except per share
data)
(unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2022
2021
2022
2021
Revenue
$
134
$
656
$
323
$
1,428
Cost of revenue(1)
92
272
217
607
Gross profit
42
384
106
821
Operating expenses:
Sales and marketing(1)
56
396
101
866
Product development(1)
46
52
112
103
General and administrative(1)
31
50
46
92
Total operating expenses
133
498
259
1,061
Loss from operations
(91
)
(114
)
(153
)
(240
)
Other income, net:
Interest and other income, net
2
8
4
8
Loss before provision for income taxes
(89
)
(106
)
(149
)
(232
)
Provision for income taxes
1
5
1
7
Net loss
(90
)
(111
)
(150
)
(239
)
Net loss per share, basic and diluted
$
(0.13
)
$
(0.18
)
$
(0.23
)
$
(0.38
)
Weighted-average shares used in computing
net loss per share, basic and diluted
667
624
664
621
(1) Includes the following stock-based
compensation expense:
Three Months Ended
Six Months Ended
June 30,
June 30,
2022
2021
2022
2021
Cost of revenue
$
3
$
5
$
2
$
10
Sales and marketing
2
3
3
6
Product development
14
14
28
29
General and administrative
10
15
(6
)
29
Total stock-based compensation
$
29
$
37
$
27
$
74
ContextLogic Inc.
Condensed Consolidated
Statements of Cash Flows
(in millions)
(unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2022
2021
2022
2021
Cash flows from operating
activities:
Net loss
$
(90
)
$
(111
)
$
(150
)
$
(239
)
Adjustments to reconcile net loss to net
cash provided by used in operating activities:
Noncash inventory write downs
—
—
3
—
Depreciation and amortization
2
3
4
5
Noncash lease expense
1
3
3
7
Impairment of lease assets and property
and equipment
2
6
6
6
Stock-based compensation expense
29
37
27
74
Other
(3
)
2
(1
)
(1
)
Changes in operating assets and
liabilities:
Funds receivable
2
19
5
37
Prepaid expenses, other current and
noncurrent assets
3
17
2
33
Accounts payable
15
(36
)
(12
)
(179
)
Merchants payable
(17
)
(68
)
(52
)
(141
)
Accrued and refund liabilities
(9
)
(67
)
(42
)
(136
)
Lease liabilities
(2
)
(3
)
(4
)
(7
)
Other current and noncurrent
liabilities
—
(6
)
(2
)
(17
)
Net cash used in operating activities
(67
)
(204
)
(213
)
(558
)
Cash flows from investing
activities:
Purchases of property and equipment and
development of internal use software
—
(1
)
(2
)
(1
)
Purchases of marketable securities
(73
)
(71
)
(226
)
(124
)
Maturities of marketable securities
87
56
137
123
Net cash used in investing activities
14
(16
)
(91
)
(2
)
Cash flows from financing
activities:
Proceeds from issuance of common stock
through employee equity incentive plans
1
5
1
6
Payment of taxes related to RSU
settlement
(5
)
—
(5
)
(5
)
Other
—
—
—
(1
)
Net cash used in financing activities
(4
)
5
(4
)
—
Foreign currency effects on cash, cash
equivalents and restricted cash
(9
)
—
(9
)
—
Net increase decrease in cash, cash
equivalents and restricted cash
(66
)
(215
)
(317
)
(560
)
Cash, cash equivalents and restricted cash
at beginning of period
767
1,620
1,018
1,965
Cash, cash equivalents and restricted cash
at end of period
$
701
$
1,405
$
701
$
1,405
Reconciliation of cash, cash
equivalents, and restricted cash to the condensed consolidated
balance sheets:
Cash and cash equivalents
$
693
$
1,405
$
693
$
1,405
Restricted cash included in prepaid and
other current assets in the condensed consolidated balance
sheets
8
—
8
—
Total cash, cash equivalents and
restricted cash
$
701
$
1,405
$
701
$
1,405
Supplemental cash flow
disclosures:
Cash paid for income taxes, net of
refunds
$
3
$
2
$
6
$
4
ContextLogic Inc.
Reconciliation of GAAP Net
Loss to Non-GAAP Adjusted EBITDA
(in millions, except
percentages)
(unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2022
2021
2022
2021
Revenue
$
134
$
656
$
323
$
1,428
Net loss
(90
)
(111
)
(150
)
(239
)
Net loss as a percentage of revenue
(67
)%
(17
)%
(46
)%
(17
)%
Excluding:
Interest and other income, net
(2
)
(8
)
(4
)
(8
)
Provision for income taxes
1
5
1
7
Depreciation and amortization
2
3
4
5
Stock-based compensation expense and
related employer payroll taxes
30
37
28
81
Lease impairment related expenses
—
6
—
6
Restructuring and other discrete items
2
—
24
—
Recurring other items
(1
)
1
(1
)
2
Adjusted EBITDA
(58
)
(67
)
(98
)
(146
)
Adjusted EBITDA margin
(43
)%
(10
)%
(30
)%
(10
)%
ContextLogic Inc.
Reconciliation of GAAP Net
Cash Used in Operating Activities to Non-GAAP Free Cash
Flow
(in millions)
(unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
2022
2021
2022
2021
Net cash used operating activities
$
(67
)
$
(204
)
$
(213
)
$
(558
)
Less:
Purchases of property and equipment and
development of internal use software
—
1
2
1
Free Cash Flow
$
(67
)
$
(205
)
$
(215
)
$
(559
)
Non-GAAP Statement of Operations
Our presentation of non-GAAP Statement of Operations excludes
the impact of stock-based compensation expense and related payroll
taxes. This measure is not a key metric used by our management and
board of directors to measure operating performance or otherwise
manage the business. However, we provide non-GAAP Statement of
Operations as supplemental information to investors, as we believe
the exclusion of stock-based compensation expense and related
payroll facilitates investors’ operating performance comparisons on
a period-to-period basis. You should not consider the non-GAAP
Statement of Operations in isolation or as a substitute for
analysis of our results as reported under GAAP.
ContextLogic Inc.
Reconciliation of GAAP
Statement of Operations to Non-GAAP Statement of Operations
(in millions)
(unaudited)
GAAP
Non-GAAP Adjustments
Non-GAAP
Q2'22
(1
)
(2
)
Q2'22
Revenue
$
134
$
—
$
—
$
134
Cost of revenue
92
(3
)
—
89
Gross profit
42
3
—
45
Operating expenses:
Sales and marketing
56
(2
)
—
54
Product development
46
(15
)
—
31
General and administrative
31
(10
)
(2
)
19
Total operating expenses
133
(27
)
(2
)
104
Loss from operations
(91
)
30
2
(59
)
Other income, net:
Interest and other income, net
2
—
—
2
Loss before provision for income taxes
(89
)
30
2
(57
)
Provision for income taxes
1
—
—
1
Net loss
$
(90
)
$
30
$
2
$
(58
)
(1)
Stock-based compensation expense and
related employer payroll taxes
(2)
Restructuring charges
GAAP
Non-GAAP Adjustments
Non-GAAP
Q2'21
(1
)
(2
)
Q2'21
Revenue
$
656
$
—
$
—
$
656
Cost of revenue
272
(5
)
—
267
Gross profit
384
5
—
389
Operating expenses:
Sales and marketing
396
(3
)
—
393
Product development
52
(14
)
—
38
General and administrative
50
(15
)
(6
)
29
Total operating expenses
498
(32
)
(6
)
460
Loss from operations
(114
)
37
6
(71
)
Other income, net:
Interest and other income, net
8
—
—
8
Loss before provision for income taxes
(106
)
37
6
(63
)
Provision for income taxes
5
—
—
5
Net loss
$
(111
)
$
37
$
6
$
(68
)
(1)
Stock-based compensation expense and
related employer payroll taxes
(2)
Lease impairment related expenses
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220809005458/en/
Investor Relations: Randy Scherago, Wish ir@wish.com
Media contacts: Carys Comerford-Green, Wish
press@wish.com
ContextLogic (NASDAQ:WISH)
Historical Stock Chart
From Aug 2024 to Sep 2024
ContextLogic (NASDAQ:WISH)
Historical Stock Chart
From Sep 2023 to Sep 2024