ContextLogic Inc. (d/b/a Wish) (Nasdaq: WISH), one of the largest
mobile ecommerce platforms, today reported its financial results
for the quarter and nine months ended September 30, 2023. Wish also
announced today that its Board of Directors has initiated a process
to explore a range of strategic alternatives to maximize
shareholder value.
Third Quarter 2023 Financial
Highlights
- Revenues: Revenues
were $60 million, a decrease of 52% YoY
- Core Marketplace
revenues were $19 million, down 53% YoY
- Product Boost
revenues were $5 million, down 55% YoY
- Logistics revenues
were $36 million, down 51% YoY
- Net Loss: Net loss
was $80 million, compared to a net loss of $124 million in the
third quarter of 2022
- Net loss per share
was $3.35, compared to a net loss of $5.53 per share in the third
quarter of 2022
- Adjusted EBITDA:
Adjusted EBITDA(1) was a loss of $54 million, compared to a loss of
$95 million in the third quarter of 2022
- Cash Flow: Cash
flows from operating activities were negative $86 million
- Free Cash Flow(1)
was negative $86 million, compared to negative $100 million in the
third quarter of 2022
"We closed the third quarter with revenue
in-line with our expectations and adjusted EBITDA above the high
end of our guidance. While revenues decreased 52% year-over-year to
$60 million, we narrowed adjusted EBITDA loss on a year-over-year
and sequential basis to $54 million. Across the entire
organization, our team demonstrated resilience and agility in their
approach to navigating increasingly challenging market dynamics.
Our performance in the quarter reflects our heightened focus on
operational efficiency and expense discipline," said Joe Yan, Wish
CEO. "As ever, we remain committed to providing a differentiated
shopping experience, along with product listing diversity and
competitive prices for our global community of shoppers. I am
energized by our ability to draw on our strengths to develop new
shopping experiences, with the ultimate goal of driving sales for
our merchants and delivering value to our shareholders. While there
is still much work to be done, we are cautiously optimistic about
the future, as we look towards executing on the opportunities ahead
of us."
Fourth Quarter Fiscal 2023 Financial
Guidance
- Revenue: Revenue is expected to be in
the range of $50 million to $60 million.
- Adjusted EBITDA: Adjusted EBITDA(1)(2)
is expected to be a loss in the range of $55 million to $65
million.
Third Quarter 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 |
|
|
|
|
|
|
|
|
Nine Months Ended |
|
|
|
|
|
|
|
| |
September 30, |
|
|
|
|
|
September 30, |
|
|
|
|
|
|
2023 |
|
|
2022 |
|
|
$ |
|
|
YoY% |
|
|
2023 |
|
|
2022 |
|
|
$ |
|
|
YoY% |
|
|
Core marketplace revenue |
$ |
19 |
|
|
$ |
40 |
|
|
$ |
(21 |
) |
|
|
(53 |
)% |
|
$ |
71 |
|
|
$ |
184 |
|
|
$ |
(113 |
) |
|
|
(61 |
)% |
|
ProductBoost revenue |
|
5 |
|
|
|
11 |
|
|
|
(6 |
) |
|
|
(55 |
)% |
|
|
19 |
|
|
|
36 |
|
|
|
(17 |
) |
|
|
(47 |
)% |
| Marketplace revenue |
|
24 |
|
|
|
51 |
|
|
|
(27 |
) |
|
|
(53 |
)% |
|
|
90 |
|
|
|
220 |
|
|
|
(130 |
) |
|
|
(59 |
)% |
| Logistics revenue |
|
36 |
|
|
|
74 |
|
|
|
(38 |
) |
|
|
(51 |
)% |
|
|
144 |
|
|
|
228 |
|
|
|
(84 |
) |
|
|
(37 |
)% |
|
Revenue |
$ |
60 |
|
|
$ |
125 |
|
|
$ |
(65 |
) |
|
|
(52 |
)% |
|
$ |
234 |
|
|
$ |
448 |
|
|
$ |
(214 |
) |
|
|
(48 |
)% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Financial Data(in millions, except
percentages; unaudited)
| |
Three Months Ended |
|
|
Nine Months Ended |
|
| |
September 30, |
|
|
September 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
Net loss |
$ |
(80 |
) |
|
$ |
(124 |
) |
|
$ |
(249 |
) |
|
$ |
(274 |
) |
|
% of Revenue |
|
(133 |
)% |
|
|
(99 |
)% |
|
|
(106 |
)% |
|
|
(61 |
)% |
| Adjusted
EBITDA(1) |
$ |
(54 |
) |
|
$ |
(95 |
) |
|
$ |
(182 |
) |
|
$ |
(193 |
) |
|
% of Revenue |
|
(90 |
)% |
|
|
(76 |
)% |
|
|
(78 |
)% |
|
|
(43 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward Looking Guidance - Fourth Quarter
2023(in millions, except percentages, unaudited)
We expect the following financial results for revenue and
Adjusted EBITDA in the period presented below:
| |
|
Three Months Ended |
|
| |
|
December 31, 2023 |
|
|
Revenue |
|
$ |
50 |
|
to |
$ |
60 |
|
|
% YoY |
|
|
(59 |
)% |
|
|
(51 |
)% |
|
Adjusted
EBITDA(1)(2) |
|
$ |
(55 |
) |
to |
$ |
(65 |
) |
|
% YoY |
|
|
42 |
% |
|
|
32 |
% |
|
|
|
|
|
|
|
|
|
|
(1) 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.”
(2) Wish has not provided a quantitative
reconciliation of forecasted Adjusted EBITDA to forecasted GAAP net
income (loss) for Adjusted EBITDA within this 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 impacted by unpredictable fluctuations in the
market price of the company's Class A common stock.
Review of Strategic
Alternatives
The Board of Directors regularly reviews Wish’s
strategic plan, priorities and opportunities as part of its
commitment to act in the best interest of Wish and its
shareholders. To that end, Wish’s Board has initiated a process to
explore a range of strategic alternatives to maximize value for
Wish shareholders. Wish has retained J.P. Morgan as the financial
advisor to assist in the process.
Wish has not set a definitive timetable for
completion of this process, and there can be no assurance regarding
the results or outcome of this process. It is possible that Wish
may not pursue a strategic alternative as a result of this process,
that a strategic alternative that has been pursued may not be
attractive, or that a strategic alternative may not ultimately be
consummated. As part of the process, Wish’s Board of Directors will
consider a full range of strategic alternatives.
Wish does not intend to comment further on this
process at this time and will make further announcements as it
deems appropriate and in accordance with its ongoing disclosure
obligations and pursuant to applicable laws and regulations.
J.P. Morgan Securities LLC is acting as
financial advisor to Wish and Sidley Austin LLP is acting as legal
counsel.
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.
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 X (formerly
Twitter) and YouTube.
Use of Non-GAAP Financial
Measures
We provide Adjusted EBITDA, a non-GAAP financial
measure that represents our loss before interest and other income,
net (which includes foreign exchange gain or loss and other
non-operating income and expenses), income tax expense, and
depreciation and amortization, adjusted to eliminate stock-based
compensation expense, lease termination and impairment related
expenses, restructuring and other discrete charges, and to add back
certain recurring items. Additionally, we provide Adjusted EBITDA
Margin, a non-GAAP financial measure that represents Adjusted
EBITDA Margin divided by revenue. The reconciliation between
historical GAAP and non-GAAP results of operations is provided
below. Our management uses Adjusted EBITDA and Adjusted EBITDA
Margin 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 and Adjusted
EBITDA Margin should not be considered as an alternative financial
measure to net loss and net loss as a percentage of revenue, which,
respectively, are the most directly comparable financial measures
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
revenues, adjusted EBITDA, strategic alternatives for Wish,
including whether any such strategic alternative will be
successfully pursued, attractive or consummated, expectations
regarding business strategies, including cost-savings strategies,
and ability to capitalize on opportunities, and other quotes of
management. 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; compliance with Nasdaq continued listing requirements;
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; material weaknesses in our internal control over
financial reporting and the effectiveness of our internal controls
generally; the continued services and retention of members of our
senior management team and key talent; our ability to offer and
promote our app on the Apple App Store and the Google Play Store;
the risk of merchants on our platform using unethical or illegal
business practices or if our policies and practices with respect to
such sales are perceived or found to be inadequate; our ability to
promote, maintain, and protect our brand and reputation; litigation
matters; potential resurgences of the recent COVID-19 pandemic;
supply chain issues; general economic conditions, including the
impact of inflation, higher interest rates, potential economic
downturns; global conflicts, including the Russian invasion of
Ukraine and crises in the Middle East; economic tension between the
United States and China; the risk our cost savings strategies will
not yield the savings we expect or otherwise result in material
adverse effects on us; and risks relating to our ability to
successfully pursue or consummate any strategic alternative,
including risks affecting the timing of the strategic review
process, the risk that any such strategic alternative will not
result in additional value for Wish and its shareholders, and the
risk that the process will have an adverse impact on Wish. 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 Quarterly Report on Form 10-Q for the three and nine
months ended September 30, 2023. Wish assumes no obligation and
does not intend to update these estimates prior to filing its
Quarterly Report on Form 10-Q for the three months and nine months
ended September 30, 2023.
ContextLogic
Inc.Condensed Consolidated Balance
Sheets(in
millions)(Unaudited)
|
|
As of September 30, |
|
|
As of December 31, |
|
|
|
2023 |
|
|
2022 |
|
|
Assets |
|
|
|
|
|
| Current
assets: |
|
|
|
|
|
|
Cash and cash equivalents |
$ |
303 |
|
|
$ |
506 |
|
|
Marketable securities |
|
142 |
|
|
|
213 |
|
|
Funds receivable |
|
6 |
|
|
|
14 |
|
|
Prepaid expenses and other current assets |
|
27 |
|
|
|
44 |
|
|
Total current assets |
|
478 |
|
|
|
777 |
|
| Property
and equipment, net |
|
4 |
|
|
|
9 |
|
|
Right-of-use assets |
|
6 |
|
|
|
9 |
|
| Other
assets |
|
4 |
|
|
|
4 |
|
| Total
assets |
$ |
492 |
|
|
$ |
799 |
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
| Current
liabilities: |
|
|
|
|
|
|
Accounts payable |
$ |
35 |
|
|
$ |
53 |
|
|
Merchants payable |
|
77 |
|
|
|
120 |
|
|
Refunds liability |
|
2 |
|
|
|
6 |
|
|
Accrued liabilities |
|
95 |
|
|
|
130 |
|
|
Total current liabilities |
|
209 |
|
|
|
309 |
|
| Lease
liabilities, non-current |
|
7 |
|
|
|
13 |
|
| Other
liabilities |
|
4 |
|
|
|
— |
|
| Total
liabilities |
|
220 |
|
|
|
322 |
|
|
Stockholders’ equity |
|
272 |
|
|
|
477 |
|
| Total
liabilities and stockholders’ equity |
$ |
492 |
|
|
$ |
799 |
|
| |
|
|
|
|
|
ContextLogic
Inc.Condensed Consolidated Statements of
Operations($ in millions, shares in thousands,
except per share data)(Unaudited)
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
Revenue |
$ |
60 |
|
|
$ |
125 |
|
|
$ |
234 |
|
|
$ |
448 |
|
| Cost of
revenue(1) |
|
46 |
|
|
|
91 |
|
|
|
184 |
|
|
|
308 |
|
|
Gross profit |
|
14 |
|
|
|
34 |
|
|
|
50 |
|
|
|
140 |
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing(1) |
|
35 |
|
|
|
80 |
|
|
|
111 |
|
|
|
181 |
|
|
Product development(1) |
|
38 |
|
|
|
42 |
|
|
|
127 |
|
|
|
154 |
|
|
General and administrative(1) |
|
21 |
|
|
|
40 |
|
|
|
68 |
|
|
|
86 |
|
|
Total operating expenses |
|
94 |
|
|
|
162 |
|
|
|
306 |
|
|
|
421 |
|
| Loss
from operations |
|
(80 |
) |
|
|
(128 |
) |
|
|
(256 |
) |
|
|
(281 |
) |
| Other
income, net: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest and other income, net |
|
3 |
|
|
|
6 |
|
|
|
13 |
|
|
|
10 |
|
| Loss
before provision for income taxes |
|
(77 |
) |
|
|
(122 |
) |
|
|
(243 |
) |
|
|
(271 |
) |
|
Provision for income taxes |
|
3 |
|
|
|
2 |
|
|
|
6 |
|
|
|
3 |
|
| Net
loss |
|
(80 |
) |
|
|
(124 |
) |
|
|
(249 |
) |
|
|
(274 |
) |
| Net loss
per share, basic and diluted |
$ |
(3.35 |
) |
|
$ |
(5.53 |
) |
|
$ |
(10.55 |
) |
|
$ |
(12.32 |
) |
| Weighted-average shares used
in computing net loss per share, basic and diluted |
|
23,897 |
|
|
|
22,435 |
|
|
|
23,601 |
|
|
|
22,243 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
(1) Includes the following stock-based compensation expense:
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
Cost of revenue |
$ |
1 |
|
|
$ |
2 |
|
|
$ |
3 |
|
|
$ |
4 |
|
| Sales
and marketing |
|
1 |
|
|
|
2 |
|
|
|
3 |
|
|
|
5 |
|
| Product
development |
|
6 |
|
|
|
13 |
|
|
|
31 |
|
|
|
41 |
|
| General
and administrative |
|
5 |
|
|
|
9 |
|
|
|
17 |
|
|
|
3 |
|
|
Total stock-based compensation |
$ |
13 |
|
|
$ |
26 |
|
|
$ |
54 |
|
|
$ |
53 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
ContextLogic
Inc.Condensed Consolidated Statements of Cash
Flows(in
millions)(Unaudited)
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
| Cash flows from
operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(80 |
) |
|
$ |
(124 |
) |
|
$ |
(249 |
) |
|
$ |
(274 |
) |
|
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Noncash inventory write downs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3 |
|
|
Depreciation and amortization |
|
1 |
|
|
|
1 |
|
|
|
3 |
|
|
|
5 |
|
|
Noncash lease expense |
|
1 |
|
|
|
2 |
|
|
|
3 |
|
|
|
5 |
|
|
Impairment of lease assets and property and equipment |
|
— |
|
|
|
5 |
|
|
|
1 |
|
|
|
11 |
|
|
Stock-based compensation expense |
|
13 |
|
|
|
26 |
|
|
|
54 |
|
|
|
53 |
|
|
Net (accretion) amortization of discounts and premiums on
marketable securities |
|
(2 |
) |
|
|
— |
|
|
|
(6 |
) |
|
|
— |
|
|
Other |
|
6 |
|
|
|
(2 |
) |
|
|
1 |
|
|
|
(3 |
) |
| Changes in operating assets
and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
Funds receivable |
|
(2 |
) |
|
|
(1 |
) |
|
|
8 |
|
|
|
4 |
|
|
Prepaid expenses, other current and noncurrent assets |
|
2 |
|
|
|
— |
|
|
|
16 |
|
|
|
2 |
|
|
Accounts payable |
|
(1 |
) |
|
|
2 |
|
|
|
(17 |
) |
|
|
(10 |
) |
|
Merchants payable |
|
(10 |
) |
|
|
(12 |
) |
|
|
(43 |
) |
|
|
(64 |
) |
|
Accrued and refund liabilities |
|
(14 |
) |
|
|
6 |
|
|
|
(32 |
) |
|
|
(36 |
) |
|
Lease liabilities |
|
(1 |
) |
|
|
(2 |
) |
|
|
(5 |
) |
|
|
(6 |
) |
|
Other current and noncurrent liabilities |
|
1 |
|
|
|
(1 |
) |
|
|
— |
|
|
|
(3 |
) |
| Net cash used in operating
activities |
|
(86 |
) |
|
|
(100 |
) |
|
|
(266 |
) |
|
|
(313 |
) |
| Cash flows from
investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of property and equipment and development of internal-use
software |
|
— |
|
|
|
— |
|
|
|
(3 |
) |
|
|
(2 |
) |
|
Purchases of marketable securities |
|
(69 |
) |
|
|
(77 |
) |
|
|
(239 |
) |
|
|
(303 |
) |
|
Maturities of marketable securities |
|
141 |
|
|
|
81 |
|
|
|
317 |
|
|
|
218 |
|
|
Other |
|
— |
|
|
|
2 |
|
|
|
— |
|
|
|
2 |
|
| Net cash provided by (used) in
investing activities |
|
72 |
|
|
|
6 |
|
|
|
75 |
|
|
|
(85 |
) |
| Cash flows from
financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of common stock through employee equity
incentive plans |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
Payments of taxes related to RSU settlement |
|
(1 |
) |
|
|
(5 |
) |
|
|
(5 |
) |
|
|
(10 |
) |
| Net cash used in financing
activities |
|
(1 |
) |
|
|
(5 |
) |
|
|
(5 |
) |
|
|
(9 |
) |
| Foreign currency effects on
cash, cash equivalents and restricted cash |
|
— |
|
|
|
(8 |
) |
|
|
(7 |
) |
|
|
(17 |
) |
| Net decrease in cash, cash
equivalents and restricted cash |
|
(15 |
) |
|
|
(107 |
) |
|
|
(203 |
) |
|
|
(424 |
) |
| Cash, cash equivalents and
restricted cash at beginning of period |
|
325 |
|
|
|
701 |
|
|
|
513 |
|
|
|
1,018 |
|
| Cash, cash equivalents and
restricted cash at end of period |
$ |
310 |
|
|
$ |
594 |
|
|
$ |
310 |
|
|
$ |
594 |
|
| Reconciliation of
cash, cash equivalents, and restricted cash to the condensed
consolidated balance sheets: |
|
|
|
|
|
|
|
|
|
|
|
| Cash and cash equivalents |
$ |
303 |
|
|
$ |
587 |
|
|
$ |
303 |
|
|
$ |
587 |
|
| Restricted cash included in
prepaid and other current assets in the condensed consolidated
balance sheets |
|
7 |
|
|
|
7 |
|
|
|
7 |
|
|
|
7 |
|
| Total cash, cash equivalents
and restricted cash |
$ |
310 |
|
|
$ |
594 |
|
|
$ |
310 |
|
|
$ |
594 |
|
| Supplemental cash flow
disclosures: |
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for income taxes, net of refunds |
$ |
— |
|
|
$ |
— |
|
|
$ |
1 |
|
|
$ |
6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ContextLogic
Inc.Reconciliation of GAAP Net Loss to Non-GAAP
Adjusted EBITDA($ in millions, except
percentages)(Unaudited)
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
Revenue |
$ |
60 |
|
|
$ |
125 |
|
|
$ |
234 |
|
|
$ |
448 |
|
| Net
loss |
|
(80 |
) |
|
|
(124 |
) |
|
|
(249 |
) |
|
|
(274 |
) |
| Net loss
as a percentage of revenue |
|
(133 |
)% |
|
|
(99 |
)% |
|
|
(106 |
)% |
|
|
(61 |
)% |
|
Excluding: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest and other income, net |
|
(3 |
) |
|
|
(6 |
) |
|
|
(13 |
) |
|
|
(10 |
) |
|
Provision for income taxes |
|
3 |
|
|
|
2 |
|
|
|
6 |
|
|
|
3 |
|
|
Depreciation and amortization |
|
1 |
|
|
|
1 |
|
|
|
3 |
|
|
|
5 |
|
|
Stock-based compensation expense and related employer payroll
taxes(1)(2)(3) |
|
13 |
|
|
|
27 |
|
|
|
55 |
|
|
|
55 |
|
|
Restructuring and other discrete items(4) |
|
9 |
|
|
|
5 |
|
|
|
12 |
|
|
|
29 |
|
|
Impairment of lease assets and property and equipment(5) |
|
3 |
|
|
|
— |
|
|
|
4 |
|
|
|
— |
|
|
Others |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1 |
) |
|
Adjusted EBITDA |
|
(54 |
) |
|
|
(95 |
) |
|
|
(182 |
) |
|
|
(193 |
) |
|
Adjusted EBITDA margin |
|
(90 |
)% |
|
|
(76 |
)% |
|
|
(78 |
)% |
|
|
(43 |
)% |
| |
|
|
|
|
|
|
|
|
|
|
|
(1) Total amount for the three months ended
September 30, 2023 consists of $13 million of stock-based
compensation expense and insignificant payroll taxes. Total amount
for the three months ended September 30, 2022 consists of $26
million of stock-based compensation expense and $1 million of
related employer payroll taxes. Total amount for the nine months
ended September 30, 2023 consists of $54 million of stock-based
compensation expense and $1 million of related employer payroll
taxes. Total amount for nine months ended September 30, 2022
consists of $53 million of stock-based compensation expense and $2
million of related employer payroll taxes.
(2) Total stock-based compensation for the three
months September 30, 2023 decreased by $13 million compared to the
three months ended September 30, 2022 due to fewer outstanding
equity awards being amortized during the third quarter of 2023
compared to the same period in 2022. This was driven by lower
headcount due to reduction in force and the departures of the
Company's former Chief Product Officer ("CPO") and Chief
Administrative Officer ("CAO") during the first quarter of
2023.
(3) Total stock-based compensation for the nine
months ended September 30, 2023 increased by $1 million compared to
the nine months ended September 30, 2022 primarily due to
reductions in headcount year over year offset by significant
non-recurring items in the following denoted periods, (i)
accelerated vesting of the Company's former CPO and CAO's RSUs upon
their departures in accordance to their separation agreements
during the first quarter of 2023, and (ii) forfeitures originating
from the resignation of the Company’s former Chief Executive
Officer, and modifications to the Company’s former Executive
Chair’s equity awards, both during the first quarter of 2022.
Employer related payroll taxes decreased from $2 million for the
nine months ended September 30, 2022 to $1 million for the nine
months ended September 30, 2023, driven by lower headcount due to
reduction in force.
(4) Total amount for the nine months ended
September 30, 2023 consisted of $12 million of employee severance
and other personnel reduction costs. Total amount for the nine
months ended September 30, 2022 includes restructuring charges
consisting of $3 million of employee severance and $11 million in
impairment of lease assets and property and equipment as well as a
$15 million one-time discretionary cash bonus paid to select
employees to help cover their tax obligations triggered by the
settlement of their RSUs that vested upon the Company’s IPO.
(5) Impairment of lease assets and property and equipment
unrelated to restructuring activities.
ContextLogic
Inc.Reconciliation of GAAP Net Cash Used in
Operating Activities to Non-GAAP Free Cash Flow(in
millions)(Unaudited)
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
Net cash used operating activities |
$ |
(86 |
) |
|
$ |
(100 |
) |
|
$ |
(266 |
) |
|
$ |
(313 |
) |
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of property and equipment and development of internal-use
software |
|
— |
|
|
|
— |
|
|
|
3 |
|
|
|
2 |
|
|
Free Cash Flow |
$ |
(86 |
) |
|
$ |
(100 |
) |
|
$ |
(269 |
) |
|
$ |
(315 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
Contacts
Investor Relations:Ralph Fong,
Wishir@wish.com
Media contacts:Carys Comerford-Green,
Wishpress@wish.com
ContextLogic (NASDAQ:WISH)
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