Announces Fourth Quarter 2022 Financial Results
with Revenue of $49.3 million with Full Year Revenue of $215.5
million
WM Technology, Inc. (“WM Technology” or the “Company”) (Nasdaq:
MAPS), a leading technology and technology solutions provider to
the cannabis industry, today announced its financial results for
the fourth quarter ending December 31, 2022.
“Our fourth quarter results, consistent with our prior guidance,
reflect both the continued importance of WM Technology to our
clients and users as well as the challenging operating environment
that exists today in cannabis,” said Doug Francis, Executive Chair
of WM Technology. “Having returned in November to an operating role
at Weedmaps, I have spent the past four months listening to our
clients’ needs and working actively with our teams to build an
achievable plan for 2023. This plan will enable Weedmaps to expand
our leadership role, help drive market stability, and allow our
clients to experience profitable and sustainable growth. Further,
we now have a financial outlook that returns us to our roots of
top-line growth as well as positive Adjusted EBITDA and cash
flow.”
Fourth Quarter 2022 Financial Highlights
- Revenue was $49.3 million as compared to $54.2 million in the
fourth quarter of 2021.
- Average monthly paying clients(1) was 5,689, as compared to
4,766 in the prior year period.
- Average monthly revenue per paying client(2) was $2,888, as
compared to $3,789 in the prior year period.
- Net loss was $60.8 million as compared to net income of $78.4
million in the prior year period. The net loss included the impact
of severance payments related to headcount reductions as well as a
non-cash charge related to a full valuation allowance recorded
against deferred tax assets.
- Adjusted EBITDA(3) was $1.5 million as compared to $3.8 million
in the prior year period. Prior to provision for doubtful accounts
(non-cash), Adjusted EBITDA(3) was $3.9 million as compared to $6.3
million in the prior year period.
- Basic and diluted net loss per share were $1.19 based on 91.4
million weighted average shares of Class A Common Stock
outstanding.
- Total shares outstanding across Class A and Class V Common
Stock were 147.5 million as of December 31, 2022.
- Cash totaled $28.6 million as of December 31, 2022, with no
long-term debt.
Fiscal Year 2022 Financial Highlights
- Revenue was $215.5 million for the year ended December 31,
2022, as compared to $193.1 million in the prior year.
- Average monthly paying clients(1) was 5,457, as compared to
4,337 in the prior year.
- Average monthly revenue per paying client(2) was $3,291, as
compared to $3,711 in the prior year.
- Net loss was $82.7 million as compared to net income of $152.2
million in the prior year.
- Adjusted EBITDA(3) was $(9.6) million as compared to $31.7
million in the prior year.
- Basic and diluted net loss per share were $1.36 based on 85.0
million weighted average shares of Class A Common Stock
outstanding.
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.
Business Outlook
Based on information available as of March 16, 2023, WM
Technology is issuing guidance for the first quarter of 2023 as
follows:
- Revenue is estimated to be $47 million.
- Non-GAAP Adjusted EBITDA(1) is estimated to be approximately $4
million.
The guidance provided above is only an estimate of what we
believe is realizable as of the date of this release. We are not
readily able to provide a reconciliation of projected Non-GAAP
Adjusted EBITDA to projected net income without unreasonable
effort. This guidance assumes that no business acquisitions,
investments, restructurings, or legal settlements are concluded in
the periods. 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.
(1) 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.
Investor Conference Call and Webcasts
The Company will host a conference call and webcast today,
Thursday, March 16, 2023, at 2:00 p.m. Pacific Time (5:00 p.m.
Eastern Time) at https://edge.media-server.com/mmc/p/nbphbmfy. 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, and headquartered in Irvine, California, WM
Technology, Inc. operates a leading online cannabis marketplace for
consumers together with a comprehensive set of eCommerce and
compliance software solutions for cannabis businesses, which are
sold to retailers and brands in the United States state-legal and
Canadian cannabis markets. The Company’s comprehensive
business-to-consumer (“B2C”) and business-to-business (“B2B”) suite
of products afford cannabis retailers and brands of all sizes
integrated tools to compliantly run their businesses and to reach,
convert, and retain consumers.
The Company’s mission is to power a transparent and inclusive
global cannabis economy. The Company’s technology addresses the
challenges facing both consumers seeking to understand cannabis
products and businesses who serve cannabis users in a legally
compliant fashion. Over the past 14 years, Weedmaps has 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. Weedmaps for Business is a set of
eCommerce-enablement tools designed to help retailers and brands
get the best out of the Weedmaps’ consumer experience, create labor
efficiencies, and manage compliance needs.
WM Technology, Inc. holds a strong belief in the importance of
enabling safe, legal access to cannabis for consumers worldwide.
The Company believes it offers the only comprehensive software
platform that allows cannabis retailers to reach their target
audience, quickly and cost effectively, addressing a wide range of
needs. The Company is committed to building the software solutions
that power cannabis businesses compliantly in the industry, to
advocating for legalization, licensing and social equity of
cannabis, and to facilitating further learning through partnership
with subject matter experts to provide detailed, accurate
information about cannabis.
WM Technology, Inc. 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 2022 Annual Report on Form 10-K to be
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, change in tax receivable agreement liability, impairment
charges, transaction related bonuses, transaction costs, legal
settlements and other legal costs, reduction in force and executive
departures 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.
Each of EBITDA, Adjusted EBITDA and Adjusted EBITDA before
Provision for Doubtful Accounts 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, 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)
December 31,
2022
2021
Assets
Current assets
Cash
$
28,583
$
67,777
Accounts receivable, net
17,438
17,550
Prepaid expenses and other current
assets
8,962
13,607
Total current assets
54,983
98,934
Property and equipment, net
24,928
13,283
Goodwill
68,368
45,295
Intangible assets, net
10,339
8,299
Right-of-use assets
31,447
36,549
Deferred tax asset, net
—
152,097
Other assets
8,970
10,687
Total assets
$
199,035
$
365,144
Liabilities and Equity
Current liabilities
Accounts payable and accrued expenses
$
33,635
$
23,155
Deferred revenue
6,256
8,057
Operating lease liabilities, current
6,334
5,463
Other current liabilities
98
1,125
Total current liabilities
46,323
37,800
Operating lease liabilities,
non-current
33,043
39,377
Tax receivable agreement liability
500
128,567
Warrant liability
2,090
27,460
Other long-term liabilities
2,302
—
Total liabilities
84,258
233,204
Stockholders’ equity
Preferred Stock - $0.0001 par value;
75,000,000 shares authorized; no shares issued and outstanding at
December 31, 2022 and December 31, 2021
—
—
Class A Common Stock - $0.0001 par value;
1,500,000,000 shares authorized; 92,062,468 shares issued and
outstanding at December 31, 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, 55,486,361 shares issued and
outstanding at December 31, 2022 and 65,502,347 shares issued and
outstanding at December 31, 2021
5
7
Additional paid-in capital
67,986
2,173
(Accumulated deficit) retained
earnings
(54,620
)
61,369
Total WM Technology, Inc. stockholders’
equity
13,380
63,556
Noncontrolling interests
101,397
68,384
Total equity
114,777
131,940
Total liabilities and equity
$
199,035
$
365,144
WM TECHNOLOGY, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
(In thousands, except for
share data)
Three Months Ended December
31,
Years Ended December
31,
2022
2021
2022
2021
Revenues
$
49,285
$
54,177
$
215,531
$
193,146
Operating expenses
Cost of revenues (exclusive of
depreciation and amortization shown separately below)
3,537
2,138
15,407
7,938
Sales and marketing
20,737
18,925
82,624
56,119
Product development
12,179
9,474
50,520
35,395
General and administrative
32,949
27,091
125,104
97,447
Depreciation and amortization
2,582
1,455
11,498
4,425
Total operating expenses
71,984
59,083
285,153
201,324
Operating (loss) income
(22,699
)
(4,906
)
(69,622
)
(8,178
)
Other income (expenses)
Change in fair value of warrant
liability
4,765
82,890
25,370
166,518
Change in tax receivable agreement
liability
142,352
—
142,352
—
Other expense, net
(444
)
(382
)
(1,674
)
(6,723
)
Income before income taxes
123,974
77,602
96,426
151,617
Provision for (benefit from) income
taxes
184,776
(843
)
179,077
(601
)
Net (loss) income
(60,802
)
78,445
(82,651
)
152,218
Net income attributable to noncontrolling
interests
47,822
43,160
33,338
91,835
Net (loss) income attributable to WM
Technology, Inc.
$
(108,624
)
$
35,285
$
(115,989
)
$
60,383
Class A Common Stock:
Basic (loss) income per share
$
(1.19
)
$
0.53
$
(1.36
)
$
0.93
Diluted loss per share
$
(1.19
)
$
0.53
$
(1.36
)
$
(0.18
)
Class A Common Stock:
Weighted average basic shares
outstanding
91,421,796
66,018,175
85,027,120
65,013,517
Weighted average diluted shares
outstanding
91,421,796
66,279,845
85,027,120
66,813,417
WM TECHNOLOGY, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Unaudited)
(In thousands)
Years Ended December
31,
2022
2021
Cash flows from operating
activities
Net (loss) income
$
(82,651
)
$
152,218
Adjustments to reconcile net (loss) income
to net cash (used in) provided by operating activities:
Depreciation and amortization
11,498
4,425
Change in fair value of warrant
liability
(25,370
)
(166,518
)
Change in tax receivable agreement
liability
(142,352
)
—
Impairment loss
4,317
2,372
Stock-based compensation
23,493
29,324
Deferred tax asset
179,077
(842
)
Provision for doubtful accounts
17,216
5,487
Changes in operating assets and
liabilities:
Accounts receivable
(16,270
)
(13,609
)
Prepaid expenses and other current
assets
7,461
8,235
Other assets
(229
)
(313
)
Accounts payable and accrued expenses
14,084
6,618
Deferred revenue
(1,895
)
2,793
Net cash (used in) provided by operating
activities
(11,621
)
30,190
Cash flows from investing
activities
Purchases of property and equipment
(16,055
)
(7,935
)
Cash paid for acquisitions, net of cash
acquired
(713
)
(16,000
)
Cash paid for acquisition holdback
release
(1,000
)
—
Cash paid for other investments
—
(6,500
)
Net cash used in investing activities
(17,768
)
(30,435
)
Cash flows from financing
activities
Distributions
(2,448
)
(18,998
)
Repayment of insurance premium
financing
(7,344
)
(7,098
)
Taxes paid related to net share settlement
of equity awards
(13
)
—
Proceeds from business combination
—
79,969
Payment of note payable
—
(205
)
Repurchase of Class B Units
—
(5,565
)
Net cash (used in) provided by financing
activities
(9,805
)
48,103
Net (decrease) increase in cash
(39,194
)
47,858
Cash – beginning of year
67,777
19,919
Cash – end of year
$
28,583
$
67,777
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
December 31,
Years Ended
December 31,
2022
2021
2022
2021
Net (loss) income
$
(60,802
)
$
78,445
$
(82,651
)
$
152,218
Provision for (benefit from) income
taxes
184,776
(843
)
179,077
(601
)
Depreciation and amortization expenses
2,582
1,455
11,498
4,425
EBITDA
126,556
79,057
107,924
156,042
Stock-based compensation
6,243
5,699
23,493
29,324
Change in fair value of warrant
liability
(4,765
)
(82,890
)
(25,370
)
(166,518
)
Warrant transaction costs
—
—
—
5,547
Impairment
3,000
—
4,317
2,372
Transaction related bonus expense
6,050
650
10,119
2,200
Transaction costs
—
1,133
251
2,583
Legal settlement and other legal costs
697
148
3,909
148
Change in Tax Receivable Agreement
liability
(142,352
)
—
(142,352
)
—
Reduction in force and executive
departures
6,116
—
8,076
—
Adjusted EBITDA
$
1,545
$
3,797
$
(9,633
)
$
31,698
Provision for doubtful accounts
2,349
2,472
17,216
5,487
Adjusted EBITDA before Provision for
Doubtful Accounts
$
3,894
$
6,269
$
7,583
$
37,185
______________________________
(1)
Stock-based compensation expense is
recorded in the following expense categories on the accompanying
consolidated statements of income for the three months and year
ended December 31, 2022:
Three Months Ended December
31,
Years Ended December
31,
2022
2021
2022
2021
Sales and marketing
$
1,519
$
1,506
$
6,358
$
6,021
Product development
1,267
1,244
5,260
5,103
General and administrative
3,457
2,949
11,875
18,200
Total stock-based compensation expense
$
6,243
$
5,699
$
23,493
$
29,324
Amount capitalized to software
development
$
401
$
404
$
1,667
$
1,099
Total stock-based compensation cost
$
6,644
$
6,103
$
25,160
$
30,423
WM TECHNOLOGY, INC. AND
SUBSIDIARIES
SELECTED KEY OPERATING AND
FINANCIAL METRICS
(Unaudited)
Selected Key
Operating and Financial Metrics
Three Months Ended
December 31,
Years Ended December
31
2022
2021
2022
2021
Average monthly revenue per paying
client
$
2,888
$
3,789
$
3,291
$
3,711
Average monthly paying clients
5,689
4,766
5,457
4,337
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