NASDAQ:MAPS WM Technology Q1 2023 Earnings Report $1.04 -0.02 (-1.89%) Closing price 04/17/2025 04:00 PM EasternExtended Trading$1.04 +0.00 (+0.48%) As of 04/17/2025 04:20 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast WM Technology EPS ResultsActual EPS-$0.03Consensus EPS -$0.06Beat/MissBeat by +$0.03One Year Ago EPSN/AWM Technology Revenue ResultsActual Revenue$48.01 millionExpected Revenue$47.03 millionBeat/MissBeat by +$980.00 thousandYoY Revenue GrowthN/AWM Technology Announcement DetailsQuarterQ1 2023Date5/9/2023TimeN/AConference Call DateTuesday, May 9, 2023Conference Call Time5:00PM ETUpcoming EarningsWM Technology's Q1 2025 earnings is scheduled for Friday, May 23, 2025Conference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by WM Technology Q1 2023 Earnings Call TranscriptProvided by QuartrMay 9, 2023 ShareLink copied to clipboard.There are 6 speakers on the call. Operator00:00:00Good day and thank you for standing by. Welcome to WM Technology Inc. Q1 2023 Earnings Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer You will then hear an automated message advising your hand is raised. Operator00:00:37Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, VP of Investor Relations, Greg Stolowitz. Please go ahead. Speaker 100:00:56Hi, everyone. Thanks for joining us today to discuss our fiscal 2023 Q1 results. We have our Executive Chair, Doug Francis and our CFO, Arden Lee with us today. By now, everyone should have access to our earnings announcement. This announcement is also on our Investor Relations website along with During this call, we'll make forward looking statements, including statements about our business outlook, strategies and long term goals. Speaker 100:01:16These statements are not guarantees of future performance. They are subject to a variety of risks and uncertainties, some of which are beyond our control. Our actual results could differ materially from expectations reflected in any forward looking statements. For a discussion of risks and other important factors that could affect our actual results, please refer to our SEC filings available on the SEC's website our Investor Relations website as well as the risks and other important factors discussed in today's earnings release. We specifically disclaim any intent or obligation to update these forward looking statements except as required by law. Speaker 100:01:44For the benefit of those who may be listening to the replay or archived webcast, this call was held on May 9, 2023. Since then, we may have made announcements related to the topics discussed, so please refer to the company's most recent press releases and SEC filings. Also during this call, we will discuss certain non GAAP financial measures in addition to financial information prepared in accordance with GAAP. These non GAAP financial measures should be considered in addition to, but not as Substitute for the information prepared in accordance with GAAP. A reconciliation of these measures to our GAAP results can be found in our earnings presentation available on our Investor Relations website. Speaker 100:02:17And finally, this call in its entirety is being webcast from our Investor Relations website and an audio replay will be available on our website in a few hours. With that, I'd like to turn the call over to Doug. Speaker 200:02:27Thanks, Greg, and hello to everyone joining us today. We had a good Q1. We beat our expectations for revenue and adjusted EBITDA and generated positive free cash flow before making payments related to last year's headcount reduction. While we have more work to do, we believe we are on the right path. I said back in March that focus is the key for us this year, focus on our marketplace, delivering value to our clients and driving profitable, sustainable growth. Speaker 200:02:54We made progress in the Q1 on all three areas. On our marketplace, We've been using AI driven algorithms to drive more personalized user experiences based on our first party user affinity data. This includes personalized store orders for menus that users see as well as personalized product recommendations in our add to cart experience. We've been deploying new language models to expand our product catalog and brand matching efforts. With more accurate tagging of products to brands, We're able to drive better user engagement and conversion through better search results, more relevant product information and product recommendations. Speaker 200:03:30On delivering value to our clients, our teams have been actively executing on the first phase of an end market activation across our major regions with our street teams, which are helping clients expand their reach and impact. We've increased our on the ground and field marketing presence by 3x and have a weekly cadence of client events. We're also rolling out changes to aid our clients on the marketplace. We launched the new listing redesign that allows our clients to add more hero imagery to engage new users along with order status push notifications to give more ways for our clients to communicate with users placing orders. We've only just begun these efforts in Q1 and have more in flight during this quarter, which arguably is the most important for the industry with 420 setting the tone for the year. Speaker 200:04:13I'll touch briefly on this year's 4/20 holiday. We always have a number of initiatives around this celebration of cannabis reform, But I'm particularly proud of how our teams rallied to drive value for our clients. We kicked off an integrated marketing campaign called the 20 days of deals to support many of our strategic clients with promotions for our users. We couple that with regional event activations and what I call retailer appreciation day dispensary tours that span markets from Boston to Kansas City to Albuquerque and to our backyard here in SoCal. The 4/20 event resulted in our largest ever order volume on a single day, surpassing the volume that we've seen in each of the 4 20 events over the last 5 years. Speaker 200:04:53Finally, on driving profitable and sustainable growth, I said back in March that we'll focus on what we can control. We control how we invest and the mindset we're operating with and Q1 bore fruit of that commitment. Our adjusted OpEx for the quarter was back to levels that we were operating under when we closed our go public transaction in 2021. Our teams are showing discipline in where we're hiring and how we're achieving Productivity to fund investments. Our net headcount declined during the quarter despite us making strategic hires as our managers are finding ways to operate more leanly. Speaker 200:05:27And as I said at the start of the call, we are free cash flow positive before termination payments from the headcount reductions we did back in December. Taking a step back, yes, license end markets continue to be challenged in a way that we haven't seen since the onset of legalization. And yes, our clients are still struggling to bring consumer demand back to license channels, while dealing with crippling taxes and a lack of federal regulatory help. But I continue to see tremendous opportunities in our regions and the focused approach we are taking on marketplace and our clients. Our clients are seeing the impact of us bringing back cannabis culture feeling the strength of our marketplace in the streets of their hometowns, which itself is bringing more opportunity. Speaker 200:06:06Now, I'll turn it over to Arden. Speaker 300:06:09Thanks, Doug, and thanks everyone for joining our call. Our Q1 performance beat our expectations on growth and profitability. Q1 revenue came in at $48,000,000 which compares to the $47,000,000 expectation that we gave in March. Q1 adjusted EBITDA was positive $7,000,000 which compares to the $4,000,000 expectation that we had. And as Doug said, we were cash flow positive prior to residual payments from the headcount reductions we took in Q4. Speaker 300:06:37Our paying client base was marginally down versus last quarter, though up 12% versus last year. We continue to see client churn due to billing issues, which is masking the new licensees that we're bringing on our platform. Our revenue per client was also marginally down versus last quarter, which primarily reflects mix considerations as we saw higher levels of growth in our emerging regions, which have lower revenue per client dynamics as opposed to spend declines in our established markets. For example, revenue per client in California was flat versus last quarter. Our marketplace revenue in California itself grew in Q1 versus Q4, which drove a slight increase in share of mix for California, which now stands at 55% of our Q1 revenue. Speaker 300:07:18What's also encouraging to See is that our monthly net dollar retention on our subscription revenue was back above 100% in Q1. Q1 adjusted EBITDA of 7,000,000 Our Q1 adjusted OpEx, as Doug noted, is at the same level as where we were in Q2 and Q3 of fiscal 2021 when we closed our go public transaction and prior to the investment acceleration to build out our platform. We saw the largest declines in spend across Sales and marketing and to a lesser extent G and A. Our adjusted sales and marketing and G and A declined by 50% 22% versus last year. Our adjusted G and A includes a $2,000,000 non cash charge related to provisions for doubtful accounts. Speaker 300:08:08We reported a net loss of $4,000,000 for the quarter, which includes $3,000,000 in D and A, dollars 4,000,000 in stock based compensation along with approximately $4,000,000 in other non recurring charges. Our GAAP OpEx excluding cost of goods and D and A was $45,500,000 in Q1, a reduction of 29% versus last year. More information on these charges is available in our earnings release and will be in our Form 10 Q. We closed the quarter with $26,000,000 in cash, which is after $5,000,000 in payments that we approved for in Q4 related to the headcount reductions we've spoken about previously. We continue to be debt free and are comfortable with our liquidity position. Speaker 300:08:49Our fully diluted share count across our Class A and B shares Classes was $148,000,000 at the end of the quarter. A reconciliation of non GAAP metrics to the nearest GAAP result as well as the details of our share classes and share count calculation are provided in our earnings presentation posted to our Investor Relations site. Turning to our outlook. We're encouraged by the tone we're seeing in recent weeks with the client dialogues our teams are having, the initiatives to drive premium listings fill rates across our established markets And the continued opportunities to grow our client base and spend levels in emerging regions with a more focused approach we're taking to these markets. With that said, we also remain cautious about the environment given continued uncertainty across license end markets in the broader macro environment. Speaker 300:09:35As such, we are planning as if our Q2 revenue will be consistent with Q1. On profitability, we have been selectively in strategic marketing in support of the 4/20 holiday for our clients and expect Q2 adjusted EBITDA will be in the $4,000,000 area. We expect our marketing investments will ramp back down to more normalized levels in the second half. As we noted last quarter, we expect our cash Q2 will continue to be impacted by remaining termination costs related to the headcount reductions we took last quarter and will represent a low point for the year. But as we also noted last quarter, we're committed to driving double digit adjusted EBITDA margins and positive cash flow for the year as we demonstrated in Q1. Speaker 300:10:17Before we open up to questions, I want to thank our team at Weebast for their continued focus on delivering against our plan for this year. We're widening our moats and creating more distance versus the competition, thanks to our employees' efforts. With that, let's take questions. Operator00:10:36Thank you. At this time, we will conduct the question and answer session. One moment please. Our first question comes from the line of William Carter of Stifel. Your line is now open. Speaker 400:11:10Hey, thanks. This is Andrew on for William. First thing I wanted to ask is looking at these kind of Sequential decline in average paying client. Could you give us a sense of how much of that was cut off? How much And I guess, which cut off would be probably the mature markets and then how much came from kind of the new markets and then within that kind of give us a sense of what The mix degradation is from new markets, I guess, better said is kind of what's kind of the delta between a new market Coming online, spend per client and kind of a mature market. Speaker 400:11:44Thanks. Speaker 300:11:46Yes. And Andrew, it's Arden here. Just to clarify, when you say cut off, I assume you mean what we Talked about previously around clients that we've unpublished. Speaker 400:11:55Correct. That's right. Speaker 300:11:57Yes. So Let me give you one way to think about it, which is, if we removed some of the churn that we've seen exactly due to that issue, Our paying client count would have been relatively flat marginally up quarter over quarter. So that's point number 1. Point number 2 is if you look at our net client kind of adds over the course of the last quarter, The vast majority of that is coming from what we would characterize as emerging regions. The regions where, again, we're not as penetrated From a licensee perspective and we're still scaling on monetization. Speaker 300:12:37And then point number 3 to the question that you asked around mix. Listen, we touched on it during the commentary, but one way to think about the impact of mix is, the decline that we saw quarter over quarter on a revenue per paying client for this quarter was largely driven by that mix, Meaning, we had more client adds in emerging regions where the revenue per client dynamics are lower than the company average. We had elevated churn due to billing issues in our more mature markets where the spend levels are higher. And so that's what you saw quarter over quarter. Speaker 400:13:16We got it. And then looking at the kind of the second quarter, the EBITDA, the kind of step down in EBITDA with a similar rate of sales, I'm assuming gross margin is going to hold on at the same rate and that you did say it was incremental advertising, but is all of that kind of step down related to kind of incremental Advertising spend? Speaker 300:13:38Yes. So again, related to the profitability, the adjusted EBITDA number for Q2, that's exactly the right way to think about it. Gross margin rate, we believe, should be pretty constant versus what we saw in Q1. We expect our product dev and G and A to stay relatively constant as a percent of sales versus Q1. The delta is the increase in sales and marketing that we highlighted on the call. Speaker 400:14:08And then one final one, kind of thinking through like your top of I know you haven't disclosed that in a while. All we can really rely on 3rd party is 3rd party data. Are you seeing any kind of stability on that front Or kind of anything you can give us on that front? Speaker 300:14:26Yes. I'll start and Doug may chime in as well. So Listen, what I'd say is that, at the moment, our teams have been primarily focused on driving mid and lower funnel conversion. And so a lot of the work that we're doing, both from a content strategy perspective, from a marketing strategy From a product roadmap perspective, it is really optimizing for those mid and lower funnel conversion. So for example, We talked about one of the things that we were promoting around the 4/20 holiday, 20 days of deals. Speaker 300:14:58That was all around again driving conversion to deal claims. So the top of the funnel as we've talked about in quarters Past tends to kind of ebb and flow based on how we're investing against marketing, full stop. But right now, where a lot of our efforts are from a funnel perspective Really driving that conversion activity. Speaker 400:15:20Thanks. I'll pass it on. Operator00:15:23Thank you. Our next question comes from the line of Brett Knoblauch of Cantor Fitzgerald. Your line is now open. Speaker 500:15:37Hi, guys. Thanks for taking my question. Really appreciate it. Speaker 300:15:42I guess coming into Q2, maybe when you had last book For Speaker 500:15:48the Q1 results, would you say you're more optimistic about the demand environment as a whole than you were, call it, 45, 60 days ago? Speaker 300:16:00Yes, Brett. And when you say demand environment, do you mean client demand or user demand or maybe we can address both? I guess on the client demand yes, go ahead, sorry. Speaker 500:16:12Yes, if you can address both, I agree more so on the client demand. Speaker 300:16:17Yes. So listen, I'd say it's a bit of a tale of 2 different sets of markets. And what I mean by that is, We have some very established markets where we do business, right? We've talked in the past about California. We've talked in the past about Colorado, these are states that as a lot of folks have seen based on the 3rd party data continue to be And continue to be sideways dealing with headwinds, right. Speaker 300:16:47So when you look at the license end market GMV data that's put out by third parties, It will show for those 2 states that I just quoted that for most of this year, we've seen pretty steady sequential week over week declines. Now with that being said, there's all the other regions where we have a footprint. And what I'd say is, if you looked at our top states where we do business, We do business where you would expect us to any state that has some form of medical or regulation. If you look at our top 20 states, we have a number of states that are up double digits, some states up triple digits, just given we have a small base A business that's growing at a very rapid clip, but we're still dealing with The end market kind of headwinds that are impacting states like California or Colorado or in Oklahoma. And that is what's weighing on kind of the overall Sentiment, as we think about client demand. Speaker 300:17:47So listen, folks for sure across the board have demand for WeebApps, whether you're in A market that's dealing with these headwinds or not, I'd say the clients that are in markets that are dealing with headwinds are even kind of more, I guess, anxious in their desire to be on our platform, just Given their need to get in front of the consumer, so that's on the client side. I'd say on the user side, we said this For a while now that we think cannabis demand consumer demand for cannabis is still very strong. We think it's resilient. Of course, we are Keeping our eye on a lot of what's happening across the macro environment, because that always is a risk, to consumer pocketbooks and their spend for discretionary product. But based on the data that we're tracking, it seems as if the consumer continues to hold in there. Speaker 300:18:43The question is how much of that demand Speaker 500:18:55Okay. Thank you for that color. And then maybe just on your 20 deals for 20 days, 4 20 promotion. Can you maybe help quantify, You said it Speaker 300:19:04was kind of Speaker 500:19:04the largest 4.20 that you had from an order volume. Can you just maybe help quantify the percentage kind of growth you're seeing Or you saw from that event over the year ago period? Thank you. Speaker 300:19:18Yes. I'll take a crack At that, in terms of metrics. And so we Doug talked about on the call how our order volume For this past 4 20s, you eclipsed the prior 4 20 holidays. And so we had our largest single day Order volume in the company's history, I characterize it as year over year we were up in the low single digit percent area, Where we also saw a big increase is in deal claims specifically due to the 20 days of deals campaign. It's a year over year, Our deal plans were up well into the double digits on a percent growth basis. Speaker 500:20:06Appreciate that. Thanks guys. Operator00:20:10Thank you. At this time, I see no further questions. Thank you for your participation in today's conference. This does conclude the program. You may nowRead morePowered by Conference Call Audio Live Call not available Earnings Conference CallWM Technology Q1 202300:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K)Quarterly report(10-Q) WM Technology Earnings HeadlinesHere are TMR Investments’ Views on WM Technology (MAPS)March 25, 2025 | msn.comWM Technology, Inc. (NASDAQ:MAPS) Q4 2024 Earnings Call TranscriptMarch 15, 2025 | msn.comMusk’s AI Masterplan – Our #1 AI Stock to Buy NowDid Elon Musk just set the stage for the next AI stock explosion? One 30-year Wall Street veteran thinks so. Musk has been quietly creating one of the most ambitious AI ventures in history.April 18, 2025 | Behind the Markets (Ad)WM Technology, Inc. (MAPS) Q4 2024 Earnings Call TranscriptMarch 13, 2025 | seekingalpha.comWM Technology beats Q4 revenue estimates, stock risesMarch 13, 2025 | investing.comWM Technology, Inc. Reports Fourth Quarter and Full Year 2024 Financial ResultsMarch 13, 2025 | businesswire.comSee More WM Technology Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like WM Technology? Sign up for Earnings360's daily newsletter to receive timely earnings updates on WM Technology and other key companies, straight to your email. Email Address About WM TechnologyWM Technology (NASDAQ:MAPS) provides ecommerce and compliance software solutions to retailers and brands in cannabis market in the United States and internationally. The company offers Weedmaps marketplace that allows cannabis users to search for and browse cannabis products from retailers and brands, and reserve products from local retailers; and education and learning information to help newer consumers learn about the types of products to purchase. It also provides monthly subscription-based business software solutions, including WM Listings, WM Orders, WM Store, WM Connectors, and WM Insights as well as other add-on products, such as WM Ads, WM AdSuite, WM Customer Relationship Management, WM Dispatch, and WM Screens. WM Technology, Inc. was founded in 2008 and is headquartered in Irvine, California.View WM Technology ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Archer Aviation Unveils NYC Network Ahead of Key Earnings Report3 Reasons to Like the Look of Amazon Ahead of EarningsTesla Stock Eyes Breakout With Earnings on DeckJohnson & Johnson Earnings Were More Good Than Bad—Time to Buy? 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There are 6 speakers on the call. Operator00:00:00Good day and thank you for standing by. Welcome to WM Technology Inc. Q1 2023 Earnings Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer You will then hear an automated message advising your hand is raised. Operator00:00:37Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, VP of Investor Relations, Greg Stolowitz. Please go ahead. Speaker 100:00:56Hi, everyone. Thanks for joining us today to discuss our fiscal 2023 Q1 results. We have our Executive Chair, Doug Francis and our CFO, Arden Lee with us today. By now, everyone should have access to our earnings announcement. This announcement is also on our Investor Relations website along with During this call, we'll make forward looking statements, including statements about our business outlook, strategies and long term goals. Speaker 100:01:16These statements are not guarantees of future performance. They are subject to a variety of risks and uncertainties, some of which are beyond our control. Our actual results could differ materially from expectations reflected in any forward looking statements. For a discussion of risks and other important factors that could affect our actual results, please refer to our SEC filings available on the SEC's website our Investor Relations website as well as the risks and other important factors discussed in today's earnings release. We specifically disclaim any intent or obligation to update these forward looking statements except as required by law. Speaker 100:01:44For the benefit of those who may be listening to the replay or archived webcast, this call was held on May 9, 2023. Since then, we may have made announcements related to the topics discussed, so please refer to the company's most recent press releases and SEC filings. Also during this call, we will discuss certain non GAAP financial measures in addition to financial information prepared in accordance with GAAP. These non GAAP financial measures should be considered in addition to, but not as Substitute for the information prepared in accordance with GAAP. A reconciliation of these measures to our GAAP results can be found in our earnings presentation available on our Investor Relations website. Speaker 100:02:17And finally, this call in its entirety is being webcast from our Investor Relations website and an audio replay will be available on our website in a few hours. With that, I'd like to turn the call over to Doug. Speaker 200:02:27Thanks, Greg, and hello to everyone joining us today. We had a good Q1. We beat our expectations for revenue and adjusted EBITDA and generated positive free cash flow before making payments related to last year's headcount reduction. While we have more work to do, we believe we are on the right path. I said back in March that focus is the key for us this year, focus on our marketplace, delivering value to our clients and driving profitable, sustainable growth. Speaker 200:02:54We made progress in the Q1 on all three areas. On our marketplace, We've been using AI driven algorithms to drive more personalized user experiences based on our first party user affinity data. This includes personalized store orders for menus that users see as well as personalized product recommendations in our add to cart experience. We've been deploying new language models to expand our product catalog and brand matching efforts. With more accurate tagging of products to brands, We're able to drive better user engagement and conversion through better search results, more relevant product information and product recommendations. Speaker 200:03:30On delivering value to our clients, our teams have been actively executing on the first phase of an end market activation across our major regions with our street teams, which are helping clients expand their reach and impact. We've increased our on the ground and field marketing presence by 3x and have a weekly cadence of client events. We're also rolling out changes to aid our clients on the marketplace. We launched the new listing redesign that allows our clients to add more hero imagery to engage new users along with order status push notifications to give more ways for our clients to communicate with users placing orders. We've only just begun these efforts in Q1 and have more in flight during this quarter, which arguably is the most important for the industry with 420 setting the tone for the year. Speaker 200:04:13I'll touch briefly on this year's 4/20 holiday. We always have a number of initiatives around this celebration of cannabis reform, But I'm particularly proud of how our teams rallied to drive value for our clients. We kicked off an integrated marketing campaign called the 20 days of deals to support many of our strategic clients with promotions for our users. We couple that with regional event activations and what I call retailer appreciation day dispensary tours that span markets from Boston to Kansas City to Albuquerque and to our backyard here in SoCal. The 4/20 event resulted in our largest ever order volume on a single day, surpassing the volume that we've seen in each of the 4 20 events over the last 5 years. Speaker 200:04:53Finally, on driving profitable and sustainable growth, I said back in March that we'll focus on what we can control. We control how we invest and the mindset we're operating with and Q1 bore fruit of that commitment. Our adjusted OpEx for the quarter was back to levels that we were operating under when we closed our go public transaction in 2021. Our teams are showing discipline in where we're hiring and how we're achieving Productivity to fund investments. Our net headcount declined during the quarter despite us making strategic hires as our managers are finding ways to operate more leanly. Speaker 200:05:27And as I said at the start of the call, we are free cash flow positive before termination payments from the headcount reductions we did back in December. Taking a step back, yes, license end markets continue to be challenged in a way that we haven't seen since the onset of legalization. And yes, our clients are still struggling to bring consumer demand back to license channels, while dealing with crippling taxes and a lack of federal regulatory help. But I continue to see tremendous opportunities in our regions and the focused approach we are taking on marketplace and our clients. Our clients are seeing the impact of us bringing back cannabis culture feeling the strength of our marketplace in the streets of their hometowns, which itself is bringing more opportunity. Speaker 200:06:06Now, I'll turn it over to Arden. Speaker 300:06:09Thanks, Doug, and thanks everyone for joining our call. Our Q1 performance beat our expectations on growth and profitability. Q1 revenue came in at $48,000,000 which compares to the $47,000,000 expectation that we gave in March. Q1 adjusted EBITDA was positive $7,000,000 which compares to the $4,000,000 expectation that we had. And as Doug said, we were cash flow positive prior to residual payments from the headcount reductions we took in Q4. Speaker 300:06:37Our paying client base was marginally down versus last quarter, though up 12% versus last year. We continue to see client churn due to billing issues, which is masking the new licensees that we're bringing on our platform. Our revenue per client was also marginally down versus last quarter, which primarily reflects mix considerations as we saw higher levels of growth in our emerging regions, which have lower revenue per client dynamics as opposed to spend declines in our established markets. For example, revenue per client in California was flat versus last quarter. Our marketplace revenue in California itself grew in Q1 versus Q4, which drove a slight increase in share of mix for California, which now stands at 55% of our Q1 revenue. Speaker 300:07:18What's also encouraging to See is that our monthly net dollar retention on our subscription revenue was back above 100% in Q1. Q1 adjusted EBITDA of 7,000,000 Our Q1 adjusted OpEx, as Doug noted, is at the same level as where we were in Q2 and Q3 of fiscal 2021 when we closed our go public transaction and prior to the investment acceleration to build out our platform. We saw the largest declines in spend across Sales and marketing and to a lesser extent G and A. Our adjusted sales and marketing and G and A declined by 50% 22% versus last year. Our adjusted G and A includes a $2,000,000 non cash charge related to provisions for doubtful accounts. Speaker 300:08:08We reported a net loss of $4,000,000 for the quarter, which includes $3,000,000 in D and A, dollars 4,000,000 in stock based compensation along with approximately $4,000,000 in other non recurring charges. Our GAAP OpEx excluding cost of goods and D and A was $45,500,000 in Q1, a reduction of 29% versus last year. More information on these charges is available in our earnings release and will be in our Form 10 Q. We closed the quarter with $26,000,000 in cash, which is after $5,000,000 in payments that we approved for in Q4 related to the headcount reductions we've spoken about previously. We continue to be debt free and are comfortable with our liquidity position. Speaker 300:08:49Our fully diluted share count across our Class A and B shares Classes was $148,000,000 at the end of the quarter. A reconciliation of non GAAP metrics to the nearest GAAP result as well as the details of our share classes and share count calculation are provided in our earnings presentation posted to our Investor Relations site. Turning to our outlook. We're encouraged by the tone we're seeing in recent weeks with the client dialogues our teams are having, the initiatives to drive premium listings fill rates across our established markets And the continued opportunities to grow our client base and spend levels in emerging regions with a more focused approach we're taking to these markets. With that said, we also remain cautious about the environment given continued uncertainty across license end markets in the broader macro environment. Speaker 300:09:35As such, we are planning as if our Q2 revenue will be consistent with Q1. On profitability, we have been selectively in strategic marketing in support of the 4/20 holiday for our clients and expect Q2 adjusted EBITDA will be in the $4,000,000 area. We expect our marketing investments will ramp back down to more normalized levels in the second half. As we noted last quarter, we expect our cash Q2 will continue to be impacted by remaining termination costs related to the headcount reductions we took last quarter and will represent a low point for the year. But as we also noted last quarter, we're committed to driving double digit adjusted EBITDA margins and positive cash flow for the year as we demonstrated in Q1. Speaker 300:10:17Before we open up to questions, I want to thank our team at Weebast for their continued focus on delivering against our plan for this year. We're widening our moats and creating more distance versus the competition, thanks to our employees' efforts. With that, let's take questions. Operator00:10:36Thank you. At this time, we will conduct the question and answer session. One moment please. Our first question comes from the line of William Carter of Stifel. Your line is now open. Speaker 400:11:10Hey, thanks. This is Andrew on for William. First thing I wanted to ask is looking at these kind of Sequential decline in average paying client. Could you give us a sense of how much of that was cut off? How much And I guess, which cut off would be probably the mature markets and then how much came from kind of the new markets and then within that kind of give us a sense of what The mix degradation is from new markets, I guess, better said is kind of what's kind of the delta between a new market Coming online, spend per client and kind of a mature market. Speaker 400:11:44Thanks. Speaker 300:11:46Yes. And Andrew, it's Arden here. Just to clarify, when you say cut off, I assume you mean what we Talked about previously around clients that we've unpublished. Speaker 400:11:55Correct. That's right. Speaker 300:11:57Yes. So Let me give you one way to think about it, which is, if we removed some of the churn that we've seen exactly due to that issue, Our paying client count would have been relatively flat marginally up quarter over quarter. So that's point number 1. Point number 2 is if you look at our net client kind of adds over the course of the last quarter, The vast majority of that is coming from what we would characterize as emerging regions. The regions where, again, we're not as penetrated From a licensee perspective and we're still scaling on monetization. Speaker 300:12:37And then point number 3 to the question that you asked around mix. Listen, we touched on it during the commentary, but one way to think about the impact of mix is, the decline that we saw quarter over quarter on a revenue per paying client for this quarter was largely driven by that mix, Meaning, we had more client adds in emerging regions where the revenue per client dynamics are lower than the company average. We had elevated churn due to billing issues in our more mature markets where the spend levels are higher. And so that's what you saw quarter over quarter. Speaker 400:13:16We got it. And then looking at the kind of the second quarter, the EBITDA, the kind of step down in EBITDA with a similar rate of sales, I'm assuming gross margin is going to hold on at the same rate and that you did say it was incremental advertising, but is all of that kind of step down related to kind of incremental Advertising spend? Speaker 300:13:38Yes. So again, related to the profitability, the adjusted EBITDA number for Q2, that's exactly the right way to think about it. Gross margin rate, we believe, should be pretty constant versus what we saw in Q1. We expect our product dev and G and A to stay relatively constant as a percent of sales versus Q1. The delta is the increase in sales and marketing that we highlighted on the call. Speaker 400:14:08And then one final one, kind of thinking through like your top of I know you haven't disclosed that in a while. All we can really rely on 3rd party is 3rd party data. Are you seeing any kind of stability on that front Or kind of anything you can give us on that front? Speaker 300:14:26Yes. I'll start and Doug may chime in as well. So Listen, what I'd say is that, at the moment, our teams have been primarily focused on driving mid and lower funnel conversion. And so a lot of the work that we're doing, both from a content strategy perspective, from a marketing strategy From a product roadmap perspective, it is really optimizing for those mid and lower funnel conversion. So for example, We talked about one of the things that we were promoting around the 4/20 holiday, 20 days of deals. Speaker 300:14:58That was all around again driving conversion to deal claims. So the top of the funnel as we've talked about in quarters Past tends to kind of ebb and flow based on how we're investing against marketing, full stop. But right now, where a lot of our efforts are from a funnel perspective Really driving that conversion activity. Speaker 400:15:20Thanks. I'll pass it on. Operator00:15:23Thank you. Our next question comes from the line of Brett Knoblauch of Cantor Fitzgerald. Your line is now open. Speaker 500:15:37Hi, guys. Thanks for taking my question. Really appreciate it. Speaker 300:15:42I guess coming into Q2, maybe when you had last book For Speaker 500:15:48the Q1 results, would you say you're more optimistic about the demand environment as a whole than you were, call it, 45, 60 days ago? Speaker 300:16:00Yes, Brett. And when you say demand environment, do you mean client demand or user demand or maybe we can address both? I guess on the client demand yes, go ahead, sorry. Speaker 500:16:12Yes, if you can address both, I agree more so on the client demand. Speaker 300:16:17Yes. So listen, I'd say it's a bit of a tale of 2 different sets of markets. And what I mean by that is, We have some very established markets where we do business, right? We've talked in the past about California. We've talked in the past about Colorado, these are states that as a lot of folks have seen based on the 3rd party data continue to be And continue to be sideways dealing with headwinds, right. Speaker 300:16:47So when you look at the license end market GMV data that's put out by third parties, It will show for those 2 states that I just quoted that for most of this year, we've seen pretty steady sequential week over week declines. Now with that being said, there's all the other regions where we have a footprint. And what I'd say is, if you looked at our top states where we do business, We do business where you would expect us to any state that has some form of medical or regulation. If you look at our top 20 states, we have a number of states that are up double digits, some states up triple digits, just given we have a small base A business that's growing at a very rapid clip, but we're still dealing with The end market kind of headwinds that are impacting states like California or Colorado or in Oklahoma. And that is what's weighing on kind of the overall Sentiment, as we think about client demand. Speaker 300:17:47So listen, folks for sure across the board have demand for WeebApps, whether you're in A market that's dealing with these headwinds or not, I'd say the clients that are in markets that are dealing with headwinds are even kind of more, I guess, anxious in their desire to be on our platform, just Given their need to get in front of the consumer, so that's on the client side. I'd say on the user side, we said this For a while now that we think cannabis demand consumer demand for cannabis is still very strong. We think it's resilient. Of course, we are Keeping our eye on a lot of what's happening across the macro environment, because that always is a risk, to consumer pocketbooks and their spend for discretionary product. But based on the data that we're tracking, it seems as if the consumer continues to hold in there. Speaker 300:18:43The question is how much of that demand Speaker 500:18:55Okay. Thank you for that color. And then maybe just on your 20 deals for 20 days, 4 20 promotion. Can you maybe help quantify, You said it Speaker 300:19:04was kind of Speaker 500:19:04the largest 4.20 that you had from an order volume. Can you just maybe help quantify the percentage kind of growth you're seeing Or you saw from that event over the year ago period? Thank you. Speaker 300:19:18Yes. I'll take a crack At that, in terms of metrics. And so we Doug talked about on the call how our order volume For this past 4 20s, you eclipsed the prior 4 20 holidays. And so we had our largest single day Order volume in the company's history, I characterize it as year over year we were up in the low single digit percent area, Where we also saw a big increase is in deal claims specifically due to the 20 days of deals campaign. It's a year over year, Our deal plans were up well into the double digits on a percent growth basis. Speaker 500:20:06Appreciate that. Thanks guys. Operator00:20:10Thank you. At this time, I see no further questions. Thank you for your participation in today's conference. This does conclude the program. You may nowRead morePowered by