Release Date: November 12, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• WM Technology Inc (NASDAQ:MAPS) reported net revenues of $46.6 million for the third quarter, exceeding their guidance.
• The company achieved its eighth consecutive quarter of positive adjusted profitability, with an adjusted EBITDA of $11.3 million.
• WM Technology Inc (NASDAQ:MAPS) has a strong cash position with a balance of $45 million and remains debt-free.
• The company is focusing on strategic growth initiatives, including expanding its marketplace both vertically and horizontally.
• WM Technology Inc (NASDAQ:MAPS) has shown operational discipline, resulting in a 21% decline in GAAP operating expenses compared to the prior year.

Negative Points

• Net revenues declined marginally compared to the prior year due to lower spend on featured listings and the impact of sunsetting certain products.
• The average monthly paying clients decreased by approximately 6% compared to the same period last year.
• Ongoing regulatory uncertainty in the cannabis industry, particularly around intoxicating hemp, poses challenges.
• The company faces industry headwinds and client profitability issues, leading to further consolidation in the market.
• Despite the positive cash flow, the company remains cautious about overextending into areas with uncertain policy or market environments.

Q & A Highlights

• Warning! GuruFocus has detected 4 Warning Signs with MAPS.

Q: Can you provide more details on the financial performance for the third quarter? A: Doug Francis, CEO, stated that the third quarter reflected strong results with net revenues of $46.6 million and adjusted EBITDA of $11.3 million. This marks the eighth consecutive quarter of positive adjusted profitability, attributed to the team's focus on efficiency. Susan Eckard, CFO, added that net income for the quarter was $5.3 million, compared to a net loss of $2.5 million in the same period last year.

Q: What are the company's views on the regulatory environment for cannabis? A: Doug Francis, CEO, expressed that the cannabis industry remains dynamic due to inconsistent regulations at both state and federal levels. He mentioned the potential impact of the new administration on cannabis rescheduling and reforms, emphasizing the need for cannabis to be treated like wine rather than being on a schedule.

Q: How is WM Technology planning to expand its marketplace? A: Doug Francis, CEO, outlined plans to expand the marketplace in two dimensions: vertically by adding new products and features in the supply chain, and horizontally by developing marketplaces for hemp, seeds, and homegrown categories. These expansions aim to provide immediate value to consumers while building out ecosystems.

Q: What is the company's approach to strategic growth and capital deployment? A: Doug Francis, CEO, stated that the company will focus on deploying capital around low-risk opportunities that will be key products when industry headwinds turn to tailwinds. The goal is to ensure long-term success for the company and stakeholders by being strategic in their approach.

Q: Can you discuss the company's financial outlook for the next quarter? A: Susan Eckard, CFO, provided guidance for Q4, expecting net revenues to be approximately $46 million and non-GAAP adjusted EBITDA to be around $7 million. The company aims to build on the progress made this year and set the stage for 2025.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.