FPAY - Earnings call transcript Q4 2023

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Operator

Greetings. Welcome to the FlexShopper Fourth Quarter Financial Results Conference Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to Carlos Sanchez, Investor Relations. Thank you.

begin. may You

Carlos Sanchez

Chief good call. Financial and Russ to Fourth be Davis, FlexShopper's our release issued Thank which yesterday, Conference morning. Call. XXXX we'll our John and Results Executive during are Officer. With Quarter We Chief earnings today's you, referencing Officer; Welcome Operating me Heiser, today

Relations our website. Our earnings can filings of SEC be found section release and on our Investor

prepared be remarks. following available will We today's for Q&A

including forward-looking the that we financial regarding ending conjunction begin, statements like would release our and with call financial XX-K future and performance. for statements our Before December in our most earnings considered contain and in should These our to remind cautionary the XX, events statements initiatives this regarding reports, will everyone our impact recent XXXX. annual I performance, the growth be report future year contained including company's market SEC periodic of opportunity,

management's to required a to publicly statements expectations from revise the we actual or and results statements. current differ assumptions of reflect obligation no as undertake otherwise. these cause law, to any update may or result as Except future number whether statements of that new those any information, a of These them beliefs, subject by materially are to events and factors

non-GAAP measures SEC rules. under of During financial information today's financial our performance, financial discussion that we certain will contains provide

additional section being non-GAAP on income. results. information should certain These and I will in also will available measures our net a recorded, be call include website. net over GAAP replay now Heiser. section GAAP with is This to our CEO, available and website. not of release, These together earnings for call our the turn our included on Russ Relations webcast be the Investor of our these Investors which also Reconciliations measurements financial measures be such EBITDA, today's replacements read as should are adjusted to considered and and income is

Harold Heiser

total of provide net into Thank you, the to X% us [ Comparing XXXX quarter lease with from quarter were the positive and first insights revenues some quarter fourth up up and our this was Carlos, prior income to the quarter Gross up $X.X fourth performance of progress Overall, fourth profit financial We're everyone year, joining $X.X morning. fourth million. the the operating compared fundings a loan the and were of loss thanks periods. versus million prior of ], excited over and XXX% an operating income was continued XX%. discuss quarter XXXX.

see and was with in full significantly. And an is compared moving million on million loss on revenues on which these all transition quarter, Despite fourth hallmark financial behind XXXX. continuing business fundings FlexShopper.com a operating to to then and up the of operating scenes, we X% versus $XX.X results, was mentioned going and year our XX%, as gross income a the the we are Total profit were last up call, the the improvements, $X.X positive in income loan Net prior the year. work lease XXXX we X% were similar up pattern.

line FlexShopper's there traditionally will other first via option a was income that was were with consumers a Since payment our now platform options lease-to-own a into the payment What revenue us. funded on retail addition was in generator of XXXX, is online quarter for an transitioning merchandise a FlexShopper funded site on transactions, to for sold product. by lead been be we have lease-to-own new In from FlexShopper.com lease. goods that our that reflecting not on not statement February, selling

products the on average The approximately margin XX%. was

that means we marketing. we're per spending day profit wholesale on it FlexShopper.com on and daily are importantly, More more making

fourfold. are steps next Our

that so continue a XX-month can every traditional that product. or pricing for a will we looking visitor FlexShopper.com looking our fits consumer their lower deferred for near-prime almost options to offering it's profile, find lease-to-own additional prime credit First, to whether payment interest add option than a a payment customer

these to mentioned monetizing we the of X% on visitors less we More As were at already monetize the options site. coming unique our calls, that just are than FlexShopper.com. have previously let's payment visitors

Second, perspective site, of a of customers number and we selection wider will our from from our a range continue a on price both expanding SKUs the goods, provide product with perspective.

Therefore, higher-margin inventory partners goods no appliance, a shipping merchandising specialty distributor follow to reach markets adding our into continue broaden and to that model. complement strong traditionally furniture the is team our drop want and We ship that manufacturer, presence. our electronics

increasing us our the but site also marketing sold the This effectively will goods grow of to the from on margins options our per leased sold prudently other are amount than cost we spend. on us day the daily allow spend, the marketing is on leased that site. given not goods FlexShopper greater or of via or payment Third, continually goods from and amount

As in front I venture this but in us. about runway excited mentioned, the launched we mid-February, are only of

is item be create Finally, expand in expect and lease efficiently the ecosystem. Using quickly reach FlexShopper what that traffic numerous of experience our generative will we expand purchases early FlexShopper.com the product March, beyond to fulfillments. expediting streamlined will sites for launched the verticals to and focused micro legacy AI, marketplace the we to first on sites adding individual goal new

year focused competency. all the and primary represent was from jewelry gaming core micro furniture time for computers this launched first to verticals The and consoles leasable that of over on will a sites range goods. Our is

through new planned through And of expanded lease have an Moving additional locations. current partners. marketplace, we additional digital XXX May. into opportunity XXX the more in-store in further process past Since today with retailer the middle end lies the the roll the with units FlexShopper of into to leasing course, our improving continues out XXXX, of offering

locations long-term that an lease XXX% of more rates. subset is together leases improved we over originate leasing in are through in sustaining exploring we're how process checkout an currently partner, Another a and and can improvement piloting

testing, improved more out the the plan the we by rolling on in into After a refinement X,XXX approximately process summer. stores end of bit

want COO, mention on million into positive Last to our April XXXX, commitment new the the cost I and increased by Finally, funding from to the to to from before a I'll closed date John which maturity X% decreased recent I that million, lender. $XXX to performance. the dive hand we year. $XXX credit our quarter interest over Wednesday, facility call off hand our the call fourth Davis now to the company's per support

John Davis

Russ. Thanks,

I'm have progress fronts. on margin almost minus FlexShopper.com the for year-over-year our versus improvement. $XX FlexShopper XXXX EBITDA strategy we was previous on all been our focused discussed $XX.X retail was a rolling we marketplace pleased have adjusted out our in in XXXX, these which improving on to grow As million business. quality, quarters, asset $XXX,XXX on million and

our XXXX, in of drive EBITDA is financial year. to improvement performance focus $X.X rolling this retail asset Helping efforts QX Our our out million was versus on adjusted year. and the our revenue improvement over minus on last a million continued quality $X strategy

of XX% online merchandising agreement, higher margin, The year. has on resulting on over merchandise the lease. on QX our relationships with last distributors when XX.X% this products versus with financial margins. working is benefit in up the Our is in of in offer percentage to XXXX of versus of sold. lease for sold FlexShopper originated year a was been as new This past shows our revenue life increase a million the P&L and wholesalers, lease XXXX. team of via year through versus over marketplace number the $X QX 'XX retail cost recognized year and QX cost of XX.X% The XX.X% of of XXXX in full merchandise in benefit This manufacturers

deal. by As FlexShopper.com alternative to on With does a online, payment Russ a new wider the broaden percentage any launched expanding options offered of convert better both a website retail the due are today FlexShopper current nonspenders segment not on looking where traffic credit and traffic in margins additional earlier, sales we was lease. website our existing A XXXX, for below our large client QX immediately reach from mentioning to solution current our accretive. set customers, initiative offer our to of above partner of applicants to served products

will increase received. which retail broader immediately and expect a is solutions, offering higher recognized sales, margin By that payment to range we of in result website

other with a marketplace first that cost have we the months X our approximately on of of XX% we offering options, have payment over sold been For markup on an $XXX,XXX sold. goods additional

expand retail margin will is into as to to also product additional lease There product opportunity our traffic significant effect on drive marketing well which have this to new reinvest and a more the to ranges halo originations. as categories website, into higher opportunity price

relevant most customers. AI customer wider potential content to look product the to for investment products increasing solutions a will improve continue payment response appeal of conversion, broader identify we we and models that targeted our the to that creation, generative As have and a selection a are into

asset to significant our regards was we percentage XXXX. for XX.X% XXXX front made lease In as on underwriting bad lease XX.X% year strides versus on XXXX. efforts debt, of Full improvements revenue, and over have a in quality,

XX% XX.X% XX.X% year, year is For benefit versus in year-over-year this was QX year. debt. versus in last QX QX a XXXX, in this last This a which was million of reduction bad $X.X

originations. quality, our deployed of control ongoing. have the in underwriting inflation in XXXX, higher been out lower course this and Numerous price resulted new which to over lease tightened Coming we is asset work strategies of XXXX, policy

months am origination that these for QX lease a place. from there of to for underwriting report the year-over-year keeping in the lease, spread is standards revenue pleased lease out to I so XX conservative XXXX, time life increased However, effect revenue while first QX of since will larger loans. originations lagged up be on the over Lease

search which which the and Our models continuous a and riskier data new part on all testing improve and continues real-time modeling patterns, machine basis. are and to of of learning-driven risk strategies navigation third-party sources, use evolve online and combined content with customers into identify fraud

Our channel to experience also partnership growth. lease continues point-of-sale

in payment they existing networks, storefront within partner their various We solutions, and which have as tire is strategic of count, the expand FlexShopper we new increase offering significantly launched XXXX, to expand footprints. continue in space the expected a QX our partner to

As December this our XX% growth XXXX, additional year. saw in an a XX, store approximately we fronts, pipeline and increase year-over-year of of rollout an suggests XX% estimated current

credit also websites other We that partnerships. offer waterfall via are growth FlexShopper from expecting leases retailer

sustainable growth. and platform to provide profitable Our of is a goal

We and use continuous marketplace in team, the asset a have quality the focus leadership to available strong of a technology stack, on and tools robust prevention. the investment heavily latest fraud invested and the making

Q&A. FlexShopper hard let call worked results. these achieve pleased over also members, that, am the in have and who team the to turn thank With are I for what would our with I accomplished momentum this poised to very XXXX. year we the to continue XXXX, like past in to operator back me

Operator

Our of come line Instructions] H.C. Wainwright. questions first from Buck [Operator the with Scott

Scott Buck

I could consumer just hoping Russ, an pointing or on kind we out. payment of are that of seeing and maybe shifts update the in get worth was trends state demand the you're any

Harold Heiser

Sure.

of what a done find to make that the So by as We options season. -- as always our the additional we the Scott, we've to in we on the performance. moving guarantee payment tends this of into the any seasonal level mentioned be to can changes refund try some sure at try year. we way way have to that we beginning demand to come always tax occur, see in lighter is there asset site Part past,

of that options side and part the on declines. number essentially providers a have So we is that of below us our also are we monetizing payment our have

the on interested level let monetize criteria, fit So to that want particular return try is is blow to to to others. do of every that may that hit what necessarily we've not those in as in our just a site really then we lock down -- lease-to-own some to have opposed tried and visitor to asset visitors

so been perspective. not what based essentially an want consumer across we've to what upon in asset response perspective, much generally from we've board, but to level more we seen So the a tightening, from but achieve

Scott Buck

helpful. That's Great.

Or now guess, kind can I'm other are I in of would curious, that site, items for inventory? payment on the we outright? adding be that seeing, not are leasable typically that options shift not pay you people the On

Harold Heiser

road. No, we're yet. the of down shift might not look be type something That seeing that we at

fill to to item of FlexShopper that goods, first, beyond goods, that in options. payment in of types. that a drop had has cap, dynamics lot other Like and these perspective there's extend especially the LTL what that $X,XXX large that furniture line bringing cetera, we're a on to really focused up when or shipping cap is shipping Given limit spending especially now it from home with parcel some for $X,XXX goods given comes historically et really

there into aren't other Once be other think aren't an top we've of that leasable. layered sorted through to leasable, complementary traditionally traditionally other some of think on opportunity goods can things warranties I I and those some move is that these pieces, that

I higher-priced items grow, but think there's had. more room starting than and we've walked lot with we're through traditionally different sectors a the to just we what

Scott Buck

Great. That's see when opening then the up helpful. location remind you revenue you X me. actually meaningful some is for what start storefront typical between lag versus And last Can to a new contribution? us

Harold Heiser

Sure.

that's So the financing extent we're experienced, little whether place, first process. rollout, before the starts taking another it to replacing it that or dynamic speeds any in the up had they're nonprime of nonprime has This with financing bit location recent a type most product. more

adoption easier bit plan. So it's a little

of But necessary to the that course, -- end out had to those most we there. the subprime originations the summer, retailer we close lease-to-own speed. past, should by should training lag the this or revenue. this steam originations are months, of latest I and the to the a online stores. will financing the we get There's while that X recognize be an be full different get expect always up to rollout max incentive Then in from has portals perspective, we But have X given that takes and Certainly, rollout. recent on of

Operator

further come line -- Michael next There the from Diana questions our are no sorry, Maxim questions Group. with of

Michael Diana

mentioned exactly go those XXX, XXX, the retail numbers on strategy in to? Okay. over do strategy, another refer what Russ, could X,XXX, is you eventually those? What you -- your

Harold Heiser

Sure.

that store lease-to-own we're provider, XXXX, we've XXX in in through goods where count, additional So since they're the we'll in out the out services the rolled almost the And automotive and locations. so -- end of are terms to continue We've the roll will today. done those There's XXX, of continue segment, into and another store XXX locations to XXX, locations. segments. exclusive these

Michael Diana

I Okay. is pricing And -- is something... this the improved you said think X,XXX or

Harold Heiser

moment is running together has experienced more already a the Tampa than there. to previously. improved have we the number a where with lease we're increase locations. throughput. the in throughput at is what with that lease a partner a of This them find a pilot new And double little We about X,XXX them to process locations market the in working up We're

point-of-sale experience just in is this So tied consumer cetera. et an easier the closer to systems,

refine So to stores, which eventually achieving the -- pilot, technology essentially hopefully, continue and we're have originations. excited into doubling we there re-roll then same and work is the to those out X,XXX in that a of results partner the

Michael Diana

Okay. your goes then as what would would of contribution retail, website, XXXX as you relative far think? year-end like when order between those among the the -- FlexShopper.com contribution And strategies be

Harold Heiser

Sure.

and we site what to the online on given increase margin these the seeing high So we're goods, providers. spend on and because marketing ability we've payment this have other added

wholesale that to on to model. but than the by offset retailer cumulative in extent it, year the like, end margin, double call feel We of which we we a we that spend more nonmarketplace, the by basis, the the the is expect marketing same channel, expect

store Given initiatives, given rollout, similar this some probably these we'll of extra see impacts. new

Obviously, market a dynamics bit repeat little the different. are

a retailer total from retail. online to as -- customer So X/X customer new retailer. perspective, before, expect repeat more online, XX% I we and it I FlexShopper about we new be From quite to be as a to it mentioned be X/X customer expect XX% perspective, customer perspective, expect much, the it doesn't

Operator

now closing Heiser our back question-and-answer remarks. turn reached floor the for to I have of to would over like session. We Russ the end

Harold Heiser

here forward generated, in the the for hard another at their everyone FlexShopper appreciate quarter. to thank quarter, look dialing past I we want the over results all and work this team morning. We great to

Operator

you. That teleconference. today's appreciate does conclude We Thank participation. your

lines your of rest at You Enjoy may time. your the disconnect this day.

FlexShopper (FPAY) 2 Apr 242023 Q4 Earnings call transcript