MAPS - Earnings call transcript Q1 2022

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Operator

Good day, good afternoon, everyone, and welcome to WM Technology Inc.'s First Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to turn the conference over to your host to Tim O'Shea, Director of Relations. ahead. go Please,

Tim O'Shea

for XXXX Thanks today discuss to Hi, quarter joining results. fiscal first our everyone. us

We CEO, should with also the us our have supporting Arden announcement. on today. CFO, our earnings website, By Chris our Beals; slide Investor now, along announcement deck. everyone This have Relations to our access is and with Lee,

future subject These statements outlook strategies business a this we'll statements not risks some During are our and call, are make beyond of about forward-looking performance. guarantees of variety which of long-term to our statements, goals. They including uncertainties, and control. are

actual expectations reflected Our in materially statements. could results differ any from forward-looking

release. other the those incorrect, and to as any our a Should please SEC of important risks these financial refer prove as from of actual risks projections today's that on results materially our in factors materialize assumptions forward-looking our be statements. should by the actual website differ Relations Investor these other SEC's For well our discussed and our and earnings website, results, affect or risks could to implied discussion could available important or filings

measures law. to to for made reflect financial new are not events be this are and statements date any during Also statements by we reported unanticipated the Forward-looking call, as discuss no our occurrence except after today made. circumstances information update results. a non-GAAP or during which or intended events, GAAP will certain of substitute statements obligation of We to beliefs only forward-looking this such call undertake reflect the represent assumptions our to or

in not our to our call earnings are to release. that, the A helpful of GAAP like be GAAP these be business, these I'd With a non-GAAP they investors to While found turn for can measures in results to we our to reconciliation over our measures results. Chris. substitute understanding intended are believe

Chris Beals

and quarter had call. and areas. first really a number of across Thanks, key a on strong I'm everyone hello pleased today's to We with Tim,

discretionary the This we're in the quarter holiday that leading technology despite demonstrated cannabis playing cannabis. from demand and provides past clear marketplace consumer only crowds broader events also and saw provider And strong, this remains broke XXX creating macroeconomic volume sectors. on XXX. pack the blow single as We ever for out distance consumer that country, at across evidence the for offense not order commerce-driven other impacting our XXX day this record Weedmaps concerns highest but

get We February. announced the straight results. goals exceeded in into Let's

client turbulence clients, and to strategy. in long-term It's we driving the us software continues that results business working give reflect driving strategy across we to spite and confidence grew For user QX, state value and of continued uninterrupted is The cannabis marketplace by year-over-year marketplace power evidenced our our solutions. is Weedmaps and we we the clear the we our base WM we're the of in provide, both user Weedmaps through client that revenue with growth are and grow by continuing and XX% engagement in some markets. users the that our results drove the

of that at growth Tech's through areas a I'll Looking be QX, WM result to continues walk today. three

accessing and continue consumers, First, regardless second of of WM adoption client markets; driving our of shopping innovating third, all business and and Business of deep for and cannabis the center to we marketplace the Weedmaps experience Weedmaps. for cannabis serve brands engagement suite expanding commerce client user retailers tools the to expanding be SaaS across of enhance to demographic; the

before. drove we in how QX. talked with outsized delivering on We start clients, client as I've engagement focused value our Let's for about

markets. our seeing continued of that our in reflection the choppiness marketplace, client returns paying the from being per of regardless revenue average direct Our end a on clients are is

new XXX our expand to over in the clients paying markets, clients with continue We added reach quarter. of across

helping our platform, transact As insight This laying interface with elements view the update, providing April, of with and and groundwork on visitor, in We've down the for quality to how I completed and in surface use while January and recreational February. of the been these With our to New like across along trends portal states which view onboarding Things sales reach metrics. active Mexico, adoption online, and enablement the opened new integration WM started in on educate which on retailers like X.X their for the orders with clients rollout to and Admin we've featured homepage breadth starts addition products them listings purchase like sales Montana, engagement deal in them a presence across and their have upgrade marketplace. menu WM digital Business user the suite. in recreational ROAS new for opportunities self-serve, spoke consumers come Business cross-product clients and now listings. clients that this of listings simple enable also Weedmaps, top can upsell live

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our Weedmaps marketplace. Moving on to

to positioning with we the for we cannabis are center reinforce proposition commerce. of ways clients. marketplace QX, the experience value users the And Our improved in user our as as our several our in core look in

are for switch these promotions of users and increased consumers the last know pricing. the than cannabis cannabis in ever seeking of so clients environment. on indicate value Studies transactability is decisions. consumers of XX% their how based XX% factor better and than this seeking value. quarter, they're say any -- convenience over noted to consumers price saying With and I better likely our driving As purchasing more retailers deals biggest we've discoverability

preferences, purchased, new to piloting Regarding with along we're their express to features more in reorder convenience, region. they available easily select and enhancements order again options including order through delivery filter allows several users which previously pickup products and allowing type users easily user

continue data. user to personalization test also party We first affinity our menu leveraging

across to conversion more and ramp our been these the expect validating. and We as have regions tests actions engagements users results to user

platform more Weedmaps anchors Now is let's of these adopt accessing propensity more the turn, The case the highlight this utilization retailers to higher few WM Why to the The we've how to expanding they a showcase menus, conversion. client that's leverage, marketplace, that platform. client a marketplace platform things WM marketplace. in brands accurate benefit and experience Business easier adoption -- In the client Business to across talk users. WM of experience through on a progress our all the solutions To is it more across WM of we're the our consumer multiple the solutions. more product solutions areas solutions up-to-date options and drive Business fluid that additional platform to our and more made. translates drives the is information more shopping use like I'll omnichannel Business that

Weedmaps We product transact, now QX, now information. that of product whether cannabis. is same or real-time expand accuracy supported capabilities XX% value-add is In integration key level and Nearly consumers party our marketplace on these how integration WM and data to to and and point-of-sale of inventory are as to to also store. in powerful to serving with employ on online. normalize menus augmentation on most our powered continue we we more integrations necessary convert machine the menu have the our information transactable ensuring it's by focusing of partners of make integrations learning data expanding surface by orders We're menu point-of-sale our our with clients well. third One companies inventory use product websites

point-of-sale these last the over solution. partnered Given point-of-sale with to approach we've own been our integrating us year, WM speed the systems retail our have which prioritize decided versus at

at previously owned and a strategy focus. dual point-of-sale partnered Our

over increasingly and data ingest investment. with that allowed service partner the scalably marketplace core us become more collaboratively clients of last year Our -- to and strategy the less

start partner being WM conflicts platform, Additionally, point-of-sale increasingly challenging. partners the as inherent Business we of the become of the integrate competitors have parts and both and market to navigating

I position vendor point-of-sale forward, platform WM as cannabis a ERP the an see to SaaS Business in emerging Looking opportunity and providers.

Next, orders. we -- across can also penetration

operates a completed pleased digital welcome and a Enlighten CRM and Business together. acquisition. the the -- called consumers another physical WM breadth To end, subscription menu Enlighten scaling the and in-store provides a incredibly called look clients. at digital and solutions that the which last powers It's connector year. which we're dispatch as menus an of kiosks. reach to that of also part yet offering operates embed our software to WM acquired offering also we ad SmartHub, that to Enlighten store solution I'm provides synergistic we're Technology team purchase. our is of in platform. forward first quarter, point acquisition in-store AdSuite, Enlighten solutions inventory offering that to WM to we of clients for the Our the expanding which And the solution solutions

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and brand tremendous point-of-sale in-store transactable Moving where -- Weedmaps providers to information software time kiosk the value-add This enrich yet example acquisition data retailers consumers can cleanse have e-commerce, forward, that another the data and partners. and partner ingest one be experiences. provide power we web across to our solution a and from positions marketplace, engaging us to point-of-sale our can you and catalogs it of

here a to time first invest across believe grew In and and that during in have, differentiator attracting design the success. back incredible pace of continuing headcount numbers engineering who cash only solutions the When the of of and industry. team a attracted design having passionate culture our focusing and focus commitment that this delivered is socially the organization if my and last this companies space technical XX% incredibly at quarter I the I we highlight cannabis design end of and on for we we we roughly and piece what that sheet XXX, just the the to in have we nearly future WM alone software I've to I of With opportunity to important quarter from over engineering end back Technology. our was top-tier and new flow, size key critical conscious think been that of were at saw technology a competitive at marquee us by supporting very pace at be result delivery. product balance in an software about we The fastest what leaned as part largest product team our to it's is team delivery And a the product space Looking advantage the is cannabis size, quarter, not development our and successful such seen that an are our talent and versus talked we have delivered QX. engineering a read where of big offense with playing incredible Technology. I that our we WM

excited our in that are forward, work have Looking the us. by teams front and opportunities we I'm of the doing

innovations technology We the ways driving are and year. visible creating over more will of the that course be new within this cannabis in

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Canada Our to US, inform take approach in whenever payments the regulations in us will enable learnings monetize on we payments. the

East be Winning our East, we critical teams online. laser-focused Big on the Coast continue is focused states Our also on what owning coming to new initiative which call

Jersey resonating the area. in tri-state still with New onboarded instance. of over very Weedmaps clients days, XX% We've already in is it's for early licensees While

We given is the be revenue year market. as from the markets. of these expect Jersey not continue nascency Though about to bullish we a reminder, this the contribution material New

we TV. which Francisco, with within only -- features $XXX million across last year. I've Weedmaps, April On and seen that Tumbleweeds featuring local and cannabis our It I'd multipart increase about is year's eclipsing a holiday of didn't holiday estimates WM over I culture our sales last prior XXX. orders day broader the that XXX. had new cannabis cities volume coupled XXX which year's we've our success from like highs in content, this the Las Finally, promotions another We in that on New series VICE highest not content with Technology by XXX, integration Heading talk moment related past into day be remiss after volumes itself. an all-time for XXX, but opening to exclusive historic is take Tumbleweeds. placed to broadcast Tumbleweed lines if double-digit access being growth in and that XXX what legal means of the Jersey, app merchandise, San Chicago over allowed docu New versus a to Mike, sales, drove is XX% rec launched users the Killer Vegas, this Weedmaps York. has of of the In industry series

downloads in this the population Our on states legalize the seen a weekly and integration launched Since states that combined XXX year, increase million residents, use start XX% versus XXX XX Tumbleweeds during over averages. excludes XX recreational of of historical with like adult we've York app New week contributed and residents. million content with

for and let country, and demand saying respect it's in which healthy. think to this highlight out is an I cannabis we've time important along, consumer remains to exciting to we're serves all alone think this at I cannabis with world remind what everyone that call what it the been --

continue our Technology license state ever to federal that over push fact more it's our lead to I'll non-licensed WM been. to and do governments call share to more while continued legalized their now to density that, accessible consumer we make to In demand up cannabis to local the With it's channels. And away so from healthiest drive the we increase to operators CFO. licensed Arden, the turn at

Arden Lee

$X.X remains growth goes year getting of approximately higher versus the continues consumer opportunities to weighing and home on the are the results. for fears only cannabis call. and Today's demand our out overseas in that improve to these of on -- $XX everyone at strong, while end each million top is And were WM by. to for the cannabis hold human spending. visibility incredibly These to our and access continues not QX Consumer concerns true same for guidance. The hello does discretionary borne the clearer are licensed XX% than many inflation driving which is quarter business our products dynamic. with We dynamics and and companies, delivered Chris environment Thanks, tragedy of be dynamics revenue outlook last in million Tech. health

While clients recognized XX% QX, XXX average -- that the during of paying over less than with now We growth from we paying we incremental X,XXX monthly last Enlighten over completed acquisition clients revenue year. have quarter. million in the $X transaction new versus added

Our our revenue last average versus per XX% X% in $X,XXX with user we is year. approximately growth continued client monthly grow base active year. And versus to higher of last paying users over monthly

is cannabis. that performance we have the other technology of scale providers the deliver QX clients solutions versus and to value users to continue both advantages proof and Our in our we

Moving the P&L. down

offering Our as new our along multichannel several as client we such the our we're with QX expand our that reflects of solutions Weedmaps -- data investments making new ad XX% network initiatives.

D&A cost after expenses revenues $XX expense and in operating came for quarter. million reported before at of Our the

Form million available transactions. related stock-based release these XX-Q. earnings other includes million will and slide with is OpEx on recent charges to our in earnings charges deck $X.X compensation our in Our be $X.X in Based non-recurring reported along in our and

OpEx $XX year. or quarter items, versus million in XX% our a increase these last at Excluding the for came non-GAAP adjusted

in as orgs continued design our from incurred that our OpEx Enlighten. engineering teams, and increase expense was product well acquisition we QX Our driven go-to-market adjusted as incremental investments of the by

see struggle also current the levels by $X who We which to to of environment, impacted clients in continue million due to the continue adjusted quarter. EBITDA for elevated expense our

Our loss factors million. of given QX a EBITDA was the $X above adjusted

EBITDA As in half adjusted a beyond would discussed reminder, strategic anticipated positive first breakeven for that slightly and investments margins our February. we the back we XXXX be reflecting to

are this our investments areas. the we year, we believe of opportunities the accelerates With these seeing dominance key in pull-forward beyond

from was statement our resulting net $XX loss change for warrants. accounting in reported these accounting value following $XX SEC of our fair which the types Our an on liability change earlier last year includes million warrant in million, the of the

classes Our and well fully across XXX EBITDA are of share our ended count end of count share million the A results to quarter debt. net Investor our and to of earnings calculation quarterly cash reconciliation the as diluted Class zero and our site. Relations as details and share the were in just our at was that release income million share B adjusted classes quarter. the A We with posted provided in presentation $XX

to We via drive whether continue that come opportunities growth highest will capital or the our believe investments organically to transaction. from Enlighten returns investing like on in

receiving We the of we also and about proposals partnership have selective in to how and on investments. think acquisition and end be to disciplined more strategic be continue very ability the

QX, on we our ahead look XXXX remains As unchanged. to outlook

which XX% grow million to expect to XXXX XX% continue $XXX XXXX We revenue our actual to represents fiscal $XXX results. growth over to to million,

a volatility also our -- macro facing our weighing consumer and challenges traction acquisition clients along Enlighten, business visibility upside number continued on is the the we on against While markets. that of end our are openings, the new increasing innovation we state recent potential see pipeline across of health from for with the of

growth our subscription-like drive consistent with line across in prior We guidance. expect our to revenue products

continues over to a recurring of be As XX% nature. in revenue reminder, our

support dollar across where drive to spend of continue net dynamics return higher clients, we growth. We expansion of see a levels

in clients while against guidance base with paying We solutions. are for by have also are our our Coast we new year And New the client progress or building earlier. relevance markets, new as to Canada new Jersey a and our rolling across underpenetrated this and quarter. product-driven strategy out we East on progress assume opportunities expanding past as growth Chris Canada evidenced And growth in to in we're making clients did material see continue from spoke not our monetization the

adoption strategy freemium a We evaluating also are revenue. – on scale to acquisition focus versus our of installs a with

that, transaction materially for that February's of XXXX that range growth year in fiscal this QX So more given in our shifts do million not in be business. end, I consistent our To year. the to of the throughout the saw is outlook we expect $XX absence expect planned what million. we $XX versus to change revenue outlook for to call, our the noted On

to margin, on outlook unchanged. again, Moving our remains

million the We in XXXX fiscal investments to expect EBITDA continue to of priorities. million, support which includes of $XX our range XXXX $XX adjusted in fiscal

DNA executing breakeven as for of EBITDA company, end our year, strategy first for adjusted a and year are strategic adjusted annually fiscal our markets teams this and We maintain cost opportunities to spoke areas investments to front not In always positive half us is to company. the maintained of XXXX have to working, we'll closing, opportunities points rigorous slightly is strengthen. also continue throughout EBITDA margins we cannabis against will half load in the as are expect our to as in history, our we differentiation for the core the discipline continue we that profitability be a our growth continue strategic as February. XX-plus Adjusted as positive EBITDA back well to

let's it tech offense, creating benefiting a questions. open are ecosystem scale our that advantages, differentiated story pull platform. cannabis for Tech against play and versus up today's in backdrop, we represents WM Business insulated As that gravitational WM a the within macro technology is With environment. the And in space broader that, our Weedmaps

Operator

our Piper go Sandler. Thank from ahead. from Tom question the show comes I Instructions] [Operator of you, Please line first sir. Champion

Tom Champion

in more the increases. Can congrats macro you're Thank provide like cost what a both inflation results. seems I I'm Overall, on licensed your the what you. at level, and detail and it with And just the you're guys, other seeing just seeing uncertainty. little and the think and consumer a out of end just strong Good investors clients. afternoon, And you context on lot there are curious, debating markets? I'm can that then And into improvements please, it after if you results the very discussed seems long drive there strong your the product in of in or Chris, is script, XQ one guys. a if if could really you to more, maybe that XQ. here? wondering, year a plays guide start I you will What two needle most? one list moves the that isolate Thanks, think the like

Chris Beals

Yeah. Great. Great.

first to we're think sort the to the of cannabis in increase in I higher it some roughly up – monthly consuming continues legalize. higher It's demand right. materially So Canada all cases the level thing is are after it's people aggregate highlight of of here. the in in is than number US into continuing states seeing who And reporting the

several not people states – online. we people it's which come had consuming people are increase So cannabis. new just consuming cannabis, in frequency in Separately, it's the

the come open which speed they As online, states with varies.

choosing trend. And centralized been seeing so One in the an in are shop is seeing namely that's thing through interesting consumers incredibly us. strong increase we're that's marketplace that, a specialized we to an data

And retailers. of at something look our user performance, so had our increasingly and what in outpaced for we're sort our cannabis rates, XXX, if you rates return like growth seeing

easily their And and look mentioned house. best that of aversion cannabis to have to are differentiated cannabis price the reduction your we in shop, delivered a story. it then to is for and online compare people's sensitivity a deals seeing ordering we're come part we're to browse, and house. having the that, And and We pricing. So way it seeing

And so come seeing we're that bear. to

the states decrease, are lowered. illicit there greatly them I about same-store options friction been in has is seeing store of seeing those which market, some because to talked often what are they move cases not We're the frequent in terms increase new of of and and we're think about choosier is states. in one as consumers consumers also wanting interesting thing more retailers that's what's number store to at sort sales of is the a look increasingly getting for in which

illicit have where bumps high overall say and long states get to you you think have to distance tax I factor The and a That of going outsized a is good still to legalized you're the undoubtedly, the legal rates key see increasing remain of So as would rates. as marketplace the news is there long which a dominance decreasing factor the I in is a as are time to of our continues that and market to store, be areas time, case. piece. as drive separately

together things tightly terms that work In these a them together, to we the doing but digest of are much -- on, I them a WM we bundle of couple bunch working think time taking and integrates more of we're sort the make bundling acquisitions to and completed the them we're platform.

your highlighted my segment be run in the "where like incredibly work of from are These easy to powerful it last MVP entire -- the So really quarter seeing marketplace. making the on really along it wow when present great directly validation this can targeted I for users -- to them, solutions easy the from you continue to inbox do CRM, across brands and have lines making where been underserved. single sign-on things something clients these we brand time." these Our campaigns

to that presence so And then say pricing, and identify coverage set want into the sub the my to a just strength inventory beta availability we're stores. with do brand help that this to augments acquisition something terms multiple businesses understand where margins their with see we brand they trends, look as rolling their They -- as products ability once retailer brand solutions I competition out brands, can it a tighter scalability of consumers. control to one of incredible in in being performing. sort or how we separately really we have the Enlighten this those a clients promote in gaps places. really menu website analytics more wholesale you kiosk of places. thing where But cannabis a promote appear have and centrally it segue that mentioned. their The and go It's using set of place, manage what's natural to the that's or Weedmaps. can menuing retailer's where appear, really retailers have highlights within promoted once. more that in if increases, online in more which the largest and -- marketplace that hit can it To Admin do appear website the in and within this WM scaled then these have and in the easily unlocking having have and the on they're it own Enlighten on are it in-store analytics -- their store appear in stores stores good MLOs for have and on And for being stores for appear the It's multiple their data using larger and is third are e-comm can X.X able then

team So that on was centered limited number We're a a they're really thematically of lot, focused. the very very key keeping but themes.

Tom Champion

Chris Thanks,

Operator

Thank you.

Our next of question Andrew Stifel. comes from go the Please line ahead. from Carter

Andrew Carter

guys. hear Can you okay? all me Thanks

Chris Beals

Yeah.

Arden Lee

Yeah.

Andrew Carter

Good. Okay.

question about the question. up backing of kind on to First markets ask I end wanted

where those I or your you under major the of Are most you're mean investment differences XX% is any Are the businesses? kind the seeing you of market seeing differences reduce three the up end in of markets impact you're key your in major the you're You're kind any some really because up seeing retailers pressure. I had quarter. in in Oklahoma think by of Oklahoma, Colorado, We you're flat. California fairly declines

Chris Beals

across would of think bit more of I'd that say -- the state state I generalizing -- it's a credit I difficult. the fair has of lot I given within -- to revised of there's there's it's a this, being states lot I degree, the bunch normalization to say a different been is sort in behavior entire bit -- trade more a say an that think would some so is a sort a coverage. to

I bit talked more think a about. is commonality these being have factors than

looks that implement there, people of being and I due of reform I come news the very reduction a sum flip or season the being hard that of April think think sort frankly But sort think a cannabis. that we're of which lot thing. tax newer volatility. hit that and material think likely yes was SaaS had bill, more with would flat-footed a And effect some horizon more said, on trailer it and where that That than in poised stays some in of of in solutions maybe the sort reduction if California state and is would -- their them this sort things but for give for California presence there's sort where the tax pretty really which bottoming people in it side, I bit especially maybe other that up, seeing on we're tax for, and bill credit thing. marketplace July, like -- seeing visibility of augmenting like, think caught sort cycle a to within good tax commonality I large that said, of capital few in take the I to them to on free use us, a up businesses a

Arden Lee

these I'd Chris certain extent. struggling But Andrew thing add noted, some only of markets on top think operators is to yes, said are is this a we those of you that are in listen, what The in actually some that do sense that, playing right. the advantage get the because to and operators beneficiary of we their mix we're net spend our shifting of of the some ways

point. case in perfect So

a revenue our surprise last QX. where area California that continued our client home in quarter that's upside and versus trends That's state. market show one we growth of per to take You had

Andrew Carter

of about question you think statement cash of that the bad million gave that I million. $X the on kind flow you a struggles noted retailers, Building I expense, it $X.XX was it Thanks. Okay. debt know

three So of row. second as up. the gone your And that it in consistently up a AR has a side revenue gone is that's quarters of percentage

can I XX aging? -- Has of give think it's anything just the XX that some we're incremental lot that you days been this give trailing be or clients us Can peaked in gains. XX this peak? going just around the you any the a comfort cover Anything you could as losing be has might to us quarter.

Arden Lee

take sure. I'll yes Yes, that.

of clients I mentioned of is the course then pay folks turn not listen utilities California, over the if taxes And are that or before, a the internally specifically it's screaming we there lot their any so, think operators right? listen, off. unfortunately I are struggling some just as So are it's in whoever loudest, telling rent the -- had don't to listen, secret operators and that

shows we think there the to we're be having our We some payment there data have of also had the our data day, we're with as the clients do that that onto also only for out clients well of data on It's a of marketplace, the operating QX. We plans. challenges. that's there informed and by dialogue put of clients. exiting And us. That's strengthening to these third-party a evidenced number is want lot seen behind data the worst that end the some by that some QX was that as -- trends at of tracking the

side. ones positioned platform storm Our struggling to the the that and clients specifically to help to our make weather is the other uniquely it are

like do at instance, growth fact it's to these marketplace, CRM, and area of the fulfill in And software pay will in the better that you for post-order tightening, have from easier our then, of is on effectively. our look stock. service And being Gap] to of we marketplace. worst I trend based those cheaper software the manage, look back are the at the into to margins the you payment compliance us. put I'm ability after do behind have the you When [Audio Amazon you. from do we're orders getting or purchase things we'll providing we're for then is think with We in off. that to chat you Generally, when we so, what for we the dealing do reacquire we're ability servicing time the sort Like going we're think think for And that you when your of it's reversal -- real of some work what manage plans get consider to sort easy orders. menu-ing pretty doing sort rendered think see things them that I the that clients said, seeing customers, within you digital when is able like it's to fastest promote helps to cost that more mission-critical people yourself more marketplace and coming yields things when you're quickly cheaper easier to more and logistics

to of a when in comes that's times compelling triple so kind of so, when play really its businesses doubly businesses -- uncertainty. And it

Andrew Carter

Thanks guys. Appreciate color. the

Operator

Thank you.

Please the Cantor go Zuanic next Pablo of line ahead. from question from Our Fitzgerald. comes

Pablo Zuanic

got that? sales, I I per from think in to you ask reason for but I'm the was came sorry own The everyone. If a that question retailers. average you about or $XXX, rate. average would lower your $X,XXX. clients I'm new how But in all terms, increased, are that, if $X,XXX one. think of year-on-year starting about very XXX Oklahoma whether Mexico, New added in disconnected, assuming, we spend of One Hello my so in about right per that asked already. to simple month those much at whatever And monthly spend client, terms try the concept same-store

client probably have existing quick -- base. thoughts you lift Any probably good So. that? a average on a spend you on your on decent have very

Arden Lee

can I Pablo. take Yes, that

up we opened is penetration our they're either while regions. states have newer a way you're, our we're have where like up they're our underpenetrated call curve. So up working new Montana, what growth in we're states client or New just that are and share where right. emerging of or in yes the Most where that markets coming for been running These Mexico

also of that to some these our kind more more be regions. lower right, mature per revenue versus they -- of emerging in client states of some You're regions tend

a about I'd of curves. talked our company around of in some Now with that what being said, we've highlight some the as past

spend market all across different at clients consistent metric? spending they're coming growth function, within month levels again, market region-specific. also we're in this of whether function, than when the we're it's higher to of example, you of over we've prior with It's is in function, over regions and over for greater a across rate that pretty clients platform. of terms spend a type cohort comparable And What increase steepening vintages up of across that seeing. just generally regions, time, seen clients they're and whether regions at is the their new their we're platform is, consistently and fully of just cohorts, more that existing the So opening a or dynamics the the terms time. sales of our It's spend the are of coming that's say of that a market. of of It's what classes look will What that more that on longer within platform though underpenetrated. It's whether type does trends is the a kind penetrated, a pretty or curve on really, with of how spending us somewhat market acceleration at I newer mean time one of cohorts. they is out -- an

Pablo Zuanic

you against subscription a said other in a your Arden. and a recovering People number part right? revenue if drop just still call, so less base they is expand they the that may month, on next color and revenue the follow-up, necessarily, give recurring, than are ads are I are or lot I but can know you each of more mean, big want. I big And saw not that of was out bidding the that XX% ads your XX%?

Arden Lee

Yes.

So we in I'll circle what about to back talked February.

over nature, impressions on on behalf solution. clicks in while our the recurring deals when revenue our also in way that They're on is those including of including though we're them talk basis. fees, a purchase or mix. necessarily of a are business solution our listing period. subscription-like somewhat terms And of clients promoted streams, What So solutions about we in purchasing well or listing generating based our QX essentially advertising paying XX% course we're they're came featured WM which awareness, about those at as performance revenue subscription as clients, for not of

are and subscription our of you revenue And so listings WM XX% revenue recurring the in as deal that's listings, those as featured our across QX when all think contribution our about in business across nature. products, about of well

Pablo Zuanic

there's terms create are entering, plan a last it, some about if color more what or those new better From of, to that Thank may. always the -- those that you. Can funnels if vertical. maybe other you're necessarily you that pebble and were a it the don't it's on some it or seems with thinking of to you're competitors thoughts, of you of know, said, thinking potential a that the was I Thank second a verticals there one that? I having if way with And in one, you -- new bit partner entering partner Chris in of you. verticals. there's of in was give the change, some always

Chris Beals

had partner of think thinking better of I way it a is, we've a always strategy.

an heavily to like of And acquisitions SaaS other invested of strategic done. software I ERPs think, not years, fits and in-licensees, One of by in the ancillary providers were my leveraged last build just are systems and other been that the cannabis space. is goals, but I CEO, since sort sector. the platform marketplace the and solutions sort leveraged that by are the providers as sort mission-critical WM came a we've and cannabis seamlessly, several POSs that of to in area we've to wraps with it's things in over intentionally that structured way They and

things And I it's have manifest, a the about integrations or the having around deeper ordering software strategy, that we menu or their we're – of frankly, fact deal solution online culmination we're this integrations sort that. basically on of think seeing and to sort seeing think engine augment companies a a our platform to parts where resell partner and so like and sort WM and of their evolutionary that for you're is blossoming that talking regard, want what I that pathways of the number of of clients with

Pablo Zuanic

I'm keep waiting about if one nobody at is and pay mean I add knows what's this there maybe that of for other interesting industry sorry are may. Walmart cash, I Chris, I line. go and I think buy right? more milk to And loyalty I But want providers, I I there. thinking on the if people the was

But more the have seems that right? the payment, the you if to pretty necessarily, POS have in you and in certain And you in to me right? providers, at disadvantage lot guys you than keying ID about way. mean? much wonder everything that your the They data Do have on dispensary I the a when a I it loyalty point-of-sale I all Here and that follow puts information. a think terminal what

Chris Beals

worth set IDs. with to broader actually we're Yes, not Enlighten personalization collect orders would that the we're looking consumers things ID POSs also did, system focused in And the transacting, a are that who actually in things do budtenders what at our of it It's that starting our to step say noting recommend what store. people is with one authentication. data transacting, that verification and into POSs check-in doing purchase the of information on opposite to turn we No. that engine people our Yes. I one we for very and we and take and potentially that in the the also guys acquisition to compliantly who we get on powering that come see are talking about from of is in and partner

sort into physical and that So, start at I'd than say injecting two we more they two, a presence generally of to broader do; things; I data much think is the one have set stores. we're about data of

Pablo Zuanic

it. Got you. Thank

Operator

comes of ahead. from you. go Hynes from show the Canaccord. Please Thank next our David line I question

Luke Morison

This Luke on for question. DJ. guys. Thanks Hey for the is taking

area So, where the you or maybe quarter. to mentioned were surprised things see was in in materialize your an areas other quite Could alternatively didn't had of expand surprise upside you the how just ARPU Arden, contextualize hoped? you -- you or growth

Arden Lee

Yes sure.

I'd we so of upside QX. margin I'd we for what other that planning -- So, mature no in kind guide quicker go growth that were client, to on new we positive say lastly on. particular than And our client showed we revenue just relative regions say scaling what saw mentioned our in for upside some baking per of on some of, informed then also incremental on expected. areas markets California the solutions order versus in our more in to specifically and original QX, we were our new emerging that

more I'd So, a forecast Ad WM taking these it's a the what our long a and in incremental some of, kind talked client; step there was in whether bit solutions there assumptions and we're then of of California, our more calling solutions, new which in per bit the last our regions around the we specifically, some about SaaS regions; on made multichannel acquisition; So, kind balanced that outlook media little Sprout our we emerging was quarter. revenue that back, of is kind and story say offering short, regions, growth mature Cannveya, more pretty newer of Network client margin on our -- on specifically across

Luke Morison

helpful. freemium create Excellent, And guys the you? then can that's just you you're that just sort you for considering of expand opportunities mentioned on and might maybe the

Chris Beals

Sorry, premium repeat offering? can that again the you

Luke Morison

that the with I Freemium Enlighten, think mentioned. you

Chris Beals

Freemium, yes.

to and piece an able that one sort for a then there's hungry they're of are initial the that, or effect things. and where sort free usage one looking stickier of the kind strategy out of sort using But is more it's is basically of change to blossoming other they where for of using --. sort software likely to free we're be contract increasingly this incremental or is effectively a the and sort strategy period -- we've the of employing and see a we're basically or other then up-sells So, the are period, business for on up-sells where in is use it platform likely are use costing of that we this and there's to pay platform pieces, doing base sort structure of looking and longer-term really tolling-based what of value given with clients strategy started employed

us sort space in also this I penetration, desire a versus about by the is. what that think, one incremental if fee rethinking reflects increasing of of based but CRM natural a penetration. And strong SaaS ROI is is, example the I at campaign you growing look high for fee think this recurring the

Luke Morison

Thank Great. you.

Operator

Fortune comes question from Partners. last ROTH Scott our show go I’ll from Please ahead. Capital

Unidentified Analyst

you what unpack asked, Hey, surprise you've for overall been mentioned little and an cut got and Nick growth what But just you it earlier specifically? others. in upside market could Thank you. on has the got a you think in that contributed in I California, And but off of this I question Scott. I apologize if in California quarter specifically to your outlook mix saw just terms than

Arden Lee

Yes.

on market. mix California, was our So, drove margin, we've them it I net talked we're that long. in so from as our more certain outlook clients ROAS it's conversation on instance, the relative delivering their on channels per acute the before we mentioned of win that we can think, QX. When a have that, the for solutions wallet all revisiting of of before. We and there's greater get that as I we're platform are returns And gross conversation mentioning continues spend showcase to straightforward Listen, beneficiary that -- what in to everything reallocating bit assumptions mentioned to and working. saw that In growth our to for across California own focus share a client, I this spend, be a that the and day we clients, before, respects.

license in to fair get share our issuance that are or coming to everyone continue expect modest continues growing We we that to for, the new the at pace of think market. not hoping California. I within is licenses but expecting continue out be There

delivering really that mix as kind beat our we're value to they vendors. of across spend to continue their We clients, the revisit drum of the around look for

solutions more Chris to. we're to have as market bringing We that spoke

features is the delivery of them clients. heavy very And and spot will for market. getting in to very so as with the as rough market, And much a we we've that. expect the this still exciting We have folks some of industry through work growth clients know done a turns lot delivery that California new it's specifically pay corner, terms a

Chris Beals

we're in are noting we're worth start for think really it's structurally, our in are in been solution of cannabis I be business, do and fitting can that And state nimble I it people is seeing products smaller we'll well going -- nimbly people educate solution, traditionally better marketplace we and solutions, with deals out our think, the see see not and That's in We're will piloting they our retailers engine bellwether store stronger putting to Not looking towards We're more in have and attacking with WM footprints. those and that think, in is set on competition with in find of store to which so We're to in-store other of with front end the other has in price with done that. more attacking trying much and POS. places to with trends integrations towards with the adopting we're features SKUs the others. and products. California We're that it we're A we're terms be delivery and recommendation some improving seeing who -- really -- an eyes. our a what e-com that and need recommend ways a attacking to California not Enlighten how California, recommendations failing the I the in something movement ability ordering kiosk as in where that ability a Cannveya well engine a with in that the brands of same compare budtender attacking embed. switch with appear trends delivery. retailers and who increase direct states. have seeing as delivery orders The the strategy, realizing embrace to brand cases pricing.

is California interesting for benefit in the drive operate we're seeing emerge and how in terms I profitability provide to think these retailers from we move that I seeing interesting thing other increasingly think and over the the we trends so the brands that states. some we're retailers, and of solutions And

Unidentified Analyst

then you there other color. there, still looking with onboarding And time clients Are have Got just comfortable mentioned With in to underway accelerate I New your Jersey place? around you Thank I of East. about sales rec one you may, to your you. lines with it. XX% states that cadence if are follow. or the you appreciate here, investment potentially

Chris Beals

us So evidenced we this reaffirming for lot positive guidance. EBITDA our of by have generally front-loaded as investments a year our

think so -- the And and been the in building of there of, time the of some terms that's pacing relationship a now. the, I sort for frankly works lot for -- in

with groups schedule of number there. working the a say on and track out So we're I closely there. We're would on

New there's sufficient recreational to XX amount that in because I is medical they think the of thing watch constraint there's is increase. for conducting well side. sure to currently number the the thing required should make supply retailers fair other those interesting are a Jersey about But sales retailers have greatly supply

supply how so actually a It's market is functioning. recreational it's say And nascent. very right and I'd now from

Unidentified Analyst

Got it. I appreciate the color.

Operator

session and Q&A for conference today's you Thank you. Thank That participating. call. concludes the all

You may all disconnect.

ProStar (MAPPF) 9 May 222022 Q1 Earnings call transcript