WTRH - Earnings call transcript Q2 2019

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Operator

Greetings, and welcome to the Waitr Holdings Second Quarter Earnings Conference Call. This conference call will include forward-looking statements within the meaning of the securities law. These forward-looking statements will include things about the company's strategic priorities and certain statements of expectation and plans.

Forward-looking statements are subject to risks and uncertainties that could cause our results to differ materially from the forward-looking statements that are contained in our company's filings with the SEC, including the Risk Factors section in our Form 10-K. The company does not assume any obligation to publicly release any revisions to the forward-looking statements discussed during the call.

that call help refer performance understand supplement financial this financial certain and on accordance the to in measures the results addition, we to will non-GAAP to with In GAAP. provide we company's financial investors.waitrapp.com. the these Waitr earlier provided most to be today GAAP in and of comparable website, filed release on financial our measures can The company earnings reconciliation Investors with non-GAAP the has counterparts a at section their of directly the found SEC

call Meaux, and Adam Yurecko, Chris today's Price, Chief Waitr's Officer. Board; Hosting of the is Chairman Financial Executive Jeff Officer; Chief

now turn Mr. would conference Meaux. over I to like to ahead. Please go the

Chris Meaux

evening, everyone. Good

time. this much and we have After have company started orders, I XXXX, processed imagined approximately I XX we never customers cities in how accomplish XX,XXX XXX million in over could than employees. short five When would served grown years, in a more to such

I me strategy is of that forward, the long-term Board. the as moving as confidence and on leadership Officer resign Executive to the right have focus Now, allow Chairman to here Chief

millions efficiency. other Logistics, unit platforms, a deliver profitable logistics know of from restaurants around announced order the since markets New of Many XX. already of founder and Officer a Homer platform this delivery U.S. employee has economics with and City June Price key to Chief we Logistics food on team you the Operating on on Adam that to of enabled promotion Adam a was a been from our of thousands York executive Chief part focus of used drivers and in Officer year February third-party Homer of

unparalleled since He to pull has physics energy momentum created infectious industry in for and brings the an levers he company about great and growth the our of has profitability. the knows that joined. knowledge Adam

and tell recap CEO happy quarter Waitr. you hand at Adam into opportunity we to a can give high-level moving it will the so of he have to over I'm be Adam? role. the the Adam about

Adam Price

Chris, you, Thank everyone. and good evening,

Waitr, review and thoughts with recent close differentiates be guidance. then our QX and financial Jeff results, what on update will initiatives. I'll an discussing then I discussion will our

stems of Let's of landscape over Benefiting markets start unique medium-sized been advantage, relationship-based I small- last Waitr and marketplace, delivery the the over from evolution time. by to approach the competitors. aggressively our opposed believe months. from transactional-based a approach success firmly food growing XX to a the the Waitr that the recent as and history first-mover noting more three-sided has by a in

are are right ones, by long-term partners a create need decades. extension business. hospitality-centric food approach to to have that has steps up Waitr same successful for to especially foundation. as set our hospitality to taken The To the delivering and way and that its we is embody we of Therefore, at Restaurants, space. the deliver value best, a win, natural successful

There each are and restaurants, three main these with long-term of lasting, stakeholders is differentiation. system: in customers. drivers our relationships Building our

our all supply on are based contracts. amazing have We independent an signed and of of restaurants, partnerships

we because and training, workforce invest a continuous driver have We in engagement. W-X professional, benefits

We part because communities have loyal of support. base are local customer we we a the

each successful an does into that customer care owner with are take and We to. someone establishment restaurant the deliver we independent their because coming we with same every

off have peers to smaller majority most engagement us allows all who markets. This of in in of of This relationship-based established a long-term our competitive approach pressures our the stakeholders. the share. commanding significantly about our market is paid better Our lead face has than also

X% that penetration. We is consumer currently has also that delivery to This need its remember in food industry infancy. approximately is an

of access the of and Consumers it's the the changing food, just the where experience. midst in an they hospitality are evolution are people beginning. partners, experiencing the way in We are not restaurant

XX and the We data. the technology space that translating success experience, complemented only the space company the meaningful of has with last delivery into that approach, and restaurant in for exemplified taking a hospitality-focused are years, is one this this a

I new advantage foundation of in excitement a the XX have role is improvement months. approach, the opportunities in XX company the in be belief this the result over next direct looking we'll of in business and the The operational growth to my stable of front X, and sitting my take that of

dig But recap before QX. into I these, let's

restaurant Flats, the Subway, door among First, including We partnerships major will Zone that agreements and Church's, we solidified Tijuana others. future partnership signed selection. to open chains, rapidly improved Popeyes, with Wing

integration. a partnership we customers X, to us additional our markets, point-of-sale expose of to new on but thousands will On not previously not with for our integration platform. restaurants our Olo activated Point-of-sale seen brands August access only allow in

addition Profitability. strides to in revenue we've made Towards establishing Second, in Path accomplishment, significant our

re-engineered to us bottom-line positions processes cost that During million our people. flows in will and some impact filled. work of as list staff which QX, $X in several we To allowed completed offset better will and streamline reduce that by are and/or XXX annual some examples, in will initiatives savings, This allocate we approximately operation. open June G&A deliver investments be

be We identified inefficiencies levels for at $X reallocated customers critical to annually approximately driver also subsidies. times. million how inefficiencies and in These deploying our increase are we totaled demand will service

Bite our of Austin, single Squad quarter, dominating were a not medium-sized cities small- meet into Las core that X markets of fully including million. expected and which did with $X acquisition markets both approximately Nevada, legacy after brand, closed, Certain migrated annual were the also Texas. the strategy and Over platforms included savings Vegas,

in acquisition off is highlight paid to of Bite win last ways. numerous Squad has the that The

leadership multiple market of and clearly able X; share the a getting to as of you learned, in been lessons the talent but new key of into acquisition and equal on multiplier does scale. it's positions that get to the and addition great areas effect, organization. instead, best practices business Waitr The have tools X+X We not and showed systems benefits

Let's the move on we challenges face. to

of Waitr platforms. and Squad the integration distracted became we seasonality, heavy Beyond in Bite a complex effort

this took it necessary team's on initiatives. delayed key our growth process, and eyes off metrics While certain revenue a

marketing our And This CAC in a acquisition real-time the our of new Regarding uptick is did target believe in quarter. shortfalls factor many slower-than-anticipated our contributing competitors performance with we customer markets. strategy. growth, levels this we our above from during spend growth in driving led not coincided in a catch noticeable and to

As a eye been monitoring closely efficacy each the real-time with result, ratio. a our marketing we our have campaigns, LTV-to-CAC more of on of

initiatives, delayed we the expectations and until planned rest QX our it the to the This revenue out for roll was QX. year. master services QX, in revenue an on to the of but Regarding platform our unfortunately during restaurants adjusted agreement initially Waitr impacted

specifically delivery, move I'll forward need early our recent initiatives. confident by I'm Because competitive go to our on Now with why strategy. adjust in a These changes entire nimble are and internal the of path win. food of head-to-head take competitors adapted highly for and with days in to our expansion team adapting strategies. our be to gloves market, have eager we the I been the and the is to highlighting teams working off

a of the ROI new are successfully expansions tactics. on to to of half XXXX slowing As these and we focus second cities executing in result changes,

are these majority update pricing results. have our the the the about X. I'll a to of platform services program, first affected restaurants we as industry, This Next, restaurants which Waitr-branded Waitr's August a to The and agreement. on immediate performance-based seen change in move talk of master changes, positive

partners. increasing delivery In partnership as not are restaurants for commission This industry's one maintains a rewarded, of of the also spirit the true lowest move model, volumes. punished, delivery position Waitr's

of to addition on new and retention the In MSA working goals we updates, are and user our actively base. the loyalty improving

our a to power that newer this For competitive face space The is cohorts user create of longevity many even have with in we the older as a in demonstrates challenge competition. increased users, of well. base loyalty

for on Waitr seen rolling have with retention and very out similar program, we be We brand. membership positive a program results Bite Squad's user the will

We have new our helps user strengthen both keeping our also customers maintain other and all us with cohorts, old. programs and engaged of loyalty incentives that and seen

a loyalty Waitr program well are features We brand. loyalty used Squad the as across platform upgrading Bite the as the on implementing being

These XXXX. for position the just the product on initiatives drive to is help exciting are exciting items us that growth working and year some an of team this

Moving operations on are improve supply delivery several there demand and and our our delivering any The to side repeatable properly operations place initiatives of to bottom taking consistent, line. a business, currently of experience to platform customer. matching the are about the

hourly is running wage in Properly whether and model. fixed are Waitr's matching pays critical Waitr's driver W-X Path Waitr of they not. supply a drivers because or deliveries demand Profitability Towards

During optimization. science and analytics we the our time series are These quarter, expertise of added to experts the team. past in forecasting and scheduling significant areas data

impacts scheduling efficiency. to all market August, of and will As handle we immediate demand of and drivers, this expect forecasting team driver

tenets Coupled space These the leads for and customer driver of and of in deliveries customer combination with the by a a and efficiency this experience in characterized reliability at consistency routing the given percentage on-shift scheduling, consumers. can arrives of driver that to time. be are

differentiator is lower a affecting our profitability. largest the hour the a each we the P&L, pay is a related lever is is most therefore, factor to can driver Since in is us item our makes an primary per hour, efficiency and average Driver hour, unique cost Driver This line efficiency in the delivery. per deliveries between inversely labor cost. and and on per-delivery our our they accomplish driver more drivers deliveries competitors.

buildings the over larger we building. experience running of millions compared current customers platforms, improvement limited two-story York like small- With markets, opportunity office City in on short changes both areas, than see for drive in to because quarters. a can time. routing driver coming to hand-off my increase our feel in planned With medium-sized faster New the of to or markets, people significant much XX-story I'm deliveries are and on and the the driver to we significantly efficiency method confident current excited Based in one- often places traffic time other to is and congestion times drive in

In of summary, I want challenges the to behind both in front and us. acknowledge

customers. some capital significant and and a questionably in We win where competitive are are to investing share market sustainable space new

space However, success and requires hospitality. on focus a longevity in this

For partnership model requires it increasing time. restaurant that value strong brings a the over

the reliable a first user. customer consistent the but experience as it customer the life-long a only and not requires retains order For that gets

of practices driver to their XXX% it them environment, a great wages labor predictable tip. providing the and keep For allow working fair that requires

So growth XX X, about Waitr and the I'm the months. position the over front-runner I has our markets see in can really clearly excited XX next and

so turn financial like Jeff I would he detail. more over the our QX now can discuss to in call to results

Jeff Yurecko

Thank you, Adam.

Now increased or results. revenue $XX.X XXX%, $XX.X our from $XX.X increased forma quarter million. pro million On Revenue million, to basis on a second year-over-year. to year-over-year XX%

seasonal the mainly Adam business slightly additional Squad, initiative, delayed due during becoming increased as effects of pronounced time that our rollout and to discussed, markets. activity of integrate QX, more needed our of are Growth in to revenue planned the our competitive slowed Bite some

Diners Average Squad Orders increase were year-over-year, organic acquisition Active to diners, more [sic] Daily of XXX% million an than grew X.X year-over-year XXX% both of Bite driven XX,XXX, strong by the a mines growth. and

$XXX for Average Sales second XXX%, X%. quarter year-over-year increase the Size approximately million, or $XXX.X increased of Food a Order with Gross slight to million,

Operations order increase in $XX.X and support increased in quarter, by expenses million, the to significant million volume. driven $XX.X a

Our the ground are operations local support cost processing, cost primarily fulfillment market the and comprised costs, support delivery such variable drivers, of our our credit of costs order card as of team. and customer

of significant margin change basis, from to scale. expenses, primarily be inefficient slight adds costs market markets was defined XXXX, activity or $X.XX, as revenue new by in less $X.XX, in-market operations as and On the decline a in year. delivery XX% of support market and each early gross XX% approximately an the prior during fixed or new The was profit, revenue, tends revenue, as driven dedicated months order

quarter marketing expenses by expanding sequentially versus the our awareness in well driven in diner increased increased acquisition of restaurant markets the quarter million, penetration investment as across Sales or full Bite first $X all Squad, as increase brand inclusion in and strategic second efforts and quarter, footprint. XX%, by the to

spend media second which that costs increased the with did marketing in campaigns $X.X of increase increased spend. the competitive due to first produce acquisition compared the million, to Customer result, related combined new to intended certain a quarter not

CAC remained healthy While overall CAC range. channels a increased, performance within our marketing within core

to monitoring As given improved our continue Adam in aggressively. place can mentioned, real-time we invest now

the cost restaurant our our million for sales continually of increased variety $X diners. due to addition to our objective marketing, improving long-term almost team In of

or Bite million, the $X.X primarily Research and due engineering of expenses the development and to increased build-out XXX%, team Squad team. inclusion the of year-over-year, engineering ongoing the

product initiatives short We increase engineering and key members expect accelerate in and add as spend to product we the our to team. R&D relatively term

General $X and growth. forma to administrative G&A impact the and the continued second XX%, to removing by the first approximately one-time by a of expenses items on overhead increased increased From million $X.X year-over-year, driven quarter, quarter primarily million, compensation, support or decreased basis. equity pro corporate

amortization of the the from Squad quarter, in and from Depreciation the result amortization as intangible Bite $X.X $XXX,XXX second merger. million assets a last the year, quarter second increased in primarily of

Net the a of loss quarter or share, $X.XX second million to year. last quarter loss loss $XX.X second of per from loss, a compared the $X.X in share, a or $X.XX was per million,

EBITDA. Second of quarter net loss noncash expenses our included considered $X.X adjusted million compensation stock within

the a heavily second million the XXXX, to growth quarter of the loss in $XX.X to the loss, invest in Adjusted quarter infrastructure. a was for $X.X continues EBITDA second and company as supporting compared million

and pursue and strengthen investments to rapidly grow Bite team integrate Squad, infrastructure and We us bolster to into allow beyond. continue to XXXX for growth, to and foundation our and our optimize strategic efficiently

already management to Path Profitability business drive towards initiative aggressively Adam, to the improvements to moving efficiencies profitability. our will by to continued that clearly demonstrated business as demonstrate commitment our in continue identify discussed our Simultaneously, and

of public of $XX.X our May Waitr's follow-on million offering or in per announced our public the a $XX of the of balance million, common resulting price to sheet. $X.XX XXXX, of at shares stock share, proceeds to net On gross XX, we closing X,XXX,XXX

As XX, primarily $XX.X of XXXX, on of market and cash cash money hand deposits. had million, June consisting we of

of of debt $XX also term $XXX.X long-term of had $XX approximately million outstanding notes. We million, total and loans of million consisting

we XXXX, of shares XX, stock million of common XX.X June had outstanding. As

Now I'll to we up take over questions. call wrap Adam? before the back to turn Adam

Adam Price

Thank you, Jeff.

revenue lowering $XXX $XXX business full we and recent to of on Given that to revenue the our initiatives, a the the million earlier year in challenges the discussed I range of are guidance call timing million. implementing

our the to to is we for quarter-over-quarter reduction revenue rest a see the of this guidance, While expect growth year. previous

dominant consolidation expressed opportunities disclosure advisers' board publicly interest recent while strategic important do intend position of Evercore of or the advise continuing have It's to not market as is the have we we appropriate. otherwise approved we a that note a the company and Considering the in continued execute of on work further or specific that developments our is and in plan. action engaged result discuss disclose business to course Jefferies has industry, unless our to management and to observed on until our further determined focused us

about the opportunities lie excited remain ahead. that We

We path lead continue necessary our team, to will and strengthen as pivot profitability to and Waitr down clear growth. a

to open We Operator ask questions. now the lines the for

Operator

we this Instructions]. question-and-answer At you. Thank be conducting time, a will session. [Operator

Thank from our your of Craig-Hallum line Capital. with the proceed question you. first Fuhrman, Alex Please comes question. And with

Alex Fuhrman

CEO to promotion your on congratulations the Adam, role.

Adam Price

Thank you.

Alex Fuhrman

a those new it's had have like the that you on Wanted some that by last and the just looks restaurants serve to if you currently of significant Waitr how the It platform. terms rolled to articles ask out local about restaurants Curious you been there's received impact may some restaurants. number media have restaurants higher been that week. on fees lost

Adam Price

elaborate Happy Absolutely. to that. on

to saying support I'll in higher a delivery by what rolled start to out, that higher properly our of out running only continuing partnership and structure deliveries that volumes the that in It's earlier, we reiterate incentives a the talked we structure So is there industry. us about aligns restaurant. first with restaurant's -- in the

of -- want of signed And say out time it to the and Jeff, do this to took up clearly that, the roll correct way, so that rolled can -- and say I restaurants sorry. you in over? a take do strategy we have we and majority are lot the happily

Jeff Yurecko

Sure.

think, X, the you're update I on and into have if may at you that our offline, fully Alex, looking noticed So expected on effect did August go site restaurants was went some and MSA the that side.

restaurant base So the impacted relatively about percent. of change, our small so XX% was by a

up the more the are As going vast there's back of every today restaurants of day. and majority online, affected

of a new every on about opportunities chains, of then with some talked we we announced to additionally, call on continue selection lot and add top national So that. we've day the the new partnership of

Adam Price

I'd we this about a do how don't add like and last next We To positive see anticipate week. fully the have to that. excited this where Alex. anticipate that, not to just of measurable on plays a reiterate this restaurants about gather join. all see effect loss we something rolled an to this really that restaurants, want immediate over Sorry We out But in that, the We of result, the but just impacts to days out is immediately XX it. we're week.

Alex Fuhrman

are that model, how might given And just results? these any going us, margin. about Thanks, up naturally the way to but Any not fees these terms EBITDA fees are That's for like thinking quantify have sort see guidance that that's your giving floating Okay. guys. to anything new higher of that beneficial gross or just helpful. you can you're that, to then assume we to through going obviously I'd how those impact

Jeff Yurecko

This little can bit is I of Jeff, you Sure. here. give a color.

in And it's can't we because as said, we be this a of impact, So a terms structure tiered-pricing it's week at exact. point. been the

rates, wasn't and in So to early, it's quantify. simple a very the it just step-up easy

some economics. impact to full is the more so a contribution better. and unit QX QX in a it's the on structure until we taken tiered impact conservative for can positive bit better impact But say to into during the contributions we we've even built have a with expecting guidance. now do we'll likely our We but the during to positive a quarter have expect view are revised quarter. internally when view our harder then later it I understand predict, So

we important note your year. touch back the to half Absent I that further guess question. increases, in kind of the kind expecting help sequential of It with of on these point. growth take-rate I'll are one is to other

Operator

Our of your from question proceed the Please RBC next Mark is question. Mahaney, with line with Capital.

Mark Mahaney

Great. Thanks. Two questions, please.

a it marketing on talk there you you past to of terms of adjustments the disclosed you like sort what going your like penetration shift points. as opportunity data strategy, of in you any if about are in like. or data making kind the expand would the half some And on markets? First, as on strategy well markets then plans those you of just there's maybe more markets year? multiple Could that plan sounded didn't optimize mature in suggest back bigger that you've some Lake So Charles, on that your the update penetration the numbers any points can of updates for in across marketing

Adam Price

you. Happy Thank let to the I'll do the answer. first Jeff take and one. second question

marketing of frame just was it in I terms to think QX. in So want with what I up happening

of So different and Squad completely the time different together Bite we came and teams and strategies to from And the teams that Waitr orders. get at acquire with together two system. of bringing how were system get installs those customers both leadership marketing

ended And of correct for we rolling those monitoring metrics strategies integrate to efficacy out up those the the teams while without strategies. trying really

that's not of rest the the and we getting year. those of QX our cumulative in impact And guidance in saw so the affecting the impact where really customers and for rolling

we're we really LTV-to-CAC leaning the strategies daily in in Moving forward, the our about of monitoring solely efficacy of metrics are on changes. of we're a so at second two integration two making those know holding your think changing, to And are we're focusing the distinct that is real-time looking cohesive terms and I on is that unifies a ratios. the strategy groups, that groups. that question what's we kind of up true basis as on the opposed with coming One and

want second take you Jeff, question about do the to penetration?

Jeff Yurecko

absolutely. Yes,

market really out ago of slides put that existing really couple on part penetration. and the question, some kind we heavily had your we're now mentioned of that a that months regarding focused we in So portion Mark, we penetration, second then of scripted right increasing

a a penetration. So that's and both population restaurant

over had our has discussed about average were our a X% So penetration. a market the Waitr has top market we penetration numbers XX% and

what So room and focused markets, upside on ton now. we're of on our the that's there's really a in existing

correlation Along lines, over helps of increased same time those drive restaurant and that variety direct restaurant penetration noticed we've a really penetration.

a market been driving market, combination, high in the since it that's the can. looking So we of penetration looking focus ours as and at every is possibly single at as

our a restaurants. up gone sequentially of notice You'll restaurants, over adding focus our We new costs have the going in and really restaurant in had kind that QX we're to and discussion investing up gone some time. sales continue heavy on have of in

think I employing. long-term short-term it's that it's not acquisition we're customer note to strategy; a strategy really it's that a important

of So expect some to restaurant start penetration, going benefits forward. fully our the realize to of we

Adam Price

But really loyal impacts targeted to low-hanging and that penetration on no-brainer going I'll there's our think thing that instituted. Waitr in and existing like with have. improvements it's really last fruit -- base to penetration business. I've and markets just we the we have really add really this again, product in we talked we come role a to we have other the loyalty the in about The that side hasn't on for seen operations in subscription. campaigns and the fruit see just like additions us things we there's is into script addition strong marketing product There's just customer low-hanging of And stepping these both describe drip from, classically are side initiatives didn't campaigns

Operator

Benchmark is proceed Our Kurnos, the with your from Company. with line Dan question Please question. next of

Dan Kurnos

Adam, last alternatives with reconcile strategic I over months. trying today I'm guess XX announcement to the just the what's happened

acknowledgment guys up the to are model partner an with you scale you how so, that if Are of that talked as the they're need somebody? guys given pointed W-X marketplace, you've even differentiated the documented, hadn't the least a much as available you you, have W-X out, about that you do historically in other you at And so prospects competition talk you or been differentiated challenges the and can about and sort about well most -- insulated, contract? opportunities given as a seen all that you'd versus And your to alternatives and standalone? strategic think necessarily model,

Adam Price

our question. prospects. by in the saying, incredibly Absolutely. standalone that I'll we're Thanks confident like, for start

As we loyal have foundation mentioned, an we of users. amazing

key We network sense have of not and about in the country the the our focus. fruit the markets. in hospitality those the really kind We're our W-X accelerate and around low-hanging I but differentiated, of of to with existing model some sense talked growth new positions in highly geographic necessarily, effects. And

And so reason don't with think has and exploring I business. concerns, a we have we're do about concerns to nothing the standalone having alternatives strategic

think I space of of what's the going more can't it's and in we much now, the right on awareness neglect that.

And so the business having a bandwidth to here only and do happening and team allow basis management focus comfortable the space in things Evercore to on way the we us to that with the right the on to regular are felt on to aspect the Jefferies was now. help both standalone bring

adapt I'd incredibly what growth but at space factors and to to that of the are XX with time. us the our we confident over we're the the position reiterate in So bandwidth happening the months, see need external and we're next same just front we X again doing in the and

Jeff, W-X do you that The meant that? and [Indiscernible]. want that Can repeat the of side W-X to question talk the by side W-X? of what you you question. about

Dan Kurnos

way you or looking markets. space smaller of The the the at business having your off, guys you of from I rest question attractive the be be given who is strategic might obviously, look investors sort partnership in put even model itself. acquiring that is typically interested runs think a and people might differentiated biggest --

and/or might if curious W-X thought be a else. hurdle a partner you just are was given who contracts that guys was versus you I for everybody that So

Adam Price

profitability. model That's looking pull restaurant is our user our about of the partnership the concerned cohorts. standalone our to for geographic our at a an to business, acquisition. good business, They're opinion. at on health question. base, we have When position, our looks terms and less much as The at model levers viability our with actually somebody of my us or the advantage think of related in model the operating to selection, they're nothing who has W-X W-X I the would do strictly in look

Dan Kurnos

of then Got it, helpful. ask Adam. if about just I the could trajectory. That's And sort just organic one

year guess guide you're half I we back would your If spend that the back pulling assume with marginally more sort of new in be means of you'll the profitable. and

Just looks especially about or think help like us do obviously trajectory spend a lot process? sort in tailwind. prior-launch go the since what markets the through do integration re-accelerate provide the we years, of to into it understand you XXXX does out take how of time growth Just

Adam Price

I'll start we're we're just spend. back by saying saying think I don't pulling that

I Jeff kind much how our let what just of being in with landscape. think that terms we're we're food delivery an capital I'll tell deploying more in light evolving of standpoint. strategic modeling of means a

Jeff Yurecko

Sure.

So we new attractive number market truly of there's do a believe opportunities.

see. way, but say be And opportunities focus our markets, going we're more so also we we efforts of, really good existing did to selective on that we're some going to taking advantage in much a

I opportunities. for capital- earlier pointed think And us. resource-intensive of room launching new Mark's our And markets. after there's existing we cities the market in outweighs short is in new was a the and that what some of just we question think highlighted But extremely ton you out additionally, term

So And resources cash will flow, in markets improve better with the should expansion us slowing really going profitable pace it our intent of our really being forward. our to help again, already, of the existing igniting deploy those help oftentimes definitely our markets the those existing existing markets, markets.

Operator

Our Jaffray. your Piper of next Miller, question with proceed Nicole is question. from Please the with line

Nicole Miller

that's sounds I'll so A quick far. Maybe couple pose like ones. It them upfront. just easiest of

believe quarter? half was? Could earlier. retention wondering answered you exactly that explain question and current a don't you have performance QX assumption. sequential you restaurants we impacting I the that's that this retain? results. of seasonality up. that going third we comment, And there the would is if just system what you of second what is the The don't new the be any EBITDA implied about talked year-over-year so wrong will around just to And seasonality need a is You or just to I'm fourth for base you metric said question second understand that

Adam Price

And Jeff? first, I can the take to want you Do --

Jeff Yurecko

Absolutely.

the QX. So, seasonality question, so in first

is call. we've a April, fell the one pointed March So shift, which to Easter out This on and into the to point slower Easter contributed purely I think thing typically year, it last impacts slightly which out April. April.

The always rapid outgrowing it's seasonality experiencing the in QX masked effectively, and, seasonality. because historically there, we're normal growth such business with was overall but

was now seasonality So impact of from the QX bit kind the just QX pronounced. little we're of at stage at, more to a

one a out of Gulf and always markets. This a fall. markets coming day that tend July same, X.X point impact pick over little In It generally to inherently X.X to of QX course bit the QX that slower probably months. months going slower, from things little had into up a the Coast hurricane anywhere relatively relevant little the our similar. July And of think through seasonality, tone, terms Summer QX are under a bit are shutdown also in same I it's bit seven from of days the year, weekend. to is over and

So impact have July. little on we bit definitely a of

again, was second What question the Nicole?

Adam Price

Second half EBITDA.

Jeff Yurecko

yes. Oh,

QX the of that of think The kind about and the Adam of way mentioned redundancies quarter loss call. of EBITDA our Squad some with of kind with I full peak Bite about on earlier it half was think the I Second impact is acquisition EBITDA. the a things

discussed at on QX. lot on a some we QX into things additional went end that initiatives of right and into really call we're working So the the of effect the

QX. to we our down loss come So after expect

Adam Price

retention. third Nicole, on question, your implied

because that just exact that into say is ask and release butchered change this effect don't retention, but X. on released we to there. contract add numbers first What had I went probably early. restaurant We is really response there this August I'll my You it I'll

just restaurants XXX% impossible. out sent to retention; the And have the we knew seeing have the They're right We the changes wouldn't And of result platform it that. that's seen that to what that as clear of contract majority we going on is already that impacts now. we've signed. a the positive in we're live

it's this It's have a restaurants them so to on of to really getting books process numbers a the really say, full six more before before lot we're we a of of their from the retention weeks time here and done money are back take kind why And impact with. back can going period. and come see truly their and on accountants you not in restaurants longer working these There's that platform? Waitr XX-day the taking get

affected is they remember on of contracts was couple thousand were that fairly that we just restaurants large a overall affected our And Waitr because had existing that restaurant with. the a chains just final those were weren't small primarily then subset the to here And platform comment base. This restaurants. of brand the

new the restaurant of on So out, talking we and a that set smaller when and contract the overall got that back restaurants overall you Squad. the both than about signed, Waitr the significantly Bite selection across we're impact the platform have

Operator

Please line Brent your with the from Jefferies. Thill, is of question next Our proceed question. with

Brent Thill

curious competitive some maybe alluded drill that Just as the you you what to into this change. didn't dynamics, you in to if relates the I'm it could past. see just you quarter saw

Adam Price

competitor talking here, only competitor an Absolutely. really in Thanks a we're, about for way. spending all talking one by about your saying and we're question. insustainable in arguably that's honesty, start I'll

you market taking. and now, you not about the markets being strategy growth. food, we're If the hand if That's go get a and going used just of yes, into some think out right tactics you're the free to

a team strategies. the is heavily chart And good that we really argue types make the our And quick we not to but way we've and about competitive in and tactics. a headwinds a reacting use in path I competitive I done so very of these would yes, went think against diligent job they wrong, what how impacted those quarter, that assess to just a as same forward talked were management changes

Jeff, do add that? to anything No? want you to

Brent Thill

be together? left? away Bite you feel it's one before away just the from little delay just hit we with too, How much can the just Is can integration rollout, briefly, two points, in I really talk through, maybe happened? like never long about the seamlessly exactly you a Squad. to you touch can is this that where again if will perfect, other the even bit just anticipate, real where you you're How follow-up, maybe is walk two just Jeff would And know but it And what to if more feel a seamless? like like, quarters

Adam Price

rollout, you the say mean delay When Absolutely. you agreement master services in updates?

Brent Thill

you're the just other in main was the the the the to? delay, of issue? release what There just issue? It in you delay no comment Just referring Is made that that the was rollout. was

Adam Price

That was one of them.

in a the here. very a I we space. equals a a think two be merger talking put you're thing distracting And our integration was of when quarter of theme parent resources in competitive the lot highly can of intensive of We're two the that companies.

our like things our the initiatives, quarter those resources. And being of so happened that impacted for a the require MSA those ton revenue the adjusted and guidance, out things delays rolling some on changes, of that

We markets restaurants the them in changes in navigating retention. upcoming have and that of these order regularly through the hundreds to maximize about ground to talking the people on

can't integration those like MSA when focusing resources doing getting So are alignment, be changes. instead they and on things organizational

it learned is early other affected quarter allocate was them. very So that's be about I resources and integrate the affected we of when to integrate it in right changes, in our think this this and business. And an on and to lesson smart changing our areas the environment that need areas how quickly MSA the big we to really

is a internal Jeff can that. primary here And so set time company, But like, wins. lot I we've what's our business to of, get into think just is frame the this and we've what made is of and a behind I standalone would been think up I to the objective that reiterate, headway. completed said actually that,

We -- a cost integrating not faster confident highly of model. position integrating cannot differentiated approach. at feel have the that about relationship-focused pace. We a But we at very lose our

and the we're And about that's where a of is space as so the winning playing business, timing the smarter it really integration. refocusing

Jeff Yurecko

the bit and announced synergies give some that. ties about that color together the we little of to realized and with integration, little portion, we've a And integration the talked in to and through now with right a on initiatives Profitability that Path scripted our

the to we're cetera, where at two of can et team, operating made integration of point. brands. and it's of reduction, end just of QX so, completed, with Phase one you kind the this as But think team; as point of I of So kind some kind we X one the of sign X being headcount of some changes team the

on the platforms. technical the So of things, Phase the is more aspect technology on X really

Adam Price

want running both low-hanging work That's the fruit. right. technology technology hurdle, of one into be things the we're we platforms. That's subscription, we really two we about: But can key different that ultimately, initiatives major some these on loyalty, talk last in is platform. -- They're the to feel we both competently

most. last The part other to right are the or at or services the at and at We'll move be in that make will been technology platform, most the right hurdle our company close integrated for that being we'll quarter the that two, over And the have integrated very time. make next time.

Operator

from with your Our Madhukar, last proceed question will line the Kunal be of Deutsche Bank. coming with question. Please

Kunal Madhukar

the improve, One, you with to that current should over that frame on have whichever a that burn quarter, talked confident levels. the talk with flow $XX over ability the in then to cash few cash the flow regard the million have about? million, kind we want free cash of EBITDA the Can of view talk breakeven also you I how being incredibly have. you next you And $XX and should guided the cash gets of to and it your you we profitability follow-up. flow improve And cash you to margin get survive into sheet, how saw time negative balance through the you amount cash that choose from quarters that free about that to I for should with free

Jeff Yurecko

color give on that. can little I a

long-term QX we goal really as time you towards, focused flow but what to working to that's we're objective changed did there. said, are for is we has there. although grow haven't nothing a EBITDA long-term outlined, But we grow getting lay on and So smart. and improvements. out our really expectations slides, fast frame in heavily cash supplemental That's our Internally,

working how being in disciplined So extremely but we're we're we do that. growth-oriented, on being

of in us of the we call. happy our to improve some raised consolidate. Profitability unfortunate position things we're the initiatives good portion our We've a some you laid funds We're today. areas in cash puts a other on including kind of of working obviously the reductions which to Path to and during It really some gives some the We with out sense headcount had scripted cash the quarter of spot. flows, that sort

about really plan. to feel our capital long-term that operate these to runway initiatives we good we combine You the with that and raised we have continue

are progress, future here. guiding more with the we'll going on aren't today say EBITDA the we I to profitability, While we make calls progress on we're that we outline where continue or forward, and can initiatives happy as

Adam Price

in the and dispatching and they're significant make bottom and make will biggest shift of of this of lever reiterate strides item platforms Squad on routing Waitr on to P&L. our front. I deliver on there how our it's space, how efficiency while operational the in And is can't costs. line years enough that to easy orders much a in that the they're in changes drivers driver After the Again, these just Bite being business both entrenched of line the are

Kunal Madhukar

cash with of balance but looking tough at just billion to it's sheet. with then offers And sitting that's somebody free the that compete Great. their competition, somebody food, kind $X of on

you you the of about how talked strategy evolved you how with and to So compete. food? your What compete to doing free are kind specifically

Adam Price

a we're necessarily customers of great experience I'll it Free we're That's don't brought after. you say customer compete in our than is that I'm question, actually. glad a food. going food the up. I to with different free trying think type

something on heart customer cohort. from. and that you're start really create of reliant distinctly we've attract that away to base And nonstop the low-quality that's when promotions a stayed to user You

and, the So for the types food. with agree fact yes, I I of say, growth same not I'm when competing is sure customers. free yes, would are we give there competitive it's you that out

after. to In very and there's early going would all we're customer of I restaurant stage, That's restaurant. the we're that delivery value, of a after varieties these high independent lot average and in connection, size, is user are out base the user of these markets. pop And higher the lifetime a of searching independent cohorts that markets, for going customers going say food order

of which why just have to to And billion than a strategy, growth the $X the we is free of these promotions. don't sheet the bit have necessarily the That's little balance so it's offer not on types business. different food plan

Operator

our session concludes participation. you day. Thank also for a Have concludes question-and-answer Thank and call. you. This wonderful our your

Waitr (ASAPQ) 9 Aug 192019 Q2 Earnings call transcript