LFLY - Earnings call transcript Q1 2024

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Operator

Good afternoon. Thank you for attending the Leafly Q1 2024 Earnings Call. My name is Matt, and I'll be your moderator for today's call. [Operator Instructions] I would now like to pass the conference over to our host, Josh with Leafly. Josh, please go ahead.

Josh deBerge

to XXXX welcome Call. and afternoon, Leafly's Earnings QX Good

of CEO, call and the as Reform have Joining call can will copy are at the of statements, pursuant our are found been press Yoko of on Act amended. be A contain remarks me on provisions investor.leafly.com. Today's prepared Litigation to today XXXX the Miyashita; Private website harbor release Securities Krishnaswamy. Today's CFO, recorded. which forward-looking our made Suresh safe

reflect the regarding which and statements future relied include as offered not strategies, by to metrics, such in date, any statements Forward-looking anticipate, financial only, potential can should projected update as markets today upon the and services our undertake by statements. views at words focus, and as Leafly believe, we These intend, plan, performance any be outlook Leafly, identified results of duty and Leafly's these our business expect, operates, be growth seek representing views industry or not subsequent do statements will. environment, opportunities

on not Forward-looking place address expectations, are and risks and to materially cause matters caution to that statements, could we you nature, subject uncertainties actual reliance from that undue results their such by statements. differ to

with release, the press other SEC. SEC our results, could on affect XXXX with please other the For report material our the risks periodic a today's and important our annual discussion Form actual discussed April risks refer of and factors filed XX-K in filings that X, to XXXX, on the

the pre-submitted the been turn at on is that, questions over answer SEC the few a our to website has the let which accordance principles. press in non-GAAP in we results which available of call, not measures, A GAAP me end at with prepared call release, call. With is non-GAAP accepted the earnings also Yoko. investor.leafly.com. included generally discuss accounting We'll our this and with financial also During will filed reconciliation and of are

Yoko Miyashita

value our Good afternoon. our to for delivery to enhancing Leafly in ensuring profitability, efficiency our commitment operational customers. remains steadfast on sustained path while

strengthening business offered as to also At we of a have efforts customer the full nurturing time, tools acquisition, the strengthen of Leafly believe on been with and concentrated on same customers, network Our platform. increasing our customers. relationships our our which spectrum empowers through them leverage our resilience to the retail and designed efforts regrow we're

in the revenue line guidance quarter $X Our first in million. was with at

million, a guidance, our and cash Our EBITDA our profitability. of reflects ahead net finished path which to $X.X building on focus loss was and adjusted continued

we in to year. QX made collection mentioned, prioritized in and believe due peak tough payment such and effective reactivate a to current customers of we past and a terms previously and efforts reactivation the underperforming nonpaying decision We nonpaying payment last come we have of after As continue is enforcing by retailers removing as process metrics our encouraged on platform. are and that reaching amounts

end of our marking ending retail of turn the decline quarter, As work had reduction delinquencies, retail focusing through the the sequentially. is to quarter-over-quarter with believe a first decline we're moderating working accounts what a on acquisitions. X,XXX by in the worst X.X% around and accounts, retail we challenges reflecting in the we accounts At Leafly

and on acquisition opportunities. key we noted board recently market managers, enhancing markets our new and we managers in new pursuing in X are earnings, penetration market who new As year-end brought on focused X intensely

retail the markets accounts we into size regardless of we of enhanced managers and are any to their retail portfolio managers armed or now point market a allows that Our with product should us ending believe price to the This growth in the to customer continue XXXX. Retail acquisition move at ramp. the which right as right sequentially price, result customer scale. product pitch product includes right for an deeper

retail We creates growing to which prospective emphasize supply improves and and to investments cycle. win back will increase renewed that a of Increased virtuous in customers experience, hunting consumer accounts continue ultimately shopping combining and penetration. existing with protecting also the

of demonstrating that to efforts the us proposition we and value retail demonstrate enhance these partners how experience. value power retailer is commitment effectively of we on consumer clientele, and ongoing to communicate retail of our our the friction to and improving focused require All our communicating and reduce platform story. Part tell to by our

promo shoppers. improvements way across Over another functionality, we with a attention introduced our of attract the quarter, price-conscious including provides which code the of yet range platform, to retailers the

introduce value we drive believe for redesigned greater and our for our and customer experience, helps listings needs. reflecting also our our their customer on that customers our meet chat better support paying information-only customers' live satisfaction We to focus enhancing retailers,

sorting consumers agreed ending step the the in a prohibition Act. DEA cannabis should We our of within the retailer Schedule volume of that revamp a diversity to now be into also improved X easier under the making Controlled menu and deals augmenting Substances and with deal of including our visibility forward goal retailers we the optimized. offering. Last deals III made deals in are bids our Previously, to marketplace. functionality the our SEO new witnessed historic to more formally the introduction them of Schedule types, we week, moved give when from mentioned We've deals U.S. changes engine,

the in content that platform Europe, have on in is and invest in drive advocates, legal use. actually hope more to looking an free legalization European and offer observers be adult went addictive legalize informed cannabis and proposition for research cannabis classification They strong with by in Leafly's We and up in acknowledgment fewer on powerhouse a base cannabis the globally of of the the what investments trigger our Union. New played potential international potential the value cash April. full that XXX [ scope rule-making this commentators does Germany potential the educate education ] will we attract cannabis. new gap Along of relief actions currently us policy to It an we ruling a worldwide. market first the And consumption industry, effect favor momentum services their for the medical that retailers upside. On believe in licensees. steady voters the state, economic businesses, assigned across operators licenses of have the following DEA's not in our that Germany drugs renewed of mean in solves of from all Florida today. acknowledgment also exists. moments celebrate for this all contribute advocates the maximize and harmful can Paired will collection to the to normalization will that consumers formalize ensuing and cannabis issuance pushing necessary role While including now plant. Along court speculate accessible have with these believe believe for should recent with making what we restrictions to to circulation most positive pivotal to and the is the and new cannabis in change, providing celebrate of a that with scale, we with our and whether meaningful a an warrant recreational retail formal consumers pathway industry time the of a celebrated to November the we for into the Germany's the is many will actions to allow decide process marketing rescheduling, and we rollout York, to this a Leafly for propel for

cater continues industry upward turn connections with the over platform providing to to remain in its them leveraging As to our consumers brands. I'll steadfast it Suresh. trajectory, discerning local and premium with while trusted to commitment high-value our retailers content robust we now facilitating

Suresh Krishnaswamy

$X.X we Yoko, sequential was accounts everyone. In from pace platform. removals revenue of reported The decline reasons. million. million, accounts and the there by removal At quarter. revenue down nonpaying the we in total X.X% churn the retail the of driven remains Retail was you, same moderating. and of a from decline level million, time, QX our welcome, the Thank and ending and down revenue some brand of end revenue QX, to the At these year-over-year primarily $X sequentially. was of accounts as continued of end budget platform. $X.X XX.X% in which XXX quarter, is year-over-year business the first decline to nonpaying account X,XXX, This totaled again the continue compared The accounts fourth due out anticipated of was retail of remove to was

focused sales that retail heads spoke added our are adding reinforces our we stabilizing ending As commitment accounts, to to accounts. which on new Yoko earlier,

Our about X% ARPA first XX% up quarter up year-over-year for sequentially. $XXX, was the and

million, $X.X expect and small out we revenue onwards As quarter the Brand from are year-over-year expected, was leveling first QX revenue of stabilizing, XX% ARPA our slowly following declines in retail decline is accounts. year-over-year. Brand the nonpaying removal down flatten. and

declines, including introduce to brand seek Longer we've our As quarter their is subscription relationship basic term, margin of back lower-priced XX% the digital part the QX part hard XXXX. to of to improved revamped business of our effort, more platform, we're compared into we offering, offering we provide. a our growth. Gross the Leafly deepen The first value extend with to to in spend and brands tier. this goal proposition the to new [indiscernible] working in to of brands, this advertising, year-over-year XX.X% return

anticipate maintaining these an margin We asset-light continue operate and attractive to model levels.

totaled $X.X XX% OpEx million, year-over-year. down to expenses. Moving In operating QX,

continue our We to for to reduce spend. costs and of mindful ways look be

comp excluding QX. expect QX, similar our OpEx to at stock-based be Looking to we to levels

million, net the Our $X.X in 'XX. net QX million QX loss $X.X an from was loss in reported improvement

was $X.X reported improvement QX 'XX. an in in negative QX $X.X million, negative from EBITDA adjusted Our the million

We work continue long-term profitability. operating towards to

our I'd was collections to of debt. and year like an XXXX. X.X% our turning Before improvement the bad X.X%, balance over percentage bad on an debt sheet, revenue the provide as average In to update for QX, full the a

the we and focused and ahead, we're improvements. further managing this tighter maintaining committed to implemented are year proactively last on Looking processes

the around in ended Now $X.X million. restricted to with cash. We cash, QX burn be sheet. cash to our the excluding expecting million $XX.X quarter We're balance in

XXXX in now notes have discussed our current As we January quarter, last and a million become liability. are XX.X convertible due of

and announced lender worked we dialogue Earlier will today, Resolving position principal portion not with these available our ongoing we and the to our notes in lender. company, our the when a additional an due. repay with have outstanding are of equity. we the week, funds to is we that converted priority this key for Given this

related the in forward December. recall, do we some this we transaction into entered similar look year, when may lender expenses as through we from providing You to anticipate the additional additional updates a with appropriate. and matter debt refinancing to our We move

XXX-day the on provide early that April meet our capital not in We notification NASDAQ is submit requirements Another compliance want for update and continued an NASDAQ on listing currently request a as item plan from to do I a the NASDAQ when received We extension to expected, to on listing. more is we market. to give plan At with requirements, stock the and time, be we this us by to provide market, this information we'll applicable time listing traded compliance the our listed on and continues May regain capital have share. to XXth. updates due which

guidance. Now to our

QX the adjusted the is expect and a up focused enhancements investing EBITDA Yoko. around our running to optimizing the The approximately loss team Leaflet of success. I'll aim business turn returning in lean growth. we at sales sheet, entire call an to million product our We're business also For setting for in the now and balance 'XX, and revenue line company long-term million. top and of $X.X of focused on back $X.X cash team improving on negative with

Yoko Miyashita

Thanks, Suresh.

to while that We're and joined Lee, new he'll with deepening President to who in investors a this the with Chief to will monetization formally questions move the for have customers. We're to and Peter. Josh that everyone as more week received here role full-time Leafly calls. our where we to we're Peter our Officer. been capacity, to Leafly excited lead future corporate submitted, operations him introduce Q&A, development, and to like focusing addressing introducing have about call. forward Peter welcoming he looking excited Before Peter relationships a questions prior efforts, now Welcome, Operating I'd to as in also active on us takes

Josh deBerge

Thanks, Yoko.

the impact received we industry? cannabis and this does of the First, question. How rescheduling the business

Yoko Miyashita

for question. the Thanks

making benefit been I little here our few so scheduling for go exciting because comments, incredibly result the retailers to why we brands an talked from as have be in to for $X the industry and tax That's have for weekly. research educational X. been is range they'll for of but from So capital content difficult operating of that and to a their Leafly the for result as XXXE investments earlier The industry the tax can source constrained. includes growth those couldn't the opportunity businesses, to billion has cash in serve. for in estimated environment that savings increase billion. $X been that expect of about operators rescheduling preeminent the consumers. from be Schedule And excitement to so X benefits engagement. are a in around and marketing this and deeper necessary excited rescheduling, from last Those years of my reinvested that about consumer want more information a We from savings Schedule And we the we

Josh deBerge

Thanks, Yoko.

update convertible we you provide question on received is, can an second The the note?

Yoko Miyashita

this over hand to Face love Peter. of question, the one I'd to

Unknown Executive

you, Thank Yoko.

place lender role the ago. in organization. our to with for than capital X is originally Leafly's with an Solving put my part of note worked I more years convertible the needs important

tackle opportunity As deleverage part debt this working convert shareholder forward to our debt the the to X of to many opportunities with to potential at took a to maximize with the resolving the us. advisers and lender work and moment equity, look that full Suresh opportunities ahead. separate noted, a priority value challenges well with working a as an the with range for to management outstanding as transactions explore to we other I small remains of and have team this

options potential tailwinds good look time it rescheduling, Given at of all is anticipated our the a to believe we from now.

Josh deBerge

can our answer. our acquisition? you talk last Suresh retail which about is then new account question customer about Can accounts, and churn And

Suresh Krishnaswamy

or end see bad business. to pace this trim we can Sure, Josh. business, due their stable nonpayment a expense in to in include ability lower at the to coming the platform teams product related We introduce we've fee turn of debt as price their our levels platform due the of peak half with with that QX believe believe accounts suite off points. both of [Indiscernible] also that of out reached accounts budget broadened normal customers And customers the last going course sales our count to XXXX. of added retain need to second to year. now that prices We for we broader delinquent budgets reasons new portfolio, that of In work pay. align accounts as well and to our may we

still reporting of in down goal on Now on both accounts, trend new in we're a focused ending year. net mitigating retail basis, half winning second we're with and declines churn but business the the the of the reversing

Yoko Miyashita

the That's our your to and Leafly. operations looking support keeping of it want appreciate I We updated progress. to thank time on for all of forward questions. are today interest continued and you your and for you

Operator

for your the concludes That call. conference you participation. Thank

You may lines. your now disconnect

Leafly (LFLY) 9 May 242024 Q1 Earnings call transcript