Earnings call transcript Q1 2023

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Operator

Good afternoon everyone, and welcome to SpringBig's Fiscal Year 2023 First Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] As a reminder, today's call is being recorded.

I would now like to turn the conference over to your host, SpringBig's Investor Relations, Ryan Flanagan. begin. please Sir,

Ryan Flanagan

everyone, conference Hi, for our joining Thank and earnings call. QX you. thanks

on are Relations CFO. Joining CEO, call also our the me today announcement This Chairman; should access is Paul earnings everyone announcement. Founder our Jeff and Sykes, now, our Investor By on have to website. and our Harris,

of are our today, and and long-term strategies During we'll forward-looking make outlook, over predictions change this may plans, statements, These which business based comments time. call, expectations our as including statements about on goals.

Our risks actual filed XX, results in risk number could March differ materially XX-K due and factors to a with our the on of the SEC uncertainties, including XXXX. outlined

discuss as this to be website website for Also hours. operating on and context for a our well non-GAAP Investor Relations measures. non-GAAP audio on at financial its Relations substitute financial measures additional in a our webcast our GAAP website Investor our of on to reconciliation during key being will replay in is we These Please call an results. earnings be our this our as will release refer from measures finally, available certain www.investors.springbig.com, to GAAP are call, a And few metrics. non-GAAP not entirety intended

call I'd the that, With like to over Jeff. to turn

Jeff Harris

year and and number our Thanks, with a quarter with for am I had making begin and first joining are thanks productive pleased the everyone execution a areas. Ryan, today's call. progress very We of across our we to

year growth our quarter year-over-year that compared Jumping XX% on at am key X% results, of guidance to and acceleration $X.X we guidance our will year-over-year reported represented million delivered of right in you revenue pleased I on you Total X% and an revenue into quarter to quarter-over-quarter, of range. midpoint the report QX. Paul XXXX. for and first QX results, provide I call, update initiatives, and full provide today's the second During business details

consideration macroeconomic on continue tenant marketing budgets discretionary. digital and broader existing from spend, and see remained our of continue customers, less central Although somewhat concerns growing to budget weigh maintaining to we where platform trend a a

We performance metrics our the Growth driven net saw also momentum prior of in which primarily within SaaS key year-over-year, retention the target and locations. the growth was environment results. year. XX% revenue again despite revenue, a rate strength across predictability first continued in at into by grew business, range saw our all our QX our from subscription in and We're sustaining provides the XXX% remaining macro of which increases visibility number quarter based with subscription

and in and While goal of we also to growth, are we EBITDA focused XXXX. leverage are continue to executing invest towards committed line during top our accelerating breakeven driving

brands the our platforms. and to segments business, our retail two in Turning primary

Our first challenging this tax slowdown cannabis across retail cadence. and they retail with that merchants with approach historical we accounts in along and create backdrop, with program, to openings, pressure. loyalty in digital manage to store inflationary XXX Despite need platform line instituting challenging pricing the they quarter retail engage data-driven connect with provides successful how and pressures, landscape customers. remains pronounced added The their and a a tools marketing in a considerations our the new

of Our our the through more platform, XXXX. platform, we with brands retail brands helps consumers exiting which directly connect observed easily cannabis momentum continuation saw

awareness about campaigns, brands, I've earnings and previous of for the excess by benefiting QX connecting pillars of In the of through selling during the XXX their retailer brands XX influence. suited growth. consumers motion key our retailers, uniquely running directly driving brand both and talked calls, traffic saw the to store We're we in and three and increasing

fact platforms; unique growth second, and network increases third, a that subscription component monetize smartphones and effect predictability opportunities new of million leverage marketable and locations in over and revenue to XX and is platform the and revenue brands feel X,XXX in have we cannabis the a our that is the present our between consumers. high stream; retail in we First, powerful than installed initiatives more that retail our

provide We positioned focused of we uniquely our SpringBig. client base to initiatives. offerings to select are introduce the both and At new growth present, introduction of our opportunities for group that are meaningful clients on

to currently VIP a And manner not in launched we their loyalty to subscribe programs offering retail program, a enabling subscription offering loyalty customer offer on those to behalf and programs opportunity will power our pay to benefits how similar subscriptions their customers retail these to the to wider subscription-based We our have manage clients partners. specific available base. discounts of their customers SpringBig a today, receive

We in customers the generated from will revenue into these share programs. subscription enrolling

or with their complete Pay, their benefits inclusion option online transaction from are Spring the payment on points SpringBig preferred by these transaction loyalty and initiative, size facilitating to stored securely. due use on behalf retail safely We also retailer can increased to focused benefits consumers transactions in-store our our where their loyalty of loyalty/payments developing and rewards partners. of conjunction The clients of in retail our

regulated of marketing the we and the including vape which our offering some us communications stores. into industry, a and platform to loyalty January other in CBD across alcohol, solution first Finally, industries cannabis integration announced expand point-of-sale with allows outside

already contracts Marketing and and expanded during we markets. to selling this in closed non-cannabis new QX four audience begun has

offerings environment, and service take we the our to shortly in complement integrations growth present cannabis announce current retail additional they but digital the to excited especially confident retailers believe given that we them to are time and to industries existing We macro evolve, that with is fuel will the and communications These state-of-the-art significant to partner time are potential with offerings. going than are in other new systems to point-of-sale to clients. bring loyalty initiatives

We continue to core functionality. significantly retail our invest in additional enhancing adding platform,

given of platform unique deliver to business our the to growth returns existing exceptional in long-term potential our industry the cannabis We the continue growth our to power clients. of see and significant

SpringBig. with that, integrated I'd to offerings. large upgraded basis A how like share customers benefits include using example operator Recognizing in they success, and point-of-sale, trial quickly multi-state in and With started our state why messaging multi-state of a to accommodating leveraging one states early choose platform their are seeing on an operator all loyalty SpringBig operate they our needs and this engagement company-wide. email SMS their and and

shopping of began our multiple As messaging last reputation feature management, members with to these leverage additional build target and their audience to referrals, at set, images feedback pointed the platform videos, based including states use and and rich our habits. on

that and quickly outstripping their was quickly increase contract. contract to in an it national initial result, was feature a evident use led As their

ROI As this and to evidence broad enterprise delivered are continue this scalability integrations multi-state we we of and operator to grow large will a expansion, high confident in alongside partner. set this

spectrum largest our location is multi-state single operators of user, service a full platform, generate sweet clients to SpringBig spot. is to the from who sophisticated from retailers, able ROI our utilizing is the While substantial

plan from ahead, of market end to we to consolidation see incremental higher cannabis on sustain the industry. benefit the focus Looking the across expect and

towards goal will comment EBITDA year. are stated quarter financial in want over it I hand results on Paul, I to Before who of making for detail, during do the breakeven our first walk our progress the the through the to we current

growth improvement a combination a QX $X of the the revenue initiative of reduction sequentially due implemented during XXXX. representing EBITDA $X.X adjusted was Our loss of the to of quarter million impact and expense one million,

losses objective. to are expect believe on our and achieve our We reduce continue stated to we track to

macro our business are performance managing is we and encouraging. industry and control our within efficiently challenging realities. Overall, current highly QX the specific Our factors the for recognize

have strategy front feedback revenue rich opportunity the reaffirming customers I'm making is right initiatives sound investments that with long-term and We from to revenue and growth as high partners growth pipeline base. as we capture strong us. confident a our ever generating of that in of are a the subscription

over to outlook. Paul, in like that, will discuss financial results our through who With walk I'd our first quarter for to detail and things the greater turn

Paul Sykes

everyone again you, Jeff, joining and thanks for us. Thank to

and first on characterized stated our for progress of reacceleration delivered result providing and results the targets. a measured moving we mentioned, our the quarter brief by will quarter our balance to quarter, towards I solid of guidance XXXX. As first a of start second a by before overview growth in

revenue XX%, a of million, X% representing and $X.X This year-over-year of revenue experienced at momentum of subscription in sequentially. QX XX% the growth growth year-over-year continuation we came was Our underpinned XXXX. by during

XX% technology derived contracts As revenue a SaaS SpringBig ago. annual compared a year quarter auto-renewing a first business reminder, with is with from XX% of primarily being

seen this larger subscription contracts, percentage excess higher continue are We of and increase we have predictable to use replace which with more revenue quality. as

XX% which in growth number year-over-year in into subscription revenue conversion strong a running this with the Brand's use revenue QX year-over-year. spend brands grew average of by byproduct in excess campaigns reduced campaign. XX% per revenue, QX continuing A and in the of year-on-year reduction is

be demand, as X,XXX quarter first X,XXX as installed continues of terms brands retail by ended client new the and with expansion platforms on and installed We platform, growth the acquisition top-line driven to within customer retail are Our well the both base. strong customer in discrete locations. in

We have in excess an annual who exceeding $XXX,XXX. subscription have of XX clients,

strong despite macro challenging the see environment. customer retention We continue to

revenue to net this ago expected year was XXX% XXX% to XXX% a retention Recall and moderate range. XXX% QX period. versus to Our XXX% we QX metric in

brands within as Gross our ago. to with basis see products to profit growth lighter of including contribution in new brand The platforms. gross upgrades. notifications year and revenue, from points messaging we QX our upsell year mix compared XX% regard started which platform, strongly more push increasing million a XX% margin our $X.X carries The As the and volumes we add yield in customers cost quarter due for is representing both XX% very in an services, and profile. opportunity to of in was profit higher year-on-year significant almost retail higher a leverage some functionality XXX with an and this margin gross improvement was our year-on-year ongoing has drive

sequential expenses, QX and Year-on-year same of entire operating November, the our accelerate QX. run profitability. quarter million, a or a therefore rate of doubtful to in for representing the focused leverage a layoffs in operating path time the drive Total receivables impact in a costs, highly to at for XX% In efficiency, increased with reduce we and from while our implemented expenses we investments following business dollars million attrition on provision X%. we this of initiatives benefited reduction series of excluding lower expenses in total taken through Moving $X.X our balancing reduction on combination QX our QX, operating additional only the XX%, growth. remain expenses workforce improving the by were in to including

contractors and premiums lower $X.X for decreased expenses growth being to software being employee and with costs. revenue expense This year-over-year. Sales and year-over-year with attributable a revenue. lower Expenses were total and XX% expenses a marketing slight expenses and total million the of increases employee the including for and with the in servicing decreased due audit rationalization higher million is associated aforementioned revenue. $X.X reduction million additional to marketing cost offshore XX% in XX% were in quarter, growth expenses of XX% company, XX% to related quarter, and quarter, representing representing expenses $X.X Technology directors costs. associated year-over-year and savings was Sales, of total representing insurance resulting in development G&A costs. the the by legal public due XX% officers'

loss flow convertible with was million significant our equates the metric this margin million in The repayment received under XXXX. quarter. Act million cash million was the credits note adjusted $X.X loss exercise negative the quarter in EBITDA million outflow comprising Free tax the relating by a most of Our million, believe XX%. QX $X adjusted guidance we the options. closely midpoint retention received flow. relating adjusted operations, in million and key QX and payroll We refundable adjusted cash provided employee is from cash the EBITDA Adjusted first the to to during of a negative representing sequentially as $X.X EBITDA improvement $X our an $X.X CARES compared represents at loss was $X.X stock of EBITDA of to of EBITDA $X.X when operating cash earnings

equivalents Turning receivables. the balance and to sheet. marketable million $X.X $X.X in We and quarter cash securities our ended in cash, with million

amount on raise. proposed of Before XXth a providing the million to of We raise on guidance, $X you the I our May. completing to like S-X filed update Form caveat. and on prospectus I equity the updated our to outlook, the anticipate our would to preliminary end prior April include would With regard usual our up in

negative general experience to pricing open across by a to product in specific material continues certain with industry issue on a to the markets mature retail given end the continue coupled environment. cannabis a states macro new have While licenses, and slowdown headwinds continue country, impact spending where markets consumers glitter discretionary in

issues not considered we trends our these reflect as think growth have guidance. prudently of Although rate the current do continue to view and factors we intrinsic these building the in transitory that industry,

For range growth we $X.X the fiscal XX% revenue a XXXX, and second X% of midpoint, million, total sequential implying the expect year-over-year quarter to million growth. $X.X in a

adjusted EBITDA an range to for expect the million We in quarter of of $X.X loss second the $XXX,XXX XXXX.

in be that with adjusted thereafter reaffirming implication being the EBITDA full the $XX range positive $X.X our of and $X the to range reiterate current year expectation adjusted anticipated $X.X we of of our of million of in loss million within million in our million. the for critical And million year to the million the adjusted the reaching of will the of are milestone of first of revenue fiscal majority $X.X year. second to For and QX guidance $X.X losses the guidance loss year. loss. our We adjusted XXXX, is this profit in fiscal the half we half to $X.X million full of HX year, The arising range EBITDA million EBITDA $XX EBITDA

And that, please I open like it pull questions. for to for Q&A. with Operator, would up

Operator

no I'm for I'll remarks. call the over time. this Jeff closing questions to Harris, CEO, showing at any turn

Jeff Harris

to with everybody quarter. forward next our everyone. Thank call. great evening Thank QX Look very conference much you. Have a for communicating you joining all

Operator

this you all and call. conclude Thank participating. does for you. today's gentlemen, Ladies conference Thank

You may a now great day. disconnect. Have

SpringBig (SBIG) 4 May 232023 Q1 Earnings call transcript