SBIG - Earnings call transcript Q4 2023 | SpringBig Holdings, Inc.

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Operator

Good afternoon, everyone, and welcome to SpringBig's Fourth Quarter and Fiscal Year 2023 Earnings Conference Call.

I would now turn the call over to Spring Big's Investor Relations, Claire Bollettieri.

Claire Bollettieri

Thank you. Hi, everyone, and thanks for joining our Q4 earnings conference call.

Joining me on the call today are Jeff Harris, our CEO, Founder and Chairman; and Paul Sykes, our CFO.

have our should announcement. everyone now, access earnings to By Relations on This also Investor website. announcement is our

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

for SEC. Also including we will could outlined in factors discuss are earnings differ not results operating metrics. a intended context our be Relations of to GAAP actual financial non-GAAP our measures on risk non-GAAP with due to Please measures. call, number measures be website our XX-K the additional that a as during to to of our certain a as non-GAAP Our materially reconciliation substitute GAAP risks on refer key will filed Investor the for and results. this release uncertainties, These our financial well

entirety Relations be and webcast call this being from is finally, our on available audio Investor our few an in website in hours. And a www.investors.springbig.com, at replay its website will

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

Jeffrey Harris

And thank this afternoon's everyone Thanks, Claire. for you joining call.

call, results, business today's XXXX. you full our and fourth our Paul year first details will guidance and quarter you During provide key for provide initiatives on of and on the update I quarter

am to SpringBig report is that in I happy an excellent position.

value front confident execute We of add strategy, clients are our we that am long-term the at a opportunity making capturing continue investments the I us. the in on both to to and same and right to sound time,

and year-on-year quarter, have expenses by and year experienced grew diligently for X% we the some and respectively. While end XX% throughout full XX% market revenues have operating the reduced by our we year, year-on-year, we fourth challenges,

a the of year. Shortly the our $X.X profitable was forward we before which target in positive adjusted as our $XXX,XXX debt value. and being of quarter And fiscal move the end with of the last and year, compared end a year, same achieved EBITDA a million continue month. in look we loss secured first in with modest cleaner our expand to December sheet EBITDA million QX, to with of stronger financing adjusted We delivering after the to lenders, deliver shareholder syndicate much us to $X allows balance

Paul financial in moment, like and recent debt the our will highlight discuss accomplishments but a over year. our past some I results financing the to of would first,

along data-driven As a and that a set and create and reminder, approach platform our to they and with their provides retail successful how and the manage merchants to they with a brands with need instituting marketing program connect loyalty brands digital tool customers. engage

stress have growth by that environment and Throughout have financial In worked in to a environment, underpinning broader XXXX, our end XX% revenues full the to and this continued subscription support X% diligently such with we grow them. an market it budgets year our the we weigh digital year-on-year and cannabis is with spend in we been industry of growth operating on year-on-year. increasing increasing and pleasing concerns compression with challenging marketing margins of have macroeconomic clients, and on revenue

an in acceleration improving anticipate we growth. potentially cannabis Schedule to market macroeconomic from X As X, and the Schedule from an benefits rescheduling environment

discrete our launch their new high potential our attention customer and And continue innovative also clients core and number and provide within have We retain a focused new on both bases complement small to offerings grow our we to product offerings. our these of develop while platform, core growth enable initiatives initiatives. to

perks subscription opportunity in rewards, as monthly fee, additional promotions talked and to the have calls access retail or return a to to on subscriptions clients SpringBig, special our loyalty by of annual quarterly We the which other launch consumers prior about enables offer VIP for subscribers. earn

expected we this pace market. been innovative given truly has in at an is a the offering Progress

have VIP see partners for this programs. more incorporate programs launched growth and programs the offering clients both profitability X and both from than and contracts time. our with launched perspective have and that meaningful their VIP potential are revenue already to these their subscribing SpringBig subscription subscriber We to We the XX X,XXX over expanded have as consumers mature already retail

existing Our method of be and also as will QX loyalty card to in enable the of second from that key consumer offering payment consumers and uniquely cards. gift gift option combine can the prepaid initiative in-store our a points loyalty use by was is launched used unique directly payment their the of wallet

expect X start the second initiatives revenue half We to from XXXX. in accruing meaningful these of

expand to platform CBD. such our and the industries vertical servicing smoke as other continue and we cannabis communications regulated vape, alcohol, loyalty with Finally, beyond messaging

While we initiatives significant going time newer we in confident evolve, offerings. to fuel to are is the potential believe are to to time, complement will existing further expand that these our take growth it present

who walk to financial our results of want will in with assessment Paul, I detail, Before SpringBig. my current the status conclude I to through hand over

SpringBig is in position. excellent an

technology over Our and consumers. States than million retail present platform XX Canada the locations United across marketable in more operational is the X,XXX and in smartphones of

to significant innovative of customer bases. We retain and and have in offer opportunity us front to develop technology solutions a enable our grow that to continue clients their

that our both in being without a having sustainable and optimized from reliant on growth. has our operating Our the to to us of the cash improved perspective balance future sheet generate having revenue level enables earnings expenses and meaningful in financial position

generating digital adjusted execution EBITDA. highly subscription XXXX, continuing in to to so successful expense our and loyalty For be expanding of on meaningful deliver significant some platform initiatives, ensuring start focus disciplined our key we management realizing our messaging our the of and further is revenue potential,

Paul. I'd to turn like things to over that, With

Paul Sykes

guidance million and Thank thanks results XXXX. in our with by January the XXXX financing want for year both before and and fourth I you, we and joining the year us. for discussing talking Jeff, everyone debt first to XXXX again quarter of $X start full for about the fiscal ending quarter to completed our

that convertible $X.X the a financing secured of of debt are million had million mature there we convertible consisting XX% million note $X secured January a and announced and we On maturity. term to loan. and of amortization no note Both term syndicate with XXXX X% payments loan in investors a prior $X.X XX, secured

at converted stock secured notes proceeds including $X.X repurchase the XXXX convertible can conversion warrants, been and a option maturity at The the the to be prior at million. public note we amount for convertible into of of entire in used time which June of existing the company discounted had any a common became a issued $X.XX. associated of The at investor to time were partially price

the were costs million. after The repurchasing note existing net transaction and proceeds $X.X

to refinancing, and cleaner a enable to with the shareholder value. balance this capital deliver much has Following SpringBig will to stronger continue that us and expand sheet

to for results turning quarter Now fourth and the fiscal our XXXX.

to million $XX.X X% in which year-on-year We adjusted able year loss expenses we year-on-year to one XXXX, and XX% $XX.X from $X.X operating gross grew in XX% show in are a EBITDA pleased from to were X% report to XXXX million profit in in improvement benefiting a in to reduction our million. in million revenues a our be able to to which $XX.X and reduction margin a significant

posted towards adjusted same December, for that last EBITDA million has during positive QX in the we quarter adjusted progress time. reflecting the million year, our profitability with the company XXXX. loss made Our first compared In was EBITDA path the $X.X $X.X along

in X% million, a came sequentially. revenue and year-on-year representing X% QX $X.X at growth decline of

worked of it we In and challenge and have some our be led for payment our the we clients that factor has support ensuring services clients. while payment continued call, to environment earnings nonpaying about of has current macro cases a to during introduction talked to to us them many plans, revenues QX. diligently the our the in inevitably This, having no cease choice also receive but through we reported servicing course, impacts of with in

QX. of a grew In year-on-year our technology derive most subscription in year-on-year was subscription by XX% our and revenues from by million, with business, [indiscernible]. and in Being year, prior of revenue XX% we to revenue revenue XX% the compared XX% XXXX, $XX.X we

sensitive is use clients derive from of the replace excess continue are revenue subscription increase revenue when use with within non-subscription contracts the we higher we larger will in other subscriptions majority as revenue is that anticipate to revenue which ancillary messaging we time, Over derived succeed the The quality. also arising volume and more excess their And subscription. revenue services. predictable clients and brands

QX by quarter installed the in by into ended year-on-year year The conversion X,XXX subscription and XX% year. use XX% of by platforms plan course, for revenue with and this revenue product, the in retail a X,XXX of fourth than in our discrete are the more been We has locations. excess reduction full

impact and of XXXX below target XXX% client prior reflection XXX% XXX%. a in retention, revenue year, our subscription was recurring revenue, the the growth slightly XX% of compared While of the net the excluding range to of acquisitions, measure with challenging market in a our in new

gross than representing margin costs $X.X compared by the message to XX%, quarters of which operators. was lower distribution telecom is recent Our a million, absorbing higher due

For million, XXXX. profit year-on-year the full XX% XX% year, representing improvement and margin a in X% to $XX.X from of gross our XXXX was from growth X%

Moving expenses. operating on to

our representing million, the operating remain leverage XX% of our the into the while, the compared investments sustainable seen a results, we course, focused the XXX to and reduction. management of for end our at time, employees our at At our of flowing were with $X.X year-on-year on operating in have diligent We count QX optimizing now XXXX. year, expenses business impact expenses of this with employee the through was XX highly same balancing growth. Total continue in end

of million marketing by servicing total quarter, XX% XXXX end Sales $X.X year-on-year to lower employee the headcount. marketing due XX% representing towards Sales, and year, and in rationalization resulting and of decreased during revenue. cost expenses were the current expenses the for

revenue. were offshore expenses and total software being expenses of savings expenses million attributable lower employee representing decreased to the with the year-over-year, contractors Technology in of the and use costs. development These with XX% associated $X.X quarter reduction in a XX%

the was reduction. revenue a X% expense million and year-over-year for XX% quarter, representing of total G&A $X.X

a For of $XX.X XX%. the full million, year, were operating representing reduction expenses year-on-year

expense reduction throughout not and While of initiatives the impact been have year, full implemented seen the these therefore, operating yet we have initiatives.

run of XXXX with compared operating the current rate from expected approximately reduction to year-on-year in XXXX XX% expenses. Our a annual is result

cash fourth flow. equates operating in margin EBITDA believe Adjusted EBITDA since of was Adjusted EBITDA loss X%. most our an representing the adjusted is earnings quarter $X.X negative closely key million, we metric to this

EBITDA EBITDA in with adjusted the is represents sequentially the than an reported $X.X and compared $X.X loss last loss QX adjusted The year. million loss in million QX improvement lower significantly

million million or year fiscal the million $X.X XX% was note primarily was For cash EBITDA from of May used negative convertible $X.X $XX.X adjusted in equity the short-term million, received in operations, of full million million and flow $X.X raise, in production. repayment loss is our for completed compared $X.X which cash our comprising and the cash $XX.X advances. year, XXXX in million with issuance our stock Free $X.X

shall guidance I quarter clients our I conclude now headwinds with usual continue our the for With [indiscernible]. highly experience specific of fiscal uncertainties regard that first XXXX. continue would macroeconomic to be to industry include our and caveat outlook, our to the

the quarter For of million fiscal expect in $X.X million EBITDA range the million $X.X range of $X.X the to we million. $X.X first XXXX, to an profit adjusted in total and of revenue

$X.X in we year growth profit of range million XX% at million For playing to the and and range total year-on-year expect the the $XX XXXX, fiscal in midpoint $XX the adjusted of $X.X full million. to of EBITDA million an revenue

I'd to it With for please that, poll questions. to Operator, Q&A. like open

Operator

Instructions]. [Operator

Our of Fortune first question ROTH. Scott

Scott Fortune

Just guidance. at on XXXX quick follow the your looking here, real wanted up to guidance

Just account understand half the But or here that the new going helpful. There's from stronger of sequential you macro in sense challenges what You're bit, of a much XQ, adding there, ramp of us bit can initiatives help get a means you XQ kind clients expecting programs standpoint, a on for to that side second just kind bigger 'XX. that. for half but the would some decline in second be on a I factor of to of in cadence? kind for And kind seasonality customers that 'XX unpack are sales softness of little want of the the or continuing environment. current

Paul Sykes

all -- thanks seasonality. bit the higher To the holiday for in decline -- question. be obviously, little so periods. We little QX. at to And the QX, we tend there's in a in obviously, QX address Scott, holidays of a still revenues first, traditional get,

and like some We have . things through Very in this few summer X/XX QX. occur

to try we factor So that in.

And there there's secondly, macro -- then challenges of environment. the is feel in ongoing we sort

QX. in to of an want too don't we assume so much uptick And there's

allow In points on for ability which VIP payment as the card have and impact we've that the half to subscribe the really and retailers also consumers XXXX payments use seasonality the talked a the mobile And year of coming number -- by second to second progresses. programs of say, products we option with is gift to as and of growth already subscription is more and X,XXX which the programs. of the already the I particularly second that many of just of there's terms is of into acceleration wallet. card. got retailers the getting the the of you prepaid in half And loyalty impact That the then rightly SpringBig, the an but some will a within those up already marketplace. And launched across signed the gift consumers in year, combine card nearly the ability is initiative board, to, launch newer retailers is the subscription good product, in gift their momentum

So year these some along X revenue with will of in growth bide the seasonality. the second some half

So XXXX. through do why we that the we that's profile get

Scott Fortune

And that going of detail. visibility standpoint, obviously see New still York accounts that paying more the since new or of is from attrition legal adding from growth have that of appreciate of the retailers what kind on I for follow-on or paying. bills you it couple have kind time been on on there's that of their We of are little more California of new an that then provide side. opportunity that -- as looking And here, retailers business be that said, states retailers quarters. overall just tough? just the follow coming great. a of from of, mean, after the that. tough on weakness side update positive kind standpoint? I taxes mature been up not account Obviously, seeing business I last With just you're kind on regionalize or through would with one are kind new but the that in market kind out The That are the

Paul Sykes

[indiscernible] XXX year. Yes, to the the new on question. comes the states the of clients the answered that from during almost medicinal You recreational. states be retail We transitioning newer from mature and continue to added new states some past are

fairly clients average. added nice a that's So a and every of each rate between And month XX XX it the to in is constant during year.

much we're on clients end, still but at lower -- We're So churn. talked seeing we -- help still challenged, seeing and lot of them, while we're put before that payment to got not the where financially of alternative. try going no too through seeing, this we've times, we are them them about suspend that a the help they're we particularly and to they through. pay also going have to At we day, industry -- the challenging is and the to them stop trying end periods the at because the us, if plans service

Scott Fortune

just ramping follow-up of meaningful that, kind cash adding of the on MSOs. kind flow kind initiatives standpoint. really any from want and that flow to a the potential right, XXXE, a from counting then of not What's even sense generation. reporting Obviously, seeing for or of positive sense large larger drive comes up growth, clients are program that's And of kind new of to these generation -- from you And cash the they outreach the the lot yours. MSOs of your big as it. right, elimination Got are

of from good color have flow cash clients little that that are of bit large your that kind pretty standpoint? Just from --

Paul Sykes

gives push, got a clients, lot top the to notifications and the therefore, and they we've messaging that being rather -- major MSOs of is plenty also text reliant spend products, obviously, expand newer growth. that the seeing mobile effective. of to continue and because than on XX then in We've seen are some transitioning and them more them us. from push cost of their deliverability with We've rather interest better our app the We're seen

continuing those grow. MSOs from seeing to big we're the So accounts

Jeffrey Harris

budgets since... kind rescheduling open the are for overall, pretty seen waiting for of to So marketing occur potential tight. just that and and up We haven't that still

Paul Sykes

flow Yes. then industry and could we that marketing the only rescheduled that we to the injection XXXE go big be And feel additional if into not obviously cash retailers the will issues and away, a get And a MSOs, budgets. but smaller boost that the larger of as well. to proportion into had

Operator

question next from of Our Capital. comes of Ryan line the Casey WestPark

Casey Ryan

along I margins, me couple on sort as -- client that that 'XX? Scott, of is but state sort a if I is questions. into But But paying increased may if gross costs in of guess had gross maybe this that -- the the pass quick costs, you I remind can ones. that just messaging does get of I relevant your sort number in got may it to missed that of which you have attention. most that of messaging we for of Paul, wasn't I move a commentary, is. a enough margins, fine Or permanent close is the

Paul Sykes

The carriers It's up cost. an costs that not -- passed sell have gone increased costs. To on. additional carriers have we've date, as their messaging

So cost. we've absorbing additional that been

our margins, [indiscernible]. at As going think then it will and get think forward, we placing about some we about largely pushed of

have But to promote of them it. alternative at won't, methods. Some to distribution time, try same the we'll absorb and we

clients. our Scott's don't deliverability costs and the that's associated be better to better then in people more can us for we have As which the both carrier for I and have notifications, question, and mentioned response using push

more deliverability. increase and may but method sort cost interestingly, get use better effective as seem mail, again, nowadays, like of antiquated see a which And an you of you also will

of about now messages are going via our either XX% have out or push e-mail notifications. So we

So will gross that in time margin. impact the

Casey Ryan

of dip increases? so it's guess say? Is I that's dollar us sort like to interesting. Well, that QX of for to what price Yes. to the to equal from QX. I mean, sort sort of -- can a thing net to of infer do on a basis that equal it's the we sort fair

Paul Sykes

Yes, okay. that's

Casey Ryan

Okay. is? It

helpful. Good. Okay. That's

period. customers, think right, in cash situations, versus expense of debt then was $XXX,XXX lower, bad the Okay. year the in quarter flow in terms or sort I million ago something $X.X Well, of and

the I shrunk like sort that Because of you you're to I'm have term doing in service payment sort and you'll X people have X, players. So cases, heard people that shrinking they right? So some tougher, tail effect in sort of I've customers, in you services curious of terms ago, to some of consume same terms moved suggest flow long for of sort the said, trend you've that's quarter like had what guess industry payments have issue as me that others about the or as from that -- a has certain people is looks to moved the being the cash has for cash I would in of if tell duration. that, somebody direction. sort of services guess, right to but sort have with But some give build. off people pay X give SpringBig like driven cutting someone negative years upfront of in months. X, people sort of steadily yes, oh, been -- But upfront smaller flow right, pay, and this then

Paul Sykes

so. over year before to don't that is we What system implement of terms. we much quite obviously clients are We've I usage. prepaying tight the that larger try smaller those to particularly have sure changed -- stay done or said players, think the last have a the making with the payment

Casey Ryan

Correct.

Okay.

Paul Sykes

you the out, for x the of benefit because client. as a platform you has client. small that Casey, our should by the suddenly some I And of then not to get spent actually as the know, It's helps these, and endless good to I the got say, manage at and good in unhappy afterwards what day, to well messages access If an times their you was that's the going them it Because can businesses. and I own send And end relatively That client find, us and not prepaying, budgets. you for bill thought have I we've spend.

helping implementing month them to prepayment So we're a upfront to month it manage on a means budgets basis.

Casey Ryan

Right.

Okay.

Good. Okay.

that has of or sort to in more of hey, of of implementing? telling lot sort a a terms billing plans prepaid of is there So practices? sort fully we're sort people, been of of payment moving model that in sort that structure, go terms some to of our adjusting we completed and work Meaning, have

Paul Sykes

transitioned with transition We've We that for effect customers largely January. completed were that. we to to the from going

Casey Ryan

Okay.

showing And Good. Super. sort a sort great That Okay. bad hopefully, trend there. of expense it's positive progress. us means debt I the think of is

of is it So that? the the is new of on this to for be sort of that normal existing guidance, customer with support there can in rely achieved doesn't sort just meaning and both, revenue expectation client Or for terms some base, adds? customer adds

Paul Sykes

labs at on XX get that cautious in that My will is the and year customer so. continue hopefully, through we've seen normal But revenue XX that the or our to month we'll the a reduction churn guidance. the side rate on we'll be last expectation some of

Casey Ryan

Right.

it And the what we Can curious if I'm sort this there comment was we're alcohol then commercially outside if some in of want -- I'm number. Good. $X at if you of Good. or for were any not sort non-cannabis all, a revenues hear. commercial to there? just segment of to even -- segment. revenues to looking just of That's smoke question kind that just sort last tied not generating good QX. tobacco I'm sure call Okay. I'm

Paul Sykes

contracts about that got broad are We've non-cannabis in are. that Yes, category. we XX

area a significant XXXX. some the that at space, system obviously, that marketing, some revenue. number in in that we'll number a non-cannabis driving out. a point-of-sale if yet So also not generating and QX is of becomes We've breaking acceleration It's start in point, it co-marketing significant and with they're integration significant started a

optimistic that quite space. growth about in non-cannabis we're So

Casey Ryan

communications and shape has one just here. non-cannabis -- a well, like realizing locations. days Well revenues it's sort should the software cannabis Does profile, in and/or the loyalty spend the look is it's cannabis and could and more margin the if just same but my just has question, and that? if thinking, different of we're why I'm the Super. I'm be and same? -- but of marketing locations a the Does a describe this X I'm it's look your similar? X from client the be there reason generally, early same And -- quite revenue And is there's similar non-cannabis way profile mind, not if a and and expectation Okay. profile, clients maybe curious that margin a to say simply profile looks

Paul Sykes

And think revenue of outside a is drives as are aspect. of be relatively there But And space, reason I challenges slightly the that the around expect of you was than would communicating retailers for the outside cannabis, message the similar for that in your is cannabis it's similar. to lower. [indiscernible]. would that consumer. people every market, that other more probably will in the know, say many I the -- client I with revenue cannabis specific the cannabis

on lower revenue the be it average client space. for will than think So is non-cannabis the I in slightly cannabis

Operator

turn time. to closing like any the questions further at I'd to call for Paul no over Sykes this showing remarks. back I'm

Paul Sykes

look a in we continuing of Thanks and to progress support you excited what's next ahead forward about and us, your good and updating Thank joining you, call with everyone, for evening. the We're and certainly our again, have SpringBig. as progresses. year thank year and you, the for our

Operator

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

a disconnect. now may Have day. You great

SpringBig (SBIG) 12 Mar 242023 Q4 Earnings call transcript