Financial Data and Key Metrics Changes - The company has a significant cash position and net operating losses, which are well-positioned to execute on its value maximization strategy [2][3] Business Line Data and Key Metrics Changes - No specific data on individual business lines was provided in the call [1][5] Market Data and Key Metrics Changes - No specific market data or key metrics were discussed during the call [1][5] Company Strategy and Development Direction and Industry Competition - The strategic investment from BC Partners is viewed as transformative, with the potential to unlock substantial value for shareholders [2] - The company aims to pursue a next phase of transformation, focusing on both organic growth and acquisitions [3] Management's Comments on Operating Environment and Future Outlook - Management expressed excitement about the investment and the opportunities it presents for future growth [3][4] - The management team looks forward to updating shareholders on progress in future calls [3] Other Important Information - The call included a presentation deck available on the company's Investor Relations website, which outlines the strategic investment details [1][2] Summary of Q&A Session - There was no question and answer section at the conclusion of the call [1][5]

Financial Performance - Total revenue for the year ended December 31, 2024, was $43 million, a decrease of $244 million or 85% compared to $287 million in 2023[159] - Loss from operations for 2024 was $79 million, compared to a loss of $328 million in 2023[156] - The company incurred total operating expenses of $86 million in 2024, down from $387 million in 2023, reflecting a decrease of $301 million or 78%[156] - Interest and other income, net decreased by $10 million, or 63%, to $6 million for the year ended December 31, 2024, compared to $16 million in 2023, with 14% of revenue in 2024 versus 6% in 2023[165] - Gain on Asset Sale increased by $4 million, or 100%, to $4 million for the year ended December 31, 2024, due to the Asset Sale completed on April 19, 2024[166] - Provision for income taxes increased by $1 million, or 20%, to $6 million for the year ended December 31, 2024, compared to $5 million in 2023, representing 14% of revenue in 2024 versus 2% in 2023[167] Operating Expenses - Sales and marketing expenses decreased by $125 million or 87% to $18 million in 2024, compared to $143 million in 2023[161] - The cost of revenue decreased by $192 million or 84% to $36 million in 2024, compared to $228 million in 2023[160] - Product development expenses decreased by $126 million, or 83%, to $26 million for the year ended December 31, 2024, compared to $152 million in 2023, representing 60% of revenue in 2024 versus 53% in 2023[162][163] - General and administrative expenses decreased by $50 million, or 54%, to $42 million for the year ended December 31, 2024, compared to $92 million in 2023, accounting for 98% of revenue in 2024 versus 32% in 2023[164] Asset Sale Impact - Following the Asset Sale on April 19, 2024, the company no longer earns operating revenue from its previous marketplace and logistics operations[142] - The Asset Sale involved selling substantially all assets to Qoo10, with the company retaining certain tax attributes and cash equivalents[139] - Following the Asset Sale, the company no longer has revenue or deferred revenue, as it has no marketplace and logistics operations[183][184] Cash Flow and Financial Position - As of December 31, 2024, the company had cash and cash equivalents of $66 million and marketable securities of $83 million, which are expected to meet anticipated cash needs for at least the next 12 months[169] - Net operating cash outflows were $94 million for the year ended December 31, 2024, compared to $341 million in 2023, primarily driven by a net loss of $75 million in 2024[170][175] - Net cash used in investing activities was $68 million for the year ended December 31, 2024, primarily due to $168 million in purchases of marketable securities[177] - Net cash used in financing activities was $1 million for the year ended December 31, 2024, due to payments of taxes related to employee restricted stock unit settlements[179] Tax and Valuation - The company is subject to income taxes in the U.S. and various international jurisdictions, requiring significant judgment and estimation[198] - Deferred tax liabilities and assets are recognized for expected future tax consequences of temporary differences and net operating loss carryforwards[199] - The company utilizes the Black-Scholes option pricing model and Monte Carlo Simulation model for estimating the fair value of stock options and PSUs, respectively[196] - The assumptions in the valuation models are based on management's estimates, which involve uncertainties and could lead to materially different stock-based compensation expenses in the future[197] Future Outlook - The company anticipates continued losses from operations as it incurs costs related to identifying and completing an acquisition[134] - The company expects to incur minimal administrative costs in overseeing and curating the remaining assets post-Asset Sale[142] - The company had an accumulated deficit of $3.3 billion as of December 31, 2024[134] - As a "smaller reporting company," the company is not required to provide quantitative and qualitative disclosures about market risk[200]

Financial Performance - Net loss for Q4 2024 was $2 million, a significant improvement compared to a net loss of $68 million in Q4 2023, representing a reduction of approximately 97%[9] - Revenue for the year ended December 31, 2024, was $43 million, down from $287 million in 2023, indicating a decline of approximately 85%[14] - The company reported a gross profit of $9 million for Q4 2024, compared to $7 million in Q4 2023, reflecting a year-over-year increase of about 29%[14] - Net loss for the three months ended December 31, 2024, was $2 million, compared to a net loss of $68 million for the same period in 2023[16] Cash and Liquidity - As of December 31, 2024, the company had $66 million in cash and cash equivalents and $83 million in marketable securities, totaling $149 million in liquid assets[12] - The company has approximately $225 million in liquidity available for investment, including a recent $75 million investment from BC Partners[2] - Total cash, cash equivalents, and restricted cash at the end of the period was $73 million, down from $238 million at the end of the previous year[16] - The company reported a net increase in cash, cash equivalents, and restricted cash of $33 million for the three months ended December 31, 2024[16] Expenses and Liabilities - The company incurred $4 million in general and administrative expenses during Q4 2024, primarily due to legal and employee expenses[5] - Total liabilities decreased to $5 million as of December 31, 2024, down from $206 million in 2023, indicating a reduction of approximately 98%[12] - Cash used in operating activities for the year ended December 31, 2024, was $94 million, a decrease from $341 million in 2023[16] Investments and Marketable Securities - Purchases of marketable securities for the year ended December 31, 2024, totaled $168 million, down from $313 million in 2023[16] - Maturities of marketable securities for the year ended December 31, 2024, were $228 million, compared to $390 million in 2023[16] - Cash disposed on asset sale, net of proceeds, was $133 million for the year ended December 31, 2024[16] Operational Structure - ContextLogic had eight full-time employees at the end of Q4 2024, reflecting a streamlined operational structure[5] - The company is focusing on strategic opportunities for growth through potential acquisitions and investments[4] Interest Income - Interest income for Q4 2024 was $2 million, with investments primarily in U.S. government instruments[6] Stock-Based Compensation - Stock-based compensation expense for the three months ended December 31, 2023, was $10 million, compared to $64 million for the same period in 2022[16] Cash Flow from Activities - Cash provided by investing activities for the three months ended December 31, 2024, was $35 million, compared to a net cash used of $1 million in the same period of 2023[16] - Cash paid for income taxes, net of refunds, was $1 million for the year ended December 31, 2023[16]

Core Insights - ContextLogic Inc. reported its financial results for the quarter and fiscal year ended December 31, 2024, highlighting significant changes in its business operations [1] - The company has taken steps to streamline operations and has secured a $75 million investment from BC Partners, enhancing its liquidity to approximately $225 million [2][4] Financial Performance - For the three months ended December 31, 2024, ContextLogic incurred a net loss of $2 million, a significant improvement compared to a net loss of $68 million in the same period of the previous year [10] - The company had total current assets of $156 million as of December 31, 2024, down from $410 million a year earlier, primarily due to the sale of its Wish platform [13][14] - Revenue for the fourth quarter of fiscal 2024 was $0, compared to $53 million in the fourth quarter of fiscal 2023 [16] Operational Changes - The company has streamlined its operations, resulting in a reduction of general and administrative expenses to $4 million for the quarter ended December 31, 2024 [5] - ContextLogic had eight full-time employees at the end of the reporting period, indicating a significant reduction in workforce [5] Investment and Liquidity - The recent investment by BC Partners is seen as a crucial milestone for the company, providing it with additional capital for potential acquisitions [4] - ContextLogic's balance sheet includes approximately $66 million in cash and cash equivalents and $83 million in marketable securities, contributing to its liquidity position [2][10] Future Outlook - The company is focused on maximizing value through both organic growth and strategic acquisitions, with management actively seeking opportunities to enhance shareholder value [4][7] - ContextLogic aims to develop a new business model following the sale of its previous operations, indicating a shift in strategic direction [8]

Core Viewpoint - ContextLogic Inc. is set to report its fourth quarter and full year 2024 financial results on March 12, 2025, with a conference call scheduled for the same day to discuss these results and a recent strategic investment by BC Partners [1][2]. Financial Results Announcement - The financial results will be released after market close on March 12, 2025 [1]. - A live conference call and webcast will be hosted by CEO Rishi Bajaj and Chairman Ted Goldthorpe at 5:00 PM ET / 2:00 PM PT [1]. Strategic Investment - The conference call will include commentary on a strategic investment made by BC Partners into ContextLogic Holdings, LLC [1]. Investor Relations Information - Information regarding the financial results and access to the live webcast will be available on the company's investor relations website [2]. - Participants can register for the conference call to receive dial-in information and a unique PIN [2]. Company Background - ContextLogic Inc. is a publicly traded company that completed the sale of substantially all of its operating assets and liabilities in April 2024 [4].

Core Viewpoint - ContextLogic Inc. has entered into a strategic partnership with BC Partners, which will provide the company with up to $300 million in cash and support its acquisition-led value maximization strategy [1][2][4] Investment Details - BC Partners will purchase up to $150 million of convertible preferred units of ContextLogic Holdings, LLC, a wholly-owned subsidiary of ContextLogic [1][3] - The preferred units will have an initial dividend rate of 4.00%, increasing to 8.00% upon the closing of an acquisition [3] - ContextLogic will own 58.4% and BC Partners will own 41.6% of Holdings' common units on a fully diluted basis, assuming full exercise of Holdings' option to issue additional convertible preferred units [3] Strategic Goals - The partnership aims to identify and evaluate strategic opportunities that benefit ContextLogic and its stockholders, following management's initiatives to streamline its administrative and financial structure [2][4] - ContextLogic is pursuing strategic alternatives to generate value for its shareholders after the sale of substantially all its operating assets in April 2024 [9] Leadership Changes - Ted Goldthorpe from BC Partners is expected to be named Chairman of the Board of ContextLogic, with Mark Ward also joining the Board [5][6] Company Background - ContextLogic Inc. is a publicly traded company that has shifted its focus towards strategic acquisitions to enhance shareholder value [9] - BC Partners is a leading international investment firm with approximately €40 billion in assets under management, specializing in private equity, private debt, and real estate strategies [10]

Asset Sale - ContextLogic Inc. completed the Asset Sale to Qoo10 on April 19, 2024, selling substantially all of its assets, including the Wish platform, while retaining net operating losses and certain cash equivalents[22]. - The Company completed an asset sale on April 19, 2024, with total proceeds of $214 million[48]. - Following the Asset Sale, the Company no longer has revenues from marketplace and logistics operations[42]. - Following the asset sale, the company received $162 million in cash from Qoo10, which included certain purchase price adjustments[113]. - Following the Asset Sale, all outstanding equity awards became fully vested, impacting the Company's stock-based compensation[73]. - Substantially all employees became employees of the buyer after the asset sale[83]. Financial Performance - The Company reported marketplace revenue of $24 million and logistics revenue of $36 million for 2023, totaling $60 million in revenue[41]. - Core marketplace revenue was $19 million in 2023, while ProductBoost revenue was $5 million, contributing to a total marketplace revenue of $24 million[41]. - The Company reported a net loss of $1 million for the three months ended September 30, 2024, compared to a net loss of $80 million for the same period in 2023[77]. - The provision for income taxes was $0 million for the three months ended September 30, 2024, compared to $3 million for the same period in 2023, primarily due to withholding taxes on intercompany dividends[75]. Cash and Assets - As of September 30, 2024, the Company held cash equivalents totaling $31 million and marketable securities of $117 million, resulting in total financial assets of $148 million[43]. - The Company’s marketable securities are classified as available-for-sale, with no identified credit loss or impairment in the periods presented[47]. - The Company had no operating lease liabilities as of September 30, 2024, due to the asset sale transferring all leases to Qoo10[61]. - The Company had no unrecognized tax benefits as of September 30, 2024, down from $4 million as of December 31, 2023[75]. Debt and Liabilities - The Company terminated its Revolving Credit Agreement, which previously allowed borrowing up to $280 million, on April 19, 2024[50]. - Following the asset sale, accrued liabilities decreased by 100% to $4 million, down from $90 million as of December 31, 2023[51][52]. - Other accrued liabilities decreased by 87% to $4 million primarily due to the asset sale[52]. - The Company reduced its Revolving Credit Facility from $280 million to $7 million as of March 2024, with a minimum liquidity covenant of $350 million[63]. Accounting and Reporting - The interim financial statements for the three and nine months ended September 30, 2024, are unaudited and include all normal recurring adjustments necessary for fair presentation[25]. - There have been no changes to the Company's significant accounting policies that have materially impacted its condensed consolidated financial statements since the 2023 Form 10-K filing[36]. - The Company expects no material impact from the adoption of recent accounting standards updates related to segment reporting and income tax disclosures[37]. - The Company identified material weaknesses in internal control over financial reporting, including insufficient management oversight and inadequate IT general controls[112]. Workforce and Compensation - The company reduced its workforce by approximately 17% in January 2023 and 34% in August 2023, resulting in charges of approximately $13 million for severance and personnel reduction costs[82]. - The total stock-based compensation expense for the nine months ended September 30, 2024, was $12 million, a decrease from $54 million for the same period in 2023[74]. - The Company’s CEO, Jun Yan, received RSUs and options with a total grant date fair value of $6 million, which became fully vested upon the Asset Sale[69]. - The fair value of stock options was estimated at $11.27 per share for the nine months ended September 30, 2023, with a risk-free interest rate of 4.15%[72]. Revenue Recognition - The Company recognized logistics revenue on a gross basis, while marketplace revenue was generally recognized on a net basis[38]. - The Company evaluated revenue recognition based on control of goods or services, fulfillment responsibility, inventory risk, and pricing latitude[38]. - The Company’s logistics services required merchants to prepay on a per order basis, with revenue recognized over time as services were performed[40].

Financial Performance - Net loss for Q3 2024 was $1 million, a significant improvement from a net loss of $80 million in Q3 2023[1] - The net loss per share for Q3 2024 was $0.04, compared to $3.35 in Q3 2023[11] - Net loss for September 30, 2024, was $73 million, a significant improvement from a net loss of $249 million in the same period of 2023[12] - Net cash used in operating activities decreased to $92 million from $266 million year-over-year[12] Cash and Liquidity - As of September 30, 2024, the company had $33 million in cash and cash equivalents and $117 million in marketable securities[2] - Total cash, cash equivalents, and restricted cash at the end of the period was $40 million, down from $310 million at the end of the previous year[12] - Cash flows from investing activities resulted in a net cash outflow of $103 million, compared to a net inflow of $75 million in the prior year[12] - Cash paid for income taxes was negligible, with no payments made in the current period compared to $1 million in the previous year[12] - The company had a foreign currency effect on cash of $(2) million, compared to $(7) million in the prior year[12] Expenses and Liabilities - The company incurred $3 million in general and administrative expenses during Q3 2024, primarily due to legal and employee expenses[4] - Total liabilities as of September 30, 2024, were $5 million, with expectations to remain low until future targets are identified[7] - The company reported a depreciation and amortization expense of $1 million for the current period, down from $3 million in the same period last year[12] - Stock-based compensation decreased to $12 million from $54 million year-over-year[12] - The company experienced a decrease in accounts payable by $15 million compared to a decrease of $17 million in the previous year[12] Strategic Focus - The company is focused on identifying and evaluating strategic opportunities to enhance stockholder value[3] - The company had eight full-time employees at the end of Q3 2024[4] Assets - Total current assets decreased from $410 million in 2023 to $158 million in 2024[10] - The company reported a deferred tax asset of $609 million as of December 31, 2023, subject to a full valuation allowance[6] Interest Income - Interest income for Q3 2024 was $2 million, with an expectation to earn approximately $2 million in Q4 2024[5] Asset Sales - Proceeds from asset sales resulted in a cash outflow of $133 million, with no comparable figure from the previous year[12]