textLogic (WISH) - 2024 Q4 - Annual Report

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] - The accumulated deficit as of December 31, 2024, was $3.3 billion, with expectations of continued losses from operations due to acquisition-related costs[134] - 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 a percentage of revenue increasing from 6% to 14%[165] - 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, with a percentage of revenue rising from 2% to 14%[167] Cost Management - Sales and marketing expenses decreased by $125 million or 87% to $18 million in 2024, compared to $143 million in 2023[161] - 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 Management - The company completed an Asset Sale to Qoo10 on April 19, 2024, selling substantially all assets except for certain tax attributes and cash equivalents[139] - Gain on Asset Sale increased by $4 million, or 100%, to $4 million for the year ended December 31, 2024, due to the completion of the Asset Sale on April 19, 2024[166] - 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 - 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, significantly improved from $341 million in 2023, primarily driven by a net loss of $75 million[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, compared to $5 million in 2023, both related to tax payments for employee stock settlements[179] Workforce and Operational Changes - Workforce reductions in 2023 involved approximately 400 employees, representing about 50% of the global workforce, incurring charges of approximately $13 million[136] - The company expects to incur minimal administrative costs post-Asset Sale while overseeing remaining assets[142] Market Conditions - The company is monitoring global financial market volatility, including inflation and rising interest rates, which may adversely affect business operations[135] Valuation and Taxation - The company utilizes the Black-Scholes option pricing model and Monte Carlo Simulation model to estimate the fair value of stock options and performance stock units (PSUs) respectively[196] - The assumptions used in the valuation models involve significant judgment and can lead to materially different stock-based compensation expenses if factors change[197] - The company is subject to income taxes in the U.S. and various international jurisdictions, requiring significant estimation and judgment[198] - Deferred tax liabilities and assets are recognized for expected future tax consequences of temporary differences and net operating loss carryforwards[199]