textLogic (WISH) - 2025 Q1 - Quarterly Results

Executive Summary & Q1 2025 Financial Highlights Strategic Developments and Outlook ContextLogic completed a strategic investment from BC Partners, strengthening its board and positioning the company for future growth and acquisitions to maximize stockholder value - The first quarter of 2025 marked a pivotal step with the completion of the strategic investment from BC Partners in a ContextLogic subsidiary, advancing the company's value-maximization strategy through organic growth and value-enhancing acquisitions[4] - ContextLogic made several important changes to its board of directors, naming Ted Goldthorpe as Chairman and adding Mark Ward from BC Partners, along with financial industry veteran Jennifer Chou[5] - CEO Rishi Bajaj stated that with the initial tranche of the BC Partners strategic investment complete and a strengthened board, ContextLogic is well-positioned to identify and pursue growth and acquisition opportunities that create long-term value for stockholders[9] Key Financial Highlights The company reported a significantly reduced net loss of $4 million in Q1 2025, held $222 million in cash and marketable securities, and generated $72 million from financing activities related to the strategic investment - As of March 31, 2025, ContextLogic had approximately $222 million in cash, cash equivalents, and marketable securities on a consolidated basis[6] - The company has an option for an additional issuance of redeemable convertible preferred units, which, if called, would add an additional $75 million in cash available for investment in the business[6] - Net loss for Q1 2025 was $4 million, a significant improvement compared to a net loss of $59 million in the first quarter of fiscal year 2024[11] - During Q1 2025, the company incurred $6 million in general and administrative expenses, including $4 million for employees, legal, and professional services (with $1 million stock-based compensation) and $2 million for strategic transaction evaluation[7] - The company used $5 million cash in operating activities and generated $72 million from financing activities tied to the Strategic Investment, consisting of $75 million proceeds from preferred unit issuance net of $3 million in stock issuance costs[8] Company Overview Business Strategy ContextLogic is currently focused on developing a new business and pursuing bolt-on acquisitions to complement its operations - ContextLogic Inc. is a publicly traded company currently seeking to develop and grow a de novo business and finance potential future bolt-on acquisitions of assets or businesses that are complementary to its operations[10] Financial Statements Condensed Consolidated Balance Sheets The balance sheet as of March 31, 2025, shows a significant increase in marketable securities and total assets, alongside the introduction of redeemable non-controlling interest due to the strategic investment Condensed Consolidated Balance Sheets (in millions) | Item | As of March 31, 2025 | As of December 31, 2024 | Change (QoQ) | | :-------------------------------- | :------------------- | :-------------------- | :----------- | | Cash and cash equivalents | $64 | $66 | -$2 | | Marketable securities | $158 | $83 | +$75 | | Prepaid expenses and other current assets | $1 | $7 | -$6 | | Total current assets | $223 | $156 | +$67 | | Total assets | $223 | $156 | +$67 | | Accounts payable | $1 | $— | +$1 | | Accrued liabilities | $2 | $5 | -$3 | | Total current liabilities | $3 | $5 | -$2 | | Total liabilities | $3 | $5 | -$2 | | Redeemable non-controlling interest | $75 | $— | +$75 | | Stockholders' equity | $145 | $151 | -$6 | | Total liabilities, redeemable non-controlling interest, and stockholders' equity | $223 | $156 | +$67 | - Total current assets increased by $67 million quarter-over-quarter, primarily driven by a $75 million increase in marketable securities, partially offset by a $2 million decrease in cash and cash equivalents[14] - Redeemable non-controlling interest increased to $75 million as of March 31, 2025, reflecting the proceeds from the issuance of redeemable convertible preferred units[14] Condensed Consolidated Statements of Operations For Q1 2025, the company reported no revenue and a substantially reduced net loss of $4 million, reflecting the impact of asset sales and significantly lower operating expenses compared to Q1 2024 Condensed Consolidated Statements of Operations (in millions, except per share data) | Item | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change (YoY) | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | :----------- | | Revenue | $— | $36 | -$36 | | Cost of revenue | $— | $30 | -$30 | | Gross profit | $— | $6 | -$6 | | Sales and marketing | $— | $15 | -$15 | | Product development | $— | $22 | -$22 | | General and administrative | $6 | $22 | -$16 | | Total operating expenses | $6 | $59 | -$53 | | Loss from operations | $(6) | $(53) | +$47 | | Interest and other income, net | $2 | $— | +$2 | | Loss before provision for income taxes | $(4) | $(53) | +$49 | | Provision for income taxes | $— | $6 | -$6 | | Net loss | $(4) | $(59) | +$55 | | Adjustments attributable to redeemable non-controlling interest | $(3) | $— | -$3 | | Net loss attributable to common stockholders | $(7) | $(59) | +$52 | | Net loss per share attributable to common stockholders, basic and diluted | $(0.27) | $(2.43) | +$2.16 | | Weighted-average shares used in computing net loss per share (in thousands) | 26,306 | 24,315 | +1,991 | - The company reported no revenue or cost of revenue in Q1 2025, compared to $36 million in revenue and $30 million in cost of revenue in Q1 2024, reflecting the sale of substantially all of its assets[16] - Total operating expenses significantly decreased to $6 million in Q1 2025 from $59 million in Q1 2024, primarily due to the absence of sales and marketing and product development expenses[16] - Net loss improved to $4 million in Q1 2025 from $59 million in Q1 2024, resulting in a net loss per share attributable to common stockholders of $(0.27) compared to $(2.43) year-over-year[16] Condensed Consolidated Statements of Cash Flows Cash flows from operating activities improved significantly, while investing activities showed a net outflow due to marketable securities purchases, and financing activities provided a substantial inflow from the strategic investment Condensed Consolidated Statements of Cash Flows (in millions) | Item | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change (YoY) | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | :----------- | | Net cash used in operating activities | $(5) | $(75) | +$70 | | Net cash (used in) provided by investing activities | $(75) | $90 | -$165 | | Net cash provided by (used in) financing activities | $72 | $(1) | +$73 | | Net (decrease) increase in cash, cash equivalents and restricted cash | $(8) | $12 | -$20 | | Cash, cash equivalents and restricted cash at end of period | $65 | $250 | -$185 | - Net cash used in operating activities significantly decreased to $5 million in Q1 2025 from $75 million in Q1 2024, primarily due to reduced net loss and changes in operating assets and liabilities[18] - Investing activities resulted in a net cash outflow of $75 million in Q1 2025, primarily due to $158 million in purchases of marketable securities, partially offset by $83 million in maturities[18] - Financing activities generated $72 million in Q1 2025, mainly from the proceeds of redeemable convertible Preferred Units, a substantial increase from a $1 million outflow in Q1 2024[18] Forward-Looking Statements Risk Factors and Disclaimers This section outlines the inherent risks and uncertainties associated with forward-looking statements, emphasizing factors such as the lack of operating revenues, acquisition risks, and the company's intention not to update these statements - This news release contains forward-looking statements subject to risks, uncertainties, and assumptions, including those related to ContextLogic's financial outlook, strategic alternatives, and the use of cash or cash equivalents[12] - Important factors that could cause actual results to differ materially include the company's lack of operating revenues after asset sales, prior history of losses, risks related to future acquisitions, and the ability to develop a viable future business plan[12] - ContextLogic assumes no obligation to, and does not currently intend to, update any forward-looking statements after the date of this release[12] Contacts Investor Relations Contact information for investor relations is provided for stakeholders - Investor Relations contact information is provided for Lucy Simon at ir@contextlogicinc.com[19]