WM Technology(MAPS) - 2025 Q2 - Quarterly Report

Part I - Financial Information Item 1. Condensed Consolidated Financial Statements (Unaudited) This section presents WM Technology, Inc.'s unaudited condensed consolidated financial statements for Q2 and H1 2025, including balance sheets, operations, equity, and cash flows Condensed Consolidated Balance Sheets Total assets increased to $188.1 million by June 30, 2025, driven by cash, while liabilities slightly decreased and stockholders' equity grew Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $77,404 | $69,512 | | Cash | $58,951 | $51,966 | | Total Assets | $188,066 | $181,866 | | Total Current Liabilities | $32,200 | $30,433 | | Total Liabilities | $60,061 | $61,799 | | Total Stockholders' Equity | $128,005 | $120,067 | Condensed Consolidated Statements of Operations Q2 2025 revenues slightly decreased to $44.8 million, while net income attributable to WM Technology, Inc. increased to $1.4 million year-over-year Q2 2025 vs Q2 2024 Statement of Operations (in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenues | $44,847 | $45,903 | | Operating Income | $1,969 | $1,231 | | Net Income | $2,159 | $1,194 | | Net Income attributable to WM Technology, Inc. | $1,427 | $716 | | Diluted EPS | $0.01 | $0.01 | Six Months Ended June 30, 2025 vs 2024 Statement of Operations (in thousands) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Revenues | $89,459 | $90,292 | | Operating Income | $4,616 | $4,992 | | Net Income | $4,653 | $3,153 | | Net Income attributable to WM Technology, Inc. | $3,074 | $1,956 | | Diluted EPS | $0.03 | $0.02 | Condensed Consolidated Statements of Equity Total stockholders' equity increased to $128.0 million by June 30, 2025, driven by net income and stock-based compensation - Total WM Technology, Inc. stockholders' equity grew from $36.1 million at year-end 2024 to $52.7 million as of June 30, 2025[25] - During the first six months of 2025, 5 million Class V Common Stock shares were exchanged for Class A Common Stock shares[25] Condensed Consolidated Statements of Cash Flows Net cash provided by operating activities was $16.7 million for H1 2025, contributing to a $7.0 million increase in cash balance to $59.0 million Six Months Ended June 30 Cash Flow Summary (in thousands) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $16,725 | $20,054 | | Net cash used in investing activities | $(6,493) | $(7,140) | | Net cash used in financing activities | $(3,247) | $(5,972) | | Net increase in cash | $6,985 | $6,942 | | Cash – end of period | $58,951 | $41,292 | Notes to Condensed Consolidated Financial Statements This section details significant accounting policies, including revenue recognition, fair value measurements, commitments, contingencies, stock-based compensation, and subsequent events - The company operates a leading online cannabis marketplace (Weedmaps) and provides a suite of SaaS solutions (Weedmaps for Business) for cannabis retailers and brands[30][31][32] - For the six months ended June 30, 2025, approximately 56% of the Company's revenues originated in California, indicating a significant geographic concentration[110] - The company settled an SEC investigation in Q3 2024 regarding its historical reporting of monthly active users (MAUs) by paying a civil penalty of $1.5 million, without admitting or denying the findings[119][120] - A loss contingency of $2.3 million was recorded in Q2 2025 due to a probable shortfall in the minimum purchase obligation under an agreement with AWS[123][124] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q2 2025 financial performance, noting a 2% revenue decrease to $44.8 million and a net income increase to $2.2 million, alongside changes in client metrics Q2 2025 Financial Highlights | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Revenues | $44.8 million | $45.9 million | | Net Income | $2.2 million | $1.2 million | | Adjusted EBITDA | $11.7 million | $10.1 million | | Average monthly paying clients | 5,241 | 5,045 | | Average monthly revenues per paying client | $2,852 | $3,033 | - The decrease in average monthly revenue per paying client was primarily due to spending declines in established markets driven by industry challenges like price deflation and consolidation[201] - The increase in average monthly paying clients was driven by new client acquisitions in developing markets, which partially offset churn in more established markets[204] Results of Operations Q2 2025 revenues decreased 2% due to lower product spending, while total costs and expenses decreased 18%, despite a 12% increase in G&A from an AWS contract contingency - Q2 2025 revenues decreased by $1.1 million (2%) YoY, primarily from a $1.4 million drop in Featured Listing and WM Deal products[243] - Sales and marketing expenses in Q2 2025 decreased by $2.2 million (19%) YoY, mainly due to a $2.1 million reduction in advertising expenses[247] - Product development expenses in Q2 2025 decreased by $2.1 million (22%) YoY, driven by a $1.9 million reduction in personnel-related costs[248] - General and administrative expenses in Q2 2025 increased by $2.2 million (12%) YoY, primarily due to a $2.3 million loss contingency for the AWS minimum commitment, partially offset by a $1.5 million decrease in SEC settlement costs[249] Liquidity and Capital Resources As of June 30, 2025, the company held $59.0 million in cash and $45.2 million in working capital, with $16.7 million net cash from operations for H1 2025 Liquidity Position (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash | $58,951 | $51,966 | | Working Capital | $45,204 | $39,079 | Six Months Ended June 30 Cash Flow Summary (in thousands) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $16,725 | $20,054 | | Net cash used in investing activities | $(6,493) | $(7,140) | | Net cash used in financing activities | $(3,247) | $(5,972) | Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, WM Technology, Inc. is not required to provide quantitative and qualitative disclosures about market risk - As a smaller reporting company, WM Technology, Inc. is not required to provide quantitative and qualitative disclosures about market risk[280] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were not effective as of June 30, 2025, due to ongoing material weaknesses in internal control over financial reporting - The CEO and CFO concluded that disclosure controls and procedures were not effective as of June 30, 2025, due to ongoing material weaknesses[283] - Ongoing material weaknesses include deficiencies in the control environment, risk assessment, and monitoring activities, which contributed to weaknesses in IT general controls and process-level controls[288] - Specific unremediated weaknesses from prior years include ineffective IT general controls for key financial systems and ineffective process-level controls related to order-to-cash, procure-to-pay, capitalized software, payroll, and income tax cycles[289][290] - Remediation efforts are in progress, including improving revenue recognition controls, segregating access in the ERP system, hiring key personnel, and implementing a new ERP system[291][292] Part II - Other Information Item 1. Legal Proceedings This section incorporates by reference Note 5, detailing ongoing litigation including shareholder class action and derivative actions related to historical MAU reporting - The company is facing a putative shareholder class action (Seret Ishak v. WM Technology, Inc. et al.) alleging material misrepresentations regarding historical MAU reporting[114] - Two shareholder derivative actions (DeGennaro v. Francis, et. al and Pearson v. Francis, et. al), which have been consolidated and stayed, were filed against board members and officers, also related to MAU reporting[117][118] Item 1A. Risk Factors There have been no material changes to the risk factors previously disclosed in the 2024 Form 10-K - There have been no material changes to the risk factors previously disclosed in the 2024 Form 10-K[294] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities during the period - None[295] Item 3. Defaults Upon Senior Securities The company reported no defaults upon senior securities - None[296] Item 4. Mine Safety Disclosures This item is not applicable to the company - Not applicable[297] Item 5. Other Information The company reported no other information under this item - None[298] Item 6. Exhibits This section lists exhibits filed with the Form 10-Q, including Certificate of Incorporation, Bylaws, officer certifications, and XBRL data files