WM Technology(US:MAPS)2022-11-08 03:42Financial Data and Key Metrics Changes - Q3 revenue was $51 million, a decline of 1% year-over-year [23] - Reported net income and adjusted EBITDA were both a loss of $10 million [23] - Q3 gross margin rate was 92%, consistent with the prior quarter [25] - Adjusted operating expenses (OpEx) were $56 million, a 46% increase year-over-year [25][26] - Cash at the end of the quarter was $34 million with no long-term debt [33] Business Line Data and Key Metrics Changes - There was a 25% growth in paying clients during Q3, but revenue per paying client declined [24] - Bad debt expense significantly impacted adjusted EBITDA, with 90% of bad debt related to 15 clients [29] Market Data and Key Metrics Changes - The California market, contributing 53% of total Q3 revenue, saw a year-over-year sales decline of 10% [28] - The overall market environment remains challenging, with liquidity issues affecting clients [38] Company Strategy and Development Direction - The company aims to execute against previous investments while recalibrating operational focus to improve efficiency [15][20] - There is a commitment to operational excellence and profitability, with a focus on cash flow generation [19][39] - The leadership transition includes a search for a new CEO with experience in complex online marketplaces [17][18] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the prolonged time required for a return to growth in cannabis markets [27] - There is a lack of clear signs that market challenges have bottomed out, with expectations of mid-single-digit revenue decline in the second half [38] - The objective for 2023 is to achieve profitability and positive cash flow despite market uncertainties [39] Other Important Information - The company will discontinue the prior MAU metric due to its correlation with marketing investments rather than revenue growth [35][36] - Plans for 2023 will be detailed in the upcoming Q4 call [36] Q&A Session Summary Question: What does "more focused and more streamlined" mean? - The focus is on prioritization, decentralizing decision-making, and restructuring to allow faster operations while controlling spending [44] Question: What key things are being watched regarding the midterms? - Positive news is expected, and the company is preparing to execute go-to-market strategies in states with favorable polling [47][49] Question: What is the current market environment like, especially in California? - California faces commoditization and a robust black market, leading to price pressures and operational challenges [54][55]