Wag! (US:PET)2022-11-13 16:12Financial Data and Key Metrics Changes - The company reported record revenue of approximately $15.4 million for Q3 2022, an increase of 161% compared to $5.9 million in Q3 2021 [6][10] - Adjusted EBITDA loss improved to $461,000 from a loss of $2.6 million in the same period last year [10][29] - The take rate improved to 61% from 43% in Q3 2021, driven by diversification of the platform [10][25] - The company ended the quarter with over $28 million in cash and cash equivalents, maintaining a strong balance sheet [29] Business Line Data and Key Metrics Changes - Wellness services contributed to 62% of revenue in Q3 2022, indicating strong demand for pet wellness products [25] - Wag! Premium penetration reached 53%, up from 50% in the previous quarter, achieving the long-term target two and a half years ahead of schedule [11][25] - Platform participants grew to 473,000, a 22% increase from the previous quarter [10] Market Data and Key Metrics Changes - The company noted a 47% return to office trend, which is expected to drive growth in existing markets [17] - The average price for pet caregivers to join the platform increased from approximately $29.95 in Q2 to around $41.50 in Q3 [12] Company Strategy and Development Direction - The company aims to accelerate growth in existing markets, expand premium subscription offerings, and prioritize opportunistic M&A [17][20] - The acquisition of Furmacy is expected to enhance the company's reach in the pet wellness category [20][30] - The company is focused on maintaining a balance of growth, margin, and profit, emphasizing operational efficiency [10][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver sustainable growth, raising the 2022 revenue guidance to a range of $51 million to $52 million, reflecting a year-over-year increase of 155% to 160% [32] - The management acknowledged potential seasonality effects and consumer behavior changes during the holiday season, which may impact Q4 performance [41] Other Important Information - The company is actively testing pricing and benefits for Wag! Premium to enhance customer value [11][18] - The company is committed to managing gross margin and profit while pursuing strategic growth opportunities [22] Q&A Session Summary Question: Details on the wellness platform growth - Management noted that wellness products, including insurance and expert care, are driving significant growth, with pet insurance being a key catalyst [35][36] Question: Consideration of a recurring fee for pet caregivers - Management indicated that while dynamic pricing is being tested, a subscription model for caregivers is not out of the question [38][39] Question: Q4 guidance and seasonality considerations - Management acknowledged conservatism in Q4 guidance due to potential shifts in consumer spending priorities during the holiday season [41] Question: Breakdown of services revenue growth - Management refrained from separating wellness revenue streams but expressed confidence in sustaining long-term growth rates above 40% [44][45] Question: Premium subscription penetration and future growth - Management plans to focus on pricing and bundling strategies to maintain premium penetration and enhance monetization [60] Question: Impact of strategic partnerships on customer acquisition costs - Management highlighted the importance of partnerships with brands like Tractor Supply and Kimpton in enhancing customer acquisition [62] Question: Customer usage of multiple services - Management reported that long-term rebooking rates remain high, with premium pet parents using services more frequently [66]