Leafly(US:LFLY)2024-05-10 19:45Financial Data and Key Metrics Changes - The company reported revenue of $9 million in Q1 2024, down 19.6% year-over-year and down 7.2% sequentially [20] - The net loss in Q1 was $2.4 million, an improvement from the $5.4 million net loss reported in Q1 2023 [10] - Adjusted EBITDA in Q1 was negative $0.9 million, improving from negative $3.3 million in Q1 2023 [10] - Gross margin improved to 89.2% in Q1 2024 compared to 88% in Q1 2023 [21] - The company ended the quarter with $14.1 million in cash, excluding restricted cash [39] Business Line Data and Key Metrics Changes - Retail revenue in Q1 was $7.9 million, while brand revenue was $1.2 million, with brand revenue down 34% year-over-year [20][9] - The average revenue per account (ARPA) for the first quarter was $677, up 22% year-over-year and up about 1% sequentially [9] - Ending retail accounts totaled 3,840, marking a 5.8% reduction quarter-over-quarter [32][50] Market Data and Key Metrics Changes - The company is focusing on enhancing retail penetration and customer acquisition in key markets [5][32] - The rescheduling of cannabis is expected to provide significant tax savings for operators, estimated between $1 billion to $2 billion, which can be reinvested into their businesses [43][55] Company Strategy and Development Direction - The company is committed to enhancing operational efficiency and building a path to profitability while nurturing customer relationships [31] - Efforts are being made to revamp the brand subscription offering to introduce brands to the Leafly platform and deepen relationships with them [37] - The company is focused on improving its product portfolio to cater to a wider range of retail customers [16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the potential for growth following the rescheduling of cannabis, which could alleviate capital constraints in the industry [27][55] - The company anticipates revenue of around $8.6 million for Q2 2024 and an adjusted EBITDA loss of approximately negative $1.1 million [41] - Management is focused on mitigating account churn and winning new business to reverse the downward trend in retail accounts [58] Other Important Information - The company is in ongoing dialogue with its lender regarding convertible notes due in January 2025, which have become a current liability [39][56] - The company plans to submit a compliance plan to NASDAQ for a 180-day extension to regain compliance with listing requirements [24] Q&A Session Summary Question: How does the rescheduling of cannabis impact the business and the industry? - Management highlighted excitement around rescheduling, noting it could alleviate capital constraints faced by retailers and brands [27] Question: Can you provide an update on the convertible note? - Management discussed efforts to work with the lender to convert a portion of the debt to equity and explore opportunities to maximize shareholder value [44][45] Question: Can you talk about account churn and new customer acquisition? - Management indicated that account churn has stabilized, and new sales heads are focused on adding accounts to mitigate churn and attract new customers [29][46]