WM Technology, Inc. (“WM Technology” or the “Company”) (Nasdaq: MAPS), a leading technology and software infrastructure provider to the cannabis industry, today announced its financial results for the third quarter ended September 30, 2021.
“Our third quarter results reflect the momentum we are seeing as we focus on executing and investing against our growth opportunities. We achieved revenue growth in the U.S. of 46% year-over-year, maintained healthy EBITDA profitability and also had double-digit year-over-year growth across a number of our key metrics. Our ability to outpace our end-market growth is especially notable given the challenges many of our clients faced given what we believe is accelerating consumer demand shifts to non-licensed channels,” said Chris Beals, CEO and Chairman of WM Technology. “Additionally, we continue to accelerate investment in both organic and inorganic growth in our platform during the third quarter as we look towards 2022. In addition to the acquisition of Sprout announced in mid-September, we also acquired the parent company to Cannveya and CannCurrent. These acquisitions complement the suite of integrated solutions we provide through our WM Business offering that help both large and small clients. We are very excited to welcome each of these teams and technology to the WM Technology family and are more excited than ever at the near and long-term opportunity for WM Technology.”
Third Quarter 2021 Financial Highlights
- Revenue increased to $50.9 million, up 9% from the third quarter of 2020 or 46% in the U.S. (when adjusting the prior third quarter to exclude revenue associated with Canada-based retail operators who failed to provide valid license information and were subsequently removed from the Weedmaps marketplace).
- Monthly active users (“MAUs”)(1)(2) increased to 13.9 million at September 30, 2021 or 37% compared to the prior year period (or 28% when adjusting the current period to exclude the MAUs attributed to the Learn section of weedmaps.com that we were not able to track during the prior period).
- Average monthly revenue per paying client(1)(3) increased to $3,817 or 7% compared to the prior year period (or 18% when excluding revenue from Canada-based retail operators who failed to provide valid license information from the prior year period).
- Average monthly paying clients(1)(4) increased to 4,444 or 2% compared to the prior year period (or increased 24% when excluding Canada-based retail operators who failed to provide valid license information from the prior year period).
- Gross Profit was $48.8 million implying a 96% margin rate, which reflects a 50bps margin expansion from the prior year.
- Net income was $49.2 million as compared to $15.5 million from the prior year period.
- Adjusted EBITDA(5) was $10.4 million as compared to $16.5 million from the prior year period.
- Basic net income per share was $0.32 based on 64.2 million of Class A Common Stock weighted average shares outstanding. Diluted net income per share was $0.02 based on 68.3 million Class A Common Stock weighted average diluted shares outstanding.
- As of September 30, 2021, our share count includes:
- 65.7 million shares of Class A Common Stock.
- 65.5 million shares of Class A Common Stock issuable upon exchange of Class A units representing limited liability company interests of WM Holding Company, LLC (“WMH”) combined with an equivalent number of shares of Class V Common Stock.
- 7.0 million shares of Class A Common Stock issuable upon exercise of warrants originally issued in a private placement in connection with the initial public offering of Silver Spike Acquisition Corp. (“Silver Spike”).
- 12.5 million shares of Class A Common Stock issuable upon exercise of the public warrants originally issued in the initial public offering of Silver Spike.
- Up to 25.7 million shares of Class A Common Stock, 23.2 million of which have vested, issuable upon exchange of Class P units representing limited liability company interests of WMH (“Class P Units”).
- 4.1 million granted restricted stock units, of which 0.2 million had vested as of September 30, 2021.
- Cash totaled $77.9 million as of September 30, 2021.
Reconciliations of GAAP to non-GAAP financial measures have been provided in the tables included in this release.
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- We have modified the definition and calculation of three of our Key Operating and Financial Metrics: (a) average monthly revenue per paying client, (b) average monthly paying clients, and (c) MAUs. We made these modifications in order to better reflect our performance during a reporting period and to make these key metrics more easily comparable on a period-to-period basis. For comparison of these metrics to previous calculations see “Selected Current and Previous Operating Key Metrics” below.
- MAUs are defined as the number of unique users opening our Weedmaps mobile app or accessing our Weedmaps.com website over the course of a calendar month. This metric previously excluded the MAUs attributed to the Learn section of weedmaps.com, which we began tracking in March 2021. See “Selected Current and Previous Operating Metrics” below for a description of how we used to calculate MAUs and what our MAUs would have been using our prior definition for the applicable periods.
- Average monthly revenue per paying client is defined as the average monthly revenue for any particular period divided by the average monthly paying clients in the same respective period. See “Selected Current and Previous Operating Metrics” below for a description of how we used to calculate average monthly revenue per paying client and what our average monthly revenue per paying client would have been using our prior definition for the applicable periods.
- Average monthly paying clients are defined as the average of the number of paying clients billed in a month across a particular period (and for which services were provided). See “Selected Current and Previous Operating Metrics” below for a description of how we used to calculate average monthly paying clients and what our average monthly paying clients would have been using our prior definition for the applicable periods.
- For further information about how we calculate EBITDA and Adjusted EBITDA as well as limitations of their use and a reconciliation of EBITDA and Adjusted EBITDA to net income, see “Reconciliation of Net Income to EBITDA and Adjusted EBITDA” below.
Third Quarter 2021 Operational Highlights
- Completed two acquisitions in Sprout and Transport Logistics Holding Company, LLC, the parent company to Cannveya and CannCurrent. As part of the acquisitions, we hired the founders and teams of both companies.
- Continued to drive improvements in the Weedmaps user experience by increasing the accuracy of menu and product information across our marketplace and surfacing deals and promotions.
- Enabled online order-ahead functionality on our iOS app.
- Launched our 2nd annual “Best of Weedmaps” marketing program heading.
- Drove wider availability of Menu and Orders integrations to ensure easier Menu set-up and Orders and WM Store-enablement so that our clients could more easily convert user traffic to transactions.
- Expanded our cost-per-click, or “CPC”, pricing tests in additional markets to enable more performance-based buying options for our clients.
- Invested ahead of key East Coast state openings, like New Jersey and New York, with on-the-ground efforts through our social equity workshops and work with local cannabis associations and also seeded awareness of the Weedmaps brand through efforts like the Kevin Durant partnership that we announced.
- Developed capabilities for full-service multi-channel media solutions offering to begin piloting in Q4.
- Continued to invest heavily in headcount, with over 75 new hires in Q3, mostly across our regional go-to-market teams and within our Engineering, Product & Design teams.
Fourth Quarter Business Outlook
Based on current business trends and conditions, the outlook for the fourth quarter of the year ending December 31, 2021, is expected to be as follows:
- Revenue is estimated to be between $50 million and $52 million.
- Adjusted EBITDA is estimated to be between $3 million and $5 million.
The guidance provided above is only an estimate of what we believe is realizable as of the date of this release. We are not readily able to provide a reconciliation of projected Adjusted EBITDA to projected net income without unreasonable effort. This guidance assumes that no business acquisitions, investments, restructurings, or legal settlements are concluded in the quarter. Our results are based on assumptions that we believe to be reasonable as of this date, but may be materially affected by many factors, as discussed below in “Forward-Looking Statements.” Actual results may vary from the guidance and the variations may be material. We undertake no intent or obligation to publicly update or revise any of these projections, whether as a result of new information, future events or otherwise, except as required by law.
Investor Conference Call and Webcasts
The Company will host a conference call and webcast today, Thursday, November 11, 2021, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time) by dialing (833) 855-0799 (United States and Canada) or (409) 937-8921 (International) and providing Conference ID 1999619. A live webcast of the call will also be available on the WM Technology investor relations website at ir.weedmaps.com.
A telephone replay of the call may be accessed the same day from Thursday, November 11, 2021 until 5:00 Pacific Time (8:00 p.m. Eastern Time) on Thursday, November 18, 2021 by dialing (855) 859-2056 (United States and Canada) or (404) 537-3406 (International) and providing Conference ID 1999619. A webcast replay will also be archived at ir.weedmaps.com.
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