FlexShopper, Inc.

Greetings and welcome to the FlexShopper first quarter financial results conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Carlos Sanchez, Investor Relations. Thank you. You may begin.

Thank you, and good morning. Welcome to Flex Shopper's first quarter 2024 financial results conference call. With me today are Russ Heiser, our chief executive officer, and John Davis, our chief operating officer. We issued earnings release yesterday, which we'll be referencing during today's call. Our earnings release and SEC filings can be found on our investor relations section of our website. We will be available for Q&A following today's prepared remarks. Before we begin, I would like to remind everyone that this call will contain forward-looking statements regarding future events and financial performance, including statements regarding our market opportunity, the impact of our growth initiatives, and future financial performance. These should be considered in conjunction with cautionary statements contained in our earnings release and the company's most recent periodic SEC reports, including our annual report and quarterly report 10Q, for the quarter ending March 31, 2024. These statements reflect the management's current beliefs, assumptions, and expectations, and are subject to a number of factors that may cause actual results to differ materially from those statements. Except as required by law, we undertake no obligation to publicly update or revise any of these statements, whether as a result of any new information, future events, or otherwise. During today's discussion of our financial performance, we will provide certain financial information that contains non-GAAP financial measures under SEC rules. These include measures such as EBITDA, net income, and adjusted net income. These non-GAAP financial measures should not be considered replacements and should be read together with our GAAP results. Reconciliation to these GAAP measurements and certain additional information are also included in today's earnings release. which is also available on the investor section of our website. This call is being recorded and a webcast will be available for replay on our investor relations section of our website. I will now turn the call over to our CEO, Russ Heiser.

Thank you, Carlos. Thanks to everyone joining us this morning. We'll discuss our first quarter performance and provide some insights into the first quarter of 2024 and the rest of the year. Overall, the first quarter continued the financial progress from prior periods. Comparing the first quarter of 2024 versus the first quarter of the prior year, total revenue increased 10%, gross profit increased 31%, free marketing EBITDA was up 25%, and core earnings, a representation of recurring earnings outlined in our press release, was up 65%. As previewed on our last call, there are two new lines on the income statement, retail revenue and cost of retail revenue. These two lines represent transactions on our FlexShopper.com website that are not settled with FlexShopper leases, but are settled with other funding options chosen by the consumer. We expect retail revenue to grow over the coming quarters. First, these additional funding options were only active for a portion of the first quarter. Second, we expect to add other funding options to the site this year that will broaden the offerings to appeal to both prime and non-prime consumers. As mentioned previously, we want to provide monetization options for all of the visitors to our site, and channeled the margins back into marketing. As you can see in our financials, marketing spend was up 60% versus the same quarter in 2023. As we continue to ramp marketing spend, we continue to grow total FlexShopper fundings as well as retail revenue. The other initiatives mentioned last quarter continue to progress. We continue to add more SKUs to the site to gain a larger share of our customer spending and launched a microsite focused on electronics, with many additional sites in the works in order to have a greater reach than the single FlexShopper.com marketplace site. Our non-prime consumer continues to face headwinds from the macroeconomic environment. There's been increased focus on enhancements to our risk-based pricing to balance the cost to the consumer versus optimizing consumer engagement. This has required significant enhancements to fraud algorithms in order to grow a portfolio that produces the correct level of asset returns. On the retail front, we planned a retail expansion of around 580 doors by mid-May. I'm pleased to report that expansion was achieved by the end of April. We continue to have a robust pipeline of retailer opportunities, both in brick-and-mortar stores and on other retailers' websites. In addition, we'll be offering our leases in Spanish in the second quarter in some verticals that have expressed an interest based upon their consumer base. Finally, we have added one other patent to our portfolio of issued and pending patents focused on providing lease-to-own options on online retailers' websites. And I'll hand the call over to John Davis to dive into the company's first quarter performance.