WM Technology, Inc.

Good afternoon, everyone, and welcome to the WM Technology Inc's third quarter 2024 earnings conference call. All participants will be in a listen-only mode for the duration of the call. I would now like to turn the call over to your host, Simon Yao, Director of Investor Relations.

Good afternoon, and thank you for joining our third quarter 2024 results. We have our CEO, Doug Francis, and CFO, Susan Eckert, with us today. By now, everyone should have access to our earnings announcement and supporting slide deck on our investor relations website. During this call, we will make forward-looking statements about our business outlook, strategies, and long-term goals. Keep in mind that forward-looking statements are not guarantees of future performance and are subject to a variety of risks and uncertainties, some of which are beyond our control. Our action results could differ materially from expectations reflected in any forward-looking statements. For discussion of risks and important factors that could affect our actual results, please refer to our SEC filings available on the SEC website and our Investor Relations website. We specifically disclaim any intent or obligation to update these forward-looking statements except as required by law. For the benefit of those who may be listening to the replay or archived webcast, this call was held on November 12, 2024. Since then, we may have made announcements related to topics discussed, so please refer to the company's most recent press releases and SEC filings. We will also discuss non-GAAP financial metrics alongside those prepared in accordance with GAAP. Non-GAAP financial measures should be considered in addition to, but not as a substitute for the information prepared in accordance with GAAP. You can find a reconciliation of these measures to our GAAP results in our earnings presentation on our Investor Relations website. And finally, today's call is being webcasted from our Investor Relations website, and an audio replay will be there shortly. With that, I will now turn it over to Doug.

Thanks, Simon, and hello to everyone joining us today. Our third quarter reflected another consecutive period of strong quarterly results with net revenues of $46.6 million, adjusted EBITDA of $11.3 million, and any cash of $45 million. This quarter represented the eighth consecutive quarter of positive adjusted EBITDA profitability, and I believe is a result of the continued focus and dedication of our team towards efficiencies. The cannabis industry continues to be dynamic, and a large part of that is due to the lack of progress towards more sensible and consistent regulation, both across the state and at a federal level. The massive change to the landscape of the federal government coming out of last week's election changes the approach, and I'm happy to work with the new administration to have our industry recognized as a lever and driver to help boost the economy, add much-needed jobs, and improve health services. It is unclear whether the incoming Trump administration will continue the progress over the last year towards rescheduling cannabis to Schedule 3. But as I've said before, we continue to believe that while the industry as a whole is excited to see Schedule 3 come to fruition, we do not think the move to Schedule 3 is enough because we firmly believe cannabis should be treated like wine and not on any schedule. On the other hand, we see some cause for optimism. The Senate is where potential cannabis reforms have died in recent years. With new Republican leadership with the Senate, who we hope are more focused on individual freedoms, We hope that the White House will lead the government towards the real change we have all been waiting for. But we remain cautious, as the government reforms may not always benefit the industry as hoped, and the timeline for these reforms is difficult to predict. Another area of continued regulatory uncertainty is around intoxicating hemp, as another year has come and gone without clear instructions from the overdue federal farm bill. This delay has forced states to independently regulate the issue and try to close loopholes that have allowed hemp companies to sell unregulated and untested products claiming to be derived from hemp in every state in the country. We believe that in response to this continued inaction on the federal level, many states will ban hemp outright, much like California recently did. Instead of trying to make sense of the many nuanced questions the Farm Bill has left unanswered, like those around dry versus wet testing, and THC versus THCA. States that do not ban hemp entirely will likely fold it into an existing medical or recreational cannabis model, which will take away the many advantages hemp businesses have over their regulated cannabis counterparts, like the ability to ship across state lines, advertise on lines with platforms that currently ban cannabis ads, and sell their products in any retail establishment or even direct-to-consumer online. To that end, growth expectations for hemp should be tempered. Regardless, we think that some form of hemp is here to stay, likely mostly in the forms of hemp-derived edibles and beverages. As a cannabis platform, we will work to find a way to provide our consumers access to this market in the safest way possible while continuing our support of the licensed cannabis operators and markets. While there's undeniable upside in the hemp space, we need to ensure we're not overextending into areas where the policy or market environment may not be fully supportive of sustainable growth. As I've said since my return to the company, our goal is to focus on the marketplace, be efficient, profitable, build a balance sheet for the future, and play the long game. 2025 will be no different. While we are not ready to change our current approach to guidance nor call a bottom, we are going to deploy capital around opportunities that we feel are low risk in the short term and will be key products for us when industry headwinds turn to tailwinds. But we'll do it on our terms in a way that ensures long-term successes for the company and our stakeholders. We're thinking about future growth potential for our marketplace in two key dimensions. First, the vertical dimension, which for us is the expansion of our core marketplace by adding new products and features both upstream and downstream in our supply chain. We are initially holding these efforts close to the vest and will discuss them in the coming quarters as we get closer to launch. Second, we also plan to expand the marketplace horizontally which for this phase will be around marketplaces for hemp, the seed and homegrown category, and marketplace dedicated to the hard work of those enjoying cannabis. We envision this to be similar to an elevated headshot. These are natural adjacencies to our core, and while they'll provide exciting opportunities, they require us to be strategic in our approach. It's a space where we can offer immediate value to consumers while building out ecosystems that expand and reach our platform. When I returned to WM Technology toward the end of 2022, my expectation was that my role as the executive chair would be temporary while I searched for a new CEO. During that time, my priority was to help navigate through the industry's headwinds and get the company back on track operationally and strategically. We have come a long way since then, and I am proud of our team's commitment and accomplishments that got us here. Our financial stability has put us in a position of strength and gives the company a runway to execute on its business initiatives. But the mission is not complete. And given the great long-term opportunities that would come with federal legalization, the Board and I have decided that I will assume the role as CEO and continue to lead the company into this next phase. With that, I will turn it over to Susan.