Wag! Group Co.

Good morning, ladies and gentlemen. Thank you for standing by and welcome to WAC's second quarter 2022 financial results conference call. At this time, all participants are on a listen-only mode. After this week's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 1-1. Please be advised that today's conference may be recorded. I would now like to hand the conference over to your speaker host, Dawn Frankfurt. Please go ahead.

Thank you for joining WAG's conference call about their second quarter 2022 financial results. On the call today are Garrett Smallwood, Chief Executive Officer, Adam Storm, President and Chief Product Officer, and Alec Davidian, Chief Financial Officer. Before we get started, please note that today's comments include forward-looking statements. These forward-looking statements are subject to risk and uncertainty and involve factors that could cause actual results to occur materially from those expressed or implied by such statements. A discussion of these risks and uncertainties contained in our final prospectus filed with the SEC on July 12, 2022, and our quarterly report on Form 8K for the three months ended June 30, 2022, which was filed with the SEC on August 15, 2022. Also, during this call, we may present both GAAP and non-GAAP financial measures. Reconciliation to the most directly comparable GAAP financial measures are available in our earnings release, which we issued a short time ago. The earnings release is available on the investor relations page of our website and is included as an exhibit in the form 8K furnished to the SEC. Lastly, you can find our earnings presentation posted on our IR website and with the SEC. And with that, let me turn the call over to Garrett.

Thank you, Dawn, and good morning, everyone. I would like to thank you all for joining our first earnings call as a public company. This is an incredible milestone in WAG's journey. We would like to thank our dedicated team for their hard work to make this possible. We're extremely proud of how far we've come since WAG launched in 2015, and we look forward to building on our success in the years ahead. For those new to our story, we are excited to introduce you to WAG. where we believe that being busy shouldn't stop you from owning or taking care of your furry family members. We solve the guilt and stress of owning a pet. And as such, our mission is simple. We exist to make pet ownership possible and to bring joy to pets and those who love them. We're building a strong consumer-branded premium pet care platform that is transforming the pet industry by simplifying caring for the pets you love. The $44 billion pet wellness and service industries are fragmented, and largely offline. We are consolidating those industries online and through our mobile app as we rapidly evolve into the number one pet wellbeing platform. We recently completed our business combination with our partners at CHW Acquisition Corporation. The transaction gave us funding that we expect to be sufficient to fully fund WEG's current business plan over the next two years until it is projected to be cashflow positive, positioning the company to expand its product offerings, achieve its exceptional growth plan, and opportunistically acquire select company. On today's call, we will be discussing our strong financial results for the second quarter, as well as detailing our compelling growth strategy that positions us to deliver strong and sustainable financial performance through 2022 and beyond. Let me now cover a high-level overview of our second quarter performance before turning it over to Adam, President and Chief Product Officer, who will give an update on our strategy and key 2022 initiatives. And then Alec, Chief Financial Officer, will then discuss our second quarter results in more detail, our capital allocation, and our guidance for 2022, which we raised today. We are pleased with our performance this quarter, with revenue increasing over 256% to $12.8 million, compared to $3.6 million in the second quarter of 2021. Net loss improved to 1.1 million from 2.4 million in the second quarter of 2021, ahead of expectations. Adjusted EBITDA improved to a loss of 900,000 from a loss of 2.3 million in the second quarter of 2021, also exceeding expectations. And take rate improved to 58% compared to 36% in the same period last year, driven by increased WAG premium penetration, and continued diversification of the platform, including significant growth in the wellness category. Driving these results, we saw WAG premium penetration increased from 34% in Q2 of 2021 to 50% in Q2 this year. Growing the premium offering is one of our key growth drivers. As pet parents who subscribe to WAG premium are paying an additional $9.99 per month and use the WAG services seven to eight times monthly. During the quarter, we also saw platform participants grow to 387,000, an increase from 19% from the first quarter of 2022. We continue to see the business accelerating coming out of COVID as our pet parents return to normal, demonstrated by WAG's LTV to CAC, which increased to eight to one. We intend to pursue significant awareness growth for our platform and plan to meet new pet parents via strategic partnerships and performance marketing initiatives. Recently, we announced a promotion with Tractor Supply, America's largest rural retailer, and PetSense to provide a range of pet service options to their customers. This partnership follows our announcement with Kempton Hotels and Restaurants to provide access to on-property and at-home pet services for guests staying in any of their properties in the U.S. These promotions are examples of the innovative ways WAG works with leading national brands to help make pet ownership easier for pet parents. Before turning the call over to Adam to discuss our growth initiatives, I'd like to provide a background on what differentiates WAG in the pet wellness category. WAG is not just an app for finding a dog walker. We are a mobile-first subscription-based pet platform, consolidating the fastest secular growth areas within the industry. Through our vertically integrated technology platform, We offer access to dog walking, pet sitting, conversations with licensed pet experts, training services, subscription, and insurance comparison options, and much, much more across more than 5,300 cities in all 50 states. We're a trusted, on-demand digital marketplace, and our goal is to be the leading platform for premium pet care, leveraging our strong consumer brand and proven business model to drive long-term growth. It is important to note that the single most important element to the success of our business is trust. as 75% of WAG pet parents are not home while services are being delivered. It is imperative to build a trusting relationship with each and every pet parent. In order to provide best-in-class experiences, we require each of the more than 400,000 pet caregivers on the WAG platform to undergo background checks, screening, knowledge tests, and we provide property damage insurance and 24-7 customer support. The deep-rooted trust we have created in our business model leads to high-frequency utilization as the average WAC pet parent uses WAC four to five times a month. We believe pet caregivers have an innate love for pets and are building their business with WAC because they love taking care of every animal, from people's dogs and cats to their pigs and ferrets. These factors combined allow us to build a compelling and trusted consumer brand with a high level of engagement, effectively creating a dynamic platform to leverage our initiatives as we rapidly expand our business to new product lines. There are over 12 million reviews in our platform with an average rating of 4.9 out of 5 stars, a testament to the strong foundation we have built and the high bar we have set in terms of experiential quality. WAG's high quality standard is demonstrated in our Q2 organic user acquisition rate of 70%, showing that great experiences drive word of mouth. The same is true on the supply side of the business, where pet caregivers pay on average $29.95 to join the platform. We've created a sizable and dependable community of caregivers, which results in a negative supply side cap. Simply put, we actually make money with the onboarding of the supply. To sum it all up, WAG is the clear leader of on-demand services and wellness platforms as we participate in a broader, convenient economy. As a mobile-first company, we are not taking share from the existing dog walking or sitting or boarding market. We are democratizing access to all pet care. With that, go ahead, Adam.