SpringBig Holdings, Inc.

Good day and thank you for standing by. Welcome to the Spring Big second quarter 2022 earnings call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you need to press star 1-1 on your telephone. Please be advised that today's conference is being recorded. I would like to hand the conference over to Spring Big Investor Relations. Please go ahead.

Thank you. Hi, everyone, and thanks for joining our Q2 earnings conference call. Joining me on the call today are Jeff Harris, our CEO, founder, and chairman, and Paul Sykes, our CFO. By now, everyone should have access to our earnings announcement. This announcement is also on our investor relations website. During this call, we'll make forward-looking statements, including statements about our business outlook, strategies, and long-term goals. These comments are based on our plans, predictions, and expectations as of today, which may change over time. Our actual results could differ materially due to a number of risks and uncertainties, including the risk factors outlined in our 10-Q that will be filed with the SEC. Also during this call, we will discuss certain non-GAAP financial measures. These non-GAAP measures are not intended to be a substitute for our GAAP results. Please refer to our earnings release on our Investor Relations website for a reconciliation of GAAP and non-GAAP financial measures, as well as additional context on our key operating metrics. And finally, this call in its entirety is being webcast from our investor relations website at www.investors.springbig.com. And an audio replay will be available on our website in a few hours. With that, I'd like to turn the call over to Jeff.

Thanks, everyone, for joining us today on what is Spring Big's first quarterly earnings call as a public company. We're thrilled to have just completed our merger with Tuatar Capital Acquisition Corporation in June. and to be listed on the NASDAQ under the ticker SBIC. We are excited to step on this larger stage and discuss our results for the second quarter and provide guidance for the balance of the year. Before I delve into our results, I wanted to take a moment to acknowledge and thank all of the employees at Spring Big responsible for building, selling, and managing the offerings that have allowed us to be where we are today. We couldn't achieve our results without the collaborative effort and support of the entire Spring Big family. Our teams have been singularly focused on operational execution against our strategic pillars and growth priorities, and we're excited by the opportunity and results we're seeing in our end markets. We had a strong second quarter. Our Q2 revenue came in at $6.6 million, representing growth of 13% year over year. As a bit of context, we are seeing two key themes that are providing headwinds to marketing spend across cannabis. First, Inflation is negatively impacting discretionary spending by consumers in the U.S. and Canada. Second, this lower consumer demand is causing oversupply in many key markets, driving a decrease in retail prices, pressuring margins, and increasing scrutiny around marketing spend. Despite these pressures, our Q2 revenue grew more than 3% sequentially, a positive sign of momentum into the second half of the year. Our growth in Q2 is underpinned by year-over-year subscription revenue growth of 35%, continuing the strong momentum we saw in Q1. As Paul will cover later, we are primarily a subscription-based SaaS business, which provides predictability and increases visibility into results. We also saw continued strength across all of our key operating metrics, with our net revenue retention rate, again, solidly above 110%, and growth in both number of clients, and locations. While our focus is on accelerating top-line growth, we remain committed to driving leverage through a balanced investment approach and plan to achieve EBITDA break-even during 2023 and are fully funded to do so. For many of the investors and analysts dialed in today, we've gotten to know you over the years, but since this is our first call as a public company, I wanted to take some extra time to walk through who we are and what we do. Leveraging my decades of experience in customer relationship marketing, in 2014, I launched Spring Big as an industry-agnostic digitized loyalty platform. Within two years, we had grown to several hundred active and paying customers, but as we analyzed our customer cohort, it became quite evident that cannabis retailers were leveraging our platform much more frequently than other industries. What we discovered was that although a fast-growing market, cannabis retailers and brands face specific challenges to broaden their exposure and had limited avenues to reach their large and growing customer base. Realizing that our platform had the unique ability for retailers to boost foot traffic and drive a material increase in average ticket size, beginning in 2017, we made the decision to go all in on cannabis with an eye towards other industries that face similarly restrictive marketing challenges. Fast forward to today, We have over 1,300 clients in more than 2,800 retail locations, addressing more than $7 billion in GMV and delivering more than 2 billion messages annually. We have expanded into other areas, including analytics, and released modules for our retail clients to easily collect consumer feedback and a suite of automation and trigger tools to drive a true one-to-one communication experience between the retailer and their customer base. with many of our clients utilizing our platform as their primary customer CRM. Further, we expect significant TAM expansion as new states continue to issue licenses with material runway for market share gains through our land and expand strategy. Lastly, tailwinds from legislative change are suggestive that we are in the early innings of cannabis retail market expansion. We have two primary segments in our business, a retailer platform and a brands platform. A retailer platform provides retailers the tools that they need to create and manage a successful loyalty program, along with instituting a data-driven approach to how they connect and engage with their customers. Utilizing a sophisticated data insights dashboard, the platform allows retailers to access campaign data and leverage robust analytics. From a customer standpoint, We offer a suite of integrated consumer-facing products, including program enrollment to ensure compliance, a rewards wallet, and customer feedback portal, all centered around the retail brand through an intuitive UI. We launched our brands platform in 2020 to help cannabis brands more easily connect with their consumers. We're uniquely suited for the selling motion by allowing brands to connect directly with customers through our retailer platforms. benefiting both the retailer by driving traffic to their locations and for the brand, increasing brand awareness and influence. To date, we have more than 100 brand customers on our platform with ROI on these campaigns averaging above 90%. NetNet, we're proud to be the largest loyalty platform in all of cannabis and see an incredible opportunity ahead to increase our wallet share and ROI for retailers and brands. Against this backdrop, I would now like to discuss three areas that we view as key pillars of future growth. First, a network effect that we feel is materially underappreciated. Second, a high growth subscription revenue component that will increase predictability in our revenue stream. And third, an emerging opportunity to monetize the troves of data we have captured. Starting with the network effect, which has become a powerful flywheel between our retail and brands platforms, As mentioned, the ability of cannabis brands to connect directly with consumers has faced challenges due to the retailer distribution model and restrictive marketing guidelines in the industry, until now. In 2019, we began development of a purpose-built co-marketing platform that brands can use to target customers who are shopping at retailers who are selling their products through the SpringVic platform. This co-marketing platform is a unique differentiator in the cannabis industry. providing brands the ability to deliver messaging content to consumers and simultaneously incentivizing retailers to use the provided content. This marketing channel offers a powerful and measurable method of connecting brands with consumers and ensuring that they are seeing the market content. Since we rolled out this co-marketing platform in the middle of last year, we have over 100 brands leveraging this platform as one of the most effective uses of their marketing spend, allowing them to touch the consumer in ways that were not previously possible. The network effect is the true definition of a win-win for both our retailer and brand clients, leveraging consumers who already signed up for their favorite retailer's loyalty programs and driving incremental spend. As a result, brands do not need to worry about building their own database and can capture immediate ROI. Importantly, this form of marketing also provides our retailers with co-op marketing dollars for their campaigns, subsidizing retailer marketing budgets. With a directly marketable database that has grown to over 35 million consumers, this virtuous cycle is playing out each and every day in real time, and one that we think is still in the very early stages. The rapid growth of our flywheel has enabled us to capture meaningful data that is unique to our industry, providing our clients with the insights that they need to be smarter about how they market to their targeted constituency groups and drive their desired results. Moving on to the core component of our revenue, high growth subscriptions. Our retail clients enter into subscription contracts at one year or longer, largely tied to messaging volumes. Superior results from campaigns are driving excess use, often leading to expansion in contract size well before renewal. This clear pattern of increased subscription contract size is creating a more predictable revenue stream, and we expect visibility into results to continue and increase over the long term. Third, I'd like to discuss the data opportunity. Although it's somewhat cliche, it has been said that data is the new oil. Similar to oil, data is dirty, and we have been hard at work organizing the vast amounts that we have captured for immediate and actionable use. We currently have nearly 900 million records, which we believe to be among the most complete data sets in the industry. We leverage it every day to help our clients be smarter about who they're talking to, what they should say, and when they should be saying it in order to generate the most profitable results for their campaigns. Further, the post campaign data analytics that we're able to share provides meaningful insights on how our clients should be thinking about future campaigns in order to drive even higher ROI. Looking ahead, we intend to market our data to third party companies in order to make data driven decisions. Although currently benefiting cannabis brands and retailers, we see a growing opportunity to leverage our data for cannabis investors CPG companies and cannabis adjacent industries that want to better understand the cannabis consumer and how they can most effectively market to them when ready further by reaching beyond the marketing departments of our clients and into other areas of their businesses our offering becomes less discretionary and stickier with our clients our focus over the last several months has been on executing against these strategic priorities and we had several notable client and product wins that I wanted to touch upon first a vertically integrated operator that initially onboarded with two states in 2018. It's now leveraging our platform in over 100 locations across 10 states. Our engagement with this client spans both their retail and wholesale operations, with their custom loyalty apps seeing a very high adoption rate, reaching the top 20 globally for medical apps in the Apple Store. Utilizing our brand's platform, this client has leveraged our platform since early Q1 of this year to connect with consumers in multiple states where their retail partners have a wholesale presence, resulting in increasing brand recognition and engagement for both parties, providing a great example of our flywheel in motion. As our customers and partners begin to realize the value proposition inherent in our platforms, expansion and upsells becomes a natural part of the selling motion. A client in the Midwest operating more than 30 retail stores has leveraged SpringFix platform to amass several hundreds of thousands of customers, driven in part by our capabilities running referral networks. We note loyalty program penetration of over 94% of this client, well above the average of 75% in the state, with average spend and store visits both double the state average. Reflecting the ROI of our offering, earlier this year, this client extended its contract for another year in a six-figure ARR deal, nearly eight times its prior year level. Lastly, a nine-store vertically integrated operator in Washington chose Spring Big in a competitive displacement worth approximately $100,000 in ARR. Due to its sizable textable database, this client was facing persistent challenges around text deliverability and customer service and made the decision to seek a new platform. Our capabilities and infrastructure for supporting large-scale clients offered a clear advantage supported by brand awareness and cross-team relationships that helped influence their decision to switch. This customer plan to utilize our complete loyalty program offering, including a custom native app, omnichannel messaging, our brand's marketplace to run co-marketing campaigns, and our data products to gain insights into performance and program results. They will also be signing up brands under their umbrella to reach customer shopping at other stores in the Spring Big Network. As we have seen across our client base, we anticipate this network effect to generate higher revenue campaigns across their network of stores. Our business model has proven out what we have set out to accomplish years ago, delivering category-leading customer loyalty and marketing automation solutions and tools for the cannabis and markets. Today, we offer what we believe to be the preeminent technology platform for cannabis in a highly fragmented ecosystem, driving amazing value to our retail and brand clients as they scale their businesses. Looking ahead, we see a tremendous growth trajectory as we continue to leverage the network effect flywheel between retailers and brands with additional targeted opportunities to monetize our troves of data collection. So in summary, we have made our debut onto the public markets. with an incredible group of investors supporting us. Regulatory changes at the state and federal levels are working in our favor, and we think there is a tremendous greenfield opportunity across our end markets. These opportunities are incredibly exciting to us as a company, personally invigorating, and increases my confidence in our ability to realize our growth priorities. With that, I'd like to turn things over to Paul, who will walk through our financial results for the second quarter and discuss our outlook. Paul, take it away.