SpringBig Holdings, Inc.

Good day and welcome to the Spring Big 4th Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Mr. Ryan Flanagan. Please go ahead.

Thank you. Hi, everyone, and thanks for joining our Q4 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-K 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 reconciliation of gaps and non-gap 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 this afternoon's call. We have a lot of exciting developments to cover. During today's call, Paul and I will provide you details on our fourth quarter and full year results, as well as our guidance for the first quarter and 2023. I'm happy to report that we closed out the year on a high note with revenue prior to a revision and accounting treatment coming in above the midpoint of our guidance, despite persistent macroeconomic headwinds. Growth in the fourth quarter was again driven by subscription revenue, which in Q4 grew 33% year-over-year. Throughout the year, our subscription revenue growth has been consistently strong, culminating in 38% year-on-year growth for 2022. Recall, we are primarily a subscription-based SaaS business, which provides predictability and increases visibility into results. Paul will discuss the fourth quarter in greater detail in a moment. But first, I'd like to highlight some of our accomplishments over the past year, including some noteworthy customer upgrades. I'd then like to lay out our key objectives for 2023. In 2022, we invested to scale the business to the long term. We doubled our commitment to profitable growth, which included a restructuring in Q4, and made material progress on new initiatives. all while successfully completing our IPO in June. While our focus remains on accelerating top-line growth, we also remain committed to driving leverage through a balanced investment approach and reiterate our plan to achieve EBITDA break-even during 2023. I would now like to discuss the two primary segments in our business, our retail and brands platforms. Our retail platform provides merchants the tools that they need to create and manage a successful digital marketing and loyalty program, along with instituting a data-driven approach to how they connect and engage with their customers. The retail landscape across cannabis remains challenging, with a pronounced slowdown in store openings. Given this backdrop, we are encouraged that we added 80 new retail accounts in the fourth quarter reinforcing our view that budget considerations for maintaining and growing existing customers remains less discretionary relative to traditional marketing spend. Our brand platform, which we launched in 2020 to help cannabis brands more easily connect with their consumers, continued to accelerate at a really nice pace in the fourth quarter, and we are encouraged by the runway performance we have observed in the first month of 2023. We're uniquely suited for the selling motion by allowing brands to connect directly with customers through our retail platform, benefiting both the retailer by driving traffic to their locations and for the brand, increasing awareness and influence. Turning to the three areas we have talked about previously as key pillars of our growth. First, a network effect that we feel is a unique and powerful flywheel between our retail and brands platforms. Second, a high growth subscription revenue component that increases predictability in our revenue stream. And third, new initiatives and the opportunity to monetize the troves of data that we've captured. Starting with the network effect, our purpose-built co-marketing platform allows brands to target customers who are shopping at retailers, who are selling their products through the Spring Big 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. Importantly, this form of marketing also provides our retailers with co-op marketing dollars for their campaigns, subsidizing retailer marketing budgets. Second, an increasing proportion of our revenue is from recurring subscriptions. Our retail clients enter into subscription contracts for one year or longer, largely tied to messaging volumes. With messages being distributed through multiple channels, And we note a trend of clients increasingly leveraging direct push notifications to consumers who are utilizing mobile apps. The net result is that superior results from campaigns drive platform utilization and a clear pattern of increased subscription contract size, creating a more predictable revenue stream. The third pillar is the intersection of our current business and our targeted set of new product initiatives. As a result of our platform being present in more than 3,000 retail locations, installed in the smartphones of over 35 million marketable cannabis consumers, and our integrations with over 20 point-of-sale systems, we are uniquely positioned to introduce offerings to our client base that provide meaningful growth opportunities for both our client base and Spring Break. At present, we are focused on the introduction of a select group of initiatives, the first being our loyalty-slash-payments initiative, Spring Pay, where consumers of our retail clients can use their loyalty points in conjunction with their preferred store payment options to complete their in-store and online transactions. The retailer benefits from higher transaction values and Spring Pay benefits by facilitating these transactions on behalf of our retail partners. Second, in Q4, we launched a consumer subscription offering, enabling customers to pay a monthly subscription fee to their retailer to receive specific discounts and benefits at their favorite retail locations. SpringViv will manage these subscription programs on behalf of our retail partners and share in the subscription revenue generated from customers that sign up for these offerings. In addition to increasing our recurring revenue stream by tapping into the millions of consumers that are on our database, these programs will increase the stickiness of both the retailers and consumers that are on our platform. with over 900 million first-party data records, which we believe to be among the most complete data sets in the industry. SpringVic is working towards the introduction of various data-driven products that will provide both retailers and brands from both within the industry, as well as those interested in learning more about it to have the meaningful insights needed for better decision-making at their fingertips. This offering will allow us to reach beyond the traditional marketing departments and become entrenched in other areas of our clients' businesses making our offerings even more critical. Additionally, in January, we announced our first integration with a point of sale solution outside of the cannabis industry, which allows us to expand into offering our loyalty and marketing communications platform across some of the other regulated industry, including alcohol, CBD, and vape stores. Marketing and selling to this audience has already begun with signed contracts from this group already in place. and we are excited with the progress we are seeing with this new group of potential customers outside of the cannabis vertical. We have an abundance of new product opportunities ahead of us and are simultaneously continuing to see significant growth in our existing business given the long-term growth potential of the cannabis industry and the unique power of our platform to deliver exceptional returns to our clients. To emphasize this unique power of our platform and give some real-life examples of how we are delivering customer value, I'd like to share a couple of notable recent upgrades with enterprise clients that highlight why customers choose SpringVic. First, one of our largest enterprise clients recently signed a significant upgrade and expansion contract, leveraging SpringVic's digital marketing across their entire tech stack. This client expanded operations across multiple states in 2022, and growth in their tech messaging marketing strategy soon outpaced their existing contract, requiring a material increase in their subscription. This client was already a six-figure contributor to annual subscription revenue, with the resulting contract upgrade representing a four-fold increase and bringing the total value to well over a million dollars annually. Similarly, in the last few weeks, one of the largest MSO operators in the U.S. and also an existing enterprise client, grew its retail location footprint significantly and has continued to leverage SpringVeg as their preferred provider for digital marketing if they open new locations. This MSO's expansion included the implementation of SpringVeg's digital marketing program across their existing markets, displacing their prior provider who faced challenges with the rapid pace of growth that this client was demanding. Our robust integrations and enterprise scalability proved to be the clear differentiator. With this expansion, Spring Big is now live across all of this multi-million dollar annual subscription revenue MSOs and markets. In summary, while 2022 is a challenging year for the cannabis industry and broader economy, we have delivered solid growth, continuing to prove out the value we are delivering to our clients as a leading technology loyalty platform across the cannabis industry. Looking forward, while economic conditions remain uncertain, we have a rich pipeline of revenue generating initiatives and a strong high growth subscription revenue base, which we believe will together deliver accelerating top line growth. I'm incredibly proud of what our team has accomplished and wish to take this opportunity to thank all of our employees, partners, clients, and investors for their continuing support and commitment to the company. With that, I'd like to turn things over to Paul, who will walk through our financial results for the fourth quarter and discuss our initial outlook for 2023 in greater detail. Paul, take it away.