Wecommerce Holdings Ltd.

Good afternoon and welcome to WeCommerce fourth quarter and full year 2021 financial results conference call. After the market closed, WeCommerce released financial results for the period ended December 31st, 2021. The press release as well as a replay of today's call can be found on the company's investor relations website at investors.wecommerce.co. Please view the release for additional information on what will be discussed during today's presentation. The company will make forward-looking statements on the call today that are based on assumptions and therefore are subject to risks and uncertainties that could cause actual results to differ materially from those projected. The company undertakes no obligation to update these statements, except as required by law. You can read about these risks and uncertainties in the press release issued by the company this afternoon, as well as in our filings on CDAR. Note that the adjusted financial measures the company speaks to today are non-IFRS measures, which are not a substitute for IFRS financial measures. Reconciliation of these measures to IFRS measures are available in the company's earnings release and the most recent MD&A. I will now turn the call over to WeCommerce CEO, Alex Pearson. Thank you, Operator.

Good afternoon, everyone. I'm joined today by Dave Chiron, our Chief Financial Officer. I'll provide some brief opening remarks before turning it over to Dave to discuss our financials in greater detail, followed by our standard Q&A. First of all, it's a pleasure to be speaking with you for the first time officially as CEO of WeCommerce. I've been with the company for nearly a year and a half, leading our acquisitions team and portfolio operations while serving as president for most of last year. We're a dramatically different company today compared to just 18 short months ago. and I expect will be dramatically different 18 months from now. I'm incredibly excited by the opportunity and humbled by the responsibility in taking over as CEO of our company. Chris Farley and Andrew Wilkinson have built a great business that empowers entrepreneurship through e-commerce, and we have a clear, defensible playbook for profitable, sustainable growth through acquisition and cultivation of these businesses for the very long term. In recent months, we've had several additions at the management level of e-commerce, as well as in our portfolio companies, all of which has been in the furtherance of the same mission, which is to build a leading acquirer and operator of e-commerce enablement technology companies. I look forward to continuing to work closely with our many talented colleagues, the board, and our shareholders to capitalize on the significant growth opportunity ahead. Dave will jump into detailed numbers in a second. I wanted to call out a few numbers from our Q4 financials that highlight our scale, growth, and cash flow generation today, despite e-commerce being in the first inning. First, our app segment is now approximately a $30 million annualized revenue business. Revenue grew 7.6% in the fourth quarter compared to Q3 2021. For the full year, the operating margin for our app business was 44%. Second, our themes segment continues to be highly strategic and cash-generated business, serving tens of thousands of new merchants annually. For the year, our themes business generated $11 million of revenue at a 45% operating margin. We acquired ArchType at the end of August, and we expect cash flows from ArchType will result in a full payback of our equity investment prior to the end of 2023. Lastly, e-commerce generated $3.7 million in of operating cash flow in the fourth quarter, or 30% of our revenue. On top of that, we have close to $50 million of available liquidity to deploy into attractive acquisition opportunities, such as our recent acquisition of NoCommerce. Altogether, I'm immensely proud of the business our employees have built over the past 18 months, and I'm confident e-commerce can continue to build the leading e-commerce enabling platform for the many years to come. I'll now turn the call over to Dave, our Chief Financial Officer, to review our financial results in more detail.

Thanks, Alex, and good afternoon, everyone. Before I begin, as a reminder, we report in Canadian dollars, and all references to amounts on this call and in our published financial reports are in Canadian dollars, unless otherwise stated. In the interest of time, I will focus my prepared remarks on the fourth quarter of 2021 and although both Q4 and full-year 2021 are disclosed in the financial statements and MD&A. Moving to our results, in the fourth quarter of 2021, we generated revenue of $12.2 million, up 99% year-over-year and 106% on a constant currency basis. Breaking down revenues by segment, the company has three reportable lines of business through which revenue is generated, apps, teams, and agency. The app segment refers to the operations associated with providing software to customers, which we classify as recurring subscription revenue. In Q4, apps or recurring subscription revenue was $7.3 million, an increase of $5.1 million, or 229%, equal to 240% on a constant currency basis from Q4 of 2020. The theme segment refers to the sale of theme design templates to customers operating their stores on various e-commerce platforms. We refer to this segment as digital goods revenue. In Q4, themes or digital goods revenue was $4 million, an increase of $1.6 million or 72% equal to 77% on a constant currency basis from Q4 2020. Lastly, The agency segment refers to the operations associated with providing agency services to customers. This segment is classified as agency services revenue. In Q4, the agency services revenue was $949,000, a decrease of $660,000 or 41% from Q4 of 2020. Net income in Q4 2021 was $4.1 million compared to a net loss of $5.5 million in Q4 of 2020. Our net income for the quarter was partially offset by certain non-cash expenses, such as depreciation and amortization, as well as fair value adjustments related to the revaluation of contingent consideration payable as part of the acquisitions of Stamped, 460, and Archetype. Our adjusted EBITDA for the fourth quarter was $3.5 million, or 28% of revenue, up 105% from the $1.7 million, or 28% of revenue reported in the fourth quarter of 2020. Operating cash flow at year end was $8 million, or 20.7% of revenues, an increase of 41% compared to $5.7 million in 2020. Cash on hand at December 31st was $26.1 million compared to $61.2 million on December 31st, 2020. Total debt outstanding at December 31st was $60.2 million. In summary, we're seeing sustained and healthy performance across our business. We remain confident that our excess cash from operations combined with a nearly $50 million liquidity position provides sufficient resources for us to execute on our strategic plans for the foreseeable future. I'll now turn the call back to Alex for a business update.