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spk00: We will begin in just a minute Good morning and thank you everyone for joining us today. Welcome to Wishpond's 2022 Fiscal First Quarter Finance Results Conference Call. Joining me on the call today are Ali Tashkender, Chairman, Founder and CEO of Wishpond, and David Place, the company's CFO. My name is Pardeep Sangha, Head of Investor Relations. This call is being recorded. We will be having a question and answer session at the end of the call. You can submit your questions to the Q&A button at the bottom of the screen. I trust that everyone has received a copy of our financial results press release that was issued earlier today. Listeners are also encouraged to download a copy of our quarterly financial statements and a management discussion analysis from CDAR.com. Please note, portions of today's call, other than historical performance, include statements of forward-looking information within the meaning of applicable securities laws. These statements are made under safe harbor provisions of those laws. Forward-looking statements involve known and unknown risks, uncertainties, assumptions, and other factors which many of which are outside of wish upon's control that may cause the actual results, performance, or achievements to differ materially from the anticipated results, performance, or achievements implied by such forelooking statements. These factors are further outlined in today's press release and in our management discussion analysis. We provide forelooking statements solely for the purpose of providing information about management's current expectations and plans relating to the future. We don't undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in our expectations or any change in advance of conditions, assumptions, or circumstances in which any such statement is based, except if it's required by law. We use gross profit, gross margin, and adjusted EBITDA on this conference call, which are non-IFRS and non-GAAP measures. For more information on how we define gross profit, gross margin, and adjusted EBITDA, please refer to the definition set out in our management discussion and analysis. And with that, let me turn the call over to Mr. Ali, Todd Skender, Chairman and CEO. Alec?
spk02: Thank you very much, Pradeep. Good day, everyone. We hope that you're all keeping safe and healthy. We truly appreciate everyone for joining us today. We are proud of our results in the first quarter of 2022, given the challenging business environment that we are currently operating in. I am very pleased with our first quarter results in which we accomplished 41% year-over-year growth compared to the same period last year. The first quarter results were driven by organic growth, as well as contributions from the acquisition we completed in 2021. The company's growth has not been directly impacted by significant supply chain disruptions, inflation and other macroeconomic challenges currently affecting other industries around the globe. Wishbone has a very diversified customer base of small, medium-sized businesses, and the demand for our products and services remains robust, with organic growth over the past year largely due to investments we have made in our sales engine. I'm particularly encouraged with the record monthly recurring revenue, or MRR, we achieved in April, after the slower month in the beginning of the year. Thus far in May, we are on track to exceed April's performance with another record high, or MRR. which sets the stage for strong financial results for the second quarter and the year ahead. We are expecting both revenue and adjusted EBITDA to accelerate in the second half of the year. I will go into our outlook later in this call today. But first, I would like to turn the call over to our CFO, David, who will review the financials for the quarter. David?
spk01: Thank you, Ali. I'm pleased to report that we had very strong quarter results for the three months ended March 31, 2022. Our first quarter 2022 results are as follows. Wishpond achieved quarterly revenue of 4.1 million during Q1 2022, compared to revenue of 2.9 million generated during Q1 of 2021, an increase of 41%. Revenue growth in Q1 2022 was positively impacted by healthy organic growth and the additional revenue from our acquisitions over the past year. Quarterly revenue declined in Q1 2022 compared to the record revenue we had in Q4 of 2021, primarily due to seasonality and wish bonds businesses. Seasonality in Wishpond's business has become more pronounced over the past year due to the acquired businesses having greater seasonal effects than Wishpond's incumbent business. The acquired business offer products and services that can be tailored to special marketing campaigns that boost demand around various holidays and special occasions such as Thanksgiving and Christmas, which results in higher seasonal revenue in Q4 and a decline in seasonal revenue in Q1. Wishpond achieved gross profit of $2.5 million compared to $1.8 million during Q1 2022, representing an increase of 41% driven by an increase in overall revenue. Wishpond's gross margin percentage in Q1 2022 was 62% compared to the same 62% in Q1 2021. The gross margins tend to be lower in Q1 due to lower revenue due to the seasonal effects. We expect gross margins to be within the historical range of 65% to 70% for the remainder of the year. The United States remains our largest and fastest growing market, generating 72% of our total revenue in the quarter. During Q1 2022, Wishpond achieved an operating loss of $1 million compared to an operating loss of $1 million in Q1 2021. The operating loss reflects continued investment in sales and lead generation, as well as in product development. During Q1 2022, Wishpond had an adjusted EBITDA loss of $441,000 compared to an adjusted EBITDA loss of $319,000 in Q1 2021. The decrease in adjusted EBITDA is mainly due to our investment in sales and marketing activities in the first quarter as we ramped up our sales team to 35 account executives compared to 24 at the end of December 31, 2021. The expansion of our sales team has already started to bear positive results in the second quarter. Our adjusted EBITDA declined from our record levels in Q4 2021, primarily due to seasonal revenue in Q1. We continue to have a clean and healthy balance sheet. As at March 31, 2022, Wishpond had $4.5 million in cash and cash equivalents. The company had no debt as of March 31, 2022. On September 29, 2021, the company entered into a new credit facility with National Bank of Canada's Technology and Innovation Banking Group for a $6 million secured revolving operating line. The credit facility remains ungrown as of today. In summary, Wishpond is in a very strong financial position with a healthy balance sheet, solid monthly recurring revenue, and very good visibility of revenue and cash flow for the current year. Wishpond is able to continue to grow comfortably with its cash flow from operations without having to raise any additional equity or debt capital. I will now provide an update on a normal course issuer bid or the NCIB. On June 7th, 2021, the TSX Venture Exchange accepted a notice of the company's intention to commence a normal course issuer bin, or NCIB, for its common shares. During the period from Jan 1, 2022 to March 31, 2022, the company purchased 130,100 common shares under the NCIB for aggregate consideration of $147,480 for an average share price $1.13. The company paused the NCIB at the end of the quarter in order to preserve cash. However, the company believes that the recent market price of the company's common shares does not properly reflect the underlying value of the shares and expects to resume share buybacks under the NCIB in the future. Our share capitalization is as follows. At the end of the first quarter on March 31, 2022, the company had 55,959,149 fully diluted securities issued and outstanding. This concludes my financial update, and I will turn the call back over to Ali.
spk02: Thank you very much, David. I would now like to take this time to talk about our acquisition strategy. One of the main reasons for doing a public listing in December of 2020 was so that we could pursue an aggressive growth and acquisition strategy. As a result, we've completed five acquisitions since our public listing, namely Invigo Media, PersisIQ, Brax, Winback, and Viral Loops. Our acquisition strategy has been a resounding success. as it has broadened our product offering, boosted our revenues and increased our customer base. When we went public, we had slightly over 2,000 customers and we achieved $7.9 million in annual revenue in 2020. Compare that to today, 16 months later, we have over 3,700 customers and we are approaching $20 million in annual run rates revenue based on our revenue in the month of April. Our acquisition strategy is working and it has complemented the company's organic growth very nicely. There are five key elements of our acquisition strategy. One, our acquisition strategy has been to do small token acquisitions. Smaller token acquisitions are less risky and they are easier to integrate in terms of both product integration and cultural integration. Two, we have been acquiring cash flow generating companies, a strategy that is now working to the company's advantage in the current economic environment, as Wishbone has a clean balance sheet and can continue to fund the growth of its sales team and new product launches with the cash flows from operations. Each of our acquired businesses is cash flow generating, which allows us to reinvest in product development to expand our product offerings and reinvest in sales and marketing to increase our revenue. Three, We have been acquiring companies that can benefit from our sales and marketing expertise. Our target acquisitions are small companies that often lack the necessary sales resources. Once we completed the acquisition, we immediately trained our sales and marketing teams on the new acquired products so that we can offer greater cross-selling opportunities to our core WishBond customers. Four, we have been very disciplined. our capital allocation by not paying outrageous valuations for these acquisitions and also structuring the acquisitions with future earn out payments which can be paid in either cash or shares based on our discretion five we have been acquiring marketing technology companies that offer products to small medium-sized businesses that are complementary to our own product offering Through these acquisitions, we have been able to broaden our platform by adding marketing operations, sales automation, ad management, SMS marketing, viral marketing, cart abandonment, appointment bookings, call tracking and a whole variety of other features and functions to our all-in-one marketing platform. Looking forward, we do not expect to be making acquisitions at the same pace that we have been doing over the past 16 months, especially given the current economic environment and the weakness in the capital markets. We are very pleased with the progress we've made with all of our acquisitions. This slide demonstrates the breadth of WishBond's complete product offering, including the acquired components. As you can see, the acquisitions have helped to significantly add value to our overall product suite. Today, we believe Wishpond has the most complete and comprehensive integrated marketing platform available for small, medium-sized businesses. Both our existing customers as well as the acquired customers are benefiting from the range of online marketing options that we provide under one roof. Furthermore, We are very satisfied with the features and functionalities of our overall platform. We've already successfully created integrations between the different products across the acquired businesses and we've implemented cross selling capabilities. We are now spending a lot of thought and effort on further integrating these products within our platform and developing pricing plans that bring the most value to our customers. Our development team is working hard to build additional integrations, single sign-on capability, and single dashboard for all the products on one integrated platform. I would now like to discuss the company's goals for this year. Which one is on track to achieve its goals for fiscal 2022, which are as follows. Increase the company's customer base and monthly recurring revenue or MRR. We expect MRR to continue to grow in 2022 through both organic and inorganic means. Two, accelerate the company's organic growth profile with investments in sales and marketing. Last year, we doubled the size of our sales team from 12 account executives or sales reps to 24 by the end of 2021. Our goal this year is nearly double the size of our sales team again. We have already started ramping up the size of our sales team, which currently sits at 35 account executives. Three, achieve positive annual adjusted EBITDA in 2022 at levels exceeding 2021 results. The increase in the size of the sales team has initially had a negative impact on our profitability in the first half of the year, but will result in higher revenue and EBITDA in the second half of the year. Despite higher costs to accommodate growth, we still expect to increase our annual adjusted EBITDA this year compared to last year. Four, pursue a disciplined acquisition and capital allocation plan. We are very pleased with the five acquisitions we've completed thus far, as they are all proving to be accretive to Wishpond's financial profile. We have a strong balance sheet to execute on additional acquisitions, and we have a robust pipeline of target acquisition opportunities. However, we are also very aware of the current global and macroeconomic conditions with increasing inflation and higher interest rates. Hence, we expect the pace of acquisitions this year to be much slower than last year. We are being very diligent in our pursuit of future target acquisitions and making acquisitions that are cash flow generating is also extremely important in this current environment. Five. invest in research and development to expand the company's product offerings and intellectual property. Our R&D and product teams have been doing a tremendous job of launching new products and services and expanding the company's intellectual property. We anticipate launching several exciting new product announcements and features in the coming quarters. Sixth, gain synergistic benefits from acquisitions through cross-selling the company's products and services across the different parts of the growing organization. We are already witnessing success in cross-selling many different products from our acquired businesses for existing customers. Most recently, Winback has been a very positive cross-selling experience. Winback has already added more than 240 customers, a 70% increase, primarily through Wishpond customers who have either purchased or are trialing Winback's products and services. Wishpond's outlook remains positive with strong revenue growth expected in 2022, driven by increased capacity in the company's sales team, positive contribution from its acquisitions, and new product-related revenues. Despite the current turbulent macroeconomic backdrop highlighted by high inflation and increasing interest rates, Richpond remains well positioned for continued growth with increasing revenue and improving cash flows in each successive quarter in 2022. In line with the company's focus on profitable growth, Wishbone has begun scrutinizing all discretionary expenditures across the organization with the intent of optimizing operations, achieving cost-saving synergies, and becoming cash flow positive in the second half of the year. Wishbone expects revenue and earnings growth to accelerate in the second half of 2022, as revenue in the second half of the year benefits from seasonality due to our small and medium-sized business customers increasing their spending to invest in various online marketing campaigns, contests, and promotions to maximize their revenue from the increase in consumer spending during back-to-school, Thanksgiving, and end-of-year holiday season. In addition, revenue growth will also benefit from the completed integration of the company's recent acquisitions and an increase in the cross-selling opportunities between products and solutions offered across all our product lines. We are already experiencing our revenue bouncing back in April and May, and we expect it to accelerate in Q3 and Q4. The second half of this year is also when we expect to generate our greatest EBITDA. Wishbone continues to experience strong performance across all of its businesses with robust demand for its products. Based on our current MRR trends, we are very optimistic about the outlook for 2022 and beyond. Before closing, I would like to comment on the recent decline in our share price. As everyone on the call is aware, our share price has experienced a rapid decline over the past month. We do not believe this drop in our share price is warranted, given our fundamentals remain extremely strong and we are very positive on our future outlook. We believe the general poor capital market conditions are the primary cause for the weakening in our share price and small cap tech stocks have suffered the worst in the market correction. I believe Wishbone sometimes unfairly gets lumped in with other e-commerce stocks who are seeing a decrease in demand for their products. However, only a quarter of our revenue is reliant on e-commerce customers. Our brick and mortar customers are, in fact, increasing their online spending for digital marketing solutions. I also believe that Wishbone sometimes unfairly gets lumped in with other small cap tech stocks who are often burning a lot of cash. However, that is not the case with WishBond. We achieved record adjusted EBITDA in Q4, and we are expecting to have record adjusted EBITDA this year again. WishBond has some seasonality, which resulted in net cash burn in Q1, but we believe we will generate positive cash flow in the second half of the year. WishBond has a healthy cash balance, and the company is able to fund this future growth without having to raise any additional equity or debt. As management has a significant ownership in the company, our interests are aligned with shareholders. Management has not been able to purchase shares this month due to the trading blackouts. Now that we have reported our Q1 results, certain members of the management will be purchasing WishBond stock in the market as we believe the shares are significantly undervalued. In closing, I want to thank all the employees of WishBond whose hard work continues to elevate the company to higher levels. We want to thank our customers who rely on us to help them with their digital marketing needs. Also, I'd like to thank you all for joining us on this call today. The capital markets have been very supportive of our vision and have provided us with funding needed to pursue our goals. We look forward to providing an update next quarter. Thank you. I will now hand it back to Pradeep.
spk00: Thank you ellie and just as a reminder, you can submit your question by hitting the Q amp a button below we'll start off with the questions from analysts primarily. First question comes in from Gabriel young from beacon securities in light of the current environment has there been a shift in emphasis between prioritizing growth versus profitability.
spk02: Very good question. I think I pride ourselves in always having been financially responsible and we never went to such extent in terms of being cash flow negative that was hard for us to recover from. And right now, already in April and May, we've made tremendous headway in reducing costs wherever we can without hurting our future growth. And that has worked really well for us. And in certain areas, the cost savings that we've made and the optimizations we've made have actually helped us accelerate growth. The revenue growth and MRR growth that we're seeing in April and May are actually record month-over-month growths. And I don't expect our growth in the coming year to slow down, even though our costs will go down and certain places would be further optimized. In fact, one of the fastest ways of achieving better cash flow situation is by increasing the gap between top line revenue and keeping costs under control and bringing them down as far as we can. So we definitely have prioritized improving cash flow situation. bringing costs under control. And we expect to spit out positive cash very shortly and not need to do another raise, not need to do any debt financing or anything like that. And the growth targets that we've talked about are still very reasonable and we believe we can achieve them.
spk00: Follow up question for Gabriel Leong. Have you seen any changes to trends in churn rates? And do you anticipate any notable churn in the viral loops over the next 12 months? Viral loops, of course, is the most recent acquisition.
spk02: Right. In Q1, as we mentioned earlier, and going through holidays and shortly after the holidays, we had higher churn due to seasonality. And to some extent, that is something that we've seen before, but now we have higher because of some of the acquired companies and the nature of them. Now our churn rate has reverted back to the lower ranges that we've had in the past. And we're not seeing the baseline of churn being any worse than before. In fact, we're actually making headways on it all the time. So if your question is macroeconomic conditions, have they resulted in customer behavior changing? No, we have not seen that. The demand is very strong and the retention is as strong as before.
spk00: And next set of questions from Daniel Rosenberg from paradigm question on gross margins compression this quarter, I think, David. talked a little bit about that or in the call, but maybe you can provide some more color understand the drivers and anything you're seeing in terms of changes in cost structure.
spk02: yeah I think David can answer first part of it, and then i'll have my own commentary, I would like to add to that as well, David.
spk01: Charlie. So in terms of gross margin, you know, what happens is a lot of the customer deliveries are based on people, right? So our people, the number of people, the headcount that we have for gross margin delivery or, you know, customer delivery doesn't go up and down every quarter, like very flexibly in terms of where the revenue is growing. So, you know, what happens when your revenue drops, your gross margin will drop. When the revenue comes back, the gross margin will pop right back down. So, you know, I think what Ali said in the past, in his previous comments, you know, everything in the company is process driven. When you have 3,700 customers, you have to be process driven. You know, we manage all our metrics very, very closely internally. So, you know, that goes for gross margin as well. So even the number of people that we have delivering to our customers is managed. So we don't expect any unfavorable trends going forward.
spk02: yeah and and the commentary i'd like to add to that is that um as we mentioned earlier we actually expect the margins to be back in that 65 to 70 percent range um you know probably in q2 and beyond definitely for the remainder of the year But in addition to that, we also have a lot of initiatives that we have optimizing the margins even further and squeezing as much as we can through that. Partly is theme of the day in terms of doing more with less. And as such, we ourselves are on a mission to bring that margin above 70%. It might take some time, but we feel there are a lot of efficiencies that we can gain as much as we've always been disciplined, but there's extra areas that we can optimize further for.
spk00: A follow-up question from Daniel Rosenberg of Paradigm. Can you provide an update on hiring plans and how that might relate to cost optimizations?
spk02: Yeah. So one of the things that we've done actually is in a lot of different areas of the organization, we have hiring freezes. We're not adding a lot of people in certain areas. We've actually reduced some spending, more optimizations, nothing major or layoff or anything like that. But in terms of adding new team members, there are certain areas such as account management and support that as The revenue grows. You know, you need to take care of those customers and make sure that the quality of service doesn't decline. So there are going to be more team members added there. But in a lot of other areas, we're actually being very deliberate in not adding headcount. If there's a departure, rethinking whether we really need to replace that person or can we get by without that? And in the area of sales, right now we have the team members we need with the 35 to continue aggressive growth for the next quarter or so. But I do expect at some point to add that to the numbers that we talked about to get it closer to the 45. But it will probably be spread out over time as opposed to one big chunk to keep a close eye on our bearing and growth. You know, again, we want to make sure every quarter our cash position increases as opposed to decreasing.
spk00: And maybe this I can add here, maybe you can add some commentary on the you got a substantial amount of your headcount is kind of outside of Canada overseas and the cost base of that is relatively cheap. So maybe comment on that.
spk02: Yeah, I mean, we have team members really across the globe, anywhere from Greece to Mexico to Philippines to India, US, Canada, and so forth. And the cost structure is not the same. We really look for the best people that we can find for the role, wherever we can find them. keeping a very close eye on margins and keeping a very close eye on our target customers are small, medium-sized businesses. And one element of our value proposition is cost effectiveness and if we want to provide cost effective solutions to our clients at scale it means that we have to optimize it through automations through the use of our technology and packaging that as well as using team members in lower cost geographies and as as a result of that the number headcount number that we have wouldn't have the same cash burden as if it were all you know they were all in canada or united states so that that's also very important to note you know some of these team members could be you know let's say a thousand dollars per month you know or fifteen hundred dollars uh per month um and so you know it makes a big difference
spk00: Great. Last question from Daniel from Rosenberg from Paradigm. You mentioned record results potentially for Q2 with April and May being very strong months. Any additional coverage you can provide on that top line and thoughts on profitability?
spk02: Yeah, it goes back to what I was mentioning. So, I mean, Q1 numbers in terms of profitability were a dip compared to Q4. And a large part of that was because we were adding new sales team members and resources in different teams and um and also the the fixed costs were there but revenue drops due to seasonality now q2 We are recovering from that. We were to recover bounce back from that and then some and then our top line is going to be greater. So even with the same cost structures, EBITDA is going to be stronger than we saw in Q1. But in addition to that, we've taken a lot of measures improving our cash flow position. And some of those we're already going to see the effect of them. Some of them, you know, maybe in June and beyond, we're going to start noticing the difference in them. So again, it goes back to the comment I made earlier that we're doing both. We're optimizing for revenue growth on the top line and we're achieving record MRR numbers in absolute terms, in growth terms, even excluding viral loops, new acquisition that we made. and bringing the costs down as much as we can and we're doing that quite successfully and effectively and um you know i can't give you specific numbers for q2 in terms of what the ebitda is going to be but it's definitely going to be substantially better than q1 all right next set of questions from christians to grow from a capital um which product or feature has had the most traction this year The largest part of our business still is the incumbent WishBond solutions, as you might call it. And as a result of that, it is still the same product and services that we've offered in the past. I would say the second to that and is growing really well is PersistIQ company and the products and services related to sales automation for B2B businesses. And now also we're offering that in terms of cross-sell opportunities to Wishpond clients. We're also now going after larger, more established B2B businesses for Wishpond. And then the package is a bundled package of Wishpond offering as well as Precious IQ offerings.
spk00: All right. Follow up question from Christians to Grow. Where has Wishpond had the most success cross-selling across the product suite?
spk02: yeah i think i think i actually probably already addressed that which is with persist iq has been the strongest in terms of the deal sizes are large the value proposition is very strong and the types of customers who need it being more b2b businesses they value it more and is a stickier product so that cross sell has been very strong a lot of wishbone customers we've been able to cross out to using Persys IQ. And now we're actually adding that as another vertical to our Wishbone sales engine, going after B2B businesses. And then when a deal is actually a bundle deal, that Wishbone takes care of their online marketing solutions and Persys takes care of their online sales solutions. That has been the strongest. But across the board for all other organizations, we've had very strong cross-sell as well. uh with winback for example no sorry for brax for example as management we've had some really large upsells and cross sales of bringing wishbone clients some of them actually in the public market space uh they need help with advertising related to ir and we've been able to you know uh like there's one client for example that we've offsold them and brought them uh you know for Roozbeh Gharakhloo, $5,000 a month extra package using racks they were so happy that then they made it for. Roozbeh Gharakhloo, You know packages that 20,000 a month and they're very happy about it they're adding more accounts, you know expected shortly as well. Roozbeh Gharakhloo, That is happening win back we've already talked about it, that we've already increased the customer account by about 70%. So, you know, in terms of absolute numbers is what I mentioned, that Wishbone and Persis IQ has been the largest absolute numbers, but we're pursuing these opportunities across all the business units and the integration between them as they become tighter, it becomes also easier to do that.
spk00: All right, good question from Chris Thompson from PI Financial. Can you talk about the success rate in transitioning customers from technology self-serve plans to fully managed plans?
spk02: We haven't seen a major change in that trend. It has been the same as before. And to some extent, a lot of times the self-serve customers are the more marketing savvy people, CMOs, marketing agencies, or those who are marketing savvy enough to want to use the platform themselves. And we are not actively pushing them to go to managed solutions. If that's what works for them, great. They can continue to use that. And when we're selling to a more business owner type that needs more of our help on the managed side or the hybrid side, then that's what we do. So no major change from the trends that we've seen in the past.
spk00: All right. Question from Mike Stevens from Echelon. Can you comment about the earnouts for BRAX and Persist IQ, the use of cash versus giving them shares and as it relates to the stock price?
spk02: In Q1, David, you might want to correct me on this. I think we had some earnouts that we paid in cash for. And then at the beginning of Q2, we did some of the earnouts in the stock. at um share price of about dollar 26 if i'm not mistaken on that um and now the share prices come down quite a bit um i can't tell you with certainty when the next earn out comes if we're going to choose cash or stock it will really depend on the share price it will depend on cash position of the company and everything else but We are very cognizant of the fact that we want to do what's best in terms of capital allocation and doing best for our shareholders. If stock price is higher, it makes more sense to do earn out using stock. And if it's lower, then it makes more sense to use cash, depending on what the cash position is and all of those things. So we will have to wait and see on that.
spk00: A follow-up question from Mike Stevens from Echelon. This is regarding Winback. Any insights on Winback's first full customer with the company? How was the seasonality impacts with that? And any other color you can provide on Winback?
spk02: Winback has been doing quite well, especially as we within Wishbone have had a lot of customers who benefit from it firsthand. That has helped us quite a bit. Seasonality-wise, I don't think we saw a huge change in that over the holiday period. The other thing that we're working on also is setting up app on sales engine for win back. And that's in the works. So far, the results are promising. And as that gets rolled out, the rate of growth on the revenue side will increase as well. But it's already increasing. It's already growing, but we want to grow it even faster.
spk00: Right, and a question here on LTV to CAC ratio. Previously, you've said the 3.5 to 1 or I think 3.4 to 1. How has that trended recently? Anything with regards to increasing customer acquisition costs given the inflation increases and macro backdrop? Anything along those lines, Kalar, you can provide?
spk02: I can't say that we've updated that number recently so that I can with absolute certainty tell you But my observation is that it has not gone down. One of the things that I know is average sales per account executive salesperson has increased for us. So that means immediately revenue versus cost when it comes to each sales rep has improved. We are also selling larger deals. On the lower end of it, we've already increased whatever was $500, for example, starting at $550, and we're pushing that up already. We're selling larger deals. Some of these B2B clients, instead of $500, could be $2,000, $3,000. So that has a positive impact. As part of our cash flow and cost reduction strategy, cash flow improvement and cost reduction, we've also made a lot of changes related to the way we generate leads and bring those costs down. So that also brings cost of acquisition down. So I expect LTV to CAC ratio to become better than it was before. I think probably where your question was coming from was that has it become harder to gain new customers? It has not. Our SMB client base, there are millions of SMB clients in the world, and our ability to reach them and win them has not changed at all. A lot of the turmoil that you see in the macro world has not had that effect in the demand for our products, and it continues to stay strong.
spk00: Great. That's it for Mike Stevens, and I'd follow up, here's a question from Neil Baxter from Canaccord. We've been seeing ad-based social media players noting a slowdown in some ad spend owing to supply chain and macro concerns. Could you provide some more color on the factors behind Brax's rebound following Q1 and what you're seeing for that product currently in terms of Brax and the seasonality and ad revenue that you're seeing in the industry?
spk02: Yeah, so Brax in terms of its revenue has two components to it. One is the subscription fees and the other part is some revenue share with some of the ad networks. In Q4, and it's typical for Brax, ad spending increases. It's holiday season and it actually makes sense for it to increase. And so that revenue share component became significantly higher in Q4 than even it was in Q3. Coming into Q1, that declined as was expected. But also there was one large client that, due to their own internal issues, had to decrease their spending quite a bit, dealing with some of their obstacles. And now they have ramped it up quite a bit and it's increasing. And the other trend that is also happening at the same time is that Brax now has a very active outbound sales team that is adding MRR to it every month. So both of the trends have resulted in a rebound in Q2 and the numbers improving consistently.
spk00: Follow-up question from Chris Thompson from PI Financial. With regards to organic revenue growth, obviously it was lower in Q1 due to seasonality, but for the full year, are you still expecting similar organic growth as you've projected previously?
spk02: Yeah, that's correct. That's correct. And the current growth that we see, you know, March, April, May, And our ability to deliver on the customers that we're winning, our ability to win the customers makes me very confident in our ability to grow our revenue this year. And we've already recovered from Q1 and then some and continue to make headway very strongly. So I think this year is going to be great in terms of our organic growth.
spk00: Follow-up question from Neil Baxi from Canaccord. With regards to your hiring of new account executives, what are you seeing so far with the early success and early efforts, selling efforts for the new ones that you brought on?
spk02: There are some of the best people that we've had in the sales team. It's a really great cohort of sales representatives in the company. And I think we're also getting better onboarding them and training them and making them productive faster. We have more sales managers and sales coaches and training programs and some of the incentive structures and tracking. We're looking at it weekly as opposed to monthly from before. And those are making a substantial impact. in ramp up and success of the sales reps. And there's call recording and coaching of what's happening with those. There's a lot of education and training that is happening. So overall, they're doing a really good job. From time to time, obviously, in any sales organization, there are team members that might not work out. But I think what I've been quite positively surprised by is that a larger percentage of them are becoming successful than I would have even expected. And I think that that is to a large extent, thanks to the efforts of the team, especially our director of sales.
spk00: So just to make sure we have the numbers right here, you had 24 by the end of last year, December 31st, 2021. You're now at approximately 35. So you've added roughly 11 or so account executives so far this year with the goal to be, you know, somewhere around 45 to 48 or something like that by the end of the year?
spk02: That's correct. I would say the 45 number is more of an approximation. We want to achieve certain growth that we've said makes sense for us and we're achieving that quite comfortably right now, and we're going to try to do again more with less. If we can get there with 40 account executives, fantastic. If we can get there with the same account executives that we have, even better. But we've budgeted for increasing it to 45.
spk00: Okay, great. I don't see any other questions here, so thank you very much. I'll turn the call back over to Ali.
spk02: Thank you very much, Pradeep. In closing, I want to thank everyone again for joining this call with us today. Thank you, the analysts, for your questions and for your support. Really appreciate it. Everyone, please stay safe and healthy. We look forward to providing more updates this year. Thank you.
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