Wishpond Technologies Ltd.

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?

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?

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.