Wishpond Technologies Ltd.

Hello, thank you everyone for joining us today and welcome to WishBonds 2022 Fiscal Second Quarter Financial Resource Conference Call. My name is Angelica and joining me on the call today are Ali Tashkander, Chairman, Founder, and CEO of Wishmont, and David Pies, the company CFO. This call is being recorded. We'll be having a question and answer session at the end of the call, which will be limited to analysts only. 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 management discussion and analysis from cedar.com. Please note, portions of today's calls, other than historical performance, include statements of forward-looking information within the meaning of applicable security laws. These statements are made under the safe harbor provision of those laws. Forward-looking statements involve unknown and known risks, uncertainties, assumptions, and other factors, many of which are outside of Westbound's control. That may cause the actual result, performance, or achievements to differ materially from the anticipated actual results, performance, or achievements. implied by such forward-looking statements. These factors are further outlined in today's press release and in our management discussion and analysis. We provide forward-looking statements solely for the purpose of providing information about management 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 events, conditions, assumptions, or circumstances on which any such statement is based except if it's required by law. We use terms such as gross profit, gross margin, adjusted EBITDA, annualized revenue run rate, and monthly recurring revenue on this conference call, which are non-IFR. Angelica Valenzuela, I frs and on gap measures for more information on how to how we define this term exclusive refer to the definition set out in our management discussion and analysis, and with that, let me turn the call over to Mr Ali Tashkender chairman and CEO.

Ali Tashkender, Thank you very much, Angelica good day everyone, we hope that you're all keeping safe and healthy we truly appreciate everyone for joining us today. We are very pleased with our second quarter results, which proved to be the strongest quarter in the company's history, with revenue of over $5 million in the quarter, representing 55% year-over-year growth compared to the same period last year. During the second quarter, we achieved two significant milestones. First, WishBond surpassed $20 million of annualized revenue run rate. And secondly, the company achieved positive cash flow from operating activities. I'm particularly proud of having achieved positive cash flow from operations in the second quarter, as that puts Wishbone in an elite class of software companies. Technology companies are known to burn lots of cash for many years before becoming cash flow positive. Very rarely do you find a software company of our size with $20 million in annual revenue run rate, that generated positive cash flow from operations and is also rapidly growing with 30% to 40% organic growth. Wishpond truly is a unique, high growth, profitable company, and we remain committed to delivering profitable growth in the future. Despite the current challenging business environment with high inflation, increasing interest rates, and recessionary concerns, thus far, we have not noticed any slowing down in the demand for our products. Our sales pipeline remains robust, and our revenue growth shows tremendous resilience despite the current uncertain economic conditions. Wishbone has a diversified customer base of small and medium-sized businesses, and its healthy organic growth over the past year has largely been driven by investments in the company's sales and marketing teams, applying our sales-driven methodology to the acquisitions we've made and new product introductions. Our outlook continues to look promising for the second half of the year with increasing sales, improving margins, and positive cash flows. I will provide additional details on our outlook later on the call. But first, I would like to turn it over to our CFO, David Pace, who will review the financial results for the second quarter. David?

Thank you, Ali. I am pleased to report that we had very strong second quarter results for the three months ended June 30th, 2022. Our first quarter 2022 results are as follows. Wishpond achieved record quarterly revenue of $5 million during Q2 2022, compared to revenue of $3.2 million generated during Q2 2021, an increase of 55%. Revenue growth in Q2 2022 is attributable to the company's expanded sales team, new product introductions and acquisitions. Wishpond achieved gross profit of $3.4 million in Q2 2022 compared to $2.2 million during Q2 of 2021, representing an increase of 50%, which is driven by an increase in overall revenue. Wishpond's gross margin percentage in Q2 2022 was 67% compared to 69% in Q2 of 2021. The gross margins are within the company's historical range of 65% to 70%. The United States remains our largest and fastest growing market, generating 69% of our total revenue in the quarter. with approximately 15% and 16% of revenue generated from Canada and the rest of the world respectively. During Q2 2022, Wishbond achieved an operating loss of $659,000 compared to an operating loss of 1.1 million in Q2 of 2021. The operating loss reflects continued investment in sales and lead generation, as well as in product development. Earnings before interest, tax, and depreciation, or EBITDA, improved from negative $1.3 million in Q2 2021 to negative $527,000 in Q2 2022. During Q2 2022, WishBond recorded an adjusted EBITDA loss of $192,000 compared to an adjusted EBITDA loss of 320,000 in Q2 2021. The improvements in EBITDA and adjusted EBITDA are primarily driven by higher revenue, recent cost savings initiatives, and operational efficiencies achieved in the latter half of the quarter. In Q2 2022, Wishpond returned to net positive cash provided by operating activities of $81,000, compared to a cash burn from operating activities of $802,000 in Q2 2021. We continue to have a clean and healthy balance sheet. As of June 30, 2022, Vishpon had $2.5 million in cash and cash equivalents, and the company has no debt. Vishpon has a $6 million secure revolving operating line of credit facility with National Bank of Canada's Technology and Innovation Banking Group, which remains ungrown as of today. In summary, Vishpon is in a very strong financial position with a healthy balance sheet, solid monthly recurring revenue, and very good visibility on revenue and cash flow for the current year. Vishpon is able to continue to grow comfortably from its cash flow from operations without the need for any additional equity dilution or debt. I will now provide an update on our normal course issue of bid or share buyback programs. On June 15th, 2022, the company announced the renewal of its normal cost force issuer bid, or NCIB, was approved by the exchange. During the second quarter, the company did not make any share purchases under the NCIB. In comparison, in the first quarter of 22, the company purchased 130,100 common shares under the NCIB for aggregate consideration of $157,265. The Board of Directors of WishBond believes that the recent market prices of the company's common shares do not properly reflect the underlying value of such shares, and that the purchase of the shares would be a desirable use of corporate funds in the best interest of the company and its shareholders. Hence, we intend to reinitiate share purchases under the NCIV program in the coming months. I would now like to provide some additional commentary on our recent cost reduction initiatives and operational efficiencies. I'm pleased to report that the company implemented several cost reduction and operational efficiencies during the second quarter designed to conserve cash, which have resulted in the company expecting to realize more than a million dollars in cost savings over the course of the next 12 months. The management team spent a considerable amount of time on this project, and we are very happy with the results of this effort so far. The following are some of the key cost cutting initiatives. Since completing five acquisitions over the past 18 months, we have slowed down our rate of acquisition activity, and we also cut our corporate development costs relating to sourcing new acquisition targets. With fewer acquisitions, we were also able to reduce the company's legal and professional fees. We have implemented this hiring freeze in most areas of the company. We have implemented a number of optimizations and improved workflows and procedures that allow us to maintain the size of the lead generation team, even as the number of account executives grow. The net result will be a lower amount of sales and lead gen expenses as a percentage of revenue. To optimize our lead gen capabilities, we have implemented AI or artificial intelligence technologies to run certain campaigns, thereby eliminating labor intensive processes and costs. From a technology perspective, we were able to consolidate some of our subscription and software costs across our acquisitions. We have also optimized our AWS and cloud storage costs. We are committed to having a focused mindset on realizing cost efficiencies while keeping our foot on the pedal of our sales generation engine. The company's financial success is predicated on increasing our revenue while running the business cost effectively. This concludes my financial update, and I will turn the call back over to Ali.