Wishpond Technologies Ltd.

Thank you everyone for joining us today and welcome to Wishpond's 2023 fiscal second quarter financial results conference call. My name is Jordan Bones, Director of Marketing, and joining me on the call today are Ali Tajkinder, Chairman, Founder, and CEO of Wishpond, and David Pace, the company's CFO. This call is being recorded. There will be 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 press results or financial results press release that was issued earlier today. Listeners are also encouraged to download a copy of our quarterly financial statements and management discussions and 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 the safe harbor provisions of these laws. Forward-looking statements involve known and unknown risks, uncertainties, assumptions, and other factors, many of which are outside of Wishbone's control that may cause the actual results, performance, or achievements to differ materially from the anticipated 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's current expectations and plans related to the future. We do not 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 adjusted EBITDA, annualized revenue run rate, and monthly recurring revenue on this conference call, which are all non-IFRS and non-GAAP measures. For more information on how we define these terms, please refer to the definitions set out in our management discussion and analysis. And with that, let me turn the call over to Mr. Ali Tajkinder, Chairman and CEO.

Thank you very much, Jordan. Good day, everyone. We hope that you are all keeping safe and healthy. We truly appreciate everyone for joining us today. We are pleased with our second quarter results in which Wishbone achieved positive adjusted EBITDA for the fourth quarter in a row, demonstrating our commitment to profitable growth. During the first six months of 2023, we generated $400,000 of positive adjusted EBITDA compared to an adjusted EBITDA loss of $600,000 in the first six months of last year. And as an outstanding improvement of over $1 million, which we are proud of achieving, which cost optimization efforts over the past year have contributed to the company's positive adjusted EBITDA profile. I'm also pleased to report that our new Propel IQ platform is gaining traction in the market and early signs are showing higher margins and increased customer retention. We are now accelerating the hiring of new sales resources to drive additional growth in the second half of the year. Based on the company's performance and growth momentum in the first half of the year, we expect to deliver strong results for the remainder of 2023. Our outlook continues to look promising for 2023 with increasing sales, positive adjusted EBITDA and improving profit margins. We are experiencing increasing demand for our products and we expect to grow rapidly as our sales pipeline remains robust and we continue transitioning to bundled product offerings for our customers. I will provide additional details on our output later on the call, but first I would like to turn it over to our CFO, David, who will review the financial results for the second quarter.

David. Thank you, Ali. I'm pleased to report that we've had strong Q2 results for the third quarter for the three months ended June 30th, 2023. Our second quarter 2023 results are as follows. Wishpond achieved quarterly revenues of $5.6 million during Q2 2023 compared to revenue of $5 million generated during Q2 2022, an increase of 13%. Revenue growth was primarily driven by stronger product demand, an increase in sales and marketing activities, and new product introductions. As we mentioned on our last conference call in May, the company experienced some softness in Q2 due to the need for training our sales executives and transitioning them to sell the new bundled Propel IQ platform. Revenue growth was also negatively impacted in Q2 due to the decline in legacy non-Propel IQ related revenue from our largest customer, which happens to be an agency. On a positive note, this customer contributed greater than 10% of Wishpond's total revenue last year, but with a growth in our overall revenue and decline in this customer revenue, we now have less customer concentration as we did not have any customer contributing more than 10% of our total revenue in Q2, 2023. Wishpond achieved gross profit of $3.7 million in Q2 2023 compared to $3.4 million during Q2 2022, representing an increase of 10% driven by an increase in overall revenue. Wishpond's gross margin percentage in Q2 2023 was 65% compared to 67% in Q2 2022. The gross margins were within the company's historical range of 65 to 70%. The United States remains our largest and fastest-growing market, generating 72% of our total revenue in the quarter, with approximately 11% and 17% of revenue generated from Canada and the rest of the world, respectively. During Q2 2023, Wishpond achieved positive adjusted EBITDA of $215,000 compared to an adjusted EBITDA loss of $192,000 in Q2 2022. A year-over-year positive swing of $408,000 in adjusted EBITDA. The improvement is primarily driven by an increase in gross profit and our cost optimization efforts over the past year. We continue to have a clean and healthy balance sheet. As at June 30th, 2023, Wishpond had $1.1 million of cash and short-term investments, and the company has no debt. The reduction in cash balances during the quarter was caused in part by payment of an earn-out for an acquisition, capitalized R&D costs related to investment in the business, and changes in working capital. The reduction in cash in Q2 2023 was due in part by our earn out of $323,990 related to the viral loops acquisition. There is a final remaining earn out in the amount of $304,000, which will be paid in equal installments in each of Q3 and Q4. We have no further earn out obligations after this payment. Wishpond has an undrawn $6 million secured revolving operating line of credit agreement with National Bank of Canada's Technology and Innovation Banking Group. I will now provide an update on our cost reduction strategies. As Ali mentioned earlier, since last year the company has been implementing various cost reduction strategies, which resulted in a $1 million positive swing in adjusted EBITDA in the first six months of this year, as compared to the first six months of last year. Wishpond has continued its ongoing efforts with cost optimization and enhanced operational efficiency. By leveraging the power of AI technology, we have seamlessly automated various processes and lead generation activities. As a result of these efforts, we have reduced our headcount by approximately 20 team members across the organization. Additionally, we have rationalized subscription and hosting costs across the organization, resulting in lower monthly operating costs Through these multifaceted initiatives, we remain committed to maximizing resource allocation and driving sustained growth. As a result of these cost reduction efforts, our declining earn-out payments, increasing revenue, and improving cash flow, we feel confident that Wishpond can continue to fund the growth of its sales team and new product launches from cash flow from operations. From time to time, we may dip into our credit line for short-term working capital requirements. The cash flow generated by the company will continue to be reinvested in the business and allocated in a disciplined manner to accelerate organic growth, future acquisitions, or share repurchases. Before I turn the call over to Ali, I would like to provide an update on the NCIB. On June 27, 2023, the company announced that its notice of intention to make a normal course issue a bid, or NCIB, was accepted by the exchange. During Q2, 2023, the company purchased 32,000 common shares under the NCIB for an aggregate consideration of $18,528. The board of directors of Wishbond believes that the recent market price 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 will be opportunistic in purchasing shares under the NCIB program while prioritizing the company's other cash requirements. In summary, Wishpond remains in a solid financial position with growing revenue and profitability. Based on the company's performance in Q2 and growth momentum, we expect to continue delivering strong results in the second half of the year, 2023. This concludes my financial update, and I will turn the call back over to Ali. Ali?