Wishpond Technologies Ltd.

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 those laws. Please refer to today's press release and in our management discussion and analysis for our disclosure of risks and uncertainties. Provide forward-looking statements solely for the purpose of providing information about management's current expectations and plans relating 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 is required by law. We use terms such as adjusted EBITDA, annualized revenue run rate, and monthly recurring revenue on this conference call, which are non-IFRS and non-GAAP measures. For more information on how we define these terms, 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 Tachkander, Chairman and CEO.

Thank you, Pavitra. Good day, everyone. We truly appreciate everyone for joining us today. On today's call, I will first provide some general commentary and details on the progress of our latest product, Sales Closer AI, followed by our CFO, Adrian Lim, who will provide a financial summary of our quarterly results and details on our cost optimization efforts. I will then come back and provide an outlook on our business. Wishbone is an all-in-one marketing platform that is built for helping small businesses with their customer acquisition and increasing sales. We currently serve more than 4,000 businesses around the world, and it's been great to work with them and give them the sales and marketing tools they need to attract customers and grow their businesses. On today's call, I want to focus on two major accomplishments in 2024. First, our commitment to improving profitability and cash flow for the business. And secondly, the launch of Sales Closer AI, our virtual sales agent earlier this year. Let's start with improving profitability. Despite lower revenue levels in Q3 2024, we continue to have a strong focus on profitability and cash flow, having achieved nine consecutive quarters of positive adjusted EBITDA, along with consistent improvements in cash flow from operations. This reflects the success of our disciplined approach to cost management and operational efficiency. I'm pleased to announce that in the third quarter, WishBond achieved adjusted EBITDA of $571,000, an improvement of 79% compared to Q3 of last year. In the third quarter, we also reported an adjusted EBITDA margin exceeding 11%, marking our most profitable quarter since 2022. Achieving double digit EBITDA margins is rare for a software company of our size, and I'm incredibly proud of our team for this accomplishment. Our commitment to cost reduction and operational efficiency has led to significant gains in both profitability and cash flow. During the third quarter, Wishbone also generated $178,000 in positive cash flow from operations. This consistent improvement in adjusted EBITDA and cash flow has been a top priority in 2024, and we remain steadfast in this commitment as we look towards 2025. We continue to have a positive outlook for 2025 with increasing EBITDA and a return to revenue growth driven by Propel IQ sales and a ramp up of sales closer revenue. Moving on to our second major accomplishment this year, the launch of Sales Closer AI. Sales Closer is a platform that features a virtual AI agent that can engage in conversations and presentations in real time through various meeting applications. It can deliver personalized round-the-clock sales calls and product demos 24-7 to engage leads, close deals, and deliver insights in 10 different languages. Sales Closer can also be adapted for use across a diverse range of industries, such as software, SaaS, professional services, education, financial services, travel and hospitality, insurance, and more. Once a customer provides Wishbone with a relevant knowledge base for upload, the custom trained AI agent can conduct sales presentations tailored to that business and can manage the entire sales process from discovery to close with minimal need for human intervention. As a result, the platform allows businesses to automate tasks, scale their sales team and sell globally, all with detailed analytics to enable continuous improvement. Sales Closer is a powerful tool that can transcend the historical constraints that have long plagued businesses, particularly in the realm of sales. These encompass language barriers and time zone disparities when dealing with international clients, as well as the scarcity of time or sales personnel available to commit to sales meetings. Previously, these challenges often led to missed opportunities or slower growth. However, Sales Closer empowers businesses to automate their sales processes, effectively overcoming these obstacles and enabling seamless sales interactions. To accelerate adoption, we are actively exploring new sales outreach initiatives and strategic channel partnerships. An example is our recently announced partnership with RoomView Technologies, a real estate marketing platform with over 220,000 real estate agents who will leverage Sales Closer to enhance lead follow-up and increase sales conversions. This collaboration addresses a significant gap in the real estate industry, where many leads are left unanswered due to limited follow-up capabilities. RoomView's platform generates over 500,000 leads annually, yet only a small fraction of these leads receive timely attention, resulting in missed sales opportunities. By integrating Sales Closer's advanced AI-driven follow-up technology, RoomView's agents can efficiently engage with leads, schedule in-person meetings, and drive successful real estate transactions. Together, Sales Closer and RoomView are poised to transform lead management practices in the real estate sector, helping agents achieve higher conversion rates while improving the overall client experience. Such channel partnerships enable us to access larger customer bases more efficiently and effectively. Furthermore, we're planning a broader rollout of Sales Closer by adding more partnerships, which we expect will play a role in driving Wishbone's growth in 2025. In addition, our monthly recurring revenue or MRR for sales closer is also higher than our current Propel IQ product offering. We are pricing sales closer between $250 a month to $2,000 a month for 16 to 200 hours of virtual agent usage. As customers use more hours, the MRR also increases. We believe sales closer will have a positive impact on our overall MRR in the future. While it's still early days, the feedback from our initial customers on Sales Closer has been incredibly encouraging. Sales Closer has proven its ability to adapt to different customer applications. We have successfully identified certain ideal customer profiles where Sales Closer was making significant impacts in customer businesses. These customers were utilizing Sales Closer in four main ways, sales outreach, lead qualification, customer service, and live virtual product demos. customers using the platform for sales outreach were able to make outbound sales calls to their potential leads. This is exciting for businesses using Sales Closer as they will be able to reduce their hiring costs as well as guarantee consistent quality in all of their outbound sales outreach. Sales Closer can also be used effectively for lead qualification. Typically, businesses will have sales or business development representatives that are hired to qualify potential leads and ensure they are the right fit before handing them off to a salesperson. Our customers were able to successfully use Sales Closer as a virtual sales development rep to conduct the qualifying round of questions, saving them time and energy. Customer service is another avenue where Sales Closer has proven to be highly effective. By providing the AI agent with a necessary knowledge base, customers can have Sales Closer accept inbound calls and answer questions that normally would be answered by a front desk or sales associate. Finally, Sales Closer has the power to conduct live presentations and demos over Zoom video calls. This has been successful for our software and SaaS customers in particular, as those customers have product demos that are normally carried out by salesperson or account executive. We are targeting specific vertical markets where sales closer can make the most impact, such as auto dealerships software companies insurance companies equipment sales and more. Our pipeline is starting to grow and we're seeing that sales closer has broader appeal beyond the SMB market. In addition to selling Sales Closer to external customers, we see an enormous opportunity to use Sales Closer for our own WishBond sales. I'm pleased to announce that WishBond has begun utilizing Sales Closer for its own purposes in lead generation and sales development, and we have actually closed some sales of Propel IQ using virtual Sales Closer agent and no human interaction. Traditionally, Wishbone has relied on increasing the number of salespeople to drive growth, which has come with its own challenges. Hiring, training, and retaining sales staff is time-consuming, expensive, and inefficient. Furthermore, employee turnover and the need for continuous training also creates additional burdens. This salesperson-dependent growth model posed significant headwinds, slowing down our ability to scale efficiently. Utilizing Sales Closer AI for our own internal sales processes removes these barriers, allowing us to scale without the need for a large sales team. Internally, we have begun accelerating the adoption of Sales Closer by utilizing it for Wishbone's own product demos and sales. Sales Closer is now able to handle most of the sales development legwork, freeing up our salespeople to focus on finalizing and closing deals. Overall, this has enabled our sales team to significantly increase their sales capacity, reducing the need for additional hires. Not only is this more cost effective, as the AI virtual agent is far cheaper than hiring more staff, but it also aids in improving gross margins and enhances our operational efficiency. This implementation has allowed us to streamline operations and reduce headcount. Looking ahead, our vision is to transform the traditional account executive function, enabling businesses to leverage AI-driven sales capabilities. I'm pleased to report that after several months of vigorous testing and improving our virtual AI agent, we are now starting to ramp up our Sales Closer demos. I would like to now share with you some of the success we are seeing with using Sales Closer. Our sales closer agent is now performing at a level that is significantly better than a human counterpart agent. In a recent study, we found that 69% of the people who started the demo with sales closer virtual agent got to the end of the demo and moved on to the next stage of the sales process. This 69% is compared to 38% of people who started the product demo with a human counterpart agent. In the third quarter, we made substantial progress in our internal utilization of Sales Closer. It has actively been conducting sales calls and product demos, and this month we are expecting to do approximately 200 product demo calls using our Sales Closer virtual agent. We have already been using Sales Closer for handling overflow of bookings from live human agents and for geographic areas that we don't currently serve very well. Moving forward, we expect to continue increasing the involvement of our Sales Closer AI virtual agent doing outbound product demos in the early stages of the sales process and having human agents doing the latter portion of the sales process. We expect that utilizing Sales Closer for our own sales will reduce hiring costs and increase efficiencies in the sales process. In the future, we expect to hire additional human account executives to support the increased sales closer activity. Currently, less than 16% of all our product demos are being conducted by a sales closer virtual agent compared to last quarter, where we had less than 8% of the total product demos. Our cost optimization program was initiated at the beginning of 2024 and included reduction in our account executive headcount. From the graph on the left, you can see how the number of sales account executives has decreased over the past year. In Q3 2024, we had 28 sales account executives, which is a significant decline compared to 42 sales account executives we had in Q4 2023. In the short term, this reduction in our account executive team has had a negative impact on our revenue. We have experienced revenue decline in the past two quarters as a result of these cutbacks in our sales team. However, we have also achieved a steady increase in revenue per account executive over the past year, highlighting enhanced productivity and efficiency gains across our sales teams. You can see from the graph on the right that the revenue per account executive headcount has increased from 144,000 in Q4 2023 to 181,000 per account executive in Q3 2024. Going forward, we are not expecting to make any more cuts to our sales team. Our plan is, in fact, to increase the number of account executives in conjunction with increasing usage in sales closures. Our sales closer and salesperson hybrid sales model is highly scalable, allowing Wishbone to increase sales capacity without the proportional increase in costs associated with expanding a human sales team. We believe the combination of highly effective sales personnel with sales closer is the best solution to achieving profitable growth going forward. We expect the increase in our sales team paired with the acceleration of Sales Closer to be a critical growth driver for our business in 2025. We believe Sales Closer has the potential to be a transformative tool for our internal sales team. Sales Closer will allow us to expand our hours of sales coverage and the geographic regions where we can sell Wishbone products. In addition, Sales Closer can handle product demos in the early stages of the sales process, as mentioned earlier. I will provide additional insights into our forward-looking outlook later in the call. For now, I'd like to turn it over to our CFO, Adrian, who will review the financial results for the year. Adrian?

Thank you, Ali, and thank you to everyone for joining us on the call this morning. I am pleased to report that we achieved strong results in revenue, gross profit, and adjusted EBITDA for the quarter ended September 30, 2024. Wishpond achieved quarterly revenue of $5.1 million during Q3 2024 compared to $5.8 million in Q3 2023. The decline in email delivery services revenues from our previously large legacy customer has negatively impacted our revenue throughout this year. This customer's revenues continued to decline in the third quarter and only accounted for $49,000 in revenue for Q3 2024, a decline of $289,000 compared to Q3 of last year. Going forward, we are expecting to report improving results without this legacy customer, who has negatively impacted our growth and our profitability. We do not expect any meaningful revenues from this legacy customer in 2025. The decrease in quarterly revenues also reflects a strategic focus on prioritizing more profitable revenues, a reduction in the sales team size as part of cost optimization efforts, and a transition to utilizing Sales Closer for executing outbound demos. As Ali mentioned earlier, the reduction in our account executive team down to a headcount of 28 had a negative impact on revenue in the third quarter as well. Wishpond achieved gross profit of $3.5 million in Q3 2024 compared to $3.8 million in Q3 2023. Wishpond achieved gross margin percentage of 69% during Q3 2024 compared to 66% in Q3 2023. The improvement in Wishpond's gross margins can partially be attributed to the decline in less profitable revenue from the legacy customer, allowing Wishpond to achieve its most profitable quarter in two years. Furthermore, we expect our gross margins to continue trending upwards as adoption of our Propel IQ platform grows and we begin ramping up sales of our new sales closer solution. During Q3 2024, WishPond achieved adjusted EBITDA of $571,000 compared to $319,000 in Q3 2023, an increase of 79%. We are very pleased to report such a significant increase in profitability despite the decline in total revenue. For the nine months ended September 30, 2024, cash flow from operations was positive $232,000 compared to a negative outflow of cash flow from operations of $208,000 for the nine months ended September 30, 2023. Taking a look at the company's balance sheet, as of September 30, 2024, Wishpond had $1.1 million in cash and debt of $1.3 million from our bank credit facility compared to cash of $1.4 million and debt of $995,000 at December 31, 2023. Wishpond continues to have plenty of capacity on its $6 million credit facility with NBC. Wishpond has solid monthly recurring revenue and a very good visibility of revenue and cash flow. The company is able to continue growing comfortably from its cash flow from operations without the need for any additional equity or debt capital raises. As of the end of the third quarter on September 30, 2024, the company had 58,317,920 fully diluted securities issued and outstanding. As announced last quarter, we have successfully completed all outstanding earn-out payments related to our previous acquisitions. With no more obligations to pay these earn-outs, we anticipate an improvement in our cash balance going forward as the funds that were previously allocated to these payments will now be redirected towards funding our core business operations and growth initiatives. This shift in cash flow management will enhance our liquidity and provide greater flexibility in executing our strategic objectives. Looking at the graph, you'll see the amount of cash that was being dispersed for earn-out considerations over the past year. As you can see, there has been a steady decrease in these payments, reflecting the gradual fulfillment of our earn-out obligations. The graph shows that we achieved $0 in earn-out payments in Q2, a trend that continued in Q3 and led to improving cash flows in the quarter. We remain confident in our ability to support Wishpond's future growth through operational cash flow and our existing credit facility. Any future financings would be strategically allocated toward acquisition opportunities, furthering our growth initiatives. This concludes my financial update, and I'll turn the call back over to Ali.