Wishpond Reports Q2-2024 Financial Results with a 151% Improvement in Adjusted EBITDA

Rhea-AI Summary

Wishpond Technologies (TSXV: WISH) (OTCQX: WPNDF) reported Q2-2024 financial results, highlighting a 151% improvement in Adjusted EBITDA to $0.5 million. Key highlights include:

- Revenue increased 3% to $5.83 million
- Gross profit up 7% to $3.94 million with 68% margin
- Launched SalesCloser AI, a virtual sales agent using AI for sales calls and demos
- Appointed Adrian Lim as new CFO
- Renewed credit facility with $6 million borrowing capacity

CEO Ali Tajskandar expects continued margin improvement and profitability expansion in coming quarters. The company aims to accelerate organic growth, achieve positive Adjusted EBITDA each quarter, and ramp up sales of SalesCloser AI in 2024.

Positive

• Adjusted EBITDA increased 151% year-over-year to $541,610
• Revenue grew 3% to $5,828,709 in Q2-2024
• Gross profit increased 7% to $3,942,748 with improved margin of 68%
• Launched new flagship product SalesCloser AI, expected to drive growth
• Renewed credit facility with $6 million borrowing capacity

Negative

• Net decrease in cash of $274,297 during the quarter
• Credit facility balance increased to $1,242,656
• Reported a loss before income taxes of $123,663

• Wishpond achieved Adjusted EBITDA⁽¹⁾ of $0.5 million in Q2-2024, an increase of 151% compared to Q2-2023 and the eighth quarter in a row of positive Adjusted EBITDA.
• During Q2-2024, Wishpond launched its new flagship product, SalesCloser AI, a virtual sales agent which leverages artificial intelligence to conduct sales calls and product demos.

VANCOUVER, BC, Aug. 21, 2024 /PRNewswire/ - Wishpond Technologies Ltd. (TSXV: WISH) (OTCQX: WPNDF) (the "Company" or "Wishpond"), a provider of marketing-focused online business solutions, announces it has filed its interim consolidated financial statements (the "Interim Financial Statements") and management's discussion and analysis (the "MD&A") for Q2-2024, representing the three and six months ended June 30, 2024. Copies of the Interim Financial Statements and MD&A are available on the Company's profile on SEDAR+ at www.sedarplus.ca.

Ali Tajskandar, Wishpond's Founder and CEO commented, "I am excited to report that Wishpond achieved its highest ever second quarter Adjusted EBITDA, with a remarkable 151% improvement over the same period last year. Our dedicated efforts in cost reductions, coupled with improvements in various business operations have driven significant efficiencies, resulting in an improvement in our Adjusted EBITDA and cash flows. Furthermore, we expect margins to continue trending upwards as adoption of our Propel IQ platform grows, and we begin ramping up sales of our new SalesCloser solution. Improving Adjusted EBITDA generation and cash flows were a significant focus for Wishpond in the first half of the year and we anticipate further Adjusted EBITDA expansion and improving profitability to continue in the coming quarters of 2024."

Ali Tajskandar further adds, "During the second quarter we launched our new flagship product, SalesCloser AI, a revolutionary virtual sales agent which leverages artificial intelligence to conduct sales calls and product demos. In the short time since launch, we have already seen SalesCloser's impact across multiple industries and use cases. As we roll out the platform more broadly, we expect SalesCloser to be a key contributor in driving new growth to our business in 2025. I am also pleased to announce that Wishpond will begin utilizing SalesCloser for its own purposes in lead generation and sales development within the coming weeks. We are excited with SalesCloser's potential to not only help grow our own internal sales capacity but also reduce our costs, thus further increasing our margins and profitability."

Adrian Lim, Wishpond's newly appointed Chief Financial Officer commented, "We are excited about the positive momentum we are building as we progress through 2024. Our cost structure has improved significantly and our major annual expenses such as audit, professional fees, and tax expenses are now mostly behind us in the first half of the year. Moreover, we no longer have any earn-outs in relation to our previous acquisitions. This positively positions us to see improvement in our cash flows as we continue to expand and optimize our operations."

Second Quarter 2024 Financial Highlights:

• Wishpond achieved quarterly revenue of $5,828,709 during Q2-2024, compared to $5,639,417 generated in the same period of 2023 (Q2-2023), representing an increase of 3%. Revenue growth was primarily driven by organic growth resulting from stronger product demand and new product introductions.
• Revenue growth was offset by a decline in revenue from the Company's legacy customer of email delivery services which reduced its spending from $419,479 in Q2-2023 to $158,857 in Q2-2024. Excluding the decrease in revenue from this customer, organic revenue growth for the rest of the business was approximately 9%.
• Wishpond achieved Gross Profit of $3,942,748 in Q2-2024 (Q2-2023: $3,680,391), representing a 7% increase from Q2-2023, driven by an increase in overall revenue and improved margins.
• Wishpond achieved a Gross Margin percentage of 68% during Q2-2024 (Q2-2023: 65%).
• During Q2-2024, Wishpond achieved positive Adjusted EBITDA⁽¹⁾ of $541,610 (Q2-2023: $215,926), representing an Adjusted EBITDA margin of 9%, and an increase of 151% from the year prior.
• As at June 30, 2024, Wishpond had $1,095,708 in cash and had drawn down $1,242,656 from its credit facility (December 31, 2023: cash of $1,424,585 and $994,658 credit facility balance outstanding). The reduction in net cash was caused in part by earnout payments for businesses acquired in 2022, investment in SalesCloser marketing activities, and changes in working capital.

Second Quarter 2024 Business Highlights:

• On April 4, 2024, the Company announced the launch of SalesCloser AI, a next generation virtual sales agent capable of delivering personalized, round-the-clock sales calls and product demos in a similar manner to a live human sales agent. The platform can work 24×7 to engage leads, close deals, and service customers in ten different languages. SalesCloser can also be adapted for use across a diverse range of industries such as software/SaaS, professional services, financial services, education, travel & hospitality, insurance, and more.

Business Highlights Subsequent to June 30, 2024:

• On July 8, 2024, the Company announced the appointment of Adrian Lim as Chief Financial Officer (CFO). Mr. Lim has responsibility for all finance, accounting, financial reporting, audit, tax and capital planning functions.
• On July 10, 2024, the Company announced that the renewal of its Notice of an Intention it filed to make a Normal Course Issuer Bid ("NCIB") was approved by the TSX Venture Exchange. Under the renewed NCIB, the Company may, during the 12-month period commencing July 15, 2024, and ending July 14, 2025, purchase up to 2,707,931 Shares in total, being 5% of the total number of 54,158,620 Shares outstanding as at June 26, 2024.
• On August 1, 2024, the Company successfully renewed its credit facility with a major Canadian bank that was previously renewed on August 11, 2023 and originally entered into on September 21, 2021. The renewed credit facility maintains the secured revolving operating line with a borrowing capacity of up to $6,000,000 based on recurring revenue, an interest rate equal to the Canadian Prime Rate plus 2.0% per annum, and is secured against the Company's assets.
• On August 8, 2024, the Company announced the launch of a new rewards distribution program through its Viral Loops product platform. The new program launched with successful integrations with the Stripe App Marketplace, Tremendous, and Sendoso allowing Viral Loops customers to use their referral rewards on any of these platforms, which the Company believes will increase Average Order Value⁽¹⁾ and customer LTV⁽¹⁾. The program is expected to drive increased customer engagement and strengthen Wishpond's overall market position and capabilities in the referral marketing space.
• On August 19, 2024, the Company announced the launch of a new Integrations Marketplace for its AI-powered virtual sales agent, SalesCloser AI. The Integrations Marketplace is designed to seamlessly integrate SalesCloser with a wide range of tools, including CRM systems, email marketing platforms, and task management software, enhancing efficiency and sales effectiveness through advanced workflow automation.

Outlook:

Wishpond expects to achieve record revenue and Adjusted EBITDA in 2024 driven by increasing traction of the Company's new Propel IQ bundled product and new sales from the recently launched SalesCloser AI virtual agent. The Company continues to have an active pipeline of sales opportunities and robust demand for its products. Management is pleased to re-iterate the Company's key goals for 2024:

• Accelerate organic revenue growth and increase Monthly Recurring Revenue⁽¹⁾.
• Achieve positive Adjusted EBITDA in each quarter in 2024.
• Leverage the Propel IQ platform to improve margins, decrease churn and increase long-term customer value.
• Ramp up sales of the new SalesCloser AI product.

Webinar Conference Call Details:

As previously announced, Wishpond will be hosting a webinar conference call to discuss its year-end financial results today at 10:00 AM (PT) / 1:00 PM (ET).

To register for the webinar, please visit the following URL: https://bit.ly/wp_q2

Date:	August 21, 2024
Time:	10:00 AM PT (1:00 PM ET)
Dial-in:	+1 778 907 2071 (Vancouver local)
	+1 647 374 4685 (Toronto local)
Meeting ID #:	873 7327 6735

Please connect 5 minutes prior to the conference call to ensure time for any software download that may be required.

Selected Financial Highlights: 

The tables below set out selected financial information relating to Wishpond and should be read in conjunction with Wishpond's Interim Financial Statements and MD&A.

	Three-months ended June 30, 2024  $	Three-months ended June 30, 2023  $	Six-months ended June 30, 2024  $	Six-months ended June 30, 2023  $
Revenue	5,828,709	5,639,417	11,878,972	11,263,234
Gross profit	3,942,748	3,680,391	8,071,670	7,369,729
Gross margin	68 %	65 %	68 %	65 %
Adjusted EBITDA(1)	541,610	215,926	831,914	424,999
Credit facility – end of period	(1,242,656)	-	(1,242,656)	-
Cash - end of the period	1,095,708	1,098,285	1,095,708	1,098,285
Net decrease in cash during the period net of credit facility	(274,297)	(836,062)	(576,875)	(1,594,359)

Reconciliation to Adjusted EBITDA

	Three-months ended June 30, 2024  $	Three-months ended June 30, 2023  $	Six-months ended June 30, 2024  $	Six-months ended June 30, 2023  $
Loss before income taxes	(123,663)	(645,042)	(591,226)	(1,435,250)
Depreciation and amortization	410,059	380,032	816,647	749,151
Interest income	-	-	-	(2,728)
Interest expense	40,186	-	78,719	-
Remeasurement of contingent consideration liability	-	-	-	(22,232)
Other expenses	48,908	52,311	152,582	264,245
Stock based compensation expense	166,120	428,625	375,192	871,813
Adjusted EBITDA	541,610	215,926	831,914	424,999

Footnotes:

(1)

Adjusted EBITDA, MRR, annualized revenue run-rate, average order value, customer churn rate and customer LTV are not financial measures recognized by International Financial Reporting Standards ("IFRS"), do not have any standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other entities. See "Cautionary Statements – Non-GAAP Financial Measures" for more information and definitions of each non-GAAP term used in this press release.

On Behalf of the Board of Wishpond
"Ali Tajskandar"
Chairman and Chief Executive Officer

About Wishpond Technologies Ltd.
Based out of Vancouver, British Columbia, Wishpond is a provider of marketing-focused online business solutions. Wishpond is a leading provider of digital marketing solutions that empower entrepreneurs to achieve success online. The Company's Propel IQ platform offers an "all-in-one" marketing suite that provides companies with marketing, promotion, lead generation, ad management, referral marketing, sales conversion and outbound sales automation capabilities in one integrated platform. Wishpond replaces disparate marketing solutions with an easy-to-use product, for a fraction of the cost. Wishpond serves over 4,000 customers who are primarily small and medium-sized businesses (SMBs) in a wide variety of industries. The Company has developed cutting-edge marketing technology solutions, including an AI powered website builder, an AI email automation tool, an AI Sales Agent and continues to add new AI enabled features and applications. The Company employs a Software-as-a-Service (SaaS) business model where most of the Company's revenue is subscription-based recurring revenue which provides excellent revenue predictability and cash flow visibility. Wishpond is listed on the TSX Venture Exchange under the ticker "WISH", and on the OTCQX Best Market under the ticker "WPNDF". For further information, visit: www.wishpond.com.

Cautionary Statements, Summary Information

Information presented in this press release is only a summary and does not purport to be a full representation of all figures, notes and discussions provided for in the Interim Financial Statements and MD&A. Readers are cautioned to read the entirety of the Interim Financial Statements and MD&A, and not to rely only on the information presented in this press release. In the event of conflict between the information in this press release on the one hand, and the Interim Financial Statements and MD&A on the other hand, the information in the Interim Financial Statements and MD&A shall govern.

Non-GAAP Financial Measures

In this press release, Wishpond has used the following terms ("Non-GAAP Financial Measures") that are not defined by IFRS, but are used by management to evaluate the performance of Wishpond and its business, including: adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA"), average order value, MRR, annualized revenue run-rate, customer churn rate and customer LTV. These measures may also be used by investors, financial institutions and credit rating agencies to assess Wishpond's performance and ability to service debt. Non-GAAP Financial Measures do not have standardized meanings prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Securities regulations require that Non-GAAP Financial Measures are clearly defined, qualified and reconciled to their most comparable IFRS financial measures. Except as otherwise indicated, these Non-GAAP Financial Measures are calculated and disclosed on a consistent basis from period to period. Specific items may only be relevant in certain periods. See the disclosure under the heading "Additional GAAP and Non-GAAP Measures" in Wishpond's MD&A for a discussion of Non-GAAP Financial Measures and certain reconciliations to GAAP financial measures. The intent of Non-GAAP Financial Measures is to provide additional useful information to investors and analysts, and the measures do not have any standardized meaning under IFRS. The measures should not, therefore, be considered in isolation or used as a substitute for measures of performance prepared in accordance with IFRS. Other issuers may calculate Non-GAAP Financial Measures differently. Non-GAAP Financial Measures are identified and defined as follows:

• Adjusted EBITDA: Adjusted EBITDA should not be construed as an alternative to net earnings, cash flow from operating activities or other measures of financial results determined in accordance with GAAP as an indicator of the Company's performance. The Company defines "Adjusted EBITDA" as Income or Loss before income taxes less interest, depreciation and amortization, remeasurement of contingent consideration liability, filing fees, credit facility setup fees, earn-out remuneration, foreign currency losses (gains), acquisition related expenses, net other expenditures (income), and stock-based compensation. The Company believes that Adjusted EBITDA is a meaningful financial metric as it measures cash generated from operations which the Company can use to fund working capital requirements, service future interest and principal debt repayments and fund future growth initiatives.
• Average Order Value: The Company defines average order value, or AOV, as the aggregate dollar amount of all customer orders over a period of time divided by the aggregate number of orders during that same period. Management believes AOV to be a useful financial measure because it helps to track the impact of sales initiatives and product offerings on customer spending patterns
• Monthly Recurring Revenue: The Company uses monthly recurring revenue, or MRR, as a directional indicator of subscription revenue going forward assuming customers maintain their subscription plan the following month. MRR is the total of all monthly subscription plan fees paid by customers in effect on the last day of that period. If customers pay for more than one month upfront, the amount is divided by the number of months in the subscription period. Discounts are deducted prior to the calculation and one-time payments and metered based charges are excluded.
• Annualized revenue run-rate: The Company uses annualized revenue run-rate as an indicator of financial performance that takes the current revenue in the quarter and converts it to an annual figure to get the full-year equivalent.
• Customer churn rate: The Company defines customer churn rate as the percentage of customers who have canceled their subscriptions over time. Management believes customer churn rate to be a useful financial measure because it provides further insight as to what products have the ability to generate continuous customer engagement and revenue.
• LTV: The Company defines customer lifetime value, or LTV, as the average revenue that a customer generates before they churn. Management believes LTV is useful as a forward looking estimate of the average revenue that a customer will generate throughout its lifespan as a customer with Wishpond.

Forward-Looking Statements

Statements that are not reported financial results or other historical information are forward-looking statements or forward-looking information within the meaning of applicable securities laws (collectively, "forward-looking statements"). This press release includes forward-looking statements regarding the Company, its subsidiaries and the industries in which they operate, including statements about, among other things, all information contained under the heading "Outlook" herein, references to expected results from future operations, future growth of the Company's products and platforms, the future development and increased use of products incorporating artificial intelligence, including SalesCloser AI, improvement in the Company's cash position and increased revenue generation, references to the growth of the Company's product portfolio and future profitability, including whether additional products or features may be developed in the future, and the functionality and timing of such products, financial results or operational activities that may be undertaken by the Company, the results of the Company's cost-savings, research and development and other initiatives, any future acquisitions or other activities done to grow the Company both organically or inorganically, expectations, beliefs, plans, future operations, the impact of broader economic factors including inflation and other general economic risks on the Company, business and acquisition strategies, opportunities, objectives, prospects, assumptions, including those related to trends and prospects, and future events and performance. Sentences and phrases containing or modified by words such as "expect", "anticipate", "plan", "continue", "estimate", "intend", "expect", "may", "will", "project", "predict", "potential", "targets", "projects", "is designed to", "strategy", "should", "believe", "contemplate" and similar expressions, and the negative of such expressions, are not historical facts and are intended to identify forward-looking statements. Readers are cautioned to not place undue reliance on forward-looking statements. Actual results and developments may differ materially from those contemplated by forward-looking statements. Although the Company believes that the expectations reflected in forward-looking statements in this press release are reasonable and are based on, among other things, the expectations and analysis of current market trends and opportunities of management of the Company, such forward-looking statements have been based on expectations, factors and assumptions concerning future events which may prove to be inaccurate and are subject to numerous risks and uncertainties, certain of which are beyond the Company's control, including, but not limited to, risks associated with changes to Propel IQ and SalesCloser AI's revenue and profitability, changes to customer preferences, competition, use cases for Propel IQ and SalesCloser AI, economic uncertainty and instability as a result of the ongoing inflation and supply chain issues, higher interest rate climate, tightening of credit availability and recessionary risks, pandemic related risks, wars, instability in global commodity and securities markets, shifts in consumer and institutional spending and marketing strategies, risks related to data breaches and privacy, the changing global market and competition for the products and services supplied by the Company, and the additional risk factors discussed in the continuous disclosure materials of the Company which are available under the Company's profile on SEDAR+ at www.sedarplus.ca. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement and are made as of the date hereof. The Company disclaims any intention and has no obligation or responsibility, except as required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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SOURCE Wishpond Technologies Ltd.

FAQ

What was Wishpond's revenue for Q2-2024?

Wishpond reported revenue of $5,828,709 for Q2-2024, representing a 3% increase compared to Q2-2023.

How much did Wishpond's Adjusted EBITDA improve in Q2-2024?

Wishpond's Adjusted EBITDA improved by 151% to $541,610 in Q2-2024 compared to $215,926 in Q2-2023.

What new product did Wishpond launch in Q2-2024?

Wishpond launched SalesCloser AI, a virtual sales agent that uses artificial intelligence to conduct sales calls and product demos.

Who was appointed as Wishpond's new CFO?

Adrian Lim was appointed as Wishpond's new Chief Financial Officer on July 8, 2024.

What is Wishpond's stock symbol on the OTCQX?

Wishpond's stock symbol on the OTCQX is WPNDF.