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| This drives efficiency and improves customer outcomes as we’re not only able to leverage our human capital, but also the manner in which we utilize our rich data assets to benefit clusters of similar businesses |
| The demand for our solutions is strong, and we continue to add new customers and penetrate new verticals |
| Our progress in the B2B sector is especially exciting as it opens up a very large and virtually untapped market for us |
| And since then, we’ve been on a very good track |
| As these negotiations are successful, these 2 properties would become self-sustaining and healthy with good growth prospects |
| That’s sounds successfully strong |
| We have implemented several expense reduction initiatives including exiting unprofitable contracts that are already having a meaningful impact on our bottom line, resulting in a $1.8 million quarterly improvement in our adjusted EBITDA despite the revenue decline |
| Our Commerce as a Service business is strong and with our expanding pipeline of businesses across a number of industries that are interested in our solutions, we are confident in our road map for profitable growth in the coming quarters |
| We are excited about the future and confident in our ability to execute against our growth strategy moving forward |
| We continue to topgrade our ranks relentlessly, and I’m very pleased with the new management changes that we have made over the last few months |
| As for our tech platform, we continue to innovate and are adding features and functionality that are helping our customers run their business more efficiently and grow their revenues and gain unique insights into our current customers and prospects alike |
| As we execute against our strategy over the course of this year, we expect to have continued results that drive towards profitability and sustained operational solidity that [indiscernible] from going forward |
| Given the current economic environment, companies are consistently searching for ways to reduce costs while driving improved results and with our platform is uniquely positioned to help our customers do just that |
| We are confident in our technology, our team and our strategy and look forward to capitalizing on our strong momentum over the rest of 2023 |
| However, the revenue contribution from new customers has been accelerating over the course of the current quarter and is expected to continue to accelerate throughout the end of the calendar year, especially as we enter a seasonally strong Q4 2023 |
| Our margins are expected to continue to improve as we realize the benefits of the aforementioned cost initiatives, realized operating leverage associated with revenue growth and benefit from the favorable mix profile of customer wins that have greater reliance and emphasis on the core technology and services platform that we provide our clients |
| These revenue and adjusted EBITDA projections would be incrementally benefited from a favorable rebound in performance, from the related party entities alluded to earlier and would be further benefited from our ability to onboard certain new customer wins already awarded sooner than presently forecasted |
| Overall, we now have a flatter organization where accountability and ownership are intrinsic and clearly placed and with a team that possesses high talent in all of the critical areas required for us to produce strong results with efficiency and quality going forward |
| As of today and based on our progress year-to-date, and as Jon noted, we’ve seen steady strong demand for our unique CaaS offering, with nearly $27 million in new bookings in 2023 to date |
| We expect to drive growth via both existing customer sales as well as new customer agreements, both of which will have a positive impact on our ability to increase revenue over time |
| Further, it is worth noting that the profitability of the aforementioned bookings is materially improved versus our historical business, both in part due to the lack of fulfillment-related bookings as well as the enhancements to cost to serve driven through the utilization of our technology and data assets |
| Shoab was a key driver of success for the business at Rugs USA playing a critical role in its growth of several hundred percent in both revenue and EBITDA over a few short years with revenue over that time frame growing by over $300 million |
| The sequential improvement is a result of increased realized savings from previously executed cost reduction activities as well as contribution of scalability related to the reduction of unprofitable revenue |
| As I mentioned on last quarter’s call, we have also opened up a new channel to market via our partnership agreement with RSM, a multibillion-dollar global consulting firm, which we have now officially kicked off and is already yielding good prospects adding to our already well-stocked, new business pipeline |
| In total, we expect our efforts to pursue only profitable sales and discontinued support and performance of certain unprofitable channels and customers will provide us with healthy, sustainable and margin-accretive revenue growth moving forward |
| And I think focusing on the folks who can really take advantage of what we do has helped us get to win rate |
| The improvement in adjusted EBITDA loss was driven in part by our cost optimization initiatives as well as the partial period impact of the aforementioned commercial decisions that we expect to continue to materialize throughout the balance of the year and beyond |
| For the full year 2023 and for 2024, given the state of our core business, the bookings mentioned earlier and the cost actions generated, we expect net revenue to range between $50 million and $55 million for the full year 2023, and we expect to be adjusted EBITDA positive during Q4 as a result of the seasonality of our same-store business, the ramp of new customer-related revenues and the realization of cost savings from all activities to date |
| With Shoab, we gained a leader who has a broad range of expertise and working with a small group of our internal members to build some technology assets that once completed, will generate massive value for our customers and create revenue opportunities previously unavailable to us and for most companies in the e-commerce space |
| This allows us to provide focused and dedicated training for our next level team members, giving them skills that will benefit them throughout their careers and building a solid network |
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| The other significant contributor to the sales decline was the loss of one customer who was sold to a new owner who has their own homegrown e-commerce platform |
| In addition to this, we are in negotiations with a potential new partner regarding the JV we have and the wholly-owned sub that previously wasn’t a JV, both of which contributed to the year-over-year sales decline |
| Net revenue in the second quarter of 2023 decreased 37.4% to $12.7 million from $20.4 million in the second quarter of ‘22 |
| The decrease in net revenue was primarily due to continued reductions in revenue related to an unprofitable customer with product sales and reductions in revenue associated with one JV and another wholly-owned subsidiary that we expect to convert into a JV before the end of the current quarter |
| But what will be happening there is one business with product revenues currently, which is the one we’ve discussed in the past, justice, that business declining over the course of the quarter in product revenues |
| It’s -- one is there’s OpEx saving but also there was negative margin associated with some of that |
| The largest decline was with the business where we sell products |
| So it’s not OpEx savings per se, but that did lead to a decline in revenue, which I guess, wasn’t part of your question but I answered it anyway |
| Adjusted EBITDA loss decreased to $7.5 million compared to an adjusted EBITDA loss of $9.3 million in the comparable year ago period |
| As previously mentioned, this line of business has been unprofitable for us, and we are in the process of winding it down, which hopefully will be accomplished before the end of this year |
| So by not all the things they’re losing your money, you lose less money |
| We expect the JV and wholly-owned sub, both of which have been ongoing headwinds to revenue for the past year to quickly become tailwinds for our business, generating profitable revenues as soon as the end of the third quarter and quite certainly within the fourth quarter of 2023, pending the successful consummation of our new partnership |
| And so the -- regardless of that, what you’ll see is that as the former business ramps down and as the wholly-owned sub is converted into a JV, the occurrence of those 2 events will eliminate the product revenues that we have historically recorded |
| Brian Kinstlinger And per there -- and then in July and partially into August, I mean reported -- the earnings have been uneven from companies right now |
| The increase in operating loss year-over-year was primarily due to expenses incurred in conjunction with our warehouse consolidation activities, severance costs related to certain reductions as well as the recording of $2.2 million legal expense included in our operating losses |
| With Nogin, high performance and cost effectiveness are never mutually exclusive choices |
| In addition, a description of some of the risks and uncertainties that could cause actual results to differ materially from those indicated by forward-looking statements on this call can be found in the Risk Factors section of our annual report form -- on the Form 10-K for the year ended December 31, 2022, filed on March 23, 2023 |
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