Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
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| Statement |
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| Q3 was a solid quarter in which despite the very challenging end market conditions, we continue to make progress towards our stated priority for this year of reaching positive adjusted EBITDA |
| Given the prevailing economic conditions and the prior year quarter being a particularly tough comparable, we view this a solid performance and are particularly pleased that our subscription revenue continues to grow at 13% and 19% year-on-year growth in the quarter and year-to-date, respectively |
| Our commitment towards the stated goal of EBITDA breakeven during 2023 is as strong as ever and we have now tantalizingly close to reaching that objective |
| We have continued to derive greater efficiencies across the company, enabling us to reduce our operating expenses |
| We are now operating at an expense level that should enable us to deliver positive EBITDA even in the absence of meaningful revenue growth and given our gross margin profile in the high 70% range, as we do deliver revenue growth, we can reasonably anticipate a rapid expansion in EBITDA |
| And by doing so -- by having that integration, market to their customers in a way that we believe is going to be a really positive experience for the retailer |
| We delivered a solid result in the third quarter with further reductions in our adjusted EBITDA loss as we continue to move along our path towards profitability |
| Our topline growth continues to be driven by strong customer demand, both in terms of new customer acquisition on the retail platform, as well as expansion within the installed base |
| SpringBig is in an excellent position |
| We have a strong pipeline of client interest and anticipate both an acceleration in clients committing to this program and of course, those already signed up rolling out their VIP subscriber programs |
| We see meaningful potential from both revenue growth and profitability standpoint for both our retail partners and SpringBig as these VIP subscription programs get launched and mature over time |
| We are delivering on a rich pipeline of revenue-generating initiatives and we have a strong, high-growth recurring subscription revenue base |
| But we are confident that in time, they will fuel significant growth to complement the potential we believe is present in our existing offerings |
| I remain as confident as ever that our strategy is sound with feedback from our clients and partners reaffirming that we are making the right investments to capture the long-term opportunity in front of us |
| So, some of the newer states that are coming online, stores seem to be well-funded, and we seem to be doing well both from a customer acquisition standpoint, but a customer retention standpoint as well |
| So, on that, we're seeing that in terms of states that seem to be doing well, where we seem to be -- New Mexico seems to be doing very well |
| So, again, we believe that in 2024, we're going to see substantial revenue growth in subscriptions |
| We've been pretty conservative in our projections as we thought about them for next year, but we believe that there's a really substantial opportunity there as we start getting larger clients interested in running these programs |
| And we're continuing to look at other point-of-sales that we can integrate with that have good presence in this market |
| So, we're excited about that |
| It should be noted that the prior year quarter was particularly strong comparable caused by high excess use revenue last year |
| As mentioned earlier, we grew our subscription revenue by 13% year-on-year in Q3, and we added 89 new clients during the quarter |
| Our Q3 subscription revenues grew 13% year-on-year to $5.8 million, representing now 84% of total revenue |
| We now have our operating expenses optimized at a level that will enable us to generate meaningful profitability in the future |
| In terms of upgrades, upgrades continue to be strong |
| For the first nine months of the fiscal year, our adjusted EBITDA loss is $3.4 million compared with $9.4 million during the same period last year, a 64% improvement |
| We continue to develop and launch innovative product offerings to enable our clients to retain and grow their customer bases |
| We're seeing a nice pickup in activity there |
| So, we'll have a lot higher quality of revenue |
| We're seeing a nice pickup of activity in Missouri |
| Statement |
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| Our clients continue to experience industry-specific headwinds, coupled with a slowdown in discretionary spending by consumers given the general macro environment |
| So, I think in terms of the customers that we believe are struggling and struggling financially and struggling to be able to meet their financial commitments |
| In addition, we are experiencing increasing receivables challenges, which, as mentioned, impact revenue and earnings as we implement a stricter policy towards non-payment |
| While broader macroeconomic concerns continue to weigh on marketing budgets and digital spend, the headwinds caused by lower revenue growth and the compression of margins in the cannabis industry have also increased the financial stress on many of our clients |
| Adjusted EBITDA loss in the third quarter was $0.9 million, representing an adjusted EBITDA margin of negative 13% |
| Our Q3 revenue came in at $6.9 million, representing a year-on-year decline of 5% |
| But as Jeff mentioned earlier, we have experienced some cash collectability challenges that have certainly necessitated some tough decisions and impacted near-term performance for the benefit of our longer term business health |
| In an environment where cash is king, this has emerged as a challenge of ensuring timely or, in some cases, any payment for our services |
| As mentioned, excess revenues were particularly high in Q3 last year, in fact, they were at an all-time peak of $1.7 million, and therefore, the decline is particularly acute this quarter at 55% |
| Gross profit in Q3 was $5.3 million, representing a 5% year-on-year decline, in line with the revenue movement and our gross profit margin for the quarter was consistent year-on-year at 77% |
| And on the East side -- in the Eastern half of the Mississippi, you're seeing more of it on the West, and you're seeing it more from the more mature markets that have been around for a while, where there are just a lot of stores and there are struggles in those geographical markets |
| Given the tendency for clients to upgrade subscriptions, we continue to see declines in excess use revenue |
| The progress was a little slower than we would have liked |
| Paul Sykes Scott, we may get a little bit of pressure on revenue but we'll certainly see some in the bad debt expense we've been experiencing |
| While primarily, the decline is due to clients upgraded so that the subscriptions better match their activity level to some extent, given the prevailing economic conditions, we have also seen downward pressure due to clients being more diligent in ensuring they manage their expense within budgeted subscription amounts |
| This impacts our revenues, which reduced by 5% year-on-year, in the quarter to $6.9 million |
| Obviously, 89 new accounts, you're still growing accounts a little bit slower than you in the past and it seems like a lot of this pressures come from the upgrading of these existing clients |
| The $6.9 million represents a 24% year-on-year reduction and 13% sequentially |
| Q3 is always a little bit softer, a little bit on the lower end of that number just because of the vacation schedule in August |
| And then obviously, the other pressure and we've seen this in the industry for a little bit of while now that you guys really experienced in this quarter, what was the client accounts |
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