WM Technology Stock Crashes On Heels Of Q3 Earnings Results With 9% YoY Revenue Growth

WM Technology, Inc. MAPS, a technology and software infrastructure provider to the cannabis industry and the owner of Weedmaps, released its third-quarter financial results, revealing revenue of $50.9 million, up by 9% from the third quarter of 2020.

Q3 Financial Highlights

• Gross profits amounted to $48.8 million implying a 96% margin rate, which reflects a 50bps margin expansion from the prior year;
• Net income was $49.2 million as compared to $15.5 million from the prior-year period;
• Adjusted EBITDA was a gain of $10.4 million, versus $16.5 million from the same quarter of 2020;
• Basic net income per share was $0.32 based on 64.2 million of class A common stock weighted average shares outstanding. Diluted net income per share was $0.02 based on 68.3 million class A common stock weighted average diluted shares outstanding.
• Monthly active users increased to 13.9 million on September 30, 2021, or 37% compared to the prior-year period;
• Average monthly revenue per paying client increased to $3,817 or 7% compared to the prior-year period, and average monthly paying clients increased to 4,444 or 2% compared to the prior-year period;
• At the end of the reporting period on Sep. 30, the company held $77.9 million in cash.

“Our third-quarter results reflect the momentum we are seeing as we focus on executing and investing against our growth opportunities,” Chris Beals, CEO and chairman of WM Technology stated. “We achieved revenue growth in the U.S. of 46% year-over-year, maintained healthy EBITDA profitability and also had double-digit year-over-year growth across a number of our key metrics. Our ability to outpace our end-market growth is especially notable given the challenges many of our clients faced given what we believe is accelerating consumer demand shifts to non-licensed channels,” said Beals.

“Additionally, we continue to accelerate investment in both organic and inorganic growth in our platform during the third quarter as we look towards 2022,” he continued. “In addition to the acquisition of Sprout announced in mid-September, we also acquired the parent company to Cannveya and CannCurrent."

Q3 Operational Highlights

• Completed two acquisitions in Sprout and Transport Logistics Holding Company, LLC, the parent company to Cannveya and CannCurrent. As part of the acquisitions, WM hired the founders and teams of both companies.
• Enabled online order-ahead functionality on our iOS app.
• Expanded cost-per-click, or “CPC”, pricing tests in additional markets to enable more performance-based buying options for company clients.
• Invested ahead of key East Coast state openings, like New Jersey and New York, with on-the-ground efforts through our social equity workshops and work with local cannabis associations and also seeded awareness of the Weedmaps brand through efforts such as the Kevin Durant partnership.

Fourth Quarter Business Outlook

Based on current business trends and conditions, the outlook for the fourth quarter of the year ending December 31, 2021, is expected to be as follows:

• Revenue is estimated to be between $50 million and $52 million.
• Adjusted EBITDA is estimated to be between $3 million and $5 million.

Price Action

WM Technology’s shares traded 24.20% lower at $8.80 per share at the time of writing Friday morning.

Photo: Courtesy of Elsa Olofsson on Unsplash