WM Technology(MAPS) - 2024 Q4 - Annual Report

Financial Performance - Revenues for fiscal year 2024 were $184.5 million, a decrease from$188.0 million in the prior year[309]. - Net income for fiscal year 2024 was $12.2 million, compared to a net loss of$15.7 million in the prior year, representing an increase of $27.9 million[326]. - Adjusted EBITDA for fiscal year 2024 was$42.9 million, compared to $36.9 million in the prior year[309]. - Operating income for 2024 was$14.7 million (8.0% of revenue), compared to an operating loss of $18.5 million (-9.8$7.6 million (4.1% of revenue), a significant improvement from a net loss of $9.9 million (-5.3$184.5 million, a decrease of $3.5 million or 2$187.9 million in 2023[359]. Client Metrics - Average monthly paying clients decreased by approximately 6% to 5,077 from 5,419 in the prior year[324]. - The decrease in average monthly paying clients was attributed to the removal of delinquent clients and industry challenges[324]. Revenue Composition - Featured Listings and WM Deal products revenue decreased by $11.5 million, while Weedmaps for Business revenue increased by$7.4 million due to favorable pricing changes[359]. Cost Management - Total costs and expenses decreased by $36.7 million, or 18$206.5 million in 2023 to $169.8 million in 2024[361]. - Cost of revenues (exclusive of depreciation and amortization) decreased to$9.0 million (4.9% of revenue) in 2024 from $12.5 million (6.7$3.5 million, or 28%, primarily due to a reduction in multi-channel marketing and cloud communication platform costs[361][362]. - Sales and marketing expenses decreased by $6.6 million, or 14$5.5 million reduction in personnel-related costs[361][363]. - General and administrative expenses decreased by $3.7 million, or 5$1.5 million charge related to an SEC settlement[361][365]. Cash Flow and Liquidity - Cash totaled $52.0 million as of December 31, 2024, with no long-term debt[309]. - Net cash provided by operating activities increased to$36.7 million in 2024 from $22.9 million in 2023, driven by a net income of$12.2 million[373][376]. - Cash as of December 31, 2024, was $52.0 million, up from$34.4 million in 2023, indicating improved liquidity[371]. - Net cash used in investing activities remained stable at approximately $11.6 million in 2024, consistent with$11.9 million in 2023[378]. - The company expects to fund future operations and potential acquisitions primarily through existing cash and cash generated from operations[371][372]. Strategic Initiatives - The company plans to continue investments in brand awareness and market expansion to enhance its two-sided marketplace[315]. - The company plans to accelerate investments in marketing to enhance brand awareness and expand business listings[343]. - The company aims to enhance its data assets and improve the functionality of its Weedmaps for Business offerings to capitalize on market growth[343]. - The cannabis market is expected to grow as more jurisdictions legalize cannabis for medical and adult use, providing new expansion opportunities[335]. - The company anticipates that competition will intensify as the regulatory environment stabilizes, potentially attracting new market participants[338]. Asset Management - The company assesses potential impairments to long-lived assets at least annually, with operating leases having a weighted average remaining lease term of 6.0 years as of December 31, 2024[402]. - The company performed a long-lived asset impairment test, recognizing impairment charges when the carrying amount of an asset exceeds its fair value[407]. - The company did not have any impairment charges related to property and equipment for the year ended December 31, 2024[407]. - An impairment charge of $6.1 million was recorded for the year ended December 31, 2023 related to intangible assets associated with certain product offerings that were sunset[401]. Liabilities and Obligations - Future payments on operating leases total$40.5 million as of December 31, 2024[381]. - The company recorded a TRA liability of $4.4 million as of December 31, 2024, up from$1.8 million in 2023[382]. - The tax savings associated with acquisitions of common units in the Business Combination would aggregate to approximately $165.7 million over 15 years from the Closing Date, with a required payment to Class A Unit holders of approximately$140.8 million[383]. Stock and Compensation - For the years ended December 31, 2024 and 2023, stock-based compensation expense recognized was $9.2 million and$13.5 million, respectively[395]. - Capitalized software development costs for the years ended December 31, 2024 and 2023 were $11.6 million and$13.1 million, respectively[396]. - The allowance for credit losses was $1.2 million and$8.7 million as of December 31, 2024 and December 31, 2023, respectively[398]. - No goodwill impairment charges were recorded for the years ended December 31, 2024 and 2023, with the fair value of goodwill exceeding its carrying amount by approximately 95%[400]. Lease and Warrant Information - The company amended its lease for its corporate headquarters in Irvine, California, extending the lease term by five years and recognizing a non-cash lease liability and ROU asset of $3.0 million each[405]. - The lease classification for the amended lease remained as an operating lease, and the company paid$0.1 million to terminate another lease agreement, reporting a gain of $0.1 million[405]. - As of December 31, 2024, the company had a warrant liability of$0.6 million, with 12,499,973 Public Warrants and all Private Placement Warrants remaining outstanding[408]. - The fair value of the Public Warrants is classified as Level 1 financial instruments based on publicly listed trading prices, while the fair value of Private Placement Warrants is determined using Level 3 inputs with the Black-Scholes model[408]. - The estimates of fair value for the warrants may change significantly based on market assumptions and valuation techniques, potentially impacting future results of operations[408].