Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Leafly Holdings Inc (LFLY, Financial) reported a positive adjusted EBITDA of $483,000 for the second quarter, reflecting a focus on profitability.
- The company successfully recovered bad debt, contributing to the positive EBITDA, with delinquent accounts trending downward.
- Leafly Holdings Inc (LFLY) revamped its brand subscription offering, introducing tiers that incentivize upgrades and have shown early positive results.
- The company expanded its partnership with Uber Eats in Alberta, Canada, allowing legal cannabis delivery, enhancing consumer access.
- Leafly Holdings Inc (LFLY) is exploring opportunities in hemp-derived cannabinoids, which could open new revenue streams.
Negative Points
- Revenue for the second quarter was $8.7 million, down 18.3% year-over-year and 3.6% sequentially.
- The company experienced a 6.4% reduction in retail accounts quarter over quarter, with significant declines in Florida, California, and Oklahoma.
- Payment delinquencies remain a significant issue, accounting for nearly 40% of monthly recurring revenue lost in the quarter.
- Brand revenue decreased by 25% year-over-year, despite a seasonal boost from the 420 holiday.
- Leafly Holdings Inc (LFLY) is facing challenges with its NASDAQ listing compliance, requiring ongoing updates and efforts to regain compliance.
Q & A Highlights
Q: How is the second half of the year shaping up? When can you get back to top-line growth?
A: Suresh Krishnaswamy, CFO: We provided guidance for Q3 revenue and adjusted EBITDA but not beyond that. The team is focused on stabilizing the account base and revenues. We're seeing positive signs from new sales efforts and product enhancements, and we're encouraged by customer responses.
Q: How many new accounts did you add in the second quarter?
A: Peter Lee, President and COO: Gross account additions in Q2 were similar to Q1. We continue to experience net declines in retail accounts, but efforts on delinquent accounts should help stabilize the account base. We're executing new sales strategies to win new business and reduce churn.
Q: Can you provide an update on the status of your NASDAQ listing?
A: Yoko Miyashita, CEO: We submitted a compliance plan to NASDAQ in late May and are working with them to regain compliance with listing standards. Our stock continues to be listed and traded on NASDAQ, and we'll provide updates as more information becomes available.
Q: What are the key factors affecting your financial performance this quarter?
A: Suresh Krishnaswamy, CFO: Revenue was $8.7 million, down year-over-year due to the removal of nonpaying retail accounts. However, we achieved positive adjusted EBITDA of $483,000, driven by successful recovery of bad debt and tighter controls on delinquent accounts.
Q: What initiatives are you undertaking to improve revenue stability?
A: Yoko Miyashita, CEO: We're focusing on product development and sales strategies to stabilize revenues. This includes revamping brand subscription offerings and testing lead generation strategies. We're optimistic about these efforts and will update on progress in future quarters.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
