Second Quarter 2023 Financial Highlights
- Revenues: Revenues were
$78 million , a decrease of 42% YoYCore Marketplace revenues were$24 million , down 56% YoY- Product Boost revenues were
$6 million , down 45% YoY - Logistics revenues were
$48 million , down 30% YoY
- Net Loss: Net loss was
$80 million , compared to a net loss of$90 million in the second quarter of 2022- Net loss per share was
$3.38 , compared to a net loss of$4.05 per share in the second quarter of 2022
- Net loss per share was
- Adjusted EBITDA: Adjusted EBITDA(1) was a loss of
$66 million , compared to a loss of$58 million in the second quarter of 2022 - Cash Flow: Cash flows from operating activities were negative
$88 million - Free Cash Flow(1) was negative
$91 million , compared to negative$67 million in the second quarter of 2022
- Free Cash Flow(1) was negative
"Our second quarter results reflect a continuingly challenging operating environment. While our adjusted EBITDA results were in-line with expectations, we experienced macro and competitive pressure on our top-line performance with total revenues declining 42% year-over-year," said
Third Quarter Fiscal 2023 Financial Guidance
- Revenue: Revenue is expected to be in the range of
$55 million to$65 million . - Adjusted EBITDA: Adjusted EBITDA(1)(2) is expected to be a loss in the range of
$55 million to$65 million .
Second Quarter Consolidated Financials
The following tables include unaudited GAAP and non-GAAP financial highlights for the periods presented:
Revenue
(in millions, except percentages; unaudited)
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||
2023 | 2022 | $ | YoY% | 2023 | 2022 | $ | YoY% | ||||||||||||||||||
Core marketplace revenue | $ | 24 | $ | 54 | $ | (30 | ) | (56 | )% | $ | 52 | $ | 144 | $ | (92 | ) | (64 | )% | |||||||
ProductBoost revenue | 6 | 11 | (5 | ) | (45 | )% | 14 | 25 | (11 | ) | (44 | )% | |||||||||||||
Marketplace revenue | 30 | 65 | (35 | ) | (54 | )% | 66 | 169 | (103 | ) | (61 | )% | |||||||||||||
Logistics revenue | 48 | 69 | (21 | ) | (30 | )% | 108 | 154 | (46 | ) | (30 | )% | |||||||||||||
Revenue | $ | 78 | $ | 134 | $ | (56 | ) | (42 | )% | $ | 174 | $ | 323 | $ | (149 | ) | (46 | )% | |||||||
Other Financial Data
(in millions, except percentages; unaudited)
Three Months Ended | Six Months Ended | ||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
Net loss | $ | (80 | ) | $ | (90 | ) | $ | (169 | ) | $ | (150 | ) | |||
% of Revenue | (102 | )% | (67 | )% | (97 | )% | (47 | )% | |||||||
Adjusted EBITDA(1) | $ | (66 | ) | $ | (58 | ) | $ | (128 | ) | $ | (98 | ) | |||
% of Revenue | (85 | )% | (43 | )% | (74 | )% | (30 | )% | |||||||
Forward Looking Guidance - Third Quarter 2023
(in millions, except percentages, unaudited)
We expect the following financial results for revenue and Adjusted EBITDA in the period presented below:
Three Months Ended | ||||||||
Revenue | $ | 55 | to | $ | 65 | |||
% YoY | (56 | )% | (48 | )% | ||||
Adjusted EBITDA(1)(2) | $ | (55 | ) | to | $ | (65 | ) | |
% YoY | 42 | % | 32 | % | ||||
(1) Indicates non-GAAP metric. See below for more information regarding our presentation of non-GAAP metrics in the section titled: “Use of Non-GAAP Financial Measures.” | ||||||||
(2) Wish has not provided a quantitative reconciliation of forecasted Adjusted EBITDA to forecasted GAAP net income (loss) for Adjusted EBITDA within this release because the company is unable, without making unreasonable efforts, to calculate certain reconciling items with confidence. These items include, but are not limited to stock-based compensation and income taxes which are impacted by unpredictable fluctuations in the market price of the company's Class A common stock. | ||||||||
Conference Call & Webcast Information
Information about Wish’s financial results, including a link to the live webcast and replay will be made available on the company’s investor relations website at https://ir.wish.com. The live conference call may be accessed by registering using this online form. Upon registration, all telephone participants will receive the dial-in number along with a unique PIN number that can be used to access the call.
About Wish
Wish brings an affordable and entertaining shopping experience to millions of consumers around the world. Since our founding in
Use of Non-GAAP Financial Measures
We provide Adjusted EBITDA, a non-GAAP financial measure that represents our loss before interest and other income, net (which includes foreign exchange gain or loss and other non-operating income and expenses), income tax expense, and depreciation and amortization, adjusted to eliminate stock-based compensation expense, lease termination and impairment related expenses, restructuring and other discrete charges, and to add back certain recurring items. Additionally, we provide Adjusted EBITDA Margin, a non-GAAP financial measure that represents Adjusted EBITDA Margin divided by revenue. The reconciliation between historical GAAP and non-GAAP results of operations is provided below. Our management uses Adjusted EBITDA and Adjusted EBITDA Margin in conjunction with GAAP and other operating performance measures as part of its overall assessment of the company’s performance for planning purposes, including the preparation of its annual operating budget, to evaluate the effectiveness of its business strategies and to communicate with its board of directors concerning its financial performance. Adjusted EBITDA and Adjusted EBITDA Margin should not be considered as an alternative financial measure to net loss and net loss as a percentage of revenue, which, respectively, are the most directly comparable financial measures calculated in accordance with GAAP, or any other measure of financial performance calculated in accordance with GAAP. We also provide Free Cash Flow, a non-
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact could be deemed forward-looking, including, but not limited to, statements regarding Wish’s outlook including expectations with respect to revenues, adjusted EBITDA, expectations regarding new business strategies, including cost-savings strategies, and ability to capitalize on opportunities, and other quotes of management. In some cases, forward-looking statements can be identified by terms such as “anticipates,” “believes,” “could,” “estimates,” “expects,” “foresees,” “forecasts,” “guidance,” “intends” “goals,” “may,” “might,” “outlook,” “plans,” “potential,” “predicts,” “projects,” “seeks,” “should,” “targets,” “will,” “would” or similar expressions and the negatives of those terms. These forward-looking statements are subject to risks, uncertainties, and assumptions. If the risks materialize or assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. Risks include, but are not limited to: our ability to attract, retain and monetize users; risks associated with software updates to the platform; compliance with Nasdaq continued listing requirements; increasing requirements on collection of sales and value added taxes; the success of our execution on new business strategies; compromises in security; changes by third-parties that restrict our access or ability to identify users; competition; disruption, degradation or interference with the hosting services we use and infrastructure; our financial performance and fluctuations in operating results; pressure and fluctuation in our stock price, including as a result of short selling and short squeezes; challenges in our logistics programs; challenges in growing new initiatives; material weaknesses in our internal control over financial reporting and the effectiveness of our internal controls generally; the continued services and retention of members of our senior management team and key talent; our ability to offer and promote our app on the
The unaudited financial results in this news release are estimates based on information currently available to Wish. While Wish believes these estimates are meaningful, they could differ from the actual amounts that the company ultimately reports in its Quarterly Report on Form 10-Q for the three and six months ended
Condensed Consolidated Balance Sheets (in millions) (unaudited) | ||||||||
As of | As of | |||||||
2023 | 2022 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 318 | $ | 506 | ||||
Marketable securities | 213 | 213 | ||||||
Funds receivable | 4 | 14 | ||||||
Prepaid expenses and other current assets | 30 | 44 | ||||||
Total current assets | 565 | 777 | ||||||
Property and equipment, net | 9 | 9 | ||||||
Right-of-use assets | 6 | 9 | ||||||
Other assets | 4 | 4 | ||||||
Total assets | $ | 584 | $ | 799 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 36 | $ | 53 | ||||
Merchants payable | 87 | 120 | ||||||
Refunds liability | 3 | 6 | ||||||
Accrued liabilities | 110 | 130 | ||||||
Total current liabilities | 236 | 309 | ||||||
Lease liabilities, non-current | 9 | 13 | ||||||
Other liabilities | 2 | — | ||||||
Total liabilities | 247 | 322 | ||||||
Stockholders’ equity | 337 | 477 | ||||||
Total liabilities and stockholders’ equity | $ | 584 | $ | 799 | ||||
Condensed Consolidated Statements of Operations ($ in millions, shares in thousands, except per share data) (unaudited) | ||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||
Revenue | $ | 78 | $ | 134 | $ | 174 | $ | 323 | ||||||||||
Cost of revenue(1) | 62 | 92 | 138 | 217 | ||||||||||||||
Gross profit | 16 | 42 | 36 | 106 | ||||||||||||||
Operating expenses: | ||||||||||||||||||
Sales and marketing(1) | 39 | 56 | 76 | 101 | ||||||||||||||
Product development(1) | 38 | 46 | 89 | 112 | ||||||||||||||
General and administrative(1) | 22 | 31 | 47 | 46 | ||||||||||||||
Total operating expenses | 99 | 133 | 212 | 259 | ||||||||||||||
Loss from operations | (83 | ) | (91 | ) | (176 | ) | (153 | ) | ||||||||||
Other income, net: | ||||||||||||||||||
Interest and other income, net | 6 | 2 | 10 | 4 | ||||||||||||||
Loss before provision for income taxes | (77 | ) | (89 | ) | (166 | ) | (149 | ) | ||||||||||
Provision for income taxes | 3 | 1 | 3 | 1 | ||||||||||||||
Net loss | (80 | ) | (90 | ) | (169 | ) | (150 | ) | ||||||||||
Net loss per share, basic and diluted | $ | (3.38 | ) | $ | (4.05 | ) | $ | (7.21 | ) | $ | (6.77 | ) | ||||||
Weighted-average shares used in computing net loss per share, basic and diluted | 23,651 | 22,241 | 23,451 | 22,146 | ||||||||||||||
(1) Includes the following stock-based compensation expense:
Three Months Ended | Six Months Ended | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Cost of revenue | $ | 1 | $ | 3 | $ | 2 | $ | 2 | ||||||||
Sales and marketing | 1 | 2 | 2 | 3 | ||||||||||||
Product development | 9 | 14 | 25 | 28 | ||||||||||||
General and administrative | 4 | 10 | 12 | (6 | ) | |||||||||||
Total stock-based compensation | $ | 15 | $ | 29 | $ | 41 | $ | 27 | ||||||||
Condensed Consolidated Statements of Cash Flows (in millions) (unaudited) | ||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||
Net loss | $ | (80 | ) | $ | (90 | ) | $ | (169 | ) | $ | (150 | ) | ||||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||||||||
Noncash inventory write downs | — | — | — | 3 | ||||||||||||||
Depreciation and amortization | 1 | 2 | 2 | 4 | ||||||||||||||
Noncash lease expense | 1 | 1 | 2 | 3 | ||||||||||||||
Impairment of lease assets and property and equipment | 1 | 2 | 1 | 6 | ||||||||||||||
Stock-based compensation expense | 15 | 29 | 41 | 27 | ||||||||||||||
Net (accretion) amortization of discounts and premiums on marketable securities | (2 | ) | 1 | (4 | ) | 1 | ||||||||||||
Other | (3 | ) | (4 | ) | (5 | ) | (2 | ) | ||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||||
Funds receivable | 1 | 2 | 10 | 5 | ||||||||||||||
Prepaid expenses, other current and noncurrent assets | 9 | 3 | 14 | 2 | ||||||||||||||
Accounts payable | (3 | ) | 15 | (16 | ) | (12 | ) | |||||||||||
Merchants payable | (23 | ) | (17 | ) | (33 | ) | (52 | ) | ||||||||||
Accrued and refund liabilities | (3 | ) | (9 | ) | (18 | ) | (42 | ) | ||||||||||
Lease liabilities | (2 | ) | (2 | ) | (4 | ) | (4 | ) | ||||||||||
Other current and noncurrent liabilities | — | — | (1 | ) | (2 | ) | ||||||||||||
Net cash used in operating activities | (88 | ) | (67 | ) | (180 | ) | (213 | ) | ||||||||||
Cash flows from investing activities: | ||||||||||||||||||
Purchases of property and equipment and development of internal-use software | (3 | ) | — | (3 | ) | (2 | ) | |||||||||||
Purchases of marketable securities | (45 | ) | (73 | ) | (170 | ) | (226 | ) | ||||||||||
Maturities of marketable securities | 91 | 87 | 176 | 137 | ||||||||||||||
Net cash provided by (used) in investing activities | 43 | 14 | 3 | (91 | ) | |||||||||||||
Cash flows from financing activities: | ||||||||||||||||||
Proceeds from issuance of common stock through employee equity incentive plans | — | 1 | — | 1 | ||||||||||||||
Payments of taxes related to RSU settlement | (1 | ) | (5 | ) | (4 | ) | (5 | ) | ||||||||||
Net cash used in financing activities | (1 | ) | (4 | ) | (4 | ) | (4 | ) | ||||||||||
Foreign currency effects on cash, cash equivalents and restricted cash | (8 | ) | (9 | ) | (7 | ) | (9 | ) | ||||||||||
Net decrease in cash, cash equivalents and restricted cash | (54 | ) | (66 | ) | (188 | ) | (317 | ) | ||||||||||
Cash, cash equivalents and restricted cash at beginning of period | 379 | 767 | 513 | 1,018 | ||||||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | 325 | $ | 701 | $ | 325 | $ | 701 | ||||||||||
Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets: | ||||||||||||||||||
Cash and cash equivalents | $ | 318 | $ | 693 | $ | 318 | $ | 693 | ||||||||||
Restricted cash included in prepaid and other current assets in the condensed consolidated balance sheets | 7 | 8 | 7 | 8 | ||||||||||||||
Total cash, cash equivalents and restricted cash | $ | 325 | $ | 701 | $ | 325 | $ | 701 | ||||||||||
Supplemental cash flow disclosures: | ||||||||||||||||||
Cash paid for income taxes, net of refunds | $ | — | $ | 3 | $ | — | $ | 6 | ||||||||||
Reconciliation of GAAP Net Loss to Non-GAAP Adjusted EBITDA ($ in millions, except percentages) (unaudited) | |||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||
Revenue | $ | 78 | $ | 134 | $ | 174 | $ | 323 | |||||||||||
Net loss | (80 | ) | (90 | ) | (169 | ) | (150 | ) | |||||||||||
Net loss as a percentage of revenue | (102 | )% | (67 | )% | (97 | )% | (47 | )% | |||||||||||
Excluding: | |||||||||||||||||||
Interest and other income, net | (6 | ) | (2 | ) | (10 | ) | (4 | ) | |||||||||||
Provision for income taxes | 3 | 1 | 3 | 1 | |||||||||||||||
Depreciation and amortization | 1 | 2 | 2 | 4 | |||||||||||||||
Stock-based compensation expense and related employer payroll taxes(1)(2)(3) | 15 | 30 | 42 | 28 | |||||||||||||||
Restructuring and other discrete items(4) | — | 2 | 3 | 24 | |||||||||||||||
Lease termination and impairment related expenses(5) | 1 | — | 1 | — | |||||||||||||||
Others | — | (1 | ) | — | (1 | ) | |||||||||||||
Adjusted EBITDA | (66 | ) | (58 | ) | (128 | ) | (98 | ) | |||||||||||
Adjusted EBITDA margin | (85 | )% | (43 | )% | (74 | )% | (30 | )% | |||||||||||
(1) Total amount for the three months ended | |||||||||||||||||||
(2) Total stock-based compensation for the three months | |||||||||||||||||||
(3) Total stock-based compensation for the six months ended | |||||||||||||||||||
(4) Total amount for the six months ended | |||||||||||||||||||
(5) Impairment of lease assets and property and equipment unrelated to restructuring activities. | |||||||||||||||||||
Reconciliation of GAAP (in millions) (unaudited) | |||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||
Net cash used operating activities | $ | (88 | ) | $ | (67 | ) | $ | (180 | ) | $ | (213 | ) | |||||||
Less: | |||||||||||||||||||
Purchases of property and equipment and development of internal-use software | 3 | — | 3 | 2 | |||||||||||||||
Free Cash Flow | $ | (91 | ) | $ | (67 | ) | $ | (183 | ) | $ | (215 | ) | |||||||
Contacts
Investor Relations:
ir@wish.com
Media contacts:
press@wish.com
Source: Wish
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