Wag! (PET) 7 Aug 24 2024 Q2 Earnings call transcript
In the recent earnings call, Wag!, a leading platform for pet care services, shared their financial performance for the second quarter of 2024. The call, hosted by Chief Executive Officer and Chairman, Garrett Smallwood, alongside President and Chief Product Officer, Adam Storm, and Chief Financial Officer, Alec Davidian, provided insights into the company's strategic priorities, financial results, and future outlook.
Financial Results and Strategic Priorities
Wag! reported a revenue decrease of 6% to $18.7 million for the second quarter, with a significant increase in adjusted EBITDA to a record $1.6 million. The company attributed this increase to prudent cost management initiatives and reduced marketing spend aimed at increasing profitability in the short term. Despite the revenue decrease, Wag! remains optimistic about its future prospects, focusing on driving free cash flow, increasing profitability, and exploring opportunities for growth.
Debt Reduction and Refinancing
One of the major highlights of the call was the company's commitment to strengthening its balance sheet. Wag! recently completed a $10 million registered public offering and plans to use the proceeds to pay down a significant portion of its debt. The company is also actively exploring options for debt refinancing, aiming to generate substantial free cash flow and improve its balance sheet. This strategic move is expected to position Wag! for a debt refinancing in the second half of 2024, potentially reducing interest expenses and improving overall financial health.
Growth Strategies and Market Outlook
Wag! remains focused on its strategic priorities, including building best-in-class software solutions for consumers and partners and growing its platform through product expansion, proprietary partnerships, and opportunistic M&A. The company is particularly excited about the long-term growth prospects of its prescription B2B SaaS platform and its vision of digitally prescribing vet medications. Despite macroeconomic challenges, Wag! remains confident in the premium pet care market, noting that wellness-related categories have been resilient, especially amidst the economic uncertainties.
Conclusion
Wag!'s second-quarter earnings call underscored the company's strategic focus on debt reduction, profitability, and growth. With a commitment to strengthening its balance sheet and generating free cash flow, Wag! is well-positioned to navigate the challenges of the current macroeconomic environment while maintaining a disciplined approach to growth. As the company moves into the back half of 2024, it will continue to balance profitability and growth, exploring new opportunities for expansion and leveraging technology and automation to improve operational efficiency. With a strong focus on its core strategic priorities and a disciplined approach to financial management, Wag! is poised for sustainable growth and value creation for its shareholders.