WM Technology's Q3 2025 Earnings Call: Contradictions Emerge in Market Challenges, Profitability, and Strategic Focus

Date of Call: November 6, 2025

Financials Results

• Revenue: $42.2M, down 9% YOY

Guidance:

• Revenue for Q4 expected to be $41M to $43M.
• Adjusted EBITDA for Q4 expected to be $5M to $7M.
• Outlook reflects ongoing pressure in mature markets and planned investments while balancing near-term profitability with positioning for future growth.

Business Commentary:

• Revenue Decline due to Industry Challenges:
• WM Technology, Inc. reported revenue of $42.2 million for Q3, down 9% year-over-year, in line with expectations.

• The decline was driven by continued softness across core markets due to persistent pricing compression and margin pressure, affecting clients' budgets and spend on the platform.

• Regulatory Challenges and Market Pressures:

• The cannabis industry faces ongoing regulatory challenges, including tax increases, like Michigan's new wholesale excise tax of 24%, impacting market health.

• Market pressures and regulatory uncertainty at both the state and federal levels are contributing to industry consolidation and reevaluation of client profiles.

• Client Growth and Acquisitions:

• Average monthly paying clients increased 2% year-over-year to 5,221, reflecting continued client acquisition in developing markets.

• The increase was offset by churn in more mature states, with average monthly revenue per paying client down 12% year-over-year, primarily due to overall revenue softness and lower spend levels of newer clients.

• Cost Management and Profitability:

• GAAP operating expenses for Q3 were $40.2 million, a 3% decrease from the prior year, driven by lower personnel-related costs and disciplined expense management.
• Despite a softer revenue environment, the company remained profitable, delivering net income of $3.6 million and adjusted EBITDA of $7.6 million.

• Financial Position and Cash Generation:
• The company ended Q3 with $62.6 million in cash, up 39% year-over-year, representing the ninth consecutive quarter of positive cash generation.
• The strong cash position allows WM Technology to navigate near-term market volatility while investing in strategic initiatives to enhance its platform and client value.
  

  Sentiment Analysis:

  Overall Tone: Neutral

  • Management said third-quarter revenue was "in line with guidance" while warning of worsening price and margin compression (retail flower prices ~9% down in CA, >20% down in MI) and regulatory headwinds. They also reported net income $3.6M, adjusted EBITDA $7.6M, and cash $62.6M (up 39% YOY) with no debt, highlighting resilience amid challenges.

Contradiction Point 1

Market Challenges and Revenue Trends

It highlights discrepancies in the reported market challenges and revenue trends, which could impact investor perceptions and strategic decision-making.

N/A - N/A (Opening remarks)

20251107-2025 Q3: Our third quarter revenue was in line with guidance, but several key markets face headwinds from price and margin compression. Average retail flower prices are down 9% in California and more than 20% in Michigan. Regulatory challenges and tax increases exacerbate these issues. - Douglas Francis(CEO)

Can you provide an update on the company's current liquidity position and cash flow projections for the next quarter? - N/A (Opening remarks)

2025Q2: Despite ongoing pressure in several of our key markets, we delivered another consecutive quarter of adjusted EBITDA profitability and positive cash flow. We're encouraged by the progress we're seeing in emerging markets like New York, with a focus on new products and premium placement opportunities. - Douglas Francis(CEO)

Contradiction Point 2

Profitability and Cash Flow

It involves differences in reported profitability and cash flow, which are critical financial indicators for investors.

Can management provide a clear update on the progress of the new product launch and its expected impact on Q4 revenue? - N/A (Financial performance and cash flow in Q3)

20251107-2025 Q3: Our GAAP net loss was $18.2 million compared to net income of $9.0 million in the third quarter of 2024. - Susan Echard(CFO)

N/A - N/A (Expense management, profitability, and cash flow)

2025Q2: Despite the challenging revenue environment, we delivered Q2 net income of $2.2 million and non-GAAP adjusted EBITDA of $11.7 million. - Susan Echard(CFO)

Contradiction Point 3

Regulatory Environment and Industry Challenges

It highlights differing perspectives on the regulatory environment and its impact on the cannabis industry, which affects both business operations and investor expectations.

Can you provide specific revenue growth and profit forecasts for the next few quarters, along with the underlying market trends and operational improvements driving them? - N/A

20251107-2025 Q3: The cannabis industry is evolving, and there are opportunities for Weedmaps to grow. - Douglas Francis(CEO)

N/A - N/A

2025Q1: The regulatory environment remains unchanged and the outlook for the cannabis industry remains challenged by over taxation and competition from unregulated hemp. - Douglas Francis(CEO)

Contradiction Point 4

Financial Performance and Market Trends

It involves differing interpretations of financial performance and market trends, which are critical for investor assessment and strategic decision-making.

How did supply chain issues impact Q2 revenue in the European market? - N/A

20251107-2025 Q3: Our third quarter revenue was in line with guidance, but several key markets face headwinds from price and margin compression. - Douglas Francis(CEO)

N/A - N/A

2025Q1: Our first quarter revenue grew 1% year-over-year [...] The increase in revenue was driven primarily by growth in our Cannabis Retail Software Services, including our software platform and services. - Douglas Francis(CEO)

Contradiction Point 5

Cannabis Industry Challenges and Strategic Focus

It reflects differing perspectives on the state of the cannabis industry and the strategic focus of WM Technology, which could impact investor confidence and long-term planning.

Can you provide a brief overview of the earnings call? - Simon Yao (Director of Investor Relations)

20251107-2025 Q3: Our third quarter revenue was in line with guidance, but several key markets face headwinds from price and margin compression. Average retail flower prices are down 9% in California and more than 20% in Michigan. Regulatory challenges and tax increases exacerbate these issues. The cannabis industry is evolving, and there are opportunities for Weedmaps to grow. - Douglas Francis(CEO)

The input content is missing. Please provide the specific Q&A text from the earnings call for me to generate the simplified version. - Anonymous Analyst

2024Q4: The cannabis industry faces significant challenges due to regulatory uncertainty, taxation, wholesale pricing pressures, and competition from illicit and hemp markets. Despite these pressures, WM Technology has focused on optimizing its operating structure and strengthening its marketplace. The company is investing in technology and marketing to enhance the Weedmaps platform and is exploring adjacencies like hemp shop and homegrown markets. - Doug Francis(CEO)