WM Technology Inc.

08/07/2025 | Press release | Distributed by Public on 08/07/2025 14:45

Quarterly Report for Quarter Ending June 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of the financial condition and results of operations of WM Technology, Inc. should be read in conjunction with the condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q as well as the discussion under "Item 1A. Risk Factors." In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions. Our actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under "Risk Factors" and included herein and in our Annual Report on Form 10-K for the year ended December 31, 2024.
For further discussion of our products and services, growth strategy, challenges in our end-markets and competitive strengths, see "Item 1. Business." Unless stated otherwise, the comparisons presented in this discussion and analysis refer to the year-over-year comparison of changes in our financial condition and results of operations as of and for the three and six months ended June 30, 2025 and 2024.
Second Quarter 2025 Financial Highlights
•Revenues were $44.8 million as compared to $45.9 million in the prior year.
•Average monthly paying clients was 5,241, as compared to 5,045 in the prior year.
•Average monthly revenues per paying client was $2,852, as compared to $3,033 in the prior year.
•Net income was $2.2 million as compared to $1.2 million in the prior year.
•Adjusted EBITDA was $11.7 million as compared to $10.1 million in the prior year.
For further information about how we calculate EBITDA and Adjusted EBITDA as well as limitations of its use and a reconciliation of EBITDA and Adjusted EBITDA to net income, see "Net Income to EBITDA and Adjusted EBITDA" in Non-GAAP Financial Measurements below.
Overview
Founded in 2008, and headquartered in Irvine, California, WM Technology, Inc. operates a leading online cannabis marketplace for consumers together with a comprehensive set of eCommerce and compliance software solutions for cannabis businesses, which are sold to both storefront locations and delivery operators ("retailers") and brands in the legalized cannabis markets in states and territories of the United States. Our comprehensive business-to-consumer and business-to-business suite of products afford cannabis retailers and brands of all sizes integrated tools to compliantly run their businesses and to reach, convert, and retain consumers.
Our business primarily consists of our commerce-driven marketplace ("Weedmaps"), and our fully integrated suite of end-to-end Software-as-a-Service ("SaaS") solutions software offering ("Weedmaps for Business"). The Weedmaps marketplace is a premier destination for cannabis consumers to discover and browse information regarding cannabis and cannabis products with 5,241 average monthly paying clients during the three months ended June 30, 2025 on the supply-side of our marketplace. These paying clients include retailers, brands and other client types (such as doctors). Further, these clients, who can choose to purchase multiple listings solutions for each business, had purchased approximately 8,600 listing pages as of June 30, 2025.
We sell our Weedmaps for Business suite in the United States and have a limited number of non-monetized listings in several other countries including Austria, Canada, Germany, the Netherlands, Spain, Switzerland, and Uruguay. We operate in the United States, Canada and other foreign jurisdictions where medical and/or adult cannabis use is legal under state or national law. As of June 30, 2025, we actively operated in over 35 U.S. states and territories that have adult-use and/or medical-use regulations in place. Substantially all of our revenue was generated in the United States during the periods presented. We define actively operated markets as those U.S. states or territories with greater than $1,000 monthly revenue.
Our mission is to power a transparent and inclusive global cannabis economy. Our technology addresses the challenges facing both consumers seeking to understand cannabis products and businesses who serve cannabis users in a legally compliant fashion. Since our founding in 2008, Weedmaps has become a premier destination for cannabis consumers to discover and browse information regarding cannabis and cannabis products, permitting product discovery and order-ahead for pickup or delivery by participating retailers. Weedmaps for Business is a set of eCommerce-enablement tools designed to help retailers and brands get the best out of the Weedmaps' consumer experience, create labor efficiencies and manage compliance needs.
As we continue to expand the presence and increase the number of consumers on the Weedmaps marketplace and broaden our offerings, we generate more value for our business clients. As we continue to expand the presence and increase the number of cannabis businesses listed on weedmaps.com, we become a more compelling marketplace for consumers. To capitalize on the growth opportunities of our two-sided marketplace and solutions, we plan to continue making investments in raising brand awareness, increasing penetration within existing markets and expanding to new markets, as well as continuing to develop and
monetize new solutions to extend the functionality of our platform. These investments serve to deepen the consumer experience with our platform and continue to provide a high level of support to our business clients.
Key Operating and Financial Metrics
We monitor the following key financial and operational metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions. The following table summarize our financial performance for three and six months ended June 30, 2025 compared to our financial performance for the same periods in 2024. For a detailed discussion of our results of operations, see "Results of Operations" below.
Three Months Ended June 30, Six Months Ended June 30,
2025 2024 2025 2024
(dollars in thousands, except for revenues per paying client)
Revenues $ 44,847 $ 45,903 $ 89,459 $ 90,292
Net income $ 2,159 $ 1,194 $ 4,653 $ 3,153
EBITDA(1)
$ 5,186 $ 4,383 $ 10,601 $ 9,277
Adjusted EBITDA(1)
$ 11,725 $ 10,090 $ 21,862 $ 19,689
Average monthly revenues per paying client(2)
$ 2,852 $ 3,033 $ 2,862 $ 3,015
Average monthly paying clients(3)
5,241 5,045 5,210 4,991
___________________________
(1)For further information about how we calculate EBITDA and Adjusted EBITDA as well as limitations of its use and a reconciliation of EBITDA and Adjusted EBITDA to net income, see "Net income to EBITDA and Adjusted EBITDA" in Non-GAAP Financial Measurements below.
(2)Average monthly revenues per paying client is defined as the average monthly revenues for any particular period divided by the average monthly paying clients in the same respective period. Average monthly revenues per paying client is calculated in the same manner as our previously-reported "Average monthly net revenue per paying client," and the description of the metric is being updated solely because we changed the reporting line item from "Net revenues" to "Revenue". For additional information, see "Basis of Presentation" and "Revenue Recognition" of Note 2. "Summary of Significant Accounting Policies," of the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on March 13, 2025.
(3)Average monthly paying clients are defined as the average of the number of paying clients billed in a month across a particular period (and for which services were provided).
Average Monthly Revenues Per Paying Client
Average monthly revenues per paying client measures how much clients, for the period of measurement, are willing to pay us for our subscription and additional offerings and the efficiency of the bid-auction process for our featured listings placements ("Featured Listings"). We calculate this metric by dividing the average monthly revenues for any particular period by the average monthly number of paying clients in the same respective period. The decrease in our average monthly revenues per paying client for the three and six months ended June 30, 2025 compared to the same periods in 2024 was primarily due to spend declines in established markets driven by continued industry challenges, such as price deflation and ongoing consolidation. In addition, new clients acquired across certain markets had lower levels of average spend.
Three Months Ended June 30, Six Months Ended June 30,
2025 2024 2025 2024
Average monthly revenues per paying client $ 2,852 $ 3,033 $ 2,862 $ 3,015
Average Monthly Paying Clients
We define average monthly paying clients as the monthly average of clients billed each month over a particular period (and for which services were provided). Our paying clients include both individual cannabis businesses as well as retail websites or businesses within a larger organization that have independent relationships with us, many of whom are owned by holding companies where decision-making is decentralized such that purchasing decisions are made, and relationships with us are located, at a lower organizational level. In addition, any client may choose to purchase multiple listing solutions for each of their retail websites or businesses.
Average monthly paying clients for the three months ended June 30, 2025 increased 4% to 5,241 average monthly paying clients from 5,045 average monthly paying clients in the same period in 2024. Average monthly paying clients for the six months ended June 30, 2025 increased 4% to 5,210 average monthly paying clients from 4,991 average monthly paying clients in the same period in 2024. The increase in average monthly paying clients compared to the same period in 2024 was primarily due to new client acquisitions across certain developing markets, partially offset by a churn in more established markets.
Three Months Ended June 30, Six Months Ended June 30,
2025 2024 2025 2024
Average monthly paying clients 5,241 5,045 5,210 4,991
Non-GAAP Financial Measures
Net Income to EBITDA and Adjusted EBITDA
Our financial statements, including net income, are prepared in accordance with GAAP. For more information regarding the components within our net income, see "Components of Our Results of Operations" below.
Net income for the three months ended June 30, 2025 and 2024 was $2.2 million and $1.2 million, respectively. The increase in net income was primarily due to a decrease in total costs and expenses of $1.8 million and a decrease in other expense, net of $0.4 million, partially offset by a decrease in revenue of $1.1 million, change in tax receivable agreement ("TRA") liability of $0.2 million and change in fair value of warrant liability of $0.1 million.
Net income for the six months ended June 30, 2025 was $4.7 million compared with a net income for the six months ended June 30, 2024 of $3.2 million. The increase in net income was primarily due to a decrease in total costs and expenses of $0.5 million, change in fair value of warrant liability of $0.8 million and a decrease in other expense, net of $1.2 million, partially offset by a decrease in revenue of $0.8 million and change in TRA liability of $0.2 million.
To provide investors with additional information regarding our financial results, we have disclosed EBITDA and Adjusted EBITDA, both of which are non-GAAP financial measures that we calculate as net income before interest, taxes and depreciation and amortization expense in the case of EBITDA and further adjusted to exclude stock-based compensation, change in fair value of warrant liability, legal settlements and other legal costs, asset impairment charges, change in the TRA liability and other non-cash, unusual and/or infrequent costs in the case of Adjusted EBITDA. Below we have provided a reconciliation of net income (the most directly comparable GAAP financial measure) to EBITDA; and from EBITDA to Adjusted EBITDA.
We present EBITDA and Adjusted EBITDA because these metrics are a key measure used by our management to evaluate our operating performance, generate future operating plans and make strategic decisions regarding the allocation of investment capacity. Accordingly, we believe that EBITDA and Adjusted EBITDA provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management.
Each of EBITDA and Adjusted EBITDA has limitations as an analytical tool, and you should not consider any of these non-GAAP financial measures in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are as follows:
•although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
•EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs; and
•EBITDA and Adjusted EBITDA do not reflect tax payments that may represent a reduction in cash available to us.
Because of these limitations, you should consider EBITDA and Adjusted EBITDA alongside other financial performance measures, including net income and our other GAAP results.
A reconciliation of net income to non-GAAP EBITDA and Adjusted EBITDA is as follows:
Three Months Ended June 30, Six Months Ended June 30,
2025 2024 2025 2024
(in thousands)
Net income $ 2,159 $ 1,194 $ 4,653 $ 3,153
Provision for income taxes
- 42 9 51
Depreciation and amortization expenses 3,458 3,187 6,779 6,124
Interest income (431) (40) (840) (51)
EBITDA 5,186 4,383 10,601 9,277
Stock-based compensation 2,624 2,752 4,818 5,571
Change in fair value of warrant liability (390) (460) (390) 390
Legal settlements and other legal costs(1)
1,436 3,020 2,540 3,513
Reduction in force (recovery) expense(2)
- - 879 -
Loss contingency(3)
2,324 - 2,324 -
Change in tax receivable agreement liability 545 395 1,090 938
Adjusted EBITDA $ 11,725 $ 10,090 $ 21,862 $ 19,689
1As of June 30, 2025, represents legal and advisory fees related to ongoing litigation related to shareholder derivative actions, and as of June 30, 2024, represents legal and advisory fees related to the SEC enforcement matter and SEC settlement. See Note 5, "Commitments and Contingencies" to the condensed consolidated financial statements included in this Quarterly Report for additional information.
2 In the first quarter of 2025, we incurred severance charges included in general and administrative expense in the condensed consolidated statement of operations, related to certain reduction in force actions taken by our management. These reduction in force actions are designed to enhance operational efficiency and align resources with strategic priorities in its corporate technology and marketing divisions.
3 We identified a purchase obligation shortfall related to the AWS Enterprise ("AWS"), minimum commitment obligation that is not probable of being recovered through usage or other means, and as such recorded a loss contingency in the three months ended June 30, 2025 of $2.3 million which is included in general and administrative expense in the condensed consolidated statement of operations. As of June 30, 2025, we recorded amounts due to AWS of $2.3 million, of which $1.7 million is included in accounts payable and accrued expenses and $0.6 million is included in other long-term liabilities in the condensed consolidated balance sheet. See Note 5, "Commitments and Contingencies" to the condensed consolidated financial statements included in this Quarterly Report for additional information.
Factors Affecting Our Performance
Growth of Our Two-Sided Weedmaps Marketplace
We have historically grown through and intend to focus on continuing to grow through the expansion of our two-sided marketplace, which occurs through growth of the number and type of businesses and consumers that we attract to our platform. We believe that expansion of the number and types of cannabis businesses that choose to list on our platform will continue to make our platform more compelling for consumers and drive traffic and consumer engagement, which in turn will make our platform more valuable to cannabis businesses.
Growth and Retention of Our Paying Clients
Our revenue grows primarily through acquiring and retaining paying clients and increasing the revenue per paying client over time. We have a history of attracting new paying clients and increasing their annual spend with us over time, primarily due to the value they receive once they are onboarded and able to take advantage of the benefits of participating in our two-sided marketplace and leveraging our software solutions.
Prices of certain commodity products, including gas prices, are historically volatile and subject to fluctuations arising from changes in domestic and international supply and demand, labor costs, competition, market speculation, government regulations, trade restrictions and tariffs, inflation, the military conflict between Russia and Ukraine and the current state of war between Israel and Hamas and the related risk of a larger regional conflict. Increasing prices in the component materials for the goods or services of our clients may impact their ability to maintain or increase their spend with us and their ability to pay their invoices on time. Rapid and significant changes in commodity prices may negatively affect our revenue if our clients are unable to mitigate inflationary increases through various customer pricing actions and cost reduction initiatives. This could also negatively impact our net dollar retention and our collections on accounts receivable.
Regulation and Maturation of Cannabis Markets
We believe that we will have significant opportunities for greater growth as more jurisdictions legalize cannabis for medical and/or adult-use and the regulatory environment continues to develop. Currently, forty states, theDistrict of Columbia, Puerto Rico, the Virgin Islands, Guam and the Northern Mariana have legalized some form of cannabis use for certain medical purposes. Twenty-four of those states, the District of Columbia, Guam and Northern Mariana have legalized cannabis for adults for non-medical purposes as well (sometimes referred to as adult or recreational use). Eight additional states have legalized forms of low-potency cannabis, for select medical conditions. Only two states continue to prohibit cannabis entirely. We intend to explore new expansion opportunities as additional jurisdictions legalize cannabis for medical or adult use and leverage our business model informed by our 16-year operating history to enter new markets.
We also have a significant opportunity to monetize transactions originating from users engaging with a retailer on the Weedmaps marketplace or tracked via one of our Weedmaps for Business solutions. Given U.S. federal prohibitions on plant-touching businesses and our current policy not to participate in the chain of commerce associated with the sale of cannabis products, we do not charge take-rates or payment fees for transactions originating from users who engage with a retailer on the Weedmaps platform or tracked via one of our Weedmaps for Business solutions. A change in U.S. federal regulations could result in our ability to engage in such monetization efforts without adverse consequences to our business. A change in U.S. federal regulations could also increase access to capital and remove limitations of Section 280E of the Internal Revenue Code of 1986, as amended, thus allowing deduction or credit for certain expenses of cannabis business to increase our cash flow and liquidity, as well as those of many industry participants.
Our long-term growth depends on our ability to successfully capitalize on new and existing cannabis markets. Each market must reach a critical mass of both cannabis businesses and consumers for listing subscriptions, advertising placements and other solutions to have meaningful appeal to potential clients. As regulated markets mature and as we incur expenses to attract paying clients and convert non-paying clients to paying clients, we may generate losses in new markets for an extended period.
Furthermore, we compete with cannabis-focused and general two-sided marketplaces, internet search engines, delivery companies and various other newspaper, television and media companies and other software providers. We expect competition to intensify in the future as the regulatory regime for cannabis becomes more settled and the legal market for cannabis becomes more accepted, which may encourage new participants to enter the market, including established companies with substantially greater financial, technical and other resources than existing market participants. Our current and future competitors may also enjoy other competitive advantages, such as greater name recognition, more offerings and larger marketing budgets.
Brand Recognition and Reputation
We believe that maintaining and enhancing our brand identity and our reputation is critical to maintaining and growing our relationships with clients and consumers and to our ability to attract new clients and consumers. Historically, a substantial majority of our marketing spending was on out-of-home advertising on billboards, buses and other non-digital outlets. Starting in 2019, consistent with the overall shift in perceptions regarding cannabis, a number of demand-side digital advertising platforms allowed us to advertise online. We also invested in growing our internal digital performance advertising team. We believe there is an opportunity to improve market efficiency through digital channels and expect to shift our marketing spending accordingly. Over the longer term, we expect to shift and accelerate our marketing spend to additional online and traditional channels, such as broadcast television or radio, as they become available to us. Further, we have begun reinvesting in our own on-the-ground and field marketing presence and are increasing the types and cadence of client events. These events and in-store activations allow Weedmaps to engage with consumers at the point of purchase and also afford Weedmaps with the opportunity to engage directly with our clients, understand their needs and challenges and foster goodwill.
Negative publicity, whether or not justified, relating to events or activities attributed to us, our employees, clients or others associated with any of these parties, may tarnish our reputation and reduce the value of our brand. Given our high visibility and relatively long operating history compared to many of our competitors, we may be more susceptible to the risk of negative publicity. Damage to our reputation and loss of brand equity may reduce demand for our platform and have an adverse effect on our business, operating results and financial condition. Moreover, any attempts to rebuild our reputation and restore the value of our brand may be costly and time consuming, and such efforts may not ultimately be successful.
We also believe that the importance of our brand recognition and reputation will continue to increase as competition in our market continues to develop. If our brand promotion activities are not successful, our operating results and growth may be adversely impacted.
Investments in Growth
We intend to continue to make focused organic and inorganic investments to grow our revenue and scale operations to support that growth.
Given our long operating history in the United States and the strength of our network, often businesses will initially list on our platform without targeted sales or marketing efforts by us. However, we plan to accelerate our investments in marketing to maintain and increase our brand awareness through both online and offline channels. We also plan to invest in expanding our business listings thereby enhancing our client and consumer experience, and improving the depth and quality of information provided on our platform. We also intend to continue to invest in several areas to continue enhancing the functionality of our Weedmaps for Business offering. We expect significant near-term investments to enhance our data assets and evolve our current listings and software offerings to our brand clients, among other areas. We anticipate undertaking such investments in order to be positioned to capitalize on the rapidly expanding cannabis market.
As operating expenses and capital expenditures fluctuate over time, we may accordingly experience short-term, negative impacts to our operating results and cash flows.
Components of Our Results of Operations
Revenues
Our revenues are derived primarily from monthly subscriptions to Weedmaps for Business, featured and deal listings, other ad solutions and WM Dispatch. Our Weedmaps for Business subscriptions generally have one-month terms that automatically renew unless notice of cancellation is provided in advance. Featured and deal listings and other ad solutions are offered as add-on products to the Weedmaps for Business subscriptions. Featured and deal listings provide customers with premium placement ad solutions and discount and promotion pricing tools. Other ad solutions include banner ads and promotion tiles on our marketplace ad as well as other advertising products on and off the Weedmaps marketplace. We have a fixed inventory of featured listing and display advertising in each market, and price is generally determined through a competitive auction process that reflects local market demand. Revenues for these arrangements are recognized over-time, generally during a month-to-month subscription period as the products are provided. We rarely need to allocate the transaction price to separate performance obligations. In the rare case that allocation of the transaction price is needed, we recognize revenue in proportion to the standalone selling prices of the underlying services at contract inception.
Costs and Expenses
Our cost structure has two components: cost of revenues and operating expenses. Our operating expenses include costs related to selling and marketing, product development, general and administrative functions and depreciation and amortization. Certain of our costs and expenses, including those associated with the operation of our technical infrastructure as well as components of our operating expenses, are generally less variable in nature and may not correlate to changes in revenue.
Cost of Revenues (Exclusive of Depreciation and Amortization)
Cost of revenues excludes depreciation and amortization expense and primarily consists of web hosting, internet service and credit card processing costs. Cost of revenues is primarily driven by fluctuationsin revenue leading to increases or decreases in credit card processing and web hosting cost. We expect our cost of revenue to continue to increase on an absolute basis and remain relatively flat as a percentage of revenue as we scale our business and inventory costs related to multi-media offerings.
Selling and Marketing Expenses
Selling and marketing expenses consist of salaries and benefits, stock-based compensation expense, travel expense and incentive compensation for our sales and marketing employees. In addition, sales and marketing expenses include customer acquisition marketing, events cost and branding and advertising costs. Over the longer term, we expect sales and marketing expense to increase in a manner consistent with revenue growth, however, we may experience fluctuations in some periods as we enter and develop new markets or have large one-time marketing projects.
Product Development Expenses
Product development costs consist of salaries and benefits and stock-based compensation expense for employees, including engineering and technical teams who are responsible for building new products, as well as maintaining and improving existing products. Product development costs that do not meet the criteria for capitalization are expensed as incurred. Amortization expense related to capitalized software development cost is included in depreciation, amortization and asset impairment expense in the consolidated statements of operations. We believe that continued investment in our platform is important for our growth and expect our product development expenses will increase in a manner consistent with revenue growth as our operations grow.
General and Administrative Expenses
General and administrative expenses consist primarily of payroll, benefit costs and stock-based compensation expense for our employees involved in general corporate functions including our senior leadership team as well as costs associated with the use by these functions of software and facilities and equipment, such as rent, insurance and other occupancy expenses. General and
administrative expenses also include provision (recovery) for credit losses, loss contingency and professional and outside services related to legal and other consulting services. General and administrative expenses are primarily driven by headcount required to support our business and meet our obligations as a public company. We expect general and administrative expenses to decline as percentage of revenue as we scale our business and leverage investments in these areas.
Depreciation and Amortization Expenses
Depreciation and amortization expenses primarily consist of depreciation on computer equipment, furniture and fixtures, leasehold improvements, capitalized software development costs and amortization of intangibles. We expect depreciation and amortization expenses to increase on an absolute basis for the foreseeable future as we scale our business.
Other Income (Expense), Net
Other income (expense), net consists primarily of change in fair value of warrant liability, TRA liability remeasurement, political contributions, interest income, interest expense, financing fees and other tax related expenses.
Provision for Income Taxes
We account for income taxes pursuant to the asset and liability method which requires the recognition of deferred income tax assets and liabilities related to the expected future tax consequences arising from temporary differences between the carrying amounts and tax bases of assets and liabilities based on enacted statutory tax rates applicable to the periods in which the temporary differences are expected to reverse. Any effects of changes in income tax rates or laws are included in income tax expense in the period of enactment. A valuation allowance is recognized if we determine it is more-likely-than-not that all or a portion of a deferred tax asset will not be recognized. In making such determination, we consider all available evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent and expected future results of operation. See Note 2, "Summary of Significant Accounting Policies" to the condensed consolidated financial statements included in this Quarterly Report for further information.
Results of Operations
A discussion regarding our financial condition and results of operations for the three and six months ended June 30, 2025 compared with the same periods in 2024 is presented below.
The following tables set forth our results of operations for the periods presented and express the relationship of certain line items as a percentage of revenues for those periods. The period-to-period comparison of financial results is not necessarily indicative of future results.
Three Months Ended June 30, Six Months Ended June 30,
2025 2024 2025 2024
(in thousands)
Revenues $ 44,847 $ 45,903 $ 89,459 $ 90,292
Costs and expenses
Cost of revenues (exclusive of depreciation and amortization shown separately below) 2,280 2,245 4,521 4,547
Sales and marketing 8,912 11,069 17,860 20,703
Product development 7,529 9,642 15,533 18,871
General and administrative 20,699 18,529 40,150 35,055
Depreciation and amortization 3,458 3,187 6,779 6,124
Total costs and expenses 42,878 44,672 84,843 85,300
Operating income 1,969 1,231 4,616 4,992
Other income (expense), net:
Change in fair value of warrant liability 390 460 390 (390)
Change in tax receivable agreement liability (545) (395) (1,090) (938)
Other income (expense) 345 (60) 746 (460)
Income before income taxes 2,159 1,236 4,662 3,204
Provision for income taxes
- 42 9 51
Net income 2,159 1,194 4,653 3,153
Net income attributable to noncontrolling interests 732 478 1,579 1,197
Net income attributable to WM Technology, Inc. $ 1,427 $ 716 $ 3,074 $ 1,956
Three Months Ended June 30, Six Months Ended June 30,
2025 2024 2025 2024
Revenues 100 % 100 % 100 % 100 %
Costs and expenses
Cost of revenues (exclusive of depreciation and amortization shown separately below) 5 % 5 % 5 % 5 %
Sales and marketing 20 % 24 % 20 % 23 %
Product development 17 % 21 % 17 % 21 %
General and administrative 46 % 40 % 45 % 39 %
Depreciation and amortization 8 % 7 % 8 % 7 %
Total costs and expenses 96 % 97 % 95 % 94 %
Operating income 4 % 3 % 5 % 6 %
Other income (expense), net:
Change in fair value of warrant liability 1 % 1 % 0 % 0 %
Change in tax receivable agreement liability (1) % (1) % (1) % (1) %
Other income (expense) 1 % 0 % 1 % (1) %
Income before income taxes 5 % 3 % 5 % 4 %
Provision for income taxes 0 % 0 % 0 % 0 %
Net income 5 % 3 % 5 % 3 %
Net income attributable to noncontrolling interests 2 % 1 % 2 % 1 %
Net income attributable to WM Technology, Inc. 3 % 2 % 3 % 2 %
Comparison of Three Months Ended June 30, 2025 and 2024
Revenues
Three Months Ended June 30, Change
2025 2024 ($) (%)
(dollars in thousands)
Revenues $ 44,847 $ 45,903 $ (1,056) (2) %
Revenues decreased by $1.1 million or 2% for the three months ended June 30, 2025 compared to the same period in 2024. The decrease was primarily due to decreases in revenues from our Featured Listing and WM Deal products of $1.4 million and our Weedmaps for Business and other SaaS solutions of $0.1 million, partially offset by an increase in revenues from our other ad solutions of $0.4 million.
For the three months ended June 30, 2025, Featured Listing and WM Deal products, Weedmaps for Business and other SaaS solution, and other ad solutions represented approximately 60%, 30% and 10% of our total revenues, respectively.
Costs and Expenses
The following table shows our total costs and expenses:
Three Months Ended June 30, Change
2025 2024 ($) (%)
(dollars in thousands)
Cost of revenues (exclusive of depreciation and amortization shown separately below) 2,280 2,245 35 2 %
Sales and marketing 8,912 11,069 (2,157) (19) %
Product development 7,529 9,642 (2,113) (22) %
General and administrative 20,699 18,529 2,170 12 %
Depreciation and amortization 3,458 3,187 271 9 %
Total costs and expenses 42,878 44,672 (1,794) (18) %
Cost of Revenues
The cost of revenues for the three months ended June 30, 2025 was flat compared to the same period in 2024.
Sales and Marketing Expenses
The decrease in sales and marketing expenses for the three months ended June 30, 2025 compared to the same period in 2024 was primarily related to decreases in advertising expense of $2.1 million and stock-based compensation expense of $0.2 million, partially offset by an increase in outside service expense of $0.2 million.
Product Development Expenses
The decrease in product development expenses for the three months ended June 30, 2025 compared to the same period in 2024 was primarily due to a decrease in personnel-related costs of $1.9 million and a decrease in outside service expense of $0.2 million. The decrease in personnel-related costs was primarily related to decreases in salaries and wages of $1.1 million, bonus expense of $0.3 million, payroll tax expense of $0.1 million and stock-based compensation expense of $0.4 million.
General and Administrative Expenses
The increase in general and administrative expenses for the three months ended June 30, 2025 compared to the same period in 2024 was primarily due to increases in salaries and wages of $0.5 million, bonus expense of $0.2 million and employee benefits of $0.2 million, vacation expense of $0.1 million, stock-based compensation expense of $0.4 million, provision (recovery) for credit losses of $0.8 million, software expense of $0.3 million and other expense of $2.6 million, partially offset by decreases in rent expense of $0.6 million, outside service expense of $0.7 million and SEC settlement of $1.5 million. The increase in other expense was primarily due to $2.3 million in loss contingency related to the shortfall under the AWS minimum commitment obligation. See Note 5, "Commitments and Contingencies" to the condensed consolidated financial statements included in this Quarterly Report for additional information.
Depreciation and Amortization Expenses
The increase in depreciation and amortization expense for the three months ended June 30, 2025 compared to the same period in 2024 was primarily due to an increase in depreciation of $0.3 million related to capitalized software development.
Other Income (Expense), net
Three Months Ended June 30, Change
2025 2024 ($) (%)
(dollars in thousands)
Change in fair value of warrant liability $ 390 $ 460 $ (70) (15) %
Change in tax receivable agreement liability (545) (395) (150) 38 %
Other income (expense) 345 (60) 405 675 %
Other income (expense), net $ 190 $ 5 $ 185 3700 %
The increase in other income (expense), net for the three months ended June 30, 2025 compared to the same period in 2024 was primarily due to an increase in interest income of $0.4 million and a decrease in property and other taxes expense of $0.1 million, partially offset by changes in fair value of warrant liability of $0.1 million and TRA liability of $0.2 million.
Provision for Income Taxes
Three Months Ended June 30, Change
2025 2024 ($) (%)
(dollars in thousands)
Provision for income taxes
$ - $ 42 $ (42) 100 %
For the three months ended June 30, 2025 and 2024, we recorded less than $0.1 million in income tax provisions due to the impact of the full valuation allowance on its net deferred assets. See Note 2, "Summary of Significant Accounting Policies-Income Taxes," to the condensed consolidated financial statements included in this Quarterly Report for further information.
Comparison of Six Months Ended June 30, 2025 and 2024
Revenues
Six Months Ended June 30, Change
2025 2024 ($) (%)
(dollars in thousands)
Revenues $ 89,459 $ 90,292 $ (833) (1) %
Revenues deceased by $0.8 million, or 1%, for the six months ended June 30, 2025 compared to the same period in 2024. The decrease was primarily due to a decrease in revenues from our Featured Listing and WM Deal products of $2.3 million, partially offset by increases in revenues from our Weedmaps for Business and other SaaS solutions of $0.3 million and other ad solutions of $1.2 million.
For six months ended June 30, 2025, Featured Listing and WM Deal products, Weedmaps for Business and other SaaS solution, and other ad solutions represented approximately 61%, 30% and 9% of our total revenues, respectively.
Costs and Expenses
The following table shows our total costs and expenses:
Six Months Ended June 30, Change
2025 2024 ($) (%)
(dollars in thousands)
Cost of revenues (exclusive of depreciation and amortization shown separately below) $ 4,521 $ 4,547 (26) (1) %
Sales and marketing 17,860 20,703 (2,843) (14) %
Product development 15,533 18,871 (3,338) (18) %
General and administrative 40,150 35,055 5,095 15 %
Depreciation and amortization 6,779 6,124 655 11 %
Total costs and expenses $ 84,843 $ 85,300 (457) (7) %
Cost of Revenues
The cost of revenues for the six months ended June 30, 2025 was flat compared to the same period in 2024.
Sales and Marketing Expenses
The decrease in sales and marketing expenses for the six months ended June 30, 2025 compared to the same period in 2024 was primarily related to decreases in advertising expense of $2.7 million and personnel-related costs of $0.2 million, partially offset by an increase in outside service expense of $0.1 million. The decrease in personnel-related costs was primarily related to decreases in salaries and wages of $0.1 million, payroll tax expense of $0.2 million and stock-based compensation expense of $0.3 million, partially offset by increases in bonus expense of $0.3 million and vacation expense of $0.1 million.
Product Development Expenses
The decrease in product development expenses for the six months ended June 30, 2025 compared to the same period in 2024 was primarily due to a decrease in personnel-related costs of $3.2 million and a decrease in other expense of $0.1 million. The
decrease in personnel-related costs was primarily related to decreases in salaries and wages of $1.8 million, bonus expense of $0.6 million, payroll tax expense of $0.3 million and stock-based compensation expense of $0.5 million.
General and Administrative Expenses
The increase in general and administrative expenses for the six months ended June 30, 2025 compared to the same period in 2024 was primarily due to increases in salaries and wages of $0.8 million, bonus expense of $0.3 million and employee benefits of $0.6 million, severance expense of $0.4 million, stock-based compensation expense of $0.1 million, provision (recovery) for credit losses of $1.7 million, software expense of $0.7 million, outside service expense of $0.5 million and other expense of $2.3 million, partially offset by decreases in SEC settlement of $1.5 million and rent expense of $0.8 million. The increase in other expense was primarily due to $2.3 million in loss contingency related to the shortfall under the AWS minimum commitment obligation. See Note 5, "Commitments and Contingencies" to the condensed consolidated financial statements included in this Quarterly Report for additional information.
Depreciation and Amortization Expenses
The increase in depreciation and amortization expense for the six months ended June 30, 2025 compared to the same period in 2024 was primarily due to an increase in depreciation of $0.7 million related to capitalized software development.
Other Income (Expense), net
Six Months Ended June 30, Change
2025 2024 ($) (%)
(dollars in thousands)
Change in fair value of warrant liability $ 390 $ (390) 780 (200) %
Change in tax receivable agreement liability (1,090) (938) (152) 16 %
Other income (expense) 746 (460) 1,206 (262) %
Other income (expense), net $ 46 $ (1,788) $ 1,834 (103) %
The increase in other income (expense) net was primarily due to an increase in interest income of $0.7 million, a decrease in property and other taxes of $0.5 million, favorable changes in fair value of warrant liability of $0.8 million, partially offset by change in TRA liability of $0.2 million.
Provision for Income Taxes
Six Months Ended June 30, Change
2025 2024 ($) (%)
(dollars in thousands)
Provision for income taxes
$ 9 $ 51 $ (42) (82) %
For the six months ended June 30, 2025 and 2024, we recorded less than $0.1 million in income tax provisions due to the impact of the full valuation allowance on its net deferred assets. See Note 2, "Summary of Significant Accounting Policies-Income Taxes," to the condensed consolidated financial statements included in this Quarterly Report for further information.
Seasonality
The cannabis industry has certain industry holidays that in recent years have resulted in increased purchases by cannabis consumers. Such "holidays" include, but are not limited to April 20th(420), and the day before Thanksgiving (Green Wednesday). Likewise, our clients will typically increase spend heading into these events. We also typically invest in marketing spend around these holidays which can create some seasonality in our sales and market expenses from quarter to quarter. While seasonality has not had a significant impact on our results in the past, our clients may experience seasonality in their businesses which in turn can impact the revenue generated from them. Our business may become more seasonal in the future and historical patterns in our business may not be a reliable indicator of future performance.
Liquidity and Capital Resources
The following tables show our cash, accounts receivable and working capital as of the dates indicated:
June 30, 2025 December 31, 2024
(in thousands)
Cash $ 58,951 $ 51,966
Accounts receivable, net $ 11,602 $ 10,060
Working capital $ 45,204 $ 39,079
As of June 30, 2025 and December 31, 2024, we had cash of $59.0 million and $52.0 million, respectively. Our funds are being used for funding our current operations and potential strategic acquisitions in the future. We also intend to increase our capital expenditures to support the organic growth in our business and operations. We expect to fund our short-term and long-term liquidity requirements from cash and working capital on hand at June 30, 2025, as well as from cash provided by operating activities. We believe that our existing cash and cash generated from operations will be sufficient to meet our anticipated cash needs for at least the next 12 months. However, our liquidity assumptions may prove to be incorrect, and we could exhaust our available financial resources sooner than we currently expect. We may seek to raise additional funds at any time through equity, equity-linked or debt financing arrangements. Our future capital requirements and the adequacy of available funds will depend on many factors. We may not be able to secure additional financing to meet our operating requirements on acceptable terms, or at all.
Sources of Liquidity
We primarily finance our operations and capital expenditures through cash flows generated by operations. To the extent existing cash and investments and cash from operations are not sufficient to fund future activities, we may need to raise additional funds. We may seek to raise additional funds through equity, equity-linked or debt financings. If we raise additional funds through the incurrence of indebtedness, such indebtedness may have rights that are senior to holders of our equity securities and could contain covenants that restrict operations. Any additional equity financing may be dilutive to stockholders. We may enter into investment or acquisition transactions in the future, which could require us to seek additional equity financing, incur indebtedness, or use cash resources.
Cash Flows
Six Months Ended June 30,
2025 2024
(in thousands)
Net cash provided by operating activities $ 16,725 $ 20,054
Net cash used in investing activities $ (6,493) $ (7,140)
Net cash used in financing activities $ (3,247) $ (5,972)
Net Cash Provided by Operating Activities
Cash from operating activities consists primarily of net income adjusted for certain non-cash items, including depreciation and amortization, change in fair value of warrant liability, change in TRA liability, amortization of right-of-use lease assets, stock-based compensation, provision (recovery) for credit losses and the effect of changes in working capital.
Net cash provided by operating activities is affected by changes in operating assets, such as accounts receivable which, is impacted by the timing of customer billings and related collections from our customers. In 2024, operating cash flow increased due to a focused effort on collecting significant outstanding accounts receivable. At the end of 2023, we had significant past due accounts, and we were successful with collecting the majority of them in 2024. This resulted in a higher-than-normal cash influx that is not expected to recur in 2025. Net cash provided by operating activities is also impacted by effects of changes in operating liabilities such as accounts payable and accrued expenses due to timing of payments; accrued personnel costs which are impacted by employee performance targets and the timing of payments related to employee bonus incentives.
Net cash provided by operating activities for the six months ended June 30, 2025 was $16.7 million, which resulted from a net income of $4.7 million, together with net cash outflows of $4.9 million from changes in operating assets and liabilities, and non-cash items of $17.0 million, consisting of depreciation and amortization of $6.8 million, change in TRA liability of $1.1 million, amortization of right-of-use lease assets of $1.3 million, stock-based compensation of $4.8 million, loss contingency of $2.3 million and provision for credit losses, net of recoveries of $1.1 million, partially offset by fair value of warrant liability of $0.4 million. Net cash outflows from changes in operating assets and liabilities was primarily due to an increase in accounts receivable of $2.6 million, a decrease in accounts payable and accrued expenses of $1.4 million, a decrease in deferred revenue of $0.2 million and a decrease in operating lease liabilities of $1.8 million, partially offset by a decrease in
prepaid expenses and other current assets of $0.6 million and a decrease in other assets of $0.5 million. The changes in operating assets and liabilities are mostly due to fluctuations in timing of cash receipts and payments.
Net cash provided by operating activities for the six months ended June 30, 2024 was $20.1 million, which resulted from net income of $3.2 million, together with net cash inflows of $2.2 million from changes in operating assets and liabilities, and non-cash items of $14.7 million, consisting of depreciation and amortization of $6.1 million, fair value of warrant liability of $0.4 million, change in TRA liability of $0.9 million, amortization of right-of-use lease assets of $2.4 million and stock-based compensation of $5.6 million, partially offset by gain on lease termination of $0.1 million and provision for credit losses, net of recoveries of $0.6 million. Net cash inflows from changes in operating assets and liabilities were primarily due to a decrease in accounts receivables of $4.8 million, a decrease in prepaid expenses and other current assets of $0.3 million, a decrease in other assets of $0.1 million and an increase in accounts payables and accrued expenses of $0.6 million, partially offset by a decrease in deferred revenue of $0.1 million, a decrease in operating lease liabilities of $3.5 million. The changes in operating assets and liabilities are mostly due to fluctuations in timing of cash receipts and payments.
Net Cash Used in Investing Activities
Net cash used in investing activities for the six months ended June 30, 2025 was $6.5 million, which resulted from $6.5 million cash paid for capital expenditures which includes purchases of property and equipment, including certain capitalized software development costs.
Net cash used in investing activities for the six months ended June 30, 2024 was $7.1 million, which resulted from $7.1 million cash paid for capital expenditures which includes purchases of property and equipment, including certain capitalized software development costs.
Net Cash Used in Financing Activities
Net cash outflows from financing activities for the six months ended June 30, 2025 was $3.2 million, which primarily consists of $1.9 million in distributions payments to members of WMH LLC, $1.4 million in TRA payments and $0.1 million in proceeds from collection of related party note receivable.
Net cash outflows from financing activities for six months ended June 30, 2024 was $6.0 million, which primarily consists $6.0 million in distributions payments to members of WMH LLC, $0.1 million in TRA payments and $0.1 million in proceeds from collection of related party note receivable.
Critical Accounting Policies and Estimates
The Company had no significant changes to our critical accounting policies and estimates from those disclosed in "Part I. Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2024 that was filed with the SEC on March 13, 2025.
Recent Accounting Pronouncements
We have reviewed all recently issued standards and have determined that, other than as disclosed in Note 2, "Summary of Significant Accounting Policies," such standards will not have a material impact on our condensed consolidated financial statements or do not otherwise apply to our current operations.
WM Technology Inc. published this content on August 07, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on August 07, 2025 at 20:45 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]