In the recent profits call, CEO Jeff Harris of SpringBig announced the company’s revenue growth and positive adjusted EBITDA for the first time in December. SpringBig saw a revenue increase of 5% year-on-year to $28.1 million and a significant decrease in adjusted EBITDA loss from $12.6 million in 2022 to $3.6 million in 2023. SpringBig also secured $8 million in debt financing and expanded its services beyond the cannabis industry.
Key Highlights:
– Revenue grew by 5% year-on-year to $28.1 million.
– Operating expenses were reduced by 17% for the full year and 31% for Q4 year-on-year.
– Adjusted EBITDA turned positive in December, with a full-year loss reduction from $12.6 million to $3.6 million.
– The company secured $8 million in debt financing and launched new product offerings.
– SpringBig expanded its services to other regulated industries beyond cannabis.
– For fiscal 2024, revenue is expected to be between $29 million to $32 million, with an adjusted EBITDA profit of $3.5 million to $5.0 million.
Company Outlook:
– Q1 fiscal 2024 revenue is anticipated between $6.4 million to $6.7 million, with an adjusted EBITDA profit of $0.2 million to $0.4 million.
– Full-year fiscal 2024 revenue is projected to be $29 million to $32 million, a 10% increase at the midpoint, with adjusted EBITDA profit between $3.5 million and $5.0 million.
Bearish Highlights:
– The company faced increased message distribution costs, leading to a lower gross profit margin of 70%.
– Total operating expenses for Q4 were $6.9 million, despite a 31% reduction year-on-year.
Bullish Highlights:
– SpringBig achieved a notable reduction in adjusted EBITDA loss, with a Q4 loss at just $0.2 million.
– The company successfully reduced sales and marketing expenses by 46% and technology and software development expenses by 41% year-on-year.
Misses:
– While the company reduced operating expenses, the gross profit margin decreased due to increased message distribution costs.
In the Q&A session:
– SpringBig plans to pass some increased costs to customers while promoting alternative distribution methods to reduce carrier costs.
– The company transitioned to a prepaid model for smaller clients to better manage budgets.
– SpringBig expects customer growth of 30 to 35 per month and a reduction in customer churn.
– There are 10 secured contracts in the non-cannabis category, with expectations of similar revenue and margin profiles to cannabis clients.
SpringBig’s fiscal year 2023 marked a turning point with the company posting its first profitable month in December and securing a healthier balance sheet through debt financing. The company has also diversified its client base, moving beyond the cannabis space and into other regulated industries, potentially broadening its market reach.
With a focus on operational efficiency and new product launches, SpringBig is set to continue its growth trajectory in the upcoming fiscal year.
