Wishpond Technologies Ltd. (TSX-V:WISH, OTCQX:WPNDF) is poised for big new developments in 2024, if its 2023 financials are anything to go by.
The company reported record annual revenue of $23.1 million for fiscal year 2023, marking a 13% increase compared to fiscal year 2022. This growth was primarily driven by sales of the company's next-generation marketing platform, Propel IQ. Additionally, Wishpond saw its sixth consecutive quarter of positive adjusted EBITDA.
The company expects to further accelerate its growth in 2024, driven by increased Propel IQ sales and the launch of SalesCloser AI, a virtual AI sales agent capable of conducting sales calls and demos in multiple languages with minimal human intervention.
In this interview, Ali Tajskandar, CEO, emphasized the pivotal nature of this period, citing the need to fortify the company's foundation for sustainable growth and revenue targets. With the groundwork laid, David Pais, CFO, reflects on the company's financial performance, noting record revenues and promising growth trajectories.
Proactive: The previous year was marked by transitions in products and the introduction of new ones. How did it pave the way for developments in 2024?
Ali Tajskandar (AT): 2023 was a very important transition year for us. We knew that to reach $100 million in annual revenue, we needed to work on the foundation and make sure we have something solid, with greater margins and retention. As a result, we developed Propel IQ, which combines all the products we acquired into a comprehensive marketing platform. This single tool eliminates the need for customers to navigate multiple platforms and avoids the sale of isolated solutions within Wishpond.
In 2023 we onboarded more than 500 customers into Propel IQ and really proved that it can have up to 40% lower churn compared to our point solutions. It can have substantially higher margins, and it can give us that foundation that we need.
I'm very happy with where we are now to have that solid foundation for growth and for the future of the company.
David, let's talk about the numbers themselves. With record annual revenue in 2023, I would imagine you’re quite happy with that?
David Pais (DP): The numbers are excellent. Even though we had a transformational year, we had increasing revenue each quarter last year from Q1 all the way to Q4. Our EBITDA compared to 2022 was higher at $0.8 million compared to $0.6 million in 2022. In terms of revenue, $23.1 million compared to $21.5 million, which is a 13% growth rate.
However, we did have a large customer whose revenue dropped. If we take that customer out and normalize it, the rest of the business actually grew by 22%, which is a great growth rate considering all the things that Ali mentioned. Now we can focus on building the business in 2024.
David, a significant aspect of our discussions over the past year has been the importance of clearing the balance sheet and identifying efficiencies. Are you still observing progress in that regard?
DP: We are, actually. We spent a lot of money on ramping up a couple of systems internally, which ensures that as the number of customers grow, we don't necessarily add a lot of headcount. We expect our gross margins to improve in the year ahead as well.
Ali, the company still has a $6 million credit facility. How will that help move the company forward?
AT: Our cash balance, net of any line of credit utilization, has seen a slight decrease, which was anticipated. This decline is attributed to various factors discussed by David, such as increased R&D spending, expansion of the sales team, and fulfilling earn-out obligations. However, many of these expenditures are now in the past. Throughout Q4 and Q1 of this year, we've focused on reducing expenses while concurrently boosting sales efforts. As a result, we anticipate improved cash flow in the second half of the year, leading to a bolstering of our balance sheet.
Currently, we do not foresee the need to raise funds through either equity or debt financing. We expect our operational cash flow to be adequate for addressing any forthcoming needs. If we utilize our $6 million line of credit, it will primarily be for working capital purposes. However, we aim to minimize dependence on this credit line to prevent accruing unnecessary debt over time.
Quotes have been edited for style and clarity