Wag! Reports Record First Quarter 2024 Results
Wag! Group Co. (the “Company” or “Wag!”; Nasdaq: PET), which strives to be the number one platform to solve the service, product, and wellness needs of the modern U.S. pet household, announced financial results for the first quarter ended March 31, 2024.
“We are thrilled to have recently announced the launch of WeCompare, one of the easiest ways to compare insurance products, starting with auto, and Furscription, beautiful e-prescribing software for veterinarians”
First Quarter 2024 Highlights:
Revenues increased 13% to $23.2 million, compared to $20.6 million in the first quarter of 2023, a quarterly revenue record – comprised of $5.3 million of Services revenue, $15.8 million of Wellness revenue, and $2.1 million of Pet Food & Treats revenue.
Net loss was $4.2 million, compared to $3.8 million in the first quarter of 2023, driven by costs associated with $5 million debt principal pay down.
Adjusted EBITDA improved to $0.2 million, compared to an Adjusted EBITDA loss of $0.4 million in the first quarter of 2023.
Achieved positive cash flows from operating activities of $0.2 million.
"Q1 marks another record quarter of results for Wag! Group Co. We achieved both record revenues and Platform Participants in the quarter,” said Garrett Smallwood, CEO and Chairman of Wag!.
“We have demonstrated that we can expand into fast-growing categories profitably and meet customers where they need us most,” said Smallwood. “We are thrilled to have recently announced the launch of WeCompare, one of the easiest ways to compare insurance products, starting with auto, and Furscription, beautiful e-prescribing software for veterinarians,” concluded Smallwood.
Recent Business Highlights:
Achieved record 671,000 Platform Participants in Q1 2024, an increase of 10% from 611,000 in Q1 2023.
Achieved record revenues driven by strong secular growth across our key verticals, with a specific emphasis on Wellness and the continued strength in pet insurance, wellness plans, and veterinary needs.
Paid down $5 million of debt balance, which drove net loss higher due to $0.6 million proportional reduction of debt discount and $0.1 million prepayment penalty.
78% of revenues was B2B (Business-to-Business) revenue, which is defined as revenue that is generated by business partners, including pet insurance companies, pet food companies, pet treat companies, and wholesale distribution partners.
Announced the launch of Furscription — digital e-prescribing and prescription management SaaS tools for veterinary staff across the U.S., with a robust waitlist of veterinary clinics.
Announced the launch of WeCompare — a consumer-facing brand focused on transferring our best-in-class digital comparison technology to new verticals, starting with auto insurance.
Guidance
“As a result of our strong first quarter results, we are continuing to focus our investments within marketing, research and development, and proprietary partnerships that will drive growth in 2024 and beyond,” said Alec Davidian, Wag! CFO. “In Q2, we are planning on scaling our new products and services, including Furscription and WeCompare, which we expect to accelerate in the back half of 2024. Accordingly, we are closely monitoring all costs related to our new products and services to ensure we are optimizing for shareholder value creation via free cash flow generation,” concluded Davidian.
For the full year 2024, we reiterate our guidance of:
Revenue in the range of $105 million to $115 million, consistent with our prior forecast.
Adjusted EBITDA1 in the range of $2 million to $6 million.
Our financial guidance includes the following outlook:
We expect holidays to drive incremental overnight vs. daytime service demand, but also expect that severe weather will impact Services demand. Pet adoption during the holidays also positively impacts pet insurance penetration and demand for wellness plans.
We anticipate that continued growth in the pet industry, driven by factors such as higher rates of pet ownership, pet insurance penetration, and increasing demand for premium pet products and services, will have a positive impact on our full year 2024 results.
General trends related to state of the economy, interest rates, and consumer confidence. We have factored in potential risks and opportunities related to these macroeconomic factors in order to accurately forecast our financial performance.
Sales & Marketing efficiency within the Pet category, our ability to manage CPCs and CPMs across key partners and advertising platforms, and our ability to manage search engine results and search engine optimization (SEO) within competitive keywords.
We recognize that there may be potential risks to our financial performance in 2024, such as disruptions to global supply chains, changes in consumer behavior due to unexpected events such as a delayed or imbalanced return-to-office, digital and performance marketing trends, the potential impact of AI, and our ability to expand through partnerships.
1 Information reconciling forward-looking Adjusted EBITDA and Adjusted EBITDA margin to the comparable GAAP financial measures is unavailable to the company without unreasonable effort, as discussed in our Non-GAAP Financial Measures and Other Operating Metrics section below.
