Wag! Group (PET) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue declined 39% year-over-year to $13.2M, with an Adjusted EBITDA loss of $1.9M and a net loss of $6.3M, impacted by a challenging marketing environment, Google search algorithm changes, and declines across all business lines.

• Platform participants declined 41.9% year-over-year, affecting all revenue streams.

• Non-recurring corporate expenses of $0.9M affected Adjusted EBITDA; excluding these, the loss would have been $1M.

• Substantial doubt exists regarding the company's ability to continue as a going concern due to ongoing losses and liquidity constraints.

• Completed an $8.6M public offering in July 2024 to support liquidity and repay debt.

Financial highlights

• Q3 2024 revenue: $13.2M (wellness $6.5M, services $5.4M, pet food/treats $1.3M), down 39% year-over-year.

• Net loss for Q3 2024 was $6.3M, up from $2.2M in Q3 2023; Adjusted EBITDA loss was $1.9M, a $2.9M decline year-over-year.

• Cash and cash equivalents were $8.4M as of September 30, 2024, down from $18.3M at year-end 2023.

• Net cash used in operating activities for the nine months ended September 30, 2024 was $5.3M.

• Cost of revenue (excl. D&A): $1.1M (9% of revenue), platform ops/support: $2.8M (21%), sales/marketing: $8.9M (67%), G&A: $4.2M (32%).

Outlook and guidance

• Q4 2024 revenue guidance: $15–$18M; Adjusted EBITDA: ($0.5M) loss to $0.5M profit.

• Full-year 2024 guidance: revenue $70–$73M; Adjusted EBITDA: ($0.5M) loss to $0.5M profit.

• October wellness revenue rebounded 79% month-over-month, with positive trends continuing into November.

• Platform participants exceeded 170,000 in October, with expectations for similar or higher activity in December due to seasonal trends.

• Management expects operating losses to continue as investments in business growth persist.