Adam Jackson
SpringBig Holdings, Inc. (Nasdaq: SBIG), which specializes in software-based marketing solutions and loyalty programs for businesses in the cannabis industry, reported a 16% increase in revenue to $7.2 million for the first quarter ended March 31.
Subscription revenue, a key metric for the company, rose 28% from the previous year, while its net dollar retention rate reached 100% for the 12 months ended March 31.
Net dollar retention rate (NDRR) measures revenue growth and customer retention over a specific period of time. It takes into account both the increase in revenue from existing customers (due to upgrades, upselling, or cross-selling) and the decrease in revenue due to customer churn (cancellations or downgrades).
Management Insights
In a statement, CEO Jeffrey Harris expressed confidence in the company’s strategy, emphasizing a focus on profitability and recognizing industry woes.
“We are managing our business efficiently with a keen eye on measured growth focused on profitability while recognizing the current macro and industry-specific realities,” he said. “I am as confident as ever that our strategy is sound, with feedback from customers and partners reaffirming that we are making the right investments to capture the long-term opportunity in front of us.”
CFO Paul Sykes noted significant progress toward profitability in the first quarter, with expectations for further improvement in the next quarter to reach EBITDA breakeven sometime during 2023.
Financial specifics
First-quarter financial highlights include:
- Gross profit of $5.8 million, representing 28% YoY growth and 81% margin.
- Net loss of $2.3 million, versus a $2.9 million loss in the prior year.
- Adjusted EBITDA loss of $1.3 million, compared to a $2.5 million loss during the same period in the prior year.
- Basic net income loss per share of $0.08.
- Cash and cash equivalents of $2.6 million as of March 31, 2023.
Operational highlights for the quarter include the addition of 108 new clients, the company said, resulting in annualized subscription revenue of $1 million and 10% growth in messaging volumes to 490 million.
SpringBig said it also expanded its reach beyond the cannabis vertical with contracts in the liquor, vape, and smoke industries.
The company’s financial outlook for Q2 2023 includes:
- Revenue between $7.3 million and $7.6 million, representing 15% year-over-year growth at the midpoint.
- Adjusted EBITDA loss between $900,000 and $1.2 million.
For the year ending Dec. 31, 2023, SpringBig expects:
- Revenue between $31 and $34 million, representing a 22% YoY growth at the midpoint.
- Adjusted EBITDA loss between $3 and $1.5 million, with positive EBITDA anticipated during the fiscal year.
