Wag! Group (PET) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue declined 6% year-over-year to $18.7 million, while net loss narrowed to $2.3 million from $3.9 million, and adjusted EBITDA reached a record $1.6 million, driven by reduced marketing spend and operational efficiency.

• Adjusted EBITDA margin improved to 8.8% from 0.5% a year ago, and net loss margin improved to (12.1)% from (19.5)% year-over-year.

• Platform participants decreased 15% year-over-year to 467,000, but revenue per user increased due to a focus on higher quality customers and upsell/cross-sell initiatives.

• Strategic priorities include building best-in-class software for premium pet households, expanding via product innovation, partnerships, and M&A, and leveraging the veterinary channel.

• The company completed a public offering in July 2024, raising $8.6 million to address liquidity needs and pay down debt.

Financial highlights

• Q2 2024 revenue: $18.7 million, down 6% year-over-year; wellness $11.5M, services $5.6M, pet food/treats $1.5M.

• Adjusted EBITDA: $1.6 million, up from $0.1 million a year ago.

• Net loss for Q2 2024 was $2.3 million, improved from $3.9 million a year ago.

• Cash and cash equivalents at quarter end were $9.2 million, with $26.3 million in total debt outstanding.

• Net cash used in operating activities was $2.0 million for the first half, down from $2.3 million in 2023.

Outlook and guidance

• 2024 revenue guidance reiterated at $92–$102 million, representing 10–22% growth over 2023.

• 2024 adjusted EBITDA guidance: $4–$8 million (4–8% margin), with positive free cash flow expected in H2 2024.

• Q3 2024 guidance: revenue $20–$24 million, adjusted EBITDA $1.5–$2.5 million.

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

• Ongoing efforts to refinance debt and improve liquidity, but no assurance of success.