Wag! Group Co (PET) 2023 Q2 法說會逐字稿

Good day and thank you for standing by. Welcome to the Wag! 2Q-'23 earnings conference call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question-and-answer session. (Operator Instructions) Please be advised today's conference is being recorded.

美好的一天，感謝您的支持。歡迎來到瓦格！ 2023 年第二季財報電話會議。此時，所有參與者都處於只聽模式。演講者演講結束後，將進行問答環節。 （操作員指示）請注意，今天的會議正在錄製中。

I would now like to hand the conference over to your speaker today, Don Frankfort. Please go ahead.

我現在想把會議交給今天的發言者唐·法蘭克福。請繼續。

Good afternoon, everyone, and thank you for joining Wag! conference call to discuss our second-quarter-2023 financial results. On the call today are Garrett Smallwood, Chief Executive Officer and Chairman; Adam Storm, President and Chief Product Officer; and Alec Dividian, Chief Financial Officer.

大家下午好，感謝您加入 Wag！電話會議討論我們 2023 年第二季的財務表現。今天參加電話會議的是執行長兼董事長 Garrett Smallwood； Adam Storm，總裁兼首席產品長；和財務長亞歷克·迪維迪安 (Alec Dividian)。

Before we get started, please note that today's comments include forward-looking statements. These forward-looking statements are subject to risks and uncertainties and involve factors that could cause actual results to differ materially from those expressed or implied by such statements. A discussion of these risks and uncertainties are included in the SEC filings.

在我們開始之前，請注意今天的評論包含前瞻性陳述。這些前瞻性陳述存在風險和不確定性，並涉及可能導致實際結果與此類陳述明示或暗示的結果有重大差異的因素。 SEC 文件中包含對這些風險和不確定性的討論。

Also, during the call, we may present both GAAP and non-GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures are available in our earnings release, which we issued today. The earnings release is available on the Investor Relations page of our website and is included in exhibit and Form 8-K furnished to the SEC. Lastly, you can find our earnings presentation posted on our IR website and with the SEC.

此外，在電話會議期間，我們可能會介紹 GAAP 和非 GAAP 財務指標。我們今天發布的收益報告中提供了與最直接可比較的 GAAP 財務指標的調整表。收益發布可在我們網站的投資者關係頁面上獲取，並包含在向 SEC 提供的附件和 8-K 表格中。最後，您可以在我們的投資者關係網站和美國證券交易委員會 (SEC) 上找到我們發布的收益報告。

And with that, let me turn the call over to Garrett.

接下來，讓我把電話轉給加勒特。

Good afternoon, and thank you for joining us today to discuss our financial performance for the second quarter of 2023. We are excited to announce another successful quarter for the Wag! team. Beating expectations for both revenue and adjusted EBITDA while achieving our highest service revenue quarter to date and our first quarter of adjusted EBITDA profitability.

下午好，感謝您今天加入我們討論我們 2023 年第二季度的財務業績。我們很高興地宣布 Wag 又一個成功的季度！團隊。營收和調整後 EBITDA 均超出預期，同時實現了本季迄今為止最高的服務收入和第一季度調整後 EBITDA 獲利能力。

This quarter further demonstrates that we are transforming the pet industry by becoming an all-inclusive trusted partner for the premium pet parent and capitalizing on the secular growth of pet ownership. We remain laser focused on profitability for the remainder of 2023 and balancing growth and profit for 2024.

本季度進一步表明，我們正在透過成為優質寵物父母值得信賴的全方位合作夥伴並利用寵物擁有量的長期成長來改變寵物產業。我們仍然高度關注 2023 年剩餘時間的獲利能力，並在 2024 年平衡成長和利潤。

To begin, I will provide a brief overview of our financial results for the second quarter. Following that, Adam, our President and Chief Product Officer, will share updates on our strategic plans and key initiatives for the remainder of 2023 and beyond. Then Alec, our Chief Financial Officer, will provide a more detailed analysis of our second quarter results, discuss our capital allocation priorities and present a revised adjusted EBITDA guidance for 2023, which we are increasing today.

首先，我將簡要概述第二季的財務表現。隨後，我們的總裁兼首席產品長 Adam 將分享我們 2023 年剩餘時間及以後的策略計畫和關鍵舉措的最新情況。然後，我們的財務長 Alec 將對我們第二季度的業績進行更詳細的分析，討論我們的資本配置優先事項，並提出 2023 年修訂後的調整後 EBITDA 指導（我們今天正在增加該指導）。

During the quarter, revenue grew 55% year over year to 19.8 million. The revenue growth was primarily driven by the success of our services business fueled by the slow and steady return to office and the general stickiness of our community. We also saw continued strength in our wellness business, driven in part by the success of Paw Protect, the only pet insurance product in the US with Instant Pay. We continue to grow our footprint in all corners of the pet care market with a focus on disciplined growth in order to achieve profitability.

該季度營收年增 55% 至 1,980 萬美元。收入成長主要得益於服務業務的成功，而服務業務的成功得益於緩慢而穩定的重返辦公室以及社區的普遍黏著度。我們也看到我們的健康業務持續強勁，部分原因是 Paw Protect 的成功，這是美國唯一一款支援即時支付的寵物保險產品。我們繼續擴大在寵物護理市場各個角落的足跡，重點是有紀律的成長，以實現盈利。

Our adjusted EBITDA was $0.1 million, an increase from a $0.9 million loss in the same period last year. As we navigate the dynamic macroeconomic landscape. Our primary objective remains centered around achieving a sustainable equilibrium between growth, profit and margin. In the second quarter, platform participants increased to 549,000, an increase of 42% year over year, and Wag! premium penetration increased to 54%, significantly ahead of expectations.

我們調整後的 EBITDA 為 10 萬美元，比去年同期的 90 萬美元虧損增加。當我們駕馭動態的宏觀經濟格局。我們的主要目標仍然是圍繞著實現成長、利潤和利潤率之間的可持續平衡。第二季度，平台參與者增至54.9萬人，年增42%，Wag!保費滲透率增至54%，大幅超出預期。

In the second quarter, our LTV to CAC ratio was a deliberate 10:1, which demonstrates our continued operational excellence and efficiency. Our second-quarter organic user acquisition rate was more than 70%, was the result of our focus on dynamic partnerships, a best-in-class experience, and our referral programs.

第二季度，我們特意將 LTV 與 CAC 比率定為 10:1，證明了我們持續的卓越營運和效率。我們第二季的自然用戶獲取率超過 70%，這是我們專注於動態合作夥伴關係、一流體驗和推薦計畫的結果。

On the supply side of the Wag! business, we maintain supply and demand equilibrium through a variable platform fee, which averaged $53.10 in the second quarter of '23. As we've mentioned before, we firmly believe that Wag! offers the best gig in America. And despite the current macroeconomic conditions, the demand for caregivers in our community remains robust. We anticipate an increasing number of pet enthusiast will choose to become pet caregivers with Wag! for the remainder of 2023 and beyond.

在 Wag! 的供應方面！業務方面，我們透過可變的平台費用維持供需平衡，2023 年第二季的平均費用為 53.10 美元。正如我們之前提到的，我們堅信 Wag！提供美國最好的演出。儘管當前宏觀經濟狀況不佳，我們社區對護理人員的需求仍然強勁。我們預計越來越多的寵物愛好者會選擇透過 Wag 成為寵物護理師！ 2023 年剩餘時間及以後。

In summary, the team at Wag! continues to execute against our goals and deliver strong and sustainable results. Our second-quarter results demonstrate our ability to scale our platform faster and more profitably than anticipated. And so, the effectiveness of our strategy and business model to become the number one platform for premium pet parents. Simply put, our team is out executing on the vision we laid out to the investment community more than a year ago as we are preparing to become a public company.

總而言之，Wag! 的團隊繼續執行我們的目標並取得強勁且可持續的成果。我們第二季的業績證明了我們有能力比預期更快地擴展我們的平台，並獲得更多的利潤。因此，我們的策略和商業模式的有效性成為優質寵物父母的第一平台。簡而言之，我們的團隊正在執行我們一年多前向投資界制定的願景，因為我們正準備成為一家上市公司。

And with that, I will turn the call over to Adam Storm to review our strategy for the remainder of 2023.

接下來，我將把電話轉給 Adam Storm，讓他檢視我們 2023 年剩餘時間的策略。

Thanks, Garrett. I will once again walk through the five top-level elements of our strategy to drive long-term shareholder value and profitable growth: One, accelerate growth in existing markets. Two, expand premium subscription offerings. Three, platform expansion. Four, opportunistic M&A. And five, operating scale.

謝謝，加勒特。我將再次闡述我們推動長期股東價值和獲利成長策略的五個頂層要素：第一，加速現有市場的成長。第二，擴大優質訂閱服務。三、平台拓展。四是機會主義併購。五、經營規模。

One, accelerate growth in existing markets. As Garrett mentioned, the second quarter was our highest services revenue quarter to date, driven by the slow and steady return to office trend and healthy consumer travel season. The Kastle Back to Work barometer is hovering just below 50% and we expect that to tick upward slowly over the next 24 months.

一是加速現有市場的成長。正如加勒特所提到的，在緩慢而穩定的重返辦公室趨勢和健康的消費者旅行季節的推動下，第二季度是我們迄今為止最高的服務收入季度。 Kastle 重返工作崗位晴雨表徘徊在 50% 以下，我們預計該晴雨表將在未來 24 個月內緩慢上升。

Two, expand premium subscription offerings. Our premium penetration rate, despite the increased pricing at 14.99 a month remained at a robust 54%, ahead of the target we set out at the beginning of the year. Moving forward, we'll continue to enhance the value of the Wag! premium bundle by introducing more benefit, forming additional partnerships, and providing more exclusive offers.

第二，擴大優質訂閱服務。儘管價格上漲至每月 14.99 美元，但我們的保費滲透率仍保持在 54% 的強勁水平，超出了我們年初設定的目標。未來，我們將持續提升Wag的價值！透過引入更多優惠、建立更多合作夥伴關係並提供更多獨家優惠來實現優質捆綁。

Three, platform expansion. Last quarter, we introduced the addition of pawprotect.com to our suite of wellness products. Wag! is the exclusive marketing partner of Paw Protect, the only pet-insurance plan with Instant Pay. Paw Protect is the only brand in America to offer each consumer an interest free, fee free, and credit-check-free line of credit to cover veterinary bills.

三、平台拓展。上個季度，我們在我們的健康產品套件中添加了 pawprotect.com。搖擺！是唯一支持即時支付的寵物保險計劃 Paw Protect 的獨家行銷合作夥伴。 Paw Protect 是美國唯一一個為每位消費者提供免息、免費、免信用檢查的信用額度來支付獸醫費用的品牌。

We have successfully integrated Paw Protech into the Petted pet-insurance marketplace demonstrated by its impressive growth in the second quarter. During the quarter, Paw Protect policies grew to 7,700 and achieved an NPS score of 90 plus, demonstrating our pet parents' overall delight with the product.

我們已成功將 Paw Protech 整合到 Petted 寵物保險市場，其第二季的驚人成長證明了這一點。本季度，Paw Protect 保單數量增至 7,700 份，NPS 得分達到 90 以上，這表明我們的寵物父母對該產品的整體滿意度。

During the quarter, we also launched Wag! Pro to help pet lovers build successful pet-care businesses on Wag!. Wag! Pro caters to the needs of passionate pet-care professionals, recognizing their invaluable contribution to the welfare and happiness of pets across the nation. Wag! Pro members enjoy features, including express onboarding, priority approval and placement in the marketplace, expanded reach, enhanced earning opportunities, and exclusive learning resources.

在本季度，我們還推出了 Wag！ Pro 幫助寵物愛好者在 Wag! 上建立成功的寵物護理業務。搖擺！ Pro 滿足熱情的寵物護理專業人士的需求，承認他們對全國寵物的福祉和幸福做出的寶貴貢獻。搖擺！專業會員可享有多種功能，包括快速入職、優先批准和市場定位、擴大影響範圍、增加賺錢機會以及獨家學習資源。

As the demand for reliable and trustworthy pet care continues to grow, Wag! Pro steps forward as the ultimate solution for connecting skilled caregivers with pet parents in need. The successful rollout of Wag! Pro demonstrates our commitment to offering the highest quality platform for pet care givers and pet parents alike. We believe Wag! Pro is a unique and evolving offering that will enhance our platform and deliver long-term value to the community.

隨著對可靠且值得信賴的寵物護理的需求不斷增長，Wag！ Pro 向前邁進，成為將熟練的護理人員與有需要的寵物父母聯繫起來的終極解決方案。 Wag! 的成功推出！ Pro 體現了我們為寵物照護人員和寵物父母提供最高品質平台的承諾。我們相信瓦格！ Pro 是一種獨特且不斷發展的產品，它將增強我們的平台並為社區帶來長期價值。

Fourth, opportunistic M&A. Wag! is strategically positioned to leverage pet-specific M&A opportunities due to our ability to swiftly integrate new assets into our platform, supported by our deep understanding of the consumer and our technology first DNA.

第四，機會主義併購。搖擺！由於我們有能力將新資產迅速整合到我們的平台中，並在我們對消費者的深刻理解和我們的技術第一 DNA 的支持下，我們的策略定位是利用寵物特定的併購機會。

At the beginning of the quarter, we acquired Maxbone, a top-tier digital platform for modern pet essentials. Maxbone expands Wag! reach into the premium pet supplies market and deepens our commitment to the needs of the premium pet parent. Wag! will continue to opportunistically evaluate deals as we look to expand our set of capabilities in 2023 and 2024. And while we're here, you should check out the new yellow collection on maxbone.com.

本季度初，我們收購了 Maxbone，這是一個現代寵物必需品的頂級數位平台。 Maxbone 擴充 Wag！進軍優質寵物用品市場，加深我們對優質寵物父母需求的承諾。搖擺！我們將繼續機會主義地評估交易，因為我們希望在 2023 年和 2024 年擴展我們的能力。當我們在這裡時，您應該在 maxbone.com 上查看新的黃色系列。

Fifth, operating scale. This quarter, we saw operating margin improvements across all areas due to the positive impact of our unit economics and fixed-cost operating leverage. Adjusted EBITDA margin improved substantially year over year from minus 7% to just under positive 1%, an eight-percentage-point improvement.

五是經營規模。本季度，由於我們的單位經濟效益和固定成本營運槓桿的正面影響，我們在所有領域都看到了營運利潤率的提高。調整後 EBITDA 利潤率較去年同期大幅提高，從負 7% 升至略低於正值 1%，提高了 8 個百分點。

As we mentioned last quarter, 2023 continues to be our year of efficiency and focus on full year adjusted EBITDA profitability. This is achieved through efficient marketing payback cycles, continued operational excellence, platform integrations and cross sell, and best-in-class customer experience. As seen in our updated guidance, we will be adjusted EBITDA profitable for full-year 2023 and plan to be free cash flow positive by the middle of 2024.

正如我們上季度所提到的，2023 年仍然是我們的效率年，並專注於全年調整後 EBITDA 獲利能力。這是透過高效的行銷回報週期、持續的卓越營運、平台整合和交叉銷售以及一流的客戶體驗來實現的。正如我們更新後的指引所示，我們將調整 2023 年全年 EBITDA 獲利，並計劃在 2024 年中期實現正自由現金流。

I will now turn the call over to Alec to discuss our second-quarter financials in more detail.

我現在將把電話轉給亞歷克，更詳細地討論我們第二季度的財務狀況。

Thanks, Adam. I'm proud to say, through the hard work and dedication of our excellent team, the growth of our footprint in all corners of the pet-care market and our disciplined execution, we've taken the next step forward as a business with a progression to profitability posting our first quarter of adjusted EBITDA profit this quarter.

謝謝，亞當。我很自豪地說，透過我們優秀團隊的辛勤工作和奉獻精神、我們在寵物護理市場各個角落的足跡的增長以及我們嚴格的執行力，我們作為一家擁有本季度第一季度調整後EBITDA 利潤公佈後，獲利能力不斷增強。

I'll begin with a review of our second-quarter financial results followed by our guidance, which we are raising again today. The second quarter exceeded our expectation across the board with revenue of $19.8 million, up 55% from last year, driven by strength across all three revenue categories. Adjusted EBITDA profit of 0.1 million compares to an adjusted EBITDA loss of 900,000 a year ago, a $1 million improvement.

我將首先回顧我們第二季度的財務業績，然後是我們今天再次提出的指導。在所有三個營收類別的強勁推動下，第二季營收達到 1,980 萬美元，比去年成長 55%，全面超出了我們的預期。調整後 EBITDA 利潤為 10 萬美元，與一年前調整後 EBITDA 虧損 90 萬美元相比，改善了 100 萬美元。

Breaking down our three revenue categories. Service revenue was 6.2 million, growing 9% from Q2 last year, making this our largest service-revenue quarter to date. This is in the face of a continued slow and steady return-to-office trend and illustrates the general stickiness of our offerings. Together with the success of complementary offerings to core services such as Wag! Pro and Wag! Premium.

細分我們的三個收入類別。服務收入為 620 萬美元，比去年第二季成長 9%，是我們迄今為止最大的服務收入季度。這是面對持續緩慢而穩定的重返辦公室趨勢的情況下，說明了我們的產品的整體黏性。加上 Wag! 等核心服務的補充產品的成功！專業人士和搖擺人！優質的。

Services also included nominal amount of e-commerce revenue for Maxbone which we closed at the start of the quarter in credit-package revenue. Wellness revenue was 12 million, increasing 69% from Q2 last year, through providing best-in-class pet insurance and wellness plan comparisons from the nation's top providers. Our product's ability to provide pet parents in numerous real-time quotes puts us at the forefront of disrupting a fragmented pet insurance and wellness industry.

服務還包括 Maxbone 名義上的電子商務收入，我們在本季度初以信用套餐收入形式關閉了該收入。透過提供一流的寵物保險和來自全國頂級提供者的健康計劃比較，健康收入為 1,200 萬美元，比去年第二季度增長 69%。我們的產品能夠為寵物父母提供大量即時報價，這使我們處於顛覆分散的寵物保險和健康產業的最前線。

Pet food increased revenue, which is a new revenue category this year, the Dog Food Advisor was $1.6 million. Dog Food Advisor is one of the most trusted pet food review sites in existence, providing pet parents with unrivaled insights and analysis of pet food for their furry family members.

寵物食品增加了收入，這是今年新的收入類別，狗糧顧問為 160 萬美元。 Dog Food Advisor 是現有最值得信賴的寵物食品評論網站之一，為寵物父母提供無與倫比的見解和對其毛茸茸的家庭成員的寵物食品分析。

In Q2, due to popular demand, we took the knowledge and success of Dog Food Advisor and launch Cat Food Advisor, the premier destination for pet parents and their furry cat family members. With over 100 professionally reviewed pet products, including dry cat food, raw cat food, kitten food, and real-time recall alert across the US and Canada.

在第二季度，由於大眾的需求，我們借鑒了狗糧顧問的知識和成功，推出了貓糧顧問，這是寵物父母及其毛茸茸的貓家庭成員的首選目的地。擁有超過 100 種經過專業審核的寵物產品，包括乾貓糧、生貓糧、小貓糧，並在美國和加拿大提供即時召回警報。

Turning to expenses. Cost of revenue, excluding depreciation and amortization was flat year over year at 1.2 million and represents 6% of revenue, down from 9% a year ago. This is the output of a very thoughtful operational excellence in the scalability of our tech stack, together with the implementation of AI to streamline our revenue-generating operation.

轉向開支。不包括折舊和攤銷的收入成本與去年同期持平，為 120 萬美元，佔營收的 6%，低於一年前的 9%。這是我們在技術堆疊的可擴展性方面經過深思熟慮的卓越營運的成果，同時也實施了人工智慧來簡化我們的創收營運。

Platform Operations and support expense was 3.5 million or 18% of revenue, down from 24% a year ago. While non-revenue generating platform operations and support functions remain a key backbone to the business, our operations have become highly efficient over the past year through redesign and use of AI tools to get answers faster. Now, the average pet parent receives more than 80% of their responses faster via AI with record CSAP.

平台營運和支援費用為 350 萬美元，佔收入的 18%，低於一年前的 24%。雖然非創收平台營運和支援功能仍然是業務的關鍵支柱，但透過重新設計和使用人工智慧工具來更快地獲得答案，我們的營運在過去一年中變得非常有效率。現在，平均寵物父母可以透過人工智慧以創紀錄的 CSAP 更快地收到超過 80% 的回應。

Sales and marketing expense was 10.8 million or 54% of revenue, up from 48% a year ago, but in line with prior quarter trend. We continue to see excellent opportunities to put dollars to work in sales and marketing as evidenced by our 10:1 LTV to CAC, but I'm maintaining a deliberate and thoughtful approach in order to drive profitability earlier than anticipated.

銷售和行銷費用為 1,080 萬美元，佔營收的 54%，高於去年同期的 48%，但與上一季的趨勢一致。我們繼續看到在銷售和行銷方面投入資金的絕佳機會，我們的生命週期價值(LTV) 與CAC 之比為10:1 就證明了這一點，但我仍採取深思熟慮的方法，以便比預期更早地實現盈利。

G&A expense of 4.9 million or 25% of revenue, up from 19% a year ago. Comparing periods, Q2 '23 includes a one-time legal settlement cost of 500,000 and over $1 million of public-company compliance costs that were not present in the prior year. Adjusting for these G&A in Q2 '23 represents 16% of revenue.

G&A 費用為 490 萬美元，佔收入的 25%，高於一年前的 19%。相較之下，23 年第 2 季包括 50 萬美元的一次性法律和解成本以及去年不存在的超過 100 萬美元的上市公司合規成本。對 23 年第二季的一般管理費用進行調整後，佔營收的 16%。

Looking to our balance sheet, we ended the second quarter with approximately 32 million in cash, cash equivalents and accounts receivables. Our balance sheet remains strong and sufficient to help us to continue to execute on our plan. Which includes growing our existing business in a profitable manner, expanding our footprint in all corners of the pet care market through value-add acquisition, and bringing to market in it, innovative new offering.

從我們的資產負債表來看，第二季末我們的現金、現金等價物和應收帳款約為 3,200 萬美元。我們的資產負債表依然強勁，足以幫助我們繼續執行我們的計劃。其中包括以盈利的​​方式發展我們的現有業務，透過加值收購擴大我們在寵物護理市場各個角落的足跡，並將創新的新產品推向市場。

Moving to our guidance for '23. As Garrett mentioned, we are thrilled with another quarter of outsized growth, as a result, we have reevaluated our '23-full-year forecast. For the full-year '23, we continue to reiterate total revenue in the range of 80 million to 84 million as previously disclosed in March '23. And an increase to our adjusted EBITDA guidance to a range of zero to $2 million, a $1 million improvement versus our prior forecast at the high end of the range.

轉向我們 '23 的指導。正如加勒特所提到的，我們對又一個季度的大幅成長感到興奮，因此，我們重新評估了「23 年全年」預測。對於 23 年全年，我們繼續重申 23 年 3 月披露的總收入在 8,000 萬至 8,400 萬之間。我們將調整後的 EBITDA 指引提高至 0 至 200 萬美元，比我們先前預測的上限提高了 100 萬美元。

For the third quarter, we expect a total revenue in the range of $19 million to $20 million, which at the midpoint would be a 27% increase in revenue over Q3 '22. And zero to $1 million in adjusted EBITDA or a 208% improvement over Q3 '22 adjusted EBITDA at the midpoint. We continue to be thoughtful and consider of the macroeconomic environment and potential slowdown in consumer spending. We believe we have turned the corner in Q2 '23 and will be adjusted EBITDA positive in subsequent quarters and on an annual basis.

對於第三季度，我們預計總營收在 1,900 萬美元至 2,000 萬美元之間，中間值將比 22 年第三季營收成長 27%。調整後 EBITDA 為零至 100 萬美元，比 22 年第三季調整後 EBITDA 中位數提高 208%。我們繼續深思熟慮並考慮宏觀經濟環境和消費者支出可能放緩的情況。我們相信我們已經在 23 年第二季扭轉了局面，並將在隨後的季度和年度基礎上調整 EBITDA 為正值。

Further, as Adam mentioned, we plan to be free cash flow positive by the middle of '24, driven by a focus on robust unit economics and operational efficiency in '23 and beyond. Our financial guidance includes the following consideration. The forecast incorporates our internal target of the Rule of 50, meaning a total of greater than 50% for revenue growth, plus adjusted EBITDA margin for the full year.

此外，正如 Adam 所提到的，我們計劃在 24 年中期實現自由現金流為正，這主要得益於對 23 年及以後強勁的單位經濟效益和營運效率的關注。我們的財務指導包括以下考慮因素。該預測納入了我們 50 法則的內部目標，即收入成長總計超過 50%，加上全年調整後的 EBITDA 利潤率。

Severe weather affects service demand and how they drive incremental overnight versus daytime service demand. Going forward, we expect this SKU to overnight and daytime services depending on summer and holiday. Pet adoption during the holidays also affects pet insurance penetration and demand for wellness plans.

惡劣天氣會影響服務需求以及它們如何推動夜間服務需求與白天服務需求的增加。展望未來，我們預計該 SKU 將根據夏季和假日提供夜間和日間服務。假期期間收養寵物也會影響寵物保險的滲透率和健康計劃的需求。

We anticipate the continued growth in the pet industry driven by factors such as rising pet ownership, pet insurance penetration, an increasing demand for premium products and services will have a positive impact on our financial performance in '23, including on our entrance to pet food entry. General trends related to the 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. We recognize that there may be potential risk to our financial performance in '23, such as disruptions to global supply chain, changes in consumer behavior due to unexpected events such as delayed or imbalanced return to office, digital and performance marketing trends, the potential impact of AI, and our ability to expand through partnerships.

我們預計，寵物保有量增加、寵物保險滲透率上升、對優質產品和服務的需求不斷增加等因素推動的寵物行業的持續增長將對我們 23 年的財務業績產生積極影響，包括我們進入寵物食品領域入口。與經濟狀況、利率和消費者信心相關的總體趨勢，我們考慮了與這些宏觀經濟因素相關的潛在風險和機遇，以便準確預測我們的財務表現。我們認識到，23 年我們的財務業績可能存在潛在風險，例如全球供應鏈中斷、由於意外事件（例如延遲或不平衡返回辦公室）導致的消費者行為變化、數位和效果行銷趨勢、潛在影響人工智慧的發展，以及我們透過合作關係擴展的能力。

In summary, a strong quarter results illustrate how we've become an all-inclusive trusted partner for the premium pet parents and a key player in the pet community with a highly efficient and profitable business. Our intense focus on profitability and operational efficiencies in '23 position us well for profitable growth for the rest of the year and in '24 and beyond.

總而言之，強勁的季度業績說明我們如何成為優質寵物父母的全方位值得信賴的合作夥伴，以及寵物社區的關鍵參與者，擁有高效且盈利的業務。我們在 23 年對盈利能力和營運效率的高度關注使我們能夠在今年剩餘時間以及 24 年及以後實現盈利增長。

And with that, we now welcome Q&A. Operator, can you kindly open it up for Q&A?

現在，我們歡迎問答。接線員，您能打開它進行問答嗎？

Thank you. (Operator Instructions) Jason Helfstein, Oppenheimer.

謝謝。 （操作員說明）Jason Helfstein，奧本海默。

Hey, two questions. One, so 10:1 LTV CAC is insane, it's suggesting that you're leaving growth on the table to protect capital, given that you're crossing over that EBITDA threshold. How are you thinking about leaning more into marketing at some point in the future?

嘿，兩個問題。第一，10:1 的 LTV CAC 是瘋狂的，這表明您將放棄增長以保護資本，因為您正在跨越 EBITDA 閾值。您如何考慮在未來某個時候更多地轉向行銷？

And then secondly, are you seeing any head -- how does the inflation headwinds on the pet insurance side impact you? Is it a positive because as premiums go up, you get a cut of that on the lead? Just broad thoughts on how some of the dynamics around pet insurance could impact you guys. Thanks.

其次，您是否看到任何頭緒 - 寵物保險方面的通膨逆風對您有何影響？這是一個正面的因素嗎？因為隨著保費的上漲，你會先獲得分成嗎？只是關於寵物保險的一些動態可能如何影響你們的廣泛想法。謝謝。

Hey Jason. This is Garrett, thanks for the question. So first one, we agree 10:1 LTV to CAC is pretty amazing, and like we mentioned, deliberate. It's not a cash issue, it's more, we just believe as we get more profitable, we'll deploy more capital to growth. We think that's functionally going to be a 2024 story, and we grew 55% year over year so it's just saving some gas, so to speak.

嘿傑森。我是加勒特，謝謝你的提問。所以第一個，我們同意 10:1 LTV 與 CAC 是相當驚人的，就像我們提到的，是經過深思熟慮的。這不是現金問題，而是更多，我們只是相信，隨著我們獲得更多利潤，我們將部署更多資本來實現成長。我們認為這在功能上將是 2024 年的故事，而且我們的同比增長了 55%，所以可以這麼說，這只是節省了一些汽油。

Secondly, in terms of headwinds or tailwinds, in terms of pet insurance and wellness plans, we have not seen a direct impact of inflation. Although I would say we have two consumers in the marketplace, the first is the pet-insurance companies themselves, we partner with to advertise their products. And the second one is the actual consumers purchasing the insurance. I think anything we've seen more of sensitivity from the actual pet insurance companies rather than the consumer as a function of the market dynamics.

其次，就寵物保險和健康計劃而言，無論是逆風還是順風，我們都沒有看到通貨膨脹的直接影響。雖然我想說我們在市場上有兩個消費者，第一個是寵物保險公司本身，我們與他們合作為他們的產品做廣告。第二個是實際購買保險的消費者。我認為我們所看到的任何事情更多的是來自實際寵物保險公司的敏感性，而不是消費者作為市場動態的函數。

Thank you.

謝謝。

One moment for our next question. Tom White, D.A. Davidson.

請稍等一下我們的下一個問題。湯姆懷特，D.A.戴維森。

Hey, this is Wyatt Swanson on for Tom. Thanks for taking our questions. So I've got a question on your wellness segment.

嘿，我是湯姆的懷亞特·斯旺森。感謝您回答我們的問題。我有一個關於您的健康部分的問題。

Can you talk a bit about how you're managing any risks on that business as it relates to revenue concentration? And what can you guys do to maybe diversify revenue streams in that segment over time?

您能否談談您如何管理該業務中與收入集中相關的風險？隨著時間的推移，你們可以做些什麼來使該領域的收入來源多樣化？

It's Wyatt, right? Wyatt?

這是懷亞特，對吧？懷亞特？

Yes, Wyatt.

是的，懷亞特。

Cool, anyway, good to hear from you, and thanks for the question. So wellness, this is a reminder it scaled much, much more quickly than we originally anticipated. That business went from a few million to tens of millions of revenue run rate very, very quickly. We just saw the fast-pulling water and lead in quickly.

很酷，無論如何，很高興收到你的來信，謝謝你的提問。所以，健康，這是一個提醒，它的擴展速度比我們最初預期的要快得多。該業務的收入運行速度非常非常快地從幾百萬增加到數千萬。我們剛剛看到水流急速拉動，趕緊進去。

We have a lot of customers in that business. So like I said earlier, we have two to customers on the face of it. One is the actual consumers purchasing pet insurance for the first time or reupping or changing plans. The second one is the actual pet-insurance companies.

我們在該行業有很多客戶。正如我之前所說，表面上我們有兩個客戶。一是實際消費者首次購買寵物保險或重新購買或改變計劃。第二個是真正的寵物保險公司。

We work with something like 12 or more major pet-insurance companies in the US. And we just announced earlier today, we're actually expanding into Canada with that product base, so pretty well diversified in terms of the actual insurance companies. But really, our goal is just to make sure customers have the best choice for the pet-insurance products, and that's really what's functionally going to drive the demand curve. So certainly, we're being thoughtful about the demand itself, they're where to concentrate to. But the customers ultimately have the choice, and they're just picking the products that they want.

我們與美國 12 家或更多主要寵物保險公司合作。我們今天早些時候剛剛宣布，我們實際上正在將該產品基礎擴展到加拿大，因此就實際保險公司而言，相當多元化。但實際上，我們的目標只是確保客戶對寵物保險產品有最佳選擇，而這實際上是推動需求曲線的功能。所以當然，我們正在考慮需求本身，它們是我們應該關注的地方。但客戶最終有選擇權，他們只是選擇他們想要的產品。

Secondly, I would add there is, we are the exclusive marketing partner of Paw Protect, which we think is phenomenal pet-insurance product, and hopefully, more and more consumers will find it delights them. So a lot of choice for the consumer and ultimately going to find the right thing for them. I hope I answered your question.

其次，我想補充一點，我們是 Paw Protect 的獨家行銷合作夥伴，我們認為這是非凡的寵物保險產品，希望越來越多的消費者會發現它令他們高興。因此，消費者有很多選擇，最終會找到適合他們的東西。我希望我回答了你的問題。

Yes, that's really helpful. Thank you. And then just to follow up, could you update us on your latest thinking as it relates to the customer value proposition with Wag! Premium? As return to office continues to pick up, how are you thinking about the current unit economics with that offering versus trying to maximize customer adoption of it?

是的，這確實很有幫助。謝謝。接下來，您能否向我們介紹您最新的想法，因為它與 Wag 的客戶價值主張有關！優質的？隨著重返辦公室的人數不斷增加，您如何看待該產品當前的單位經濟效益，而不是試圖最大限度地提高客戶採用率？

Yeah. So I think we've said this before. The goal with Wag! Premium is to keep customers engaged in the platform, it's not so much a revenue driving initiative. We found that certainly, it was mispriced at the beginning, this year, which is why we raise prices to 14.99, the Pet Food & Treats got too high.

是的。所以我想我們之前已經說過了。與瓦格的進球！溢價是為了讓客戶參與平台，與其說是收入驅動措施。我們發現，當然，今年一開始定價錯誤，這就是為什麼我們將價格提高到 14.99，寵物食品和零食太高了。

Our thesis and belief in the product has not changed, we continue to believe it is a reason for consumers to stay on the platform as participants of the Wag! ecosystem. And we're so convinced of that, we actually are rolling out similarly priced pro tooling. So we mentioned earlier that Pet Caregiver Pro subscription and membership is something we're in the middle of testing and rolling out. So again, we just -- we need more reasons and we believe there's more reasons to be our forever customer of the Wag! ecosystem than anything else.

我們對產品的論點和信念沒有改變，我們仍然相信這是消費者作為 Wag 參與者留在平台上的原因！生態系。我們對此深信不疑，實際上我們正在推出價格相似的專業工具。因此，我們之前提到過，我們正在測試和推出 Pet Caregiver Pro 訂閱和會員資格。再說一次，我們只是 - 我們需要更多的理由，我們相信有更多的理由成為我們永遠的 Wag 客戶！生態係比什麼都重要。

Got it. Thank you very much.

知道了。非常感謝。

One moment for our next question. Matt Koranda, ROTH MKM.

請稍等一下我們的下一個問題。馬特·科蘭達，羅斯·MKM。

Hey guys, good afternoon. Just wondering on the international expansion for pet insurance, have you built much into the revenue guidance that didn't necessarily go up for the full year? But did we build much in terms of revenue contribution from that expansion? And maybe, just talk about the size of the addressable market that you're entering internationally?

嘿夥計們，下午好。只是想知道寵物保險的國際擴張，您是否在全年不一定會上漲的收入指導中加入了很多內容？但我們從這次擴張中獲得了許多收入貢獻嗎？也許，只是談談您正在進入的國際市場的規模？

Hey, Matt. Good to hear from you, geared again. So we think International's mostly upside. Canada pet insurance, I think something like 0.5 million pets growing about 7% to 10% ish outpacing general pet trends.

嘿，馬特。很高興收到你的來信，再次做好準備。所以我們認為國際市場主要有上漲空間。加拿大寵物保險，我認為大約 50 萬隻寵物的成長速度約為 7% 至 10%，超過了一般寵物趨勢。

We think there's a lot of room to run there. Still early for us, we're just getting our footing, but we certainly think international interesting. And I generally think the things you'll see us launching now, as we just announced Cat Food Advisor, we just announced Wellness Canada, are all 2024 big bets and things that we think are in a test now and we're into now, and that'd be really driving forward in 2024. The business is growing at 35% year on year right now, again, I think we're saving some gas in the tank so to speak.

我們認為那裡有很大的運行空間。對我們來說還為時過早，我們剛剛站穩腳跟，但我們當然認為國際化很有趣。我一般認為，你會看到我們現在推出的東西，正如我們剛剛宣布的貓糧顧問，我們剛剛宣布的加拿大健康計劃，都是2024 年的大賭注，我們認為現在正在測試，我們現在正在做的事情，這將真正推動 2024 年的發展。目前業務正以 35% 的速度同比增長，我認為我們可以說節省了一些汽油。

Okay, got it. And then maybe, for Alec. Just on the adjusted EBITDA guidance up a touch and it's very minor, but just -- are we just pulling through the second quarter outperformance? Is there something incremental what we should be assuming in terms of cost savings or margin expansion that we should be factoring in for the third and the fourth quarter?

好，知道了。然後也許，對於亞歷克來說。只是調整後的 EBITDA 指引略有上升，這是非常小的，但只是——我們剛剛度過了第二季的優異表現嗎？在成本節約或利潤擴張方面，我們應該假設第三季和第四季會出現一些增量因素嗎？

No, I don't think so. I think Q2 is a representation of where we are today. As the output of a number of things that I mentioned on the efficiencies that we've been able to achieve Q2 to date, and I think we'll see those efficiencies with AI and automation through the rest of the year.

不，我不這麼認為。我認為第二季度代表了我們今天的處境。正如我所提到的關於我們迄今為止在第二季度實現的效率的許多事情的輸出，我認為我們將在今年剩餘時間內看到人工智慧和自動化帶來的這些效率。

Okay, got it. And maybe just one more on the platform participant number. Healthy growth year over year, but I did notice sequentially, it's down a bit. Any call outs just in terms of what's driving that number in the second quarter?

好，知道了。也許平台上還有一個參與者數。逐年健康成長，但我確實注意到，逐年下降了一點。對於第二季這數字的推動因素有什麼看法嗎？

And then, any -- I guess I did notice also that marketing -- sales and marketing was down a bit sequentially. Did we pull back during the quarter for any notable reason? Maybe just speak to that and the platform participant number. Thanks.

然後，任何 - 我想我也注意到行銷 - 銷售和行銷連續下降了一點。我們在本季是否因任何顯著原因而縮減？也許只是談談這個和平台參與者的數量。謝謝。

Yeah. So we initially planned for Q1 and Q4 to be the higher watermarks just as a function of wellness seasonality, Matt. As a reminder, last quarter, we did something like 20.6 of revenue, this quarter was 19.8. So you'll see just sensitivity there with platform participants just functionally match that.

是的。因此，我們最初計劃將第一季和第四季設為更高的水位線，作為健康季節性的函數，馬特。提醒一下，上個季度我們的營收約為 20.6，本季為 19.8。因此，您會看到平台參與者的敏感度在功能上與此相符。

Your second question was sales and marketing was down. Yeah, I think we're just being really thoughtful about where we're deploying dollars right now as it's a function of where we want to make incremental bets. And again, that was deliberate, you see it in our LTV to CAC. And really wanted to just get to profitability, adjusted EBITDA profitability. It's not we're there, I think there is room to keep plugging along. But for us, the major watermark was can we get to adjusted EBITDA profitability a year ahead of time? And we did, so I think you'll see us get back to where we want to go.

你的第二個問題是銷售和行銷下降。是的，我認為我們只是在認真考慮我們現在在哪裡部署美元，因為它是我們想要進行增量押注的函數。再說一遍，這是故意的，您可以在我們的 CAC 生命週期價值中看到這一點。並且真正想要實現盈利，調整後的 EBITDA 盈利能力。不是我們在那裡，我認為還有繼續前進的空間。但對我們來說，主要的問題是我們能否提前一年獲得調整後的 EBITDA 獲利能力？我們做到了，所以我想你會看到我們回到我們想去的地方。

Right. I said in the quarter, and I'll take the rest on it offline. Thanks guys.

正確的。我說過在這個季度完成，剩下的部分我會在線下完成。多謝你們。

Thanks, Matt.

謝謝，馬特。

One moment for our next question. J. Cole, Craig-Hallum.

請稍等一下我們的下一個問題。 J.科爾，克雷格-哈勒姆。

Thanks, guys. This is Jack on for Jeremy. First one for me, so could you just touch on what you're seeing in terms of return to office?

多謝你們。這是傑瑞米的傑克。我的第一個問題，您能談談您在重返辦公室方面看到的情況嗎？

I know Kastle Back to Work Barometer has been around like 45% to 50%, do you guys still think that can you get to 70% long term? Or what do you guys think the long-term potential is there? And how are you thinking of that as a driver of revenue?

我知道 Kastle 重返工作晴雨表一直在 45% 到 50% 左右，你們仍然認為長期能夠達到 70% 嗎？或者你們認為長期潛力是什麼？您如何看待這作為收入驅動因素？

Yeah. Thanks for the question. Over the long term, yes, we certainly think it can get back to 70%. I think that we see headlines all the time about this business getting back to office, that business getting back to office.

是的。謝謝你的提問。從長遠來看，是的，我們當然認為它可以回到 70%。我認為我們一直看到有關該企業重返辦公室、該企業重返辦公室的頭條新聞。

But that's all anecdotal, right? The Kastle Back to Work Barometer is the thing that we're focusing most on and measuring against. So we're going to invest in whatever the fastest-moving water is. You've seen wellness be that over the last and 12, 18, maybe 24 months.

但這都是軼事，對吧？ Kastle 重返工作晴雨表是我們最關注和衡量的指標。因此，我們將投資於流速最快的水域。在過去的 12、18、甚至 24 個月裡，您已經看到了健康狀況。

So as in 2024, which is really a resumption of the growth story, you'll see us investing behind whatever has the highest returns. So if the Kastle Back to Work Barometer still at the 50% level, I think that will scale our investments appropriately across the different business lines. If we see more momentum in the return to office in January, and that's the timeline that the businesses are on, then certainly, we're going to put firepower behind the services segment.

因此，到 2024 年，成長故事將真正恢復，你會看到我們投資在回報率最高的事物。因此，如果 Kastle 重返工作晴雨表仍處於 50% 的水平，我認為這將適當擴大我們在不同業務線的投資。如果我們看到一月重返辦公室的勢頭更大，而且這就是業務的時間表，那麼我們當然會為服務部門提供火力支援。

Got it, great, that's really helpful. And then, maybe switching gears, in terms of the premium price points. Are you seeing any pushback from customers on the 14.99? I noticed the premium penetration went down from 55% to 54%, just maybe a little bit more color on that.

明白了，太好了，真的很有幫助。然後，也許會在溢價點方面改變方向。您是否發現客戶對 14.99 有任何抵制？我注意到溢價滲透率從 55% 下降到 54%，只是可能有更多的色彩。

And do you think that that you'll stay around that 14.99 for a little bit here, presumably it will continue to rise long term? But just any color on the premium pricing would be great.

您是否認為您會在 14.99 附近停留一段時間，大概會繼續長期上漲？但溢價的任何顏色都會很棒。

Yeah. So I would say that the 54% was still above our internal targeting. I think that we're happy anywhere in the 40% to 50% range is our kind of guidepost. So 54% is well ahead of internal expectations. In terms of pricing, no, no real pressure. The mix of services in the summer can be more travel based as opposed to in office space. That's going to be more of a sitting and boarding as opposed to walking, so it's some dynamics there. But all around, I think we're really happy with the price and customer seem really happy with the value they're getting.

是的。所以我想說 54% 仍然高於我們的內部目標。我認為我們對 40% 到 50% 範圍內的任何地方感到滿意是我們的路標。因此 54% 遠超出內部預期。在定價方面，不，沒有真正的壓力。夏季的服務組合可能更多地基於旅行而不是辦公空間。這將更多是坐著和登機，而不是步行，所以那裡有一些動態。但總的來說，我認為我們對價格非常滿意，客戶似乎對他們獲得的價值也非常滿意。

Got it. That's helpful color. That's all for me. Thanks, guys.

知道了。這是有用的顏色。這就是我的全部。多謝你們。

One moment for our next question. Greg Pendy, Chardan.

請稍等一下我們的下一個問題。格雷格·彭迪，查丹。

Hey, thanks a lot for taking my question. Just one real quick, just as you call that seasonality in your financial outlook, can you just give us any color on any meaningful differences? I know we can back into the revenues, but just in terms of expenses on overnight versus daytime services.

嘿，非常感謝您提出我的問題。就像您在財務前景中所說的季節性一樣，您能否給我們任何有意義的差異的顏色？我知道我們可以恢復收入，但僅限於夜間服務與白天服務的費用。

And then secondarily, on that point, is there any opportunity you think to grow overnight with the growing premium penetration? Thanks.

其次，在這一點上，您認為隨著保費滲透率的不斷增長，是否有機會一夜之間實現成長？謝謝。

Yeah. So as it pertains to seasonality, the sitting and boarding business which is effectively a travel business, is going to be Q4 heavy as you might expect. Yes, so if the walking business is a derivative of office occupancy, and the sitting and boarding are a derivative of travel, certainly, we're going to be investing behind the travel adjacent businesses, right?

是的。因此，由於與季節性有關，座位和登機業務實際上是一項旅行業務，正如您所預期的那樣，第四季度將非常繁忙。是的，所以如果步行業務是辦公室佔用的衍生品，而坐和登機是旅行的衍生品，那麼我們當然會投資與旅行相鄰的業務，對嗎？

So there we think there's a lot we can do in terms of ecosystem and caregiver tools to help them promote themselves and build their business. So yeah, we think that it's a big market and there's lots of opportunity to grow.

因此，我們認為在生態系統和護理工具方面我們可以做很多事情來幫助他們推銷自己並建立業務。所以，是的，我們認為這是一個很大的市場，並且有很多成長的機會。

Okay. And do you have -- can you give us any rough estimate on where you think you are in penetration and boarding versus the market size? Just so we get an idea of how big or what type of opportunity that could be?

好的。您能給我們粗略估計一下您認為自己的滲透率和登機率與市場規模的差距嗎？只是為了讓我們了解這可能有多大或什麼類型的機會？

Yeah, hey, Greg. You have Garrett. So again, taking a step back, Wag! started with on-demand dog walking in the US in a few cities, expand very quickly. People end up falling in love with it, using it four to five times a month.

是的，嘿，格雷格。你有加勒特。所以，再次退後一步，Wag！從美國幾個城市的按需遛狗服務開始，擴張速度非常快。人們最終會愛上它，每月使用四到五次。

And we're really now just realizing that customers want us for everything else. Which is why the last few years, you've seen us launch things like 20-, 30-, and 60-minute drop-ins, one-on-one training, personalized advice with the pet experts, specialty services in the last quarter or two, which is things like trail running and photos with your dog and all kinds of really cute requests.

我們現在才真正意識到客戶需要我們提供其他一切。這就是為什麼在過去幾年中，您會看到我們在上個季度推出了 20 分鐘、30 分鐘和 60 分鐘的拜訪、一對一培訓、寵物專家的個性化建議、專業服務等服務一兩個，例如越野跑、和你的狗合影以及各種非常可愛的要求。

And I think if you look at the new app and look at how we're designing things, you'll see us put the caregiver more front and center, which is really a function of just giving people choice. And we think leads us to more sitting and boarding requests and other episodic requests that we have the customer locked in with premium.

我認為，如果你看看新的應用程序，看看我們是如何設計的，你會發現我們把看護者放在了更重要的位置，這實際上是為人們提供選擇的功能。我們認為這會導致我們產生更多的就座和登機請求以及其他偶發請求，我們將客戶鎖定為溢價。

We're really early as a reminder, our business is majority, on demand or daytime services. And so, we're really -- I think, if anything, less than 5% penetrated in the travel category, there's a long way to run there. So very excited about the opportunity, and you'll see consistent changes in the product experience, which we think will make us more competitive for the customer.

我們很早就提醒您，我們的業務以按需或日間服務為主。因此，我認為，如果說有什麼不同的話，旅遊類別的滲透率還不到 5%，但要實現這一目標還有很長的路要走。我們對這個機會感到非常興奮，您將看到產品體驗的持續變化，我們認為這將使我們對客戶更具競爭力。

That's very helpful. Thanks a lot.

這非常有幫助。多謝。

This concludes today's Q&A session. I'd like now to turn the call back over to Garrett Smallwood for any closing remarks.

今天的問答環節到此結束。我現在想將電話轉回加勒特·斯莫爾伍德 (Garrett Smallwood)，聽取結束語。

Thanks everyone for another quarter. This is almost our one-year anniversary, so it's been fun and we look forward the next one. Thanks so much.

感謝大家又一個季度。這幾乎是我們的一周年紀念日，所以這很有趣，我們期待下一次。非常感謝。

Ladies and gentlemen, this does conclude today's presentation. You may now disconnect and have a wonderful day.

女士們、先生們，今天的演講到此結束。您現在可以斷開連接並度過美好的一天。