Wag! Group Co (PET) 2024 Q2 法說會逐字稿

Good afternoon, and welcome to the Wag! second-quarter 2024 earnings conference call. (Operator Instructions) As a reminder, this conference is being recorded.

下午好，歡迎來到 Wag！2024 年第二季財報電話會議。（操作員指示）謹此提醒，本次會議正在錄製中。

I'll now introduce your host, Greg Robles, with Investor Relations. Thank you. You may begin.

現在我將介紹主持人格雷格·羅伯斯（Greg Robles），他是投資者關係部門的負責人。謝謝。你可以開始了。

Good afternoon, everyone, and thank you for joining Wag!'s conference call to discuss our second-quarter 2024 financial results. On the call today are Garrett Smallwood, Chief Executive Officer and Chairman; Adam Storm, President and Chief Product Officer; and Alec Davidian, Chief Financial Officer.

大家下午好，感謝您加入 Wag!'s電話會議討論我們 2024 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·戴維安 (Alec Davidian)。

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 our filings with the SEC. We also remind you that we undertake no obligation to update the information contained on this call. These statements should be considered estimates only and are not a guarantee of future performance.

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。我們向 SEC 提交的文件中包含對這些風險和不確定性的討論。我們也提醒您，我們沒有義務更新本次電話會議所包含的資訊。這些陳述僅應被視為估計，並不是未來績效的保證。

Also, during the call, we 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. These non-GAAP measures are not intended to be a substitute for our GAAP results.

此外，在電話會議中，我們也介紹了公認會計準則和非公認會計準則的財務指標。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。這些非公認會計原則衡量標準無意取代我們的公認會計原則結果。

Lastly, you can find our earnings presentation posted on our IR website and with the SEC.

最後，您可以在我們的 IR 網站和 SEC 上找到我們發布的收益報告。

And with that, I'll now turn the call over to Garrett Smallwood.

現在，我將把電話轉給加勒特·斯莫爾伍德。

Good afternoon, and thank you for joining us today to discuss our financial performance for the second quarter of 2024. First, I will provide an overview of our financial results for the second quarter. Following, Adam, our President and Chief Product Officer, will share brief updates on our strategic priorities for 2024 and beyond. Then, Alec, our Chief Financial Officer, will provide a more detailed analysis of our second-quarter results and discuss our capital allocation priorities.

下午好，感謝您今天加入我們討論我們 2024 年第二季的財務表現。首先，我將概述我們第二季的財務表現。接下來，我們的總裁兼首席產品長 Adam 將分享我們 2024 年及以後策略重點的簡要更新。然後，我們的財務長亞歷克將對我們第二季的業績進行更詳細的分析，並討論我們的資本配置優先事項。

During the second quarter, our revenues decreased 6% to $18.7 million, while our adjusted EBITDA increased to $1.6 million, a quarterly record for Wag!. As we have communicated, these results were highly intentional as we reduced marketing spend to increase profitability in the short term.

第二季度，我們的營收下降 6% 至 1,870 萬美元，而調整後的 EBITDA 增加至 160 萬美元，創下了 Wag! 的季度記錄。正如我們所傳達的，這些結果是我們有意為之的，因為我們減少了行銷支出以提高短期獲利能力。

As noted in our preliminary results released in July, our debt prepayment penalty expires this month, and our full debt becomes due a year from now. We are intensely focused on increasing adjusted EBITDA and free cash flow as we evaluate all options to refinance our debt. Strengthening our balance sheet and demonstrating consistent profitability is going to be utmost importance. Additionally, we recently completed a $10 million registered public offering last month, and we will use the net proceeds to pay down a significant portion of our debt.

正如我們在 7 月發布的初步業績中所指出的，我們的債務提前償還罰款將於本月到期，我們的全部債務將在一年後到期。在評估所有債務再融資方案時，我們高度關注增加調整後 EBITDA 和自由現金流。加強我們的資產負債表並展示持續的盈利能力將至關重要。此外，我們最近在上個月完成了 1000 萬美元的註冊公開發行，我們將使用所得淨收益來償還我們很大一部分的債務。

We will refinance the remaining debt principal and strengthen our balance sheet, allow us to generate substantial free cash flow. In fact, by lowering our debt principal and refinancing the remaining balance, we believe we'll be in a position to deliver positive free cash flow going forward.

我們將對剩餘債務本金進行再融資並加強我們的資產負債表，使我們能夠產生大量的自由現金流。事實上，透過降低我們的債務本金並對剩餘餘額進行再融資，我們相信我們將能夠在未來提供正的自由現金流。

Our adjusted EBITDA margin is improving, as indicated by our 8.8% adjusted EBITDA margin in second quarter, which is a significant improvement from the 0.5% a year ago and the 0.7% from the first quarter of this year. As we return to growth, we expect to maintain a healthy adjusted EBITDA margin to balance profitability and growth going forward.

我們的調整後 EBITDA 利潤率正在改善，第二季調整後 EBITDA 利潤率為 8.8%，比去年同期的 0.5% 和今年第一季的 0.7% 都有顯著改善。隨著我們恢復成長，我們預計將保持健康的調整後 EBITDA 利潤率，以平衡未來的獲利能力和成長。

In second quarter, we delivered a quarterly record adjusted EBITDA of $1.6 million, which was driven by reduced and more efficient marketing spend and operational efficiency across all business units. In turn, second-quarter platform participants decreased 15% year over year to $467,000. We remain focused on acquiring the highest quality customers.

第二季度，我們實現了創紀錄的季度調整後 EBITDA 160 萬美元，這是由於所有業務部門的營銷支出減少且效率提高以及營運效率提高所致。反過來，第二季度平台參與者年減 15% 至 467,000 美元。我們仍然專注於獲取最優質的客戶。

On the operations side, we continue to benefit from AI and process automation tools, which we will lean into in order to increase the quality of our products while reducing overall OpEx. As we move into the back half of the year, we remain focused on reaching more US households as the all-encompassing trusted partner for premium wellness, service and products. We expect to generate free cash flow as we benefit from lower interest expense on our debt, which ultimately provides us with increased flexibility to reward shareholders through opportunistic M&A, reinvesting in the business for further growth and returning cash to shareholders through stock buybacks.

在營運方面，我們繼續受益於人工智慧和流程自動化工具，我們將依靠這些工具來提高產品品質，同時降低整體營運支出。進入今年下半年，我們仍然專注於為更多的美國家庭提供優質健康、服務和產品，成為全方位的值得信賴的合作夥伴。我們預計將產生自由現金流，因為我們受益於較低的債務利息支出，這最終為我們提供了更大的靈活性，可以透過機會主義併購來回報股東，對業務進行再投資以實現進一步增長，並透過股票回購向股東返還現金。

And with that, I will turn the call over to Adam to review our strategic priorities for 2024.

接下來，我將把電話轉給 Adam，讓他審查我們 2024 年的策略重點。

Thanks, Garrett. Our strategic priorities remain unchanged and are as follows. Building best-in-class software solutions for consumers and partners is core to what we do. We are focused on solving the needs of the premium pet households across wellness, insurance, prescription meds and other solutions.

謝謝，加勒特。我們的策略重點保持不變，如下。為消費者和合作夥伴建立一流的軟體解決方案是我們工作的核心。我們專注於解決優質寵物家庭在健康、保險、處方藥和其他解決方案方面的需求。

Of note, we're very excited about the long-term growth prospects of our prescription B2B SaaS platform and expect to share a more fulsome update on our next earnings call. We continue to believe in the power of the veterinary channel and the opportunity in digitally prescribing vet medications to streamline the prescription process for Pet Parents and vets alike.

值得注意的是，我們對處方 B2B SaaS 平台的長期成長前景感到非常興奮，並希望在下一次財報電話會議上分享更豐富的最新資訊。我們仍然相信獸醫管道的力量以及數位化獸醫藥物處方的機會，以簡化寵物父母和獸醫的處方流程。

Two, we're focused on growing our platform via product expansion, proprietary partnerships and opportunistic M&A. Our integrations of Dog Food Advisor, Maxbone and Furmacy were seamless and we're always looking for new opportunities that delight the premium Pet Parents in are a value-add to the Wag! Platform. On WeCompare, we remain confident in our ability to replicate our success with pet insurance and other insurance verticals but we expect the majority of the growth contribution to come in 2025, when we have more marketing bandwidth to allocate for a more robust launch.

第二，我們專注於透過產品擴展、專有合作夥伴關係和機會性併購來發展我們的平台。我們對 Dog Food Advisor、Maxbone 和 Furmacy 的整合是無縫的，我們一直在尋找新的機會，讓優質寵物父母感到高興，因為這是 Wag 的增值！平台。在WeCompare 上，我們仍然對在寵物保險和其他保險垂直領域複製成功的能力充滿信心，但我們預計大部分成長貢獻將在2025 年實現，屆時我們將有更多的行銷頻寬來分配更強勁的發布。

As Garrett mentioned, we are intensely focused on driving free cash flow, increasing profitability and therefore, have been more measured with our marketing spend. In short, the team at Wag! is performing exceptionally well and we continue to advance against our core strategic pillars. We remain excited about our company's future growth prospects and believe a strength in balance sheet will allow us to return to growth and scale our business profitably and sustainably for increased shareholder value creation.

正如加勒特所提到的，我們非常專注於推動自由現金流、提高獲利能力，因此我們更加重視我們的行銷支出。簡而言之，Wag! 的團隊表現非常出色，我們將繼續朝著我們的核心策略支柱前進。我們對公司未來的成長前景仍然感到興奮，並相信資產負債表的實力將使我們能夠恢復成長並以盈利和可持續的方式擴大我們的業務，從而增加股東價值的創造。

I will now turn the call over to Alec to discuss our second-quarter financials and 2024 forecast in more detail.

我現在將把電話轉給 Alec，更詳細地討論我們第二季的財務狀況和 2024 年的預測。

Thanks, Adam.

謝謝，亞當。

Our Q2 results, which were highlighted by our highest adjusted EBITDA profitability on record, are a result of our commitment to strengthening our balance sheet. Our results were driven by prudent cost management initiatives. As a result, Q2 metrics were as follows. Revenue of $18.7 million, down 6% year over year, comprising of wellness of $11.5 million; services of $5.6 million compared to increase of $1.5 million.

我們第二季的業績，以我們有記錄以來最高的調整後 EBITDA 獲利能力為亮點，是我們致力於加強資產負債表的結果。我們的業績是由審慎的成本管理措施所推動的。結果，第二季指標如下。收入為 1,870 萬美元，年減 6%，其中健康收入為 1,150 萬美元；服務成本增加 560 萬美元，相較之下增加了 150 萬美元。

Adjusted EBITDA of $1.6 million, representing a $1.5 million improvement year over year and an adjusted EBITDA margin improvement from positive 0.5% and to positive 8.8%. Platform participants of $467,000, a decline of 15% year over year, however, generating higher revenue per user statistic.

調整後 EBITDA 為 160 萬美元，年增 150 萬美元，調整後 EBITDA 利潤率從正 0.5% 提高到正 8.8%。然而，平台參與者的收入為 467,000 美元，年減 15%，但每個用戶統計數據產生了更高的收入。

Our expenses were analyzed as a percentage of revenue were as follows. Cost of revenue, excluding depreciation and amortization, totaled $1.2 million, representing 6% of revenue, staying flat to 6% a year ago. Platform operations and support expenses totaled $2.7 million, representing 15% of revenue versus 18% a year ago. The decrease year over year was achieved through optimized technology benefit and headcount costs.

我們的費用佔收入的百分比分析如下。不包括折舊和攤銷的收入成本總計 120 萬美元，佔收入的 6%，與一年前的 6% 持平。平台營運和支援費用總計 270 萬美元，佔收入的 15%，而一年前為 18%。年比下降是透過優化技術效益和人員成本來實現的。

Sales and marketing expense totaled $11 million, representing 59% of revenue, up from 54% a year ago, but down from 67% in Q1 of this year. As mentioned earlier, we reduced marketing spend in the quarter to increase profitability in the near term but expect to increase this investment once we refinance our debt. G&A expense totaled $3.8 million, representing 20% of revenue, down from 24% a year ago. The reduction was driven by technology and headcount cost optimization and lower public company costs.

銷售和行銷費用總計 1,100 萬美元，佔營收的 59%，高於去年同期的 54%，但低於今年第一季的 67%。如前所述，我們減少了本季的行銷支出，以提高短期獲利能力，但預計一旦我們為債務再融資，我們將增加這項投資。G&A 費用總計 380 萬美元，佔收入的 20%，低於一年前的 24%。這項削減是由技術和員工成本優化以及上市公司成本降低所推動的。

From a balance sheet perspective, we ended the quarter with $17 million in cash, cash equivalents and accounts receivable. As we mentioned, in July, we completed a $10 million capital raise that added approximately $8.5 million of cash to the balance sheet after expenses. We plan to use the proceeds to pay down high interest debt. This will generate approximately $340,000 of quarterly interest cost savings starting in Q3.

從資產負債表的角度來看，本季末我們的現金、現金等價物和應收帳款為 1,700 萬美元。正如我們所提到的，7 月份，我們完成了 1000 萬美元的融資，扣除費用後的資產負債表增加了約 850 萬美元的現金。我們計劃用所得款項來償還高利債務。從第三季開始，這將節省約 34 萬美元的季度利息成本。

With the lower debt balance and better cash to debt ratio, we are positioning ourselves for a debt refinancing that has the potential to generate further interest cost savings. We are actively exploring options, and we'll provide an update at the appropriate time.

憑藉較低的債務餘額和更好的現金債務比率，我們正在為債務再融資做好準備，這有可能進一步節省利息成本。我們正在積極探索各種選擇，並將在適當的時候提供更新。

Moving to our guidance for 2024, taking into consideration our results year to date, we reiterate our guidance provided on July 10 of revenue of $92 million to $102 million, which represents growth of 10% to 22% over 2023; adjusted EBITDA in the range of $4 million to $8 million, representing drastic growth over 2023. This guide anticipates a 4% to 8% adjusted EBITDA margin, in addition to our expected positive free cash flow in the second half of 2024.

轉向我們對 2024 年的指導，考慮到我們今年迄今為止的業績，我們重申 7 月 10 日提供的指導，收入為 9,200 萬美元至 1.02 億美元，這意味著比 2023 年增長 10% 至 22%；調整後的 EBITDA 在 400 萬至 800 萬美元之間，比 2023 年大幅成長。除了我們預計 2024 年下半年的正自由現金流之外，本指南預計調整後的 EBITDA 利潤率為 4% 至 8%。

For our third-quarter 2024 guidance, we expect revenue in the range of $20 million to $24 million and adjusted EBITDA in the range of $1.5 million to $2.5 million. We are approaching Q3 from a position of strength. And we are seeing healthy competition in the pet category alongside an improved consumer environment for the premium household compared to last quarter.

對於我們 2024 年第三季的指導，我們預計營收在 2,000 萬美元至 2,400 萬美元範圍內，調整後的 EBITDA 在 150 萬美元至 250 萬美元範圍內。我們正在以強勢的姿態接近第三季。與上季相比，我們看到寵物類別的良性競爭以及高端家庭消費環境的改善。

In summary, our second quarter illustrates our commitment to strengthening the balance sheet. Our ability to balance growth versus profit. And finally, confidence in the next stage of Wag!'s journey as a profitable growth company beyond 2024. Our operational discipline on headcount and automation will allow us to continue lowering OpEx and increasing profit for sustainable, profitable growth.

總之，第二季反映了我們加強資產負債表的承諾。我們平衡成長與利潤的能力。最後，對 Wag! 的下一階段充滿信心到 2024 年以後，將成為一家獲利成長型公司。我們在員工數量和自動化方面的營運紀律將使我們能夠繼續降低營運支出並增加利潤，實現可持續的獲利成長。

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，您可以打開它進行問答嗎？

(Operator Instructions) Jason Helfstein, Oppenheimer.

（操作員說明）Jason Helfstein，Oppenheimer。

Hey, everybody. So now that you guys got that financing done -- the equity financing, do you -- how are you thinking about leaning back into marketing? Obviously, you didn't change the full-year guide. But do we think about you leaning into marketing potentially in the fourth quarter, or we more think about that next year?

嘿，大家。那麼現在你們已經完成了融資——股權融資，是嗎——你們如何考慮重新轉向行銷？顯然，您沒有更改全年指南。但我們是否會考慮您在第四季度可能會轉向行銷，還是明年我們會更多地考慮這一點？

And then I guess as we're just thinking about next year, like how do you think about, I don't know, like the priorities for growth? Is it like the same kind of view as you came into this year just with more money to spend? Thank you.

然後我想，我們只是在考慮明年，我不知道你如何考慮成長的優先事項？這是否與今年剛進入時的觀點相同，只是有更多的錢可以花？謝謝。

Hey, Jason. Thanks for the question. So as it pertains to growth, I really think that our first priority is the debt. So the financing was really about paying down debt and putting us -- putting the remaining debt balance. This is after the pre-payment penalty expires, putting the remaining balance in a place that we can refi. So it -- as it pertains to growth, I think that we're first going to refi the remainder of the debt and then once that's behind us, and we're really in a position where we're generating real cash, then we'll lean back into growth. And that will happen in the back half of this year.

嘿，傑森。謝謝你的提問。因此，就成長而言，我確實認為我們的首要任務是債務。因此，融資實際上是為了償還債務並讓我們——把剩餘的債務餘額。這是在預付款罰款到期後，將剩餘餘額放在我們可以重新融資的地方。因此，就成長而言，我認為我們首先要重新償還剩餘的債務，然後一旦這一切過去了，我們確實處於產生真正現金的位置，那麼我們將恢復成長。這將在今年下半年發生。

As it pertains to 2025, like yes, we want to return to being a growth company, but probably a little bit more balanced between growth and profitability than we came into this year. Our initial thoughts for this year was to kind of be very growth heavy in something like 3% or 4% EBITDA margins. Next year, I think that we want to be more on the order of 8%, 10%, 12% EBITDA margin somewhere in that range and then kind of balance growth on top of that.

就 2025 年而言，是的，我們希望恢復成為一家成長型公司，但成長和獲利能力之間可能比今年更加平衡。我們今年最初的想法是實現 3% 或 4% 的 EBITDA 利潤率大幅成長。明年，我認為我們希望 EBITDA 利潤率達到 8%、10%、12% 左右，在此範圍內，然後在此基礎上實現平衡成長。

I hope that answers your question.

我希望這能回答你的問題。

Yes. Super helpful. Thanks.

是的。超有幫助。謝謝。

Jeremy Hamblin, Craig-Hallum.

傑里米·漢布林，克雷格·哈勒姆。

Thanks, and congrats on the improvements in profitability. I wanted to hone in actually on the point that Alec was making. There's been a lot of noise and frankly, a bit of softening in consumer spend.

謝謝，並祝賀盈利能力的提高。我其實想深入探討亞歷克所表達的觀點。有很多噪音，坦白說，消費者支出有些疲軟。

I think I caught in Alec's comments that in Q3, you've seen increased demand for premium pet care services, but I wanted to see if you could explore that. You obviously guiding to sequential improvement, pretty nice sequential improvement here in Q3 versus Q2. So I wanted to get a sense for how things are starting out and how you're seeing kind of competitive balance?

我想我注意到了 Alec 的評論，即在第三季度，您看到了對優質寵物護理服務的需求增加，但我想看看您是否可以探索這一點。顯然，您指導了連續改進，與第二季相比，第三季的連續改進相當不錯。所以我想了解事情是如何開始的以及你如何看待競爭平衡？

Sure. So thanks for the question, Jeremy. I don't think it's a surprise to anyone to say that the macro backdrop is a little bit shaky right now, like literally right now this week. But broadly within the pet ecosystem, premium pet care. So that's kind of like all of the wellness categories have been pretty durable.

當然。謝謝你的提問，傑里米。我認為，現在宏觀背景有點不穩定（就像本週的現在一樣），任何人都不會感到驚訝。但在寵物生態系統中，廣泛的是優質寵物照護。所以這有點像所有的健康類別都相當持久。

I don't think NVIDIA trading off has a big impact on whether or not you're going to get a pet insurance policy. So I don't think it's a shock to you or kind of anybody listening to this call to say that wellness and our kind of health-related businesses have been the kind of the bright spot over the last 12 months. And I don't see that changing. I think that's a pretty durable secular trend, and we're going to kind of continue to play in that space.

我認為 NVIDIA 的權衡不會對您是否獲得寵物保險產生很大影響。因此，我認為，健康和我們與健康相關的業務是過去 12 個月的亮點，這對您或任何聽到這個電話的人來說都不會感到震驚。我認為這種情況不會改變。我認為這是一個相當持久的長期趨勢，我們將繼續在這個領域發揮作用。

Great. And then I wanted to say it looks to me like you saw a pretty significant improvement in your ARPU given the platform participants here in Q2, double-digit increase, I think, year over year in ARPU. And just wanted to get a sense for what you're learning as you've kind of gone through this process of getting more disciplined, getting more profitable and squeezing a bit more out of the platform itself. As you reignite the growth engines here post debt refinancing, how from a strategic standpoint, what learning's have you had that you're going to apply so that moving into 2025 as you invest dollars in sales and marketing to continue to get that good improvement in ARPU?

偉大的。然後我想說，在我看來，考慮到第二季度的平台參與者，您的 ARPU 有了相當顯著的改善，我認為 ARPU 同比增長了兩位數。只是想了解您正在學習的內容，因為您已經經歷了這個變得更加自律、獲得更多利潤並從平臺本身中獲得更多收益的過程。當您在債務再融資後重新點燃成長引擎時，從策略角度來看，您將如何應用所學到的知識，以便進入2025 年，當您在銷售和行銷方面投入資金時，繼續在銷售和行銷方面取得良好的進步ARPU？

Yes, that's a good question, a good observation, frankly. So any quarter where we pull back on marketing sequentially, the customer mix is going to change a little bit. So there's more returning customers relative to new customers as a function of that spend. Those returning customers are going to have higher ARPU, as you've noticed, but it's also kind of actions that we're taking internally.

是的，坦白說，這是一個好問題，一個很好的觀察。因此，任何一個季度，如果我們連續減少行銷活動，客戶組合都會發生一些變化。因此，根據支出情況，相對於新客戶而言，回頭客會更多。正如您所注意到的，那些回頭客將擁有更高的 ARPU，但這也是我們內部採取的行動。

So cross-sell and upsell becomes really, really important when we're looking for growth outside of just deploying marketing dollars. So you're going to see more of that. I think that the road map and the customer acquisition landscape is going to push us a little bit harder on the up-sell, cross-sell that you kind of observed in Q2.

因此，當我們在部署行銷資金之外尋求成長時，交叉銷售和追加銷售變得非常非常重要。所以你會看到更多這樣的事。我認為路線圖和客戶獲取情況將推動我們在第二季度觀察到的追加銷售和交叉銷售方面更加努力。

Got it. And then with the -- clearly, the focus is on debt refinancing here. As you start to think about the timing for that, I think the pre-payment penalty expires here in the coming few days. What's the timing that you think that, that can get done? And then how much improvement do you think that you can get out there in the market in terms of kind of annualized interest rate reduction. I mean are we looking at 400, 500 basis points or something more than that based kind of on the engagements you've had thus far?

知道了。然後，顯然，重點是這裡的債務再融資。當你開始考慮這樣做的時間時，我認為預付款罰款將在未來幾天內到期。您認為什麼時候可以完成？然後，您認為在年化利率降低方面，市場可以得到多少改善。我的意思是，我們是否會根據您迄今為止的參與情況來考慮 400、500 個基點或更多的基點？

Good question, Jeremy. So definitely in the back half of this year, we're actively working on it at the moment and having a lot of good conversations with a lot of different parties, some of this is outside of our control on paperwork and working through a process with parties and typical time line is not days, it's weeks to potentially months. But ultimately, we feel confident that we'll be able to close it in the second half of the year.

好問題，傑里米。因此，毫無疑問，在今年下半年，我們目前正在積極開展工作，並與許多不同的各方進行了很多良好的對話，其中一些超出了我們對文書工作的控制範圍，並通過與派對和典型的時間線不是幾天，而是幾週甚至幾個月。但最終，我們有信心在今年下半年完成它。

From an interest rate perspective, we're currently at 15.8%. And we think that and expect that we can get to a rate closer to 10%, which will be a significant impact from an interest expense perspective together with or compounded with a lower outstanding principal level.

從利率角度來看，目前利率為 15.8%。我們認為並預計我們可以達到接近 10% 的利率，從利息支出的角度來看，這將與較低的未償還本金水準一起產生重大影響。

Got it. And then in conjunction, maybe with that question, you saw a reduction in your G&A costs. We know that you've made some tough decisions in terms of staffing levels. How should we be thinking about as you get into kind of Q3 and really more into Q4 and looking to kind of reignite revenue growth? How should we be thinking about that G&A line item as you I think based on what you have in your guidance, you're looking at somewhere in the $27 million plus revenue in Q4. How much does your G&A grow in getting to those types of revenue levels?

知道了。然後結合這個問題，你會發現你的管理費用減少了。我們知道您在人員配置方面做出了一些艱難的決定。當您進入第三季度，甚至更多地進入第四季度並尋求重新點燃收入成長時，我們應該如何思考？我們應該如何考慮 G&A 訂單項，我認為根據您在指導中的內容，您正在考慮第四季度 2700 萬美元以上的收入中的某個位置。為了達到這些類型的收入水平，您的一般管理費用增加了多少？

So G&A for the quarter was 20%. I think as revenue scales in Q3, Q4, G&A will not scale with revenue. I think it's scalable. We're seeing efficiencies with headcount, with technology. And so I would expect that to increase a little bit, but it will scale nicely as revenue scales.

因此，本季的 G&A 為 20%。我認為隨著第三季、第四季的營收規模擴大，一般管理費用將不會隨著收入規模而擴大。我認為它是可擴展的。我們看到員工數量和技術的效率提高。因此，我預計這一數字會略有增加，但隨著收入的擴大，它會很好地擴大。

Got it. And then just lastly, in terms of looking ahead in the success you've had with the wellness platform and marketplace. As you get into launching WeCompare next year in earnest, what type of support do you need in terms of infrastructure to manage that. In other words, kind of bodies and team versus kind of the sales and marketing support costs and getting that launched? Is there more infrastructure significantly more infrastructure that you need in launching that? Or how do you feel about your staffing levels related to that?

知道了。最後，展望您在健康平台和市場上的成功。當您明年認真啟動 WeCompare 時，您在基礎設施方面需要什麼類型的支援來管理它。換句話說，什麼樣的機構和團隊與什麼樣的銷售和行銷支援成本以及啟動？啟動該專案時是否需要更多基礎設施？或者您對與此相關的人員配備水準有何看法？

And then the second part is sales and marketing costs related to launching that.

第二部分是與推出產品相關的銷售和行銷成本。

So we've done a lot of the heavy and hard work for WeCompare. There's still a little bit to do to Adam's point. We have most of the tech ready to go, and it's a final fine tuning. As we've always done, we've added headcount where there's a good ROI.

所以我們為WeCompare做了很多繁重而艱苦的工作。對於 Adam 的觀點，還有一些工作要做。我們已經準備好大部分技術，這是最後的微調。正如我們一直所做的那樣，我們增加了具有良好投資回報率的員工人數。

And so as WeCompare launches and scales, and we'll likely add headcount there as well. And there will be some marketing to deploy it, but we have what we believe is a playbook with the pet insurance business and our moat with providers from the supply side and on the demand side with the insurance providers that we will be applying to weak impact. So while there'll be some investment, it will not be a significant investment to get that up and running.

因此，隨著 WeCompare 的推出和規模擴大，我們也可能會增加那裡的員工人數。將會有一些行銷來部署它，但我們相信寵物保險業務有一本劇本，我們與供應方和需求方的供應商和保險提供商的護城河我們將應用於弱影響。因此，雖然會有一些投資，但啟動和運行它不會是一項重大投資。

Great. Thanks. Congratulations, and best wishes.

偉大的。謝謝。祝賀你，並致以最美好的祝愿。

(Operator Instructions) Matthew Koranda, Roth Capital.

（操作員指令）Matthew Koranda，Roth Capital。

Hey, guys. Good afternoon. Can you just do the math on the refi for us just wanted to make sure I understood the working pieces. So I think $9 million in cash in the second quarter, $8.5 million added from the recent raise and then to repay all of the debt remind us the total principal out? And then what that means for the size of the new facility that you're looking for?

嘿，夥計們。午安.您能否為我們計算一下 refi，只是想確保我理解工作內容。所以我認為第二季的現金是 900 萬美元，最近的融資增加了 850 萬美元，然後償還所有債務提醒我們本金總額已出？那麼這對於您正在尋找的新設施的規模意味著什麼？

Yes, absolutely.

是的，絕對是。

Alec, do you want to take this?

亞歷克，你想要這個嗎？

We have $9 million in cash. The outstanding principal is $25.7 million. After the raise, we have added around $9 million in cash. So -- and then with the clearing of AR, we're $18 million. So there's essentially a $7 million delta between our current cash and debt. So that puts us in a position to pay down the debt, refinance the delta looking at -- refinance at somewhere in the range of $12 million to $14 million, maybe $15 million as the new debt amount versus the $25.7 million we have today.

我們有 900 萬美元現金。未償還本金為 2570 萬美元。融資後，我們增加了約 900 萬美元的現金。那麼，隨著 AR 的清算，我們的收入為 1800 萬美元。因此，我們目前的現金和債務之間基本上存在 700 萬美元的差值。因此，這使我們能夠償還債務，為三角洲再融資——再融資範圍在 1200 萬美元到 1400 萬美元之間，新債務金額可能為 1500 萬美元，而我們今天的債務金額為 2570 萬美元。

Got it. And I assume that, that gives you sufficient working capital cushion and get you to sustain profitability in 2025. Is that the right way to think about it?

知道了。我認為，這將為您提供足夠的營運資金緩衝，並讓您在 2025 年保持盈利能力。這是正確的思考方式嗎？

Absolutely. We've never been a heavy working like heavy CapEx company or heavy working capital companies. So it will give us sufficient coverage there, combined with our expectations of adjusted EBITDA generation in future quarters to add incremental cash to the balance sheet.

絕對地。我們從來都不是像重資本支出公司或重營運資本公司那樣重工作的公司。因此，它將為我們提供足夠的覆蓋範圍，再加上我們對未來幾季調整後的 EBITDA 產生的預期，從而為資產負債表增加增量現金。

Got it. Okay. And then just in terms of the third-quarter outlook and the rest of the year, maybe could you speak a little bit to what you're assuming in terms of return on ad spend? Because I know you mentioned pulling back on marketing, focus on profitability that obviously hits the top line. But what are we assuming in terms of efficiency on the marketing spend in terms of returns?

知道了。好的。然後，就第三季和今年剩餘時間的前景而言，您能否談談您對廣告支出回報率的假設？因為我知道你提到要減少行銷，專注於顯然會影響營收的獲利能力。但是，我們對行銷支出的效率和回報的假設是怎樣的呢？

I'm happy to jump into this one. Kind of a similar profile to Q2, frankly, but with a little bit more scale, hopefully coming from the seasonality of these different businesses. We're also leaning into partnerships and different distribution channels that are not necessarily Google, Facebook, what have you, that kind of give us more bang for your buck. So it'll -- it's kind of the change in gears from focusing on growth as the primary metric like we came into the year with and kind of having shorter payback windows, higher ROI bar for future growth.

我很高興能加入這一行。坦白說，與第二季的情況類似，但規模更大一些，希望來自這些不同業務的季節性。我們也傾向於建立合作夥伴關係和不同的分銷管道，這些管道不一定是Google、Facebook 等，這會為我們帶來更多的收益。因此，這將是一種齒輪變化，不再把重點放在成長作為主要指標上，就像我們進入這一年一樣，投資回收期更短，未來成長的投資報酬率更高。

And then finally, it's important to note that the debt refi is really our top priority right now and balance sheet health. And I don't think that we're going to kind of really push the levers on growth until we have that refi kind of locked down or in its final stages.

最後，值得注意的是，債務再融資確實是我們目前的首要任務和資產負債表的健康狀況。我認為，在再融資被鎖定或進入最後階段之前，我們不會真正推動成長。

Okay. Fair enough. And then moving, I guess, the move out of social and search and the traditional performance channels. Is that in reaction to anything that you guys have seen in terms of just erosion of performance? Or is that just we're moving into a broader set of channels to try to find new customers like maybe just put that in context for us?

好的。很公平。我想，然後就是退出社交和搜尋以及傳統的績效管道。這是對你們所看到的性能下降的反應嗎？或者只是我們正在進入更廣泛的管道來嘗試尋找新客戶，就像也許只是將其放在我們的背景下？

Yes. I think that over the longer term, durable partnerships and ways of acquiring customers that look more like organic acquisition as opposed to giving margin to Google or Facebook, I think that's just more scalable and has a better return profile. So that has been a big focus for us, kind of Q2 and going forward.

是的。我認為，從長遠來看，持久的合作夥伴關係和獲取客戶的方式看起來更像是有機收購，而不是為谷歌或Facebook 提供利潤，我認為這更具可擴展性，並且具有更好的回報率。因此，這一直是我們第二季和未來的重點。

Yes, as it pertains to ROI on marketing generally, it is an election year, and it's looking to be a contentious one at that. So I do think that the marketing landscape is going to be more challenging in Q4 -- Q3 and Q4 this year than otherwise. But not in really a super dramatic way just on the margin.

是的，因為它與行銷的投資回報率有關，所以今年是選舉年，而且看起來會是一個有爭議的一年。因此，我確實認為第四季的行銷環境將比其他情況更具挑戰性——今年第三季和第四季。但並不是以一種非常戲劇性的方式只是在邊緣。

Okay. Very helpful. Appreciate it, guys.

好的。非常有幫助。非常感謝，夥計們。

This concludes our question-and-answer session. I'll now turn the call over to Garrett Smallwood for closing remarks. I'm sorry. Garrett Smallwood?

我們的問答環節到此結束。現在我將把電話轉給加勒特·斯莫爾伍德 (Garrett Smallwood) 作結束語。對不起。加勒特·斯莫爾伍德？

I'm sure Garrett means to give a closing remarks here, but thank you, everybody, for joining the call. Garrett has two young children at home. So I'm sure he's chasing somebody doing something right now. But thanks, everybody, for joining the call. Looking forward to connecting soon.

我確信加勒特打算在這裡發表結束語，但感謝大家加入電話會議。加勒特家裡有兩個年幼的孩子。所以我確信他現在正在追趕某個正在做某事的人。但謝謝大家加入我們的電話會議。期待盡快連線。

Ladies and gentlemen, this concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

女士們、先生們，今天的電話會議到此結束。此時您可以斷開線路。感謝您的參與。