Aiera/aiera-transcript-sentiment huggingface dataset:
I have a copy of the notice of this meeting together with the affidavit of mailing the proxy statement provided to all of the company's stockholders of record as of the close of business on February 14th 2024.
Sentiment: neutral
I also have a list of the stockholders entitled to vote at the meeting which has been available for inspection on the proxy meeting website.
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Miss what advises me that the holders of at least one third of the outstanding shares of voting stock as of the record date are represented at this meeting in person or by proxy.
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A quorum is therefore present and the 2024 annual meeting is properly and legally convened and ready to transact business.
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Stockholders attending the meeting virtually may vote their shares in real time on the virtual meeting website until the polls are closed.
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If you have already submitted a proxy to vote. Your shares you do not need to submit an online ballot unless you want to change your vote.
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We will now proceed to the items on the agenda.
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The first item of business is the election of two class II directors. The nominees are Don Hutchison and Gena Lee Man.
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Pursuant to the company's bylaws no other nominations will be accepted.
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The second item of business is a vote to approve an amendment to our certificate of incorporation to effect a reverse stock split at a ratio in the range of one for four to one <unk> six with the exact ratio to be set within that range at the discretion of our board of directors.
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The third item of business is a vote to approve an amendment to our certificate of incorporation to decrease our authorized shares of common stock.
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The fourth item of business is a nonbinding advisory vote on the compensation paid by us to our named executive officers for the year ended December 31 2023.
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The fifth item is to ratify the appointment of grant Thornton as the independent registered public accounting firm of the company for 2024.
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Are there any questions or comments regarding the proposals.
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If you are a stockholder and voting electronically today on the virtual meeting website, you must submit your votes at this time in order for them to be counted by the inspector of elections. Please see click here to vote on your screen inspector of election will not accept ballots proxies or votes or any changes or revocations submitted after.
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It is 935, a M and the polls are now closed Mr. Coleman. Please report the preliminary results.
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We will be reporting the final vote results in a current report on form 8-K to be filed with the SEC within four business days.
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So with that I'll turn the meeting over to Mr. Li.
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This concludes the formal part of the meeting and the meeting is adjourned. Thank you everyone.
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The meeting has now concluded thank.
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Thank you for joining and have a pleasant day.
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The House has ended this call goodbye.
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Ladies and gentlemen, thank you for standing by, and welcome to the Wish Second Quarter 2021 Earnings Conference Call. (Operator Instructions)
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I would now like to hand the conference over to Dennis Walsh, Wish VP and Investor Relations. Thank you. Please go ahead, sir.
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Thank you, May. Good afternoon, and welcome, everyone. Joining me today to discuss our results are Wish's Founder and CEO, Peter Szulczewski; as well as our interim Co-CFOs, Brett Just and Jennifer Oliver.
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During the call, we will make forward-looking statements about our future plans and financial performance. These statements are subject to risks, uncertainties and assumptions. If the risks materialize or assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. We encourage you to consider the risk factors described in our SEC filings for additional information. The date of this call is August 12, 2021, and forward-looking statements made today are based on assumptions as of this date. We undertake no obligation to and do not intend to update these statements as a result of new information or events.
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This call is being broadcast on the Internet and is accessible on our Investor Relations website. A recording of the call will be available later today.
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During the call, we will discuss GAAP and non-GAAP measures, including adjusted EBITDA and free cash flow. We encourage you to read our quarterly shareholder letter and earnings news release, both of which can be found on our Investor Relations website and on a Form 8-K, which we have filed with the SEC, as they contain important information about our GAAP and non-GAAP results, including reconciliations of historical non-GAAP financial measures.
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We'll now open with brief remarks, and then we will take your questions. And with that, I'll turn the call over to Peter.
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Thank you, Dennis, and welcome, everyone. Wish faced several obstacles that affected our performance in the second quarter of 2021. Our results were disappointing as they came in below our expectations on both the top and bottom line due to a combination of macro and company-specific headwinds. In addition, we expected user retention to increase now that we have made reliable logistics. However, our retention declined instead. We know that we can do better, but first, we need to make changes to the way that we operate and improve our execution. While we have already begun taking action, we expect it will be several quarters before the benefits begin to materialize.
Sentiment: negative
I'll focus our opening remarks today on the headwinds we face and the actions we are taking to address them. Then I will close out with our outlook. You can find a detailed review of our results in the shareholder letter that has been posted to our Investor Relations website.
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Starting with our Q2 results. After a strong start, demand slowed as we moved through the quarter, resulting in a 6% year-over-year decline in revenue to $656 million. Strong Logistics revenue growth of 126% year-over-year was more than offset by a 29% year-over-year decline in Marketplace revenue. While we are not pleased with this revenue performance, we should note that we faced a very difficult comparison with the second quarter of 2020. That period last year was strong due to increased mobile usage and less competition from physical retail as the pandemic intensified. In fact, our Q2 guidance that we provided called for only a 3% year-over-year revenue growth at the midpoint of the range.
Sentiment: negative
On the bottom line, we reported a second quarter 2021 net loss of $111 million and adjusted EBITDA loss of $67 million. This compares with a net loss of $11 million and adjusted EBITDA gain of $16 million in Q2 2020. The increased losses were primarily due to lower order volume and the comp to a strong Q2 2020.
Sentiment: negative
From a macro perspective, as vaccine rates increased and stay-at-home orders began to ease over the past few months, daily user activity and active buyers on our platform declined more than we anticipated. This was particularly true in the U.S., France and Italy, 3 of our largest markets. In fact, we saw a 13% reduction in app installs and a 15% reduction in average time spent on our platform globally from the second quarter of 2020.
Sentiment: negative
Despite lower engagement, the cost of digital advertising on leading ad platforms, which historically have generated a lot of demand and conversion of new and existing buyers on our app, continued to increase during Q2. In fact, CPMs on one ad platform were up nearly 50% year-over-year.
Sentiment: positive
In addition, the recent privacy changes for iOS has caused more advertisers to shift spend to Android devices. As a reminder, the majority of Wish users are on Android devices. So the iOS changes were not expected to have any immediate major impact on our business. However, as more advertisers shifted their spend from iOS to Android, it drove up bids for impressions, limited the quantity of impression supply and ultimately increased our advertising costs.
Sentiment: negative
These rising digital advertising costs contributed to lower marketing efficiency. Therefore, during the quarter, Wish used proprietary data science algorithms to reduce our digital advertising spend, resulting in slower new buyer growth and reduced retention. Our algorithms are designed to optimize for returns on marketing investments and user conversion in real time. Ultimately, our goal is to execute cost-effective and successful digital marketing strategies to acquire new users and reengage existing users on the Wish platform.
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The rise in digital advertising costs, coupled with declining retention and new buyer conversion, requires us to make some significant changes in the way we operate. We are implementing the following initiatives that we believe will improve the user experience and increase retention.
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First, we are focused on enhancing product quality and selection. With Wish's new quality score system, we are now emphasizing products and merchants that received positive ratings and feedback from our users. In July, we initiated an impression with distribution process to prioritize more high-quality merchants and products within the app feed. In addition, we are augmenting our inventory with more globally recognizable brands and product categories like apparel, home goods and gadgets that translate well into an online treasure hunt experience. We have a significant amount of data that we can leverage to select attractively priced, high-quality products that should delight our users.
Sentiment: positive
Second, we strive to ensure that the Wish app provides an unmatching fun, entertaining shopping experience for all users. To do so, we are developing a more engaging and personalized discovery-based online shopping experience. In addition to providing users with a unique experience, eclectic products and great prices, the Wish app also provides a way to decompress or to get inspired.
Sentiment: positive
Our users have told us that they want the Wish shopping experience to be even more fun and to incorporate even more social elements. We are answering their call by leaning into social commerce and entertaining features such as video reviews, shoppable influencer content and more gamification, which has a unique opportunity to create moments of fun in people's lives and also introduce them to products that pique their interest that they may have never known existed. If users feel joy while on the Wish app, we believe that they will come back often.
Sentiment: positive
We strongly believe that social shopping experiences are the future of e-commerce. Our focus on entertaining features dovetails perfectly with where the industry is going. We believe that we have the brand and the user base to support leaning into this strategy. We have already begun implementing some of these initiatives. 2 weeks ago, we hosted our first live shopping event on Instagram. The live stream featured an influencer conducting a makeup tutorial using beauty products available on Wish. We're also working with a group of influencers to promote apparel products across various social media platforms.
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Wish is well positioned to be on the leading edge of the social commerce trend. So you can expect to see more of these innovations from us over the next few quarters.
Sentiment: positive
To oversee the evolution of our product strategy, we welcomed our new Chief Product Officer, Tarun Jain, to our leadership team just last week. Tarun brings to Wish a deep product management experience, including incubating and leading the development of Google's discovery ads, which typically drive higher levels of engagement than direct response ads. We are fortunate to have someone of Tarun's caliber leading product at Wish.
Sentiment: positive
And third, we recognize the need to enhance the user experience on our apps from end-to-end. Since Wish was built on a culture of experimentation, there have been a high number of ongoing platform tests that resulted in a slowdown or latency of the app speed. The forward platform performance impacted the user experience, particularly for existing users who are used to a faster, smoother experience.
Sentiment: positive
To address this slowdown, we conducted a thorough review and cleanup of all open tests, which has already resulted in significant latency improvement. In fact, we have reduced our app speed by nearly 50%. This is an impressive upgrade that dramatically enhances the user experience. Going forward, we will aim to more effectively balance testing to advance innovation with the need to maintain optimal platform performance for our users.
Sentiment: positive
In July, we brought on our new Chief Technology Officer, Farhang Kassaei, to oversee Wish core product suite and the creation of new technology solution. Farhang also joined us from Google, where he led the development and rollout of full stack commerce capabilities. Farhang's work with logistics and scaling merchant onboarding at Google are particularly relevant experiences that will have positive impact on our core business.
Sentiment: positive
As you may have realized, the actions we are discussing today have one commonality, the focus on our users. We have identified opportunities for improvement and believe that successful execution on these initiatives will position Wish for a strong rebound. However, we do not expect the benefits of these actions outlined today to begin materializing into positive year-over-year results until the second half of 2022.
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We have already begun to significantly cut back our digital advertising spend, and we will focus on maintaining retention of our existing user base in the near term. We believe new buyer conversions will be minimal. Once we see improved user engagement trends, we plan to slowly ramp up our growth advertising investments to reignite our new user acquisition engine.
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At this time, we will not be providing our usual quarterly revenue outlook as we are focused squarely on execution and efficient expense management. To provide some context, quarter-to-date total revenue through July 2021 was down approximately 40% compared with the prior quarter, while Marketplace revenue was down approximately 55% compared to the same period. With the pullback in digital ad spending, we expect third quarter revenue to decline further. As a result, we expect third quarter adjusted EBITDA loss in the range of $70 million to $65 million.
Sentiment: negative
As we look ahead to the second half of 2021 and beyond, we are sharply focused on execution and user retention. We have a solid cash position to navigate this turnaround with a goal of returning to growth. We plan to maintain a disciplined approach to cash management as we progress towards improving adjusted EBITDA on a sequential basis beginning with the fourth quarter of 2021.
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Before we open up the call for your questions, I want to reiterate that these results are not reflective of what we believe this company can achieve. We clearly have work to do to turn our performance around, but we have identified opportunities for improvement in the way we operate.
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So I am super optimistic about Wish's future. The initiatives outlined today will support our strategic execution as we progress towards achieving our long-term vision. Along the way, we'll strive to create a more engaging experience for our users and merchants and to generate greater value for our shareholders. We will work hard to return to growth during 2022, and we are confident that we will emerge as a stronger business.
Sentiment: positive
With that, operator, we are ready for the first question.
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(Operator Instructions) Your first question comes from the line of Doug Anmuth of JPMorgan.
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This is Neeraj on for Doug. So just a couple of questions. So first, I just wanted to understand if you can pass through the impact from reopening versus the higher cost of advertising? And second would be you had talked previously that you can become profitable if you -- even if you stopped advertising, which we saw in first half of 2019. So how has that dynamic changed in this quarter?
Sentiment: negative
Yes. Thanks. Thanks, Doug. That's a good question. Look, as we mentioned, we're facing several macro and company-specific headwinds, which we're addressing with the actions that potentially will impact our near-term results but that we believe will generate more sustainable and consistent long-term revenue growth for Wish. So from a macro perspective, the stay-at-home restrictions, as they ease and as the economies begin to open, consumers spend less time at home and less time on their phones, which has impacted user activity on our app. This includes engagement, conversion into sales and retention.
Sentiment: negative
At the same time, CAC, our customer acquisition cost, increased this quarter. And retention has declined, which has reduced LTV to CAC to a point where we believe it just makes a lot more sense to focus on retention instead of investing in new buyer acquisition. So this results in lower ad spend and obviously, in a slowdown in user and buyer growth. Retention has decreased this quarter, and our marketing is less efficient as the cost for impressions continue to rise.
Sentiment: negative
So as mentioned in the remarks, one ad platform. This is surprising and unexpected. The CPMs have increased 50% year-over-year. That's quite a dramatic rise. I don't think we've seen that before. On other platforms, the cost has even doubled year-over-year on a CPC basis. We expected the retention to improve as our logistics became much more reliable. We were successful in improving logistics, as evidenced by lower customer complaints related to logistics and shipping reasons not being the #1 reason any longer for customer service requests or complaints.
Sentiment: positive
However, retention has continued to decline, indicating that we really need to improve other areas of our business, starting with product quality. And then once we saw this reduction in retention and increasing cost of acquiring new customers, we adjusted our user acquisition strategy, right?
Sentiment: negative
So as a result of these factors, Q2 MAUs were down 22% year-over-year, and active buyers were actually down 44% year-over-year. And this trend actually continues into July as MAUs are down 9% even just compared to June. So we do plan to reinvest in growth once we see improvements in user engagement trends. But until then, we think that spending on low retention buyers is not a good strategy for us.
Sentiment: negative
And then to address the second portion of your question, in the past, with where historically the cost of advertising even on a CPM basis has been, that was the case and I think notably in 2019. But with this unexpected rise in digital advertising, that has become a much greater challenge.
Sentiment: negative
Your next question comes from the line of Stephen Ju of Credit Suisse.
Sentiment: neutral
This is Tyler on for Stephen. So Peter, it seems like for now, the LTV to CAC ratio is not at a place where you want to spend on acquisition. But one thing you can do to potentially increase LTV is better product selection or more selection in general. So what can you do in that regard? I think you talked about apparel and home goods in your prepared remarks. So is that a potential recovery direction you could take? And any more color here would be appreciated.
Sentiment: negative
Yes. Thanks, Tyler. Yes. So look, the Core Marketplace revenue per active buyer is actually up 21% year-over-year. So there are signs that, that sort of continues to improve. We're seeing sort of signs of that with the AOV as well. And of course, we want to add as many products as possible that will ultimately appeal and delight our customers. So expansion into more branded products or even more high-quality products is part of that strategy, especially in categories where they will drive further sort of repeat purchase behavior.
Sentiment: positive
Your next question comes from the line of Jason Helfstein of Oppenheimer.
Sentiment: neutral
Appreciate in the letter that you've clearly laid out that this is going to take a year, and there's a significant reset here. So my question is, should you be -- are there any markets that you plan to exit? Do you think it makes sense to kind of look at the Logistics business almost as a stand-alone business and kind of run that on its own, let that try to also serve external customers and then also obviously kind of serve Wish customers? And then I guess you outlined the 2 management changes you've already made, but maybe just talk about what else you need to do to kind of go through this transition.
Sentiment: negative
Yes. So in terms of advertising in these specific markets, the majority of our advertising is focused on our key markets. So that includes Europe, North America. We continuously review our ad spend and determine sort of where to invest, where the regions can be successful. And we may sort of exit future markets -- there's no plans right now -- if we find that they're not workable at the time. But I don't think we have anything to announce there at this point in time. So we will sort of continue to assess the situation, but no specific plans in mind.
Sentiment: neutral
Your second question with respect to Logistics and what we're doing there. I think ultimately, right now, we're just focused on providing the best logistics solutions for our merchants and really providing faster, much more reliable logistics solutions, leveraging volume cost savings, figuring out whether -- sort of how to sort of optimize the flow. But at this point in time, we're looking for as much adoption as possible. I think it's really -- we have nothing to announce there whether we should be really spinning this out as sort of a separate business.
Sentiment: neutral
Now we do have this pilot around Logistics as a Service for non-Wish transactions and non-Wish merchants, right? So this already includes several online retailers. And we have expanded this test to open it up to more retailers. It's probably too early to share any specific details, but we're very encouraged by sort of the early signs that we've actually had feedback on from the participants so far.
Sentiment: neutral
And then I believe your last question was centered around sort of other leadership changes. Look, I think ultimately, we want to bring in a world-class team. Running an e-commerce company has many sort of different and distinct and unique moving parts. I think with the additions that we made in just the last 4 weeks or so, with our Chief Technical Officer and our Chief Product Officer, we're making sort of the right moves. We're always looking to attract top industry talent, but we don't necessarily have -- other than sort of the CFO search that we have that's going on to find a permanent CFO for Wish, we don't really have anything else to announce at this moment.
Sentiment: neutral
Your next question comes from the line of Michael McGovern of Bank of America.
Sentiment: neutral
I was just wondering if you could dig a little bit further into the quarter-to-date trends that you're seeing that you outlined in the shareholder letter. It looks like in my model, to get to a 55% decline, I would have to model Core Marketplace revenue down on a year-over-year basis. And like you said earlier, it was still up 21% in the second quarter. So can you just parse a little bit further into what you're seeing like with that and also with ProductBoost quarter-to-date?
Sentiment: negative