Wag!’s First Quarter Results Drives
Outperformance Ahead of Planned Business Combination with CHW
Acquisition Corporation
Revenue Increased 273% Year Over Year in First
Quarter 2022, Including Significant Adjusted EBITDA
Improvements
Reaffirms 2022 and 2023 Outlook
Wag Labs, Inc. (“Wag!” or the “Company”), an American pet
services marketplace company powering a mobile-first technology
platform that enables on-demand and scheduled dog walking,
training, and other pet care services, which recently announced it
would become publicly traded through a merger with special purpose
acquisition company, CHW Acquisition Corporation (Nasdaq: CHWA;
“CHW”), today announced financial results for its first quarter
ending March 31, 2022. Wag! also reiterated its guidance for the
year ending December 31, 2022 and 2023, as previously presented in
its Investor Presentation, available at investors.wag.co.
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Quarterly Revenue * (Graphic: Business
Wire)
Garrett Smallwood, Chief Executive Officer of Wag!,
stated: “We are extremely proud of the results we achieved in the
first quarter of 2022, which exceeded our expectations. With more
than 23 million pet parents adopting a new pet during the pandemic,
the market potential for Wag! users continues to grow. We are
relentlessly focused on a balance of growth, margin, and profit,
and are encouraged by the return-to-office trend we are seeing
across the country.”
Smallwood continued, “Pet Parents are expressing concerns about
missing their pets as they return-to-office, dine-out, and engage
in other out-of-home social activities. We have high visibility
into this return-to-normal behavior, as demonstrated by Wag!‘s
LTV:CAC, which increased to 4:1 in Q1'22. The LTV charts show that
our recent cohorts’ lifetime value (“LTV”) continues to expand
higher than previous periods, demonstrating both LTV momentum and
durability. In the coming quarters, we intend to pursue significant
awareness growth for our platform and plan to meet new pet parents
via strategic partnerships and performance marketing
initiatives.”
First Quarter 2022 Highlights:
- Gross Bookings increased 141% to $17.5 million, compared
to $7.3 million in the first quarter of 2021.
- Revenue increased 273% to $9.7 million, compared to $2.6
million in the first quarter of 2021.
- Net loss improved to $(2.4) million from $(2.7) million
in the first quarter of 2021.
- Adjusted EBITDA improved to a loss of $(2.1) million
from a loss of $(2.6) million in the first quarter of 2021.
Recent Business
Highlights:
- Increased active Pet Parent Wag! Premium penetration
year-over-year from 33% to 48%, which is exceedingly bullish as Pet
Parents who subscribe to Wag! Premium are paying an additional
$9.99 per month and signaling their intent to increase their Wag!
usage.
- As of Q1'22, we've seen our Pet Parent multi-service attach
rate increase to 26%. This is up from 20% reported in October 2021.
We are increasingly expanding the share-of-wallet captured by the
Wag! Platform by helping Pet Parents address a multitude of
problems.
- Improved the take rate to 55% in the first quarter 2022, driven
by increased Wag! Premium penetration and continued diversification
of the platform including significant growth in the Wellness
category.
- Rapidly recovered out of the pandemic, with first quarter 2022
gross bookings up 141% from the same period in 2021.
- Launched Browse & Book in combination with Wag! Premium,
simplifying how Pet Parents discover and book more than 400,000
highly-rated local overnight sitters, boarders, walkers, and
trainers.
- Simplified the Wag! Pet Parent sign-up and pet profile
experience, lowering the barrier to entry and making it easier to
use Wag!.
- Reached a total of 325,012 Platform Participants in Q1’22.
On February 3, 2022, Wag! announced plans to become listed
through a $350 million business combination with CHW Acquisition
Corporation.
Outlook
Wag! is reaffirming its guidance for the year ending December
31, 2022 and the year ending December 31, 2023, as previously
presented in its Investor Presentation available at
investors.wag.co:
- Full Year 2022 Guidance:
- Gross Bookings of $93.4 million
- Revenue of $41.8 million
- Adjusted EBITDA of $(15.6) million
- Full Year 2023 Guidance:
- Gross Bookings of $163.5 million
- Revenue of $71.0 million
- Adjusted EBITDA of $(10.7) million
Business Combination
Transaction:
On February 3, 2022, Wag! announced a definitive business
combination agreement with CHW Acquisition Corporation (Nasdaq:
CHWA) (“CHW”). Upon the closing of the business combination, which
is expected in the second quarter of 2022, the combined company
will be named Wag! Group Co. Wag! intends to list the common stock
of the combined company on the Nasdaq under the new ticker symbol,
“PET”.
Form S-4 Filing
On March 10, CHW filed its Registration Statement on Form S-4
with the U.S. Securities and Exchange Commission (“SEC”) in
connection with the previously announced business combination
transaction between Wag! and CHW. The filing can be accessed at
https://www.sec.gov/.
Non-GAAP Financial Measures and Other
Operating Metrics
Adjusted EBITDA is a non-GAAP financial measure defined as net
income (loss) adjusted for (benefit from) income taxes, interest
income (expense), depreciation and amortization, and stock-based
compensation expense. Adjusted EBITDA provides a basis for
comparison of our business operations between current, past, and
future periods by excluding items from net income (loss) that we do
not believe are indicative of our core operating performance.
Gross bookings is defined as the total dollar value of a
transaction booked via the platform for pet and wellness services,
in each case without any adjustment for discounts or refunds, Pet
Caregiver earnings and Pet Parent incentives. Bookings are an
indication of the scale of our current platform, which ultimately
impacts revenue.
Take rate is calculated as revenue divided by gross
bookings.
Platform Participant is defined as a Pet Parent or Pet Caregiver
who transacted on the Wag! platform for a service in the quarter.
Services includes dog walking, sitting, boarding, drop-ins,
training, premium, telehealth services, wellness plans, and pet
insurance plan comparison.
About Wag! – Wag.co
Wag! strives to be the #1 app for pet parents, offering access
to 5-star dog walking, pet sitting, expert pet advice and training
from local pet caregivers nationwide. Wag!'s community of over
400,000 pet caregivers are pet people, and it shows. Making pet
parents happy is what Wag! does best. With safety and happiness at
the forefront, pet caregivers with Wag! have a trusted record of
experience with over 12.1 million pet care services completed by
pet caregivers on the Wag! Platform and over $325 million total
bookings across all 50 states, resulting in more than 96% of
services earning 5 stars.
About CHW Acquisition Corporation –
www.chwacquisitioncorp.com
CHW is a blank check company formed for the purpose of effecting
a merger, share exchange, asset acquisition, share purchase,
reorganization or similar business combination with one or more
businesses. The focus of the team is to pursue a business
combination within the consumer, health and wellness or retail
sector. Management is led by Jonah Raskas, Mark Grundman, and Paul
Norman.
Additional Information and Where to Find It
In connection with the proposed business combination, on March
10, 2022, CHW filed a registration statement on Form S-4 (the "Form
S-4") with the Securities and Exchange Commission (the "SEC"). The
Form S-4 includes a proxy statement of CHW and a prospectus of
Wag!, referred to as a proxy statement/prospectus. The proxy
statement/prospectus will be sent to all CHW shareholders.
Additionally, CHW will file other relevant materials with the SEC
in connection with the proposed business combination. Copies of the
Form S-4, the proxy statement/prospectus and all other relevant
materials filed or that will be filed with the SEC may be obtained
free of charge at the SEC's website at www.sec.gov. Before making
any voting or investment decision, investors and security holders
of CHW are urged to read the Form S-4, the proxy
statement/prospectus and all other relevant materials filed or that
will be filed with the SEC in connection with the proposed business
combination because they will contain important information about
the proposed business combination and the parties to the proposed
business combination.
Participants in Solicitation
CHW, Wag! and their respective directors and executive officers,
under SEC rules, may be deemed to be participants in the
solicitation of proxies of CHW's shareholders in connection with
the proposed business combination. Investors and security holders
may obtain more detailed information regarding the names and
interests in the proposed business combination of CHW's directors
and officers in CHW's filings with the SEC, including CHW's initial
public offering prospectus, which was filed with the SEC on August
30, 2021, CHW's subsequent quarterly reports on Form 10-Q, annual
reports on Form 10-K and the Form S-4. To the extent that holdings
of CHW's securities by CHW's insiders have changed from the amounts
reported therein, any such changes have been or will be reflected
on Statements of Change in Ownership on Form 4 filed with the SEC.
Information regarding the persons who may, under SEC rules, be
deemed participants in the solicitation of proxies to CHW's
shareholders in connection with the business combination will be
included in the proxy statement/prospectus relating to the proposed
business combination when it becomes available. You may obtain free
copies of these documents as described in the preceding
paragraph.
No Offer or Solicitation
This communication shall not constitute a proxy statement or
solicitation of a proxy, consent or authorization with respect to
any securities or in respect of the proposed business combination.
This communication shall also not constitute an offer to sell or a
solicitation of an offer to buy any securities of CHW or Wag!, nor
shall there be any sale of securities in any state or jurisdiction
in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any
such state or jurisdiction. No offering of securities shall be made
except by means of a prospectus meeting the requirements of Section
10 of the Securities Act of 1933, as amended.
Forward-Looking Statements
This communication includes "forward-looking statements" within
the meaning of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995 with respect to the
proposed business combination between CHW and Wag!. Words such as
"expect," "estimate," "project," "budget," "forecast,"
"anticipate," "intend," "plan," "may," "will," "could," "should,"
"believe," "predict," "potential," "continue," "strategy,"
"future," "opportunity," "would," "seem," "seek," "outlook" and
similar expressions are intended to identify such forward-looking
statements. Forward-looking statements are predictions, projections
and other statements about future events that are based on current
expectations and assumptions and, as a result, are subject to risks
and uncertainties that could cause the actual results to differ
materially from the expected results. These statements are based on
various assumptions, whether or not identified in this
communication. These forward-looking statements are provided for
illustrative purposes only and are not intended to serve as, and
they must not be relied on by an investor as, a guarantee, an
assurance, a prediction or a definitive statement of fact or
probability. Actual events and circumstances are difficult or
impossible to predict and will differ from assumptions. These
forward-looking statements include, without limitation, Wag!'s and
CHW's expectations with respect to anticipated financial impacts of
the proposed business combination, the satisfaction of closing
conditions to the proposed business combination, and the timing of
the completion of the proposed business combination. You should
carefully consider the risks and uncertainties described in the
"Risk Factors" section of CHW's initial public offering prospectus
and its subsequent quarterly reports on Form 10-Q and annual
reports on Form 10-K. In addition, there will be risks and
uncertainties described in the Form S-4 and other documents which
are or will be filed by CHW from time to time with the SEC. These
filings would identify and address other important risks and
uncertainties that could cause actual events and results to differ
materially from those contained in the forward-looking statements.
Many of these factors are outside Wag!'s and CHW's control and are
difficult to predict. Many factors could cause actual future events
to differ from the forward-looking statements in this
communication, including but not limited to: (1) the outcome of any
legal proceedings that may be instituted against CHW or Wag!
following the announcement of the proposed business combination;
(2) the inability to complete the proposed business combination,
including due to the inability to concurrently close the business
combination and related transactions, including the private
placement of common stock, borrowing under the credit facility or
due to failure to obtain approval of the shareholders of CHW; (3)
the risk that the proposed business combination may not be
completed by CHW's business combination deadline and the potential
failure to obtain an extension of the business combination deadline
if sought by CHW; (4) the failure to satisfy the conditions to the
consummation of the proposed business combination, including the
approval by the shareholders of CHW, the satisfaction of the
minimum cash requirement following any redemptions by CHW's public
shareholders and the receipt of certain governmental and regulatory
approvals; (5) delays in obtaining, adverse conditions contained
in, or the inability to obtain necessary regulatory approvals or
complete regulatory reviews required to complete the proposed
business combination; (6) the occurrence of any event, change or
other circumstance that could give rise to the termination of the
business combination agreement; (7) volatility in the price of
CHW's or Wag!'s securities; (8) the risk that the proposed business
combination disrupts current plans and operations as a result of
the announcement and consummation of the business combination; (9)
the inability to recognize the anticipated benefits of the proposed
business combination, which may be affected by, among other things,
competition, the ability of the combined company to grow and manage
growth profitably, maintain relationships with users and suppliers
and retain key employees; (10) costs related to the proposed
business combination; (11) changes in the applicable laws or
regulations; (12) the possibility that the combined company may be
adversely affected by other economic, business, and/or competitive
factors; (13) the risk of downturns and a changing regulatory
landscape in the highly competitive industry in which Wag!
operates; (14) the impact of the global COVID-19 pandemic; (15) the
potential inability of Wag! to raise additional capital needed to
pursue its business objectives or to achieve efficiencies regarding
other costs; (16) the enforceability of Wag!'s intellectual
property, including its patents, and the potential infringement on
the intellectual property rights of others, cyber security risks or
potential breaches of data security; and (17) other risks and
uncertainties described in CHW's initial public offering
prospectus, its subsequent Quarterly Reports on Form 10-Q and
Annual Reports on Form 10-K, and the Form S-4. These risks and
uncertainties may be amplified by the COVID-19 pandemic, which has
caused significant economic uncertainty. Wag! and CHW caution that
the foregoing list of factors is not exclusive or exhaustive and
not to place undue reliance upon any forward-looking statements,
including projections, which speak only as of the date made.
Neither Wag! nor CHW gives any assurance that Wag! or CHW will
achieve its expectations. None of Wag! or CHW undertakes or accepts
any obligation to publicly provide revisions or updates to any
forward-looking statements, whether as a result of new information,
future developments or otherwise, or should circumstances change,
except as otherwise required by securities and other applicable
laws.
Wag Labs, Inc Consolidated
Statements of Operations
Three Months Ended March
31,
($ in thousands, except per share
amounts)
2022
2021
Revenues
$
9,666
$
2,589
Costs and expenses:
Cost of revenues (exclusive of
depreciation and amortization shown separately below)
806
523
Platform operations and support
2,577
2,446
Sales and marketing
6,082
605
General and administrative
2,367
1,663
Depreciation and amortization
152
55
Total costs and expenses
11,984
5,292
Interest expense, net
(32)
(5)
Loss before income taxes
(2,350)
(2,708)
Income tax expense
-
-
Net loss
$
(2,350)
$
(2,708)
Net loss per share
Basic and diluted
$
(0.37)
$
(0.48)
Weighted-average shares used to compute
net loss per share
Basic and diluted
6,297,398
5,634,632
Wag Labs, Inc. Adjusted EBITDA
Reconciliation
Three Months Ended March
31,
2022
2021
($ in thousands)
Revenues
$
9,666
$
2,589
Adjusted EBITDA reconciliation:
Net loss
$
(2,350)
$
(2,708)
Add:
Interest expense, net
32
5
Depreciation and amortization
152
55
Share based compensation
54
61
Tax expense
-
-
Adjusted EBITDA
$
(2,112)
$
(2,587)
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version on businesswire.com: https://www.businesswire.com/news/home/20220420005326/en/
Media: Wag!: Media@wagwalking.com ICR for Wag!:
Wag@icrinc.com CHW: info@chwacquisitioncorp.com Investor
Relations: ICR for Wag!: WagIR@icrinc.com
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