Florida-based cannabis software solutions provider SpringBig Holdings Inc. (Nasdaq: SBIG) saw notable growth and a path toward profitability in its preliminary financial results for the second quarter ended June 30, 2023, and updated its outlook for the second half of the fiscal year.
The company expects revenues for the three months ended June 30 to reach $7.2 million, reflecting a 12% increase versus the same period last year. The adjusted EBITDA loss for the quarter is anticipated to be $1.1 million, significantly reduced from $3.4 million during the same period in 2022.
“We have rightsized our operating expenses, and this combined with continuing revenue growth results” will help move the company toward adjusted EBITDA profitability in the third quarter of 2023, CFO Paul Sykes said.
SpringBig expects to generate an adjusted EBITDA profit between $500,000 and $1 million in the second half of the fiscal year. Sykes attributed these optimistic projections to “consistent revenue growth” and a planned reduction in operating expenses, moving from a run rate of approximately $25 million annually to about $6.25 million quarterly.
The company also bolstered its balance sheet with a May 31 $4 million public equity offering. The equity offering witnessed active participation by key executives and directors, including Sykes and CEO and Chairman Jeffrey Harris.
The proceeds from this offering were used to partially offset the outstanding balance on the company’s senior secured convertible notes and to further strengthen its financial standing.
For the year ending Dec. 31, SpringBig projects revenue in the range of $31 million to $32.5 million, representing a 19% growth at the mid-point, and an adjusted EBITDA loss between $1.5 million and $2 million.
During the quarter, SpringBig launched “Subscriptions by springbig,” an offering that allows retail clients to offer consumers additional loyalty rewards and exclusive promotions in return for a monthly or annual subscription. The company said that the service has seen rapid uptake, with several retailers having already updated their contracts with SpringBig to include their own VIP loyalty paid subscription programs.
“Our expectation is that we will begin to see many more clients launch subscription programs for their respective customer bases in the months to come,” Harris said.
However, the launch has been under fire after a company partner Kind+ took Springbig to court in June over copycat claims regarding the service.