Wag! Group Co. (NASDAQ:PET) Q3 2024 Results Conference Call November 13, 2024 8:30 AM ET

Company Participants

Greg Robles - Investor Relations
Garrett Smallwood - Chief Executive Officer
Adam Storm - President and Chief Product Officer
Alec Davidian - Chief Financial Officer

Conference Call Participants

Ryan Meyers - Lake Street Capital Markets
Jeremy Hamblin - Craig-Hallum
Matthew Koranda - ROTH Capital

Operator

Good morning, and welcome to the Wag! Third Quarter 2024 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

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

Greg Robles

Good morning, everyone, and thank you for joining Wag!'s conference call to discuss our third 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. 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. 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. And with that, I'll now turn the call over to Garrett Smallwood.

Garrett Smallwood

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

We had a challenging third quarter as our revenues decreased to $13.2 million, while our adjusted EBITDA decreased to a loss of $1.9 million versus the year ago period. In the middle of Q3, we encountered an incredibly dynamic marketing environment, which resulted in less efficient marketing spend in our Wellness and Pet Food & Treats revenue streams. As you know, these offerings provide comparison tools for pet parents looking for the best insurance and pet food options, and we've been on a lot of keywords with many SEO partnerships. In the quarter, we experienced changes to Google that impacted our listing results and made it more competitive to bid on these SEM keywords leading to shifts in visibility and fluctuations in traffic and conversions. Therefore, we cannot spend efficiently on our Wellness business.