Wishpond Technologies Ltd. (WISH) Earnings Call Transcript & Summary

Thank you, everyone, for joining us today, and welcome to Wishpond 2023 Fiscal First Quarter Financial Results Conference Call. My name is Jordan Bones, Director of Marketing. And joining me on the call today are Ali Tajskandar, Chairman, Founder and CEO of Wishpond; and David Pais, the company's CFO. This call is being recorded. We will have a Q&A session at the end of the call, which will be limited to analysts only. I trust that everyone has received a copy of our financial results press release that was issued earlier today. Listeners are also encouraged to download a copy of our quarterly financial statements and management discussion and analysis from sedar.com. Please note portions of today's call other than historical performance, include statements of forward-looking information within the meaning of applicable securities laws. These statements are made under the safe harbor provisions of these laws. Forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors, many of which are outside of Wishpond's control that may cause the actual results, performance or achievements to differ materially from the anticipated results, performance or achievements implied by such forward-looking statements. These factors are further outlined in today's press release and in our management discussion and analysis. We provide forward-looking statements solely for the purpose of providing information about management's current expectations and plans relating to the future. We don't undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in our expectations or any change in events, conditions, assumptions or circumstances on which any such statement is based, except if it's required by law. We use terms such as gross profit, gross margin, adjusted EBITDA, annualized revenue run rate and monthly recurring revenue on this conference call, which are non-IFRS and non-GAAP measures. For all -- sorry, for more information on how we define these terms, please refer to the definition set out in our management discussion and analysis. And with that, let me turn the call over to Mr. Ali Tajskandar, Chairman and CEO.

Thank you, Jordan. Good day, everyone. We hope that you are all keeping safe and healthy. We truly appreciate everyone for joining us today. We are very pleased with our first quarter results, which proved to be another strong quarter. Wishpond achieved revenues of $5.6 million in Q1 2023 representing a 38% increase over Q1 2022, driven by the company's continued focus on organic growth and increase in sales activity and new product introduction. I'm especially excited with the launch of our new Website Builder, which is powered by generative artificial intelligence, AI technologies, and was released in Q1. The use of AI technology is rapidly changing the digital marketing landscape and Wishpond is at the forefront of utilizing these new innovations to provide small businesses with new advantages against larger competitors. We are actively working on developing additional AI-powered marketing tools, which we intend to launch in the coming quarters. Additionally, as part of our continued cost reduction initiatives we launched in 2022, we continue to monitor our costs and with the intent to optimizing operations and achieving cost savings synergies. As a result, the company was able to achieve positive adjusted EBITDA in Q1 2023 of $209,000, an increase of 147% compared to the same period last year. Our commitment to having a focused mindset and realizing cost efficiencies while still achieving growth is what has permitted us to consistently generate positive adjusted EBITDA. Our outlook continues to look promising for 2023 with increasing sales, positive adjusted EBITDA and improving margins. We continue to experience increasing demand for our products and have not witnessed any slowing down or negative impact due to external macroeconomic conditions. We expect to continue growing rapidly as our sales pipeline remains robust, and we continue transitioning to bundled product offerings to our customers. I will provide additional details on our outlook later on the call. But first, I would like to turn it over to our CFO, David, who will review the financial results for the first quarter. David?

Thank you, Ali. I'm pleased to report that we had very strong Q1 results for the 3 months ended March 31, 2023. Our first quarter 2023 results are as follows: Wishpond achieved quarterly revenue of $5.6 million during Q1 2023 compared to revenue of $4.1 million generated during Q1 2022, an increase of 38%. Revenue growth was primarily driven by organic growth resulting from stronger product demand and increase in sales and marketing activities and new product introductions. Wishpond's small decline in revenue of 5% from Q4 2022 to Q1 2023 was not unexpected and is due to seasonality in our business. Last year, we experienced a significant decline in revenue from Q4 2021 to Q1 2022. In comparison, the seasonal impact was much less in Q1 this year due to the acquisition of Viral Loops last year and the launch of Propel IQ. Wishpond achieved gross profit of $3.7 million in Q1 2023 compared to $2.5 million during Q1 2022, representing an increase of 45%. This was driven by an increase in overall revenue. Wishpond's gross margin percentage in Q1 2023 was 66% compared to 62% in Q1 2022. The gross margins were within the company's historical range of 65% to 70%. The United States remains our largest and fastest-growing market, generating 75% of our total revenue in the quarter, with approximately 10% and 15% of revenue generated from Canada and the rest of the world, respectively. During Q1 2023, Wishpond achieved positive adjusted EBITDA of $209,000 compared to an adjusted EBITDA loss of $441,000 in Q1 2022. The improvement is primarily driven by higher revenue and improvement in gross margins and our cost optimization efforts over the past year. We continue to have a clean and healthy balance sheet. As at March 31, 2023, Wishpond had $1.9 million in cash and short-term investments and the company has no debt. The reduction in cash balances was caused in part by payment of earn-outs for businesses acquired in 2022, investments in the business and changes in working capital. Wishpond has a $6 million secured revolving operating line of credit facility agreement with National Bank of Canada's Technology and Innovation Banking group, which remains undrawn as of today. In summary, Wishpond remains in an extremely strong financial position with a clean balance sheet and growing profitability. Based on the company's performance in Q1 and growth momentum, we are expecting to continue delivering strong results through the rest of 2023. This concludes my financial update, and I will turn the call back over to Ali.

Thank you, David. I would now like to share with you some recent business highlights. On February 28, 2023, the company announced that Gartner Digital Markets, one of the world's leading platforms for business software review and research presented Wishpond with 5 industry awards recognizing Wishpond's popularity and performance in the marketing technology space. Wishpond received awards and recognitions from GetApp, Capterra and Software Advice, which operated by Gartner Digital Markets. On March 9, 2023, the company announced the launch of Propel IQ, the company's next-generation marketing technology platform. Propel IQ is the most extensive solution offered by Wishpond to date, combining Wishpond's award-winning software with its recent acquisitions to create one connected platform. In addition to Wishpond's lead generation, e-mail marketing, automation and marketing technology solutions, Propel IQ includes SMS marketing from Winback, referral marketing from Viral Loops and sales engagement software from PersistIQ, all integrated together into 1 platform. The Propel IQ businesses can manage the complete customer life cycle on 1 platform, eliminating the need to pay for multiple marketing and sales [teams]. On March 30, 2023, the company announced the launch of its new Website Builder powered by generative AI technologies. With a Website Builder, small- to medium-sized businesses can launch a website within minutes using AI technologies, positioning Wishpond to disrupt the website building process. Wishpond's AI-powered website builder is now available to customers using Wishpond's next generation Propel IQ. Given Wishpond's management's successful acquisition track record, we are once again looking at acquisition opportunities and building our acquisition pipeline, which consists primarily of small tuck-in acquisitions. Wishpond has demonstrated a disciplined capital allocation strategy, having successfully completed 6 acquisitions since the company's public listing in December 2020. Our acquisition strategy has been to do tuck-in acquisitions of marketing technology companies that offer complementary product solutions to small-, medium-sized businesses. Our acquisition target have all been companies that can benefit from our sales and marketing expertise and their products and solutions offer great cross-selling opportunities for our core Wishpond customers. Our acquisition strategy has worked to date. As this has added tremendous functionality to our product offering as well as complemented the company's organic growth very nicely. [ Relevant ] to that, on May 3, 2023, the company announced that it completed the acquisition of certain assets of Essential Studio Manager, ESM. ESM is a provider of business management software, including invoicing and customer relationship management solution for small businesses in the services industry. ESM is expected to be integrated with Wishpond's Propel IQ platform this year, and we will provide updates in the coming quarters. Wishpond's customers using Propel IQ will then be able to access contract signing, invoicing and access other CRM functionalities from one single platform. ESM brings over 150 customers who are currently being onboarded to Wishpond family, and we are currently in the integration process for ESM operations. We expect the integrating and technology integration with Wishpond's Propel IQ platform in the second half of 2023, and we'll provide further updates in the coming quarters. Management is very optimistic about the company's growth prospects, and I am pleased to share Wishpond's key goals for 2023. Number one, increase monthly recurring revenue through both organic and inorganic means. Two, scale the size of the sales team to help achieve the company's organic growth profile. Three, remain adjusted EBITDA profitable by balancing growth with increased positive cash flow from operations. Four, invest in research and development so that we can continue to launch new AI-powered products and services to increase long-term value for our clients. Five, leverage the Propel IQ platform to further accelerate the company's growth, improve margins and increase customer retention and long-term customer value. Wishpond's outlook for Q1 2023 and heading into 2023 remains strong and positive. Wishpond's performance is positive across all of its product lines and for the entire company as a whole. We believe that Wishpond is well positioned for continued growth and profitability. Wishpond expects to achieve record revenue and cash flows in 2023. This is driven by organic growth from ramping up sales of the company's new Propel IQ bundled product offerings, increasing the size of its sales team and new product introductions. Wishpond continues to experience strong performance across all of our businesses with robust demand for our products. We expect organic growth this year to be in line with the historic range of 30% to 40% per year. We continue to sign up more new clients every day. We are getting very positive feedback from customers on our Propel IQ platform. However, with the training of new sales staff and transitioning sales personnel to the bundled Propel IQ platform, we expect some softness in Q2 and greater revenue growth to occur in the second half of the year. The transition of sales staff to [indiscernible] new Propel IQ platform takes time as sales staff familiarize themselves with the product and value proposition. We expect to be adjusted EBITDA positive in each quarter going forward, in line with the company's focus on profitable growth, Wishpond will continue to scrutinize all discretionary expenditures across this organization with the intent of optimizing operations and achieving cost saving synergies. With the launch of Propel IQ, we are expecting higher customer retention rate going forward. Clients are increasingly signing up for annual 12-month terms. Propel IQ improves the stickiness of our platform and aids in retaining customers for longer periods of time. The bundled pricing of Propel IQ is expected to result in greater customer satisfaction, less churn and consequently higher long-term value per customer. Wishpond will continue to invest in research and development efforts to launch new AI-based marketing tools and products. The use of AI technology is rapidly changing the digital marketing landscape and Wishpond is at the forefront of utilizing these new innovations to provide SMBs the new advantages against larger competitors. We've already launched 2 AI-based products with Braxy and our Website Builder, and we're actively working on developing additional AI-powered marketing tools for our Propel IQ platform. We are in a very fortunate position to be able to lead the charge in applying AI to marketing applications and to provide our clients with powerful tools that will help them grow their businesses more efficiently and profitably than [where they were] possible in the past. Wishpond is recession resilient. The business has felt no impact due to recession, inflation, supply chain or other macroeconomic effects. In an economic slowdown, companies often reduce or freeze their budgets. However, they still need to acquire new customers to keep their business afloat. And so businesses find value in Wishpond's all-in-1 consolidated software platform, which costs a fraction of all the individual products [indiscernible]. Further more businesses keeping a close eye on their costs and looking to cut costs, find Wishpond as a more effective alternative than internal marketing resources. Wishpond is an effective and affordable alternative that is thriving in a recessionary environment. Wishpond can continue to fund the growth of it's sales team and new product launches from cash flow from operations without having to raise additional equity or debt capital. The cash flows generated by the company will continue to be reinvested in the business and allocated in a disciplined manner, which may come in the form of future acquisitions, share repurchases or [indiscernible] organic growth. In closing, I want to reiterate that Wishpond is an elite software company with profitable growth. Technology companies are known to burn a lot of cash for many years before becoming cash flow positive. It is rare to find a software company of our size that is generating positive cash flow from operations, it's rapidly growing with 30% to 40% organic growth and maintains gross margins of over 65%. Wishpond is a unique, high-growth profitable company, and we remain committed to delivering profitable growth in the future. Wishpond today is in an enviable position with a growing customer base, increasing revenue, broadened product offerings, clean balance sheet and positive cash flow from operations. I'm extremely proud of what we have accomplished, and I'm excited with our future plans. Finally, I want to thank all the employees at Wishpond with hard work continue to elevate the company to a higher level. We want to thank our customers who rely on us to help them with their digital marketing needs. Also, I'd like to thank all of you for joining us on this call today. We look forward to providing an update next quarter. And with that, I will now hand it back to Jordan for questions.

With that, we will now open the call to questions. Just a reminder that questions will be limited to analysts only. The first question is from Jason Zandberg of PI Financial Okay. Please go ahead, Mr. Zandberg.

Perfect. Can you hear me okay?

Yes.

All right. First of all, great quarter. Just wanted to just talk about your cash position. So I see that cash dropped slightly in Q1 and that we [explained] that, that was due to some earn-outs. What I wanted to ask is how confident are you that you can generate cash through the remainder of the year. knowing [full well], you do have a $6 million secured LLC to back you up, but just wanted to get your outlook in terms of cash generation for the remainder of the year.

Yes, for sure. Good question, Jason. So -- the cash drop, as you mentioned, for a number of reasons. One that I want to add a little bit more color on is deferred revenue, for example, at the end of Q4 was higher because we had some larger customers who prepaid for usage of the platform early. And in Q1, we didn't have that even though they were continuing with the services, but they weren't prepaying. So some of that deferred revenue you see coming down on cash collection wasn't as much in Q1. And the second element of it is earn-outs that we paid in cash, knowing that where we believe the value of the stock is, it didn't make a ton of sense for us to use stock for the earn-out even though we have that at our discretion. Going forward, what we see right now is that our free cash flow generation capability is quite strong. We are seeing that we are in a balanced space where I don't see in the rest of the year for us needing to tap into the line of credit for continuing operations. And I see that we are balanced and we're going to have continued -- increased cash flow put on the line. So right now, we don't have a concern with that. But obviously, we have the line of credit available as well. We obviously don't want to use that for operations, but use that for acquisitions or other things that might come our way. David, there anything you want to add?

Ali, I think you covered it off. Primarily the cash decline is due to working capital differences, deferred revenue in this case. A little more color in terms of the earn-out. The good news is we've pretty much cleared all the earn-outs. There's literally only one quarterly installment left that we intend to pay -- that we have to pay in July. So after that, we're free and clear, at least with the current 6 acquisitions, that we've made. So again, just in terms of looking into the future, we don't expect earn-outs to be use of cash.

Fantastic. If I could ask another question, just more housekeeping. I just wanted to get a number on sales execs at the end of the quarter. How much -- how many did you hire during Q1, that would be great.

I don't have an exact number, but I'll answer it in a way that hopefully gets to the to the heart of your question. So we haven't really aggressively increased the size of the sales team because we've been in this transition from selling point solutions to Propel IQ bundled offering that we can see is becoming very successful when it's rolled out. Retention is much better, client happiness is great. We have been in that transition period, and our effort has been mostly on training and making sure that, that transition happens successfully. It would have been quite difficult to increase the size of the sales team at the same time that, that transition is happening. And I expect by end of Q2 for that to be completed and then we accelerate adding more people to the sales team in the remainder of the year.

Okay. Great. And if I could just ask 1 more question. Just in terms of the Viral Loops contribution in mid Q1, just trying to delineate the acquired revenue growth versus the organic revenue growth, if that's possible.

David, when was Viral Loop's acquisition completed?

So the Viral Loops acquisition was completed April 1 of last year. So we didn't have the benefit of that revenue in Q1 of last year. But generally speaking, we haven't really been breaking up the revenue of each of these divisions. And more so, Jason, looking forward, since we've actually integrated all of these in Propel IQ, more so, it's going to be a bundled sales. So breaking it -- I guess, especially going forward, breaking it out won't make a lot of sense.

I think what we do see, though, what we continue to see is that, that organic growth profile of 30% to 40% is still holding. So I think if you look back at Viral Loops, what their revenue was when we acquired them and subtract that or you can make certain adjustments to that, you'll see that close to 30% was [indiscernible] organic growth.

The next question is from Gabriel Leung from Beacon Securities.

just had some questions around the, I guess, the retraining of the sales staff around Propel. Ali, how is this being done right now? Is it being done sort of batches within the sales team? Or are they all doing it all at once and hopefully everybody is done by the end of Q2?

No, it has been cohorts. And so most of the training is already done. That's not really where the problem is or where the challenge is, is that after you finish the training, then you also have to do the ongoing coaching and make sure that people are successful. And a lot of people are now becoming successful, but it's still what you usually -- what we're seeing and what you usually see is that as you're transitioning, you [indiscernible] a little bit before people closing and all of those things get back to normal levels. So we're getting there. I think that's why I do expect by end of June for us to be there..

I'm just curious, you mentioned this being done in sort of cohorts. What sort of results or what have you sort of seen within, I guess, the first cohort that's done their training. What sort of results have you seen on the back of that. We've talked about Propel potentially resulting in sort of longer-term contracts -- I know it's obviously early, but any signs of success on that perspective?

absolutely. So for sure, we're seeing the contracts that are longer -- and for sure, we're seeing that the earlier accounting executives who've nailed it are quite happy actually with the product offering. It is really a no-brainer in terms of the value proposition and comparing it with any competitors in terms of the value, in terms of the cost, in terms of everything that is built into it. And their closing rate also is those who are [kind of a little bit] earlier, their closing rate and average deals as were comparable to what we had with the individual point solutions or what we call Wishpond 1.0. So we know that it works quite well. And then on the account management side, the other thing that is quite exciting is that it takes us less effort, less services help or less people help to manage these accounts. So it is a higher margin and better retention and longer-term contracts as well. It really gives us best of all worlds.

Any sort of feedback from potential customers in terms of pushback on the platform itself? Is there anything holding customers back from actually deploying sort of the full suite? Is it just really [indiscernible] cost thing?

No, I mean nothing more than usual but obviously, when you're talking to different people, they might have different reasons for going or not going ahead with the platform. But for most part, the reaction has been very positive. And the challenge has been whether it is portrayed the right way, and that goes back to sales training. So people who are properly trained and now off to par, their success rate is great and people really -- they get it. They look at it like, okay, wow, this is amazing. [indiscernible] everything I need. I've never seen anything quite like this anywhere else.

Got you. And I just want to clarify 2 points you made earlier, Ali. So you said because of the sort of the retraining transition, you might see a dip in Q2. Do you mean a sequential dip? Or do you mean a dip in the usual 30% organic growth?

So what we currently expect is that 2 numbers would be an increase over the current Q1 numbers. So no, I'm not talking about the dip over what we have. I think more than likely, it will be close to or similar to or in the vicinity of our Q4 numbers, which was $5.9 million. No, that's going to still go back to the growth, but I guess it's not going to be at the growth levels that we ourselves have set up for ourselves. And I think it's -- the way I would look at it is that we're revving up, right? Like you have to kind of sometimes rev up the engine and then you can accelerate, and that's what's going to happen in the second half of the year.

Got you. And just 1 last thing. Is your plan still to take your sales rep count to about 70 to 80 by year-end. So there'd obviously be a big push sort of in Q3, Q4 in terms of hiring?

That's correct.

And the next question comes from Neehal Upadhyaya.

Congrats on strong quarter here. With another quarter gone, has the onboarding of customers from legacy products to the Propel IQ platform gone as expected? And has there been any surprises in terms of resistance from the customers to transfer over?

I think some of the customers were transitioning over. Some of the customers, we might actually let them continue in the packages they signed up for because you have to remember that they had the certain pain points and needs and they might have come in with those expectations. And it's not always straightforward to say you signed up for this, here's another alternative and you migrate. We do that sometimes, we don't necessarily do that all the times. And we [indiscernible]. I think it's more important -- it has been more important for us to offer it to new clients than migrating existing clients and risk challenges that might come with that.

Got you. No, perfect. And then can you talk about [what] your plan on increasing hiring with the sales team? How long does it take from hiring an account executive until they are fully ramped up?

The training usually takes 2 to 3 weeks. And then after that, they're on the floor and start selling. In the first couple of weeks after that, they should have 1 or 2 wins under their belt. And really, by the end of the 3-month term, the probation period, we have a fairly good idea of how they're performing and they should start hitting their normal quotas that we expect from [indiscernible] .

Perfect. And then maybe if we can talk about the product road map here. In terms of other AI solutions, can you talk about what we can expect being launched in the coming quarters?

Yes, there's several things. I mean, one that we mentioned before is AI-powered e-mail responder that you go into your inbox, especially as a salesperson, and you have a whole bunch of e-mails that actually helps you respond to them and you don't have to spend so much time on every single one. It learns about your business and everything you've done. That's one that is quite interesting. We might do things related to AI-powered live chat. We're experimenting with it right now. There are also opportunities for us to help with generating the content of newsletters that go out with AI as well as generating the content of outbound e-mails as part of PersistIQ platform. And a lot of these functionalities, first, we do them internally for our own purposes and gaining efficiencies. And when we see that they're working really well, then we productize them. So we're doing a lot of those things already for our team or we're rolling them out for our team already.

Perfect. And maybe just a couple -- just two more from my end. With Propel IQ, has there been a shift regarding the size of the customer you're now able to track given that it is such a comprehensive platform?

Not yet because we're still going for the same ICP, ideal customer profile. And that has been the determining factor in terms of the size of it. But you're right. I think, ultimately, this is a platform that scales quite well. So we talk about small, medium-sized businesses because they have specific needs. They're under served. There are So many of them, and we have a profitable way of onboarding them. But really, ultimately, nothing is stopping us from selling to larger customers either. And for sure, that will be part of what we're going to explore. And what's really interesting about this and our pricing with Propel IQ is that the pricing and our revenue generation often scales with that, right? So if it starts with $1,000 upfront fees and $300 a month, and now you're a larger business that has instead of 1,000 leads in the database on Wishpond, you have 50,000, you might end up paying us $2,500 a month because of that lead overage, right? Now you start sending invoices to your customers and people start paying for those invoices. Now a percentage of that payment is through the ESM platform [percentage of] that payment is going to come to us as well. So increasingly, we're going to work on usage based and success-based pricing as well, with Winback the same as well. One of the things that we're experimenting with right now is, well, let's collect the percentage of the revenue that is recovered like shopping cart abandonment and all of those things. If someone actually ends up making $10,000 extra revenue through the use of Winback, well, we'd like to make $1,000 of that. And so those are some of the things that we're working through and makes it more interesting to serve the mid-level of the market as well.

That's fantastic. That's great color, Ali. I appreciate that. And then 1 last 1 from my end. Can you talk about your M&A pipeline. What type of product gaps are you trying to fill through M&A? And then maybe some of the characteristics beyond economics of the business that you're looking for because it's kind of clear with your ESM talking that there might be other things than just scale that you're looking for?

Yes. So we're becoming more active and looking at acquisition opportunities. I think there's a few things in terms of acquisitions that we're looking for. Initially, at least right now, because our own cash balance is lower than it was before, it's going to be more smaller tuck-in acquisitions, similar to ESM or more cash-rich businesses that we can then take on debt, and it makes sense to take on debt to make those acquisitions. The other element would be, I think the market conditions, we don't know how long it's going to stay depressed like right now. But at some point, I think whether an inflection and the price of the stock makes sense, then we would like to do a race and do more aggressive acquisitions as well so that the path from here, let's say, I don't know, $23 million revenue run rate or whatever to $100 million becomes the shorter one and more faster accelerated growth. So that's kind of the way we're looking at acquisition strategy. And as we add more cash from operations, which we're very actively working on improving free cash flow generation, then we can actually use internally generated cash flow for acquisitions as well.

Thanks. The next question is from Neil Bakshi of Canaccord.

Ali and David, congratulations on the results. Just a first question, just to clarify, the earn-outs that will have to be paid, David, was it about $600,000 or so then that be paid out in July in the past?

So specifically in Q1, we paid $371,000. If asking about this current quarter, we actually did an installment earn-out to Viral Loops that was about $330,000. So if you're totaling the 2, yes, it adds up to $700,000.

Okay. Great. And then just a question with respect to, I guess, the ESM acquisition, Nice to see the kind of small tuck-in that fits in well with the product portfolio or looking to build the Propel lQ. Just wondering if you could provide more kind of detail on, I guess, the rationale of prioritizing ESM versus other deals in the pipeline? Was it kind of a pain point you saw internally from talking to customers. Just maybe walk us through a little bit more about why ESM now.

Yes. The reason ESM was interesting was that we were looking for this type of functionality. So back office functionality, invoicing, payment links, that kind of thing. And the reason it is important is that we see that already with ESM, their churn is really low because it's the kind of thing that when it's embedded into your business, that's your back office. You don't want to go anywhere. So that was important. But also very important is that one of the points I made earlier I think increasingly into the future, our revenue is not going to be just from subscriptions but also usage-based access-based fees. And ESM with sending more invoices or percentage of the payments received through those invoice contract timing, all of those things really contributes to it. And also, it is a local service-based kind of business that is not a category of businesses that we have a huge penetration with, and this actually makes it stronger and possible for us to gain more customers in that vertical. So all of those things, and we were able to find an opportunity that just price-wise made sense, technology made sense, it just checked all the boxes.

Great. I appreciate that. And I guess just 1 more question before I pass the line. Just with respect to kind of the organic growth outlook in this kind of macro environment, I understand it hasn't been affected. So just to clarify, you're seeing potential deal cycles in Propel IQ to this point that's actually been just as robust or quick as the current or the legacy platform. I guess just wondering, is that alongside your expectations or a bit ahead of expectations when you first launched Propel IQ back late last year?

I think more or less consistent with our expectations. We knew that is a very strong offering and something that is quite compelling to people. But when it comes to change management and training and all of that and humans involved, yes, I think it always takes longer than we expect. So that part of it, I would say, we wish it would have been even faster. But we plan for what we're seeing right now in this kind of period of transition.

Right. One more question just came up. So I'm thinking about the expectation for record cash flows for this year. I assume on an annual basis. If you look back in the last couple of years, some pretty strong cash flow generation on an annual basis. But let's say, $1 million was what you generated last year. Is it fair to expect then on a full year basis that CFO should exceed around $1 million or so? Or how should we look at it compared to I guess, 2020 was a real standout year for Wishpond?

I'll say a couple of things, and then David, actually, I think, would be better positioned to answer that question. But what I would say is that one thing we didn't really touch on much, we touched on a little bit in the slides, was cost savings. Last Q2, we did a lot of effort, $1 million of cost savings annually. And right now, over the past 1.5 months and even continue to now, we're continuing to do a lot of those efforts as well without loss of functionality, optimization, tightening things up, consolidations, renegotiating contracts, all of those things. So immediately, we're seeing our cash flow generation capability has improved quite a bit. And I don't think some of what we're going to see, we have to wait for Q3 or Q4. I don't think so. I think we're going to see some of the results even in Q2. But David, please correct me if I'm wrong or add any other color that you might want to.

Sure, Ali. No, absolutely correct. So we have focused a little bit more on cost savings, Neil, more recently, like April and May. In addition to that, I mean, there's this 2 levers, right? I mean, there's the revenue lever, that will help you generate more cash flow. And then there's a cost lever that also if you save on your costs, you're going to generate more cash flow. So Ali kind of touched on the cost saving element of that. And on the revenue line, I mean, if you go from $5.6 million and we grow from there, if -- just very simple, look, if you take a look at our quarterly growth in 2022, right, from Q1 all the way to Q4 and you look at the cash flows if we start spinning off each quarter as the revenue grew, our margins also increased bottom line improved, and we expect that to happen this year as well. So we expect Q3 and Q4 to start building and all the foundation we built in Q1 and Q2 with Propel IQ. And then you're going to see more cash flow from operations spinning up from revenue growth in Q3 and Q4.

We definitely currently expect cash flow generation this year to be record numbers and adjusted EBITDA also to be record numbers. So I don't see a reason to doubt that [indiscernible].

And our last question is from Christian Sgro of Eight Capital.

Ali and David, congrats on a stable Q1 at the start of the year. The first question I'll ask on is on Propel IQ. Do you go to market with any point solutions anymore? Or do you go to new customers with the full Propel IQ platform, and it's kind of an a la carte. That's the way I have come to think of new customer conversations. And then the follow-on there is, is it almost entirely monthly or annual contracts like getting them onto a subscription program right away. It sounds like the offering and pricing model is a little dynamic, which is good. But maybe just unpack what's commonly sold and what customers subscribe to?

Yes. I mean majority of what we're increasingly selling is the bundled offering for Propel IQ. But still, we do have some point solutions that are being sold based on customer needs or based on inbound interest that might come, right? If someone is finding, let's say, Winback [indiscernible] marketplace and all they want is just Winback, we'll still sell them that. But it's becoming -- all of those point solutions are becoming smaller part of our sales efforts. So yes, and generally, we are pushing for annual terms, and that's actually for Propel IQ's requirement. We're not doing anything below the 12-month terms. And that's working well . Now with the AI-powered Website Builder, now we have an opportunity to also use that as a premium offering to get people in the door and playing with the platform. And then when they're more serious and they want more functionality, which is Propel IQ, then we would use that as a lead generation channel for us and get them on to [indiscernible] rest of the platform [indiscernible].

That's great. That's a lot of helpful context, Ali. Similar question, the customer supports, our training implementation, any hands on where, I guess, the legacy products would have had a fully managed solution, but how do you price out or sell your services now. [because] they're tiered? We'll get you off the ground all the way to unlimited support? Like how do you price and sell that to customers?

So the base package is that $1,000 upfront fee is for the onboarding, and that's where we're most heavily involved, whether it's rebuilding their website on Wishpond or installing things or copy of the content or imagery, all of that. That's where we're really involved. And then after that, when we pass it on to them, we have a lot of -- we want people through the platform and how to use it, and we give them a lot of resources like training videos and courses on Wishpond Academy and all of those things. And then if they want, they can always come to us, whether that onboarding specialists or someone from our support team to help them. So that's our involvement ongoing is quite limited from that point of view. But what we do still do in the first few months of someone being on Propel IQ is still touch base with them, at least on a monthly basis, kind of as a marketing consultation, okay, how are you using the platform? Do you have any questions? These are some opportunities I had identified for you and then pass that on to them. So that's 1 part. The other element of it is that if someone wants to use a service on the marketplace and say, "All right, this is great, but I still want you guys to actually help me coming up with outbound sales methodology for my business, can you do it all [indiscernible], then yes, we have these, what we call flex plans that generally would be for 3-month terms or 6-month terms. So we don't want for the annual term. We actually -- we want that as a bit of a [touch] to help them and then pass it on to them again that could be as low as an additional $300,000 a month or as high as an additional [$1,500] a month, depending on what their needs are. And we can help them through that period. But ultimately, they are in the driver's seat and they can decide to what level they want those services and we're there to support them.

One stop shop, which is the original value prop, it's all there.

There are no further questions. So I'll pass the call back to Ali Tajskandar for closing remarks.

That looks good. Thank you very much. Okay. So in closing, I want to thank everyone once again for joining our call. Thank you to the analysts for your insightful questions and for your continued coverage and support. Everyone, please stay safe and healthy. We look forward to providing more updates this year. Thank you.