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

Thank you everyone for joining us today, and welcome to Wishpond's 2024 Fiscal Second Quarter Financial Results Conference Call. My name is Paviter Sangha, Investor Relations, and joining me on the call today is Ali Tajskandar, Chairman, Founder, and CEO of Wishpond; and Adrian Lim, the company's CFO. This call is being recorded. We will be having a question-and-answer 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 analysis from sedarplus.ca. 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 those laws. Please refer to today's press release and in our management discussion and analysis for a disclosure of risks and uncertainties. We provide forward-looking statements solely for the purpose of providing information about management's current expectations and plans relating to the future. We do not 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 is required by law. We use terms such as adjusted EBITDA, annualized revenue run rate, monthly recurring revenue on this conference call, which are non-IFRS and non-GAAP measures. For more information on how we define these terms, please refer to the definitions set in our management discussion and analysis. And with that, let me turn the call over to Mr. Ali Tajskandar, Chairman and CEO.

Thank you very much, Paviter. Good day, everyone. We truly appreciate everyone for joining us today. On today's call, I will first provide some general commentary followed by our CFO, Adrian Lim, who will provide a financial summary of our quarterly results as well as additional details on our cost optimization efforts. I will then come back and provide some details on the progress of our latest product SalesCloser AI, followed by a look at our business outlook for the rest of the year. I'm excited to report that Wishpond achieved its highest ever second quarter revenue and adjusted EBITDA in the company's history. Wishpond achieved quarterly revenues of $5.8 million in Q2 2024, representing over $23 million annualized revenue run rate. This growth has been driven by the company's organic growth and successful market positioning. In the second quarter, we also maintained our streak of achieving positive adjusted EBITDA for eighth consecutive quarter in a row. The company achieved 9% adjusted EBITDA margins for the quarter and a remarkable 151% improvement in adjusted EBITDA when compared to the same period last year. This quarter, we were focused on improving our cost structure, profitability and cash flow generation. Our improvement in EBITDA and cash flow stems from the sustained momentum of our cost reduction efforts initiated earlier this year, coupled with the ongoing growth of our various product lines. Furthermore, improvements in various business operations have also driven significant efficiencies. As a result, we've seen improvement in cash flows and our gross margins, which have now grown to 68% in Q2 2024. I'm also pleased to report during the second quarter, we launched our new flagship product SalesCloser AI, a revolutionary virtual sales agent which leverages artificial intelligence to conduct sales calls and product demos. In the short time since launch, we have already seen SalesCloser's impact across multiple industries and use cases. As we roll out the platform more broadly, we expect it to be a key contributor in driving new growth for our business in 2025. The company's outlook for the remainder of 2024 is very promising, stable EBITDA generation and improving cash flows were significant focus for Wishpond in the first half of the year, and we anticipate further EBITDA expansion and improving profitability to continue in the second half of 2024. Our cash position is expected to improve by the end of the year as a result of our cost reduction efforts and because the company has completely paid out all of its earnouts related to prior acquisitions, which Adrian will discuss in further detail. We are confident in our ability to fuel the company's future growth through operational cash flow and our $6 million credit facility. I will provide additional details on our outlook later on the call, but first, I would like to turn it over to our CFO, Adrian, who will review the financial results for the year.

Thank you, Ali, and thanks to everyone for joining us on the call this morning. I am pleased to report that we achieved strong results in revenue, gross profit and adjusted EBITDA for the quarter ended June 30, 2024. Wishpond achieved quarterly revenue of $5.8 million during Q2 2024 compared to $5.6 million in Q2 2023. Revenue growth in the quarter was largely affected by a decline in spending from our large legacy customer. The revenue from the legacy customer reduced from approximately $419,000 in Q2 2023 to $159,000 in Q2 2024. This decline in spending is not attributable to Wishpond Solutions and Services, but instead issues in the customers on business. Despite this decline in our large legacy customer, we were still able to grow our overall revenue on a year-over-year basis. The continued decline in spending from our large legacy customer has resulted in increased diversification of our revenues. Currently, Wishpond has no customer contributing more than 5% of its annual revenue production. Wishpond achieved gross profit of $3.9 million in Q2 2024 compared to $3.7 million in Q2 2023, representing a 7% increase driven by an increase in overall revenue. Wishpond achieved a gross margin percentage of 68% during Q2 2024 compared to 65% in Q2 2023 and in line with the company's historical performance. During Q2 2024, Wishpond achieved adjusted EBITDA of $542,000 compared to $216,000 in Q2 2023, an increase of 151%. I will now provide some additional color in our cost optimization efforts. Our cost optimization program was initiated at the beginning of 2024 and included a reduction in overall headcount, optimization of vendor costs and the use of AI technologies to improve internal processes. Cash flow from operations for the 6-month period ending June 30, 2024, was positive $54,000 compared to an outflow of cash flow from operations of $431,000 for the 6 months ended June 30, 2023. Wishpond has achieved persistent revenue growth while continuing to reduce expenses. We had an approximate 10% year-over-year reduction in the company's overall headcount compared to Q2 of last year. Despite the reduction in headcount, we achieved 9% year-over-year organic growth excluding the decrease in revenue of our large legacy customer. Our reduction in headcount and increase in organic revenue has resulted in an increase in the company revenue per headcount. During Q2, Wishpond realized a 14% year-over-year increase in revenue per headcount compared to the same period last year. We're very proud of this accomplishment. Furthermore, our cost structure has improved significantly as we head into the second half of the year. In the first half of the year, Wishpond incurs several costs such as major audit and professional fees, compliance costs and tax expenses. These costs are not repeated in the second half of the year and are now mostly behind us. This positively positions us to see improvement in our cash flows as we continue to expand and optimize our operations. Taking a look at the balance sheet. As at June 30, 2024, Wishpond had $1.1 million in cash and debt of $1.2 million from our bank credit facility compared to cash of $1.4 million and debt of $995,000 as at December 31, 2023. The reduction in cash net of credit facility balances was caused in part by earnout payments for previously acquired businesses, investment in the business and changes in working capital. Wishpond also renewed its $6 million credit facility with the National Bank of Canada on August 1, 2024. Although we are expecting our cash balance to improve in the latter half of 2024, we also have undrawn capacity on our credit facility if needed in the future. Wishpond has had solid monthly recurring revenue, and we have very good visibility of revenue and cash flow. The company is able to continue growing comfortably from its cash flow from operations without the need for any additional equity or debt capital raise. As of the end of second quarter on June 30, 2024, the company had 58,454,170 fully diluted securities issued and outstanding. I'm also very pleased to announce that we have successfully completed all outstanding earnout payments related to our previous acquisitions. With no more obligations to pay these earnouts, we anticipate an improvement in our cash flows going forward as the funds that were previously allocated to these payments will now be redirected towards funding our core business operations and growth initiatives. This shift in cash flow management will enhance our liquidity and provide greater flexibility in executing our strategic objectives. Looking at the graph, you'll see the amount of cash that was being disbursed for earnout considerations over the past year. As you can see, there's been a steady decrease in these payments reflecting the gradual fulfillment of our earnout obligations. The most recent data point shows that we are now at $0 in earnout payments, signaling that we have fully met all of our prior earnout commitments. This concludes my financial update, and I'll turn the call back over to Ali.

Thank you, Adrian. Before I talk about our outlook, I would like to provide an update on Propel IQ and SalesCloser AI. First, Propel IQ. Last year, we announced the launch of Propel IQ, Wishpond's next generation marketing technology platform. Propel IQ is our most extensive platform offered to date, combining Wishpond's award-winning software with its recent acquisitions to create one connected platform. With Propel IQ, businesses will be able to manage the complete customer life cycle in one platform, eliminating the need to pay for additional marketing and sales tools. There are 3 key attributes that we like for Propel IQ. One, we expect Propel IQ gross margins will exceed 80%, which is a large improvement from the company's traditional gross margin range of 65% to 70%. As we continue to grow our customer base on Propel IQ, we expect Wishpond's total gross margins to trend upwards as a result. Two, the customer churn rate for Propel IQ customers is up to 40% lower compared to customers of other Wishpond solutions. Three, customer lifetime value or LTV is over 20% higher for Propel IQ than customers of other Wishpond solutions. Propel IQ is the future for Wishpond, and we believe that the platform will give us deeper integration into the client's business and marketing systems, increasing our customer retention and long-term customer value. Moreover, through the Propel IQ platform, we expect to further increase Wishpond's margins. I would now like to talk shortly about our AI initiatives. The use of AI technologies is rapidly changing the digital marketing landscape, and Wishpond is at the forefront of utilizing these new innovations to provide SMBs with new advantages against larger competitors. I believe that artificial intelligence technology truly has the potential to disrupt much of the way people and businesses operate, and I firmly believe many AI applications are here to stay and will revolutionize the marketing industry. Wishpond has launched several AI tools for marketing and sales, including the AI website builder, sales email AI, Braxy's AI platform and our most recent launch, SalesCloser AI. These components are a part of our expanding AI product suite, which represents our vision of a comprehensive suite of end-to-end marketing, sales and customer service-related AI powered marketing tools tailored for our Propel IQ platform. These tools are being crafted to provide an automated end-to-end marketing pathway, seamlessly guiding users from lead generation to sale closure and thereafter to customer support and service. By leveraging our automated tools, clients can efficiently scale and nurture their businesses in a cost-effective manner, thereby fostering growth and success. These are just some of the exciting developments that are taking place at Wishpond. We're in a very fortunate position to be able to lead the charge in applying AI to marketing applications as to provide our clients with powerful tools that will help them grow their businesses more efficiently and profitably than was ever possible in the past. Moving on to SalesCloser AI. SalesCloser AI is an AI-based platform that acts as a virtual AI representative and can engage in conversations and presentations in real time through various meeting applications. It can deliver personalized round the clock sales calls and product demos 24x7 to engage leads, close deals and deliver insights in 10 different languages. SalesCloser can also be adapted to use across a diverse range of industries such as software/SaaS, professional services, financial services, education, travel and hospitality, insurance, and more. Once a customer provides Wishpond with a relevant knowledge base for upload, the custom trained AI and conduct sales presentations tailored to that business and can manage the entire sales process from discovery to close with minimal need for human intervention, as a result, the platform allows businesses to automate tasks, scale their sales team and sell globally, all with detailed analytics to enable continuous improvement. SalesCloser is a powerful tool that can transcend the historical constraints that have long plagued SMBs, particularly in the realm of sales. These encompass language barriers and time zone disparities when dealing with international clients as well as the scarcity of time and sales personnel available to commit to sales meetings. Previously, these challenges often led to missed opportunities or slower growth. However, SalesCloser empowers businesses to automate these sales processes, effectively overcoming these obstacles and enabling seamless sales interactions. Our Monthly Recurring Revenue or MRR for SalesCloser is also higher than our current Propel IQ product offering. We believe SalesCloser will have a positive impact on our MRR in the future. Wishpond has made significant progress with SalesCloser since its launch at the beginning of April. While it's still early days, the feedback from our initial customers on the product has been incredibly encouraging. SalesCloser has proven its ability to adapt to different customer applications. Through our beta program, we were able to successfully identify certain ideal customer profiles where SalesCloser was making significant impacts in customer businesses. These customers were utilizing SalesCloser in 4 main ways: sales outreach, lead qualification, customer service and live virtual product demos. Customers using SalesCloser for sales outreach were able to make outbound sales calls to their potential leads. This is exciting for businesses using SalesCloser as they will be able to reduce their hiring cost as well as guarantee consistent quality in all of their outbound sales outreach. SalesCloser can also be used effectively for lead qualification. Typically, businesses will have sales or business development representatives that are hired to qualify potential leads and ensure they are the right fit before handing them off to a salesperson. Our customers were able to successfully use SalesCloser as a virtual sales development rep to conduct the qualifying round of questions. Customer service is another avenue where SalesCloser has proven to be highly effective. By providing the AI agent with the necessary knowledge base, customers can have SalesCloser accept inbound calls and answer questions that normally would be answered by front desk or sales associate. Finally, SalesCloser has the power to conduct live presentations and demos over Zoom video calls. This has been successful for our software and SaaS customers in particular as those customers have product demos that are normally carried out by salesperson or account executive. Now that we are live, we are able to target specific vertical markets where SalesCloser can make the most impact, such as auto dealerships, software companies, insurance companies, equipment sales and more. Our pipeline is starting to grow, and we're seeing that SalesCloser has broader appeal beyond the SMB market. In addition, we see an enormous opportunity to use SalesCloser AI for our own Wishpond sales. I'm pleased to announce that Wishpond has begun utilizing SalesCloser for its own purposes in lead generation sales development, and we have actually closed some sales of Propel IQ using a virtual SalesCloser agent with no human intervention. We have been using SalesCloser for handling overflow bookings from live human agents and for geographic areas that we don't currently serve very well. We are finding that SalesCloser could be a great addition to our sales team. The number of sales account executives has remained relatively stable since the beginning of the year. We remain focused on increasing the productivity and efficiency of our account executives while we implement SalesCloser to assist in our sales efforts. In the long run, this could result in substantial reduction in cost as we may not need to hire as many salespeople when ramping up our sales of Propel IQ. This is an extremely exciting possibility for us as it will allow us to expand hours of sales coverage and geographic regions where we can sell our Wishpond products. We're excited with SalesCloser potential to not only help grow our own sales, but also reduce our costs, thus further increasing our margins and profitability. We are on track to achieving all of our key 4 objectives for the year: one, accelerate organic revenue growth and increase monthly recurring revenue, MRR; two, achieve positive adjusted EBITDA in each quarter in 2024; three, leverage the Propel IQ platform to improve margins, decrease churn, and increase long-term customer value; four, ramp-up sales of new SalesCloser AI product. Wishpond's outlook for the remainder of 2024 remains strong and positive. We continue to be focused on improving profitability and cash flow in the second half of the year. Wishpond expects to achieve record revenue and adjusted EBITDA in 2024. This is driven by organic growth from ramping up sales of the company's new Propel IQ bundled product offerings and new product introductions like SalesCloser AI. Wishpond continues to experience strong demand for its products. I'm especially optimistic about the future potential of SalesCloser AI, which truly has the opportunity to be a game-changer for our customers. We expect to further improve adjusted EBITDA and cash flows in the second half of the year. In line with the company's focus on profitable growth, Wishpond will continue to scrutinize all discretionary expenditures across the organization with the intent of optimizing operations and achieving cost saving synergies. With the launch of Propel IQ and SalesCloser AI, we're expecting higher gross margins and lower customer churn rates 2025. 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 customer retention. Wishpond can continue to funds its growth and new product launches from cash flows 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, primarily in new product introductions and ramping up sales and marketing. In closing, I want to reiterate that Wishpond is an elite software company with profitable growth. Technology companies are known to burn lots of cash for many years before becoming cash flow positive. It is rare to find a software company of our size that is growing rapidly, maintains gross margins of over 65% and is also adjusted EBITDA positive. Wishpond truly 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 and positive EBITDA. I'm proud of what we have achieved, and I'm excited with our future plans. Finally, I want to thank the entire team at Wishpond whose hard work continues to elevate the company to higher levels. We want to thank our customers who will rely on us to help them with their digital marketing needs. Also, I'd like to thank you all for joining us on this call today. We look forward to providing an update next quarter. I will now hand it back to Paviter for questions.

That will now open the call to questions. Just a reminder that questions will be limited to analysts only. The first question is from Gianluca Tucci of Haywood Securities.

Ali, could you maybe start by providing an update for us on how many customers are on Propel IQ today? And how the upsell process of SalesCloser AI is going?

Yes. Last time we reported a number of clients using Propel IQ, it was about 500. We don't have a more up to date number as of right now. But generally, our focus has not been on migrating existing customers, but focusing on getting new customers on Propel IQ. While we still have salespeople that are focused on selling the other point solutions that we've had in the past, increasingly more and more of our sales will push towards Propel IQ.

Okay. And then just secondly, I'm just wondering how should we think about sales growth in second half of the year, and if you could touch on any planned growth investments in sales. It doesn't sound like there's going to be much, but could you just touch on expectations for the second half against the first half?

Yes. So I mean, we're always active on making sure that we grow and continue to increase our MRR. So that's not changed. I think the difference might be that we are very focused on profitable growth, responsible growth and make sure that we do more with less. So in practical terms, it means that we're not going to be adding account executive sales resources at the pace that, for example, last year we were adding. Instead of that, we're going to -- and we already are really double down and focus on helping the current salespeople, account executives we have, yes, successful as possible and drive higher average deal sizes, higher closing rates. And we believe with that, we can have very impressive growth coming from the existing team. And then some of the efforts that are underway, and we alluded to that earlier, is using SalesCloser to further ramp up and increase the opportunities. So I could see in the future, we might not need to add as many sales resources to have substantial increase in our sales because SalesCloser can do some of the qualification and then each of our account executives would actually get more opportunities that they can work with.

That's good color. And then just lastly for Adrian, perhaps, your OpEx was noticeably lower in Q2 against Q1. Obviously, the headcount cuts to explain that. But is this a new baseline to model from? Or is there some more cutting to be done in the second half?

Yes. Thanks for the question. So we made a lot of cost optimizations in Q2 2024. We expect that to become the baseline for us. Of course, we're going to expect some increases correlated with growth as well. We have increases in revenue. We'll see some increases on the OpEx as well. But a lot of those cost optimizations that we've had in Q2 2024 are permanent cost reductions. So we do expect that to maintain as a stabilized cost basis, and then we're expecting to see continued growth in our adjusted EBITDA and adjusted EBITDA margins.

The next question is from Doug Taylor of Canaccord.

Let me just follow up on Gianluca's question around the sales, sorry, Propel IQ penetration. I know you're not updating the 500 customers or users on a monthly ARR. But I think you've also previously said about 10% of your of Wishpond's customer base was, at that point, Propel IQ. And so is there -- can you update that figure or give us a sense of the directionality of that particular statistic? Because it would help us to both understand the upside potential and cross sell potential, but also to help us decompose the gross margin expansion profile.

Yes. Unfortunately, I mean, they're really 2 sides of the same coin, so I don't have updated numbers on that. I think also the other part about it is that even though Propel IQ is a big part of our growth, we still have sales team members that are focused on, let's say, Invigo focused on the medical field or on Propel IQ -- PersistIQ focused just on the B2B businesses. And because of that, they're also continuing to bring new businesses. So as a percentage, I don't have an updated number. I think directionally and probably more in the next year than right now, we're going to see Propel IQ become larger and larger percentage. I think, overall direction of the company is consolidating and have fewer of the silos and have the same one sales team with the same product offering. And then based on who they're talking to, they'll decide what parts of the platform it might make sense to include in the demo, but still they're going off of the same playbook. So that means that over time, all of our sales will be Propel IQ, but we're not quite there yet.

Shifting gears to the SalesCloser AI product, a lot of positive data points and case studies you spoke to about the customer interest in that product, and you've identified it as a key driver for 2025 revenue growth. I guess my question is, what is it about the pipeline dynamics or the customer response to that product that gives you confidence and visibility in being able to convert that pipeline into growth next year?

Yes. We're seeing a few things. One is that, we've always believed that is a very exciting product, a very useful product, and now we're seeing our customers say the same thing. We see the -- in the demos there's a lot of excitement. We are also seeing more and more partnership opportunities or channel sales opportunities that we're working on -- actively working on related to SalesCloser. The other part of it that I think is also key is very important in the growth of SalesCloser is that up until now, we were kind of still in that phase of, let's nail it before we scale it. Let's make sure the use cases are handled well. Let's make sure post sales fulfillment, customer success, those things are in the place that they need to be. Now we're kind of getting to the phase where we're ready to actually train all of our account executives to sell SalesCloser, not just a dedicated or a few dedicated account executive selling SalesCloser. Because, basically, anyone who's using Wishpond, whether its Propel IQ or is any of our subsidiaries could use SalesCloser. Anyone who receives incoming calls, support inquiries who has sales calls, makes outbound calls, has training calls, Zoom calls, which basically means all businesses. So any of the businesses that are coming to us would potentially take advantage of SalesCloser. And going from 1 or 2 salespeople focused on selling SalesCloser to, I don't know, 35, 40 salespeople immediately that is going to be a huge opportunity. It's going to be a huge upsell opportunity for us. It's going to be a huge stickiness opportunity. So it gives us a lot of exciting opportunities to work with.

Maybe one last question then related to that. The question is really about the market that you serve and how you describe the purchasing behavior in that end market because that's certainly shifted over the last couple of years. So where do we stand now from your perspective in the SMB market?

Yes, so I think there has been ups and down in the SMB market in terms of interest and all that. And I think one of the things that we've seen is that salespeople need to be that much better at clearly communicating the value proposition, clearly showing successes. Sometimes sales cycles are slightly longer, especially if the demo is not done exactly up to par. So we've seen that, but not in a significant way. So what we see now, again, is more demand, more requests for getting demos of the product than we have salespeople availability, which we're hoping to alleviate with SalesCloser qualifying some of those leads, but we are again in that position. So that [Technical Difficulty]

Ali, your mic is cut out.

Seems like we may have lost him there...

Is it back now?

Yes.

It's back now.

Yes. So basically, what we're seeing with Propel IQ, and SalesCloser is we're bringing the value proposition that what large companies are doing with their digital marketing success, we're bringing it down and making it available to small businesses, and that is a timeless value proposition. We have all the pieces that they need in one platform. We've made it cost effective, and we actually help them with the onboarding. So that's something that it resonates with people. But they see that, they know that they need that, and because of that there's continued interest.

Next question is from Gabriel Leung of Beacon Securities.

Just a couple of follow-ups. Just going back to SalesCloser for a second. Ali, sounds like the feedback from the initial pilot guys have been very positive, and I'm just curious, what additional -- what else needs to happen before some of these early customers decide to go to larger deployments? Is this something that needs to be done on their end? Some more development work that has to be done on your side? I'm just curious, what's happening there.

Some of that is already happening. So we already are starting to see in small numbers, but starting of customers that, let's say they are on a $1,000 per month plan, and they've used all their airtime. And now they're asking to upgrade to higher plants. So automatically, I think we're going to see some of that, and it's very exciting when you look at that and see that that is working well for them. And so quickly, they're ramping up. I think, over time though, we've added a lot of functionality to address some more intricate details that might come up. So I'll give you a few of those that we've added, I guess, quietly and some of them not so quietly. For example, there's a -- let's say there's a phone call incoming phone call, AI answers it, and some of our clients were telling us that we want to be able to transfer that call to a live human based on certain triggers, right? Or if the person says, oh, I want to talk to a real person. We can actually immediately connect that. So that call routing and call transfer was a functionality that then we added to the platform. That's one. Or we were asked, like, can you guys track the conversion of the call, so we know which flow works, we've added that functionality. As you saw in the press release, it says we released a marketplace -- Integrations Marketplace where now people can connect SalesCloser with their CRM system, with any system of record with Slack, with all of those things. So that was also coming from the interest that was -- and the feedback we were getting from customers. Another one that is ready -- almost ready to be rolled out is also to automatically check calendar availability and book that. Another functionality we -- that we already added was ability to check inventory. So those are some of the things that we've actively been developing and adding functionality, and people really like it and resonates well with them. But in terms of SalesCloser really picking up, I think, rolling it out to our entire sales team, I think that is probably the best bets that we have for ramping it up much faster and then some of the partnership opportunities.

And then just moving to, I guess, margins and growth. I know you're talking about seeing that margin profile improve over the course of the year. I'm curious if there's a ceiling on where you see EBITDA margins before you think about reinvesting more capital to accelerate top line growth perhaps back to historical rates of 25%, 30%.

I'll add some colors and then maybe Adrian can fill in as well. I don't see those 2 things being contradictory. Obviously, if money is not an issue, you can invest in growth, and sometimes those growth avenues might be profitable. Sometimes they're not the most efficient, and you have to cut them. Right now, our priority is make sure that we are profitable. We can handle our cash flow and all of those things, and we made great progress and more to come in Q3 and onwards. So we're very confident in that. Now a lot of our focus is on further ramping up sales. And I think, especially in 2025, that's what our expectation is to go back to the historic growth rates that we've had in the past.

Yes. Just to maybe add on to that, just put some numbers there. So we achieved 9% adjusted EBITDA margins for Q2 2024, which is actually the highest that it's been since Q1 2023. For the 6 months ended for June 30, 2024, for adjusted EBITDA, it's actually the total of that is higher already than the full adjusted EBITDA of 2023. So we're on track to have a very good adjusted EBITDA for 2024. So we're expecting to continue to realize those cost optimizations and further improvement in adjusted EBITDA margins through the end of the year.

Maybe one last thing. I'm just curious as you start to sell more Propel and perhaps SalesCloser down the road, do you expect to see more sort of annual prepaid commitments versus the traditional monthly payments you're getting just to help on the cash flow side of things?

It's a good question. Annual already is happening, but prepaid, it is a discussion we've had. I think it is something we'll probably offer to clients who want to take it and maybe they get a slight discount for doing that. But SMB market obviously is very cost conscious, and they might not necessarily want to commit to and pay that much money upfront as opposed to spread over the year. So I don't think it will be a significant improvement to our cash flow based on that. I think more what we're -- what we expect is better profitability and revenue growth while keeping our costs under control. We're not planning to aggressively reinvest money when we're so tight on profitability. We want to be in a more secure cash flow position and grow aggressively without having to increase our cost basis significantly.

There are no further questions. We will now pass the call back to Ali Tajskandar for closing remarks.

Thank you very much. Once again, I want to thank everyone for joining us on this call today. Thank you, analyst for your questions. Very insightful. Everyone, please stay safe and healthy, and we look forward to providing more updates this year. Thank you.

Thank you.