WISH Opens Market At All Time Low After Disastrous Quarter
Shares in ContextLogic (NASDAQ: WISH) opened this morning at a new all-time low following poor earnings results published after market hours last night. Revenues fell on a year over year basis to $656 million, a 6% decline from the $701 million posted in the same period last year.
Revenues fell in two of four segments on a year over year basis, with Core Marketplace and Marketplace Revenue, the two largest segments, falling from $555.0 million and $600 million last year to $378 million and $428 million this quarter, respectively. Gross profits meanwhile amounted to $384 million overall, a 22% decline year over year.
The company managed to post a loss of $111 million for the quarter, a massive increase from the $11 million net loss recorded a year ago. Adjusted EBITDA meanwhile fell to negative $67 million, down from the positive $16 million recorded in Q2 2020.
While the company recorded $1.6 billion in cash and cash equivalents and marketable securities, free cash flow during the quarter amounted to negative $205 million, indicating that its current reserves likely will not last the company long.
Things did not improve from here for the company either, with user metrics effectively amounting to a disaster. Total monthly active users declined a total 22% year over year to 90 million, while active buyers over the last twelve months declined 26% to 52 million. It appears future sales growth is to be restricted as well, based on the fact that the company saw app installs decline by 13%, and average time spent on the platform fell by 15% relative to the first quarter of 2021.
The company blamed the fall from grace on the lifting of stay-at-home restrictions that has resulted in less digital activity.
And it appears the worst of it is not over for the company.
ContextLogic actually refrained from providing a formal revenue outlook for the third quarter, instead commenting that quarter-to-date July 2021 total revenues were down 40% “compared with the prior quarter,” while Marketplace Revenue, the firms largest segment, are down 55%. As such, third quarter results are expected to be even worse than the current quarter, with the company guiding to an EBITDA loss of between $65 and $70 million.
ContextLogic is currently trading at $6.90 in pre-market trading.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.