Greetings and welcome to PublicSquare’s First Quarter 2024 Earnings Conference Call and Webcast. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, William Kent, Vice President of Investor Relations. Thank you. You may begin.

Thank you, Dee. Good morning, everyone and welcome to PublicSquare’s first quarter 2024 earnings conference call. Joining me today are Michael Seifert, Chairman and Chief Executive Officer; and Brad Searle, Chief Financial Officer of PublicSquare. The information discussed today is qualified in its entirety by the Form 8-K and Form 10-Q filed today by PublicSquare, which may be accessed on the SEC’s website or PublicSquare’s website. Today's call is also being webcast and a replay will be posted to PublicSquare's investor relations website. Please note that statements made during today’s call, including financial projections or other statements that are not historical in nature, may constitute forward looking statements. Such statements are made on the basis of PublicSquare's views and assumptions regarding future events and business performance at the time they're made, and we do not undertake any obligation to update these statements. Forward looking statements are subject to risks that could cause PublicSquare's actual results to differ from its historical results and forecasts, including those risks set forth in PublicSquare's filings with the SEC, and you should refer to and carefully consider those for more information. This cautionary statement applies to all forward looking statements made during this call. Do not place undue reliance on any forward-looking statements. During this call, we may refer to certain non-GAAP financial measures. These non-GAAP measures are not prepared in accordance with GAAP or generally accepted accounting principles. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP measures is available in the company's quarterly filing today with the SEC. I will now open the call to Michael. Michael, please go ahead.

Wonderful. Thank you, Will. And thank you to everyone for joining our call today. The first quarter of 2024 was our most monumental quarter yet. Building upon the strength we have witnessed since launching our core marketplace platform nationwide nearly two years ago. It has been a wild ride over the last two years since July 4th of 2022, when we launched our core platform nationwide, and we are just getting started. So to jump in for a few details, from this first quarter, 2024, as highlights, we saw net revenue increase 9.2x, while cash flow from operating expenses only rose 2.2x compared to the first quarter of 2023, showcasing the fact that our business is trending in an incredible fashion toward a profitable and sustainable path of growth. So again, we saw net revenue increase over 9x from Q1 2023, while cash flow from operating expenses only rose just over 2x compared to Q1 of 2023. More specifically, we increased net revenue in Q1 by 8.117% to $3.5 million compared to the first quarter of 2023. And even more impressive, pro forma first quarter net revenue was greater than all of 2023 net revenue. So on a pro forma basis, Q1 net revenue was $6.4 million, including Credova, which is 12.2% greater than the entire 2023 PSQH net revenue. For the Marketplace segment, we increased our revenue by over 150% compared to the first quarter of 2023. And obviously the revenue is indicative of greater traffic and heavier usage. Our Marketplace monthly average users in Q1 increased by 314% compared to the first quarter of 2023. And for our Brands segment, EveryLife, our life-affirming baby brand subsidiary. It contributed over $2.1 million in net revenue for the first quarter of 2024. And for the most exciting statistic from EveryLife…

Thank you, Michael. Congratulations, Mike, and good morning, everybody. I'm thrilled to be with you here today to discuss our first quarter of 2024 results. I'd like to present a few items to note from the quarter. So first off, as Michael mentioned, we increased net revenue by 817% to $3.5 million compared to the first quarter of 2023. Also, on a pro forma basis, so meaning if we had included all of Credova’s Q1 net revenue, our Q1 net revenue would have been $6.4 million, which is 12.2% greater than the 2023 net revenue figure we reported on our 2023 10-K. I'd like to point out that in Q1, we incurred $5.9 million in share-based compensation expenses, as well as $2.3 million in one-time transaction costs related to the Credova transaction during the first quarter. In terms of share count as of 3/31/24, we had 28,177,917 Class A common shares outstanding and 3,213,678 Class C common shares outstanding. And we ended the first quarter of 2024 pro forma for the previously announced insider affiliate investment with $19.3 million in cash, of which $0.2 million was restricted cash. So before I hand the call back to Michael, I will cover the updated outlook for 2024 we've provided in this morning's release. First, in terms of revenue, our guidance from March 14, 2024 remains unchanged. We are guiding to a year end 2024 exit run rate revenue of approximately $47 million to $53 million. Moving on to profitability, Credova is expected to remain cash flow positive in 2024. We expect EveryLife to reach and maintain cash flow positivity by the end of 2024. And we intend to prioritize the resourcing and growth of PSQ payments, led by former CEO of Klarna North America, Brian Billingsley. Lastly, in regards to our cash position outlook, we expect to exit 2024 with approximately $8 million to $10 million of cash on the consolidated balance sheet. I will now hand the call back to Michael for some closing remarks and Q&A.

Wonderful, thank you, Brad. To wrap up, the remainder of 2024 will bring even more growth and further opportunity to the business. With the addition of Credova to the PublicSquare ecosystem and the forthcoming launch of our payment stack, among many of the other exciting milestones we've laid out today, we are supercharging our growth potential and we're grateful for all of those who are on the journey with us. So we are excited now to move on to Q&A. We will address some of the inbound questions we received before the call. And I believe we're going to hand it over to Will.

Operator, we'll take the first dial-in questions first and then I'll take some of the questions that were submitted by shareholders.

[Operator Instructions] Our first question comes from the line of Darren Aftahi from ROTH Capital Partners.

Hey guys, good morning. Thanks for taking my questions. A couple by me. So can you just talk about your marketplace? Just, I know Mike, you had some comments about progress. I'm just kind of curious about any metrics you guys kind of find encouraging. I know you launched this roughly six or seven months ago, but as it compares to the initial launch, any kind of encouraging metrics you guys saw in 1Q in terms of whether it was conversion, AOV, retention, anything like that. And then I get just supposing as part of that, how does kind of live the broader strategy fit into the commerce marketplace?

Great questions, Darren, thank you. Good to hear from you. Yes, I'll give you a few metrics that we're very encouraged by as we look at the marketplace. I obviously mentioned that bulk usage up over 300% from Q1 of last year, that's a big deal for us. The platform is becoming more and more usable and user-friendly as each day passes and as new features and enhancements are added to the experience like auto saving address information, enhanced search that actually uses predictive analysis based upon past searches, saved past purchases so that you can actually resurface purchases you've already made and check out again. There are a lot of enhancements to the overall shopping workflows that we've added that help people experience better category grouping that we're really proud of. We've had our AOV hover right around $70 which we're very encouraged by, that's exactly where we want to be. So again an AOV of $70 is a good metric that we look to hover right around. If we are launching campaigns that have a number of quick pick-up household items, we'll have a few days to dip below that. And if we're selling larger products for gifts or larger holidays, sometimes the AOV will go significantly above $70. We want it to maintain, though, hanging right around that $70 mark. I would also say that the fact that Q1 order volume was actually larger than Q4 is a great sign for us, especially without increased costs in marketing in Q1. And the reason I say that is because obviously our marketplace is structured as a marketplace, a retail shopping experience. And the fact that we didn't have this massive spike during Christmas shopping season that then descended down into a lower Q1, but it actually was the…

That is. Just a couple more on Credova. So I think you guys gave the contribution with and without for the full quarter. I think the math, if mine's right, is $3.3 million roughly. But my question is not so much the math, it's more, is there any seasonality in the payments business I assume there is tied to commerce in general and then maybe some initiatives you guys kind of talked about in the release to kind of help further growth there.

Yes, great question. There is certainly seasonality in the payments business broadly. If you look at Credova on the consumer and business financing side, there is seasonality that's tied to the retailers that they serve. So we obviously saw that buy now pay later across the entire industry went on a tear in Q4 of last year, it was responsible for the bulk of the Christmas shopping that the market experienced, the uptick of 9% from the year before across the whole market. And that's certainly true of Credova as well. The seasonality generally follows shopping trends. And so given that some of their largest vendors are gun marketplaces, for example, so entities like guns.com, the seasonality that they experienced will obviously be the seasonality often the Credova experiences with one exception. I would say that one of the nice things about buy now, pay later is that it gives folks an opportunity to actually break free of seasonality a little bit. And that sort of new school layaway is a good way for consumers to experience the financial freedom to purchase these higher AOV items and do it in a little bit more of a strategy that allows for some financial planning over the year. What I'll say on the payment side is that payments are a little less seasonal given that we are not exclusively serving retailers. The payment stack that we are building that is beginning to onboard clients and will have our launch in Q3 has a wide variety of different industries that it will represent. Obviously, our design clients, the V1 is largely catered toward the shooting sports industry, but there are many other industries that are partaking in this that have wildly different seasons of strength. So for example, we have tax professionals that really see the spring and the winter as their sweet spot. And we have traditional retailers that are looking to the Christmas shopping season for their purchasing boom. So payments will be a little less seasonal. Credova is a bit more seasonal, but even in Credova's case, there are a few attributes of the actual product that break it free from seasonal pressure. One more note that I will mention is that the combination of these forces between payments and a credit product is very exciting to be able to take to these retailers. It helps them up their conversion rates in a pretty major way. And so we're excited to see that drive traffic to some of our great partners in this space.

Right, and then I guess last one for me on EveryLife, business continues to grow really nicely. You guys are adding, I think you said lotions and soaps and then you launched or we'll be launching, Eden eating pretty soon. I guess when you step back and kind of look at the tam for that, I mean, where are we in terms of like the scratching the surface of this business? Do you feel like you have tens of segments underneath the EveryLife brand, hundreds of segments, are they all organic? I'm just trying to get a sense for, and just kind of feedback, obviously the subscription piece has been fairly strong and consistent, but just give me your general thoughts on kind of the bigger picture with EveryLife. Thanks.

Yes, thanks, Darren, appreciate it, it's on. We continue to be very pleased with the growth of EveryLife. It's been a wild ride and a very fun endeavor to be a part of. One thing that we're very positive about is the fact that our churn is just so low. Our churn is less than 10% on average and that's a big deal for a subscription business with an LTV of about 18 months generally. And we're really thrilled by the new traffic that's coming in, that's choosing to elect, even as a first time purchaser, an actual subscription offering with recurring revenue, where the diapers actually show up at their doorstep. It's a great sign of brand trust. I also continue to be incredibly pleased with our over 700 ambassadors with EveryLife that are utilizing their exclusive discount code, sharing them with their communities and their churches and their organizations. To directly answer your question, I would point out a few things related to the future of EveryLife. Number one, I would say that the TAM, we are not yet even 5% of the way through the TAM. So even if you just look at diapers and wipes in the United States for this specific industry cohorts, you don't add any other products to the mix, you don't add any segments to the mix other than what exists today, we continue to believe we're less than 5% of the way through the TAM. And that's actually pretty conservative. On top of that, I would say that, EveryLife actually has potential international applicability that is unique, and so we're excited to, and we've begun the process of doing analysis on what that TAM actually looks like if you expand it out beyond our borders. So we'll see how that evolves,…

Our next question comes from the line of Tom Doherty from Maxim Group.

Great, thanks Michael, congrats on the quarter. Two questions for me. The first one, you've talked a lot about this, but I was hoping you can give like a 60 to 90 second overview on your strategy for selecting additional first party categories beyond baby. So you talked about getting into women's care products, but what's your overriding strategy?

Great question, good to hear from you, Tom. So what I would say briefly is that it's really informed by our consumers. Our strategy is consumer led, meaning consumers will reach out to us and they will share demand for a certain niche or a sub industry within an industry. And we'll let us know that they would love to see that represented in greater capacity on the platform. We then look and see, well, gosh, is there an opportunity already out there in the market that exists? We just need to invite them to the platform. So is it an opportunity to host a great third party that we can promote and potentially court as an advertiser. If there's not, well, then we know that there's a void here. We know that there's a hole. And what if we actually created a consumer product to meet the demand of this consumer base? So that's the first litmus test. We have to know that there's consumer demand, and the consumer demand is actually categorically ranked every month. So we, as a product team, get together and we rank the interest, the search results from our platform. And we try to have a very fine-tuned understanding of exactly what our customers are looking for. The second thing that I would mention is, ultimately, they have to be products that are synergistic to the overall vision and mission. We have to be able to leverage the existing audience to catapult into new buyers. That way we can keep the customer acquisition costs rather low compared to our competitors, and that can serve as a powerful differentiator. So in the case of feminine care, we've seen that there's obviously quite a relevant conversation going on right now related to womanhood. And we've heard…

Great. And then my second and final question. I want to talk about your customer acquisition costs and lifetime value of a customer. So you've done an amazing job of brand building to date, which I think has enabled you to acquire essentially a large number of customers for free. You talked about a great spot you had on Fox News. Which sounds like another wonderful brand building event. But can you talk about your customer acquisition costs and how that's turned it over time and then just your high level thoughts on your life time value of those customers you're acquiring.

Great question. So what I would say is that our customer acquisition cost, based upon segment, will be a KPI that we track very closely moving forward, especially now that our marketplace has a few months under its footing since the launch in November of these new e-commerce capabilities. I would say that the way that we're fine tuning our customer acquisition cost more than any other moving forward is, of course, continuing to leverage these earned media opportunities that we love. There's no better customer acquisition cost than $0. We enjoy that quite a bit. But we also are excited to continue dialing our direct response strategy. So you're going to hear me talk quite a bit about our direct response strategy across segments as we move forward. We have discovered a lookalike audience that is enormous and it is indicative of our TAM. Our goal then is to create digital experiences and advertisements and online social and content campaigns that can go actually target that lookalike audience and convert them into buyers by showcasing our wonderful products we are selling and the stories that these business owners are telling. One of the other ways that we are doing that in the direct response world is through quite a bit of user generated content. And we can actually have a past customer that has a strong lifetime value. They are excited about the mission. They have loved the quality of the products that they purchased from the site. We can turn them into an actual ambassador through user generated content. We then actually advertise that UGC on our digital and social channels and it drives traffic at a low customer acquisition cost to the site. What is nice about this as well is it is a very data driven…

I will now turn the conference back to William Kent for submitted questions.

Thank you, Dee. Great, as in past quarters, we've received some questions via the Say Tech platform and we'll probably cover four or five of them here before we close things up. First question, and these by the way are upvoted by shared representative is on platform expansion. And a question around when can we see expansion of the PublicSquare platform to other countries as expected and what are your thoughts on that?

I love this question. We certainly understand that the desire for a parallel economy in certain nation states is not exclusive to the United States. We've heard great interest from other nations including Canada, Australia, South Africa, New Zealand, Mexico, South Korea, among many others. We actually have an international wait list that has grown by the tens of thousands of folks that are looking for our product expansion into other nations. What I would say is that product expansion into other nations is not something certainly that's off the table. In fact, it's something that we're excited about with two caveats. Number one is it probably expands segment by segment, meaning there's not a high chance that we bring all of the PSQ Holdings product verticals into a new country all at once. It likely looks like we launch EveryLife in another country, as I just mentioned. Then we actually learn about that audience there before we would consider bringing PublicSquare the platform to that audience. Our goal with all of this is to nail it before we scale it. That's the first thing I'd say is that it's likely segmented so that we can understand the opportunity fully before we jump in. The second thing that I would mention is that we are currently in the process of courting international ambassadors, so folks that know their economic environment very well, they've courted a high level of trust amongst their merchant community and consumer community in their respective countries. And then we're able to cross-reference that with the amount of interest that has been displayed through our international wait list that can help inform to us when it is time to begin the process of seriously considering international expansion. And if I had a third point, it would be this. We ultimately believe at the end of the day that PublicSquare will never be the world's marketplace, meaning we don't want to drop the importance of your respective nation. We actually love the idea of economic nationalism. And we believe that our responsibility as citizens should be primarily first to serve our community. And so while we are certainly open and interested and excited about international expansion with the PublicSquare marketplace, it probably looks like, just like PublicSquare is America's marketplace, it probably looks like PublicSquare Canada is Canada's marketplace, meaning there's not cross-border selling as much as there is your own dedicated marketplace internal that serves your community first and foremost. So more on that to come. Love the question. And we're excited to see how this continues to progress.

Thank you, Michael. Next question we got was on exposure. It seems that the last quarter was way above expectations, yet the capital markets have not responded with the stock price moving much higher. Besides social media, how will you guys look to get additional exposure in the markets?

Happy to answer this question. So I would say something right off the bat, and it's that I firmly do not believe that the price of the stock today is at all indicative or reflective of how our business is actually performing. So I want to make that abundantly clear. I believe that we have continued to perform above expectations, and all signs from myself as well as the management team and our board of directors is pointing in an increasingly positive direction. I have never been more bullish and excited about the future of this business than I am right now. So I just don't believe that the stock is reflective of that or indicative of that reality. I don't yet believe that people have fully realized what we're really on to here. So what I would say related to the exposure question is, I'm most interested in exposure toward further consumers and merchants. We want to grow the business at the end of the day because my firm belief is that as we grow our business and as we execute against our roadmap, and as we perform and meet these milestone moments that we've been so excited to put forth on a roadmap, we will eventually see the exposure to the investment community continue to uptick as well. Now that said, we are not neglecting or ignoring important investor outreach. In fact, we have a very connected board of directors. We've some great capital markets advisors. We've made the conference circuit this year, haven't we, Will? We have certainly tried to get our message out to as broad of a network as possible on the investor side. But I believe firmly, as I mentioned, the way to ultimately achieve long-term exposure in the investment community that will ultimately hopefully reflect in a positive stock price is by first executing on the business and making sure we've got our exposure dialed to a larger and larger customer base until we can achieve the fullness of this TAM that we have set forth.

Thank you, Michael. Two more questions. The second last question is on shipping. Obviously, with EveryLife you have some distribution related to that product, what's PublicSquare's thought on distribution centers to ship products going forward?

So our thoughts on this are a bit nuanced, and what I mean by that is that we have quite a few options as we move forward, and you see some competitors choosing to bring all of their 3PL fulfillment and even manufacturing operations in-house. You see other businesses that are actually selling off those operations, and so we're certainly watching the market carefully. More than anything, though, we're just looking for cost-effective and value-aligned strategies in these early days. So great example. For EveryLife, we have partnered with an incredible 3PL partner that is completely value-aligned. They are with us in our mission. We actually found them through our own platform, which was pretty neat. They were a business service listed on PublicSquare when we were launching EveryLife, and they could not be a better treat to work with. Salt-of-the-earth folks with high levels of integrity. What I want to do now is not only continue utilizing their fulfillment network for our further product development, I actually want to monetize a relationship where I can actually go and endorse them to the other consumer products brands that are third parties on our site, and that way I can take my time, and our management team can take our time on deciding whether or not we actually need to own that vertical as we move forward, or whether or not it makes sense to say, you know what, let's stay asset-light, and let's achieve a revenue-share relationship where we actually promote certain solutions on the business services manufacturing or fulfillment side to our broader consumer product audience. That's a decision we're currently in the process of making right now. So I cannot give you a definitive answer on where we will go with this, but I will tell you that we're keeping our options open. We're learning a lot right now from our early days with EveryLife and with the development of our feminine care brand. And at the end of the day, we're grateful for good partners and excited to see our relationships with them can continue to grow.

So our last question submitted is on business ratings. Shareholders state part of the reasons why they like some of our competitors is their rating systems and can see what other customers see about certain products. Is PublicSquare working on something similar and when can we expect that?

So I love this question. Whoever asked it, you think very much in alignment with our team. This has been one of the most exciting features we're looking forward to bringing to market reviews. Here's the reason it hasn't happened until now. The world of reviews is largely broken and very few platforms are actually doing anything to fix it. Oftentimes there are junk reviews, there are bot reviews, there are reviews that are simply issued because they dislike the business without ever having partaken in the business. We saw that during the COVID season quite a bit. We also see that on a third party marketplace like us, where we actually facilitate the ability for these businesses to link their product catalogs, we kind of have a decision to make. You can either bring in their existing reviews from their own website or you start brand new with reviews from purely public square customers or a bit of both. We also don't want to do reviews just as reviews with simple text and a five star rating. We want to go bigger than that. We actually want to allow for consumers to tell the story of the relationship and interaction they had with these businesses and for businesses to actually share those stories at a greater capacity then. To wrap all that up, this review endeavor has been in the works for quite a while now and it is on the near term roadmap to release. That way, as you mentioned, consumers can know with blessed assurance, not only are these great businesses that have been vetted in alignment with our values and the quality expectations we would hold, but there's consumer validation from the other members of the community that have deemed these businesses very worthwhile to go and shop from as well. So this is on the near term roadmap for us, stay tuned. This is a feature that we've taken great lengths to ensure we're thinking through intentionally and our team is as excited about as you are. All right, I believe that that was our last question here. We as a management team, a board of directors and a broader PSQ Holdings entity are very grateful for all of those who have joined us on this journey, whether as consumers, business, merchants, investors or just interested participants. We have loved this journey so far and we continue to reaffirm the strong belief that we are just getting started. We hope that all of you have a fantastic rest of the week. And thank you again for joining us on this Q1 2024 earnings call today. We'll talk soon.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.