Good afternoon, thank you for attending today's Leafly second quarter 2023 earnings call. My name is Jason, I'll be the moderator for today's call. All lines will be muted during the presentation portion of the call, with an opportunity for questions and answers at the end. If you'd like to ask a question, please press star one on your telephone keypad. I'll now pass the conference over to our host, Josh de St. Jean. Good afternoon, welcome to Leafly's Q2 2023 earnings call. Joining me on the call today are CEO, Yoko Miyashita, and CFO, Suresh Krishnaswamy. Today's prepared remarks have been recorded, after which Yoko and Suresh will host a live Q&A. A copy of our press release, along with an accompanying earnings presentation, can be found on our website at investor.leafly.com. Today's call will contain forward-looking statements, which are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements regarding the services offered by Leafly, the markets in which Leafly operates, business strategies, performance metrics, industry environment, potential growth opportunities, and Leafly's projected future results and financial outlook, and can be identified by words such as expect, anticipate, intend, plan, believe, seek, or will. These statements reflect our views as of today only, should not be relied upon as representing our views at any subsequent date, and we do not undertake any duty to update these statements. Forward-looking statements, by their nature, address matters that are subject to risks and uncertainties that could cause actual results to differ materially from expectations, and we caution you not to place undue reliance on such statements. For a discussion of the material risks and other important factors that could affect our actual results, please refer to the risks discussed in today's press release, our annual report on Form 10-K, filed with the SEC on March 29th, 2023, and other periodic filings with the SEC. During the call, we will also discuss non-GAAP financial measures, which are not prepared in accordance with generally accepted accounting principles. A reconciliation of the GAAP and non-GAAP results is included in our earnings press release, which has been filed with the SEC and is also available on our website at investor.leafly.com. With that, let me turn the call over to Yoko. Thanks, Josh, and hello to everyone who is joining us today. Revenue for the quarter was 10.7 million, slightly above our guidance given in May. There are a few themes driving this, which I'll speak to in a moment. Overall, I'm pleased with the considerable amount of work the team has accomplished over the past several months to put us on stronger footing as we head into the second half of this year. Our focus on new go-to-market initiatives, coupled with Leafly's strong value prop, has strengthened relationships with high-value customers. We also delivered positive adjusted EBITDA, highlighting our efforts towards building a durable and profitable business. This was driven by the upside in revenue and continued focus and discipline on operational efficiencies. As expected, we significantly reduced our cash burn in the second quarter to approximately 850,000, from just under 10 million in the first quarter. Operationally, we are in a stronger position than a year ago, which positions us well for long-term sustainability. The industry continues to consolidate and face some instability. In light of that, there are signs that the efforts we've taken over the last nine months to navigate these challenges are becoming more deeply rooted, and we are seeing some green shoots across the company. We continue to highlight the Leafly value prop, and our new team structure, implemented last quarter, has allowed us to invest in and strengthen our relationships with our high-value clients, particularly when critical momentum events occur, such as the introduction of adult use in a market. We've also continued our efforts to reduce retailer friction and focused on enhancing the consumer experience by improving functionality in deals, search, and delivery. We have been focused on building a healthier subscription base of revenue, and when combined with out-of-business churn as a result of the softer macro environment over the past year, we saw a sequential decline in ending retail accounts. As a reminder, we have a wide range of retail accounts on our platform, from small single-store owners to large MSOs across all legal markets, and each faces its own set of challenges. Looking ahead, we continue to actively manage delinquencies and emphasize collection efforts, which, along with the difficult environment for some operators, will likely result in a decline in ending retail accounts in the short term. In addition, we expect to see additional cancellations arising out of price increase conversations. We will continue to focus on building our platform, leveraging our local market strategy, where we utilize a playbook tailored to specific key markets and their local needs. In May, we began rolling out new rate cards and price increases in select markets to select clients to better align our pricing with the value we deliver to our partners. We've been pleased with the response so far, as it validates Leafly's role as an integral part of retailers' businesses and the value we provide. We've also emphasized annual subscription agreements to lock in revenue and lower our servicing costs. These new contracts also now have an established escalator upon annual renewal. The net of these changes have resulted in some less profitable accounts churning, which will likely continue into Q3. While the account base will decline in the short term, we expect to evolve to a healthier customer base, supporting more durable revenue over time, and made progress to that end in Q2. As a result, total ending retail accounts declined 8% from Q1, but ARPA in Q2 remained steady. It is likely that delinquencies and churn will lead to further declines in total ending retail accounts in Q3, but we expect improvements to ARPA in subsequent quarters, particularly as the price increases take effect and churn stabilizes. In addition, as we've noted in previous calls, we've adjusted our go-to-market team to align our resources to our highest value clients and better optimize for individual customer needs and market dynamics. For our lower-paying clients, we have implemented a one-to-many, more cost-optimized approach. Given the current industry-wide softness in brand advertising, we are opening up our expansive brand advertising products and inventory to retailers for additional add-on purchase. To do this, we've cross-trained our sales staff on retail and brand products to empower the teams to leverage our whole suite of products and customized solutions based on customer needs. We've made our teams smaller and more agile, including our product and engineering teams. This has allowed us to make quick and meaningful improvements to the platform that reduce retailer friction based on customer feedback, which in turn has allowed us to create additional value on our platform. In June, we launched a beta version of a new Order API, which allows any POS system to integrate with Leafly, rather than the select few with custom integrations historically. This opens a wider opportunity for retailers to work with Leafly and allows them to seamlessly integrate Leafly orders into the systems they are already using in store. Our belief is that unlocking additional order integrations through this new API will enhance retailers' order processing capabilities, leading to an increase in customer retention over time and boosting the average number of orders per retailer. We plan to make this API more broadly available over the next couple of months. We also improved our delivery experience for both retailers and consumers. We now support scheduled delivery windows, which allows retailers to receive orders for a future delivery time, enhancing the delivery experience for the customer and making it easier for the retailer to plan for. It's early, but we have already seen early adoption amongst delivery-enabled retailers. Deals continue to be an important driver of orders as consumers look for value in this softer macro environment, and we've made significant improvements to our deals engine to enable retailers more flexibility in the types of deals they are able to offer and the ease with which they are able to post them. Over the course of Q2, we saw the number of deals live on Leafly increase by 31%, and the percentage of orders using a deal increased by nearly 8% over the same period. We also enhanced the consumer experience on Leafly, particularly around shopping. We improved the user journey to make it easier and faster for consumers to create an account or sign in so that checkout is faster. These enhancements led to immediate improvements in the number of new accounts created. This is important as consumers who create an account are far more likely to place an order than users that haven't. It gives us greater opportunities to build shopper retention and improve our targeting capabilities. We're also focused on features that drive consumer engagement and conversion to orders. For example, we enhanced our strain effects-based shopping experience by better aligning the consumer search to local retailer inventory. This is our data advantage at play, leveraging our proprietary strain database and our substantial effects data to drive better discovery and shopping for consumers. We also revamped our order history page, creating a seamless reordering experience we are all accustomed to on larger e-commerce platforms. While some of these are incremental improvements, they are making the shopping experience on Leafly better. The number of orders has grown year-over-year, and just as importantly, the number of customers ordering on Leafly is up year-over-year as well. This is in part, we believe, because of our focus on the consumer experience over the past year. All of these initiatives have been focused around improving conversion to sales, which drives direct value for retailers, and we're seeing some encouraging results, which we believe will provide long-term revenue opportunities. We'll continue to focus efforts in these mid to lower funnel areas, engaging our most valuable consumers and driving increased orders. This includes producing compelling and engaging content that helps inform their shopping decisions. This content shift is a change from our previous focus on general cannabis MAUs that drove top-of-funnel consumer traffic. As our business and the industry has evolved and mainstream media has taken on a larger role in covering cannabis-related news, we can focus greater efforts on deeper funnel content and monetization. Over time, we expect growth in MAUs to become less relevant to the overall health of the business. We will continue to develop and create content that gives consumers valuable information to help educate them about cannabis and inform their shopping decisions, and content that demonstrates our presence in local markets across the country. Finally, there continues to be legalization momentum that brings long-term opportunity. In Minnesota, recreational use became legal at the beginning of the month, with tribal sales commencing on the first and broader retail sales expected to begin next year. In Florida, a ballot initiative to legalize recreational use received enough signatures to move forward in 2024. In Pennsylvania, lawmakers introduced a rec legalization bill, which is now in committee. While the path isn't always a straight line for states moving towards legalization, Leafly will be there to welcome millions of new shoppers in the legal cannabis market when they finally win legal access. Now, I'll turn it over to Suresh. Thank you, Yoko, and welcome everyone. As we outlined last quarter, we're carefully managing expenses and are committed to a sustainable path of profitability. In the second quarter, we achieved positive adjusted EBITDA of 80,000. The environment continues to be challenging for companies in the cannabis space, and we're focusing on those things we can control. First and foremost, we're partnering with our customers to highlight the value Leafly can provide their businesses. Additionally, work continues in our product and engineering teams to elevate the consumer experience on our platform. Importantly, all of this work and investment is taking place with an eye towards managing our expenses, bottom line, and cash burn. Now to our results. In the second quarter, our revenue was 10.7 million, down 11.4% year-over-year, but modestly above our expectations. Retail revenue was 8.8 million, and brand revenue was 1.8 million. Looking more closely at our retail results, ending retail accounts in Q2 were essentially flat year-over-year and declined 8% sequentially to 5,261. As we discussed last quarter, we expected some churn due to industry instability and adjustments to our go-to-market strategy. There are pockets of strength across the industry, but we're also seeing some areas where retailers are pulling back on spend or going out of business. While this activity causes disruptions in the subscribed listings on our platform and will likely continue into Q3, we're working on building a healthier base of retail accounts and a better consumer experience. Our retail ARPA in the second quarter was $558, a decline of 4% year-over-year and up about 1% quarter-over-quarter. As we noted last quarter, ARPA has been stabilizing over the last several quarters. We began rolling out price increases in May and June to better align our pricing with the value we deliver to our partners, and we expect to complete these across most accounts and regions by the end of Q3. As we work to implement our new pricing structure, we anticipate further customer account adjustments. We expect to see modest ARPA growth from this level for the balance of the year as our new pricing takes effect, as we grow share of wallet with customers, and as we lose lower-producing, paying accounts. Turning to brands, on a sequential basis, revenue was up 3%. While other sectors may be seeing the early signs of a recovery, we're still seeing downward pressure in brand marketing in the cannabis space, we're not forecasting a recovery in this area in 2023. Continuing down the financial statement, our total growth margin in Q2 remained stable at 88%, we expect to remain at similar levels this year. For OpEx, Q2 totaled 10.2 million, down 48% year-over-year and down 31% sequentially. We've made meaningful progress in reducing costs across the business through our two headcount reductions in Q4 of 2022 and Q1 of 2023, as well as our cost-cutting efforts. As a result of this focused execution, our adjusted EBITDA for Q2 was positive $80,000, above the guidance we provided of negative $2.1 million. We continue to focus on managing costs and expect adjusted EBITDA in the second half of the year to improve from the negative 3.2 million in the first half. Turning to the balance sheet. Our team has been diligent in managing our cash resources, and we remain committed to prudently managing our capital. We ended the quarter with just over 14 million in cash and equivalents, excluding restricted cash. Our cash burn in Q2 was just below 850000. As a reminder, we paid an interest payment in Q3 of 1.2 million. Even including this payment, we plan on ending the year with around 14 million in cash, similar to current levels. At our annual shareholder meeting held July 12th, stockholders approved the reverse split for Leafly shares to help restore Leafly's ability to trade above a dollor share for Nasdaq market requirements. We expect the reverse split to occur in the first half of September and will announce the details, including the split ratio, as we near the effective date. Now to our guidance. For Q3 2023, we expect revenue around 11 million and adjusted EBITDA loss around -0.5 million. As the cannabis industry continues to evolve, we remain focused on running Leafly with efficiency and firmly on a path towards profitable growth without a need for additional capital. We'll continue to enhance the platform to build a robust marketplace and be the leading destination for informed cannabis shopping. We'll now open up the call for questions. Operator? ... If you would like to ask a question, please press star followed by one on your telephone keypad. If for any reason you'd like to remove that question, please press star followed by two. Again, to ask a question, it is star one. Our first question comes from Vivien Azer with TD Cowen. Your line is now open. Hi, this is Seamus Cassidy on for Vivien Azer. Thanks for the question. I was hoping you could maybe comment on the recent announcement that Mastercard will be banning debit card transactions at cannabis dispensaries, understanding that you're not exposed on the payment side. Can you maybe offer any context on how this has maybe impacted your retail partners and their willingness to spend more on ads? Hey, Seamus, Yoko here. Thanks for the question. You know, this is just one of the challenges, continuing challenges that our client base and our ecosystem suffers from as part of being a state legal, federal legal business. There's no direct impact that we see. It's just another one of those challenges that retailers navigate, and the reality is, you know, this is one of many. Nimble, they continue to navigate these challenges. We don't see the impact to direct spend with us. What I will say is that this is the largest challenge for consumers, and really from a policy perspective, it's incumbent on all of us to advocate for continued access to legal payments, just as consumers are used to in regular e-commerce. Understood. That's helpful. Then just one more from me. You touched a bit on new adult use market activations. I was hoping maybe you could comment on sort of trends and uptakes, uptake that you've seen in those markets, specifically maybe in Maryland and Minnesota, which have seen adult use sales start recently. Yeah, Maryland just started in July, and we couldn't be happier about that transition. It, you know, and I think they've done that right as a market. For us, Maryland's been a strong med market, and that provided, provided a foundation on which we could build on those relationships. Why is building on those relationships important? It's because Maryland gave that first priority and first right to those existing med dispensaries. You know, that we, we come into this market with such a strong base, both across customers who are really used to using our pickup and online ordering products, and those relationships with our existing medical dispensaries. We're super excited about being able to bring all of the power of the platform to play. That's our content, that's our sales, that's our relationships, and the platform services we provide to grow on our base in Maryland. As it relates to Minnesota, very excited about what that market will offer. As you know, it just started up, August 1, but it will take until sometime next year for us to see broad retailer access to that market. We'll be ready, and again, you know, we love these markets that start with med. We've got the consumer attention, they're reading on Leafly, and ready to serve them when the stores open. Perfect, thanks. We'll hop back in the queue. Thanks, Seamus. Thanks, Yoko. Our next question is from Jason Helfstein with Oppenheimer. Your line is now open. Hi, this is Steve Roman on for Jason Helfstein. So I just have two questions. One is, can you give us a sense of client retention from pre- and post-price increases, meaning of those clients in those markets where you put on the price increases, how many stayed on versus how many left? I know you said that generally it was the unprofitable businesses that left. And then secondly, more on G&A, much lower than we expected. Do you have plans to cut more, or do you kind of feel like 5 million is the lowest absolute level that you see from an efficiency basis? Thank you. Yeah, let me take the first bit on price increases, and I'll hand it over to Suresh on the G&A piece. As it relates to the client retention and the price increases, we are midstream in this whole process, and we'll have more to share as we work through that data over the course of the next quarter. What I will say is that I'm incredibly pleased with how we rolled this out. You know, we've talked about our shift in go-to-market strategy and really that focus on account management. As it relates to the, you know, top 85% of clients accounting for top 85% of revenue, we seeded all of those conversations with a, with an account review first, communicating the value that Leafly, Leafly was providing, to then situate and have these very personal one-on-one conversations about the price increases. We had very clear visibility as to how those will stick, and we've been pleased with the results so far. The unpredictable part of this yet, where we're expecting to see more data come through as time passes, you know, the last of the notifications went out at the end of July, is related to that broader base of clients that account for lower dollar revenue overall. Really can't speak to that yet. We'll just need a little more time to work through that. Let me hand it over to Suresh on the G&A question. Hey, Steve. On the OpEx, I mean, we, we've said that our focus is on managing to the bottom line and staying on this path of profitability, that's exactly what we're doing. In Q2, the, you know, as, as you see, the overall OpEx, excluding stock-based compensation, was 50% lower year-over-year. On the last call, we said, you know, we're looking at closer to 30% savings. We've realized higher than expected savings. That being said, looking forward to the second half, we're looking at the quarterly average in the second half to be very similar to what we saw in Q2. We're gonna maintain our cost discipline, we're gonna continue to manage to the bottom line, and, and really focus on that cash balance. Once again, if you'd like to ask a question, it is star one on your telephone keypad. There are no more questions, I'll pass the call back over to the management team. Thank you again for joining us and for your interest in Leafly, and we'll look forward to speaking with you again soon.