Ladies and gentlemen, thank you for standing by, and welcome to the WeCommerce Q1 2021 earnings conference call. The company will make forward-looking statements on the call today that are based on assumptions, and therefore subject to risk and uncertainties that could cause actual results to differ materially from those projected. The company undertakes no obligation to update these statements, except as required by law. You can read about these risks and uncertainties in the press release this afternoon, as well as in our filings on SEDAR. Note that the adjusted financial measures we speak to today are non-IFRS measures, which are not a substitute for IFRS financial measures. All amounts referenced in today's call are in Canadian dollars, unless otherwise stated. With that, I will now turn the call over to Mr. Chris Sparling, Chief Executive Officer of WeCommerce. Please go ahead. Thank you, operator. Good afternoon. As the operator said, my name is Chris Sparling, and I am the Chief Executive Officer of WeCommerce. Today, I am joined on this call by our President, Alex Persson, and Evan Brown, our Chief Financial Officer. Earlier today, after the close of the market, we released our first quarter 2021 results, which are now available on SEDAR. As is our practice in these calls, Evan and I will make a few opening comments and then open the floor for questions from analysts and shareholders. We'll start with the financial review of the quarter. Evan? Thank you, Chris, and good afternoon to everyone on the call. As a reminder to everyone, we do report in Canadian dollars, and all references to amounts on this call and in our published financial reports, unless otherwise stated, are in Canadian dollars. Let's jump into the financial results. In the first quarter of 2021, we generated revenues of CAD 6 million, up 45% year-over-year. Net loss for the first quarter was CAD 1.8 million, compared to net income of CAD 100,000 in the prior year. The net loss during the quarter is due to a number of one-time expenses, including finance fees related to the repayment of our term debt and transaction costs related to the acquisition of Stamped. Absent these expenses, net income for Q1 would've been approximately CAD 200,000. Adjusted EBITDA for the first quarter amounted to CAD 2 million, compared to CAD 900,000 in the prior period. Cash generated from operations was CAD 1.3 million compared to approximately CAD 900,000 in the prior year. Just after the quarter end, we closed the acquisition of Stamped. We used our existing cash on hand, along with our new debt facility to finance this transaction. As of now, we have term debt of $40 million, along with approximately CAD 5.6 million cash on hand. Our portfolio companies, which now include Stamped, continue to produce very healthy cash flows from operations. With that, I'm going to pass it back to Chris. Thank you, Evan. I only have a few comments before opening up for questions. As Evan mentioned, we closed the acquisition of Stamped on April 6th. We described Stamped in detail during our last quarterly call, so I won't go into as much detail this time. I will note that our focus right now is very much on successfully integrating Stamped into the WeCommerce family, and to date, we couldn't be happier with how that one's going. Also, as we announced last month, Evan will be stepping down as CFO in June, and we expect to be announcing his replacement shortly. With that, I'll pass it back to the operator to facilitate the Q&A. Thank you. We have your first question from Daniel Chan with TD Securities. Afternoon. The MD&A states that the apps revenue, excluding Foursixty, the growth there year-over-year was about 2%. This is much lower than the overall subscription spend and app store spending growth we've seen from the Shopify ecosystem. Can you just give us some color on the overall organic growth? Where are you seeing strength and where are you seeing weakness? Yeah. Evan, do you want to speak to that? Yeah. This might actually be a good one for Alex, because this is sort of directly into the Pixel Union apps space, and some changes that were made there in late 2020 moving to pricing. Yeah, I can talk to that. Do you want to do that, Alex? Sure. Hi, Dan. We mentioned this previously, but in Q4, we switched the pricing for one of our core applications, Ultimate Special Offers. What we did there was we changed from essentially a higher fee up front to a lower fee tied that also has a volumetric component based on number of orders. We did that because the data was showing the LTV would be higher under that pricing and the churn would be lower, but it comes at the expense of slightly lower revenue up front. The initial data there is promising, but it of course comes at a recognized little lower revenue up front. Okay, that's helpful. Thanks. Can you just remind us, the Ultimate Special Offers, approximately what% of your overall revenue that comprises? For Pixel Union or for the overall- Yeah. For the overall consolidated piece, maybe for all of 2020. Yeah. I think I can follow up with you on that on a separate call. Okay. Yeah, that's no problem. Okay. Then moving on from that, some markets have started to reopen, and we're seeing reports of strong spending returning to services like hospitality and travel. Just wondering if you guys are tracking any metrics in those markets that have reopened, and do you anticipate the pace of WeCommerce investments to change at all as markets reopen? I don't think we're necessarily tracking any metrics that would help in understanding the hospitality or anything like that. I do think that the adoption of eCommerce has been a significant acceleration, and I think it's become more of a household name, and more and more people are now going to break the habit of defaulting to eCommerce first. I'm very excited, though, that the world's opening up. Myself, I just can't wait to resume life and start going out to restaurants again. I don't necessarily see there being any adverse effects with eCommerce being adopted worldwide. We continue to be very bullish with the trend. Yeah. I think, Dan, if I were to add anything there, it would be I think there was a clear uptick in the overall trend line in the past 12 months. It wouldn't surprise us if there's a bit of a boomerang effect as people spend more time outside. A lot of our revenue comes from North America. The U.S. obviously being one of the leaders in opening up, that could have a short-term effect. At least we're not tracking any data or seeing any data that would result in the overall trend being reversed. Okay. That's helpful. Last quarter, you talked about potentially investing for growth later in the year. Is that still the plan timeline, or has anything changed there? No, that's still the plan. Sure. That's still very much the plan. Stamped. Our core focus for Q2 is integrating Stamped into the WeCommerce family. We put a new CEO into that business, essentially when the transaction closed on April 6th. I think it's very much status quo in that there's a ton of opportunity in that business, and we plan to invest in that, not just for the second half of this year. We're essentially looking at everything from pricing to sales and marketing to product development, we look at it as a multi-year investment focus. Okay. When we spoke last quarter, you mentioned that there wasn't going to be a whole lot to do in terms of integrating Stamped. What is left to do on it? I think when I say integrating, it's less so on some of the mechanics of actually bringing into our family of companies, and more so on ensuring that the right leadership is there and building the foundation for growth. Okay. Evan, just a housekeeping item. There's about CAD 780,000 of acquisition costs adjusted out of the adjusted EBITDA calc. Just what is that related to? That's pretty much legal, tax costs involved in a lot of it has to do with Stamped. Also, I don't think there's anything else from the other acquisitions, so it should all be from Stamped. Okay. Yeah. It was a multi-jurisdictional deal, and obviously we put together a new credit facility as well. Okay. Okay. Chris Sparling, in your letter to the shareholders that you recently put out there, you mentioned that you're merging the Rehash and Pixel Union agencies. While you don't assume synergies in your transactions, are there more opportunities like this to increase scale where it makes sense and potentially become more efficient? I think there's opportunistic synergies, I suppose. In the case of Rehash with the Pixel Union agency, it really was spearheaded between the two. One was CEO and the GM there just raising their hands and saying that this just seemed very obvious for them, we encouraged it. We've seen that a few other times recently. Post acquiring Stamped, there seems to be a very similar connecting of the dots with Foursixty that we're going to read through and think about in greater detail over time. It's not necessarily at the forefront of our thesis necessarily. We're not trying to pay for opportunities that we see through synergies. Opportunistically going forward, yeah, they could continue to exist. Okay. If we move over to the M&A side of things, Shopify's app ecosystem seems to continue growing at a pretty good clip. Just any commentary around how the M&A pipeline is looking would be helpful. Yeah. I'd say similar to last month, actually. We're continuing to have a lot of really good opportunities come across all of the different divisions, especially on the software side. Pipeline's very active, and we're having a variety of different discussions with all sorts of different possibilities with a number of different companies. It's still very, very healthy. As I mentioned last time in the letter, we brought on a new person to help manage the overall pipeline just because there's so many conversations happening. There's nothing more I can share at this point. Okay. You mentioned in your presentation that there's over CAD 100 million of revenue in the M&A pipeline. What does that mostly consist of? Are those mostly apps or themes, agencies? Just any kind of color on how that looks. Yeah, mostly apps is what it is. Alex, do you want to speak to that? Yeah, I was just looking at that, Dan. You're right, it is mostly apps, but I would say a good way to think about it is it's pretty consistent with our overall revenue mix. Obviously, pro forma for the Stamped acquisition is probably a good way to think about that. Okay, that's helpful. Any change in valuation in the pipeline yet? No, not necessarily. I don't think so. Alex, anything jump out to you there? No, I think what we shared previously, Dan, is still very much the case in that it's a bit of a lagging indicator vis-a-vis public markets. We obviously saw a pretty healthy correction. Some of that's been corrected. Valuations are a little bit all over the place in that we're seeing higher valuations, obviously, for venture-funded companies almost irrespective of the actual outlook for those businesses. The founder-owned businesses that we like tend to be a little more balanced in terms of valuation. I think the overall average is probably high, but we still think of ourselves as pretty advantageous given that we focus on those founder-led businesses. Okay. Yeah, that's helpful. Well, like you said, overall, the values have run up. Has the run-up in valuations also impacted themes in agency companies? If not, does their valuation of themes and agencies, does the relative valuation to apps acquisition make the themes and agency targets more appealing maybe? I think we look at them quite differently in that themes, we like that ecosystem because it's more or less of a closed ecosystem. The addressable market is lower than apps, obviously. Apps has broader competition because it's a more open ecosystem. With agencies, it's very much a people business, and they scale by combining agencies and specializing. Ultimately, that comes down much more on the people side of the equation. With apps, we've seen valuations really range for those companies, and all based on scale and margins historically and where we think that they can go forward. I don't know if changes in apps necessarily results in making a themes business more attractive or less attractive, is the short answer to your question. Given that we take a much more longer-term outlook, and it's not necessarily what they're trading at this quarter or next quarter. Okay. Just a little bit more on Stamped here. I believe Stamped's loyalty app is getting to be about a year old now. I just checked the Shopify App Store before this call, and it seems to still have a high rating of 4.7 out of 5 and has about 68 reviews now. Is that loyalty app performing to expectations, and do any of your investment plans include trying to accelerate that? Yeah. I can't necessarily comment on the applications. I think all of that is under consideration as we think about the opportunity for Stamped, whether that focuses on investing further in our products today, bundling or product innovation, either organically or inorganically. I wouldn't say we're disappointed with the growth in that, but it is still a relatively new business, even if it launched last summer. Okay. I say that. Sorry, Daniel, just to add. It really wasn't marketed until Q4 last year. Okay. Still very new. Okay. It wasn't even added to the website until Q4 last year, let alone marketed out. Yeah. Okay. That's fair. Has acquiring Stamped provided you with any additional leads in the M&A pipeline? You mentioned last quarter that Stamped tends to have larger customers. I'm just wondering if you got any additional insight into what apps might be more popular. Yeah. We get a lot of insight, not just from Stamped, but also through our agency as well as Foursixty, as well as just having, I would say, a pretty good network of merchants. So we have pretty good insights into what people are focusing on. There's been a huge run-up. You may have seen this in the number of SMS apps on the platform. A lot of which are growing healthily. Away from that, a lot of it is doubling down, not surprisingly, on ways to retain customers, given increasing acquisition costs, which you've seen in the results of Facebook and Google. Which we think bodes well for an offering such as Stamped that really helps with re-engagement as well as conversion once those customers are on the site. Right. Okay. You mentioned Foursixty a bit there. I just want to ask a question there. During the roadshow, it was highlighted that the integration of Foursixty with some partners such as Klaviyo and Okendo would accelerate growth. Is that playing out as expected? Yeah. I think those partnerships had a pretty big uplift. There could be greater partnerships even within the portfolio of companies too, that we currently own. Yeah, certainly Foursixty had a meaningful uplift from those partnerships. Okay. Dan, I don't want to stop all the questions from you, but I wouldn't mind opening up to just a few more parties. If there's any questions at the end, you can rejoin the queue. Sure. Thanks. Again, if you would like to ask a question, please press star one on your telephone keypad. Again, that is just star one to ask a question. We have your next question from Robert Young with Canaccord Genuity. Your line's open. Hi, thanks. Maybe just talk about the pipeline, the size of targets that are in the pipeline. CAD 100 million+ can mean a lot. I think Stamped was quite larger than maybe some people expected. Maybe just talk about tuck-in to large, what that pipeline looks like. Maybe just some color there would be helpful. Sure. We're looking at all sizes, but it may disappoint you to hear this, but everything from Stamped size to very small tuck-in opportunities or even just I'd say that it's really difficult to give a clear indication of pacing when it comes to size. Alex, anything you want to help paint a picture on for Rob? Yeah. No, I think, if you think about just like a bell curve, Stamped was clearly an outlier in terms of size, but the ecosystem keeps growing at a pretty healthy clip. What was in our sweet spot maybe a few quarters ago, call it CAD 10 million-CAD 50 million maybe of an acquisition size, that's increasing as these companies are continuing to grow and continuing to have healthy acquisitions. Yeah. While obviously not every future acquisition will be Stamped size. Unfortunately, we can't really comment on exactly what a next acquisition could look like, given that they truly do range from a few million up to CAD 100 million. Okay. There are still very, at the larger end of the scale, there are some that might be CAD 100 million in size, I guess. Yeah. The CAD 100 million pipeline figure is kind of consolidated revenue across apps, fees, and agency opportunities. Yep. Okay, great. We talked a little bit about it already, but just the competition. I know you'd said that you'd faced a little stronger competition on Stamped. Just in general, is there any change in the level of interest from VC or private equity? You touched a little bit on this in the letter that you put to investors. Maybe any thoughts whether that's gotten worse or easier or if it's the same? I definitely feel like we're seeing more increased competition. I feel like more and more people are becoming aware of eCommerce broadly. Shopify, the partner ecosystem, it's just becoming more and more of a household name, which just has the unfortunate side of more and more people are raising capital in various forms and pursuing targets in this ecosystem. At the same time, more and more founders are coming up with new ideas and innovating within the ecosystem. There's more and more potential opportunities at the same time. It can all both seem to be rising effect. Yeah, Alex? I would add, Rob, there's a lot of companies that are not in the auction process, are not speaking to VCs. They're going to come directly to us simply because of the product that we offer. A lot of people will say to us, "We only want to sell to you guys. We're not actively selling. Okay. Still a lot of confidence that you can convert that pipeline, that competition doesn't change that. Yeah. Sorry. Oh, go ahead. I was just going to say, what we highlighted in the letter was that we have a fundamentally different product. Even if there's increased interest in VC and product and strategic acquisitions, we still think what we offer is pretty differentiated. Right. Okay. Then the CEO transition at Stamped. I know it's super early, but are there any benefits you see from your changes? I think you said you're going to invest in some of the customer acquisition process and customer success or support. Maybe it's too early to ask about that, but thought I'd take a crack at it. This is with Stamped you're asking? Yeah. Stamped. Yeah. I'd say it's going well. Andrew Dumont, the CEO of Stamped, is doing a great job. He really has a good lay of the land in a pretty short time. There's so much opportunity here, though. I'd say that as Alex was kind of indicating, we do have a multi-year investment plan for that business, and we're looking at everything from pricing to sales and marketing to product innovation. I think I kind of touched on this last call or last month, but to the adage, "What gets measured gets managed" comes to mind here. Stamped, as it was before, wasn't measuring much. As a by-product, hadn't been managing much within the business. They were really just focused on building the best product possible. We look at this and Andrew Dumont has his arms full because it's a smorgasbord of opportunity here. Alex, anything more you want to touch on? It's tough to over-point to necessarily one specific avenue being pursued because there's a lot going on. Alex, any thoughts? Yeah. No, I think it's a little bit too early to tell. We've owned the business for less than two months at this point. We hope to share actual information on the results and some of those initiatives and the impact of those initiatives in the coming quarters, Rob. Okay. Yeah, that's fair. Sounds like you're excited about the potential, though. I think that's all the questions I have. Maybe last one just to wrap it up, just on the CFO search. Evan, you're on the call today. What happens, I think you said June was the transition. Are you going to have maybe an overlap or are you going to see a situation, Alex, where you're going to step into the CFO role or will you have a good level of overlap? I'll pass the line. Yeah. I was going to say the CFO search has been going quite well. We've been meeting with a number of different candidates, and we're aiming to have some good news to talk about shortly. The candidates are all very interesting. We're pretty excited. Evan, do you want to speak about the transition? Yeah, for sure, Rob. I'm not going anywhere imminently, so here to transition that person over the next coming months. That's what it is. I don't think at this point there would be a transition where Alex steps into that role at this point. Okay, great. Thanks for taking all the questions, guys. Have a good weekend. Yeah. You too, Rob. I'm showing no further questions at this time. I would like to turn the conference back to Mr. Chris Sparling, Chief Executive Officer, for any closing remarks. Wonderful. Thank you, operator. I think that there's been some great discussion here and some really good questions. As you guys can see, we're still pretty excited about Stamped and the direction that we're going to be taking business over the coming time. If there's any other questions anyone has, you can feel free to email us, and we're happy to make time for you. We'll leave it there. Thank you, everyone. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.