SpringBig Holdings, Inc. (SBIG)·Q3 2024 Earnings Summary

Executive Summary

• Q3 revenue declined 6.7% YoY to $6.425M and slipped 2.8% QoQ vs Q2, while gross margin remained solid at 69%; Adjusted EBITDA turned positive at $0.409M as cost controls reduced operating expenses 44% YoY .
• Management guided Q4 revenue to $6.5–$6.8M and Adjusted EBITDA to $0.8–$1.0M, implying sequential EBITDA acceleration despite a cautious demand backdrop as clients limit messaging volumes to stay within subscriptions .
• Q3 slightly trailed the prior quarter guide (from Aug 13) which called for $6.5–$6.8M revenue and $0.5–$0.8M Adj. EBITDA; actuals were $6.425M revenue and $0.409M Adj. EBITDA, reflecting softer volumes and disciplined opex .
• Debt maturities were extended to January 2027; interest rates step down by 0.75% per quarter if quarterly Adjusted EBITDA ≥ $0.9M (max 3.0% reduction), adding flexibility as the company targets stronger free cash flow in 2025 .

What Went Well and What Went Wrong

What Went Well

• Sustained cost discipline drove margin resilience and profitability improvement: operating expenses fell 44% YoY in Q3 (and 6% QoQ), with Q3 Adjusted EBITDA positive at $0.409M versus a $(0.882)M loss in Q3’23 .
• CFO highlighted the eighth consecutive quarter of improving Adjusted EBITDA and reiterated expectation for positive trends to “continue and accelerate in the final quarter of the year and moving into 2025” .
• Debt maturity extension (to Jan 2027) and performance-based interest step-downs support liquidity and FCF goals; management states the company is compliant with all terms and anticipates strong free cash flow in 2025 .

What Went Wrong

• Top-line softness persisted as clients remained “increasingly budget-conscious in managing their messaging volumes,” driving an 8% YTD decline in revenue and Q3 revenue below the Q2 guide range ($6.425M vs $6.5–$6.8M) .
• Gross profit dollars declined YoY to $4.435M (from $5.284M), reflecting volume pressure despite a stable 69% gross margin .
• Net loss remained negative at $(0.554)M (vs $(2.742)M YoY), indicating further progress needed to achieve consistent GAAP profitability despite non-GAAP improvements .

Financial Results

Segment/Sub-mix detail:

KPIs and Operating Metrics:

Notes: Gross margin for Q3 2023 is computed from reported revenue and gross profit; subscription mix for Q3 2023 not disclosed in the press release .

Guidance Changes

Context vs prior guidance:

• Q3 2024 guidance (issued Aug 13) was revenue $6.5–$6.8M and Adjusted EBITDA $0.5–$0.8M; actuals were $6.425M and $0.409M, respectively, coming in slightly below both ranges amid lower messaging volumes .

Earnings Call Themes & Trends

Note: No Q3 2024 earnings call transcript or webcast link was found on the company’s IR “Quarterly Results” page; themes below reflect disclosures from Q1/Q2/Q3 press releases and filings .

Management Commentary

• “We are reporting a third quarter of positive Adjusted EBITDA*, and our eighth consecutive quarter of improving Adjusted EBITDA*... achieved in a period where we have experienced an 8% decline in revenue due to clients being increasingly budget-conscious... We expect the positive trend in our Adjusted EBITDA* to continue and accelerate in the final quarter of the year and moving into 2025.” — Paul Sykes, CFO .
• “We are now in compliance with all the terms and requirements of both the Convertible Notes and Term Loan, and the extended maturity provides additional financing flexibility... We anticipate generating strong free cash flow during 2025.” — Paul Sykes, CFO .
• Prior context: “Our newer offerings, such as ‘subscriptions by Springbig’ and ‘gift cards by Springbig’ are gaining traction...” — Jeffrey Harris, CEO (Q2) ; similar product traction and diversification noted in Q1 .

Q&A Highlights

• No Q3 2024 earnings call transcript or webcast link was available on the company’s IR site as of this analysis; therefore, there are no Q&A highlights to report .

Estimates Context

• Wall Street consensus via S&P Global (Capital IQ) was unavailable through our data connector at this time, so we cannot provide definitive “vs. consensus” comparisons for Q3 or Q4 guidance. As a proxy, we compared actuals to the company’s prior guidance ranges where disclosed .

Key Takeaways for Investors

• Cost actions are the primary driver: 44% YoY opex reduction underpinned positive Adj. EBITDA despite softer revenue; this remains the core bull pillar near term .
• Top-line remains pressured by client budgeting around messaging volumes and churn avoidance; sustaining subscription mix around 80% offsets some volatility but constrains upsell into usage fees .
• Q3 missed the company’s own Q2 guide ranges modestly on both revenue and Adj. EBITDA, underscoring conservative near-term expectations into Q4 .
• Liquidity/capital structure improved with maturities pushed to 2027 and potential interest rate step-downs tied to performance; successful execution toward ≥$0.9M quarterly Adj. EBITDA could lower borrowing costs by up to 300 bps over four qualifying quarters .
• Q4 outlook calls for EBITDA acceleration ($0.8–$1.0M), which, if achieved, should validate the operating model reset and may reset expectations for 2025 free cash flow generation .
• Risk skew: revenue sensitivity to client spend, sector-specific dynamics, and churn management; legal/financing covenants now less binding near term but still bear monitoring via quarterly filings .
• Trading setup: watch early read-through on Q4 revenue trajectory and any monthly demand color; delivery against EBITDA guide and evidence of interest step-down eligibility are likely stock-moving catalysts .