In the latest earnings call, SpringBig's CEO Jeff Harris announced the company's revenue growth and positive adjusted EBITDA for the first time in December. The company, which trades under the ticker symbol SBIG, saw a revenue increase of 5% year-on-year to $28.1 million and a significant decrease in adjusted EBITDA loss from $12.6 million in 2022 to $3.6 million in 2023. SpringBig also secured $8 million in debt financing and expanded its services beyond the cannabis industry.
Key Takeaways
- SpringBig grew revenues by 5% year-on-year to $28.1 million.
- Operating expenses were cut by 17% for the full year and 31% for Q4 year-on-year.
- Adjusted EBITDA turned positive in December, with a full-year loss reduction from $12.6 million to $3.6 million.
- The company secured $8 million in debt financing and launched new product offerings.
- SpringBig expanded its services to other regulated industries beyond cannabis.
- For fiscal 2024, revenue is expected to be between $29 million to $32 million, with an adjusted EBITDA profit of $3.5 million to $5.0 million.
Company Outlook
- SpringBig anticipates Q1 fiscal 2024 revenue between $6.4 million to $6.7 million, with an adjusted EBITDA profit of $0.2 million to $0.4 million.
- Full-year fiscal 2024 revenue is projected to be $29 million to $32 million, a 10% increase at the midpoint, with adjusted EBITDA profit between $3.5 million and $5.0 million.
Bearish Highlights
- The company faced higher message distribution costs, resulting in a lower gross profit margin of 70%.
- Total operating expenses for Q4 were $6.9 million, despite a 31% reduction year-on-year.
Bullish Highlights
- SpringBig achieved a significant reduction in adjusted EBITDA loss, with Q4 loss at just $0.2 million.
- The company successfully reduced sales and marketing expenses by 46% and technology and software development expenses by 41% year-on-year.
Misses
- While the company reduced operating expenses, the gross profit margin was down due to increased message distribution costs.
Q&A Highlights
- SpringBig plans to pass on some increased costs to customers while promoting alternative distribution methods to reduce carrier costs.
- The company has transitioned to a prepaid model for smaller clients to better manage budgets.
- SpringBig expects customer growth of 30 to 35 per month and a reduction in customer churn.
- There are 10 secured contracts in the non-cannabis category, with expectations of similar revenue and margin profiles to cannabis clients.
SpringBig's fiscal year 2023 has marked a turning point with the company posting its first profitable month in December and securing a healthier balance sheet through debt financing. The company has also diversified its client base, moving beyond the cannabis space and into other regulated industries, potentially broadening its market reach.
With a focus on operational efficiency and new product launches, SpringBig is poised to continue its growth trajectory in the coming fiscal year.
InvestingPro Insights
SpringBig's (SBIG) latest financial results show a company that is making strides towards profitability, as evidenced by its growth in revenue and positive adjusted EBITDA. To further understand the company's financial health and stock performance, here are some key metrics and insights from InvestingPro:
InvestingPro Data:
- The company's market capitalization stands at a modest $8.07 million, indicating a relatively small enterprise but one that has room to grow.
- Revenue for the last twelve months as of Q1 2023 was reported at $28.03 million, showing a solid increase of 7.01%.
- Despite the growth, the gross profit margin was recorded at 78.75%, which is strong, but the company faces challenges with a negative operating income margin of -35.11% for the same period.
InvestingPro Tips:
- An InvestingPro Tip suggests that SBIG's stock is currently in overbought territory according to the RSI indicator, which could signal a potential pullback in the near term.
- Another tip to consider is that the stock typically exhibits low price volatility, which might appeal to investors looking for more stable stock performance.
For investors seeking a deeper analysis, there are additional InvestingPro Tips available, which can provide further insights into SpringBig's financials and stock potential. Use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription to access these valuable tips. With a total of 6 InvestingPro Tips listed for SBIG, investors can gain a comprehensive understanding of the company's financial outlook and stock performance.
Full transcript - SpringBig Holdings Inc (SBIG) Q4 2023:
Operator: Good afternoon, everyone, and welcome to SpringBig's Fourth Quarter and Fiscal Year 2023 Earnings Conference Call. I would now turn the call over to Spring Big's Investor Relations, Claire Bollettieri.
Claire Bollettieri: Thank you. Hi, everyone, and thanks for joining our Q4 earnings conference call. Joining me on the call today are Jeff Harris, our CEO, Founder and Chairman; and Paul Sykes, our CFO. By now, everyone should have access to our earnings announcement. This announcement is also on our Investor Relations website. During this call, we'll make forward-looking statements, including statements about our business outlook, strategies and long-term goals. These comments are based on our plans, predictions and expectations as of today, which may change over time. Our actual results could differ materially due to a number of risks and uncertainties, including the risk factors outlined in our 10-K that will be filed with the SEC. Also during this call, we will discuss certain non-GAAP financial measures. These non-GAAP measures are not intended to be a substitute for our GAAP results. Please refer to our earnings release on our Investor Relations website for a reconciliation of GAAP to non-GAAP financial measures as well as additional context on our key operating metrics. And finally, this call in its entirety is being webcast from our Investor Relations website at www.investors.springbig.com, and an audio replay will be available on our website in a few hours. With that, I'd like to turn the call over to Jeff.
Jeff Harris: Thanks, Claire. And thank you everyone for joining this afternoon's call. During today's call, Paul and I will provide you details on our fourth quarter and full year results, update you on our key business initiatives and provide guidance for the first quarter of 2024. I am happy to report that SpringBig is in an excellent position. We continue to execute on a sound strategy, and I am confident that we are making the right investments to both add value to our clients and at the same time, capturing the long-term opportunity in front of us. While throughout the year, we have experienced some end market challenges, we grew revenues by 5% year-on-year, and we have diligently reduced our operating expenses by 17% and 31% year-on-year for the full year and fourth quarter, respectively. We achieved our target of delivering positive adjusted EBITDA before the end of the fiscal year, with December being our first profitable month. And in Q4, our adjusted EBITDA loss was a modest $200,000 compared to $3.2 million in the same quarter last year. Shortly after the end of the year, we secured $8 million in debt financing with a syndicate of lenders, which allows us to move forward with a much stronger and cleaner balance sheet as we look to continue to expand and deliver shareholder value. Paul will discuss our financial results and the recent debt financing in a moment, but first, I would like to highlight some of our accomplishments over the past year. As a reminder, our retail and brands platform provides merchants and brands with the tool set that they need to create and manage a successful loyalty and digital marketing program along with instituting a data-driven approach to how they connect and engage with their customers. Throughout 2023, we have been operating in a challenging end market environment with broader macroeconomic concerns weigh on marketing budgets and digital spend and compression of margins in the cannabis industry increasing the financial stress on our clients, and we have worked diligently to support them. In such an environment, it is pleasing that we have continued to grow revenue with full year growth of 5% year-on-year and with our subscription revenues underpinning this growth and increasing by 14% year-on-year. As the cannabis market benefits from an improving macroeconomic environment and potentially rescheduling from Schedule 1 to Schedule 3, we anticipate an acceleration in growth. We have also focused our attention on a small number of high potential growth initiatives. And while we continue to develop and launch innovative product offerings to enable our clients to retain and grow their customer bases within our core platform, these new initiatives both complement our core and provide discreet new offerings. We have talked on prior quarterly calls about the launch of subscriptions by SpringBig, which enables our retail clients to offer consumers in return for a monthly or annual subscription fee, the opportunity to earn additional loyalty rewards, access to special promotions and other perks as VIP subscribers. Progress has been at a pace we expected given this is truly an innovative offering in the market. We have 13 clients that have expanded their contracts to incorporate this offering and six have already launched their VIP subscriber programs with more than 1,800 consumers already subscribing to these programs. We see meaningful potential from both the revenue growth and profitability perspective for both our retail partners and SpringBig as the VIP subscription programs are launched and mature over time. Our second key initiative was launched in Q4 is our offering of unique gift card payment option that can be used by consumers as a method of payment in-store directly from their existing loyalty wallet and will also enable the consumer to uniquely combine the use of loyalty points and the prepaid gift cards. We expect meaningful revenue from these two initiatives to start accruing in the second half of 2024. Finally, we continue to expand beyond the cannabis vertical with our loyalty and messaging communications platform servicing other regulated industries such as alcohol, vape, smoke and CBD. While these newer initiatives are going to take time to evolve, we are confident that in time, it will fuel significant growth to complement the potential we believe is present to further expand our existing offerings. Before I hand over to Paul, who will walk through our financial results in detail, I want to conclude with my assessment of the current status SpringBig. SpringBig is in an excellent position. Our technology platform is operational in more than 2,900 retail locations across the United States and Canada and present in the smartphones of over 35 million marketable consumers. We have a significant opportunity in front of us to continue to offer and develop innovative technology solutions that enable our clients to retain and grow their customer bases. Our financial position has improved both from the perspective of having cash in our balance sheet and having optimized our operating expenses to a level that enables us to generate meaningful and sustainable earnings in the future without being reliant on revenue growth. For 2024, our focus is on ensuring successful execution of our key initiatives, so we start realizing some of the significant potential, further expanding our subscription revenue generating loyalty and digital messaging platform and continuing to be highly disciplined in our expense management to deliver meaningful adjusted EBITDA. With that, I'd like to turn things over to Paul.
Paul Sykes: Thank you, Jeff, and thanks again to everyone for joining us. I want to start by talking about the $8 million debt financing we completed in January 2024 before discussing our results for the fourth quarter and 2023 fiscal year and ending with our guidance for both the first quarter and full year of 2024. On January 24, we announced that we had secured $8 million of debt financing with a syndicate of investors consisting of a $6.4 million 8% secured convertible note and a $1.6 million 12% secured term loan. Both the convertible note and term loan mature in 2026 and there are no amortization payments prior to maturity. The convertible notes can be converted into common stock at the option of the investor at any time prior to maturity at a conversion price of $0.15. The proceeds were partially used to repurchase the entire existing secured convertible note including associated warrants, which had been issued at the time we became a public company in June of 2022 and for a discounted amount of $2.9 million. The net proceeds after repurchasing the existing note and transaction costs were $4.6 million. Following this refinancing, SpringBig has a much stronger and cleaner balance sheet with the capital that will enable us to continue to expand and to deliver shareholder value. Now turning to our results for the fourth quarter and fiscal 2023. We are pleased to be able to report a year in which revenues grew 5% year-on-year to $28.1 million and one in which we were able to show a significant reduction in our adjusted EBITDA loss from $12.6 million in 2022 to $3.6 million in 2023, benefiting from a 2% improvement in gross profit margin to 77% and a 17% year-on-year reduction in our operating expenses to $29.9 million. Our Q4 adjusted EBITDA loss was $0.2 million compared with $3.2 million in the same quarter last year, reflecting the progress that the company has made along our path towards profitability during 2023. In December, we posted positive adjusted EBITDA for the first time. Q4 revenue came in at $6.8 million, representing growth of 1% year-on-year and a 1% decline sequentially. In our earnings call, we talked about the challenge in the current macro environment of ensuring we receive payment for our services and that while we have worked diligently with many clients to support them through the introduction of payment plans, it has inevitably also led to us having no choice in some cases but to cease servicing nonpaying clients. This, of course, impacts our reported revenues and has continued to be a factor during Q4. Being a technology business, we derive most of our revenue from the recurring subscription contracts. In 2023, 79% of revenue was subscription revenue compared with 73% in the prior year, and we grew our subscription revenues by 14% year-on-year to $22.3 million, and by 10% year-on-year in Q4. The majority of the non-subscription revenue is excess use revenue arising when clients exceed the messaging volume within their subscription. And we also derive revenue from brands clients and other ancillary services. Over time, we anticipate the sensitive revenue which is derived in subscriptions will continue to increase as we replace excess use revenue with larger subscription contracts that are more predictable and higher quality. The byproduct, of course, of this conversion into subscription revenue has been a year-on-year reduction in our excess use revenue by 24% in Q4 and by 28% for the full year. We ended the fourth quarter the year with 1,298 discrete plan platforms and are installed in more than 2,900 retail locations. While net revenue retention, a measure of the growth in our recurring subscription revenue, excluding the impact of new client acquisitions, was 97% in 2023 compared with 105% in the prior year, a reflection of the challenging market and slightly below our target range of 100% to 110%. Our gross was $4.8 million, representing a margin of 70%, which is lower than recent quarters due to absorbing higher message distribution costs imposed by the telecom operators. For the full year, our gross profit was $21.6 million, representing 8% year-on-year growth and a margin improvement of 2% from 75% from 2022 to 77% in 2023. Moving on to operating expenses. We have seen the impact of our diligent management expenses now flowing through into our operating results, and we continue to remain highly focused on optimizing the leverage in our business while, of course, at the same time, balancing this with our investments for sustainable growth. Total operating expenses in Q4 were $6.9 million, representing a 31% year-on-year reduction. At the end of the year, our employee count was 83 compared with 126 employees at the end of 2022. Sales, servicing and marketing expenses were $1.8 million for the quarter, representing 26% of total revenue. Sales and marketing expenses decreased by 46% year-on-year due to cost rationalization towards the end of 2022 and during the current year, resulting in lower employee headcount. Technology and software development expenses were $1.8 million in the quarter representing 26% of total revenue. These expenses decreased 41% year-over-year, with the savings being attributable to lower expenses associated with the use of offshore contractors and a reduction in employee costs. G&A expense was $3.4 million for the quarter, representing 50% of total revenue and a 9% year-over-year reduction. For the full year, operating expenses were $29.9 million, representing a year-on-year reduction of 17%. While operating expense reduction initiatives have been implemented throughout the year, and therefore, we have not yet seen the full impact of these initiatives. Our current annual run rate is expected to result in a year-on-year reduction of approximately 30% from 2024 compared with the 2023 operating expenses. Adjusted EBITDA is our key earnings metric since we believe this most closely equates to operating cash flow. Adjusted EBITDA loss in the fourth quarter was $0.2 million, representing an adjusted EBITDA margin of negative 4%. The adjusted EBITDA loss represents an improvement sequentially compared with the $0.9 million adjusted EBITDA loss in Q3 and is significantly lower than the $3.2 million loss reported in Q4 last year. For the full year, our adjusted EBITDA loss is $3.6 million compared with $12.6 million in 2022 or 71% production. Free cash flow for the fiscal year was negative $3.2 million, comprising primarily $5.3 million cash used in operations, $12.7 million in repayment of our convertible note $4.2 million received from the issuance of stock and our equity raise, which was completed in May and $1.9 million short-term cash advances. I shall now conclude with our guidance for the first quarter of fiscal 2024. With regard to our outlook, I would include our usual caveat that our clients continue to experience industry specific headwinds and the macroeconomic uncertainties continue to be highly prevalent. For the first quarter of fiscal 2024, we expect total revenue in the range of $6.4 million to $6.7 million and an adjusted EBITDA profit in the range of $0.2 million to $0.4 million. For the full year of fiscal 2024, we expect total revenue in the range of $29 million to $32 million and playing 10% year-on-year growth at the midpoint and an adjusted EBITDA profit in the range of $3.5 million to $5.0 million. With that, I'd like to open it to Q&A. Operator, please poll for questions.
Operator: [Operator Instructions] Our first question comes from the line of Scott Fortune of ROTH. Your line is open.
Scott Fortune: Thank you, and, good afternoon. Just wanted to follow-up real quick on the guidance here, looking at your 2024 guidance. You're expecting kind of a sequential decline in 1Q, you factor a little bit on the macro side of that. There's some seasonality on there, but I just want to get a sense for that means a much bigger ramp in the second half of '24. But can you help us understand the 1Q kind of softness from that standpoint, continuing challenges for clients or adding new customers here in the current environment. And what sales initiatives or programs are going to account for kind of the stronger second half of '24 cadence? Just kind of unpack bit, that would be helpful.
Paul Sykes: Scott, thanks for the question. To address the Q1 decline at first, obviously, there's still a little bit of seasonality. We -- revenues tend to be a little higher in holiday periods. And -- so in Q4, we get, obviously, all the traditional holidays in Q2. We have things like 4/20 and some through this summer . Very few occur in Q1. So we try to factor that in. And then secondly, there is -- we feel there's ongoing sort of challenges in the macro environment. And so we don't want to assume there's too much of an uptick in Q1. In terms of the second half of the year, and as you rightly say, there's an acceleration in growth as the year progresses. That really is the impact of the seasonality that I just talked to, but also the impact of some of the newer products coming on board, particularly the VIP subscription product, which we launched in the second half of 2023 and is already getting good momentum in the marketplace. And we've already got nearly 2,000 consumers subscribe into those programs across a number of retailers and many more retailers already signed up to launch their subscription programs. And then the second initiative is the ability -- is gift card by SpringBig, which is the ability for retailers to have a gift card payment option within the mobile wallet. And that will allow consumers to combine payments with loyalty points and the use of the prepaid gift card. So these two will bide some revenue growth in the second half of the year along with some seasonality. So that's why we get the profile that we do through 2024.
Scott Fortune: Thank you. I appreciate that detail. And just kind of follow up on obviously overall weakness here, just kind of provide an update on what you're seeing from the new business side the last couple of quarters. Obviously, there's been attrition of accounts that have been tough time paying. We see that in California as more retailers are going out of business or not paying their bills or taxes from that standpoint, but just kind of a little more visibility on the new account side. With that said, are you kind of, I mean, regionalize it since the mature market is still tough? The New York coming on with legal retailers kind of through kind of the growth opportunity or the states that are looking positive for adding new retailers on that -- from that standpoint? And then I have one follow-on after that. That would be great.
Paul Sykes: You almost answered the question. Yes, the mature states continue to be tough. New retail comes on from some of the newer states and the states that are transitioning from medicinal to recreational. We added 396 new clients during the past year. So that's a nice average. And it is a fairly constant rate of between 30 to 35 clients added in each and every month during the year. So -- but we're seeing -- still seeing too much churn. We're still seeing, particularly at the lower end, a lot of clients where they're financially challenged, and we've talked about before that while we try to help them, we put them on payment plans and we're trying to help them through this -- the challenging periods that the industry is going through. At times, we also have to suspend them and stop the service because if they are not going to pay us, at the end of the day, we got no alternative.
Scott Fortune: Got it. And then just kind of a follow-up on that, are you seeing any positive outreach from kind of the large MSOs. Obviously, the big MSOs are really reporting meaningful cash flow generation. And that's not even counting the potential elimination 280E, right, as cash flow generation comes from a lot of these larger clients of yours. What's kind of the sense for -- they want to drive growth, right, and kind of sense of adding to the program or ramping up your new initiatives from that standpoint. Just kind of little bit of color from your large clients that are -- that have pretty good cash flow from that standpoint?
Paul Sykes: We're seeing the major MSOs that are our clients, and we've got plenty of the top 10 that they continue to expand their spend with us. We've seen growth. We've seen interest from them in some of the newer products, and a lot of them also transitioning to the mobile app rather than -- and therefore, push notifications rather being reliant on text messaging because push, obviously, then gives better deliverability and is more cost effective. So we're seeing the accounts from those big MSOs continuing to grow.
Jeff Harris: So overall, the marketing budgets are still pretty tight. We just haven't seen that open up and kind of waiting for potential rescheduling for that to occur and since...
Paul Sykes: Yes. And we feel that if we get rescheduled and the 280E issues go away, then that could be a big boost and not only to the larger MSOs, but obviously to the smaller retailers as well. And had a proportion of that additional cash injection into the industry will flow into marketing budgets.
Scott Fortune: Appreciate the update. I will jump back in the queue.
Operator: Thank you. Our next question comes from the line of Casey Ryan of WestPark Capital. Your line is open.
Casey Ryan: Good afternoon, gentlemen. Thanks for the update today. I just had a couple of quick questions. Scott, I got most of the relevant ones. But on the messaging costs, I guess the gross margins, Paul, you may -- I may have missed this in your commentary, but is that sort of a number that -- does that get pass along to client in that sort of increased messaging costs as we move into '24? Or is that sort of a permanent state for gross margins, which is fine if it is. But maybe you can remind me of that if I wasn't paying close enough attention.
Paul Sykes: It's an additional cost. The messaging costs have gone up as carriers -- sell carriers have increased their costs. To date, we've not passed that on. So we've been absorbing that additional cost. As we think about pricing going forward, and we think about our margins, then some of it will largely get pushed at and transferred. Some of them won't, and we'll have to absorb it. But at the same time, we try to promote alternative distribution methods. As I mentioned in response to Scott's question, the more people can be using push notifications, which we don't have the associated carrier costs and have better deliverability and then that's better for both us and for our clients. And interestingly, you will also see an increase use of mail, which may seem sort of like antiquated as a method nowadays, but again, you get more cost effective and better deliverability. So we now have about 40% of our messages are going out via either e-mail or push notifications. So that in time will impact the gross margin.
Casey Ryan: Yes. Well, it's sort of interesting. I guess it's sort of -- so the dip from Q3 to Q4. I mean, can we infer that that's sort of equal to on a dollar basis equal to what the like net price increases? Is that sort of a fair thing for us to do to say?
Paul Sykes: Yes, that's okay.
Casey Ryan: It is? Okay. Okay. Good. That's helpful. Okay. Well, then in terms of customers, right, and sort of cash flow situations, I think bad debt expense was lower, $732,000 in the quarter versus $1.1 million or something in the year ago period. So that looks like the trend is in the right direction. But tell me if you've moved to -- I guess I've heard others in the industry suggest that some people have moved to sort of upfront payments for certain customers, right? So that has the same effect as sort of cutting people off and being tougher, but have -- in some cases, has SpringBig driven I guess, sort of cash flow sort of negative in terms of people pay you upfront for services or have you shrunk the like service term that like you'll sort of give somebody to sort of consume services and then be billed? I'm sort of curious about what you're doing in terms of payment duration. Because some people have said, oh, yes, two, three, four years ago, people would give someone a quarter to pay, right, three months. But that, that's been steadily shrinking as they had this long tail issue with cash flow from smaller players.
Paul Sykes: We've said to the larger players, we obviously try to stay with quite tight payment terms. I don't think those have changed that much over the last year or so. What we have done is implement a system of making sure that the -- particularly the smaller clients are prepaying before usage.
Casey Ryan: Correct. Okay. Okay.
Paul Sykes: That actually has a benefit to the client as well in that and some of these, as you know, Casey, the relatively small businesses. And by prepaying, it helps them manage their own budgets. Because If you have access to our platform and can send out, should I say, endless messages and then you get the bill afterwards and you find, I suddenly spent x times what I thought I was going to spend. And that's not good for the client. It's not good for us because at the end of the day, we've got an unhappy client. So implementing a prepayment upfront it means we're helping them to manage budgets on a month to month basis.
Casey Ryan: Right. Okay. Okay. Good. So sort of that structure, has that been sort of fully implementing? Meaning, is there more to go in terms of telling some people, hey, we're moving to a prepaid model or have we sort of completed a lot of that work in terms of adjusting our sort of payment plans and sort of billing practices?
Paul Sykes: We've largely completed that. We transitioned to that for the customers we were going to transition with effect from January.
Casey Ryan: Okay. Okay. Good. Super. That means it's sort of great progress. And I think hopefully, the bad debt expense is sort of showing us a positive trend there. So in terms of the revenue guidance, and this is for both, can that be achieved with just the existing client base, meaning it doesn't rely on new customer adds? Or is there some expectation for sort of normal customer adds to sort of support that?
Paul Sykes: My expectation is that normal customer labs at the rate of 30 to 35 a month will continue and that we'll get some reduction in the churn that we've seen through the last year or so. But hopefully, we'll be on the cautious side on our revenue guidance.
Casey Ryan: Right. Okay. Good. Good. That's good to hear. And then the last question sort of sort of outside -- I'm not sure what we want to call this non-cannabis or sort of alcohol tobacco smoke kind of segment. Can you comment if there were any commercial revenues tied to that segment just at all, even if it was $1 in Q4. I'm just -- I'm not looking for a number. I'm just curious if we're commercially generating some revenues there?
Paul Sykes: Yes, we are. We've got about 10 contracts that are in that broad non-cannabis category. So they're generating revenue. It's not a significant number yet and if it becomes a significant number at some point, obviously, we'll start breaking that out. We've also started marketing, co-marketing a significant integration with a point-of-sale system in the non-cannabis space, and that is driving some acceleration in that area in Q1 of 2024. So we're quite optimistic about growth in that non-cannabis space.
Casey Ryan: Okay. Super. Well -- and one more question, realizing we're early days here. Does the shape of the revenues look similar? And like I'm just -- if a non-cannabis clients say has five locations and a cannabis client has five locations. Does the spend and the margin profile just look the same? And in my mind, simply I'm thinking, well, it's software and it's sort of this communications marketing and loyalty should be -- could be the same profile, but maybe there's a reason why it's not quite the same profile, but I'm just curious if generally, your expectation is from a revenue and margin profile that cannabis and non-cannabis looks similar and/or different if there is a way to describe that?
Paul Sykes: I think it's relatively similar. I would expect that the outside of cannabis, the revenue is -- for a client that was similar in every other aspect. But for the market, the revenue would be slightly lower. And the reason I say that is there are specific challenges in the cannabis space, as you know, around communicating with your consumer. And that drives many of the cannabis retailers to message more than people probably will outside of cannabis where the restrictions don't apply. So I think on the average revenue for non-cannabis client will be slightly lower than it is in the cannabis space.
Casey Ryan: Right. Okay. Got it. Well, thank you. Thank you for the encouraging outlook. And yes, we're looking forward to a good year. So thanks for your time.
Paul Sykes: Thanks, Casey.
Operator: Thank you. I'm showing no further questions at this time. I'd like to turn the call back over to Paul Sykes for any closing remarks.
Paul Sykes: Thank you. And thank you, everyone, for joining our call and for your continuing support in SpringBig. We're certainly excited about the next year and what's ahead of us, and we look forward to updating you with our progress as the year progresses. Thanks again, and have a good evening.
Operator: Thank you. Ladies and gentlemen, this does conclude today's conference. Thank you all for participating. You may now disconnect. Have a great day.
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