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Wag! Reports Fourth Quarter and Full Year 2024 Results; Announces Review of Strategic Alternatives to Maximize Shareholder Value

1. Wag! reported Q4 2024 revenue of $15.4 million, down from $21.7 million. 2. The company is reviewing strategic alternatives for maximizing shareholder value. 3. Net loss for 2024 increased to $17.6 million from $13.3 million in 2023. 4. CEO emphasized partnerships to improve demand for wellness products. 5. Projected revenues for 2025 are estimated between $84 million and $88 million.

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Why Bearish?

Wag! reported declining revenues and increased losses, indicating financial instability. Historical examples show that such trends can negatively affect stock performance, as seen with similar companies facing increased operational challenges.

How important is it?

The announcement of financial results and strategic reviews weigh heavily on investor perception of future profitability, thus influencing stock price expectations.

Why Short Term?

The immediate investor reaction to losses and strategic reviews may lead to volatility in stock prices. Past instances of similar adjustments have often resulted in short-term declines in stock prices.

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WOOFPETSBARK
March 24, 2025 07:00 ET  | Source: Wag! Group Co. SAN FRANCISCO, March 24, 2025 (GLOBE NEWSWIRE) -- Wag! Group Co. (the “Company” or “Wag!”; Nasdaq: PET), which strives to be the number one platform to solve the service, product, and wellness needs of the modern U.S. pet household, today announced financial results for the fourth quarter and full year ended December 31, 2024. The Company also announced that its Board of Directors (the “Board”) is advancing its review of strategic alternatives to identify opportunities to maximize value for shareholders, including potential investments, strategic partnerships, sale, merger, or other strategic transactions involving the Company or its assets. “Our Board and management team continues to believe in the strength of our business, the effectiveness of our strategic plan, and our ability to execute on our strategy to drive value for shareholders,” said Garrett Smallwood, CEO and Chairman of Wag!. “We remain focused on strengthening our balance sheet and reducing our debt. Our Board is committed to a disciplined and deliberate approach to ensure the best outcome for our shareholders." The Board has not set a timetable for the conclusion of this review process. There can be no assurance that any transaction or other strategic alternative will be available to the Company, approved by the Board, or otherwise consummated. The Company does not intend to disclose developments relating to this process until it determines that further disclosure is appropriate or necessary. BofA Securities is acting as the Company’s financial advisor during the ongoing process. Fourth Quarter and Year-End 2024 Results “I want to thank the entire Wag! team for their hard work and dedication in 2024,” said Garrett Smallwood, CEO and Chairman of Wag!. “We are excited about the forward momentum in our business, highlighted by the addition of three major new distribution partners that we believe will accelerate demand for Wellness. Additionally, we have seen stability in Google search trends and we are leaning into AI through high-quality content and strategic partnerships.” Fourth Quarter 2024 Highlights: Revenues of $15.4 million, compared to $21.7 million in the fourth quarter of 2023 – comprised of $5.3 million of Services revenue, $8.9 million of Wellness revenue, and $1.2 million of Pet Food & Treats revenue.Net loss was $4.8 million, compared to $3.5 million in the fourth quarter of 2023.Adjusted EBITDA1 loss of $1.0 million, compared to breakeven Adjusted EBITDA loss in the fourth quarter of 2023. Full Year 2024 Highlights: Revenues decreased 16% to $70.5 million, compared to $83.9 million in 2023 – comprised of $21.6 million of Services revenue, $42.7 million of Wellness revenue, and $6.2 million of Pet Food & Treats revenue.Net loss was $17.6 million, compared to net loss of $13.3 million in 2023.Adjusted EBITDA1 loss of $1.1 million, compared to positive Adjusted EBITDA of $0.7 million in 2023. Guidance For the full year 2025, we expect: Revenues in the range of $84 million to $88 million.Adjusted EBITDA1 in the range of $2.0 million to $4.0 million. Wag!’s Fourth Quarter and Full Year 2024 Conference Call Wag! will host a conference call and live webcast today, March 24, 2025, at 8:30 a.m. ET to discuss financial results. Investors and analysts interested in participating in the call are invited to dial 1-800-717-1738 (international callers please dial 1-646-307-1865) approximately 10 minutes prior to the start of the call. A live audio webcast of the conference call will be available online at https://investors.wag.co. A recorded replay of the conference call will be available approximately three hours after the conclusion of the call and can be accessed online at https://investors.wag.co for 90 days. Wag! also provides announcements regarding financial performance and other matters, including SEC filings, investor events, press and earnings releases, on our investor relations website (https://investors.wag.co), and/or social media outlets, as a means of disclosing material information and complying with disclosure obligations under Regulation FD. The list of social media channels that Wag! uses may be updated on the investor relations website from time to time. In addition, you may automatically receive email alerts and other information about Wag! when you enroll your email address by visiting the “Email Alerts” section at (https://investors.wag.co/ir-resources/email-alerts). About Wag! Group Co. Wag! Group Co. strives to be the number one platform to solve the service, product, and wellness needs of the modern U.S. pet household. Wag! pioneered on-demand dog walking in 2015 with the Wag! app, which offers access to 5-star dog walking, sitting, and one-on-one training from a community of over 500,000 Pet Caregivers nationwide. In addition, Wag! Group Co. operates Petted, one of the nation’s largest pet insurance comparison marketplaces; Dog Food Advisor, one of the most visited and trusted pet food review platforms; WoofWoofTV, a multi-media company bringing delightful pet content to over 18 million followers across social media; maxbone, a digital platform for modern pet essentials; and Furmacy, software to simplify pet prescriptions. For more information, visit Wag.co. Non-GAAP Financial Measures and Other Operating Metrics Adjusted EBITDA is a non-GAAP financial measure defined as net income (loss) adjusted for interest expense, net; income taxes; depreciation and amortization; and stock-based compensation, as well as other non-recurring items which are not indicative of our operating performance and other transaction-specific costs that do not represent an ongoing operating expense of the business, including but not limited to, integration and transaction costs associated with acquired businesses, severance costs, loss on extinguishment of debt, and legal settlements. Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by revenues. Adjusted EBITDA and Adjusted EBITDA margin provide a basis for comparison of our business operations between current, past, and future periods by excluding items from net income (loss) that we do not believe are indicative of our core operating performance. Platform Participant is defined as a Pet Parent or Pet Caregiver who transacted on the Wag! platform for a service in the quarter. Services include dog walking, sitting, boarding, drop-ins, training, premium telehealth services, wellness plans, and pet insurance plan comparison. Information reconciling forward-looking Adjusted EBITDA and Adjusted EBITDA margin to the most directly comparable GAAP financial measures is unavailable to the Company without unreasonable effort. The Company is not able to provide reconciliations of Adjusted EBITDA and Adjusted EBITDA margin to the most directly comparable GAAP financial measures because certain items required for such reconciliations are outside of the Company’s control and/or cannot be reasonably predicted, such as the provision for income taxes. Preparation of such reconciliations would require a forward-looking balance sheet, statement of income and statement of cash flow, prepared in accordance with GAAP, and such forward-looking financial statements are unavailable to the company without unreasonable effort. The Company provides a range for its Adjusted EBITDA and Adjusted EBITDA margin forecast that it believes will be achieved, however it cannot accurately predict all the components of the Adjusted EBITDA and Adjusted EBITDA margin calculation. The Company provides an Adjusted EBITDA and an Adjusted EBITDA margin forecast because it believes that Adjusted EBITDA and Adjusted EBITDA margin, when viewed with the Company’s results under GAAP, provides useful information for the reasons noted above. However, Adjusted EBITDA and Adjusted EBITDA margin are not measures of financial performance or liquidity under GAAP and, accordingly, should not be considered as alternatives to net income (loss), net income (loss) margin or cash flow from operating activities as an indicator of operating performance or liquidity. Forward-Looking Statements This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Some of the forward-looking statements can be identified by the use of forward-looking words. Statements that are not historical in nature, including the words “anticipate,” “expect,” “suggests,” “plan,” “believe,” “intend,” “estimates,” “targets,” “projects,” “should,” “could,” “would,” “may,” “will,” “forecast” and other similar expressions are intended to identify forward-looking statements. These statements include those related to the strategic process and opportunities to maximize value for shareholders; the strength of the Company’s business, effectiveness of the Company’s strategic plan and ability to drive value; guidance for future periods; being the number one platform to solve the service, product, and wellness needs of the modern U.S. pet household; and all other statements that are not historical facts. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this press release, including but not limited to: the strategic review may not result in any transaction or other strategic alternative or otherwise maximize value for the Company’s shareholders; market adoption of the Company’s pet service, product, and wellness offerings and solutions; failure to realize the financial benefits of acquisitions; the ability of the Company to protect its intellectual property; changes in the competitive industries in which the Company operates; changes in laws and regulations affecting the Company’s business; the Company’s ability to implement its business plans, forecasts and other expectations, and identify and realize additional partnerships and opportunities; and the risk of downturns in the market and the technology industry. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and the other risks and uncertainties described in the “Risk Factors” section of the Company’s filings with the Securities and Exchange Commission, including the most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. These filings identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and the Company assumes no obligation and does not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise. The Company does not give any assurance that it will achieve its expectations. Contact Us Media: Media@wagwalking.com Investor Relations Wag!: IR@wagwalking.com Gateway for Wag!: PET@gateway-grp.com Wag! Group Co. Preliminary Consolidated Balance Sheets(unaudited)   December 31, 2024 2023 (in thousands)ASSETSCurrent assets: Cash and cash equivalents$5,630  $18,323 Accounts receivable, net 6,580   10,023 Prepaid expenses and other current assets 2,855   3,428 Total current assets 15,065   31,774 Property and equipment, net 2,172   347 Operating lease right-of-use assets 737   1,045 Intangible assets, net 6,766   8,828 Goodwill 4,646   4,646 Other assets 52   57 Total assets$29,438  $46,697 LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)Current liabilities:  Accounts payable$6,169  $9,919 Accrued expenses and other current liabilities 2,496   4,015 Deferred revenue 1,432   1,781 Deferred purchase consideration – current portion —   547 Operating lease liabilities – current portion 406   386 Notes payable – current portion, net of debt discount and warrant allocation of$1,267 as of December 31, 2024 18,960   1,751 Total current liabilities 29,463   18,399 Operating lease liabilities – non-current portion 464   816 Notes payable – non-current portion, net of debt discount and warrant allocation of —     $4,563 as of December 31, 2023 —   25,664 Other non-current liabilities —   172 Total liabilities 29,927   45,051 Commitments and contingencies  Stockholders’ equity (deficit):  Common stock 4   4 Additional paid-in capital 178,809   163,376 Accumulated deficit (179,302)  (161,734)Total stockholders’ equity (deficit) (489)  1,646 Total liabilities and stockholders’ equity (deficit)$29,438  $46,697          Wag! Group Co. Preliminary Consolidated Statements of Operations(unaudited)  Three Months Ended Twelve Months Ended December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023 (in thousands, except per share amounts)Revenues$15,433  $21,673  $70,507  $83,916 Costs and expenses:    Cost of revenues (exclusive of depreciation and amortization shown separately below) 1,412   1,767   5,286   5,477 Platform operations and support 2,237   2,845   10,709   12,475 Sales and marketing 10,385   13,735   45,939   50,523 Royalty —   —   —   1,791 General and administrative 4,318   4,736   16,597   19,223 Depreciation and amortization 619   503   2,360   1,673 Total costs and expenses 18,971   23,586   80,891   91,162 Interest expense 1,236   1,731   6,215   7,417 Interest income (42)  (193)  (374)  (907)Loss on extinguishment of debt —   —   1,180   — Other expense, net —   —   —   21 Loss before income taxes and equity in net earnings of equity method investment (4,732)  (3,451)  (17,405)  (13,777)Income taxes 82   14   163   93 Equity in net earnings of equity method investment —   —   —   553 Net loss$(4,814) $(3,465) $(17,568) $(13,317)Loss per share, basic and diluted$(0.10) $(0.09) $(0.39) $(0.35)Weighted-average common shares outstanding used in computing loss per share, basic and diluted 50,018   39,416   44,719   38,402  Wag! Group Co. Preliminary Consolidated Statements of Cash Flows(unaudited)  Year Ended December 31, 2024 2023 (in thousands)Cash flow from operating activities:       Net loss Adjustments to reconcile net loss to net cash used in operating activities:$(17,568) $(13,317)Stock-based compensation 6,586   4,712 Non-cash interest expense 2,232   2,506 Depreciation and amortization 2,360   1,673 Reduction in carrying amount of operating lease right-of-use assets 308   333 Equity in net earnings of equity method investments —   (553)Loss on extinguishment of debt 1,180   — Other —   12 Changes in operating assets and liabilities, net of effect of acquired business:  Accounts receivable 3,443   (4,083)Prepaid expenses and other current assets 573   (395)Other assets 5   7 Accounts payable (3,750)  3,995 Accrued expenses and other current liabilities (1,519)  (841)Deferred revenue (349)  (478)Operating lease liabilities (332)  (208)Other non-current liabilities (172)  172 Net cash used in operating activities (7,003)  (6,465)Cash flows from investing activities:  Cash paid for acquisitions, net of cash acquired (128)  (10,430)Cash paid for equity method investment —   (1,470)Purchase of property and equipment (1,832)  (361)Net cash used in investing activities (1,960)  (12,261)Cash flows from financing activities:  Repayment of debt (11,752)  (1,264)Debt prepayment penalty (100)  — Proceeds from exercises of stock options 114   104 Proceeds from registered public offering of common stock, net of issuance costs 8,570   — Other (562)  (757)Net cash used in financing activities (3,730)  (1,917)Net change in cash and cash equivalents (12,693)  (20,643)Cash and cash equivalents, beginning of period 18,323   38,966 Cash and cash equivalents, end of period$5,630  $18,323  Wag! Group Co. Preliminary Adjusted EBITDA (Loss) Reconciliation(unaudited)                 Three Months Ended Twelve Months Ended December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023 (in thousands, except percentages)Net loss$(4,814) $(3,465) $(17,568) $(13,317)Interest expense, net 1,194   1,538   5,841   6,510 Income taxes 82   14   163   93 Depreciation and amortization 619   503   2,360   1,673 Stock-based compensation 1,787   1,184   6,586   4,712 Integration and transaction costs associated with acquired business —   —   —   189 Severance costs 129   68   289   199 Legal settlement 40   163   50   663 Loss on extinguishment of debt —   —   1,180   — Adjusted EBITDA (loss)$(963) $5  $(1,099) $722 Revenues$15,433  $21,673  $70,507  $83,916 Adjusted EBITDA (loss) margin (6.2)%  —%  (1.6)%  0.9%                 Wag! Group Co. Preliminary Key Operating and Financial Metrics(unaudited)     Three Months Ended Twelve Months Ended December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023 (in thousands, except percentages)Platform Participants (as of period end) 445   600   445   600 Revenues$15,433  $21,673  $70,507  $83,916 Net loss$(4,814) $(3,465) $(17,568) $(13,317)Net loss margin (31.2)%  (16.0)%  (24.9)%  (15.9)%Net cash provided by (used in) operating activities$(1,729) $(1,841) $(7,003) $(6,465)Adjusted EBITDA (loss)$(963) $5  $(1,099) $722 Adjusted EBITDA (loss) margin (6.2)%  —%  (1.6)%  0.9% _____________________________ 1 Information reconciling forward-looking Adjusted EBITDA and Adjusted EBITDA margin to the comparable GAAP financial measures is unavailable to the company without unreasonable effort, as discussed in our Non-GAAP Financial Measures and Other Operating Metrics section below.

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