Springbig Announces Third Quarter 2024 Financial Results and Amendment to its $6.4 million Convertible Notes and $1.6 million Term Loan

• Company achieves positive Adjusted EBITDA* for the third consecutive quarter, reaching $0.9 million year-to-date, a $4.3 million improvement year-on-year
• Third-quarter operating expenses reduced by 44% year-on-year with year-to-date operating expenses down by 38%
• Existing debt obligation maturity extended to January 2027

"We are reporting a third quarter of positive Adjusted EBITDA*, and our eighth consecutive quarter of improving Adjusted EBITDA*. Our Adjusted EBITDA* for the nine months ended September 30, 2024, of $0.9 million represents a $4.3 million year-on-year improvement, achieved in a period where we have experienced an 8% decline in revenue due to clients being increasingly budget-conscious in managing their messaging volumes. We continue to manage the optimization of our operating expenses, which have reduced by 38% year-on-year. We expect the positive trend in our Adjusted EBITDA* to continue and accelerate in the final quarter of the year and moving into 2025,” said Paul Sykes, Springbig's CFO.

Third Quarter 2024 Financial Highlights:

• Revenue was $6.4 million, compared to $6.9 million in the prior year.
• Subscription revenue represents 81% of total revenue at $5.2 million, compared to $5.4 million in the prior year.
• Gross profit was $4.4 million, representing a gross profit margin of 69%.
• Operating expenses reduced by 44% year-on-year to $4.5 million, representing a 6% sequential reduction compared with the second quarter.
• Net loss was $(0.6) million, compared to a net loss of $(2.7) million in the prior year.
• Adjusted EBITDA* was $0.4 million compared to a loss of $(0.9) million in the prior year.
• Basic net loss per share was $(0.01) based on 46.3 million weighted average shares outstanding. Total shares outstanding as of September 30, 2024, were 46.3 million.

• Revenue was $19.5 million, compared to $21.3 million in the prior year.
• Subscription revenue represents 82% of total revenue at $16.1 million, compared to $16.6 million in the prior year.
• Gross profit was $13.8 million, representing a gross profit margin of 71%.
• Operating expenses reduced by $8.8 million, or 38% year-on-year, to $14.2 million.
• Net loss was $(0.8) million, including a gain of $1.6 million on the repurchase of convertible debt, compared to a net loss of $(7.0) million in the prior year.
• Adjusted EBITDA* was $0.9 million compared to a loss of $(3.4) million in the prior year.

For the fourth quarter of 2024, Springbig currently expects:

• Revenue in the range of $6.5 - $6.8 million.
• Adjusted EBITDA* in the range of $0.8 - $1.0 million.

Adjusted EBITDA is a non-GAAP financial measure provided in this "Financial Outlook” section on a forward-looking basis. The Company does not provide a reconciliation of such forward-looking measure to the most directly comparable financial measure calculated and presented in accordance with GAAP because to do so would be potentially misleading and not practical given the difficulty of projecting event-driven transactional and other non-core operating items in any future period. The magnitude of these items, however, may be significant.

Amendment to the Terms of its $6.4 million of Convertible Notes and $1.6 million Term Loan

The Company has agreed with its syndicate of lenders to a twelve-month extension in the maturity of its $6.4 million Secured Convertible Notes (the "Convertible Notes”) and $1.6 million Secured Term Loan (the "Term Loan”), with both now maturing in January 2027. The interest rate payable on the Convertible Notes and Term Loan is amended to 13% and 17%, respectively, with the rate being reduced by 0.75% following each quarter in which the Company reports an Adjusted EBITDA for the quarter of at least $0.9 million, subject to a maximum reduction of 3.0% for both the Convertible Notes and Term Loan, after reporting four quarters exceeding the Adjusted EBITDA threshold. The amendment also provides the Company with the option to prepay the Term Loan at any time after February 1, 2025, and waives the requirement for the Company to maintain minimum specified cash balances until after February 1, 2025.

Paul Sykes, CFO of Springbig, said "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 to the Company. This represents our only remaining debt obligation, and we anticipate generating strong free cash flow during 2025”.

About Springbig

Springbig is a market-leading software platform providing customer loyalty and marketing automation solutions to retailers and brands in the U.S. and Canada. Springbig's platform connects consumers with retailers and brands, primarily through SMS marketing, as well as emails, customer feedback system, and loyalty programs, to support retailers' and brands' customer engagement and retention. Springbig offers marketing automation solutions that provide for consistency of customer communication, thereby driving customer retention and retail foot traffic. Additionally, Springbig's reporting, and analytics offerings deliver valuable insights that clients utilize to better understand their customer base, purchasing habits and trends. For more information, visit https://springbig.com/.

Forward Looking Statements

Certain statements contained in this press release constitute "forward-looking statements” within the meaning of the "safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. The words "anticipate,” "believe,” "continue,” "could,” "estimate,” "expect,” "intends,” "outlook,” "may,” "might,” "plan,” "possible,” "potential,” "predict,” "project,” "should,” "would,” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements are predictions, projections and other statements about future events and financial results that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. In particular, these include but are not limited to statements relating to the Company's business strategy, future offerings and programs and expected financial performance for the fourth quarter of 2024 and the year ending December 31, 2024. 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 fact that we have a relatively short operating history in a rapidly evolving industry, which makes it difficult to evaluate our future prospects and may increase the risk that we will not be successful; that if we do not successfully develop and deploy new software, platform features or services to address the needs of our clients, if we fail to retain our existing clients or acquire new clients, and/or if we fail to expand effectively into new markets, our revenue may decrease and our business may be harmed; and the other risks and uncertainties described under "Risk Factors” of the Company's Annual Report on Form 10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission ("SEC”) on April 1, 2024, as well as the Company's Quarterly Report on Form 10-Q that will be filed following this earnings release, and other periodic reports filed by the Company from time to time with the SEC. These forward-looking statements involve a number of risks and uncertainties (some of which are beyond the control of Springbig), and other assumptions, which may cause the actual results or performance to be materially different from those expressed or implied by these 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 other than as required by applicable law. The Company does not give any assurance that it will achieve its expectations.

Use of Non-GAAP Financial Measures

In addition to the results reported in accordance with accounting principles generally accepted in the United States (GAAP) included throughout this press release, we have disclosed EBITDA and Adjusted EBITDA, both of which are non-GAAP financial measures that we calculate as net income before interest, taxes, depreciation and amortization, in the case of EBITDA, and further adjustments to exclude unusual and/or infrequent costs, in the case of Adjusted EBITDA, which are detailed in the reconciliation table that follows, in order to provide investors with additional information regarding our financial results. Below we have provided a reconciliation of net loss (the most directly comparable GAAP financial measure) to EBITDA and Adjusted EBITDA.

We present EBITDA and Adjusted EBITDA because these metrics are key measures used by our management to evaluate our operating performance, generate future operating plans and make strategic decisions regarding the allocation of investment capacity. Accordingly, we believe that EBITDA and Adjusted EBITDA provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management. Management also believes that these measures provide improved comparability between fiscal periods.

EBITDA and Adjusted EBITDA have limitations as analytical tools, and you should not consider them in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are as follows:

• Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and neither EBITDA nor Adjusted EBITDA reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; and
• EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs; and
• EBITDA and Adjusted EBITDA do not reflect tax payments that may represent a reduction in cash available to us.