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Growth in the second quarter was again driven by subscription revenue, which in Q2 grew 19% year-on-year. We are primarily a subscription-based vertical SaaS business, which provides predictability and increases visibility into results. We saw continued strength across all of our key performance metrics. We added 105 new customers in the quarter, maintaining the cadence of recent quarters. Our net revenue retention rate remained within our target range at 100% despite the macro environment, and we continue to develop and launch innovative new product offerings. While we continue to invest in growing our top line, we are also focused and committed to driving leverage and are continuing to execute towards our goal of EBITDA breakeven during 2023, which is now tantalizingly close.

We have two primary segments in our business: our retail and brands platforms. Our retail platform provides merchants the tool set they need to create and manage a successful digital marketing and loyalty program, along with instituting a data-driven approach to how they connect and engage with their customers. Our brands platform helps cannabis brands more easily connect directly with consumers through our retail platform. We're uniquely suited [ selling motion ] of directly connecting brands, retailers and consumers and during the first half of the year, we have seen 74 brands, well in excess of 1,200 campaigns, an increase of 36% compared with last year, benefiting both the retailer by driving traffic to their store and the brand through increased awareness and influence.

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Since becoming a publicly listed company in June of last year, I have repeatedly talked about the three key pillars of our growth: first, a network effect that we feel is a unique and powerful flywheel between our retail and brands platforms; second, a high-growth subscription revenue component that increases predictability in our revenue stream; and third, the new initiatives and opportunities we have to monetize and leverage the fact that our platform is present in more than 3,100 retail locations and present in the smartphones of over 35 million marketable consumers. We're uniquely positioned to introduce offerings to our client base that provide meaningful growth opportunities for both our clients and SpringBig. I'm as confident as ever that our strategy is sound, with feedback from our clients and partners reaffirming that we are making the right investments to capture the long-term opportunity in front of us.

We continue to develop and launch innovative SaaS-based offerings to enable our clients to retain and grow their customer bases, including our most recent launch of a VIP loyalty program, Subscriptions by SpringBig. Subscriptions by SpringBig enables our retail clients to offer consumers in return for a monthly or annual subscription, the opportunity to earn additional loyalty rewards, access to special promotions and other perks as VIP subscribers. This program, operating in conjunction with other SpringBig loyalty and digital communications offerings, was launched in June, and we are already seeing meaningful interest from our clients with several having expanded their contracts to incorporate this new offering and a few having already launched the VIP subscriber programs.

We see meaningful potential from both revenue growth and a profitability standpoint for both our retail partners and SpringBig as these VIP subscription programs get launched and mature over time. As discussed in previous calls, we are also expanding our offerings to beyond the cannabis markets with clients including alcohol, vape and smoke stores, and developing products that will enable our clients to offer their consumers the ability to combine the redemption of loyalty rewards with a stored payment method at the point of sale. These newer initiatives are going to take time to evolve, especially given the current macro environment, but we are confident that in time, they will fuel significant growth to complement the potential we believe is present in our existing offerings.

Before I hand over to Paul, who will walk through our financial results for the second quarter in detail, I do want to comment on the excellent progress we are making towards our stated goal of EBITDA breakeven during the current year. Our Q2 adjusted EBITDA was a loss of $1.1 million and with the combination of revenue growth and impact of the expense reduction initiatives, we expect a significant reduction in losses during Q3. For the second half of the fiscal year, we are expecting to generate positive adjusted EBITDA. Our Q2 performance is encouraging. Overall, we are managing our business efficiently for the factors within our control and recognize the challenging current macro and industry-specific realities. We have a rich pipeline of revenue-generating initiatives and a strong high-growth subscription revenue base.

With that, I'd like to turn things over to Paul, who will walk through our financial results for the second quarter in greater detail and discuss our outlook. Paul?

Paul Sykes: Thank you, Jeff, and thanks again to everyone for joining us. As mentioned, we delivered a solid result in the second quarter with further reduction in our adjusted EBITDA loss, as we continue to move along the path towards profitability, a key objective for the company during the current fiscal year. I will start by providing a brief overview of our second quarter results before moving on to our guidance for the third quarter and balance of 2023. Our Q2 revenue came in at $7.2 million, representing growth of 12% year-over-year, underpinned by year-over-year subscription revenue growth of 19%. SpringBig is a vertical SaaS technology business with 79% of our second quarter and year-to-date revenue now being derived from primarily annual auto-renewing contracts, compared with 73% in the first half of last year.

We have seen this percentage increase as we continue to replace excess use revenue with larger subscription contracts that are both more predictable and higher quality. Our excess used revenues reduced by 7%, a byproduct of our success in converting revenue into subscriptions, and in the current macro environment, also a sign of clients being more careful in managing expenditures within their budget. Although brands revenue reduced by 15% year-over-year in Q2, this was primarily due to timing of campaigns after a strong Q1, which grew 56%, and Q3, which has started strongly. Year-to-date brands revenue has increased by 16%, and the number of campaigns has increased by 36% year-over-year. Our top line growth continues to be driven by strong customer demand, both in terms of new customer acquisition on the retail and brands platform, as well as expansion within the installed base.

In Q2, we added 105 new customers with annualized subscription revenue of $0.9 million, and a further $1.5 million in annualized subscription revenue was added through 81 customers upgrading their subscriptions. We ended the second quarter with 1,439 discrete client platforms in use and are installed in 3,187 retail locations across the United States and Canada. We continue to see solid customer retention despite the challenging macro environment. Our Q2 net revenue retention rate was 100%, consistent with the rate reported last quarter, although lower than the 114% in the year-ago period. Recall, we expect this metric to moderate to the 100% to 110% range. As we add more products and functionality to our platform, we see an ongoing opportunity to drive upsell with existing customers.

The recent launch of Subscriptions by SpringBig is a good example. Gross profit in Q2 was $5.7 million, representing 24% year-over-year growth and our gross profit margin for the quarter was 80%, compared with 71% a year ago. The year-on-year improvement in gross margin of almost 900 basis points is due to higher yield in services, including an increase in mix of push notifications within our messaging volumes, which grew in total 20% year-on-year in Q2. Moving on to operating expenses, we remain highly focused on improving the leverage in our business, while at the same time, balancing this with our investments for sustainable growth. Total operating expenses in Q2 were $7.5 million, representing a 24% year-on-year reduction and a 1% reduction sequentially.

Sales, servicing and marketing expenses were $2.2 million for the quarter, representing 30% of total revenue. Sales and marketing expenses decreased by 30% year-over-year due to cost rationalization measures towards the end of 2022, resulting in lower employee headcount. Technology and software development expenses were $2.0 million in the quarter, representing 28% of revenue. These expenses also decreased 30% 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 $3.2 million for the quarter, representing 45% of total revenue and a 16% year-over-year reduction. The stock compensation expense in the quarter was $0.2 million, compared with $1 million in the same quarter last year, and this is the primary cause for the reduction.

Excluding the non-cash stock compensation expense, our general and administrative expense increased by 8% due to incurring a full quarter impact of the additional expenses associated with being a public company. Our key earnings metric is adjusted EBITDA, as we believe this most closely equates to operating cash flow. Adjusted EBITDA loss in the second quarter was $1.1 million, representing an adjusted EBITDA margin of negative 16%. The adjusted EBITDA loss represents an improvement sequentially compared with the $1.3 million adjusted EBITDA loss in Q1 and is significantly lower than the $3.4 million adjusted EBITDA loss reported in Q2 last year. For the first six months of the fiscal year, our adjusted EBITDA loss is $2.5 million, compared with $5.9 million during the same period last year.

Free cash flow for the first half of the fiscal year was negative $2.8 million, comprising negative $2.6 million cash used in operations, $4.2 million of repayment of our convertible note and $4 million received from the issuance of stock in our equity raise completed at the end of May and from the exercise of stock options. I shall now turn to our updated guidance for the balance of the year. With regard to our outlook, I would include our usual caveats. Our clients continue to experience industry-specific headwinds, coupled with a slowdown in discretionary spending by consumers, given the general macro environment. Although we continue to view these issues as transitory and think the current trends do not reflect the intrinsic long-term growth rate of the industry, we have prudently considered these factors in building our guidance.

For the third quarter of fiscal 2023, we expect total revenue in the range of $7.2 million to $7.5 million. We expect an adjusted EBITDA loss in the range of $0.3 million to $0.7 million for the third quarter of 2023. For the full year for fiscal 2023, we expect total revenue of $29 million to $31 million, implying a 13% year-on-year growth at the midpoint, and an adjusted EBITDA loss in the range of $1.5 million to $2.5 million. The implication of our full-year adjusted EBITDA guidance is that following a first half adjusted EBITDA loss of $2.5 million, we expect to generate positive adjusted EBITDA for the second half of the year. With that, I would like to open it up for Q&A. Operator, please poll for questions.

Operator: [Operator Instructions] First, we have a question coming from the line of Scott Fortune with ROTH MKM. Your line is open.

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