TD Lowers Forecast After Q4 ReportWeCommerce reported Q4/20 results and held its conference call last night. Impact: MIXED Top-line beat. Revenue of $6.1mm beat our estimate of $5.8mm given betterthan-expected agency service revenue. Revenue grew 53% y/y due to estimated organic growth of 26% and strong contribution from the foursixty acquisition, which we estimate to have been $1.1mm in the quarter. EBITDA of $1.7mm was below our estimate of $2.0mm, partly because of an accounting change, where revenue from the theme updater app is now recognized over 12 months rather than upfront. Higher-than-expected corporate expenses also negatively affected EBITDA margin. Stamped is expected to drive considerable growth. Management will continue to invest in Stamped. Its growth was 103% in 2020 with less than $400k of direct advertising spend. We believe that management will increase S&M spending to accelerate growth, while being mindful of margins. The loyalty app that was released in the middle of 2020 is seeing good traction, especially when bundled with the core reviews app. We believe that this could help increase monthly ARPU from the current US$73. Acquisition pipeline remains strong, but competition is increasing. Management continues to stay active with the M&A pipeline. We estimate that the company has $44mm of net debt, or 3.3x net debt/EBITDA, if we factor in the Stamped acquisition. The debt covenants require WeCommerce to stay below 4.0x. If we assume that the company acquires companies with similar multiples and EBITDA to Stamped, we estimate that WeCommerce could deploy another $11mm towards acquisitions. The company has access to another C$50mm (US $40mm) from a new revolver and delayed draw term loan. Management also noted that the acquisition environment was getting more competitive as VCs increased their presence in the space. WeCommerce was competing with two other VCs for Stamped. TD Investment Conclusion We maintain our HOLD rating and reduce our target price to $23.00. 2020 was a stellar year for ecommerce solutions vendors, but the reopening of economies could slow ecommerce growth in 2021 off a tough y/y comparable period. Combined with less dry powder and an increasingly competitive M&A environment, we are maintaining our HOLD rating. 35 35 30 30 25 25 20 20 15 15 10 10 5 5 0 0 Jun-20 Aug-20 Oct-20 Dec-20 Feb-21 Apr-21 WE-V: Price Company Profile WeCommerce Holdings Inc. is a consolidator of the Shopify partner ecosystem. Through its portfolio of companies, WeCommerce sells apps, themes, and agency services to merchants on the Shopify platform.