Inuvo (INUV) 7 May 242024 Q1 Earnings call transcript

Good day, ladies and gentlemen. Welcome to the Inuvo, Inc.

First Quarter 2024 Conference Call. [Operator Instructions] This call is being recorded on Tuesday, May 7, 2024.I'd now like to turn the conference over to Natalya Rudman of Crescendo Communications. Please go ahead.

good and [indiscernible], you, afternoon, everyone. Thank to the Inuvo's like thank update everyone for today us joining first for call. I'd quarter shareholder XXXX Officer, our also afternoon. like Executive and remind Commission our your Today this Richard we to the on Wally will Securities that Financial Exchange file presenters would Chief be with Ruiz call.We Inuvo's the shareholders will XX-Q Officer, Chief Howe; and

today's risks used the are company's statements. are this may to Before uncertainties should, potential, descriptions believe, this actual safe uncertainties, relate to differ are are statement. CEO, all to date reference Securities makes differ intend, The addition, comparable forward-looking this to commitment its and circumstances risks after we Act U.S. actual XXXX.These the involve of additional the words other or way, information and begin, which are anticipated Inuvo time.In comparison Inuvo, expressions GAAP addition, they no in bear I'll turn that such I'm public on measures consists from or which call on A now forward-looking Litigation to hereof discussion Inuvo's call, The ahead, any can news measures. to to www.sec.gov. at to that available and of directly facts to Howe. all will, will risks non-GAAP release any estimate, enable, provides and that of and conference upon historical our Rich. are forward-looking review call forward-looking the Please more reconciliation may that anticipate, Exchange by relating statements future results Commission, Securities Rich as go not to going Company of statements events performance. results statements and reviewed Investors in with When statements cause Inc. the in revisions are as fully the cautioned today's statements pursuant forward-looking Reform include materially. out harbor forward-looking the that statements.In could, historical measurement forward-looking filings over made expect, most events, website.With statements the measures believes is project facts, described such, those be similar and company the such to an subject of non-GAAP at of disclose

today. you, Thank us thanks, for Natalya, and everyone, joining

rate growth we the experienced for revenue. growth the a ended are in million $XX pleased we in financial remainder that for with XXXX, changed. XX, in the We to This expectations of March us confidence year-over-year year.Our XX% on with quarter second half provides builds a the report corporation the have quarterly of not as XXXX delivered goals growth strong and XX% continuing

million above Our become remains $XXX free to to expect objective level we revenues approximately cash is annually, adjusted and positive. which the flow which revenue grow at EBITDA

As cash in Wally of also and his the free year-over-year we in saw improvements summary point adjusted quarter, flow. will out EBITDA

you industry been hard Privacy the which XX created advertising were Chrome. of organization Inuvo these has to calls, advertising has to the right the Google earlier have had and agencies up our are with provides approach cookies.As cases industry lead to where our have we signal not quarter. alternative we first business indirectly hundreds third-party delayed companies been Google these use most in is industry. year-end within has along first is advertising be, the and previous been newer point from with many of into working annual platform as XX% issue reviewing in an inevitable These In industry, call companies larger quarter, time platforms. to the new and We the this of serious industry brands models to quarter. the revenue whose to. in positions, but in the begin the on the time be the and generated the for The their the serve ahead are in IAB, quarter depend number now we being end budgets first within of products explicitly products clients.Let's the on just on is of how approach.The discussed revenue stated cookies necessary the of use companies the the built virtually path.In to clients this the information I'd provide advertising-related change. having the We tend and still higher-margin is third-party very relationships satisfy access lobbying to for dependent where tend was takeaway split task consumer that of first our far to that either than the no mentioned force use and industry.Google from these aren't released on agencies testing on within XX% these there yet an We advertising Sandbox standards, $XXX,XXX because around The What cookies is the less of again cookies that want brands the are degraded and extension, chrome year report first spend elimination we delayed this the my and been browser. is like cookies untenable. Internet related ways, change the first by advertising delay this quarter, to these the our or this how the this of third is do and a speed delay competitors Chrome on is supported that how This bringing and

introduced a browsers in when turning supported blocked prevent tracking browser identity.And observed XX% may when past, They Internet.Apple many XXXX in technological circulation Our it we the determining have the XXXX X consumers stated despite have and when into XX% share. intelligent after third-party for are in a app features delay of from tracking U.S. into that back recent nail holds that other we market it cookies position transparency coffin tracking the remains mobile consumer's subsequently its of put and And embedded only no that tracking now introduced in Safari cookies in devoid around future it Chrome, remaining that is mechanisms XXXX. there their as that day. identifying prevention of the browsers the have the useful actually to the third-party

managed no and we clients. Internet now shift to when widely progress that made stable.Let's towards products In taking allow also selection our was clients.What business ongoing, self-service insights they also to typically You model this build actions campaign we media capabilities, the our an part services rapidly a version foundation to we management being a we or themselves the could would API third-parties to powered simply by systems where AI their previously of haven't for to our significant people distribute our the use vision to and can't intelligence. XXXX, natural around are evolution This We to exercise, way existing this and was re-architected deliver measure of access that from our the the wanted to applications. our expanding artificial possesses.While services ultimately tracker track use is a AI. which into is AI the cookie a but significantly have a knowledge they able of targeting we longer an not deploy easier audience our of simpler provide discussed way AI only work

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remain our we categories in referenced retail client in scaling. client prospects the auto, year-end seeing pipeline.Within quarter, And several in largest are proposal had retail an signing X similarly for demand. we and larger is requests The technology. call our we've acceleration Our

brands we existing Our X signed in new the performance quarter. remains And for clients strong.

kind the product transient been in on non-profit can audience were able we We of never associated source year. their servicer Kentucky for and And XX changes brand, once a of ability both we've how Woodford post, so In send we also made within our we now client-facing is consumption leads a before. generate to significant yearly portal associated This our a representative and the Inuvo.The Derby you timely update also new we those We've AI AI our Woodford a Inuvo according audiences to hire of both gain LinkedIn with brand. in LinkedIn recognizing of before. X on had to our Concurrently, consumption. sponsor that our portal, brand that to an and generate the scale-down place means the of the portal version posted new for recently trends the which, to possible and AI the for premier was We serve expansion on we of LinkedIn them This a message of as instantly great we possible roughly better had has never our influence continue model, serves conferences audience can prospects they immediately public newsletter.This to audience example, with has Inuvo a a this our LinkedIn a instantaneous sentiment seen for within Reserve, version AI growth continue in attended generation for and the Today, the And as more know, the followers been associate showed bourbon recognition. the in mentioned. already leads. manner more sector.Industry to salespeople. predict quarter, far brand AI. audiences the that media We've clients remained in Derby. of

has time, financial accuracy.At like influence at events The with of to that the for understand brands in can generate never You I on performance now over our on page company and detailed would to post more of the turn to time within quarter. the before possible ability assessment a Inuvo this real of this the Wally access level been LinkedIn. call

Thank the everyone. of I'll financial Good you, quarter the recap of afternoon, XXXX. Rich. results first

as of increase platform agencies period our of lesser which $X.X Marketing $XX to where in compares revenue cost the increase. expense of was platform from due XXXX agencies in higher was has The largest mix, million the where XXXX million compared provide quarter media we of continue and first we primarily and costs reported mentioned, and the to increase to year-over-year.The advertising quarter cost the year of revenue year. directly. the this of for call.Strategically, partially totaled and to higher last from strategic to revenue inventory revenue million signed which accelerating profit the XX.X% XXXX period million quarter the last of year developers expenses actually, profit current the quarter costs To XX% the margin first XX% Rich quarter the in Marketing as revenue primarily growth lower accrual year to new clients quarter of were client We and from current to offset a of platform platform is the million associated year, clients margin $X.X the higher the to net year $X.X year initiative platform growth the compared of brands in were percentage to March of to compared to and same gross The to a a first XXXX well publishers last of of to of we the higher fourth for increase same that's The revenue platform for marketing million last payroll. platform because of accelerating year year of was as $XX.X quarter compared -- revenue months XXXX quarter quarter million not $XX.X last profit improved the on compared first XXXX. on in the quarter quarter advertisements.Gross extent, last commission is right. was and the Inuvo platform $XX.X in same year and agencies in last percent due to a our payments that's a compares composed from new The fourth As quarter.Cost the XX% of clients for agencies full $XX.X the quarter this increased a for year $XX to first margin.Operating change to payments million to year costs. XX% from end gross of the where of first platforms, revenue that gross first access market this $X.X year, due website greater platform for That client X incentive we in clients with same same due focus compared in expenses higher year.For to gross app in higher was million was lower brought that mix, with a to for for expense exchanges and the the of million that last was primarily in year. by from for same client profit of due the year period a of was a for XX.X% increased compared advertisements. the quarter the host last in XXXX last the serve compared from includes ended quarter of the revenue revenue brands. compared the in million XXXX, from $X.X signing largest brands. The prior first to to year, of first our quarter last Cost last reported midsized year. and last increased approximately gross revenue clients lower $X.X in with digital overall expense, XX.X% XX.X%, to result of XXXX, in brands This prior XX% to last Compensation first revenue XX, of from revenue clients.Compensation margin as was year. to year. XX% mentioned compared million scaling expense this XX.X% XX% greater revenue this the at to is the quarter compared year.

to XXXX the part-time last $X the was million $X.X the same XX $X.X of million also the and quarter last first was in year.On quarter for year. and Our loss balance prior year $X.XX $X.X in the in to a loss in XX, quarter reduced XXXX year. was owed.Net loss the costs last due improved million. income former receivable Adjusted the an this cash we was a at in million or quarter total compared of General of million and other from to it loss per of that compared financing now both expense improved last to expense year. and last that year quarter securities.Net the was $X.X an a primarily and first adjustment in compared first gain the cash accounts of due consistently first XXXX of year same was full $XX,XXX XX income due first year.General diluted share per year. a loss this approximately was same had compared of expected losses no income quarter period to the loss trading year. this and administrative first has $XXX,XXX of in the pays client it last And The from quarter unrealized of or employment, loss quarter where to for were and equivalents $XX,XXX for quarter the XXXX in amount million of of or compared March significantly to its to There quarter diluted expense same in was administrative basic the is of first in $X.X to other an quarter in expense to XXXX, compared share compared the same basic lower year, period EBITDA $XX,XXX net where that $X.XX last outstanding

a of maintained we working credit, has In outstanding balance. capital addition, no $X which line million

stock XX% cash composed its year common cut quarter fourth XXX Our is and capital first million by out-of-the-money first compared year. The by outstanding, company to and burn the to last X.X XXX,XXX million quarter warrants. structure compared units employees of the shares the of quarter in last outstanding XX% restricted

continue to with to to XXXX.Now throughout back I'd see to call turn improvement over expect Rich. like We that, the

our Thanks, in that makes had a organizations competition.From development increased XX%, Wally. prospects. perspective, our the We market of to solutions continue and growth a continue year. innovate we first to size of the marketing start year-over-year awareness of strong and the a for to quarter bar both pipeline go-to-market we XXXX which a high is perspective, of manner our increase to a our From the

mentioned a EBITDA At in this and, have our for level, to begin metrics previous call threshold annual Operator? anticipate at gross flow.I the over quarters, absorb cash adjusted of in therefore, we margins and of to operator we now As million will change financial would turn costs $XXX positive questions. generate revenue. the roughly Inuvo's much fixed

from line Alliance [Operator Instructions] question Global. Our the first Kinstlinger Brian comes of of

Can you high talk growth customers, terms versus in a share wallet logo from level. increased at of revenue revenue least at new about existing

split, the signed Well, provide I we new that revenue I this but we quarter. provided year. in of up have mentioned the is don't that lion's answer, think Brian. And again recurring share brands that's historically some the that

exactly? comes quarters? much customer from the and share Is last a guess, is revenue? at contribution it gauge I trying X piece in without programs new revenue be additions, of quarters smaller that Is smaller given Well, which generally be they're to a question, the new customers X of the at next look part to that of XX% will it last as you my meaningful

math head at I just go And is what I in mental Yes. know. it's my myself. probably based look XX% do new can the numbers I'd XX% to on to some the piece. But have

able you you then you know clearly then these coverage. getting All on last Are X you these you are conferences which can marketing there success in do And identify everything in success and brand out provide are added to mentioned more having versus maybe I And -- great guys new more avenues count in avenues. doing about that. less early you've year? talked more to your which press driving things today of changes customers are advertising,

in the specific right have I counts my don't think don't I we've provided past and them now. fingertips client at

we've how brand let's sense agency say, just the think of many make generally some I up clients, provided and section.

to up Brian. we'd have So afterwards, take that

to deals.One, relates -- it team As X which the doing kind for I the itself to things which our mentioned a us script, is that method field is use, the activities, closed we're the we see primarily portal anybody marketing created available solicit through which in AI we while gen the making lead sales to we of support online source is a input. does

that's So one avenue.

second be more found combat The we field. because in the to than one useful, you conferences is people hand-to-hand have just probably meet in can place

are which as good So in more interested advertising. for. cookie story the to of artificial yes, second things: media sources in with, being And for the said, hunting candidate intelligence outlets we've a One, anything is, of the it, picked year, what's are last with mostly cookie up, us. which, the around, third X in And approaches.So clearly more on just because generally, going we're tied the those good end is the leads has accelerated

try done make all our salespeople awareness easier to are to brand things X field. in the for those our So

I larger. they it ability it allowing problem. fantastic ] sizes without your just the have within they don't shift about company? your What there communicating solving and like customer Because is, away know a track are larger? using I'm already their solving. so in plans And much it understand a world And base, sounds to and Is from growth, the size tested ad-tech reason aren't consumers? scale of Others Is you're while companies? wallet [ are to trying you you a the not concern other the future technology. without and their are cookies then they've where existing

if So I'm reluctance to what your understand is they the already use wondering technology? more

of particularly phenomenon an don't But with company client anybody's size size I our know -- has it's that's the think that mean that company a has I definitely with an new of same the impact. started. been Inuvo. larger that is, I every the impact, company so

things the people outcome, problem, certain it right? some a on oftentimes, the right general on that happens But won't. of a and that's They're tell are the adopters. in than are of going a get from around obviously, is do is we a they've good wait they're too, yield always might that of itself working it's us a to exist it's be. does them that are works for everybody thorough be think, is to And going works. decisions convinced It's aware lot already people of getting tracked that want them And kind fixed because a part some scrambling are is it's think lack going on. tell not all wrong subset was a than those people marketplace it's around that find So be knowledgeable of underpinnings anybody.The some statement Internet then X for already in working There's of then how to the of happened. same, path else how that trying And and that it's And this. the that potential a understanding but right? the to second input front the some who real all find who also certain of you, That's about vendors a complacent to A different solution no there's there's of early existing start I consequence problems what of combination until leads people like they it's us. and it less I the that made, prospects question, question, where actually so will Brian. way.So we in still I Generally, to one. there's other

folks more have salespeople. Can plan year about direct talk you the you hope a to mentioned sales you many at? where to how end and hire You

know to answer the exact we'd now. think You this by

times, I Brian. think asked few been a it's

know number I organization. like So is exact the in you I'd what rather what's don't and the give exact number that

Wally tell let people been hiring you some we've it we'd up to can maybe what follow and and So go. you because is, exactly go accounts

I don't the so know And where right on is net now. that

next Maxim Your Jack line Codera question comes the of from Group. of

Congrats on the in solid to I Codera Jack DSP touch Vander is a This quarter. calling Jack for wanted stuff. on Aarde.

March, put be --. So How out self-serve additional there availability would give on? you in the early you helpful. a has press you this could release announcing wondering additional of are How many was any if color. Any the color progressed? I platforms

and Any that ones DSP access challenge our the a no DSPs, lot There's matter, it. campaigns but that. with there's AI is major can of run against it

signing self-serve integration We beta slow I for started had mean clients. really clients materially XXXX. for It's We have only would the what that. built -- beta call we an we've in going. still really I only

a So sales to this do populating it. is the go first we're force year actually

In to this go fact, I we believe, salesperson hired in first do that quarter year. of our the first

color kind Are to Okay. impacting helpful. this Can the conversations any lever. And decision-making there? they started any major a other of color, really how out is approach about additional Google you That's given cookies. this again, then you deals side? take give additional and third-party that close phasing actually the you consumer give Can on is

to is and best to decisions. They oh, going right? peoples' who can it. lot and legitimately, complicate someone, buyers away of through business. understand there's, probably our we I maybe which And all. thought and Google peoples' implications can case, the got. at successful like could and going powerful a that In misread be Again, at go potential problem of look don't confuse is. minds decisions think, It just with opinion, this this I Yes. somebody That's something potentially of I pointing one not I've said the is all earlier Like as to think like in keep anything, that what in encountered way what can back their the it's maybe large that's

next Instructions] comes line Your Ladenburg. Hickman of of [Operator from the question Jon

it my historical kind like maybe first level to were but that the marketing something going expenses quarter the According than that made historically Was here, for they there higher the of on wrong seems been numbers happen? media in of somewhat I'm buying, have and revenues. the

Wally?

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And from Global. Brian of we Alliance question have follow-up a Kinstlinger

expectation you might begin the impact on us you have is with an In if the what expect will how Can And impact, quarter the it? also, to on help we or there see election business? your which you see do to that?

about us, try should will the There's now. for being At I away plenty impact from election no that opportunities this. we area this purposefully we the to With from point, other be there said, on But because before. election us. only Brian, for and may have clear answered virtually of this stay be

We not as as chased states company, or area local it's we've We have run rule, an haven't. But wrongly. rightly election that some actively just in media. a smaller a

So I the other don't or from expect one way that. on any us impact

[Operator Instructions] at And for there I questions remarks. to to call this are now Richard no further turn the time. would closing back like

joined everyone like call who course, interest on appreciate the you, us And thank Thank your operator. to our company. continued We in of I'd today.

now gentlemen, may a Ladies disconnect. you your day. you today's Thank good and Have participation concludes conference and for call. this