Inuvo (INUV) 8 Nov 242024 Q3 Earnings call transcript

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

Third Quarter 2024 Earnings Conference Call. [Operator Instructions]. And this call is being recorded on Friday, November 8, 2024. I would now like to turn the conference over to Natalya Rudman of Crescendo Communications. Please go ahead.

morning. good and you, Thank I'd like the us for for thank Third Quarter everyone Inuvo Call. joining XXXX today to Shareholder Update Chief Howe; Richard Ruiz, presenters Executive Financial the Inuvo's on Wallace your will and call. Officer, be Today, Chief Officer, shareholders like our to the and our with morning. this we Exchange plan We would Commission remind that also Securities to file XX-Q

historical statements call this Before These believe, to risks The subject involve statements forward-looking intend, call, statement. forward-looking to we as by they safe anticipated cause and that not actual enable, And estimate, statements. all company's will, results are potential, in harbor results relate are are anticipate, similar as begin, forward-looking of all uncertainties, Inuvo the time. are I'm used made could, forward-looking to the going Litigation cautioned words When differ this statements facts descriptions events. expressions those and future statements expect, XXXX. uncertainties, the of this Reform from such risks to statements at Act relating pursuant to conference may Investors project are Securities and materially. review such, forward-looking in to are should, and which as Inc. differ Inuvo, may that actual

risks that any disclose any the date can reviewed to after at be forward-looking forward-looking in In bear Inuvo's company Securities which Commission, no events upon statements. public to are commitment facts, described other more fully circumstances statements U.S. www.sec.gov. addition, Exchange filings hereof with or and the revisions makes or The

to our that website. most directly the over go on call of available way, measurement I'll consistent performance. news information The comparable today's out now Rich will ahead, With non-GAAP Rich. historical provides comparison discussion of to an non-GAAP A today's CEO, Howe. to the reconciliation measures. addition, the measures is its measures release company in the believes In references of that Please turn such and additional include GAAP

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

XX, We report roughly delivered XXXX. are of to XX% sequential part by of pleased the that largest year X% quarter September And history We the large come strongest down was that our the growth. year-over-year, driven platform quarter having fiscal third off quarter our XXXX, we ended in quarter in in client. for were

The For revenue. averaged ended up having the with we X X months is XX, first up fourth day per shaping year-over-year. X% are $XXX,XXX approximately the quarter of September in days nicely November roughly

EBITDA $XXX,XXX estimating quarter We year. of improved are growth $XXX,XXX loss year-over-year currently in a sequentially the the at double-digit Adjusted quarter. third fourth in this of

We expect be fourth breakeven adjusted near EBITDA quarter. the in to

second that outstanding the end million completing large have a $XX master signed September, In a at cash our receivables and and and working had that I'm quarter, in from report agreement process to mentioned that meet capital services retailer, We I pleased of the we were needs. availability facility agreement. we no our with to have sufficient the we debt of

to continue for exceptional expect will We the this have we client. consequently, this well thrive delivered do results And relationship into consistently future.

for interest. calls, the from have we X.X approximately approval the discussed in taken client years process prior having extensive, initial this As was by

some our and our information provide clients our now me about Let industry, products.

the industry. with Let's begin

it's roughly control. to themselves Our reach platforms these the And platform advertising the products deliver This typically, component and very ecosystem. annually. the or websites designed they to $X on specific extend own billion services to are is do focused we a niche market not of

advertisers. had on we clients. advertising return effort with from resulting on their These years, marketplace platform work this has past the experienced our have the a been have those changes. X.X the large growth within this market And a to of spend companies concerted Over driver improve behalf of platform

center consumer's potential these long, would confidence browsers dependent us better goal, on the a our reduced better private on on an over information. finite advertising privacy. that the work gives the finite this revenue quality a relied the number has shift has of shifts of towards set content of with, through focus a to business component this and players that agency continue accomplish nature The partners scale. marketplace clients, platform privacy with major improving that the and enable companies along and quality long, technology, to quantity, is prioritizing of say that with some significant in too Among choosing our companies to This partners. brand have of and consumer model instead sale exchange industry to around they Now Inuvo this those one compliance. of

marketplace consumer reminder, Safari As was to consumer by In that. mentioned browser Chrome data. tracking without They issue continues find on how mobile one longer has to goes empower possible using slow they The with over towards both is exactly legislatively own the on is the consumer to yet technologically. with of is approach summarized a shift is to something another Apple consumers digital stating Regardless to of AI a within debate Google to to have already been their this advertising where audiences market movement choices. in browser consumers there. announce to best their they tracking consumer August a browser make their announced they and a intention person's personalization. that control like debate, plan our XX% year, of industry privacy, their their this change. prior do And no calls, accelerate, share. designed as I've statement this the probably

agency to clients. with agencies. working now XXX platform, and brand small- our medium-sized clients, actively and over Across now we our Moving are

AI clients KPIs some on clients XX% new and this component average new revenue by to education, growing relates nonprofit brands while we X agencies. brand entertainment, care, technology. for new Across part and the Key health it outperformed clients as those As within serve and agency by we third included agencies that and quarter, quarter, also new the in adding XX% we sectors existing products, in agencies our year-over-year. those signed X were brands direct the of of our Intent with X clients, These our

this XXXX, current of brand which quarter our we up One I with of retail be manufacturer, large of an our our and are working mentioned this as to earlier, will quarter. the component revenue fourth agency them. sequentially on to first million had compared is business, client, is currently first year. up forecasted started when in booked forecasting The roughly up fourth auto quarter to larger we clients, be the Based in the $X.X be tenfold

remain our and growth for capital of our strong company. platform a working driver relationships Our

is While well. quarter. quarter QX was part And into last year's in also we head compared from to strong as down clients revenue that these this the forecasted be sequentially XX% business performance, of is this up scaling to

third our We campaign IntentKey their strategy during the quarter. to target product clients audiences allows self-service This made our platforms. within progress of also selling product own aspect generate and

small While in of notable we of component the revenue today, and quarter, hospitality, auto our this secured sectors. brands technology the overall remains a within a number

of are with with positive than technology this business of product our cash in mentioned campaign services. we have is because calls, towards flow As along significantly part an drive we along being higher when our component growth, self-serve margins deliver important this the prior in our

in launch we to to first Let the product, quarter of and AI announce now capabilities self-serve buyers within our Early XXXX, plan offering me an products. enhanced media unprecedented turn this and and upper Inuvo more to ends lower tools easily the ad market. use of new the scale set capabilities an ease across advertising. tech both within These of should allow of

represented the our Consequently, of calls, within AI wisdom available technology or I as content of advertising. pages that on brand. already continues has is humanity As across capture discussed the and a the an prior billions service product, Internet. intelligence about knows any It's have things disruptive it to of in

also This, clients. action client's IntentKey easy-to-use interface, we've either captured series audience client. as any new able able captured able their AI version the However, client actual to with audience no be provide tested the use. have self-serve but of product, can they seen with IntentKey that target those choices. itself that to to markets implement performance AI for instantly their signed clients with that ultimately to being Prior they now now may this now to part new of of will not the flexibility, and to wish discussions simply to the providing seeded There information contextual performance target the of for In ease any with example, is generate surprisingly, brand Inuvo this choice. matter, information this of service With tech that now the this in an seed some that be the information in have not they does to when describe themselves audience of product, provide latest bottlenecks. even other launch, the And URLs information competitor with the be for a guides level or this which close for quite or would product some needs the has this AI and/or ad will self-serve is an that caused describe as them now, immediately the version want alone, time of which is verbally audience to a technology, to the platform for other up, attack. product, its define in in be within the related landscape to self-serve efficiency, content of or competitive the market,

would to performance more turn of about this our I over We assessment talk the Wally? quarter. within our for this will more Wally like year-end financial the now detailed time, call. At definitely call on a to

third of period the expected. million year. million year-over-year Inuvo decrease had Good third for for the down as XXXX. we for the last of That's financial XXXX, a $XX.X Thank quarter same results I'll you, X% morning. quarter our Rich. of reported from revenue recap $XX.X

which largest launch the third revenue client, However, was due X.X% to during last previous in the back quarter the with a is quarter platform fourth current an in before quarter the revenue to sequential advertiser up new growth XX% than year higher year product the third improve are we scaled The X Through rapid months higher quarter performance. first effort the XXXX, experienced being in our year-over-year. quarter. of in last

third as platform from well brands. In and from a the and with slight where agencies continue as This revenue XXXX, signing revenue the and came revenue clients was year, represents shift third clients XX% on We platform from brands. platform XX% remaining focus the agencies and on the from quarter agencies midsized our XX% new of of quarter to clients from last brands. of of XX% scaling from

in agency compared this of period million $X.X of million $XX.X were million to made for and of year clients million of $XX.X in last in the to year. of same $XX in and and this made compared on compared from slight a our of the composed decline was due of a proportion the brands compared and quarter for third for extent, the to of of Cost a and Marketing web coming the Marketing margin year. mainly Cost gross to is same lower revenue advertisements. million quarter from in lower of for revenue as gross We to our year was brand this increase remainder were quarter expenses primarily fourth in for of last higher of year a decrease were We profit same costs brands. same The agencies last year. $X.X year. this this revenue expect because includes revenue publishers All the expenses last margin for a We gross lesser revenue. last reported $XX.X due Operating to host lower developers payments totaled lower to quarter revenue percentage XX.X% the year. behalf was media the that quarter website XXXX year. same to the profit compared gross quarter million third third of third period year. clients. agencies operating to the from year to profit of $XX.X costs XXXX payments the primarily million for The of anticipate XXXX compared total the XX.X% $XX.X million components to last period platform quarter

compared Compensation in $XXX,XXX quarter's This of XXXX expenses that charge million the expense and related of for impairment and XXXX agreement noncash longer year included positions in the referral services the same lower quarter, was we commission elimination the was stock-based compared to expense. of no quarter year. a second expense to end marketing in $X.X to third of due eliminated primarily same quarter roles. to of prior of support onetime expense in lower the $X.X Compensation quarter quarter a through million third the this effort lower is use. the the At lower year reduce to compensation, last an expenses incentive XX redundant

third expense year. interest and year-end. both end loss General approximately the in the compared $X a employment, quarter reduction end doubtful to of was to or resulting We loss compared full $X.XX was expense, the and third quarter total of and of the salespeople of prior of $XX,XXX last the along Our was fees prior amortization expense. interest shares collections, net in for amortization includes Net the in approximately $X.X year. account administrative per to the compared year. XXXX million same XXXX The expense, and last in of The of $XXX,XXX at year XXXX, and improved expenses. income per million expense reflects compared million to this shares the the third $X.X $X.X quarter plan quarter a million to quarter $X.XX lower people with XXXX the or quarter of million of was net in the third loss professional collections noncash third period $X.X of basic lower lower basic for diluted and XX at net third by part-time XX add year. diluted X Net that's of

months X same last last by the has in loss $XXX,XXX to this EBITDA of compared in an improved million. year. the income year the compared of third first year, Adjusted XXXX loss the net quarter period of to For $XX,XXX $X.X was

first compared million. by adjusted EBITDA the X improved XXXX has For months $X.X to of last year,

we July, line of equivalents had of XX, year, in million $X.X and debt million. working capital year, in cash no of $XX third And asset-based credit. of September the As of as September we a this XX, And quarter this cash secured was there of outstanding.

remarks. of further million months last its improvements company fourth shares of the is during of by it the I'd XXXX that, X XXX outstanding approximately units X capital employee structure composed to compared has closing to million months The to the in for stock reduced XX common cash Our expects like quarter. year turn restricted $XXX,XXX and back With burn outstanding. Rich and

first XXXX to year. strong quarter And Thanks, Wally. fourth We prior digits compared prior year were down the X we back to double of grew year-over-year roughly expect we the X% the in while quarters up year-over-year the in quarter. third at be a coming comp, in off

X over November, Over per fact, of averaged unaudited we the have, day. days first $XXX,XXX in

offerings. achieving earlier multifaceted execute both of are to expansion which, the our markets, and remarks, we on continue noted a We that strategy in my as by includes offering full-service self

quickly We ability and continue to personal to a lean consumer's information. identify the which audiences into our is target without using market advantage,

and growth service teams retention. sales enhance to in and our latter both by better and that upgrading a the manner we incentivizes continue organizing Additionally, the former

and We support we marketing for a and highlight I have now to clients Operator? better the operator stronger sales investors refined messaging to in call value our alike. and to will putting proposition. questions. enablement over strengthened ourselves our our proposition the functions, clearly communicate have to our Furthermore, and strength turn value position

[Operator Instructions].

the Global of of line from Alliance comes Our question Partners. first Brian Kinstlinger

ask back I in queue. bunch, a so few get have the I'll a maybe and then

you company that You them. the new on mega mentioned large manufacturer; brand third last touched you you as customer. But that a and discussed? a customer any about updates car retailer talked you Can provide quarter, the also technology on

more some me the technology… context Give on

mega about IntentKey. X talked brands using you quarter last the In

that And had of highlighting were to key. the and penetrate you how you kind so, was those,

if about So, I progress think technology I we them, was talked to, large get kind X but understand brand. of of which I'll any on to wanted that there

the the But largest way platform Brian, of really go I company, So, technology exactly our based referring client, was the look it, to I'd I there in world. on to have were what there. comments one my a is and large which back you're think largest phrasing at

we they revenue let's might fact, their, some still progress, technology Now -- to with that up called they small be than have said, be are in technology large terms but in and signed contribution actually what called, They're Inuvo, call companies. other definitely we are more the sector. making are of in we it, working

performing they growth I Then market let's on they level, high which increased on of touched it metrics the on their are manufacturer, share ahead? talking kind expectations. going years a from and about of is already and really What well, the touch which retailer, based you're KPIs the And car performance? if assume against, on it's you the communicating in are kind

Budgeting for year. quarter, happen in early clients to given for the any late fourth the in fourth first quarter the quarter, tends in

fair find delivering continuously, What So audiences, record just what yes, let's parts is will about go say, this Halloween, Thanksgiving year just outstanding. mentioning there's maximizing people. for are any, used of the I in on capital KPIs XXXX to on compared any, Christmas will to focused I've these that target technology time, And seasons, largest the on which is what will everybody clients, at ones we head-to-head I always of clients the said you're other time year, for win. and testing of once the with we're again, most including against as in ongoing say return the the But and dialogue so-called associated XXXX. are with could the typically investment be,

using already and technology? What the usage obvious so what does to that and do Inuvo I take think you their the increase when how it of will happen? many that's times, base I've your dramatically asked begs it competition client your think So, for question outperforming

is accelerate One are necessary Two that. to relationships. things

that So, digital people client probably living the spite of a in is want the face-to-face world the relationship. the with meetings, relationship and likely to less to consequently, to a fact in accelerating catalyst are we're have biggest

So we relationship with And being can get relationships have. plethora that's competitors, the of our and why we've we not of will in people in other been them relationships by then is the thwarted and fear we're that teams if sales with those with where We grow. thing know a second with investing change. build

the decisions So, whenever those change. people technology markets changing, in this whenever got a and you've version involved disruptive got to new you have

and the on So we're things, both. are those X working Brian,

to So fourth other get question. do next about have because the I'll person. looking And how the that X obvious then find the talked in But hired that the hire you quarter? And talk queue candidate leads any about in yet to ideal back I Have you you salespeople. new questions. and

I'm not in hired one the we've sure fourth quarter. if

think the answer I did. that. might Wally know probably to we

things matters. for what plethora one to prior look to look asked, there's question they the trusted things relationships ones, after the other the do and skills The for because done So, of number we've that. changed possible. of quite for I'm back ones that best relationships combination extensively people to But you of those is can we best we a possess? can best of get opine we -- when that we've hired talking, And mentioned, and that are new look the well, as he and we've going been salesperson. out the of on I kind But long-standing trying you're a to trying hire you some do

that in of care a be consultative. describe I'll table about categorized that lot those relationships And the we the then salesperson would probably comes being skills So, one to bucket as the second with.

analytics for mean to unfortunately cookies. within and I and IP going there's and you're on and list and and complicated. there's and And salespeople, tech platforms technology There's data ad campaign goes there's addresses the segmentation If the world, there's on it's position on.

hard a that things do come really how those selling good by. to to this so, any in skills product understand sort of demands work. job And are And industry you

actually is for the look of characteristics. is That work. has a who X how the of individual kind understanding your main strong we answer be question would long-drawn-out the X things and answer. So, The an strong relationships to

And question Hickman Jon your of of the line comes next from Ladenburg.

the activity to your Rich, on? world. portion lot what just I Do of landscape you you there's Is wondering was a like a like acquire? Or M&A in going targets there for like ad target? of are tech you looks feel the

I'll answer first. the last one

I think it could be both.

for associated sensitive able us very us limitation be allow of -- And be to that, on sort dilution of to with we're sheet balance of doesn't behalf which our freely acquirer shareholders. the course, our would an course, is Of to there, do to that. be

that a acquired, latter, things, interesting, dialogue there all for out and we're the also yes, I us are look, and The So, targets we with is are having potentials there think, being ongoing acquiring that. time possibility.

said, the person trying think interest. there's you this reality talk case, to it generative the So, to we and quite that biggest and the want time have large the at we're talk what that solving AI who to got problem. I patents and the if have. period however be of frankly, disruptive us use we the next look companies only all whatever built and we've a probably about we or there'll that wants been industry's to define capability in the for language Yes, With the nature to probably learn increased it,

Jon. both, we're having it's expect us as conversations. right? expect, nothing always would imminent, you But to would think I our those So, There's shareholders do, as

Okay. one me. more And for

that You share maybe maybe there so price the count little at or Is have level reverse outstanding, share discussion million XXX the less a any give higher? little was split take. shares of the a Board a than

So, expect, things about basis And is, would is in talk for yes, meetings. that analysis these routine a not you on the the as our Board we answer simple.

out a this there's or the way. results sort at history mixed it and of terms it looking companies by negative defined the being look a of have it, history or worked that taken whether in of way haven't who and folks to maybe contrary So not in at a in done positive

would if guise ever this, sort that a when guess, we So, do that do make very the do your question under comprehensive the and of I is, to choose it sure we to that doesn't of outcome. if it do, it, analytics do yield, we answer bad

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

few you you the limited could importance and about Over wonder, capital, and about looking talked you have in I the quarters, this obviously, effectiveness. talk last I but I months, the your keep about last need of do talk effectiveness need advertising? XX Just over that, and to marketing Do it's the maybe what because doing And call you if the please. you're think advertising have to changes? you backward, working? of maybe make doing

Yes, sure.

already one field. talked fact that about key we've we people components in So, the out the that is of to the have the

And CEO so, improving us say, former at, to done this of has great and that, an of we Barry, in brought of I'd go-to-market. the job a our agency part help he professionalism with

matter Now we in be fact, about that and which the you the side points doing doing, on back there things of we sales asked things relationships are, can of matter. other the one are of some other lots that to question

who, just this, have individuals say will I let's the contracted So, we some advertising have broad Brian, ecosystem. within say, recently, with other relationships

have so, this brought used face-to-face meetings in important do. I earlier, not that if said like we where, in many as of you at world the introductions, as this as can them we recognizing living the And of With to to. find that, what of leveraging least want buyers or things one to we're their help make marketing to strength consultants they do it as us that's so don't effective will, specifically, help stuff, new seems the to on scalability, marketing us that, we relationships

because found We the have conferences attend they to that well do conferences. for don't while people have pretty us work face-face want meetings,

And to So, and you for sure some there attended as these leaning scale place of quarter, of third sense note give them the network our side of that the pretty really conferences us just those part X relationships. good and a the marketing into we operation of activity. us become make to in a I'm

to to of who intelligence intersection. industry that, desire we're companies the company, And we've advertising. trade magazines getting addition the ourselves a reputable clearly, published at that successful been quintessential artificial in talk quintessential about not one at if have In and quite

memory those us. in published And third articles the had of quarter, so, I X if think about serves, we

So people LinkedIn to a We've that's of the and an increase. to subscribed Inuvo pretty have on increase consequently, at working. pretty that's reach LinkedIn. who trying advertising We've in number been active professionals also strong and seen marketing within

think I now I in fact, we have, goes have it's information we know, think newsletter who Inuvo push I out, mean, about don't monthly. subscribers X,XXX-ish we I So, a to. that subscribe those numbers X,XXX so or all up, there's alone And that to to. and if advertising people, push that that marketing And going X,XXX professionals will. newsletter we specifically are you

So, the forgive long be thorough. I answer, to wanted but

direct XX that? right now? quarterly Great. you or have, question I agencies Can a to many you think added I How share basis you last The new said customers X on you and logos. brand maybe customers brands are actively serving

that's know I afterwards that. We answer should up not sure follow I tell and say you probably the question. don't something wrong. so I'm a good Yes, to that,

back time. no to at I like remarks. And it for questions closing would there this further are to turn Richard

today's Thank We our interest call. who on your continued in us thank appreciate very operator, and much, you, company. joined everybody, you

And disconnect. and Thank for call. you conference participating, much, this ladies Thank gentlemen, Have you you today's presenters. day. so may and concludes a now great