Inuvo, Inc. (NYSE American: INUV), a leading provider of marketing
technology, powered by artificial intelligence (AI) that serves
brands and agencies, today provided a business update, and
announced its financial results for the second quarter ended June
30, 2022.
Richard Howe, CEO of Inuvo, stated, “We had another
exceptionally strong quarter as demonstrated by a 79.3%
year-over-year increase in revenue to $22.7 million for the three
months ended June 30, 2022. We also achieved a 77.4% year-over-year
increase in revenue to $41.3 million for the six months ended June
30, 2022. Importantly, we have realized approximately 15%
compounded quarterly growth rate over the two-year period between
Q2 of 2020 and Q2 of 2022. Both the Search and Social ValidClick
and Programmatic IntentKey platforms experienced significant growth
in the three and six months ended June 30, 2022.”
Mr. Howe added, “We believe the industry we serve is not
prepared for the implications of a consumer privacy led future
where consumer data is no longer available to facilitate behavioral
targeting of advertising. Most of an advertisers’ return on
advertising spend is related to the use of 3rd party cookies and
consumer data. The industry we serve is rapidly changing, and
within the next two years, we anticipate cookies will be eliminated
on all major platforms including Apple and Google. This poses an
immediate threat to existing incumbent advertising technology and
data companies. Currently, we estimate that 75% of the media
purchase opportunities within the open web either do not have a
consumer cookie ID, or that cookie ID does not persist the next
day. This disruptive change, already well underway within the
industry provides Inuvo a unique opportunity to rapidly capture
market share, while incumbents continue to develop and deploy
variations on outdated technologies poorly aligned with the
future.”
Financial Results for the Three and Six Month Ended June
30, 2022Net revenue for the second quarter ended June 30,
2022 totaled $22.7 million, an increase of 79.3% as compared to
$12.6 million for the same period last year. Net revenue for the
six months ended June 30, 2022 totaled $41.3 million, an increase
of 77.4% compared to $23.3 million for the same period last
year.
IntentKey programmatic platform revenue for the three months and
six months ended June 30, 2022 exceeded the same period last year
by 197% and 232%, respectively. ValidClick search and social
platform revenue for the three and six months ended June 30, 2022
exceeded the same period last year by 44% and 35%, respectively.
Revenue split between IntentKey and ValidClick was roughly 38%
versus 62% for the three months ended June 30, 2022, which compares
to 23% and 77%, respectively, for the same period last year.
Cost of revenue for the second quarter ended June 30, 2022,
totaled $9.3 million as compared to $2.3 million for the same
period last year. Cost of revenue for the six months ended June 30,
2022, totaled $18.0 million as compared to $3.7 million for the
same period last year. The increase in the cost of revenue for the
three months and six months ended June 30, 2022 as compared to the
same period last year was related to the acquisition of new
customers and growth of IntentKey as a percentage of revenue.
Gross profit for the three and six months ended June 30, 2022
totaled $13.4 million and $23.3 million, respectively as compared
to $10.4 million and $19.5 million, respectively, for the same
period last year. Gross profit margin for the three and six months
ended June 30, 2022 was 59.1% and 56.5%, respectively as compared
to 82.1% and 84.1%, respectively, for the same period last year.
The IntentKey platform has a lower gross margin than the ValidClick
platform but has a greater overall net margin than the ValidClick
platform. The gross margin decreased as IntentKey revenue became a
greater percentage of net revenue.
Operating expenses for the three months ended June 30, 2022
totaled $16.2 million, an increase of 27.0% as compared to $12.8
million for the same period last year. Operating expenses for the
six months ended June 30, 2022 totaled $28.3 million, an increase
of 15.2% as compared to $24.5 million for the same period last
year. Operating expenses for the three and six months ended June
30, 2022 included a one-time marketing expense of $1.4 million
related to fraudulent media purchased from a prominent advertising
platform, from whom the Company expects reimbursement. The company
has withheld payment of an equivalent amount of payables due to
this advertising platform.
Other expense/income for the three and six months ended June 30,
2022 included an expense of approximately $395 thousand and $377
thousand, respectively, from unrealized losses on trading
securities. Other expense/income for the three months ended June
30, 2021 included approximately $25 thousand from unrealized gains
on trading securities, and for the six month period ended June 30,
2021, other expense/income included income of approximately $495
thousand due to the reversal of deferred revenue from a one-time
contract cancellation.
Net loss for the second quarter of 2022 totaled $3.2 million, or
$0.03 per basic and diluted share, as compared to net loss of $2.4
million, or $0.02 per basic and diluted share, for the same period
last year. Net loss for the six months ended June 30, 2022 totaled
$5.3 million, or $0.04 per basic and diluted share, as compared to
net loss of $4.5 million, or $0.04 per basic and diluted share, for
the same period last year.
Net loss in the second quarter included $1.3 million non-cash
depreciation, amortization, and stock compensation and for the
six-month period those same items were $2.7 million. The net loss
also includes $1.4 million dollars of expense related to the
fraudulent media described above and $395 thousand of marked to
market losses of which, by August 12th, had regained approximately
$300 thousand.
Adjusted EBITDA was a loss of approximately $142 thousand in the
second quarter of 2022, compared to a loss of approximately $965
thousand for the same period last year. Adjusted EBITDA was a loss
of approximately $859 thousand for the six months ended June 30,
2022, compared to a loss of approximately $1.8 million for the same
period last year.
Liquidity and Capital Resources:On June 30,
2022, Inuvo had $8.4 million in cash, cash equivalents and
marketable securities, $8.9 million of working capital, an unused
working capital facility of $5 million and no debt.
As of June 30, 2022, Inuvo had 119,873,869 common shares issued
and outstanding.
Conference Call Details: Date: Monday,
August 15, 2022 Time: 10:00 a.m. Eastern Time Toll-free
Dial-in Number: 1-888-394-8218International Dial-in Number:
1-323-701-0225Conference ID: 3117716Webcast Link: HERE
A telephone replay will be available through Monday, August 29,
2022. To access the replay, please dial 1-844-512-2921 (domestic)
or 1-412-317-6671 (international). At the system prompt, please
enter the code 3117716 followed by the # sign. You will then be
prompted for your name, company, and phone number. Playback will
then automatically begin.
About InuvoInuvo®, Inc. (NYSE American: INUV)
is a market leader in Artificial Intelligence built for
advertising. Its IntentKey AI solution is a first-of-its-kind
proprietary and patented technology capable of identifying and
actioning to the reasons why consumers are interested in products,
services, or brands, not who those consumers are. To learn more,
visit www.inuvo.com.
Safe Harbor / Forward-Looking StatementsThis
press release contains “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements are subject to risks and
uncertainties that may cause actual results to differ materially,
including, without limitation risks detailed from time to time in
our filings with the Securities and Exchange Commission (the
“SEC”), and represent our views only as of the date they are made
and should not be relied upon as representing our views as of any
subsequent date. You are urged to carefully review and consider any
cautionary statements and other disclosures, including the
statements made under the heading "Risk Factors" in Inuvo, Inc.'s
Annual Report on Form 10-K for the fiscal year ended December 31,
2021 as filed on March 17, 2022, our Quarterly Reports on Form
10-Q, and our other filings with the SEC. Additionally,
forward looking statements are subject to certain risks, trends,
and uncertainties including the continued impact of Covid-19 on
Inuvo’s business and operations. Inuvo cannot provide assurances
that the assumptions upon which these forward-looking statements
are based will prove to have been correct. Should one of these
risks materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those expressed
or implied in any forward-looking statements, and investors are
cautioned not to place undue reliance on these forward-looking
statements, which are current only as of this date. Inuvo does not
intend to update or revise any forward-looking statements made
herein or any other forward-looking statements as a result of new
information, future events or otherwise. Inuvo further expressly
disclaims any written or oral statements made by a third party
regarding the subject matter of this press release. The
information, which appears on our websites and our social media
platforms is not part of this press release.
Inuvo Company Contact: Wally Ruiz Chief
Financial Officer Tel (501) 205-8397 wallace.ruiz@inuvo.com
Investor Relations:David Waldman / Natalya
RudmanCrescendo Communications, LLCTel: (212)
671-1020inuv@crescendo-ir.com
(Tables follow)
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INUVO, INC. |
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30 |
|
June 30 |
|
June 30 |
|
June 30 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net
revenue |
|
$ |
22,651,305 |
|
|
$ |
12,635,583 |
|
|
$ |
41,260,672 |
|
|
$ |
23,253,392 |
|
Cost
of revenue |
|
|
9,273,589 |
|
|
|
2,264,020 |
|
|
|
17,935,095 |
|
|
|
3,708,079 |
|
Gross
profit |
|
|
13,377,716 |
|
|
|
10,371,563 |
|
|
|
23,325,577 |
|
|
|
19,545,313 |
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
Marketing costs |
|
|
10,988,409 |
|
|
|
8,213,140 |
|
|
|
18,157,858 |
|
|
|
15,518,924 |
|
Compensation |
|
|
3,215,890 |
|
|
|
2,880,217 |
|
|
|
6,373,596 |
|
|
|
5,618,084 |
|
General and administrative |
|
|
2,011,237 |
|
|
|
1,676,890 |
|
|
|
3,737,909 |
|
|
|
3,401,868 |
|
Total
operating expenses |
|
|
16,215,536 |
|
|
|
12,770,247 |
|
|
|
28,269,363 |
|
|
|
24,538,876 |
|
Operating loss |
|
|
(2,837,820 |
) |
|
|
(2,398,684 |
) |
|
|
(4,943,786 |
) |
|
|
(4,993,563 |
) |
Interest expense (income), net |
|
|
3,070 |
|
|
|
(7,991 |
) |
|
|
2,071 |
|
|
|
(30,380 |
) |
Other
income (loss), net |
|
|
(395,177 |
) |
|
|
24,548 |
|
|
|
(377,475 |
) |
|
|
494,548 |
|
Net
loss |
|
|
(3,229,927 |
) |
|
|
(2,382,127 |
) |
|
|
(5,319,190 |
) |
|
|
(4,529,395 |
) |
Other
comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized loss on marketable securities |
|
|
(124,253 |
) |
|
|
- |
|
|
|
(222,409 |
) |
|
|
- |
|
Comprehensive loss |
|
|
(3,354,180 |
) |
|
|
(2,382,127 |
) |
|
|
(5,541,599 |
) |
|
|
(4,529,395 |
) |
|
|
|
|
|
|
|
|
Earnings per share, basic and diluted |
|
|
|
|
|
|
|
Net
loss income |
|
|
(0.03 |
) |
|
|
(0.02 |
) |
|
|
(0.04 |
) |
|
|
(0.04 |
) |
Weighted average shares outstanding |
|
|
|
|
|
|
|
Basic |
|
|
119,827,944 |
|
|
|
116,497,035 |
|
|
|
118,788,819 |
|
|
|
116,497,035 |
|
Diluted |
|
|
119,827,944 |
|
|
|
116,497,035 |
|
|
|
118,788,819 |
|
|
|
116,497,035 |
|
INUVO, INC. |
|
CONDENSED CONSOLIDATED BALANCE SHEETS |
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
June 30 |
|
|
December 31 |
|
|
|
|
2022 |
|
|
2021 |
|
Assets |
|
|
|
|
|
|
|
|
|
|
|
Cash
and cash equivalent |
|
$ |
6,373,070 |
|
$ |
10,475,964 |
|
Marketable securities-short term |
|
|
2,044,601 |
|
|
1,927,979 |
|
Accounts receivable, net |
|
|
13,094,811 |
|
|
9,265,813 |
|
Prepaid expenses and other current assets |
|
|
1,074,366 |
|
|
1,408,186 |
|
Total
current assets |
|
|
22,586,848 |
|
|
23,077,942 |
|
|
|
|
|
|
|
Property and equipment, net |
|
|
1,688,478 |
|
|
1,506,766 |
|
|
|
|
|
|
|
Intangible
assets, net of accumulated amortization |
|
6,141,541 |
|
|
6,720,585 |
|
Goodwill |
|
|
9,853,342 |
|
|
9,853,342 |
|
Other
assets |
|
|
2,209,980 |
|
|
2,838,439 |
|
|
|
|
|
|
|
Total
assets |
|
$ |
42,480,189 |
|
$ |
43,997,074 |
|
|
|
|
|
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
Accounts payable |
|
$ |
6,246,536 |
|
$ |
4,844,716 |
|
Accrued expenses and other current liabilities |
|
|
7,422,403 |
|
|
5,817,823 |
|
Total
current liabilities |
|
|
13,668,939 |
|
|
10,662,539 |
|
|
|
|
|
|
|
Long-term liabilities |
|
|
304,895 |
|
|
526,540 |
|
|
|
|
|
|
|
Total
stockholders' equity |
|
|
28,506,355 |
|
|
32,807,995 |
|
Total
liabilities and stockholders' equity |
|
$ |
42,480,189 |
|
$ |
43,997,074 |
|
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA |
(unaudited) |
|
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|
June 30 |
|
June 30 |
|
June 30 |
|
|
June 30 |
|
|
2022 |
|
2021 |
|
2022 |
|
|
2021 |
Net loss |
|
$ |
(3,229,927 |
) |
|
$ |
(2,382,127 |
) |
|
$ |
(5,319,190 |
) |
|
$ |
(4,529,395 |
) |
Interest (Income) Expense |
|
$ |
(3,070 |
) |
|
|
7,991 |
|
|
|
2,071 |
|
|
|
30,380 |
|
Depreciation |
|
|
372,939 |
|
|
|
314,106 |
|
|
|
729,732 |
|
|
|
619,634 |
|
Amortization |
|
|
270,563 |
|
|
|
537,530 |
|
|
|
627,741 |
|
|
|
1,086,730 |
|
EBITDA |
|
|
(2,589,495 |
) |
|
|
(1,522,500 |
) |
|
|
(3,959,646 |
) |
|
|
(2,792,651 |
) |
Stock-based compensation |
|
|
684,376 |
|
|
|
557,602 |
|
|
|
1,355,534 |
|
|
|
952,472 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-recurring transactions:Expense of fraudulent media |
|
|
1,367,800 |
|
|
|
- |
|
|
|
1,367,800 |
|
|
|
- |
|
Unrealized loss on
investments |
|
|
395,177 |
|
|
|
- |
|
|
|
377,475 |
|
|
|
- |
|
Adjusted EBITDA |
|
|
(142,142 |
) |
|
|
(964,898 |
) |
|
|
(858,837 |
) |
|
|
(1,840,179 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Operating Loss to EBITDA and Adjusted
EBITDA We present EBITDA and Adjusted EBITDA as a
supplemental measure of our performance. We defined EBITDA as Net
loss plus (i) interest expense, (ii) depreciation, and (iii)
amortization. We further define Adjusted EBITDA as EBITDA plus (iv)
stock-based compensation and (v) certain identified expenses that
are not expected to recur or be representative of future ongoing
operation of the business. These adjustments are itemized above.
You are encouraged to evaluate these adjustments and the reasons we
consider them appropriate for supplemental analysis. In evaluating
EBITDA and Adjusted EBITDA, you should be aware that in the future
we may incur expenses that are the same or similar to some of the
adjustments in the presentation. Our presentation of EBITDA and
Adjusted EBITDA should not be construed as an inference that our
future results will be unaffected by unusual or non-recurring
items.
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