Fluent, Inc. (NASDAQ: FLNT), a leading data-driven performance
marketing company, today reported financial results for
the third quarter ended September 30, 2022.
Don Patrick, Fluent’s Chief Executive Officer,
commented, “Our third quarter results came in as planned and
exhibit the continued progress we are making on our long-term
strategic growth plan. We are focused squarely on consumer
engagement, along with enhancing the quality experience in our
performance marketplace.
Creating more effective, long term customer acquisition
solutions for our clients, while successfully positioning Fluent as
a market leader is the winning road forward, and it represents a
more sustainable Fluent business for our stakeholders. We
anticipate the economic environment will remain volatile for some
time, and we will strategically and financially adapt to the
economic realities by balancing our investments and managing our
business mix without compromising our key long-term strategic
bets.”
Third Quarter Financial Summary
- Q3 2022 revenue of $89.0 million, up 4% over Q3 2021
- Net income of $3.1 million, or $0.04 per share compared to net
loss of $2.5 million, or $0.03 per share, in Q3 2021
- Gross profit (exclusive of depreciation and amortization) of
$23.8 million, an increase of 8% as compared to the three months
ended September 30, 2021 and representing 27% of revenue for the
three months ended September 30, 2022
- Media margin of $28.1 million, an increase of 16% over Q3 2021
and representing 31.5% of revenue for the three months ended
September 30, 2022
- Adjusted EBITDA of $5.9 million, representing 6.6% of revenue
for the three months ended September 30, 2022
- Adjusted net income of $5.0 million, or $0.06 per share
Media margin, adjusted EBITDA and adjusted net income are
non-GAAP financial measures, as defined and reconciled
below.
Business Outlook
- Monetization, as measured by media margin per registration, is
up 30% in Q3’22 vs. Q3’21 enabled by continued focus on quality of
traffic, re-engagement of consumers and additional investments in
technology and analytics.
- Continued expansion of Fluent’s media footprint with focus on
improving our internal technology for additional growth.
- More opportunities to drive higher quality traffic while
adjusting our media mix for improved margins.
- Given the more volatile macro-economic environment, we believe
prudently managing the mix of our growth and margin initiatives
with our continued disciplined approach towards operating expenses,
would position us to successfully manage current market
realities.
Conference Call
Fluent, Inc. will host a conference call on Monday, November 7,
2022, at 4:30 PM ET to discuss its 2022 third
quarter financial results. The conference call can be accessed by
phone after registering online at Fluent Earnings Release
Conference Call. The call will also be webcast simultaneously on
the Fluent website at the Fluent's Investors Page. Following the
completion of the earnings call, a recorded replay of the webcast
will be available for those unable to participate. To listen to the
telephone replay, please connect via Fluent Inc. 3Q 2022 Earnings
Release Conference Call Replay. The replay will be available for
one year, via the Fluent website Fluent Investors Page.
Conference Call Link:
https://register.vevent.com/register/BI3e21cfc8ab0449c589e6747da50576f3
About Fluent, Inc.
Fluent, Inc. (NASDAQ: FLNT) is a global data-driven performance
marketing company and trusted growth partner for leading brands.
Experts in creating value for consumers, Fluent leverages its
consumer database, digital media portfolio, and proprietary data
science and technology to deliver outcome-based solutions for
marketers. Founded in 2010, the company is headquartered in New
York City. For more information, visit www.fluentco.com.
Safe Harbor Statement Under the Private Securities
Litigation Reform Act of 1995
The matters contained in this press release may be considered to
be “forward-looking statements” within the meaning of the
Securities Act of 1933 and the Securities Exchange Act of 1934.
Those statements include statements regarding the intent, belief or
current expectations or anticipations of Fluent and members of our
management team. Factors currently known to management that could
cause actual results to differ materially from those in
forward-looking statements include the following:
- Compliance with a significant number of governmental laws and
regulations, including those laws and regulations regarding privacy
and data;
- The outcome of litigation, regulatory investigations or other
legal proceedings in which we are involved or may become
involved;
- Failure to safeguard the personal information and other data
contained in our database;
- Failure to adequately protect intellectual property rights or
allegations of infringement of intellectual property rights;
- Unfavorable global economic conditions, including as a result
of health and safety concerns around the ongoing COVID-19
pandemic;
- Dependence on our key personnel;
- Dependence on third-party service providers;
- Management of the growth of our operations, including
international expansion and the integration of acquired business
units or personnel;
- The impact of the Traffic Quality Initiative, including our
ability to replace lower quality consumer traffic with traffic that
meets our quality requirements;
- Ability to compete and manage media costs in an industry
characterized by rapidly-changing internet media and advertising
technology and evolving industry standards;
- Regulatory uncertainty, and changing user and client demands;
management of unfavorable publicity and negative public perception
about our industry;
- Failure to compete effectively against other online marketing
and advertising companies;
- The competition we face for web traffic;
- Dependence on third-party publishers, internet search providers
and social media platforms for a significant portion of visitors to
our websites;
- Dependence on emails, text messages and telephone calls, among
other channels, to reach users for marketing purposes;
- Liability related to actions of third-party publishers;
- Limitations on our or our third-party publishers’ ability to
collect and use data derived from user activities;
- Ability to remain competitive with the shift to mobile
applications;
- Failure to detect click-through or other fraud on
advertisements;
- The impact of increased fulfillment costs;
- Failure to meet our clients’ performance metrics or changing
needs;
- Compliance with the covenants of our credit agreement; and
- The potential for failures in our internal control over
financial reporting.
These and additional factors to be considered are set forth
under “Risk Factors” in our Annual Report on Form 10-K for the
fiscal year ended December 31, 2021 and in our other filings
with the Securities and Exchange Commission. Fluent undertakes no
obligation to update or revise forward-looking statements to
reflect changed assumptions, the occurrence of unanticipated events
or changes to future operating results or expectations.
FLUENT, INC.CONSOLIDATED
BALANCE SHEETS(Amounts in thousands, except share
and per share data)(unaudited)
|
|
September 30, 2022 |
|
|
December 31, 2021 |
|
ASSETS: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
33,106 |
|
|
$ |
34,467 |
|
Accounts receivable, net of
allowance for doubtful accounts of $491 and $313, respectively |
|
|
67,550 |
|
|
|
70,228 |
|
Prepaid expenses and other
current assets |
|
|
2,312 |
|
|
|
2,505 |
|
Total current assets |
|
|
102,968 |
|
|
|
107,200 |
|
Property and equipment,
net |
|
|
1,063 |
|
|
|
1,457 |
|
Operating lease right-of-use
assets |
|
|
5,653 |
|
|
|
6,805 |
|
Intangible assets, net |
|
|
30,714 |
|
|
|
35,747 |
|
Goodwill |
|
|
110,780 |
|
|
|
165,088 |
|
Other non-current assets |
|
|
1,840 |
|
|
|
1,885 |
|
Total
assets |
|
$ |
253,018 |
|
|
$ |
318,182 |
|
LIABILITIES AND
SHAREHOLDERS' EQUITY: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
14,918 |
|
|
$ |
16,130 |
|
Accrued expenses and other
current liabilities |
|
|
27,577 |
|
|
|
33,932 |
|
Deferred revenue |
|
|
1,331 |
|
|
|
651 |
|
Current portion of long-term
debt |
|
|
5,000 |
|
|
|
5,000 |
|
Current portion of operating
lease liability |
|
|
2,402 |
|
|
|
2,227 |
|
Total current liabilities |
|
|
51,228 |
|
|
|
57,940 |
|
Long-term debt, net |
|
|
36,780 |
|
|
|
40,329 |
|
Operating lease liability |
|
|
4,238 |
|
|
|
5,692 |
|
Other non-current
liabilities |
|
|
723 |
|
|
|
811 |
|
Total
liabilities |
|
|
92,969 |
|
|
|
104,772 |
|
Contingencies (Note 10) |
|
|
|
|
|
|
|
|
Shareholders' equity: |
|
|
|
|
|
|
|
|
Preferred stock — $0.0001 par
value, 10,000,000 Shares authorized; Shares outstanding — 0 shares
for both periods |
|
|
— |
|
|
|
— |
|
Common stock — $0.0005 par
value, 200,000,000 Shares authorized; Shares issued — 84,242,962
and 83,057,083, respectively; and Shares outstanding — 79,942,810
and 78,965,260, respectively (Note 7) |
|
|
42 |
|
|
|
42 |
|
Treasury stock, at cost —
4,300,152 and 4,091,823 Shares, respectively (Note 7) |
|
|
(11,171 |
) |
|
|
(10,723 |
) |
Additional paid-in
capital |
|
|
421,990 |
|
|
|
419,059 |
|
Accumulated deficit |
|
|
(250,812 |
) |
|
|
(194,968 |
) |
Total shareholders'
equity |
|
|
160,049 |
|
|
|
213,410 |
|
Total liabilities and
shareholders' equity |
|
$ |
253,018 |
|
|
$ |
318,182 |
|
FLUENT, INC.CONSOLIDATED
STATEMENTS OF OPERATIONS(Amounts in thousands,
except share and per share
data)(unaudited)
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Revenue |
|
$ |
89,046 |
|
|
$ |
85,858 |
|
|
$ |
276,470 |
|
|
$ |
229,406 |
|
Costs and
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue (exclusive of depreciation and amortization) |
|
|
65,270 |
|
|
|
63,784 |
|
|
|
202,859 |
|
|
|
171,379 |
|
Sales and marketing |
|
|
4,254 |
|
|
|
3,034 |
|
|
|
12,590 |
|
|
|
8,995 |
|
Product development |
|
|
4,622 |
|
|
|
4,464 |
|
|
|
13,979 |
|
|
|
11,331 |
|
General and administrative |
|
|
10,877 |
|
|
|
13,279 |
|
|
|
33,852 |
|
|
|
36,505 |
|
Depreciation and amortization |
|
|
3,398 |
|
|
|
3,200 |
|
|
|
10,037 |
|
|
|
9,939 |
|
Goodwill impairment and write-off of intangible assets |
|
|
— |
|
|
|
144 |
|
|
|
55,528 |
|
|
|
343 |
|
Loss (gain) on disposal of property and equipment |
|
|
(2 |
) |
|
|
— |
|
|
|
19 |
|
|
|
— |
|
Total costs and
expenses |
|
|
88,419 |
|
|
|
87,905 |
|
|
|
328,864 |
|
|
|
238,492 |
|
Income (loss) from
operations |
|
|
627 |
|
|
|
(2,047 |
) |
|
|
(52,394 |
) |
|
|
(9,086 |
) |
Interest expense, net |
|
|
(517 |
) |
|
|
(405 |
) |
|
|
(1,331 |
) |
|
|
(1,840 |
) |
Loss on early extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2,964 |
) |
Income (loss) before
income taxes |
|
|
110 |
|
|
|
(2,452 |
) |
|
|
(53,725 |
) |
|
|
(13,890 |
) |
Income tax (expense) benefit |
|
|
3,003 |
|
|
|
— |
|
|
|
(2,119 |
) |
|
|
1 |
|
Net income
(loss) |
|
|
3,113 |
|
|
|
(2,452 |
) |
|
|
(55,844 |
) |
|
|
(13,889 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
income (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.04 |
|
|
$ |
(0.03 |
) |
|
$ |
(0.69 |
) |
|
$ |
(0.17 |
) |
Diluted |
|
$ |
0.04 |
|
|
$ |
(0.03 |
) |
|
$ |
(0.69 |
) |
|
$ |
(0.17 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
81,592,316 |
|
|
|
80,133,406 |
|
|
|
81,327,639 |
|
|
|
79,753,662 |
|
Diluted |
|
|
81,699,966 |
|
|
|
80,133,406 |
|
|
|
81,327,639 |
|
|
|
79,753,662 |
|
FLUENT, INC.CONSOLIDATED
STATEMENTS OF CASH FLOWS(Amounts in
thousands)(unaudited)
|
|
Nine Months Ended September 30, |
|
|
|
2022 |
|
|
2021 |
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(55,844 |
) |
|
$ |
(13,889 |
) |
Adjustments to
reconcile net loss to net cash provided by (used in) operating
activities: |
|
|
|
|
|
|
|
|
Depreciation and
amortization |
|
|
10,037 |
|
|
|
9,939 |
|
Non-cash loan amortization
expense |
|
|
201 |
|
|
|
361 |
|
Share-based compensation
expense |
|
|
2,652 |
|
|
|
3,577 |
|
Non-cash loss on early
extinguishment of debt |
|
|
— |
|
|
|
2,198 |
|
Non-cash accrued compensation
expense for Put/Call Consideration |
|
|
— |
|
|
|
3,213 |
|
Non-cash termination of
Put/Call Consideration |
|
|
— |
|
|
|
(629 |
) |
Goodwill impairment |
|
|
55,400 |
|
|
|
— |
|
Write-off of intangible
assets |
|
|
128 |
|
|
|
343 |
|
Loss on disposal of property
and equipment |
|
|
19 |
|
|
|
— |
|
Provision for bad debt |
|
|
275 |
|
|
|
113 |
|
Provision for income
taxes |
|
|
2,119 |
|
|
|
— |
|
Changes in assets and
liabilities, net of business acquisitions: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
2,406 |
|
|
|
(14,012 |
) |
Prepaid expenses and other
current assets |
|
|
277 |
|
|
|
227 |
|
Other non-current assets |
|
|
52 |
|
|
|
(298 |
) |
Operating lease assets and
liabilities, net |
|
|
(127 |
) |
|
|
(136 |
) |
Accounts payable |
|
|
(1,212 |
) |
|
|
8,493 |
|
Accrued expenses and other
current liabilities |
|
|
(9,616 |
) |
|
|
(5,685 |
) |
Deferred revenue |
|
|
456 |
|
|
|
(651 |
) |
Other |
|
|
(89 |
) |
|
|
(96 |
) |
Net cash provided by
(used in) operating activities |
|
|
7,134 |
|
|
|
(6,932 |
) |
CASH FLOWS FROM
INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
Capitalized costs included in
intangible assets |
|
|
(3,316 |
) |
|
|
(2,237 |
) |
Business acquisitions, net of
cash acquired |
|
|
(971 |
) |
|
|
— |
|
Acquisition of property and
equipment |
|
|
(10 |
) |
|
|
(26 |
) |
Net cash used in
investing activities |
|
|
(4,297 |
) |
|
|
(2,263 |
) |
CASH FLOWS FROM
FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
Proceeds from issuance of
long-term debt, net of debt financing costs |
|
|
— |
|
|
|
49,624 |
|
Repayments of long-term
debt |
|
|
(3,750 |
) |
|
|
(45,486 |
) |
Exercise of stock options |
|
|
— |
|
|
|
934 |
|
Prepayment penalty on debt
extinguishment |
|
|
— |
|
|
|
(766 |
) |
Taxes paid related to net
share settlement of vesting of restricted stock units |
|
|
(448 |
) |
|
|
(719 |
) |
Proceeds from the issuance of
stock |
|
|
— |
|
|
|
136 |
|
Net cash (used in)
provided by financing activities |
|
|
(4,198 |
) |
|
|
3,723 |
|
Net decrease in cash,
cash equivalents and restricted cash |
|
|
(1,361 |
) |
|
|
(5,472 |
) |
Cash, cash equivalents and
restricted cash at beginning of period |
|
|
34,467 |
|
|
|
22,567 |
|
Cash, cash equivalents and
restricted cash at end of period |
|
$ |
33,106 |
|
|
$ |
17,095 |
|
Definitions, Reconciliations and Uses of Non-GAAP
Financial Measures
The following non-GAAP measures are used in this release:
Media margin is defined as that
portion of gross profit (exclusive of depreciation and
amortization) reflecting the variable costs paid for media and
related expenses and excluding non-media cost of revenue. Gross
profit (exclusive of depreciation and amortization) represents
revenue minus cost of revenue (exclusive of depreciation and
amortization). Media margin is also presented as percentage of
revenue.
Adjusted EBITDA is defined as net
income (loss) excluding (1) income taxes, (2) interest
expense, net, (3) depreciation and amortization, (4) share-based
compensation expense, (5) loss on early extinguishment of debt, (6)
accrued compensation expense for the Put/Call Consideration, (7)
goodwill impairment, (8) write-off of intangible assets, (9)
acquisition-related costs, (10) restructuring and other
severance costs, and (11) certain litigation and other related
costs.
Adjusted net income (loss) is
defined as net income (loss) excluding (1) share-based compensation
expense, (2) loss on early extinguishment of debt, (3) accrued
compensation expense for the Put/Call Consideration, (4) goodwill
impairment, (5) write-off of intangible assets, (6)
acquisition-related costs, (7) restructuring and other
severance costs, and (8) certain litigation and other related
costs. Adjusted net income (loss) is also presented on a per
share (basic and diluted) basis.
Below is a reconciliation of media margin from gross profit
(exclusive of depreciation and amortization), which we believe is
the most directly comparable GAAP measure.
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Revenue |
|
$ |
89,046 |
|
|
$ |
85,858 |
|
|
$ |
276,470 |
|
|
$ |
229,406 |
|
Less: Cost of revenue (exclusive of depreciation and
amortization) |
|
|
65,270 |
|
|
|
63,784 |
|
|
|
202,859 |
|
|
|
171,379 |
|
Gross profit
(exclusive of depreciation and amortization) |
|
$ |
23,776 |
|
|
$ |
22,074 |
|
|
$ |
73,611 |
|
|
$ |
58,027 |
|
Gross profit
(exclusive of depreciation and amortization) % of
revenue |
|
|
27 |
% |
|
|
26 |
% |
|
|
27 |
% |
|
|
25 |
% |
Non-media cost of revenue (1) |
|
|
4,290 |
|
|
|
2,088 |
|
|
|
12,713 |
|
|
|
11,141 |
|
Media
margin |
|
$ |
28,066 |
|
|
$ |
24,162 |
|
|
$ |
86,324 |
|
|
$ |
69,168 |
|
Media margin % of
revenue |
|
|
31.5 |
% |
|
|
28.1 |
% |
|
|
31.2 |
% |
|
|
30.2 |
% |
(1) Represents the portion of cost of revenue (exclusive of
depreciation and amortization) not attributable to variable costs
paid for media and related expenses.
Below is a reconciliation of adjusted EBITDA from net
loss for the three and nine months ended September
30, 2022 and 2021, respectively, which we believe is the most
directly comparable GAAP measure.
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Net income (loss) |
|
$ |
3,113 |
|
|
$ |
(2,452 |
) |
|
$ |
(55,844 |
) |
|
$ |
(13,889 |
) |
Income tax expense
(benefit) |
|
|
(3,003 |
) |
|
|
— |
|
|
|
2,119 |
|
|
|
(1 |
) |
Interest expense, net |
|
|
517 |
|
|
|
405 |
|
|
|
1,331 |
|
|
|
1,840 |
|
Depreciation and
amortization |
|
|
3,398 |
|
|
|
3,200 |
|
|
|
10,037 |
|
|
|
9,939 |
|
Share-based compensation
expense |
|
|
801 |
|
|
|
1,145 |
|
|
|
2,652 |
|
|
|
3,577 |
|
Loss on early extinguishment
of debt |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,964 |
|
Accrued compensation expense
for Put/Call Consideration |
|
|
— |
|
|
|
586 |
|
|
|
— |
|
|
|
3,213 |
|
Goodwill impairment |
|
|
— |
|
|
|
— |
|
|
|
55,400 |
|
|
|
— |
|
Write-off of intangible
assets |
|
|
— |
|
|
|
144 |
|
|
|
128 |
|
|
|
343 |
|
Loss on disposal of property
and equipment |
|
|
(2 |
) |
|
|
— |
|
|
|
19 |
|
|
|
— |
|
Acquisition-related
costs(1)(2) |
|
|
536 |
|
|
|
2,906 |
|
|
|
1,673 |
|
|
|
3,406 |
|
Restructuring and other
severance costs |
|
|
— |
|
|
|
133 |
|
|
|
38 |
|
|
|
230 |
|
Certain litigation and other
related costs |
|
|
504 |
|
|
|
295 |
|
|
|
2,502 |
|
|
|
1,322 |
|
Adjusted
EBITDA |
|
$ |
5,864 |
|
|
$ |
6,362 |
|
|
$ |
20,055 |
|
|
$ |
12,944 |
|
(1) Includes compensation expense related to
non-competition agreements entered into as a result
of acquisitions (See Note 11, Business acquisition, in
the Notes to Consolidated Financial Statements.)(2) Includes for
the three and nine months ended September 30, 2021, a net expense
of $2,796 related to the Full Winopoly Acquisition (See Note
11, Business acquisition, in the Notes to Consolidated Financial
Statements.)
Below is a reconciliation of adjusted net income (loss) and
adjusted net income (loss) per share from net loss for the
three and nine months ended September 30, 2022 and 2021,
respectively, which we believe is the most directly comparable GAAP
measure.
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
(In thousands, except
share and per share data) |
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
Net income (loss) |
|
$ |
3,113 |
|
|
$ |
(2,452 |
) |
|
$ |
(55,844 |
) |
|
$ |
(13,889 |
) |
Share-based compensation
expense |
|
|
801 |
|
|
|
1,145 |
|
|
|
2,652 |
|
|
|
3,577 |
|
Loss on early extinguishment
of debt |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,964 |
|
Accrued compensation expense
for Put/Call Consideration |
|
|
— |
|
|
|
586 |
|
|
|
— |
|
|
|
3,213 |
|
Goodwill impairment |
|
|
— |
|
|
|
— |
|
|
|
55,400 |
|
|
|
— |
|
Write-off of intangible
assets |
|
|
— |
|
|
|
144 |
|
|
|
128 |
|
|
|
343 |
|
Loss on disposal of property
and equipment |
|
|
(2 |
) |
|
|
— |
|
|
|
19 |
|
|
|
— |
|
Acquisition-related
costs(1)(2) |
|
|
536 |
|
|
|
2,906 |
|
|
|
1,673 |
|
|
|
3,406 |
|
Restructuring and other
severance costs |
|
|
— |
|
|
|
133 |
|
|
|
38 |
|
|
|
230 |
|
Certain litigation and other
related costs |
|
|
504 |
|
|
|
295 |
|
|
|
2,502 |
|
|
|
1,322 |
|
Adjusted net
income |
|
$ |
4,952 |
|
|
$ |
2,757 |
|
|
$ |
6,568 |
|
|
$ |
1,166 |
|
Adjusted net income
per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.06 |
|
|
$ |
0.03 |
|
|
$ |
0.08 |
|
|
$ |
0.01 |
|
Diluted |
|
$ |
0.06 |
|
|
$ |
0.03 |
|
|
$ |
0.08 |
|
|
$ |
0.01 |
|
Weighted average
number of shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
81,592,316 |
|
|
|
80,133,406 |
|
|
|
81,327,639 |
|
|
|
79,753,662 |
|
Diluted |
|
|
81,699,966 |
|
|
|
80,514,650 |
|
|
|
81,327,639 |
|
|
|
80,755,776 |
|
(1) Includes compensation expense related to
non-competition agreements entered into as a result of an
acquisitions (See Note 11, Business acquisition, in the Notes
to Consolidated Financial Statements.)(2) Includes for the three
and nine months ended September 30, 2021, a net expense of $2,796
related to the Full Winopoly Acquisition (See Note 11,
Business acquisition, in the Notes to Consolidated Financial
Statements.)
We present media margin, as a percentage of revenue, adjusted
EBITDA, adjusted net income (loss) and adjusted net income
(loss) per share as supplemental measures of our financial and
operating performance because we believe they provide useful
information to investors. More specifically:
Media margin, as defined above, is a
measure of the efficiency of the Company’s operating model. We use
media margin and the related measure of media margin as a
percentage of revenue as primary metrics to measure the financial
return on our media and related costs, specifically to measure the
degree by which the revenue generated from our digital marketing
services exceeds the cost to attract the consumers to whom offers
are made through our services. Media margin is used extensively by
our management to manage our operating performance, including
evaluating operational performance against budgeted media margin
and understanding the efficiency of our media and related
expenditures. We also use media margin for performance evaluations
and compensation decisions regarding certain personnel.
Adjusted EBITDA, as defined above, is
another primary metric by which we evaluate the operating
performance of our business, on which certain operating
expenditures and internal budgets are based and by which, in
addition to media margin and other factors, our senior management
is compensated. The first three adjustments represent the
conventional definition of EBITDA, and the remaining adjustments
are items recognized and recorded under GAAP in particular periods
but might be viewed as not necessarily coinciding with the
underlying business operations for the periods in which they are so
recognized and recorded. These adjustments include certain
litigation and other related costs associated with legal matters
outside the ordinary course of business. We consider items one-time
in nature if they are non-recurring, infrequent or unusual and have
not occurred in the past two years or are not expected to recur in
the next two years, in accordance with SEC rules. There were no
adjustments for one-time items in the periods presented in this
Quarterly Report on Form 10-Q.
Adjusted net income (loss), as
defined above, and the related measure of adjusted net income
(loss) per share exclude certain items that are recognized and
recorded under GAAP in particular periods but might be viewed as
not necessarily coinciding with the underlying business operations
for the periods in which they are so recognized and recorded. We
believe adjusted net income (loss) affords investors a
different view of our overall financial performance as compared to
adjusted EBITDA and the GAAP measure of net income (loss).
Media margin, adjusted EBITDA, adjusted net income (loss) and
adjusted net income (loss) per share are non-GAAP financial
measures with certain limitations regarding their usefulness.
They do not reflect our financial results in accordance with
GAAP, as they do not include the impact of certain expenses that
are reflected in our condensed consolidated statements of
operations. Accordingly, these metrics are not indicative of our
overall results or indicators of past or future financial
performance. Further, they are not financial measures of
profitability and are neither intended to be used as a proxy
for the profitability of our business nor to imply
profitability. The way we measure media margin, adjusted
EBITDA and adjusted net income (loss) may not be comparable to
similarly titled measures presented by other companies and may not
be identical to corresponding measures used in our various
agreements.
Contact Information: Investor
RelationsFluent, Inc.(212)
785-0431InvestorRelations@fluentco.com
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