2023 Revenue up 21% to $8.2 Million Driven by
Creative Services and Digital Marketing
Customer Retention Rate 94% Year-over-Year as
of December 31, 2023
AiAdvertising, Inc. (OTC: AIAD), an industry leader in
AI-powered digital advertising solutions, has reported its
financial and operational results for the year ended December 31,
2023.
Key Fourth Quarter and Subsequent 2024 Highlights and
Business Update
- Revenue for Q4 2023 was $2.3 million, up 11% from $2.1 million
in Q4 2022.
- Revenue for the year ended December 31, 2023, and 2022 was $8.2
million and $6.7, respectively, an increase of 21%.
- Gross profit margin of 1.9% in 2023, a notable increase as
compared to (8.4%) in the same year ago period.
- Platform License revenues for the quarter ended December 31,
2023, decreased by 48% to $87,472 due to a business model
shift.
- Digital Marketing revenues for the quarter ended December 31,
2023, increased by 14% to $1.76 million.
- Creative Services revenues for the quarter ended December 31,
2023, increased by 31% to $0.46 million.
- Net Loss for the quarter ended December 31, 2023, was ($2.0)
million.
- Net Loss for the year ended December 31, 2023, improved by 26%
to ($6.3) million.
- Net Cash used in the year ended December 31, 2023, was $5.5
million, compared to cash used of $4.9 million a year ago.
- Completed the second tranche of its securities purchase
agreement with Hexagon Partners, Ltd., a Texas-based investment
company, for a strategic investment of $2.5 million.
- Customer retention rate was a strong 94% year-over-year as of
December 31, 2023.
- First half 2024 revenue expected to be in the $4.0 to $4.2
million range and FY 2024 revenue expected to be in the $9 to $10
million range on continued strong momentum driven by high customer
retention, increased digital marketing budgets, and new customer
wins.
Management Commentary
"We continued our systematic cadence of operational execution in
the fourth quarter with 11% revenue growth,” said Jerry Hug,
Chairman and CEO of AiAdvertising. “For the full year, both revenue
and net loss improved as we began to see the cumulative results
from our efforts over the last year to acquire new customers and
strong growth from current customers in Digital Marketing.
Moreover, our customer retention rate was a strong 94%
year-over-year as of December 31, 2023, having lost only two
customers; one due to an acquisition and the other due to the
client taking marketing in house.
“Benefits of our Campaign Performance Platform and its targeting
capabilities continued to garner interest among new clients as
cookie-based tracking becomes more in doubt. By applying AI and ML
technologies to marketing and advertising solutions, our AdTech
software and optimization services allow advertisers to eliminate
guesswork, predict creative, and prove performance.
“Operationally, we are absolutely seeing the benefits of
leveraging our AI tools which augment and automate mundane and
repetitive tasks typically thought of as human-like 'seeing,
listening, understanding, and creating' by our team. This is
evidenced by our operational expenses remaining flat year over year
while managing more clients and increased revenue. We extended our
partnership with Hexagon Partners with the recent $2.5 million
second tranche of its strategic investment, enabling us to focus on
further development of our AI-powered targeting solutions to
generate more engaging, higher-impact campaigns that drive results
for our clients. In addition, with the new investment from Hexagon
to propel our sales efforts, we believe we will reach cashflow
breakeven in the near term.
“As the industry shifts toward solutions leveraging AI, we are
focused on scaling our platform while we deliver superior results
to our clients and execute on our revenue backlog. We believe we
are well positioned to deliver value to our customers, partners and
shareholders with first half 2024 revenue expected to be in the
$4.0 to $4.2 million range and FY 2024 revenue expected to be in
the $9 to $10 million range on continued strong momentum driven by
high customer retention, increased digital marketing budgets, and
new customer wins. Lastly, we expect to report our first and second
quarter 2024 financial results soon and resume timely reporting
thereafter,” concluded Hug.
FY 2023 Financial Results
Revenue for the quarter ended December 31, 2023, and 2022 was
$2.3 million and $2.1 million, respectively, an increase of 11%.
The increase was primarily due to new customer wins in Digital
Marketing. The Platform License segment revenues for the quarter
ended December 31, 2023, decreased by 48% to $87,472 from the prior
year due to management’s focus on a hybrid model of lower platform
fees to drive higher customer budget spend. Digital Marketing
revenues for the quarter ended December 31, 2023, increased by 14%
to $1.76 million as a result of this strategic shift.
Revenue for the year ended December 31, 2023, and 2022 was $8.2
million and $6.7 million, respectively, an increase of 21%. The
increase was primarily due to new customer wins, but additional
growth from current customers was additive due to a focus on
reduced platform fees for the customer to drive higher budget spend
creating more revenue and more profit for AI Advertising. Benefits
of the Campaign Performance Platform and its targeting capabilities
are garnering interest among new clients as cookie-based tracking
becomes more in doubt. The Platform License segment revenues for
the year ended December 31, 2023, decreased by 25% to $0.47 million
from the prior year. Digital Marketing revenues for the year ended
December 31, 2023, increased 33% to $6.1 million.
Gross profit in the fourth quarter of 2023, was ($0.1) million,
or (4.2%) of revenues, compared to a gross loss of ($284,558), or
(13.7%) of revenues, in the comparable year ago quarter. Gross
profit in the year ended December 31, 2023, was $0.2 million, or
1.9% of revenues, compared to a gross loss of ($567,918), or (8.4%)
of revenues, in the prior year. Gross profit and gross margin
percentage improved due to leveraging our costs over a greater
revenue base created by increased customer digital marketing
budgets.
Total operating expenses for the quarter ended December 31,
2023, were $1.9 million, compared to $1.6 million in the prior
year. Total operating expenses for the year ended December 31,
2023, were $6.9 million, compared to $8.0 million in the prior
year.
Operating activities for continuing operations used $5.5 million
in net cash for the year ended December 31, 2023, compared to $4.9
million for the year ended December 31, 2022. The increase in cash
flow used in operating activities was primarily due to an increase
in accounts receivable from revenue growth in the fourth quarter,
reduced accounts payable from better liquidity reserves compared to
a year ago and reduced deferred revenue at year-end.
Net loss for the quarter ended December 31, 2023, was ($2.0)
million, as compared to a net loss of ($1.9) million in 2022. Net
loss for the year ended December 31, 2023, was ($6.3) million, as
compared to a net loss of ($8.5) million in 2022.
Cash and cash equivalents totaled $0.1 million at December 31,
2023, as compared to $0.1 million at December 31, 2022.
John C. Small, Chief Financial Officer of AiAdvertising, added,
“As of today, we believe that our existing cash, together with the
additional strategic investment of $2.5 million from Hexagon
Partners and $0.7 million in account receivables, will be
sufficient to meet our anticipated capital requirements to fund
planned operations as we approach cash flow breakeven.”
About AiAdvertising
AiAdvertising is an AI-powered solutions leader employing the
industry’s most scientifically advanced, patent-pending AI
targeting process. Transforming marketing and customer experiences,
allowing marketers to personify client data and scientifically
target their ideal customers with hyper-personalized campaigns. By
harnessing artificial intelligence (AI) and machine learning (ML),
we empower brands to easily target, predict, create, scale, measure
campaign performance and reduce waste. Our clients gain the
intelligence they need to prove advertising’s impact on the bottom
line. This means more engaging, higher-impact campaigns that drive
conversions and results.
For more information about the Company, please visit
www.AiAdvertising.com or our LinkedIn or Twitter pages.
Forward-Looking Statements
This press release may contain "forward-looking statements."
Forward-looking statements are neither historical facts nor
assurances of future performance. Instead, they are based only on
our current beliefs, expectations, and assumptions regarding the
future of our business, future plans and strategies, projections,
anticipated events and trends, the economy, and other future
conditions. Because forward-looking statements relate to the
future, they are subject to inherent uncertainties, risks, and
changes in circumstances that are difficult to predict and many of
which are outside of our control. Our actual results and financial
condition may differ materially from those indicated in the
forward-looking statements. Therefore, you should not rely on any
of these forward-looking statements. Important factors that could
cause our actual results and financial condition to differ
materially from those indicated in the forward-looking statements
are included in our filings with the Securities and Exchange
Commission, including the "Risk Factors" section of our annual
report on Form 10-K for the year ended December 31, 2023. Any
forward-looking statement made by us in this release is based only
on information currently available to us and speaks only as of the
date on which it is made. We undertake no obligation to publicly
update any forward-looking statement, whether written or oral, that
may be made from time to time, whether as a result of new
information, future developments, or otherwise, except as may be
required under applicable law.
AIADVERTISING, INC. AND
SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
December 31, 2023
December 31, 2022
ASSETS
Current assets:
Cash
$
110,899
$
55,831
Accounts receivable, net
517,344
95,300
Prepaid and other current Assets
58,982
105,076
Total current assets
687,225
256,207
Property and equipment, net
72,948
102,659
Right-of-Use assets
147,480
175,974
Other assets:
Lease deposit
8,939
8,939
Goodwill and other intangible assets,
net
20,202
20,202
Total other assets
29,141
29,141
Total assets
936,794
563,981
LIABILITIES AND SHAREHOLDERS’
DEFICIT
Current liabilities:
Accounts payable
1,567,751
2,071,122
Accounts payable, related party
-
10,817
Accrued expenses
46,430
39,233
Operating lease liability
33,572
28,494
Deferred revenue and customer deposit
533,386
791,133
Total current liabilities
2,181,139
2,940,799
Operating lease obligation, net of current
portion
113,907
147,480
Total liabilities
2,295,046
3,088,279
Shareholders’ deficit:
Preferred stock, $0.001 par value;
5,000,000 Authorized shares:
Series A Preferred stock; 10,000
authorized, zero and 10,000 shares issued and outstanding;
-
-
Series B Preferred stock; 25,000
authorized, 18,025 shares issued and outstanding;
18
18
Series C Preferred stock; 25,000
authorized, 14,425 shares issued and outstanding;
14
14
Series D Preferred stock; 90,000
authorized, 86,021 and 90,000 shares issued and outstanding;
86
86
Series E Preferred stock; 10,000
authorized, 10,000 shares issued and outstanding;
10
10
Series F Preferred stock; 800,000
authorized, zero and zero shares issued and outstanding;
-
-
Series G Preferred stock; 2,600
authorized, 2,597 shares issued and outstanding;
3
3
Series H Preferred stock; 1,000
authorized, zero and zero shares issued and outstanding;
-
-
Series I Preferred stock; 3,000,000
authorized, 2,272,727 and zero shares issued and outstanding;
2,273
-
Series J Preferred stock; 700 authorized,
zero and zero shares issued and outstanding;
-
-
Common stock, $0.001 par value;
10,000,000,000 and 2,000,000,000 authorized shares; 1,334,408,773
and 1,175,324,203 shares issued and outstanding, respectively
1,334,415
1,175,330
Additional paid in capital
56,865,961
49,595,914
Common stock payable, consisting of
5,000,000 shares valued at $0.1128
564,000
564,000
Accumulated deficit
(60,125,032
)
(53,859,673
)
TOTAL SHAREHOLDERS’ EQUITY (DEFICIT)
(1,358,252
)
(2,524,298
)
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
(DEFICIT)
$
936,794
$
563,981
AIADVERTISING, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
Twelve Months Ended December
31,
2023
2022
Revenue
$
8,170,957
$
6,744,297
Cost of Revenue
8,018,382
7,312,215
Gross Profit
152,575
(567,918
)
Sales, general, and administrative
expenses
6,852,960
7,952,193
Total operating expenses
6,852,960
7,952,193
Loss from operations
(6,700,385
)
(8,520,111
)
Other income (expense)
Other income
435,026
4,990
Gain (loss) on Sales of Discontinued
Operations
-
25,197
Total other income
435,026
30,187
Loss from operations before income
taxes
(6,265,359
)
(8,489,924
)
Provision for income taxes
-
-
Net Loss
(6,265,359
)
(8,489,924
)
Dividends on preferred stock
-
-
Net loss attributable to common
shareholders
$
(6,265,359
)
$
(8,489,924
)
Net loss per share:
Basic
$
(0.00
)
$
(0.01
)
Diluted
$
(0.00
)
$
(0.01
)
Weighted-average common shares
outstanding:
Basic
1,313,030,101
1,123,312,864
Diluted
1,313,030,101
1,123,312,864
AIADVERTISING, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS
For the Twelve Months
For the Twelve Months
Ended
Ended
December 31,
December 31,
2023
2022
CASH FLOWS FROM OPERATING
ACTIVITIES
Net Loss
$
(6,265,359
)
$
(8,489,924
)
Adjustment to reconcile net (loss) income
to net cash used in operating activities:
Bad debt expense
272,532
(1,180
)
Depreciation and amortization
31,813
37,553
Gain on extinguishment of debt
(4,990
)
Gain on sale of discontinued
operations
-
(25,197
)
Stock based compensation
1,831,977
1,891,371
Non-cash service expense
-
123,374
Changes in assets and liabilities:
Accounts receivable
(694,576
)
403,302
Prepaid expenses and other assets
46,094
77,351
Costs in excess of billings
-
27,779
Lease deposit
-
861
Right-of-use assets
28,494
-
Accounts payable
(514,188
)
1,279,395
Accrued expenses
7,197
(32,925
)
Operating lease liability
(28,495
)
-
Deferred revenue
(257,747
)
299,498
Net cash (used in) provided by operating
activities
(5,542,258
)
(4,413,732
)
INVESTING ACTIVITIES
Cash paid for fixed assets
(2,102
)
(20,973
)
Proceeds from sale of discontinued
operations
-
25,197
Net cash provided by (used in) investing
activities
(2,102
)
4,224
FINANCING ACTIVITIES
Proceeds from sale of common stock
599,428
1,033,884
Proceeds from sale of preferred stock
5,000,000
-
Net cash provided by (used in) financing
activities
5,599,428
1,033,884
Net increase in cash and cash
equivalents
55,068
(3,375,624
)
Cash and cash equivalents at beginning of
period
55,831
3,431,455
Cash and cash equivalents at end of
period
$
110,899
$
55,831
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Interest paid
$
-
$
-
Income taxes paid
$
-
$
-
NON-CASH INVESTING AND FINANCING
ACTIVITIES:
Right of use asset exchanged for lease
liability
$
-
$
186,706
Change in right of use asset
$
-
$
(70,608
)
Retired stock issuance
$
-
$
2,940
Exercise of stock options
$
3,931
$
3,190
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version on businesswire.com: https://www.businesswire.com/news/home/20240912466664/en/
Investor Contact: Larry Holub/Chris Tyson 312-261-6412
AIAD@mzgroup.us www.mzgroup.us