Net loss of $11.6 million for Q2 2024 and $17.9 for 1H 2024
Gross profit (exclusive of depreciation and amortization) of $12.6 million for Q2 2024 and $31.2 for 1H 2024
Media margin of $15.7 million for Q2 2024 and $37.8 million for 1H 2024
Adjusted EBITDA of negative $4.5 million for Q2 2024 and $3.8 million for 1H 2024
Adjusted net loss of $7.3 million for Q2 2024 and $11.5 for 1H 2024
NEW YORK, Aug. 19, 2024 (GLOBE NEWSWIRE) -- Fluent, Inc. (NASDAQ:FLNT), a leading data-driven performance marketing company, today reported financial results for the second quarter ended June 30, 2024.
Don Patrick, Fluent's Chief Executive Officer, commented, "We continued to drive key strategic initiatives in the second quarter of 2024 to accelerate our strategic pivot as we position the Company for enhanced results in the second half of the fiscal year. Our second quarter started with continued challenges in our owned and operated marketplaces as well as new regulatory challenges in Medicare and ACA verticals affecting our call solutions business and necessitating a $3.1 million write down of accounts receivable and an equal offset against revenue. In the later part of the second quarter, we saw two important financial and strategic trends: (1) more stabilization in our owned and operated marketplaces and (2) the continued strong growth of our new syndicated performance marketplaces, which grew significantly over the first quarter and exceeded our internal forecasts for both revenue and gross profit in the second quarter. Our syndicated marketplaces gained several new key partners in the second quarter and, importantly, we are working with our partners to expand beyond post-transaction solutions. Early results have been encouraging, and we believe these new marketplaces and solutions will position us favorably in a rapidly growing sector of the digital advertising and commerce media markets."
Mr. Patrick continued, "We remain optimistic about our growth prospects heading into the second half of 2024. With our visibility today, we're anticipating margin expansion over the second quarter, driven primarily by relative stabilization of our owned and operated marketplaces, the growth of our syndicated performance marketplaces, and continued expense discipline across our business. Overall, we believe that our business is well positioned to benefit from strong demand and drive improved results through the balance of 2024, and we're intently focused on generating enhanced value for all stakeholders."
Second Quarter Financial Highlights
Revenue of $58.7 million, a decrease of 29%, compared to $82.1 million in Q2 2023
Net loss of $11.6 million, or $0.75 per share, compared to net income of $4.3 million, or $0.31 per share, for Q2 2023
Gross profit (exclusive of depreciation and amortization) of $12.6 million, a decrease of 44% over Q2 2023 and representing 21% of revenue
Media margin of $15.7 million, a decrease of 40% over Q2 2023 and representing 26.7% of revenue
Adjusted EBITDA of negative $4.5 million, a decrease of $10.1 million over Q2 2023 and representing (7.7%) of revenue
Adjusted net loss of $7.3 million, or $0.47 per share, compared to adjusted net income of $0.0 million, or $0.00 per share, for Q2 2023
Six Months Ended June 30, 2024 Financial Highlights
Revenue of $124.7 million, a decrease of 22%, compared to $159.4 million in 1H 2023
Net loss of $17.9 million, or $1.11 per share, compared to $27.7 million, or $2.02 per share, for 1H 2023
Gross profit (exclusive of depreciation and amortization) of $31.2 million, a decrease of 25% over 1H 2023 and representing 25% of revenue
Media margin of $37.8 million, a decrease of 21% over 1H 2023 and representing 30.3% of revenue
Adjusted EBITDA of negative $3.8 million, a decrease of $9.9 million over 1H 2023 and representing (7.7%) of revenue
Adjusted net loss of $11.5 million, or $0.72 per share, compared to $2.7 million, or $0.20 per share, for 1H 2023
Media margin, adjusted EBITDA, and adjusted net income (loss) are non-GAAP financial measures, as defined and reconciled below.
Business Outlook & Goals
Expect to achieve improved performance through the balance of 2024 driven primarily by the growth of our syndicated performance marketplaces, which leverage our advertiser and technology assets to drive enhanced results for our advertising partners in growing market segments.
Continue to make strategic progress scaling our Adflow offering, with new partners added in the retail and ticketing verticals in the second quarter, as well as penetration into the grocery vertical and plans to expand beyond post-transaction solutions.
Fortify the long-term success of our owned and operated marketplaces and efficiently adjust to the regulatory changes in the Medicare and ACA industries for our call solutions business.
Source consumer traffic that meets the internal quality standards, leading to higher engagement for advertisers.
Continued expense discipline and prudent growth management are expected to support mid single digit adjusted EBITDA and revenue in the second half of 2024, driving enhanced profitability and improved value for stakeholders.
The Company cannot provide a reconciliation of adjusted EBITDA to expected net income or net loss for the remaining periods of 2024 due to the unknown effect, timing, and potential significance of certain operating costs and expenses, share-based compensation expense, and the provision for (or benefit from) income taxes.
Conference Call
Fluent, Inc. will host a conference call on Monday, August 19, 2024, at 4:30 PM ET to discuss its 2024 second quarter financial results. The conference call can be accessed by phone after registering online at https://register.vevent.com/register/BI3cd5c7e31c054f859ecfe19cf4b3a642. The call will also be webcast simultaneously on the Fluent website at https://investors.fluentco.com/. 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 https://edge.media-server.com/mmc/p/wfthvf3y. The replay will be available for one year, via the Fluent website https://investors.fluentco.com/.
About Fluent, Inc.
Fluent, Inc. (NASDAQ:FLNT) has been a leader in performance marketing since 2010, offering customer acquisition and partner monetization solutions that exceed client expectations. Leveraging untapped channels and diverse ad inventory across partner ecosystems and owned sites, Fluent connects brands with consumers at the most optimal moment, ensuring impactful engagement when it matters most. Constantly innovating and optimizing for performance, Fluent unlocks additional revenue streams for partners and empowers advertisers to acquire their most valuable customers at scale. For more insights visit https://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:
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, 2023 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.
Compliance with a significant number of governmental laws and regulations, including those regarding telemarketing, text messaging, privacy and data;
The financial impact of compliance changes to our business, including changes to our employment opportunities marketplace and programmatic advertising businesses, and whether and when our competitors will implement similar changes;
The outcome of litigation, regulatory investigations, or other legal proceedings in which we may become involved in the future;
Failure to safeguard the personal information and other data contained in our database;
Unfavorable publicity and negative public perception about the digital marketing industry;
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 concerns, terrorist attacks or civil unrest;
Dependence on our key personnel and ability to attract or retain employees;
Dependence on and liability related to actions of third-party service providers;
A decline in the supply or increase in the price of media available;
Ability to compete in an industry characterized by rapidly-evolving standards and internet media and advertising technology;
Failure to compete effectively against other online marketing and advertising companies or respond to user demands;
Competition for web traffic and 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;
Credit risk from certain clients;
Limitations on 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;
Fluctuation in fulfillment costs;
Dependence on the gaming industry;
Failure to meet our clients' performance metrics or changing needs;
Pricing pressure by certain clients and the ability of our marketplace to respond through allocating traffic to higher paying clients;
Potential limitations on the use of the revolving credit line under our credit agreement to fund operating expenses based on the amount and character of accounts receivable at any given time and our ability to meet our financial forecast, the potential for which raises substantial doubt about our ability to continue as a going concern;
Compliance with the covenants of our credit agreement in light of current business conditions, the uncertainty of which raises substantial doubt about our ability to continue as a going concern;
Potential for failures in our internal control over financial reporting;
Ability to maintain listing of our securities on Nasdaq or any stock exchange and potential impact on our stock price, liquidity, and ability to obtain financing; and
Management of the growth of our operations, including international expansion and the integration of acquired business units or personnel.
FLUENT, INC.CONSOLIDATED BALANCE SHEETS(Amounts in thousands, except share and per share data)(unaudited)
June 30, 2024
December 31, 2023
ASSETS:
Cash and cash equivalents
$
4,973
$
15,804
Accounts receivable, net of allowance for credit losses of $157 and $231, respectively
55,063
56,531
Prepaid expenses and other current assets
7,109
6,071
Total current assets
67,145
78,406
Restricted cash
1,464
—
Property and equipment, net
431
591
Operating lease right-of-use assets
2,502
3,395
Intangible assets, net
23,770
26,809
Goodwill
—
1,261
Other non-current assets
3,183
1,405
Total assets
$
98,495
$
111,867
LIABILITIES AND SHAREHOLDERS' EQUITY:
Accounts payable
$
7,814
$
10,954
Accrued expenses and other current liabilities
26,214
30,534
Deferred revenue
717
430
Current portion of long-term debt
32,538
5,000
Current portion of operating lease liability
2,261
2,296
Total current liabilities
69,544
49,214
Long-term debt, net
750
25,488
Operating lease liability, net
673
1,699
Other non-current liabilities
75
1,062
Total liabilities
71,042
77,463
Contingencies
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, 14,680,246 and 14,384,936, respectively; and Shares outstanding, 13,911,651 and 13,616,316, respectively
44
43
Treasury stock, at cost, 768,595 and 768,595 Shares, respectively
(11,407
)
(11,407
)
Additional paid-in capital
438,237
427,286
Accumulated deficit
(399,421
)
(381,518
)
Total shareholders' equity
27,453
34,404
Total liabilities and shareholders' equity
$
98,495
$
111,867
FLUENT, INC.CONSOLIDATED STATEMENTS OF OPERATIONS(Amounts in thousands, except share and per share data)(unaudited)
Three Months Ended June 30,
Six Months Ended June 30,
2024
2023
2024
2023
Revenue
$
58,717
$
82,145
$
124,700
$
159,399
Costs and expenses:
Cost of revenue (exclusive of depreciation and amortization)
46,109
59,540
93,457
117,812
Sales and marketing
4,605
4,215
9,417
9,028
Product development
4,717
