[Management View]
Fluent's management emphasized the strategic shift towards commerce media solutions, which saw a 121% YoY growth and now represents 36% of total revenue. The company is reducing reliance on owned and operated channels due to regulatory and supply-side challenges.

[Outlook]
Management expects adjusted EBITDA positivity in Q4 2025 and full-year double-digit consolidated revenue growth in 2026. The company anticipates commerce media revenues to become the majority of total revenue during 2026.

[Financial Performance]
Revenue for fiscal Q2 2025 was $44.7 million, a 24% YoY decrease. Commerce media solutions revenue was $16.1 million, up 121% YoY. Media margin was $11.9 million, down from $15.7 million in fiscal Q2 2024. Adjusted EBITDA was ($2.8) million, a $1.7 million improvement from the prior year. GAAP net loss was $7.2 million, an improvement from $11.6 million in fiscal Q2 2024.

[Q&A Highlights]
Question 1: Can you expand on what drove the steeper declines in your owned and operated segment in Q2? What are your thoughts on stabilizing the segment from here?
Answer: The FTC settlement restricted our ability to buy on certain media channels profitably, primarily on biddable platforms. This led to a steep increase in pricing on these platforms, affecting our media supply diversification. We managed the margin by lowering revenue but keeping the margin percentage in line.

Question 2: How is your partnership with Revise progressing? Are you fully engaged with the majority of brands on the platform?
Answer: The partnership is progressing well, with good cultural fit and operational synergy. It had no meaningful effect in Q2 but is showing momentum with onboarding merchant partners. We see tremendous upside in accessing all 12,000 merchants and their top 50 targets.

Question 3: On the new agreements with firms, are they mostly revenue share in nature or minimum guarantee? How should we think of margin pressures easing?
Answer: Margin decline in Q2 was driven by launching adjacent commerce media solutions, competitive revenue splits, and lower margins in new verticals. We expect margins to improve significantly in Q3 and return to historical levels by Q4.

Question 4: Does the new solutions change some of the advertiser relationships, or have you had to find additional advertising partners?
Answer: For the most part, it's the same advertising group, with different concentration or mix depending on the solution. We used existing advertiser relationships to launch into commerce media and continue to have strong demand in newer solutions.

Question 5: Would you discuss the new placements beyond post transactions referenced in the press release?
Answer: We are moving into loyalty plays and post-event monetization opportunities like post receipt and post registration. These are early-stage but represent large growth opportunities beyond post transaction.

Question 6: How does your first-party data differentiate you from competitors, and what are the implications for winning business and shareholder benefits?
Answer: Our first-party data asset allows us to better identify consumer behavior and serve relevant ads, driving better results. This competitive advantage helps us win partnerships and deliver strong financial performance.

Question 7: The Commerce Media second quarter revenues were $16.1 million annualized, but the press release says the run rate exceeds $80 million. Is this due to new business won recently?
Answer: The annual revenue run rate metric accounts for seasonality and media partners brought on through 06/30. New partners added in Q3 will further increase this number.

Question 8: You anticipate double-digit revenue growth in 2025. Can you clarify the math behind this projection?
Answer: We expect double-digit growth in 2026 from a consolidated basis, not 2025. The math will apply once we know the 2025 revenues.

[Sentiment Analysis]
Analysts showed a mix of concern and optimism, focusing on the decline in owned and operated segments and the promising growth in commerce media solutions. Management maintained a confident and strategic tone, emphasizing long-term growth and profitability.

[Quarterly Comparison]
| Metric | Q2 2025 | Q2 2024 | Q1 2025 |
|-------------------------------|-----------------|-----------------|-----------------|
| Revenue | $44.7 million | $58.8 million | $55.2 million |
| Commerce Media Solutions Rev. | $16.1 million | $7.3 million | $13.4 million |
| Media Margin | $11.9 million | $15.7 million | $13.7 million |
| Adjusted EBITDA | ($2.8) million | ($4.5) million | ($3.1) million |
| GAAP Net Loss | $7.2 million | $11.6 million | $8.3 million |

[Risks and Concerns]
- Owned and operated segment decline due to regulatory headwinds.
- Media margin compression from flexible pricing structures.
- Limitations on media supply due to FTC settlement.

[Final Takeaway]
Fluent's strategic pivot towards commerce media solutions is showing significant growth, despite challenges in the owned and operated segment. The company is focused on long-term profitability and expects commerce media to drive future revenue. Management's confidence in achieving adjusted EBITDA positivity and double-digit revenue growth in 2026 is supported by new partnerships and a strong first-party data asset. Investors should monitor the ongoing transition and its impact on overall financial performance.