• Revenue: $22.4 million for Q3 2024, down 9% year over year, but up 23% sequentially.
• Gross Profit: $19.8 million for Q3 2024, with a gross margin of 88.4%.
• Operating Expenses: $21.7 million for Q3 2024, down from $23.5 million in the same period last year.
• Net Loss: $2 million for Q3 2024, or $0.1 per share.
• Adjusted EBITDA: Loss of $357,000 for Q3 2024, improved by $310,000 sequentially.
• Cash and Cash Equivalents: $2.6 million as of September 30, 2024.
• Debt: No outstanding debt as of September 30, 2024.
• Platform Client Revenue: 83% of total revenue for Q3 2024.
• Agency and Brand Revenue: 17% of total revenue for Q3 2024, expected to increase as a percentage of total revenue.
• Cost of Revenue: $2.6 million for Q3 2024.
• Marketing Costs: $17 million for Q3 2024.
• Compensation Expense: $3.1 million for Q3 2024.
• General and Administrative Expense: $1.6 million for Q3 2024.
• Interest Expense: $101,000 for Q3 2024.

• Warning! GuruFocus has detected 4 Warning Signs with INUV.

Release Date: November 08, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Inuvo Inc (INUV) reported a 23% sequential growth for the quarter ended September 30, 2024.
• The company has no outstanding debt and sufficient cash availability from a $10 million receivables facility.
• Inuvo Inc (INUV) signed a master services agreement with a large retailer, expecting a tenfold increase in revenue from this client in Q4 compared to Q1 2024.
• The company is actively working with over 100 small and medium-sized agencies, adding new clients in sectors like healthcare, entertainment, and technology.
• Inuvo Inc (INUV) plans to launch enhanced capabilities within its self-serve AI product, aiming to scale across the ad tech market with higher margins.

Negative Points

• Revenue for the third quarter of 2024 was down 9% year over year, attributed to a strong prior year comparison.
• The gross profit margin decreased to 88.4% from 90.7% in the same period last year, mainly due to lower revenue.
• Operating expenses for the third quarter totaled $21.7 million, although lower than the previous year, still significant.
• The company reported a net loss of $2 million for the third quarter of 2024, compared to a net loss of $1.2 million in the same period last year.
• Revenue from platform clients was down 12% this quarter compared to last year's strong performance.

Q & A Highlights

Q: Can you provide updates on the large technology company mentioned as a new mega brand customer last quarter? A: Richard Howe, CEO: The large technology company referred to is our largest platform client, one of the largest in the world. We are making progress and have signed up other large technology companies, though their revenue contribution is still small.

Q: What are the expectations for growth with the retailer and car manufacturer clients? A: Richard Howe, CEO: Budgeting discussions typically occur late in Q4 or early Q1. Currently, the focus is on maximizing ROI for the holiday seasons. Our KPI performance for these clients is outstanding, and we expect to outperform competitors in head-to-head tests.

Q: What will it take for clients to increase their usage of Inuvo's technology? A: Richard Howe, CEO: Two things are necessary: building strong relationships and overcoming the fear of change. We are investing in our sales teams to foster relationships and address the aversion to change.

Q: What does the M&A landscape look like for Inuvo? Are there acquisition targets, or is Inuvo a target? A: Richard Howe, CEO: It could be both. While our balance sheet limits acquisitions, we are in ongoing discussions with potential targets. Inuvo could also be an acquisition target due to our unique capabilities and patents in AI-driven advertising.

Q: How effective has Inuvo's marketing and advertising been over the past year? A: Richard Howe, CEO: We've improved our sales professionalism and contracted individuals with strong industry relationships. Conferences have been effective for networking, and we've increased our presence in industry publications and on LinkedIn, which has boosted our visibility.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.