FLNT - Earnings call transcript Q1 2019

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Operator

Good afternoon and welcome to Fluent, Inc., First Quarter 2019 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please after today’s presentation there will be an opportunity to ask a question. [Operator Instructions] Please note that event is being recorded. I’d like to turn conference call over to Ryan McCarthy. ahead. go Please

Ryan McCarthy

welcome. our and today for us CFO. joining Ryan Good quarter Thank XXXX discuss Mandel, Alex first CEO; me earnings to Schulke, afternoon and you results. are With

our begin call on by will A you To replay and our followed session. website. that with Our call question-and-answer call available will comments Ryan following being Alex Relations a to Schulke like Investor would webcast, event our recorded. is the of be please www.fluentco.com. from the I this website, the Mandel, and remind on access live today webcast visit page

Harbor Before discussed of Litigation Securities Act would by the like will or meaning. speak the I implied of Company's we this business. Reform on those should, and forward-looking the no this words due words identified Actual anticipate, may be will, statements projects, and of statements to from such information as undertakes XXXX. during call advise date Safe similar conference may, any could this call begin, with hereof. by covered listeners by risks made the estimates, could, statements stated are provided results provisions believes, expects, associated These information The plans, uncertainties our Company management materially only statements intense, during forward-looking contain Private that certain as obligation forward-looking Any to the other differ to update under call.

on report Company's XX-Q. with the annual on exchange to the with review uncertainties recent discussion securities quarterly XX-K, For and you of the including Company's and Fluent's reports Form business, encourage associated Form I risks commission, filings most

Fluent our adjusted to adjusted on margin, present a provided most measure call, of comparable and EBITDA of and information financial GAAP indicators and net evaluates reconciliations The the key variety metrics is performance definitions that, the media we an release I'm will today. Ryan issued adjusted net these earlier earnings certain media non-GAAP to During Management to income. including the Schulke. directly With income. CEO, introduce business margin, financial adjusted EBITDA press also relating financial of pleased

Ryan Schulke

thanks and joining quarter afternoon for XXXX our calls. earnings Good first

the running our manage philosophical CFO framework Alex our first the our detail. as business, growth. factors engage indicate, the earn as numbers about two support guidance. revisiting by consumers QX there and the numbers our our Marketing media to Mandel Performance we approach think profitability year-over-year. the for to which to margin out decline trust in of have strategic some start about well QX X%, more expanded reflection seek to results. constituencies increased consistent of call, And of into and up is solid EBITDA we our we XX% On team speaking are be infrastructure delivering core I'll Fluent's and quarter Revenue performance with business results quarter speak was and which to the for XX%, future our business the will investments we've through clients. which as footprint As I'll with a we today's and made and contributing

thrive. North these we business Our both as do to to deliver so, continue and value is groups will Star our to compelling

platforms core a offerings, which on deliver we through in the As think key of our Fluent our middle about them excellence performance basis. and sits constituencies, the connecting service business, managed for two operational areas in true our we

well engage attract through surveys on of on clients. engage about and consumers we which advertising On with have one, offers the as them two products to we behalf content experience our the our side, they channels and consumer the we deliver media platform, we or think as our as

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am on execute focus, attracting deeper which competitive protecting which our the highly quarters, through about we by broader that a a analytics through our campaign into business invest AS look And think being we right balances to because plans to today between expand right in we what place and From core incremental we Fluent time. can our business, in believe we proprietary testing going level we this is clients consumers to channels proprietary So, be clients, which at as relevant, extending our and with terms of framework, create we if delivery future take and where in expand our report these initiatives of creative level. areas to of sit and sides in we next and consumers effectively look to standing media engagement consumer think connections we we and I and operational to able primarily running fuel the back in the their our highlighting we the seems our of enduring that you on, to new do the performance at are these middle, this of with which us. and efficient as insights depth an context, share informative, we will industry. along QX, hopefully referenced reach. in

and we a continue always testing towards we with. that that consumers new budget portion reserve are learning our channels QX anticipate and platforms that will and in effort our engaging of We

formats value opportunities user to for to through businesses. business, retention Also to opportunity side as spend scale our of been which have return our testing ad their ourselves. we long with we the consumers and as expanding the media So, at outcomes as dynamics clients different our for have and new and that the consumer acceptable as on drive and access than clients' proposition communicate well engage see acquisition

the XX-K, the believe client upon, build interacting is of On day-in talking business experiences. merging we insights data, asset and filed Marketing course referenced to significantly capture we’re demographic, the deep our side to highly first in about which and we've data purchase notably and have Performance In our valued which in which March. business, our the party with enables the executing we consumption our that And offering and valued continuously day-out attributes as of behavioral by data, attitudinal we consumers advertisers. we by other was data and XXXX behaviors in pertaining

business of data recently the side offering you The talent look platform can see Our you we’ve into Fluent in how adding added sales the further, initiatives our and analytics to this the focus greater product. execution example terms industry. Fluent been of with another our that with has on recognition capabilities us across the media and side to our the value at regard that over few When quarters helped of of yet fits of drive and and to programmatic the and of data asset past has our launch anticipate and our client consumer our together. regard business tile brand

and Performance and out last themed from our one zoom around our growing innovating we if success data. can more value doing to business our longer-term Marketing be So,

to growing committed and organically. revenue For context, profitability we’re overtime

generate appropriate opportunities that We on investment can capital. our are return strategic also an believe there

execution parallel comprises disciplines. several Our roadmap ongoing

committed enhancing Marketing First worth, through is business the basis. is daily hammer our our team and on Performance and which optimizing nail

to Performance new to offering to and we iterate and that are tailored as rapidly access with newer formats product the Second, test extensions on consumer expansions business channels, new and the our engage our media Marketing such build, format, media for clients.

is Third I and referred what to innovation. as a structured to strategic approach

organically some to that lines leverage have specific on who the core specific of set as expand entrepreneurs of been tuck-in our focuses. long-term of the And quarter. consumers, numbers look the Natural shareholders. brand staff Our and continuing with last to pods forward our invest these focused shared. capabilities its performance this approach laser turn and on an are extend have thoughts, clients up to can into them of acquisitions our discipline has I’ll to-date along records that Fluent initiatives, value track exciting We anticipate for our with advantage growth And since market will platform with we to variability, just for but have quarterly this We review opportunity. for demonstrated executing framework I investment we strategy basis. deliver or potential our taking for could accelerated is cycles the very and and Alex

Alex Mandel

afternoon those Thanks, on Ryan, to the and good line. conference

transaction. generated our outcomes performance As to Fluent. our with results consistent derived representing we campaigns our marketing our their which on Included completed And campaigns a for clients we in measure events our basis, Ryan install, our standard actions quarter, to clients, These deliver In year-over-year. objectives. through lifecycle meet enabling a clients outcomes performance form, return to these revenue by the such consumers profitability million who that a a profile specified our specific deliver better have were supported the registration side of are reengage pricing on performance is Company app precisely $XX.X through initiative the by revenue of XX% previously outlook. or the a was our which Growth from growth Revenue noted, we with lower opportunities This than submission initial or are also properties. cost service, by a us media business. at desired primarily consumer of the trial subscription the in with acquisition. designed provides consumer outcomes our doable growth this with quarter our incremental interacted from our with as QX an

a metric relatively in of expenses. revenue million million, on our which both media Ryan of reference, XX% margin new we new XX% of channels. partners of use compared of in the representing as able metrics, earnings as Adjusted of spend a non-GAAP content and margin also X.X channels unchanged XXXX So, to QX as a release XX% media revenue. revenue a year-over-year. supply, well XX% QX we is additional and and XXXX. represents media return to Media related afternoon, format, primary to been of of of digital XX.X based X% access was revenue a Company quarter as produced this To decline to earlier in The existing media the measure such margin by as to. media growth referred a in reconciled platforms year-over-year, new which and of is percentage which sourcing And had media we've is issued our EBITDA having margin from the scale larger publisher

of invest As manner Company. our of to assets is a discussed, core strategic and part opportunities core that structured the Ryan innovation strategy the leverage in into

as human Our respect both growth our we support maintain Adjusted G&A. anticipate this plans, investment X.X% discussed investment periods. non-cash zero, increase expenses. Provision income in net against we our With million the tax product to net our our also NOL income quarter, assets into valuation development are capital space full items and for exclusive non-recurring that and which being X.X in our a of a metrics previously in deferred position, year's in to allowance income the XXXX. office quarter. the from and don't taxes is and We've area observable prior for expanded in X.X was continuing non-GAAP million certain operations, an over was from taxpayer companies cash reflected

of Company Moving equivalents into of balance Cash used which of December in X.X cash under liabilities million a PP&E interest expense in current working as million headquarters. credit the Total X.X change reflects current XX.X of new was being million corporate to X.X primary operations of cash million The primarily million. sheet, of March cash and working onto reduction investing occupancy consisted with with while the with XX, flow of activities as of dynamics adjusted compared at a from debt cash favorable our XX.X operating flow capital. was XXst. XXX,XXX million, assets converting exhibit capital XX.X million related EBITDA to million uses facility were the continued minus defined X.X and X.X

at withholding taxes scheduled shares our While the our of growth XXX,XXX to credit cash year-over-year, amortization close nicely on In infrastructure used innovation grew to for for quarterly numbers deployed facility core million along to was conclusions, reflecting and the were its business to with us of enabling consistent K, net X.X with comprised XXX and settle take support X.X our principal investing the plans. of into RSUs, treasury. our feature for while vesting financing million outlook, activities quarter a that of

now operating or we’re flow have an the questions, Should We each them have basis take demonstrated following income four consistent on balance profitability in quarters GAAP later. the to glad and dynamics maintaining with spinoff you a favorable net and solid of sheet. cash

Our for you the IR earnings contact info is concluded release. interest. on Thank your

Operator

[Operator from will The Partners. first begin Gibson question session. be ROTH now Instructions] Capital William of will We question-and-answer the

William Gibson

headquarters. into your moved new You've

would the expenditures of capital So the rest you to the expect year? be

Alex Mandel

don’t anticipate CapEx. a On Bill, PP&E significant we basis,

cost relatively similar We you the to and intangible smallish the could be remainder earnings a the have can amount see that the assets in included slightly of and of press year. throughout increase capitalized QX in release

William Gibson

Thank you. a more you you exact those with referred formats us little that media share what And and new give color are? or Could channels. on the us on

Ryan Schulke

Yes. good to you. Bill, it's from hear

platforms we’ve the content certainly heavy work the of properties content formats, channels. been called we there. video just in social for thesmartwallet.com, to And different buying going as There of hard have our been new lot really things expanding a we’re like recently is in So, into we that, of our case designing to we're how very up interact some consumers of terms a user with with the video example. spun data out a content of one these inform instance, new is as creative on clients, across half and generated

Operator

The come Research. from Jim Goss will next with question Barrington

Jim Goss

operation. years in put this You several

previously And how more well a varied making the information the request able you’re to You acquired perhaps how significant process whole database. advantage your I’m for acquired take and and data wondering, efficient? have of

Ryan Schulke

to from Jim, you. Yes, hear good

they’re go to from out our acquire surveys the in register. of into properties them. order self our to it, our a access have of weave content we how be it’s function some with themselves reported Many to and of clear media terms data consumer experiences. of In you just and We that’s engaging as

refresh respect our and dynamics. we’re becoming that’s to And more offers, were iterated about from So as overtime partners they’re profile, that’s that. requesting over able advertising on how and over been and seeing consumers here deepen more with going again to their the

new like such platform messenger different technology with of areas brands. we’re through communicating for and into So, starting platforms, And interact to some as consumers the to play seeing areas that. starting new

So, that us big focus large of it’s the as certainly some a a big results. of focus and platforms well as for

Jim Goss

that And back Yes. and something wondered, a I same probably for therefore, you lot And group margin? trying in by sample consumer I you else efficiency list more might for right the over coming actually and of from to improve the understand Does and say, them. email to you're inflammation efficient you I back what say was other looking more. much Does their advertisers return how it whole of is media deepening volunteered whatever that for getting that, the the who that's maybe profile. the have people its metrics time promise process as getting or you? is gets improve the the there get more you But measuring because that or and then

Ryan Schulke

absolutely. Yes,

has seeing matching of that us and lot and how our have is also content base. can offers sure characterize we get more a efficiency been and parts. new So with that and I sort going of information relevant condensed the them and knowledge lot I'd efficiently answered where towards. that it we're that investment to experience we there, can a since It up capture of make such start two access a a we that perimeters design going absolutely, which in deep we're out, consumers to on up and audience content as advertising breadth And more the one, consumers, is think more, to to would frees key

and frequently. see efficiencies the are of certainly and margin more set the supporting those on which demographics place yes, expansion So, we consumers in

Jim Goss

to receive on get people continuity you're this the more and can know the there you you it's and behind basis with that you dealing want get are from it? some some of they that sense information you to of out that a Do regular create a

Ryan Schulke

and to absolutely consumer really for market to Yes, go to is big a with which personalize brands tailor to and media us expectations. we focus and in to around it's start the continue strengthen

see freeing And new of most. the market very and of some we're for the mind the brands a to lot audiences. types us up out out of that's is So and new again, executions and of demographics lot our go of in content we that order to deliver spin and resources top in looking to up go existing of terms attract

Jim Goss

through process affect improving this go talked as you does in percentage be then measure. serviced of of this finally, And should sales measure continuation media that that especially you've merchants' since an this that's overtime process? the about cost type And

Ryan Schulke

To can day for I'll money you, organization. have spend innovation the we're we're we a continually time, growth. even. At investing to oriented just make expansion. into the or where day where and channels of see opportunities We're the yes, certain going not XX growth same degree, intermediate X do clear business areas margin Jim, remind we We

in, as we of So, those margins media that towards may to mature. that coming bit more channels are time a are take some reinvesting new

expansion don't shot want more exact to consumers shift starting the amount engaging the and on" as to we're frequently. whole, on marketplaces, of of some consumption And you'll the some margin actively they're very in seeing learn where "call across those opportunities I behaviors. interesting we're are of because new some channels very see trying grow to their So

Operator

attending And today’s today’s with it presentation. conference We conclude does to want everybody that, call. thank for

You disconnect day. Have may now lines. a your great

Fluent (FLNT) 8 May 192019 Q1 Earnings call transcript