INUV - Earnings call transcript Q3 2021

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Operator

Please stand by, we're about to begin. Good day and welcome to the Inuvo, Inc. 2021 Third Quarter results -- Financial Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Valter Pinto, Managing Director of KCSA Strategic Communications. sir. ahead, go Please

Valter Pinto

will Officer, that Officer, on shareholders the your and us Financial I'd Exchange filing anticipate Third today conference Chief shareholder Operator, everyone Quarter our to for like Chief with be update remind Executive Commission’s Inuvo's Today, joining for call. Securities morning. Howe, We'd and to good presenters Ruiz, you, Wally and our we call. like XX-Q afternoon. (ph) thank XXXX Richard Thank the Inuvo tomorrow

Before to could Harbor I are XXXX. subject actual of uncertainties the Statement. Securities forward-looking facts to review Statements of statements all forward-looking to are that risks may These and such, related are statements descriptions the I'm Litigation call future made begin, Reform going as to results and are expect, as Company's should events. forward-looking differ statements words Act in Safe to statement. this this not call, risks And this Commissions historical conference pursuant using that the Investors anticipate to are relate those may they and from by at intend enable such anticipated project statements which actual Inc cautioned cause Inuvo, materially. a estimate and involve forward-looking differ are results forward-looking will potential similar time. When all Inuvo believe uncertainties expressions

and In addition, Securities can filings Commission, Exchange other sec.gov. U.S. risks are the which more reviewed fully public described in with Inuvo's be at

Richard Howe

which ended us XXth, was revenue, thanks and joining where very everyone today. and $XX.X the third Thank XX% for delivered sequentially. year-over-year XX% million XXXX, for September had Valter, months up We quarter you up strong we X in a

month of we positive back EBITDA adjusted in positive. to back the to Adjusted of we be half messaged pleased it September was As fact expect I'm that in in throughout report year, EBITDA the have the XXXX. to

securities stable positive the along a we time quality by to automation up in September XXXX The a manually million of reduction additional a contributed the compounded platform. clients the in need marketable in continuous The XX% lowest this are recently been to XX% with XX%, growth of has The ensure remains of which is the facility. our steady $XX.X to in debt no Twitter $X the line media low million numerous revolved which capital. under has quarter, $XX.X off the media spend For automating to the was best cost. This roughly million loss have relationships. the product at necessary most delivered, are Much consumers the a on campaigns. unused was spent the then of cash Of Balance financing added these continues and continued multichannel million, adjusting because third through in of resources services sequentially. X% 's of notably around largest ValidClick traffic enhancements $XXX,XXX. of Sheet Company it currently and ValidClick with buying strong not The and rate an of May monthly XXXX. COVID-related year-over-year platform platform's up include approximately management, ValidClick optimizing competencies, sources support clients. to social campaigns the these delivered enhancements having our impact, seen to enhance to technological time $XX.X We've

publishing Additionally, we've within our continued to enhance ValidClick. technologies

a overall a leverages innovative a and to improve in-market at of is the us pages allows dynamically content as This can feature user's detect unit the able further declining manner to monetize we so users the declining. that quarter, insert engagement advertising time at a testing of articles advertising systems when of Further, opportunities ValidClick were page's that intent it engagement in to and largest result, clients, our our the began interest, engagement. search with related the on yield. Within customize that combination into and reignite an content improve time now in we

TV. in While it a XXXX. quarter, positive where we we connected online in capability, multichannel now advancement in our a significant the phase, social, entire and us with win the Most video, to of combined larger channels in growth our audio, sell notably search, the this puts for of Artificial driver and significant competitive manage where across program advertising, to of the directly television, IntentKey and first Consequently, position to win in initial this more is include services significant multi-channel test of the this larger is differentiation spend Intelligence, time, strategy see Linear that showing as direct This ValidClick upside results opportunity. combination streaming with the display to deals. services clients, the with advertising clients is we the a leveraged

us wins, gives later, will This quarter's which in more I confidence about talk strategy. the

channels One continues as deliver the million these larger orders started signed is than both we IntentKey platform up and X-month the such more orders a agencies. was as quarter, across those through to capability the third can that replacement incorporate social our $X.X existing product's XX% into direct of collection The the confident the today up third executing delivered, on of universally. this year-over-year are we been has platform's consumer $XX proposition a search, through this the industry outperform will strong, on uses anticipate media client, value third-party and part rate businesses, managing. the for which of budgets performance to and million, core $XX.X within of advantages the where worth be We over which platforms data, million AI based we integration. as our by approach this XX% Of In we of quarter to ability in are contributed now sequentially. growth approximately period. We and a that

outreach s continues year. has submitted resulted in compared more period Our improve, which same the XX% last sales to to RFP

include the larger sell of further RFP that by go months. in chain. It's requires our to the volume last diverse also noting X signed after worth insurance, dollar education, over clients deal not submitted has every gaming, go RFP. to reflects we companies This technologies, the These XX%. addition, and online In We up increased after an within pet clients a these quarter, is a goals range number XX business. care, investing, wine new, screening, making, gym by within the XX% ran initiatives, e-commerce, lending, on estate, client COVID real were memberships, were urgent XX which states of a outperformed personal and DNA We renewals Across campaigns campaigns few. of average name within XX% XX base, the quarter. up of sequentially. to the we and existing strategy

follow. that are to the future of who service, is as that advertising understand And future, XX% brand cost used an we are a agencies not less we only is this has of We often in no online for The their coming people the believe so as of are market the achieved in exceeds at begin others match product, this [Indiscernible] longer future; digital cookie data to and first [Indiscernible] prospecting a is to no technology consumer who one trying two Rather the methods effectively consumer asked reality. We're part client use. data cycle. sales this we the but do level in one performance already can we Company's Apple where uses fact through a it this IntentKey, of well-positioned part consumer identify more continue tests clients deliver the ran of that means aware, data you as share data as lower is as that use a best onboarded part the to as based the prove than strategic based we works its This same activities. is quarter, adopting a a of our artificial or end. sign a within intelligence. accelerate interest, cookie core, advertising. us companies cookies mechanism for clients win of At we solution large for marketing this an In with. valuable This currently privacy intelligence acceptance within such interest determines uses that already privacy the our advertising why era its to will can is existing their which effective to that example where believe to consumer believe that list for new future. of considerably strongly exists We go-to return. for adopted its market and

comments my related clients. activity ValidClick, in mentioned cross-channel As for managing are handful now a advertising to of we

and our required building for sell where also reporting to strategy clients out tools new We existing a have Across the performance These sales, support positions along ensure and SaaS hiring account revised with a and we future preparing As us focus clients those with operations, we are we directly XXXX currently full of and Company, on in are continued sales employees. campaigns. management, development to solution in to business a delivery service and our part-time marketing. and managed are campaign to result, select XX agencies.

of in enter marketing our Wally with and to as our are over efforts very increasing our performance activities our to uses financial CMOs, create more turn them. awareness intent I As awareness plan direct within to are selling and quarter. so a the support complement we plan detailed that Company brand-building a leads We qualified the to of we message to a solutions. CMO to for call of we to increase assessment like XXXX, technology, now the to using its those funnel to the would key identify this the

Wallace Ruiz

Good the Rich. financial the XXXX. you, Quarter afternoon. of results Thank of I'll recap Third

ValidClick acquisition in by quarter, prior revenue the year. came same year. new XX% in most year revenue This this months the roaring and third by of of Both XXth, back of the year's and exceeded IntentKey XX%, XX% third affected quarter compares ValidClick last year. this XXXX. As of IntentKey, ValidClick the for exceeded $XX.X the starting platforms, of last in year. to anomaly revenue reported quarter exceeded approximately ended the represented revenue Rich year's for pandemic year, the year ended IntentKey million the due last XX% in the quarters, Second revenue million by an a in customers. to revenue compared September last XXth, Quarter bit total that the reported in Inuvo the to of COVID-XX the mentioned, XXXX This quarter $X.X X quarter being quarter prior primarily September the

the XX% last same are the expect quarter continue of quarter to the the decreased the year. However, Inuvo last third intend Quarter XX% in strong The the key, we a percent quarter as to grow we in revenue growth to Third XX% IntentKey gross seeing in revenue. XX% gross fourth margins year. IntentKey to in compared the in were same to the quarter compared in due margins the to total

are in the new multi-channel ads us attempt campaigns The different gross gross channels they that the we want. margins, different Our customers requiring to Though multi-channel customers deliver have optimize deliver margins. want environment. we a to to to

margins and gross IntentKey the third A.I. of result traffic are may of IntentKey forward, also with reported of XX% SaaS operating environment year. quarter the marketing revenue, rather modeling quarter the higher This significantly increase of ValidClick's components the the were the compared acquisition-related in is last in. fixed associated due cost expected now Going same a of the increased not multichannel to operating to XX% mostly ValidClick's decision to expense. of be costs platform. we just The a in version as the where as to margins are gross costs and margins use as due are majority

an $X.X we third largest compared The reduction pandemic. year, marketing to of expenses the Operating the stabilize. year, and customers due started quarter ValidClick and expense the increase integrate It ValidClick million COVID-XX $X.X ValidClick traffic prior the largest expect the of $X.X million activities same with million ValidClick. year services margins with with costs. response year. costs with the expense compensation the the in last quarter stock-based quarter expense costs the traffic year, $X.X XXXX ValidClick low operating component in of this prior higher acquisition $X.X this IntentKey of to last higher associated Again, this higher lesser unusually to degree, gross million do quarter the year have the costs has Rich the million. in associated in costs. Marketing expense employee platform. a associated million were Marketing acquisition The the $XX mostly to year the to in was with predominantly As third is million million $XX.X revenue compared to $XX.X were of to expense is third compared mentioned, salary primarily to in Compensation to year. last we

and XX of increase to that in last was XXth, The September with management majority support, headcount employment ad compares for at year. at XX occurred and of IntentKey. sales, account full-time September Our the sales the

We third $XX,XXX other compared and year, outstanding $XX,XXX in expense within prior of fees IT compared third an a with last support to prior expense year's and to also of to securities. compares hired credit. acquisition debt by on year's to where quarter lower function this expense professionals unrealized due the Net quarter. was year the the this year the from in $XX,XXX to in-house. costs strategy This last marketable decreased professional the year equipment, interest of expenses This due -- related $X,XXX operating line our ValidClick and to We loss to year in general and was Selling bring the consolidated that's traffic year. had the we IT the is administrative to associated third of of expense quarter this this leasing primarily facilities.

The loss quarter of contract a from $X.X last We compared to was million or last Technology. license loss the the other of million quarter million this for compares per adjusted deferred reported was $X.XX with in same year. of of year. September $X.X third net the time the quarter per of expenses gain or a ended XXth That a recognition associated $X.X $XXX,XXX for EBITDA share $X.X $X.XX last revenue to for a loss to year basic share in ValidClick totaled net approximately $XX,XXX period loss year, the same basic The quarter. Non-cash-based million the of a

had to September. month having we and positive As should mentioned, believe million we $XX.X a we On -- $XX adjusted securities million quarter. EBITDA the capital of in XXXX, marketable and the be had a equivalents units which credit, positive addition XXth a September fourth XXX,XXX adjusted common EBITDA outstanding the for networking We cash-and-cash to that, of EBITDA working To stock, million stock balance. only line turn with an incentive $X equity through over maintain common cap I'd and to call warrants no With a simple like of to stock. currently Rich. plan back restricted has purchase structure employee's in

Richard Howe

over Thanks, all-time high. a or $XX very XX% quarter, Wally. year-over-year worth XX% Quarter, of IntentKey We We strong million within and with orders Third had growth. the an sequential signed

the We expect to Fourth report strong year-over-year growth Quarter. in

sequential product expect growth so to Quarter. lines We to the in show both -- Fourth

are month adjusted Quarter We EBITDA the to in forecasting be Fourth September. in positive coming off positive a

alongside improving expect performance We continue growing pipeline rates. client the IntentKey with win to notable of

strong to Balance is to needs growing immediate raise that, have result, of the Our we now capital I as sheet for business. will And Operator the plans no a turn With currently the enough over the accommodate working call questions. to Operator? capital.

Operator

Global signal. a opportunity with [Operator you. Brian Partners. first we'll to just the take Thank Instructions]. pause Kinstlinger give And Alliance from our question for moment everyone We'll to

Brian Kinstlinger

Great, thanks.

very for quarter breakout a be a to been IntentKey. satisfying seem coming. I'm long it's time quarter third as The sure it's

building? ValidClick RFP the as the how that As privacy Can number the just perspective, that tracking? from in about on Is tracking in quarter you're as talk a or clear of pipeline you're performance. And is you quarter? the using, higher leverage it bidding well the talk some third higher about the the changes than you drove maybe mentioned, fourth of

Richard Howe

quarter, sort the RFP know or but were been counts, today, has don't if we the I think, XXX where the exact somewhere it memory Brian, I of number quarter's And near stand steadily. serves. for of increasing ish, fourth third

it to would the the don't categorize is feel in referred pretty Certainly, evolving the to the as IntentKey it quarter has a much know in was launched quarter. way quarter, product. about a breakout I We that I since the grown good XXXX. I think if 's good I pipeline notes. call the IntentKey but was continuously

it ever So, was this took was sure, grown has bump -- but a that in of a not it up point. it really at launched QX since year,

Brian Kinstlinger

look I revenue think to far By see. the I differently. come, best guess I'd quarter but it in and at we'll more

more Apple for were you're And time privacy with customers? You others then new about resonating you first-party for and by with offering with data. XX for on. some what's for trend? RFPs bid goal are reasonable Can how XX in that growth and is Maybe either or how roles this demand months of a being and talk a and guys preparing -- IntentKey

Richard Howe

Yes.

think who directly are like sell I the to or ahead affects So, within any curve. that to will we There change clients that of agencies an are we industry. those individuals

would call I adopter the then getting disruptive to there early coming. we're phase degree others early will Let's them a and the changes be to adopters say large aren't. of and

that continue comes ahead as in XXXX, the world stringent more with and and deal to good help the rules want are just forced we'll be people they and to try able basically there. forge like a to be created, companies Apple so, when to get willing get issue they privacy situation. to cookie and news, to ready, to going as As create the continue head And to have

Brian Kinstlinger

You I or was the what provide first that's from look the the just orders can't you my second remember through third how progressed? gave model. in see quarter XX-Q to in quarter quarter. and $XX I that Can million quickly didn't

Richard Howe

the it know way, those actually we've so largest on the it's give said what it quarters, why I'd don't I significantly larger. That's in had it's a -- yes, didn't is. We even record. larger By significantly

Brian Kinstlinger

Okay.

Richard Howe

give then. We didn't can't they don't track I'm back don't track you I are. -- sorry. those. I what I know it

Brian Kinstlinger

-- CPM demand is quarter strength all the you're demand issues fourth at impact the in seasonal The or supply on from the and for seeing last if to question chain CPMs.

it usual companies are suffering, quarter, supply others saying are how, which will so its as you're portfolio-specific impact said unimpacted. on any who at ad you budgets challenges strong customers. your about on on at companies fourth maybe as the I'd look can chain talk it's be as not seeing if of all, the Some

Richard Howe

It's in really figure seems that. affecting trying auto seeing clients, to back or predict nicely, decrease coming Christmas. we're increase like of Thanksgiving talking really people we're back think anything, it They to, prospects if do to perspective. companies If It's is other impact our whatnot to like you and where them. and to us I chip hard these or some as have how either leading don't them. that from the or -- advertising things Most budgets, not their of the variability into have problems out not mean coming are

Now, as with that in being has business Brian, you I know, think weaker our in said, it. It's seasonality typically

Wallace Ruiz

the first in of the half. the half stronger and second year

Brian Kinstlinger

Great. you. Thank

Wallace Ruiz

Thank you, Brian.

Operator

Instructions]. [Operator

to on. Investors. Moving Warwick Aaron Go with Breakout

Aaron Warwick

Wally. today Hey, doing Rich well and I -- hope you're

Richard Howe

Hey, Aaron.

Aaron Warwick

terms wanted with Hey, quarter. Twitter comment about to ValidClick? expect, what more of the previous in compared I the on if maybe deal, terms could and business current on potential have you bit a some clients that, other just -- of your little ask of in you the to there expand you you like

Richard Howe

them, uniqueness’s has channel, your clients. different Twitter be obviously one context media are we that that to needs being there the importantly understanding are channels. -- a other this nuances Yes, lot better a we world for you'll adept Then at number where maybe each digital modern you you think than at of -- are in know that social The it can that advertise. live meeting of of I of places it more the

channels, pretty in add common -- you could everything. adding Twitter, a resources their But we more ours, us have using So, Twitter is we larger not did in can't where basis we I at find working we've allocating don't social Company, that's and platforms a the become semi-regular answer interested with responsive channel. know, actually new in been do media And the relationships. other internally better companies like that as help because

seen So good we've as expect we and good a results, result, performance, scale it. to

Aaron Warwick

terms then sounds expanding clients them Thank of see promising. XX% additional had to to good, mentioned in amount. was, whatever client pretty you that do you. then your dollar seeing and of it clients $XX even sounds What That campaigns? in getting keeping current all the RFPs though and you very Are are and expand? With IntentKey, their really $X.XX% in you year-over-year terms you of the retention in there? well What million

Richard Howe

it of Yeah. money The can they and might course in start then for media the quarter. interesting quarter go, clients in thing a another X their don't come and and and up actually take continuously. about spend always pause is then They spend another

stopped maybe client In back client. fact, a a who had started we've constitutes up not for out it's next little the versus a then clients and a and difficult what lost spent figure then to X so lost year, quarters

IntentKey, they've as been the data. we with and loss lose see doing performance the never that of Because have to I And we've as remember -- we're a that environment. them an lost strong things to able I've because up We because the just even they've they tend before, market are work who really to that market keep in again that. so with to the they we agency don't That on strategic lose ability so, of because are. said, have reasons seen of honing but the constraints when we really certainly agencies, it's to are. relationship things with and and the maintain of How's some them I we such it there agency because we're opposed clients, client they and the to clients, do clients think are existing produces they before why working in who maybe it's tended them. and opens with consumer few things when time the provider never and to people the approach is the valuable, service

Aaron Warwick

of mentioned part? IntentKey that on but something ValidClick, that. you sort and at integrating them some ValidClick your of I a can I correctly? that clients hear saying certain you my was hear Thank the know the into of did get opening Appreciate been you've I to IntentKey, recently that. over misunderstanding leverage here in you aspects or remarks for Did AI you about

Richard Howe

No, that's exactly right.

competency media search. has an ValidClick doing robust extremely Been that and in years. social and search. many Social buying for in

channels now yes, with of so and and we've AI audio, streaming that offering connected and video, display all incorporated the IntentKey the A other now the provides. we're And etc. the TV, And that and social directly which pretty campaigns those those cool. to audiences by media add was result, value-add to those as identify intelligence. created able To running, artificial be we're and that platforms channels using into and then audiences’ in identifiers into combination our within and that search-based a market

so-called was mines that a have got to in for to big to desire you've who that sell them and But bigger you to clients, to want vendors. So have step space. becomes to in manage. our within go towards sell a us also differentiation want difficult that multiple when don't our competitive deals, directly we programmatic the It try clients recognizing huge recognizing

Let's have and it somewhere just sell result and the call a third to we clients to quarter, work and doing these out we start now which somewhere bigger were video And somewhere, have, else, deals and plan lot say on services. to we've which I to to the I we do billion a wanted it those have of of else There's better as find, a go this of my ability sign my able we XXXX. that single programmatic in in just do a companies, would year providers social X.X the else. buying buying rather dollars known somewhere sorts billion search of

Aaron Warwick

Fantastic. Yes.

talked final up and calls you thing pushed is the still your for or something have me, that that for The then, Sounds you for acquisition X on aside that -- what X just set Is the that. last about cash the right thinking potential that with would radar something or on you're on what like now. you wondering that's the is it now? be --

Richard Howe

that prior be be our future. that part consultancies on result, marketing be a about sort knowledgeable client's With in now. deals selling of having calls, acquisition on did focused the kind the of now advertising don't in push do resources an right we've still resources sale. consulting I've to position Company And my so good a would said of we that consultancy -- ball a distracted and the can preference distracted and with marketing tell, in you believe XXX% to the want some acquire a Aaron, it. to said, but We as now we digital Company, on large should client advertising like that ourselves we comes be of associated more those to been tend of with has on the successful because work tend not a want not because don't closed. don't as strong the to the dropping result advertising. as integration complexities It's we value, growth, relationships the as a it more have aside, be find the And be to to in We not and be want to of at right more an bigger acquisition or to that

Aaron Warwick

Keep Guys, work. end this I looking Thank of up the 'XX. forward to you. I'm appreciate your time, and year the in good

Richard Howe

Thanks, Aaron.

Operator

back management comments. to for closing the does it turn like that conclude any or additional I'd And to session. question-and-answer

Richard Howe

Operator. continued who your interest thank you, call. our like in everyone us joined I'd Thank to We on appreciate Company. today's

Operator

conference. Thank you. That like for does conclude We'd to today's thank their everyone participation.

You now disconnect. may

Inuvo (INUV) 12 Nov 212021 Q3 Earnings call transcript