Inuvo, Inc. (NYSE:INUV) Q1 2022 Earnings Conference Call May 12, 2022 4:15 PM ET Company Participants Richard Howe – Chief Executive Officer Wallace Ruiz – Chief Financial Officer Natalia Velez – Investor Relations Conference Call Participants Jack Vander Aarde – Maxim Group Nicole Kaufman – Black Rich Capital Operator Good day, and welcome to the Inuvo First Quarter 2022 Financial Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to [Indis ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 OR (Address of principal executive offices) (Zip Code) (501) 205-8508 Registrant's telephone number, including area code not applicable ☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________________ to ___________ ...

Financial Data and Key Metrics Changes - Inuvo reported Q4 2021 revenue of $19.7 million, a 53% increase year-over-year and a 17% increase sequentially, with full-year revenue up 34% to $59.8 million [6][25] - Gross margins averaged approximately 73% for the year, but decreased to 57% in Q4 compared to 83% in the same quarter last year [7][26] - Adjusted EBITDA for Q4 2021 was $466,000, up from $347,000 in the same quarter last year [8][33] - The company reported a net loss of $1.2 million or $0.01 per basic share, compared to a net loss of $715,000 or $0.01 per basic share in the same quarter last year [33] Business Line Data and Key Metrics Changes - ValidClick revenue increased by 26% year-over-year in Q4, while IntentKey revenue surged approximately 121% due to new customer acquisitions [25] - IntentKey revenue represented 41% of total revenue in Q4 2021, up from 28% in the same quarter last year [26] - ValidClick gross margins were 71% in Q4 compared to 99% in the same quarter last year, while IntentKey gross margins were 37% compared to 45% [26][27] Market Data and Key Metrics Changes - The company successfully diversified its revenue sources, with the top five clients contributing 22%, 19%, 13%, 12%, and 8% of Q4 revenue, reducing reliance on a single client [10] - The average cash balance for the year was approximately $16 million, providing a strong foundation for growth [11] Company Strategy and Development Direction - Inuvo aims to leverage its technology to address the upcoming challenges in consumer privacy, which is expected to impact $200 billion of media spend [23] - The company plans to run its business close to breakeven on an adjusted EBITDA basis to capture market share during this transitional period [37] - Inuvo is focusing on integrating its ValidClick and IntentKey platforms to deliver multi-channel solutions to clients [31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to scale its services and meet the growing demand for multi-channel advertising solutions [31] - The company anticipates strong year-over-year growth in Q1 2022, driven by the ongoing shift in the advertising landscape due to privacy concerns [37] Other Important Information - The company has no debt and over $13 million in cash and marketable securities as of December 31, 2021, with access to a $5 million line of credit [8][33] - Inuvo signed a deal to be a premier sponsor for a new advertising conference focused on artificial intelligence, marking a first for the company [15] Q&A Session Summary Question: How many active logos did you have running campaigns with IntentKey during the December quarter compared to the end of 2020? - Management indicated there were roughly 90 active logos, but did not have a comparison to the prior year [41] Question: Can you quantify how much of IntentKey's growth is related to new logos compared to larger campaigns or increased usage from existing customers? - The growth is largely attributed to new clients, although existing clients are also growing [42] Question: What is the average size of campaigns that IntentKey is running today, and has there been growth in the average size of campaigns from 6 or 12 months ago? - Management did not provide a specific average size but confirmed that it is larger than 12 months ago [43] Question: How are prospective brands responding to the changes that prohibit cookies? - Management emphasized that their technology does not require consumer data, which is a significant advantage in the current environment [44] Question: Can you provide an update on new IntentKey orders for Q4 and how much of the $10 million from last quarter was recognized? - A small portion of the $10 million was recognized in December, with less than 50% expected to be recognized by February [50] Question: What is the current demand for IntentKey SaaS and how do you see it growing? - Demand is primarily from direct clients wanting full-service solutions, with SaaS growth expected to be slower than initially anticipated [54] Question: Are you noticing any increase in new clients due to the upcoming cookie-less future? - There is increased discussion and confusion among clients regarding the transition, but no panic has been observed [56] Question: Where are you in terms of integrating the technologies of IntentKey and ValidClick? - Management reported that they are successfully serving multiple clients with both technologies and are confident in scaling this integration [58]

Revenue Performance - Inuvo's revenue increased approximately 34% in 2021 compared to 2020, with key customers Yahoo! and Google accounting for 48.6% of total revenue, down from 60.5% in 2020[21][46] - Year-over-year revenue increased by 34%, reaching $59.83 million for the year ended December 31, 2021, compared to $44.64 million in 2020[93] - Total revenue for the year ended December 31, 2021, was $59,830,688, representing a 34.0% increase from $44,640,007 in 2020[199] - Revenue from the ValidClick platform was $41,648,730, accounting for 69.6% of total revenue in 2021, down from 76.7% in 2020[199] - Revenue from the IntentKey platform increased to $18,181,958, making up 30.4% of total revenue in 2021, up from 23.3% in 2020[199] Profitability and Loss - The company's gross profit margin decreased to 73.4% in 2021 from 81.4% in 2020, primarily due to a change in revenue mix[46] - Inuvo reported an operating loss of approximately $7.8 million in 2021, slightly improved from an operating loss of approximately $8.1 million in 2020[46] - Net loss for 2021 was $7.60 million, compared to a net loss of $7.30 million in 2020, resulting in a basic and diluted loss per share of $0.06[177] - Operating loss for 2021 was $7.77 million, slightly improved from a loss of $8.05 million in 2020[177] - The accumulated deficit reached $144 million by December 31, 2021, indicating ongoing financial challenges despite liquidity from equity offerings[102] Expenses and Costs - Operating expenses increased by 16.4% to $51,675,492 in 2021 from $44,392,105 in 2020, driven primarily by a 20.7% rise in marketing costs[96] - Cost of revenue for 2021 was $15.93 million, a 92% increase from $8.30 million in 2020[93] - Marketing costs for 2021 were $33.10 million, up from $27.41 million in 2020, reflecting an increase of 20.7%[177] - Compensation expenses rose by 21.7% to $11,381,279 in 2021, attributed mainly to higher stock-based compensation and an increase in total employment from 75 to 78[97] Cash Flow and Financing - Net cash used in operating activities was $5,276,257 in 2021, with a reported net loss of $7,600,649, including non-cash expenses of $5,644,168[111] - Net cash used in investing activities surged to $4,597,885 in 2021 from $1,185,335 in 2020, primarily due to capitalized internal development costs and marketable securities purchases[113] - Net cash provided by financing activities was $12,459,441 in 2021, down from $14,302,346 in 2020, mainly from proceeds from common stock sales[114] - As of December 31, 2021, the company had approximately $13.3 million in cash, cash equivalents, and marketable securities, with a net working capital of $12.4 million[102] - The company raised $13,137,500 from the sale of common stock in 2021, compared to $16,432,190 in 2020, showing a 20% decrease in proceeds from stock sales[182] Technology and Innovation - The company has developed a proprietary AI technology, IntentKey, designed to predict consumer intent and optimize advertising placements[18][23] - Inuvo plans to focus resources on growing its AI technology, the IntentKey, aiming for a return to positive cash flow from operations[106] - The company has 17 issued patents and eight pending patent applications, protecting its intellectual property related to advertising technologies[34] - The company has 17 issued and eight pending patents protecting its intellectual property, which is crucial for its competitive advantage[187] Market and Business Strategy - Inuvo's business strategy includes evaluating acquisition candidates to enhance advertising relationships and expand market presence[24] - The second half of the year typically shows stronger performance due to increased demand for marketing placements leading into the holiday season[40] - The company maintains long-standing relationships with major partners, including Yahoo! and Google, which provide access to hundreds of thousands of advertisers[21][47] Risks and Challenges - The company is exposed to credit risk on accounts receivable, which is heightened during periods of economic downturn[49] - Regulatory and legal uncertainties could adversely affect the company's business, particularly with increasing scrutiny on internet-based commerce[57] - The company must adapt to rapid technological changes to remain competitive, which includes maintaining compatibility with various operating systems and devices[54] - The company relies on direct relationships with advertisers and advertising agencies, which can be terminated at any time with limited notice[50] Seasonal and Market Fluctuations - The company's financial results are subject to significant seasonal fluctuations, particularly in the fourth quarter and early first quarter[62] - The ValidClick platform experienced a significant reduction in demand during the COVID-19 pandemic, impacting revenue run rate[47] - The company experienced a significant reduction in marketing budgets due to COVID-19, impacting revenue run rates in 2020[90]

Financial Performance - For the three months ended September 30, 2021, net revenue was $16,841,035, an increase of 82.8% compared to $9,214,350 in the same period of 2020[97]. - ValidClick revenue increased by 88% year-over-year for the third quarter of 2021, while IntentKey revenue rose by 71% in the same period[98]. - Gross profit for the nine months ended September 30, 2021, was $32,628,410, reflecting a 27.5% increase from $25,582,599 in 2020[97]. - The company reported a net loss of $6,359,663 for the nine months ended September 30, 2021, which included non-cash expenses of $2,343,874 for depreciation and amortization[114]. - The company reported a net loss of $6,589,604 for the comparable nine-month period in 2020, which included non-cash expenses of $2,452,930 for depreciation and amortization[115]. Operating Expenses - Operating expenses for the three months ended September 30, 2021, were $14,828,024, a 48.3% increase from $10,001,658 in the same period of 2020[100]. - Marketing costs for the three months ended September 30, 2021, were $10,163,006, up 79.3% from $5,668,707 in 2020[100]. - The change in operating assets and liabilities resulted in cash used in operations of $4,707,321 during the nine months ended September 30, 2021[114]. Cash Flow and Liquidity - In the nine months ended September 30, 2021, net cash used in operating activities was $7,543,216, compared to $4,335,631 in the same period of 2020[113]. - Net cash used in investing activities was $1,180,107 for the nine months ended September 30, 2021, an increase from $852,423 in 2020, primarily due to capitalized internal development costs[116]. - Net cash provided by financing activities was $12,535,122 for the nine months ended September 30, 2021, compared to $14,343,279 in 2020, mainly from proceeds from the sale of common stock[117]. - The company has sufficient liquidity to sustain operations for the next twelve months, but may need additional funding if growth plans are unsuccessful[111]. Intellectual Property and Technology - The company holds 18 issued and seven pending patents, indicating a strong intellectual property position in the market[89]. - The company has a plan to grow its AI technology, the IntentKey, which is expected to lead to positive cash flow from operations if successful[110]. Accounts Receivable and Financial Condition - The company experienced an increase in accounts receivable by $2,645,508 due to increased revenue in the third quarter of 2021[114]. - As of September 30, 2021, there were no off-balance sheet arrangements that could materially affect the company's financial condition[118]. Response to Market Conditions - The company implemented temporary compensation changes for senior officers and employees in response to reduced advertiser marketing budgets due to COVID-19[112]. - The company focused resources on areas with immediate revenue potential while reducing expenses to minimize daily operating disruptions[112]. Capital Raising - The company raised approximately $14.3 million in January 2021 through the sale of securities, and an additional $16.5 million in the second and third quarters of 2020[93]. - As of September 30, 2021, the company had a positive net working capital of $13.1 million[93].

Call Start: 16:15 January 1, 0000 4:50 PM ET Inuvo, Inc. (NYSE:INUV) Q3 Earnings Conference Call November 11, 2021, 16:15 PM ET Company Participants Richard Howe – CEO Wallace Ruiz – CFO Valter Pinto – Managing Director Conference Call Participants Brian Kinstlinger – Alliance Global Partners Aaron Warwick – Breakout Investors 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 r ...

Inuvo, Inc. (NYSE:INUV) Q2 2021 Earnings Conference Call August 12, 2021 8:30 AM ET Company Participants Valter Pinto - Managing Director, KCSA Strategic Communications Richard Howe - Executive Chairman & Chief Executive Officer Wallace Ruiz - Chief Financial Officer & Secretary Conference Call Participants Brian Kinstlinger - Alliance Global Partners Operator Good day and welcome to the Inuvo Second Quarter 2021 Financial Results Conference Call. Today's conference is being recorded. At this time, I'd like ...

Financial Performance - For the three months ended June 30, 2021, net revenue was $12,635,583, a 66.5% increase from $7,590,187 in the same period of 2020[93]. - ValidClick revenue increased by 72% year-over-year for the second quarter of 2021, while IntentKey revenue grew by approximately 50% due to new customer acquisitions[94]. - Gross profit for the three months ended June 30, 2021, was $10,371,563, reflecting a 59.1% increase from $6,520,159 in the same quarter of 2020[93]. - Operating expenses for the three months ended June 30, 2021, totaled $12,770,247, a 64.6% increase compared to $7,756,827 in the same period of 2020[96]. - Marketing costs (TAC) for the three months ended June 30, 2021, were $8,213,140, up 112.9% from $3,857,395 in the same quarter of 2020[96]. - The company reported a net cash used in operating activities of $2,465,545 for the six months ended June 30, 2021, compared to $2,336,029 for the same period in 2020[109]. - The net loss for the six months ended June 30, 2021, was $4,529,395, which included non-cash expenses of $1,552,386 for depreciation and amortization[110]. - Net cash provided by financing activities increased to $12,710,562 in the first half of 2021, up from $6,702,072 in the same period of 2020, primarily from the sale of common stock[113]. Workforce and Operations - The company has 76 employees as of June 30, 2021, compared to 70 in the same period of 2020, indicating growth in workforce to support the IntentKey platform[97]. - The company implemented temporary compensation changes for senior officers and employees in response to the financial impact of COVID-19[108]. Financing and Capital - The company raised approximately $14.3 million in January 2021 through securities offerings, contributing to a positive net working capital of $15.4 million as of June 30, 2021[90]. - The company entered into a Sales Agreement allowing for the potential sale of up to $35 million in common stock, although no shares were issued during the three months ended June 30, 2021[105]. - The company may need to fund operations through private or public sales of securities or debt financings if the IntentKey product growth plan is unsuccessful[107]. Cash Flow and Investments - Cash used in investing activities was $788,670 for the six months ended June 30, 2021, compared to $557,818 in 2020, mainly for marketable securities and internal development costs[112]. - The change in operating assets and liabilities resulted in cash used in operations of $24,844, primarily due to the purchase of marketable securities[110]. Market Conditions - The company experienced a significant reduction in advertiser marketing budgets due to COVID-19, adversely impacting overall revenue throughout 2020[108]. - As of June 30, 2021, the company had no off-balance sheet arrangements that could materially affect its financial condition[114]. Future Plans - The company plans to focus resources on growing its AI technology, the IntentKey, which is expected to have higher margins[106]. - Other income for the three months ended June 30, 2021, was approximately $25,000, primarily from unrealized gains on trading securities[101]. - Interest expense, net, for the three months ended June 30, 2021, was approximately $8,000, a decrease from $73,000 in the same period of 2020[99][100].

Financial Data and Key Metrics Changes - Inuvo reported revenue of approximately $10.6 million for Q1 2021, down 18% sequentially and from $14.9 million in Q1 2020, primarily due to seasonality and lower ValidClick revenue [8][30] - ValidClick revenue was $8.5 million, a decrease of 35% year-over-year, while IntentKey revenue grew 15% year-over-year to $2.1 million, representing 20% of overall revenue [9][31] - Gross margins improved to 86% from 77% year-over-year, with adjusted EBITDA showing a loss of $878,000, an improvement of 36% compared to the previous year [11][33][40] Business Line Data and Key Metrics Changes - ValidClick's performance is recovering, with a 9% compounded monthly growth rate since its low in May 2020, and expected to return to its pre-pandemic average monthly revenue run rate of approximately $4.4 million within 2021 [9][10][25] - The IntentKey platform has shown strong performance, exceeding client goals by 48% on average, with a growing client base and a strong pipeline [13][19] - IntentKey gross margins were 42% in Q1 2021, with expectations for improvement as the SaaS version develops [34] Market Data and Key Metrics Changes - The company anticipates a strong second quarter with year-over-year revenue growth exceeding 50%, driven by both IntentKey and ValidClick platforms [12][44] - The shift towards cookie-less advertising is expected to benefit Inuvo, as its AI-driven approach focuses on the reasons behind purchases rather than consumer identity [23][24] Company Strategy and Development Direction - Inuvo is positioning itself to capitalize on the disruption caused by the elimination of third-party cookies, emphasizing its unique AI capabilities that do not rely on third-party data [23][24] - The company plans to utilize its strong cash position of $17.8 million for working capital and potential acquisitions in 2021 [41][45] Management's Comments on Operating Environment and Future Outlook - Management noted that the first quarter is typically the softest due to advertisers delaying budget allocations, but expects a strong recovery in the second half of the year [8][12] - The company is optimistic about the post-pandemic economy leading to larger media budgets and believes it is well-positioned to gain market share as competitors struggle with the cookie-less transition [19][44] Other Important Information - Inuvo completed two public offerings in January, raising $14.25 million to support working capital and sales force expansion [42] - The company has no debt and a simple capital structure, which supports its financial stability [41] Q&A Session Summary - No specific questions or answers were documented in the provided content, indicating a conclusion to the conference call without a detailed Q&A segment [47][48]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 OR ☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______________________ to ______________________ Commission file number: 001-32442 Inuvo, Inc. (Exact name of registrant as specified in its charter) Nevada 87-0450450 (S ...