Financial Data and Key Metrics Changes - Inuvo reported revenue of $18.6 million for Q1 2022, a 75% increase year-over-year from $10.6 million in Q1 2021 [5][16] - The trailing 12-month growth rate stands at 69% [5][25] - Gross margins for Q1 2022 were approximately 53.5%, down from 86.3% in the same period last year [18] - Adjusted EBITDA loss for Q1 2022 was approximately $703,000, an improvement from a loss of $878,000 in Q1 2021 [24] Business Line Data and Key Metrics Changes - IntentKey revenue grew approximately 280% year-over-year, while ValidClick revenue increased by 24% [5][16] - Revenue split between IntentKey and ValidClick was 44% and 56% respectively in Q1 2022, compared to 20% and 80% in the same period last year [5][17] - The largest client represented 22% of total revenue in Q1 2022, down from 40% in the same quarter last year [17] Market Data and Key Metrics Changes - Unaudited revenues for April 2022 exceeded $7 million, indicating strong growth momentum [8][25] - The advertising market is undergoing significant changes due to privacy concerns, impacting approximately $200 billion in annual advertising spend [9][10] Company Strategy and Development Direction - The company aims to capitalize on the upcoming changes in the advertising market, particularly as competitors struggle with the loss of cookies and consumer data [10][11] - Inuvo is focusing on optimizing for growth while maintaining gross margins, with plans to achieve positive adjusted EBITDA for the year [8][9] - The company is enhancing its technology and client offerings, including a new graphical user interface for AI-generated insights [13] Management's Comments on Operating Environment and Future Outlook - Management noted that the advertising community is largely unprepared for the upcoming changes in consumer data usage, which could lead to performance degradation for many companies [10][39] - The company expects demand to increase as the market realizes the implications of these changes, particularly when Google implements similar changes in 2023 [39] Other Important Information - The balance sheet remains strong with no debt and approximately $9 million in cash and marketable securities [9][24] - The company is in the final stages of securing an $8 million financing facility, positioning it well for growth without needing additional capital [9] Q&A Session Summary Question: Can you speak on the trend of larger clients with bigger budgets and client retention? - Management confirmed that they are signing larger clients with budgets ranging from $250,000 to $1.5 million per month, and they rarely lose clients, typically only when an agency loses a client [27][28] Question: How is the demand for new customer orders and SaaS revenue? - Demand remains strong, with April revenues indicating continued growth. Most growth is expected to come from services rather than SaaS due to high demand for full-service capabilities [29][31] Question: Are there challenges in acquiring talent? - The labor market is tight, making it harder to find qualified talent, especially in engineering and data science. However, the company continues to hire, focusing on sales and marketing roles [32][33] Question: How significant is the problem of cookies going away, particularly regarding Google? - The market problem is substantial, with many companies unprepared for the changes. Management expects demand to increase as companies realize the implications of losing cookies and consumer data [39]

Financial Performance - For the three months ended March 31, 2022, net revenue was $18,609,367, a 75.3% increase compared to $10,617,809 in the same period of 2021[86] - ValidClick revenue increased by 24% year-over-year, while IntentKey revenue surged by 280%[87] - Cost of revenue for Q1 2022 was $8,661,506, a significant increase of 499.8% from $1,444,059 in Q1 2021[86] - Operating expenses totaled $12,053,827 for Q1 2022, reflecting a 2.4% increase from $11,768,629 in Q1 2021[89] - The company reported a net loss of $2,089,263 for the three months ended March 31, 2022, compared to a net loss of $2,147,268 in the same period of 2021[103] Cash and Working Capital - As of March 31, 2022, the company had approximately $9 million in cash, cash equivalents, and marketable securities, with a net working capital of $11.2 million[95] - Net cash used in operating activities was $3,580,762 for Q1 2022, compared to $2,442,647 in Q1 2021[102] - The company has an accumulated deficit of $146.0 million as of March 31, 2022[95] Strategic Focus - The company plans to focus resources on growing its AI technology, the IntentKey, to achieve positive cash flow from operations[99] Financing Activities - The company raised $8.0 million and $6.25 million in gross proceeds from registered direct offerings in January 2021[96] Off-Balance Sheet Arrangements - As of March 31, 2022, the company has no off-balance sheet arrangements that could materially affect its financial condition or results of operations[107] - The term "off-balance sheet arrangement" refers to transactions or agreements with unconsolidated entities that may involve guarantees or contingent interests[107] - The company does not have any obligations arising from off-balance sheet arrangements that serve as credit or liquidity support[107] Market Classification - The company is classified as a smaller reporting company, thus certain market risk disclosures are not applicable[108]

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 ...

Financial Data and Key Metrics Changes - Inuvo reported revenue of $12.6 million for Q2 2021, representing a 66% year-over-year increase and a 19% sequential increase [5][24] - Adjusted EBITDA for the quarter was a loss of $965,000, roughly flat sequentially [5] - Gross margins decreased to 82% in Q2 2021 from 86% in the same quarter last year, primarily due to a shift in the cost of revenue [26] Business Line Data and Key Metrics Changes - The development platform contributed $9.7 million in revenue, up 72% year-over-year [6] - IntentKey platform revenue was approximately $2.9 million, growing 50% year-over-year and 37% sequentially [8] - ValidClick revenue exceeded the prior year by 72% [24] Market Data and Key Metrics Changes - The number of campaigns launched in Q2 2021 was 84, with a 56% increase in prospective client presentations and a 70% increase in deals won compared to the same period in 2020 [9][10] - ValidClick served ads into roughly 100 million page views, hitting an all-time monthly high [23] Company Strategy and Development Direction - The company is focusing on enhancing its AI capabilities and differentiating its advertising solutions from competitors, particularly in light of the upcoming deprecation of third-party cookies [13][14] - Inuvo is actively looking for M&A opportunities to support growth objectives, focusing on companies with strong client portfolios rather than technology acquisition [53] Management's Comments on Operating Environment and Future Outlook - Management expects strong continuing year-over-year and sequential revenue growth for both product lines in Q3 2021, projecting a 45% to 55% increase year-over-year [36] - The company maintains a strong balance sheet with over $18 million in cash and no debt, indicating no immediate need for additional capital [36] Other Important Information - Operating expenses increased to $12.8 million in Q2 2021 from $7.8 million in the previous year, primarily due to higher marketing costs [27] - The company has been enhancing its internal systems and processes to improve efficiency and scalability [15][16] Q&A Session Summary Question: Can you quantify how many customers you ran campaigns for in Q2 2021? - The company ran 84 campaigns in Q2 2021, which is significantly higher than the previous year [40] Question: How many clients are there compared to last year? - The number of clients has approximately doubled compared to last year [41] Question: Describe the evolution of a new customer. - New customers typically start with a small campaign and gradually increase their budget after successful tests [42][43] Question: How should we think about the introduction of the SaaS model from a P&L perspective? - The SaaS model will coexist with fully managed services, with higher margins expected for the SaaS version [46] Question: Is the market still in recovery for ValidClick? - The market for ValidClick is recovering strongly, with growth trajectories indicating a return to pre-pandemic levels [47] Question: Discuss the M&A landscape and strategy. - The company is actively looking for M&A opportunities to enhance growth, focusing on client portfolios rather than technology [52]

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 ...