Fluent(FLNT) - 2025 Q1 - Quarterly Results

Fluent, Inc. First Quarter 2025 Financial Results CEO Commentary and Strategic Pivot Fluent's Q1 2025 saw strong Commerce Media Solutions growth and a new partnership, despite attrition in its Owned and Operated business - The Commerce Media Solutions business has been the primary growth driver, achieving nearly triple-digit year-over-year growth since its launch in early 2023[3] - Announced a strategic partnership with Rebuy Engine to launch "Rebuy Ads powered by Fluent," targeting Shopify merchants with post-purchase advertising[3][6] - The Owned and Operated business experienced attrition due to a reduction in media supply, particularly from social media, with active expansion of supply channels underway to mitigate this[3] - Due to the shifting revenue mix, consolidated revenue for Q2 2025 is expected to be similar to Q1 2025[3] First Quarter Financial Highlights Q1 2025 revenue decreased 16% to $55.2 million, driven by Owned and Operated declines offset by 99% growth in Commerce Media Solutions Q1 2025 Key Financial Metrics vs. Q1 2024 | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $55.2M | $66.0M | -16% | | Commerce Media Solutions Revenue | $12.7M | $6.4M | +99% | | Owned and Operated Revenue | $31.1M | $44.7M | -30% | | Gross Profit (excl. D&A) | $11.4M | $18.6M | -39% | | Net Loss | $8.3M | $6.3M | +32% | | Net Loss Per Share | $0.39 | $0.45 | N/A | | Adjusted EBITDA | ($3.1M) | $0.7M | -$3.7M | - Commerce Media Solutions revenue grew to represent 23% of consolidated revenue in Q1 2025, up from 10% in Q1 2024[6] - The annual revenue run rate for Commerce Media Solutions now exceeds $65 million, an 8% increase quarter-over-quarter[6] Business Outlook & Goals Fluent targets full-year 2025 revenue growth and positive adjusted EBITDA, leveraging its data for competitive advantage - Goal to drive revenue growth, improve net loss compared to 2024, and achieve positive adjusted EBITDA for the full-year 2025[7] - Financial improvements are expected to materialize in the second half of 2025 as Commerce Media Solutions becomes a larger portion of consolidated revenue[8] - Strategy includes leveraging its 14-year leadership in customer acquisition and its database of first-party user data as a competitive differentiator[8] Financial Statements Unaudited Q1 2025 financial statements show decreased assets, a wider net loss, and improved operating cash flow Consolidated Balance Sheets The balance sheet reflects changes in assets, liabilities, and equity as of March 31, 2025 Balance Sheet Summary (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $4,828 | $9,439 | | Total current assets | $51,228 | $65,955 | | Total assets | $77,494 | $93,617 | | Total current liabilities | $51,659 | $64,682 | | Total liabilities | $55,459 | $68,662 | | Total shareholders' equity | $22,035 | $24,955 | Consolidated Statements of Operations The statement of operations details revenue, expenses, and net loss for the first quarter of 2025 Statement of Operations Summary (in thousands, except per share data) | Account | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue | $55,210 | $65,983 | | Total costs and expenses | $62,286 | $69,936 | | Loss from operations | ($7,076) | ($3,953) | | Net loss | ($8,269) | ($6,276) | | Basic and diluted loss per share | ($0.39) | ($0.45) | Consolidated Statements of Cash Flows The cash flow statement summarizes cash movements from operating, investing, and financing activities Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $2,112 | ($132) | | Net cash used in investing activities | ($1,570) | ($1,796) | | Net cash used in financing activities | ($5,153) | ($2,218) | | Net decrease in cash | ($4,611) | ($4,146) | | Cash at end of period | $6,083 | $11,658 | Non-GAAP Financial Measures Fluent uses non-GAAP measures like Media Margin, Adjusted EBITDA, and Adjusted Net Income to evaluate performance - The company uses Media Margin, Adjusted EBITDA, and Adjusted Net Income as supplemental performance measures[19][20][21] - Media margin is a primary metric to measure the financial return on media costs, while Adjusted EBITDA is used to evaluate operating performance and for compensation decisions[31][32] Reconciliation of Adjusted EBITDA from Net Loss (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss | $(8,269) | $(6,276) | | Adjustments (Taxes, Interest, D&A, etc.) | $5,185 | $6,941 | | Adjusted EBITDA | $(3,084) | $665 | Reconciliation of Adjusted Net Loss from Net Loss (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss | $(8,269) | $(6,276) | | Adjustments (Share-based comp, etc.) | $1,611 | $2,047 | | Adjusted net loss | $(6,658) | $(4,229) | Reconciliation of Media Margin (Consolidated, in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue | $55,210 | $65,983 | | Gross profit (excl. D&A) | $11,435 | $18,635 | | Media margin | $13,731 | $22,139 | | Media margin % of revenue | 24.9% | 33.6% | Reconciliation of Media Margin (Commerce Media Solutions, in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue | $12,660 | $6,376 | | Gross profit (excl. D&A) | $2,813 | $1,823 | | Media margin | $3,111 | $1,998 | | Media margin % of revenue | 24.6% | 31.3% | Other Information This section includes conference call details, a corporate overview, and a Safe Harbor statement on forward-looking risks - A conference call to discuss Q1 2025 results was scheduled for May 15, 2025, at 4:30 PM ET[9] - The Safe Harbor statement lists significant risk factors, including compliance with credit agreement covenants, industry competition, reliance on the gaming industry, and potential changes in online marketing spend by clients[11][12]