Fluent(FLNT) - 2025 Q2 - Quarterly Results

Management Commentary Management highlights strong Commerce Media Solutions growth and strategic shift, projecting Q4 2025 adjusted EBITDA profitability and 2026 full-year growth - Commerce Media Solutions revenue grew 121% year-over-year, with its annual revenue run rate now exceeding $80 million, a 23% increase from the first quarter of 2025[3][7] - The company is strategically reallocating resources from its owned and operated segment to the higher-growth Commerce Media Solutions, which is expected to become the majority revenue contributor in H2 2025[4] - Margins for Commerce Media Solutions were temporarily lower due to strategic expansion into new placements and incentives offered to secure long-term media partner contracts[3] - Fluent expects to achieve adjusted EBITDA profitability in the fourth quarter of 2025, with projections for full-year double-digit consolidated revenue growth and adjusted EBITDA profitability in 2026[4] Financial Highlights Q2 2025 saw a 24% total revenue decrease to $44.7 million, driven by Owned and Operated decline, offset by 121% growth in Commerce Media Solutions Q2 2025 vs Q2 2024 Financial Performance (in millions, except per share data) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $44.7 | $58.7 | -24% | | Commerce Media Solutions Revenue | $16.1 | $7.3 | +121% | | Owned and Operated Revenue | $21.4 | $42.0 | -49% | | Gross Profit | $10.3 | $12.6 | -18% | | Net Loss | $(7.2) | $(11.6) | +38% | | Net Loss Per Share | $(0.30) | $(0.75) | +60% | | Adjusted EBITDA Loss | $(2.8) | $(4.5) | +38% | H1 2025 vs H1 2024 Financial Performance (in millions, except per share data) | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $99.9 | $124.7 | -20% | | Commerce Media Solutions Revenue | $28.7 | $13.7 | +110% | | Owned and Operated Revenue | $52.5 | $86.7 | -39% | | Gross Profit | $21.7 | $31.2 | -30% | | Net Loss | $(15.5) | $(17.9) | +13% | | Net Loss Per Share | $(0.68) | $(1.11) | +39% | - Subsequent to the quarter, the company raised $10.3 million from new investors and insiders[7] Business Outlook & Goals Fluent's strategy focuses on accelerating Commerce Media Solutions growth, securing new partners, leveraging data and AI, and reaffirming Q4 2025 adjusted EBITDA profitability - Strategic goals include: - Accelerating growth of Commerce Media Solutions - Winning top-tier media partners in diverse new market verticals - Leveraging 14 years of customer acquisition experience and first-party data as a competitive differentiator - Using AI to improve monetization and return Commerce Media Solutions gross margin to the high twenties[10] - The company reiterates its financial outlook, expecting adjusted EBITDA profitability in Q4 2025, as well as full-year double-digit consolidated revenue growth and full-year adjusted EBITDA profitability in 2026[10] Consolidated Financial Statements Unaudited consolidated financial statements for Q2 2025 show decreased assets and liabilities, narrowed net loss, and improved cash from operations Consolidated Balance Sheets As of June 30, 2025, total assets decreased to $74.5 million, total liabilities to $55.3 million, and shareholders' equity to $19.1 million Balance Sheet Summary (in thousands) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $4,929 | $9,439 | | Accounts receivable, net | $31,227 | $46,532 | | Total current assets | $46,948 | $65,955 | | Total assets | $74,471 | $93,617 | | Total current liabilities | $49,651 | $64,682 | | Total liabilities | $55,348 | $68,662 | | Total shareholders' equity | $19,123 | $24,955 | Consolidated Statements of Operations Q2 2025 revenue was $44.7 million with a net loss of $7.2 million, improving from the prior year's $11.6 million net loss Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $44,706 | $58,717 | $99,916 | $124,700 | | Loss from operations | $(7,106) | $(10,378) | $(14,182) | $(14,331) | | Net loss | $(7,223) | $(11,627) | $(15,492) | $(17,903) | | Basic & Diluted loss per share | $(0.30) | $(0.75) | $(0.68) | $(1.11) | Consolidated Statements of Cash Flows H1 2025 saw net cash provided by operating activities of $3.0 million, a turnaround from $13.2 million used in H1 2024 Cash Flow Summary for Six Months Ended June 30 (in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash from operating activities | $3,047 | $(13,199) | | Net cash used in investing activities | $(3,231) | $(3,542) | | Net cash (used in) provided by financing activities | $(3,198) | $7,374 | | Net decrease in cash | $(3,382) | $(9,367) | Non-GAAP Financial Measures & Reconciliations Fluent uses non-GAAP measures like Media Margin and Adjusted EBITDA, with Q2 2025 showing improved adjusted EBITDA loss and stable total media margin percentage - The company uses Media Margin to measure the financial return on media costs, Adjusted EBITDA to evaluate operating performance, and Adjusted Net Income to provide a different view of overall financial performance[33][34][36] Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net loss | $(7,223) | $(11,627) | $(15,492) | $(17,903) | | Adjusted EBITDA | $(2,773) | $(4,504) | $(5,857) | $(3,839) | Media Margin Performance (in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Media Margin | $11,943 | $15,665 | $25,674 | $37,804 | | Total Media Margin % | 26.7% | 26.7% | 25.7% | 30.3% | | Commerce Media Margin | $3,217 | $2,219 | $6,328 | $4,218 | | Commerce Media Margin % | 20.0% | 30.4% | 22.0% | 30.9% | Safe Harbor Statement This section provides a forward-looking statement disclaimer, highlighting risks including credit agreement compliance, going concern doubts, and competitive industry challenges - The press release contains forward-looking statements that are not guarantees of future performance and are subject to various risks and uncertainties[13] - Key risk factors include: - Compliance with credit agreements and substantial doubt about the ability to continue as a going concern - Operating in a competitive, rapidly changing, and highly regulated industry - Investment in the Commerce Media Solutions business may continue to compress margins - Dependence on key personnel and third-party service providers[13]