Fluent(FLNT)2022-03-09 01:15Financial Data and Key Metrics - Full-year 2021 revenue was 100.4 million, a decline of 9% year-over-year, representing 31% of revenue [7] - Adjusted EBITDA for 2021 was 99.8 million, up 22% year-over-year [8] - Q4 2021 media margin was 10.2 million, or 10% of revenue [8] Business Line Data and Key Metrics - Fluent Sales Solutions grew to represent roughly 10% of 2021 annual revenue, with Q4 revenue growing six times year-over-year [16] - CRM revenue increased 50% year-over-year in 2021, driven by enhanced capabilities and strong client demand [18] - Mobile apps business is in early stages but represents a significant growth opportunity, with the total available market roughly two times the size of mobile web [15] - Jobs business, AdParlor agency, and international business achieved 50% year-over-year revenue growth in 2021, with Q4 growth accelerating to over 75% year-over-year [14] Market Data and Key Metrics - The mobile app market is estimated at 30 billion available outside of Google and Facebook, representing a significant opportunity for Fluent [39] - The company is expanding into higher-value verticals such as insurance, financial services, and home services, which are expected to contribute to future growth [45] Company Strategy and Industry Competition - Fluent is focused on building higher-quality digital experiences for consumers and creating sustainable customer acquisition solutions for marketers [6] - The company is investing in traffic quality initiatives (TQI) to enhance consumer engagement and improve ROI for clients [10] - Fluent is differentiating itself by starting with consumer quality and then matching brands to drive meaningful experiences and ROI, rather than focusing solely on volume [46] Management Commentary on Operating Environment and Future Outlook - Management is confident in the company's strategic path and expects to enhance margins as businesses scale over time [9] - The company anticipates revenue growth returning to or above industry growth rates in 2022, with sequential margin improvement [21] - The ongoing crisis in Ukraine has impacted the media business, with constraints expected to affect media margin growth in Q1 2022 [26] Other Important Information - Fluent's new credit facility reduced the effective interest rate by 500 basis points, resulting in a 34.5 million in cash and cash equivalents, an increase of $13.4 million year-over-year [31] Q&A Session Summary Question: Sustainability of Q4 growth and feedback from advertising clients [33] - Management highlighted that demand from advertisers has increased, driven by higher-quality traffic and enhanced CRM capabilities, which are expected to sustain growth [34][35][36] Question: Media margin growth and levers for improvement [37] - The company is focused on revenue growth at or above industry standards and managing media margin within a disciplined range, with investments in higher-margin initiatives [38] Question: Mobile app growth initiatives and milestones [39] - Fluent has launched its mobile app rewards product on Android and expects significant growth opportunities in the mobile app market, with contributions to revenue expected later in 2022 [39] Question: Impact of higher customer acquisition costs and profitability [42] - The company is not redoing its financial statements but is expanding its ability to monetize consumers, with a focus on driving revenue growth and maintaining margins [44] Question: Progress on the business model adjustment [47] - Fluent has returned to traditional growth rates, with Q4 2021 revenue growth of 22%, ahead of expectations, though traffic quality initiatives have taken longer than anticipated [48][49]