Fluent(US:FLNT)2020-08-11 02:09Financial Data and Key Metrics Changes - Revenue for Q2 2020 increased by 1% year-over-year to $71.5 million, while media margin rose by 8% to $24.8 million, representing 34.7% of revenue [10][22][24] - Adjusted EBITDA decreased by 3% year-over-year to $9.4 million, with a margin of 13.1%, reflecting a reduction of 60 basis points year-over-year but an improvement of 170 basis points quarter-over-quarter [26] - GAAP net income was reported at $452,000, or $0.01 per share, while adjusted net income was $4.2 million, or $0.05 per share [27] Business Line Data and Key Metrics Changes - The media and entertainment sector, particularly streaming services and gaming apps, showed strong performance, helping to offset declines in other verticals due to COVID-19 [12] - The UK business more than doubled its top line year-over-year, with non-U.S. markets exceeding 5% of total revenue for the first time [13][12] Market Data and Key Metrics Changes - The company capitalized on increased consumer engagement during the pandemic, leading to favorable media pricing and strong demand from clients [23] - The international expansion strategy is yielding results, with significant growth in the UK and plans for further expansion into Germany and Canada [16][12] Company Strategy and Development Direction - The company focuses on three strategic growth pillars: Performance Marketplace, Media Footprint, and Platform technology [14][16][17] - The acquisition of a 50% stake in Winopoly is aimed at enhancing consumer engagement and monetization opportunities [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business despite the challenging operating environment due to COVID-19 [9][19] - The company anticipates a return to seasonal revenue patterns experienced in previous years, with a focus on maintaining media margin as a key performance metric [24][43] Other Important Information - The company reported a goodwill impairment related to the AdParlor business due to macroeconomic conditions and social unrest impacting forecasts [39] - The structure of the Winopoly transaction includes a put-call feature, resulting in a non-cash expense that will be accrued over time [40] Q&A Session Summary Question: Is there a meaningful increase in revenues in Q3 versus Q2? - Management clarified that the reference was to media margin dollars and did not specifically comment on revenue [32] Question: What is driving success in the UK market? - Success is attributed to strong relationships with global brands in media and entertainment, with plans for further local partnerships [34][36] Question: Can you explain the goodwill impairment? - The impairment was due to a triggering event related to the AdParlor business, influenced by COVID-19 and social unrest [38][39] Question: What is the put-call structure in the Winopoly transaction? - The put-call structure involves deemed compensation expenses that will be accrued over time, impacting non-GAAP metrics [40]