Inuvo(US:INUV)2022-05-12 22:43Financial 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]