Inuvo(INUV)2022-03-17 22:41Financial Data and Key Metrics Changes - Inuvo reported Q4 2021 revenue of $19.7 million, a 53% increase year-over-year and a 17% increase sequentially, with full-year revenue up 34% to $59.8 million [6][25] - Gross margins averaged approximately 73% for the year, but decreased to 57% in Q4 compared to 83% in the same quarter last year [7][26] - Adjusted EBITDA for Q4 2021 was $466,000, up from $347,000 in the same quarter last year [8][33] - The company reported a net loss of $1.2 million or $0.01 per basic share, compared to a net loss of $715,000 or $0.01 per basic share in the same quarter last year [33] Business Line Data and Key Metrics Changes - ValidClick revenue increased by 26% year-over-year in Q4, while IntentKey revenue surged approximately 121% due to new customer acquisitions [25] - IntentKey revenue represented 41% of total revenue in Q4 2021, up from 28% in the same quarter last year [26] - ValidClick gross margins were 71% in Q4 compared to 99% in the same quarter last year, while IntentKey gross margins were 37% compared to 45% [26][27] Market Data and Key Metrics Changes - The company successfully diversified its revenue sources, with the top five clients contributing 22%, 19%, 13%, 12%, and 8% of Q4 revenue, reducing reliance on a single client [10] - The average cash balance for the year was approximately $16 million, providing a strong foundation for growth [11] Company Strategy and Development Direction - Inuvo aims to leverage its technology to address the upcoming challenges in consumer privacy, which is expected to impact $200 billion of media spend [23] - The company plans to run its business close to breakeven on an adjusted EBITDA basis to capture market share during this transitional period [37] - Inuvo is focusing on integrating its ValidClick and IntentKey platforms to deliver multi-channel solutions to clients [31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to scale its services and meet the growing demand for multi-channel advertising solutions [31] - The company anticipates strong year-over-year growth in Q1 2022, driven by the ongoing shift in the advertising landscape due to privacy concerns [37] Other Important Information - The company has no debt and over $13 million in cash and marketable securities as of December 31, 2021, with access to a $5 million line of credit [8][33] - Inuvo signed a deal to be a premier sponsor for a new advertising conference focused on artificial intelligence, marking a first for the company [15] Q&A Session Summary Question: How many active logos did you have running campaigns with IntentKey during the December quarter compared to the end of 2020? - Management indicated there were roughly 90 active logos, but did not have a comparison to the prior year [41] Question: Can you quantify how much of IntentKey's growth is related to new logos compared to larger campaigns or increased usage from existing customers? - The growth is largely attributed to new clients, although existing clients are also growing [42] Question: What is the average size of campaigns that IntentKey is running today, and has there been growth in the average size of campaigns from 6 or 12 months ago? - Management did not provide a specific average size but confirmed that it is larger than 12 months ago [43] Question: How are prospective brands responding to the changes that prohibit cookies? - Management emphasized that their technology does not require consumer data, which is a significant advantage in the current environment [44] Question: Can you provide an update on new IntentKey orders for Q4 and how much of the $10 million from last quarter was recognized? - A small portion of the $10 million was recognized in December, with less than 50% expected to be recognized by February [50] Question: What is the current demand for IntentKey SaaS and how do you see it growing? - Demand is primarily from direct clients wanting full-service solutions, with SaaS growth expected to be slower than initially anticipated [54] Question: Are you noticing any increase in new clients due to the upcoming cookie-less future? - There is increased discussion and confusion among clients regarding the transition, but no panic has been observed [56] Question: Where are you in terms of integrating the technologies of IntentKey and ValidClick? - Management reported that they are successfully serving multiple clients with both technologies and are confident in scaling this integration [58]