Inuvo(US:INUV)2019-11-15 00:41Financial Data and Key Metrics Changes - For Q3 2019, the company reported revenue of $13.8 million, a decrease from $14 million in Q2 2019 and $16.8 million in Q3 2018 [6][20] - For the nine months ended September 30, 2019, revenue was $43.3 million, down from $56.3 million in the same period of 2018 [6][20] - Gross margins for Q3 2019 were approximately 64%, compared to 63% in the same quarter last year [23] Business Line Data and Key Metrics Changes - ValidClick revenue streams generated $11.2 million in Q3 2019, down from approximately $12 million in Q2 2019 [10] - IntentKey revenue was $2.6 million in Q3 2019, representing a 30% sequential growth [13][22] - The publishing component of the business generated approximately $320,000 in revenue, which is being deemed less strategic [11] Market Data and Key Metrics Changes - ValidClick revenue for July, August, and September was $3.2 million, $3.7 million, and $4.3 million respectively, with unaudited October revenue around $5.2 million [12][34] - IntentKey's client base has been growing at roughly 20% month-over-month, with performance results averaging over 30% above client expectations [16] Company Strategy and Development Direction - The company aims to manage towards stable revenue sources that can deliver roughly $50 million annually with improving gross margins [9] - There is a focus on hiring sales professionals for the IntentKey business, with plans to hire 10 by June 2020 [14] - The company is exploring the potential sale of the publishing component of its business as resources shift towards IntentKey [11] Management's Comments on Operating Environment and Future Outlook - Management noted that the macro-level trends in media, marketing, and data are favorable, as third-party data providers face increasing pressure [34] - The company expects to burn an average of $100,000 per month starting in January 2020 until Q3 2020, when gross margins from new IntentKey revenue are anticipated to outpace sales costs [32] Other Important Information - The company reported a net income of approximately $800,000 for Q3 2019, positively impacted by other income associated with the termination of a merger [8][29] - Cash and cash equivalents at September 30 were $714,000, with outstanding bank debt of $2.4 million [30] Q&A Session Summary Question: Guidance on IntentKey revenue - Management acknowledged a downward adjustment in guidance for IntentKey revenue due to a client pushing their budget to Q1 2020, but noted potential for higher revenues [36][38] Question: Sales hiring plans - The target number of IntentKey sales representatives was reduced from 14 to 10 based on reassessment of needs to meet 2020 goals [39][40] Question: Connected TV capabilities - The company confirmed that it has integrated Connected TV media inventory into its offerings through the IntentCloud, enhancing targeting capabilities for clients [42][43]