Inuvo(US:INUV)2019-08-14 23:20Financial Data and Key Metrics Changes - For Q2 2019, the company reported revenue of $14 million, down from $15.5 million in Q1 2019 and $19 million in Q2 2018 [7] - For the first half of 2019, revenue was $29.5 million, compared to $39.5 million in the same period of 2018 [34] - Gross margins for Q2 2019 were 59.6%, a decrease from 63.2% in Q2 2018 [37] - Adjusted EBITDA loss was approximately $850,000 in Q2 2019 [17] Business Line Data and Key Metrics Changes - The IntentKey revenue for Q2 2019 was $2 million, with the media component generating over $900,000 in June alone, up from approximately $95,000 in January [18][61] - The ValidClick business experienced a revenue decline due to slow adaptation to pricing fluctuations and reduced emphasis on the supply side, resulting in a revenue decrease of $963,000 in Q2 2019 compared to the same quarter last year [36] Market Data and Key Metrics Changes - The IntentKey has seen a greater than 200% increase in the number of RFPs it is competing for year-over-year through July 2019, with a win rate increasing from 38% in 2018 to over 55% in 2019 [24] - The largest client, a major insurance provider, is spending an average of $150,000 per month with the IntentKey, with $400,000 spent in June [26] Company Strategy and Development Direction - The company is focusing resources and investments towards scaling the IntentKey while ensuring a stable ValidClick business [51] - The IntentKey is viewed as a unique and powerful data product for the 21st century, with plans to challenge existing marketing information providers [50] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that the Q2 results are not indicative of the larger opportunity ahead, citing the impact of the terminated merger and product defocusing [8][9] - The company expects the IntentKey business to contribute positively to cash flow in 2020 and be a major contributor thereafter [30] Other Important Information - The company raised $4.4 million in July 2019 to fund working capital and IntentKey growth, primarily through hiring additional sales professionals [32] - The balance sheet at June 30, 2019, showed cash and cash equivalents of $995,000, with outstanding bank debt of $2.9 million and notes of $2.5 million [42] Q&A Session Summary Question: Has anyone new been hired in the sales force? - No new hires have occurred yet, but plans include hiring one in August and a total of roughly 14 salespeople by mid-2020 [53] Question: Can progress on IntentKey leverage ValidClick? - The focus will be on IntentKey due to its higher growth and margin potential, rather than leveraging ValidClick [54] Question: What was the IntentKey contribution in the first quarter? - The IntentKey contributed $2 million in Q2, with a materially lower contribution in Q1 [61] Question: What is the expected cash position post-capital raise? - Pro forma cash is approximately $2.5 million, with roughly $5 million in debt [76]