INUV 8-K
Inuvo, Inc. (INUV)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Registrant's telephone number, including area code | ( |
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On November 10, 2023, Inuvo, Inc. issued a press release regarding financial performance for Q3 2023. A copy of the earnings release is being furnished herewith as Exhibit 99.1.
The information in this Current Report on Form8-K under this caption and accompanying exhibits are being furnished under Item 2.02 and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liabilities of such section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933 (the “Securities Act”) or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
The Company made reference to non-GAAP financial information in the press release and a reconciliation of these non-GAAP financial measures to the comparable GAAP financial measures is contained in the press release.
ITEM 7.01 REGULATION FD DISCLOSURE.
On November 10, 2023, the Company held a management conference call to discuss the Company's financial results for Q3 2023, the outlook of the Company and certain other matters.
A copy of the script for the conference call is attached as Exhibit 99.2 and is incorporated by reference into this Current Report on Form8-K.
The information in this Current Report on Form 8-K and accompanying exhibit is being furnished and shall not be deemed to be “filed” for the purposes of Section18 of the Exchange Act, or otherwise subject to the liabilities of such section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits.
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SIGNATURES |
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| INUVO, INC.
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Date: November 10, 2023 | By: | /s/ John B. Pisaris |
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| John B. Pisaris, General Counsel | ||
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EXHIBIT INDEX
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EXHIBIT 99.1
Inuvo Reports Record Quarterly Revenue of $24.6 Million, a
44% Year-Over-Year Increase for the Third Quarter of 2023
Reports positive free cash flow and adjusted EBITDA
Management to host conference call at 11:00 AM ET today, Friday, November 10, 2023
LITTLE ROCK, AR, November 10, 2023 (GLOBE NEWSWIRE) -- Inuvo, Inc. (NYSE American: INUV), a leading provider of marketing technology, powered by artificial intelligence (AI) that serves brands and agencies, today provided a business update, and announced its financial results for the third quarter ended September 30, 2023.
Recent Highlights:
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| · | Added a dozen new clients across non-profit sector, entertainment, oil & gas, consulting and retail industries |
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| · | Released version 2.0 of the AI-powered Audience Discovery Portal |
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| · | Announced that by using its IntentKey solution, advertisers can reach their desired audiences on Safari browser, despite new privacy restrictions |
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| · | Significantly enhanced IntentKey’s generated Insights within the clients dashboard |
Richard Howe, CEO of Inuvo, stated, “I am pleased to report that we achieved a 44% year-over-year increase in revenue to $24.6 million for the third quarter of 2023, the highest quarterly revenue realized in the Company’s history. We also achieved strong sequential revenue growth of 48%, a 117% year-over-year increase in gross profit and delivered positive adjusted EBITDA for the quarter. Notably, for the last five months, we have been generating positive free cash flow.”
Mr. Howe added, “The end of identity and consumer data-oriented ad-targeting across the open web is fast approaching. This transformation will impact every aspect of how marketing has been done for generations. Our proprietary AI-powered IntentKey could not be better positioned given the privacy oriented technological and legislative events occurring within our industry.”
Financial Results for the Three and Nine Months Ended September 30, 2023
Net revenue for the third quarter of 2023 totaled $24.6 million, compared to $17.1 million for the same period last year. Net revenue for the nine months ended September 30, 2023, totaled $53.1 million compared to $58.3 million for the same period last year. The higher revenue for the three-month period ended September 30, 2023 compared to comparable prior year period was primarily attributable to an increased focus on Indirect channels since the start of the year. The change in mix between Direct and Indirect revenue in 2023 is attributed to this change in focus. Indirect channels provide access to multiple end-clients.
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Cost of revenue for the third quarter of 2023 totaled $2.3 million, compared to $6.8 million for the same period last year. Cost of revenue for the nine months ended September 30, 2023, totaled $7.8 million as compared to $24.7 million for the same period last year. The decrease in the cost of revenue for the three months and nine months ended September 30, 2023, as compared to the same periods last year, was related to the decline in focus related to Direct customers.
Gross profit for the three and nine months ended September 30, 2023, totaled $22.3 million and $45.2 million, respectively, as compared to $10.3 million and $33.6 million, respectively, for the same periods last year. Gross profit margin for the three and nine months ended September 30, 2023, was 90.7% and 85.2%, respectively, as compared to 60.3% and 57.6%, respectively, for the same periods last year. The higher gross margin was due to changes in revenue mix, where a greater percentage of the revenue this year was from Indirect customers, which typically have higher gross margins.
Operating expenses for the three months ended September 30, 2023, totaled $23.5 million compared to $14.1 million for the same period last year. Operating expenses for the nine months ended September 30, 2023, totaled $53.2 million compared to $42.3 million for the same period last year.
Net loss for the third quarter of 2023 totaled $1.2 million, or $0.01 per basic and diluted share, as compared to net loss of $3.8 million, or $0.03 per basic and diluted share, for the same period last year. Net loss for the nine months ended September 30, 2023, totaled $8.0 million, or $0.06 per basic and diluted share, as compared to net loss of $9.1 million, or $0.08 per basic and diluted share, for the same period last year.
Adjusted EBITDA [see reconciliation table below] was approximately $32 thousand in the third quarter of 2023, compared to a loss of approximately $2.6 million for the same period last year. Adjusted EBITDA was a loss of approximately $4.4 million for the nine months ended September 30, 2023, compared to a loss of approximately $3.4 million for the same period last year.
Liquidity and Capital Resources:
As of September 30, 2023, Inuvo had $7.0 million in cash and cash equivalents, approximately $1.7 million of working capital, and a working capital facility of $5.0 million with no outstanding balance.
As of November 6, 2023, Inuvo had 137,981,678 common shares issued and outstanding.
Conference Call Details:
Date: Friday, November 10, 2023
Time: 11:00 a.m. Eastern Time
Toll-free Dial-in Number: 1-888-506-0062
International Dial-in Number: +1 973-528-0011
Conference ID: 983191
Webcast Link: HERE
An audio replay of the call will be available through November 24, 2023, and can be accessed by dialing 877-481-4010 for U.S. callers or +1 919-882-2331 for international callers and by entering the access code: 49395.
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About Inuvo
Inuvo®, Inc. (NYSE American: INUV) is a market leader in Artificial Intelligence built for advertising. Its IntentKey AI solution is a first-of-its-kind proprietary and patented technology capable of identifying and actioning to the reasons why consumers are interested in products, services, or brands, not who those consumers are. To learn more, visit www.inuvo.com.
Safe Harbor / Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding Inuvo’s quarter-end financial close process and preparation of financial statements for the quarter that are subject to risks and uncertainties that could cause results to be materially different than expectations. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including, without limitation risks detailed from time to time in our filings with the Securities and Exchange Commission (the “SEC”), and represent our views only as of the date they are made and should not be relied upon as representing our views as of any subsequent date. You are urged to carefully review and consider any cautionary statements and other disclosures, including the statements made under the heading “Risk Factors” in Inuvo, Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 as filed on March 10, 2023, and our other filings with the SEC. Additionally, forward looking statements are subject to certain risks, trends, and uncertainties including the continued impact of Covid-19 on Inuvo’s business and operations. Inuvo cannot provide assurances that the assumptions upon which these forward-looking statements are based will prove to have been correct. Should one of these risks materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those expressed or implied in any forward-looking statements, and investors are cautioned not to place undue reliance on these forward-looking statements, which are current only as of this date. Inuvo does not intend to update or revise any forward-looking statements made herein or any other forward-looking statements as a result of new information, future events or otherwise. Inuvo further expressly disclaims any written or oral statements made by a third party regarding the subject matter of this press release. The information which appears on our websites and our social media platforms is not part of this press release.
Inuvo Company Contact:
Wally Ruiz
Chief Financial Officer
Tel (501) 205-8397
Investor Relations :
David Waldman / Natalya Rudman
Crescendo Communications, LLC
Tel: (212) 671-1020
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(Tables follow)
INUVO, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
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| Three Months Ended |
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| Nine Months Ended |
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| September 30 |
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| September 30 |
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| September 30 |
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| September 30 |
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| 2023 |
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| 2022 |
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| 2023 |
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| 2022 |
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| Net revenue |
| $ | 24,570,588 |
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| $ | 17,072,189 |
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| $ | 53,069,433 |
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| $ | 58,332,859 |
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| Cost of revenue |
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| 2,274,626 |
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| 6,782,047 |
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| 7,833,729 |
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| 24,717,143 |
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| Gross profit |
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| 22,295,962 |
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| 10,290,142 |
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| 45,235,704 |
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| 33,615,716 |
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| Operating expenses |
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| 90.7 | % |
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| 60.3 | % |
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| 85.2 | % |
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| 57.6 | % |
| Marketing costs |
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| 17,625,806 |
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| 8,620,161 |
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| 36,769,972 |
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| 26,778,020 |
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| Compensation |
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| 3,525,943 |
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| 3,237,414 |
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| 10,202,200 |
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| 9,611,011 |
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| Selling, general and administrative |
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| 2,335,295 |
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| 2,206,119 |
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| 6,229,069 |
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| 5,944,027 |
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| Total operating expenses |
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| 23,487,044 |
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| 14,063,694 |
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| 53,201,241 |
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| 42,333,058 |
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| Operating loss |
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| (1,191,082 | ) |
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| (3,773,552 | ) |
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| (7,965,537 | ) |
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| (8,717,342 | ) |
| Interest (expense) income, net |
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| 19,852 |
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| (13,149 | ) |
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| (37,454 | ) |
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| (11,078 | ) |
| Other income (loss) , net |
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| 250 |
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| (23,861 | ) |
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| 14,668 |
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| (401,336 | ) |
| Net loss |
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| (1,170,980 | ) |
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| (3,810,562 | ) |
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| (7,988,323 | ) |
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| (9,129,756 | ) |
| Other comprehensive income |
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| Unrealized loss on marketable securities |
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| - |
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| 36,170 |
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| 84,868 |
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| (186,239 | ) |
| Comprehensive loss |
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| (1,170,980 | ) |
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| (3,774,392 | ) |
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| (7,903,455 | ) |
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| (9,315,995 | ) |
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| Earnings per share, basic and diluted |
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| Net loss income |
| ($0.01) |
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| ($0.03) |
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| ($0.06) |
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| ($0.08) |
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| Weighted average shares outstanding |
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| Basic |
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| 127,381,051 |
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| 119,995,367 |
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| 128,793,522 |
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| 118,838,258 |
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| Diluted |
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| 127,381,051 |
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| 119,995,367 |
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| 128,793,522 |
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| 118,838,258 |
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INUVO, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
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| September 30 |
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| December 31 |
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| 2023 |
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| 2022 |
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| Assets |
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| Cash and cash equivalent |
| $ | 6,978,481 |
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| $ | 2,931,415 |
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| Marketable securities-short term |
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| - |
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| 1,529,464 |
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| Accounts receivable, net |
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| 10,159,727 |
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| 11,119,892 |
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| Prepaid expenses and other current assets |
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| 959,037 |
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| 798,977 |
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| Total current assets |
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| 18,097,245 |
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| 16,379,748 |
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| Property and equipment, net |
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| 1,682,427 |
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| 1,668,972 |
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| Goodwill |
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| 9,853,342 |
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| 9,853,342 |
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| Intangible assets, net of accumulated amortization |
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| 4,910,916 |
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| 5,649,291 |
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| Other assets |
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| 1,631,724 |
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| 2,005,957 |
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| Total assets |
| $ | 36,175,654 |
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| $ | 35,557,310 |
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| Liabilities and Stockholders’ Equity |
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| Current liabilities |
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| Accounts payable |
| $ | 7,766,466 |
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| $ | 8,044,802 |
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| Accrued expenses and other current liabilities |
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| 8,673,984 |
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| 5,550,984 |
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| Total current liabilities |
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| 16,440,450 |
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| 13,595,786 |
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| Long-term liabilities |
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| 866,526 |
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| 212,208 |
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| Total stockholders’ equity |
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| 18,868,678 |
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| 21,749,316 |
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| Total liabilities and stockholders’ equity |
| $ | 36,175,654 |
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| $ | 35,557,310 |
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RECONCILIATION OF LOSS FROM CONTINUING OPERATIONS BEFORE TAXES TO ADJUSTED EBITDA
(unaudited)
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| Three Months Ended |
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| Nine Months Ended |
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| September 30 |
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| September 30 |
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| September 30 |
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| September 30 |
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| 2023 |
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| 2022 |
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| 2023 |
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| 2022 |
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| Net loss |
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| (1,170,980 | ) |
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| (3,810,562 | ) |
| $ | (7,988,323 | ) |
| $ | (9,129,756 | ) |
| Interest (Income) Expense |
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| (19,852 | ) |
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| 13,149 |
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| 37,454 |
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| 11,078 |
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| Depreciation |
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| 420,808 |
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| 394,942 |
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| 1,245,762 |
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| 1,124,674 |
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| Amortization |
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| 265,904 |
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| 270,742 |
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| 816,167 |
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| 898,484 |
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| EBITDA |
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| (504,120 | ) |
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| (3,131,729 | ) |
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| (5,888,940 | ) |
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| (7,095,520 | ) |
| Stock-based compensation |
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| 536,538 |
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| 535,458 |
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| 1,471,683 |
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| 1,890,991 |
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| Non recurring items: |
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| Expense of fraudulent media |
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| 1,367,800 |
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| Unrealized loss on marketable securities |
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| 23,861 |
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| 401,336 |
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| Adjusted EBITDA |
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| 32,418 |
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| (2,572,410 | ) |
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| (4,417,257 | ) |
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| (3,435,393 | ) |
Reconciliation of Operating Loss to EBITDA and Adjusted EBITDA
We present EBITDA and Adjusted EBITDA as a supplemental measure of our performance. We defined EBITDA as Net loss plus (i) interest expense, (ii) depreciation, and (iii) amortization. We further define Adjusted EBITDA as EBITDA plus (iv) stock-based compensation and (v) certain identified expenses that are not expected to recur or be representative of future ongoing operation of the business. These adjustments are itemized above. You are encouraged to evaluate these adjustments and the reasons we consider them appropriate for supplemental analysis. In evaluating EBITDA and Adjusted EBITDA, you should be aware that in the future we may incur expenses that are the same or similar to some of the adjustments in the presentation. Our presentation of EBITDA and Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.
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EXHIBIT 99.2
| Inuvo, Inc. Third Quarter 2023 November 10, 2023 |
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Operator Comments:
Good afternoon, and welcome to INUVO’s 2023 Third Quarter Conference Call. Today’s conference is being recorded. Ms. Natalya Rudman of Crescendo Communications, please go ahead.
Natalya Rudman (Investor Relations) Comments:
Thank you, operator, and good morning.
I’d like to thank everyone for joining us today for the INUVO third quarter 2023 shareholder update call. Today, INUVO’s Chief Executive Officer Richard Howe and Chief Financial Officer Wally Ruiz will be your presenters on the call.
We would also like to remind our shareholders that as today is a federal holiday, we plan on filing our 10-Q with the Securities and Exchange Commission on Monday.
Before we begin, I’m going to review the Company’s Safe Harbor statement. The statements in this conference call that are not descriptions of historical facts are forward-looking statements relating to future events and, as such, all forward-looking statements are made pursuant to the Securities Litigation Reform Act of 1995.
These forward-looking statements are subject to risks and uncertainties and actual results may differ materially. When used in this call, the words anticipate, could, enable, estimate, intend, expect, believe, potential, will, should, project, and similar expressions as they relate to INUVO, Inc., are, as such, a forward-looking statement.
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| Inuvo, Inc. Third Quarter 2023 November 10, 2023 |
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Investors are cautioned that all forward-looking statements involve risks and uncertainties which may cause actual results to differ from those anticipated by INUVO at this time. In addition, other risks are more fully described in INUVO’s public filings with the US Securities and Exchange Commission, which can be reviewed at www.sec.gov.
The Company makes no commitment to disclose any revisions to forward-looking statements, or any facts, events, or circumstances after the date hereof that bear upon forward-looking statements.
In addition, today’s discussion will include references to non-GAAP measures. The Company believes that such information provides an additional measurement and consistent historical comparison of its performance. A reconciliation of the non-GAAP measures to the most directly comparable GAAP measures is available in today’s news release on our website.
With that, I’ll now turn the call over to CEO Richard Howe.
Richard Howe (CEO) Comments:
Thank you, Natalya and thanks, everyone for joining us today.
We are pleased to report that for the quarter ended September 30, 2023 Inuvo delivered the highest quarterly revenue in its history, growing 44% year-over-year and 48% sequentially to $24.6 million as compared to $17.1 million and $16.7 million for the prior periods, respectively.
We delivered roughly $32 thousand dollars of Adjusted EBITDA in the quarter following a $1.8 million dollar Adjusted EBITDA loss in the second quarter of 2023. On a cash flow basis, the company has been generating free cashflow for the last five months, averaging roughly $800 thousand per month or approximately 11% of average monthly revenue for that period. As we have leaned into our indirect channels in 2023, our gross margins have consequently increased to 91% in the third quarter of 2023.
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| Inuvo, Inc. Third Quarter 2023 November 10, 2023 |
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Our cash and cash equivalents position remains strong, measuring roughly $7 million at the end of September. Additionally, at the end of the quarter we had no debt and a $5 million unused borrowing facility. During the quarter, we resolved a dispute with a large advertising platform that was first disclosed in the second quarter of 2022. Wally will talk more about the quarter’s financial results in his section of the call.
Let me now turn to some of the operational highlights. As mentioned earlier and on previous calls this year, we leaned into our indirect channels at the beginning of 2023. As we have also described on previous calls, an indirect channel is one where we gain access to advertisers through that advertiser’s platform and/or its services providers.
We continue to see strong demand through this go-to-market channel as evidenced in the revenue mix change year-over-year between indirect and direct as disclosed within our financial statements. We have a number of potentially significant initiatives underway with a few of the larger clients within this indirect channel that we believe will continue to contribute to strong revenue growth into Q4 and 2024.
Our sales team was very active in the third quarter, adding roughly a dozen new advertisers to the roster across industries that include the non-profit sector, entertainment, oil & gas, consulting and retail. The sales team has narrowed its focus to the empowerment of mid-sized agencies through the incorporation of our technology and services. This strategy allows these agencies to better serve their clients with improved performance and differentiation while mitigating the current and future privacy risks associated with using consumer data. We currently have 21 total associates within our go-to-market team.
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| Inuvo, Inc. Third Quarter 2023 November 10, 2023 |
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Our awareness & marketing outreach activities have continued to increase throughout 2023 driven principally by our attendance at industry conferences and the increase in media coverage related to our proprietary artificial intelligence ad-targeting technology.
More specifically, we have seen an uptick in media coverage since March having appeared in various publications roughly 20 times. This has included well respected industry journals like Advertising Week, DigiDay and Media Post.
In the last four months, we have also announced enhancements to our Audience Discovery Portal, an enrichment to our Safari targeting capabilities and a significant augmentation of our AI generated client Dashboards.
Each one of these technological advancements represent never before delivered features and/or capabilities by any AdTech company and are the direct result of our proprietary large language, generative artificial intelligence.
At the end of Q2 we reported that we had delivered roughly 80 different campaigns in the year. As of the end of Q3, we are projecting to have delivered roughly 100 campaigns by year-end. Performance against client KPI’s remains strong across those campaigns. As was the case in Q2, we also had 2 former clients return in the third quarter.
As we have continued to message for the better part of two years, our industry is in the midst of a transformation that will impact every single aspect of how marketing has been done for generations. This transformation at its foundation is all about how our industry uses consumer identity and data for ad-targeting. This change mostly impacts the non-walled garden open web.
Apple’s latest IOS release in September included, yet again, changes that will thwart conventional identity-based advertising technology. Google has already stated they will begin disabling 3rd party cookies in Q1 of 2024 and have recently also stated they are working on IP blocking technology which they plan to release within Chrome in February of 2024. The IntentKey AI technology we have developed could not be better positioned given this series of significant technological and legislative events occurring simultaneously.
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| Inuvo, Inc. Third Quarter 2023 November 10, 2023 |
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As a solution for marketers who want to target the open web outside the walled gardens, we continue to have the best future proof offering available within the market. Our AI locates and targets audiences for any product, service or brand without identity or consumer data, it predicts just-in-time which channels and campaigns will perform so media budgets can be adjusted in real-time, it generates detailed insights that highlight the reasons why audiences are actually interested, it generates demographical information and it informs cable television buying in ways never before possible.
I would now like to turn the call over to Wally for a more detailed assessment of our financial performance within the quarter.
Ruiz (CFO) Comments:
Thank you, Rich, and good morning everyone. I will recap our third quarter financial results.
As Rich mentioned, Inuvo reported revenue of $24.6 million for the quarter ended September 30, 2023; a 44% increase, or $7.5 million higher than the $17.1 million reported in the third quarter of the prior year; the highest quarterly revenue ever achieved by the company.
As Rich also mentioned, this year we changed our go-to-market focus to pursue indirect channels. During the year, we launched new products and enhancements directed at these Indirect Customers, and as a result, the revenue mix has changed. This year’s third quarter revenue was 88% from Indirect Customers compared to 55% last year.
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| Inuvo, Inc. Third Quarter 2023 November 10, 2023 |
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An agency customer may have multiple advertisers we can serve. Our sales team, now composed of ten team members, has contracted with approximately 40 new customers, both direct and indirect since the start of the year. We believe this momentum will give us a strong head start into next year. We expect revenue from our Indirect Customers to continue to grow and this revenue mix to persist for the remainder of the year.
Cost of revenue was $2.3 million in the third quarter of 2023 compared to $6.8 million in the same quarter last year. Cost of revenue is predominately payments to advertising platforms that provide access to supplies of advertising inventory. These advertisements are placed on behalf of our clients.
Gross profit for the third quarter ended September 30, 2023, totaled $22.3 million as compared to $10.3 million for the same period last year. Gross profit margin for the third quarter this year was 91% as compared to 60% for the same quarter last year. The change in revenue mix has had a positive impact on gross margins, where Indirect Customers generally have higher margins. We expect Inuvo’s gross margins for the remainder of the year to be in line with the results of this quarter.
Operating expenses were $23.5 million in the third quarter of 2023 compared to $14.1 million in the prior year, an increase of $9.4 million which reflects the higher marketing expenses associated with the indirect channel. The largest component of our operating expenses is marketing costs. Marketing costs were $17.6 million in the third quarter of this year compared to $8.6 million in the same quarter last year. Going forward, we expect marketing costs as a percentage of revenue to continue at a relatively similar pace.
During the quarter we settled an outstanding dispute with a large advertising network that was first reported in June of last year. We are satisfied with the settlement, and it has been recorded as an offset to marketing expenses.
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| Inuvo, Inc. Third Quarter 2023 November 10, 2023 |
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Compensation expense was $3.5 million in the third quarter this year compared to $3.2 million in the prior year due to higher employee salary cost, commissions and accrued incentive expense. Our full-time and part-time employment was 86 on September 30, 2023, compared to 92 on September 30, 2022.
General and administrative expense increased by $129 thousand in the third quarter this year, compared to the prior year, due to higher doubtful account allowance, depreciation expense and IT costs, partially offset by lower professional fees and travel & entertainment expense.
Net financing costs were $20 thousand income in the third quarter of 2023 compared to a $37 thousand expense in the same quarter last year. This year’s income is due to a decrease in utilization of our line of credit and an increase in our bank interest income.
We reported a net loss of $1.2 million or 1¢ per basic share compared to a $3.8 million net loss or 3¢ per basic share in the same quarter last year.
We had a positive EBITDA adjusted for stock-based compensation expense, and as Rich mentioned we have had positive monthly free cash flow since May. We define free cash flow as net cash used in operating activities less capitalized costs.
On September 30, 2023, we had cash and cash equivalents of $7 million, and net working capital of $1.7 million. In addition, we have a $5 million working capital line of credit which had no outstanding balance.
We maintain a simple capital structure with 138 million common shares outstanding, 6.9 million employee restricted stock units outstanding through an equity incentive plan and 107 thousand of out of the money warrants.
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| Inuvo, Inc. Third Quarter 2023 November 10, 2023 |
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Now, I’d like to turn the call back to Rich for closing remarks.
Richard Howe (CEO) Closing Comments:
Thanks, Wally. We had exceptionally strong year-over-year and sequential growth for the quarter, up 44% and 48% respectively. At $24.6 million of revenue for the quarter, we are now approaching the revenue run rate at which generating free cash flow becomes more typical.
Through the first nine months of the year, we have continued to make significant advancements both in the technology and the services that will be required to continue scaling our company. We also have numerous initiatives underway that provide us with a positive outlook for the future of our business.
We continue to invest in sales and awareness programs so we can capitalize on the demand associated with a changing market driven by privacy concerns from government, technology, and consumers.
The growth rate in the third quarter was significant and consequently our client support organizations are first and foremost focused on client satisfaction. As a result, we are forecasting to be up between 30-40% year-over-year in the fourth quarter of 2023.
I will now turn the call over to the operator for questions. Operator?
Richard Howe Final Comments:
I would like to thank everyone who joined us on today’s call. We appreciate your continued interest in our company.
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