8-K
Inuvo, Inc. (INUV)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) November 11, 2021
| INUVO, INC. | ||
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| (Exact name of registrant as specified in its charter) | ||
| Nevada | 001-32442 | 87-0450450 |
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| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
| 500 President Clinton Ave., Ste. 300, Little Rock, AR | 72201 | |
| --- | --- | |
| (Address of principal executive offices) | (Zip Code) | |
| Registrant's telephone number, including area code | (501) 205-8508 | |
| --- | --- | |
| (Former name or former address, if changed since last report) | ||
| --- |
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):
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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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 11, 2021, Inuvo, Inc. issued a press release regarding financial performance for Q3 2021 and held a management conference call to discuss the results and the outlook of the Company. 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 11, 2021, the Company held a management conference call to discuss the Company's financial results for Q3 2021, 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.
Exhibit No. Description
99.1 Press Release for Q3 2021 financial results.
99.2 Conference Call Script.
| SIGNATURES |
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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 11, 2021 | By: | /s/ John B. Pisaris |
| John B. Pisaris, General Counsel |
EXHIBIT INDEX
99.1 Press Release for Q3 2021 financial results
Document
Inuvo Announces Revenue Increase of 83% Year-Over-Year for the Third Quarter Ending September 30, 2021
LITTLE ROCK, AR., November 11, 2021 (GLOBE NEWSWIRE) -- Inuvo, Inc. (NYSE American: INUV), a leading provider of marketing technology, powered by artificial intelligence (AI) that serves brands and agencies, today announced its financial results for the third quarter and nine-month periods ending September 30, 2021.
Richard Howe, CEO of Inuvo, stated, “Revenue for the third quarter grew 83% year-over-year and 33% sequentially driven by significant growth in both platforms. We signed in excess of $10 million worth of IntentKey orders within the quarter that we expect to deliver over a nine-month period beginning in the fourth quarter and as we had been messaging throughout the year, we achieved a positive Adjusted EBITDA in September. We expect to continue growing throughout the last quarter of 2021.”
Financial Results for the Third Quarter and Nine Month Periods Ended September 30, 2021:
Inuvo experienced higher year-over-year revenue for the three and nine months ended September 30, 2021 as compared to the same periods in 2020. Net revenue for the third quarter and first nine months ended September 30, 2021 totaled $16.8 million and $40.1 million, respectively, an increase of 82.8% and 26.3% as compared to $9.2 million and $31.7 million for the same period the prior year.
Revenue from both platforms, ValidClick and IntentKey exceeded the prior year. IntentKey revenue for the three months ended September 30, 2021 exceeded the prior year quarter by 71%. ValidClick revenue exceeded the revenue in the third quarter of last year by 88%.
Revenue increased sequentially 33% for the third quarter of 2021 as compared to the second quarter of 2021. IntentKey revenue increased 75% sequentially.
Cost of revenue for the third quarter and first nine months ended September 30, 2021, totaled $3.8 million and $7.5 million as compared to $1.6 million and $6.2 million during the same periods the year prior. The increase in the cost of revenue for the three and nine months ended September 30, 2021 as compared to the same quarter in 2020 was related to the growth within both platforms.
Gross profit for the third quarter and first nine months ended September 30, 2021, totaled $13.1 million and $32.6 million as compared to $7.6 million and $25.6 million during the same periods the year prior. Gross profit margin for the third quarter of 2021 was 77.7% as compared to 82.1% for the same period the year prior. Gross profit margin for the first nine months ending September 30, 2021 was 81.4% as compared to 80.6% for the same period the year prior.
The net loss for the third quarter of 2021 totaled $1.8 million or $0.02 per basic and diluted share as compared to the net loss of $2.4 million or $0.03 per basic and diluted share for the same period the year prior. The net loss for the first nine months period of 2021 totaled $6.4 million or $0.05 per basic and diluted share as compared to the net loss of $6.6 million or $0.09 per basic and diluted share for the same period the year prior.
Non-cash based expenses totaled roughly $1.5 million and $4.2 million for the three and nine month periods respectively.
Adjusted EBITDA was a loss of $338 thousand in the third quarter of 2021. Adjusted EBITDA was positive in the month of September.
Liquidity and Capital Resources:
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On September 30, 2021, Inuvo had $14.6 million in cash, cash equivalents and marketable securities, $13.0 million of working capital, an unused working capital facility of $5 million and no debt.
As of November 11, 2021, Inuvo had 118,747,447 common shares issued and outstanding.
Conference Call Details: Date: Thursday, November 11, 2021 Time: 4:15 p.m. Eastern Time Toll-free Dial-in Number: 1-866-548-4713 International Dial-in Number: 1-323-794-2093 Conference ID: 2532390 Participant Link: https://viavid.webcasts.com/starthere.jsp?ei=1506822&tp_key=604c48f45d
A telephone replay will be available through Thursday, November 25, 2021. To access the replay, please dial 1-844-512-2921 (domestic) or 1-412-317-6671 (international). At the system prompt, please enter the code 2532390 followed by the # sign. You will then be prompted for your name, company, and phone number. Playback will then automatically begin.
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. 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, 2020 as filed on February 11, 2021, our Quarterly Reports on Form 10-Q, 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 that 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
wallace.ruiz@inuvo.com
Investor Relations:
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KCSA Strategic Communications
Valter Pinto, Managing Director
Tel (212) 896-1254
Valter@KCSA.com
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| INUVO, INC. | ||||
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| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
| Three Months Ended | Nine Months Ended | |||
| September 30 | September 30 | September 30 | September 30 | |
| 2021 | 2020 | 2021 | 2020 | |
| Net revenue | $ 16,841,035 | $ 9,214,350 | $40,094,427 | $31,737,520 |
| Cost of revenue | 3,757,938 | 1,645,392 | 7,466,017 | 6,154,921 |
| Gross profit | 13,083,097 | 7,568,958 | 32,628,410 | 25,582,599 |
| Operating expenses | ||||
| Marketing costs | 10,163,006 | 5,668,707 | 25,681,930 | 19,148,925 |
| Compensation | 2,840,149 | 2,462,693 | 8,458,233 | 6,925,239 |
| Selling, general and administrative | 1,824,869 | 1,870,258 | 5,226,737 | 5,710,221 |
| Total operating expenses | 14,828,024 | 10,001,658 | 39,366,900 | 31,784,385 |
| Operating loss | (1,744,927) | (2,432,700) | (6,738,490) | (6,201,786) |
| Interest expense, net | (6,261) | (26,143) | (36,641) | (251,335) |
| Other income (expense) , net | (79,080) | 53,763 | 415,468 | (136,483) |
| Net loss before taxes | (1,830,268) | (2,405,080) | (6,359,663) | (6,589,604) |
| Net loss | $ (1,830,268) | $ (2,405,080) | $(6,359,663) | $(6,589,604) |
| Earnings per share, basic and diluted | ||||
| Net loss income | (0.02) | (0.03) | (0.05) | (0.09) |
| Weighted average shares outstanding | ||||
| Basic | 116,645,509 | 92,110,881 | 117,230,419 | 70,652,630 |
| Diluted | 116,645,509 | 92,110,881 | 117,230,419 | 70,652,630 |
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| INUVO, INC. | ||
|---|---|---|
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||
| September 30 | December 31, | |
| 2021 | 2020 | |
| Assets | ||
| Cash and cash equivalent | $ 11,702,464 | $ 7,890,665 |
| Marketable securities | 2,925,785 | - |
| Accounts receivable, net | 8,920,881 | 6,227,610 |
| Prepaid expenses and other current assets | 496,250 | 413,435 |
| Total current assets | 24,045,380 | 14,531,710 |
| Property and equipment, net | 1,422,422 | 1,187,061 |
| Intangible assets, net | 7,186,961 | 8,586,089 |
| Goodwill | 9,853,342 | 9,853,342 |
| Other assets | 2,529,530 | 1,023,369 |
| Total other assets | 19,569,833 | 19,462,800 |
| Total assets | $ 45,037,635 | $ 35,181,571 |
| Liabilities and Stockholders’ Equity | ||
| Accounts payable | $ 4,680,629 | $ 4,048,260 |
| Accrued expenses and other current liabilities | 6,344,304 | 4,680,912 |
| Total current liabilities | 11,024,933 | 8,729,172 |
| Deferred tax liability | 107,000 | 107,000 |
| Other long-term liabilities | 536,640 | 1,056,285 |
| Total long-term liabilities | 643,640 | 1,163,285 |
| Total stockholders' equity | 33,369,062 | 25,289,114 |
| Total liabilities and stockholders' equity | $ 45,037,635 | $ 35,181,571 |
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| RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA | ||||
|---|---|---|---|---|
| (unaudited) | ||||
| Three Months Ended | Nine Months Ended | |||
| September 30 | September 30 | September 30 | September 30 | |
| 2021 | 2020 | 2021 | 2020 | |
| Net loss | $(1,830,268) | $(2,405,080) | $(6,359,663) | $(6,589,604) |
| Interest expense, net | 6,261 | 26,143 | 36,641 | 251,335 |
| Depreciation | 325,112 | 335,769 | 944,746 | 1,053,802 |
| Amortization | 547,117 | 541,630 | 1,636,551 | 1,690,228 |
| EBITDA | (951,778) | (1,501,538) | (3,741,725) | (3,593,239) |
| Stock-based compensation | 613,544 | 258,430 | 1,566,016 | 660,615 |
| Non-recurring items: | ||||
| Adjustment to derivative liability accounts | - | - | - | 168,364 |
| Adjusted EBITDA | $(338,234) | $(1,243,108) | $(2,175,709) | $(2,764,260) |
Reconciliation of Net 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, net, (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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Document
| Inuvo, Inc.<br><br>Third Quarter 2021<br><br>November 11, 2021 |
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Operator Comments:
Good afternoon, and welcome to the INUVO’s 2021 Third Quarter Conference Call. Today’s conference is being recorded. Mr. Valter Pinto of KCSA Strategic Communications. Please go ahead, sir.
Valter Pinto (Investor Relations) Comments:
Thank you, operator, and good afternoon.
I’d like to thank everyone for joining us today for the INUVO third quarter 2021 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 we anticipate filing our 10Q with the Securities and Exchange Commission tomorrow morning.
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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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.
With that, I’ll now turn the call over to CEO Richard Howe.
Richard Howe (CEO) Comments:
Thank you Valter and thanks everyone for joining us today.
We had a very strong third quarter where for the three months ended September 30, 2021, we delivered $16.8 million in revenue, which was up 83% year-over-year and up 33% sequentially.
As we have messaged throughout the year, we expected to be back to positive Adjusted EBITDA in the back half of 2021. I’m pleased to report that Adjusted EBITDA in the month of September was positive. For the third quarter, it was a loss of $338,000.
The balance sheet remains strong with no debt, and roughly $14.6 million in cash and marketable securities, along with an unused $5 million dollar financing facility. The company is not currently in need of additional capital.
Of the $16.8 million we delivered, the ValidClick platform contributed approximately $11.7 million, which was up year-over-year by 88% and up 21% sequentially. The platforms growth rate has been a steady 8% compounded monthly through September 2021 off the Covid related low in May of 2020.
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ValidClick’s services include multi-channel media buying in support of our largest clients. The product line has continued to enhance these competencies having recently added Twitter to the stable of social media relationships.
Much of the technological enhancements within ValidClick revolve around automating the numerous traffic sources under management and necessary to ensure the best quality consumers are delivered to our clients at the lowest cost.
This automation continues to have a positive impact, most notably, on the time resources spent manually adjusting campaigns. We’ve seen a 50% reduction in this time spent optimizing campaigns because of these continuous enhancements to the platform.
Additionally, we’ve continued to enhance our publishing technologies within ValidClick. Within the quarter, we were able to dynamically insert related articles into content at a time when our systems detect a user’s engagement is declining. This feature allows us to reignite engagement at the time of declining interest and as a result improve the opportunities to further monetize that engagement.
Further, in combination with our largest ValidClick client, we began in-market testing of an innovative advertising unit that leverages the search intent of users on pages so it can customize content and advertising in a manner that improves a page’s overall yield. While this program is in the initial test phase, it is showing positive results with significant upside opportunity and, consequentially, we see this as a significant growth driver in 2022.
Most notably in the quarter, and for the first time, we leveraged the services of ValidClick in combination with the services of the IntentKey to win larger direct clients, where we now manage the entire multi-channel online advertising spend across channels that include social, search, connected TV, video, display, streaming audio, and linear TV.
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This is a significant advancement of our strategy to sell directly to clients where the competitive differentiation of our Artificial Intelligence, combined with this multi-channel capability, puts us in a position to win more and larger deals. This quarter’s wins, which I will talk more about later, gives us confidence in this strategy.
One of the advantages of this approach is our ability to incorporate our AI into channels such as social and search where we are confident that we can outperform existing performance within those platforms through this integration. We started executing on this capability in the third quarter as part of the larger media budgets we are now managing.
Of the $16.8 million delivered, the IntentKey platform contributed approximately $5.1 million, which was up year-over-year by 71% and up 75% sequentially. The platform’s growth rate has been and continues to be strong based on the product’s core value proposition as a replacement for third-party consumer data, which the industry uses today universally.
In the third quarter, we signed more than $10 million worth of orders across a collection of businesses, both direct to client and through agencies. We anticipate that these orders will deliver over a nine-month period.
Our sales outreach continues to improve, which has resulted in 31% more RFPs submitted compared to this same period last year. In addition, the dollar volume of RFPs submitted has increased by 75%. This reflects our strategy to go after larger clients and to sell further up the chain, which is now making its way to our proposal process. It’s worth noting that that not every deal we go after requires an RFP.
We’ve signed a diverse range of clients over the last 3 months. These include companies within insurance, online gaming, education, a number of states covid initiatives, real estate,
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eCommerce, investing, winemaking, urgent care, DNA screening, pet technologies, gym memberships, and personal lending to name a few.
Across the client base, we outperformed goals by 40% on average within the quarter. We ran 95 campaigns within the quarter, which is up 13% sequentially. Twenty-five of these campaigns were new and 70 were renewals of existing business.
We continue to sign clients who understand that the future of online advertising is one where consumer data is no longer used as part of a company’s prospecting activities. The IntentKey, as you are aware, uses no consumer data as a part of its artificial intelligence.
Rather than trying to identify WHO the people are that match a product, service, or brand interest, it determines WHY that interest exists to begin with. This intelligence is considerably more valuable and strategic to the clients adopting us as their go-to-market technology for this privacy-first future.
At its core, the cookie is in effect the mechanism through which consumer data is onboarded for use within digital advertising. We believe strongly that the era of WHO based marketing that uses this consumer data is coming to an end and believe we are well positioned to win market share as companies and agencies accelerate their acceptance of this new reality. Apple has already adopted this new future, others will follow.
We are often asked to prove that our cookieless solution works as part of our sales cycle. In one such example within the quarter, we ran two large cookieless tests for a client where we achieved a 50% lower cost for the same return.
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This not only means we can in fact deliver advertising effectively in a privacy-first future, but we can do so at a level of performance that already exceeds the best of the existing WHO based methods currently in use.
As mentioned in my comments related to ValidClick, we are now managing cross-channel advertising activity for a handful of clients. As a result, we are also building out reporting and performance tools required to support these campaigns. These new clients are preparing us for a revised sales strategy in 2022 where we sell a managed service directly to clients and our SaaS solution to agencies.
Across the company we are hiring to ensure delivery of existing and future business with a continued focus on sales, account management, and campaign operations, along with select positions in development and marketing. We currently have 77 full and part time employees.
As we enter 2022, we are increasing our brand building activities in support of our efforts to increase the awareness of our company and its solutions.
We plan to complement this awareness with a direct to CMO marketing plan that uses the IntentKey to identify and message to those CMOs to create a funnel of qualified leads using the very technology we are selling.
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:
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Thank you, Rich, and good afternoon. I will recap the financial results of our third quarter of 2021.
As Rich mentioned, Inuvo reported revenue of $16.8 million for the quarter ended September 30, 2021; this compares to $9.2 million reported in the third quarter of last year.
Both platforms, ValidClick and IntentKey, exceeded the prior year. ValidClick revenue
exceeded the revenue in the third quarter of last year by 88% and the IntentKey revenue for the three months ended September 30, 2021 exceeded the prior year quarter by approximately 71% primarily due to the acquisition of new customers.
IntentKey revenue represented 30% of total revenue in this year’s quarter compared to 32% in the same quarter last year. This year’s quarter is a bit of an anomaly in that ValidClick, being the most affected by the COVID-19 pandemic last year, came roaring back starting in the second quarter this year. Due to the strong growth we are seeing in the IntentKey, in the fourth quarter we expect IntentKey revenue to continue to grow as a percent of total revenue.
Inuvo Gross Margins decreased in the third quarter to 78% compared to 82% in the same quarter last year. The IntentKey gross margins were 36% in the third quarter compared to 49% in the same quarter last year. Our new customers are requiring us to deliver ads in a multichannel environment. The different channels have different gross margins. Though we attempt to optimize gross margins, we want to deliver to customers the multichannel campaigns they want. Going forward, IntentKey gross margins may increase due to the increased use of the SaaS version of IntentKey where margins are expected to be significantly higher as a result of the mostly fixed costs associated with operating just the AI Modeling and Decision components of the platform.
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The majority of ValidClick’ s costs are traffic acquisition related and not reported as a cost of revenue, rather as a marketing expense. ValidClick’s gross margins were 96% in the third quarter compared to 98% in the same quarter last year. This also is due to the multichannel environment we are now operating within. As Rich mentioned, we have started to integrate the ValidClick services with IntentKey customers. We expect ValidClick gross margins to stabilize.
Operating expenses were $14.8 million in the third quarter of 2021 compared to $10 million the prior year, an increase of $4.8 million.
The largest component of operating expense is marketing costs. Marketing costs are predominantly traffic acquisition costs associated with ValidClick. It is the largest expense associated with the ValidClick platform. Marketing costs were $10.2 million in the third quarter this year compared to $5.7 million in the same quarter last year. The $4.5 million higher expense this year compared to last year has mostly to do with the reduction of traffic acquisition activities last year in response to the unusually low ValidClick revenue last year associated with the COVID-19 pandemic.
Compensation expense was $2.8 million in the third quarter this year compared to $2.5 million in the prior year primarily due to higher stock-based compensation expense and to a lesser degree, higher employee salary cost. Our full-time employment was 73 on September 30, 2021, compared to 66 on September 30, 2020.
The majority of the increase in headcount occurred within sales, sales support and account management for the IntentKey. We also hired traffic acquisition professionals within ValidClick to support a strategy to bring that function in-house.
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Selling, general and administrative expense decreased $45 thousand in the third quarter this year compared to the prior year due to lower professional fees and IT costs where we consolidated our computing facilities.
Net interest expense was $6 thousand in the third quarter of 2021 compared to $26 thousand expense in the same quarter last year. This year’s expense is associated with the leasing of IT equipment and last year’s expense was primarily related to the outstanding debt on our line of credit.
We had other expense of $79 thousand in the third quarter of this year due to an unrealized loss from marketable securities. The other gain of $54 thousand from the third quarter last year was associated with the recognition of deferred revenue from a contract to license ValidClick technology.
We reported net loss of $1.8 million or 2¢ per basic share compared to a $2.4 million net loss or 3¢ per basic share in the same quarter last year. Non-cash based expenses totaled roughly $1.5 million in the quarter.
The adjusted EBITDA for the quarter ended September 30, 2021, was a $338 thousand loss compared to a loss of $1.2 million last year. As mentioned, we had a positive adjusted EBITDA in the month of September. We believe we should be Adjusted EBITDA positive for the fourth quarter.
On September 30, 2021, we had cash and cash equivalents and marketable securities of $14.6 million, and a net working capital of $13 million. In addition, we have a $5 million working capital line of credit which currently has no outstanding balance. We maintain a
| Inuvo, Inc.<br><br>Third Quarter 2021<br><br>November 11, 2021 |
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simple cap structure with only common stock, employee restricted stock units through an equity incentive plan and 300,000 warrants to purchase common stock.
Now, I’d like to turn the call back too Rich for closing remarks.
Richard Howe (CEO) Closing Comments:
Thanks, Wally, we had a very strong third quarter with 83% year-over-year and 33% sequential growth. We signed over $10 million worth of IntentKey orders within the quarter, an all-time high. We expect to report strong year-over-year growth in the fourth quarter.
We expect both product lines to show sequential growth in the fourth quarter. We are forecasting Adjusted EBITDA to be positive in the fourth quarter coming off a positive month in September. We expect the IntentKey’s notable client performance to continue alongside a growing pipeline with improving win rates.
Our balance sheet is currently strong enough to accommodate the working capital needs of the growing business and, as a result, we have no immediate plans to raise capital.
I will now turn the call over to the operator for questions.
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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