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 fourth quarter and full year ended December 31, 2023.
Q4 2023 Financial Highlights (year-over-year):
- Revenue increased 21% to $20.8 million in Q4 2023
- Gross profit increased 55% to $18.2 million in Q4 2023
- Gross margin increased to 87.3% in Q4 2023 from 68.0% in Q4 2022
- Adjusted EBITDA loss improved by $600 thousand and net loss improved by $1.6 million in Q4 2023
2023 Operational Highlights:
- Clients now include a top three auto, technology and retail company
- Introduced two new higher margin products in 2023
- Hired advertising agency insider Barry Lowenthal as President
- Signed 56 new agencies/brands and one new platform during the year
- Increased brand awareness with 35 media mentions
- Company had an all-time high Q3 2023 quarter of $24.6 million
- Company revenue in the second half of 2023 increased 32% year-over-year
Richard Howe, CEO of Inuvo, stated, “I am pleased to report we achieved solid financial results for the fourth quarter of 2023, with revenue increasing 21% to $20.8 million on a year-over-year basis. At the same time, our gross profit increased by 55% to $18.2 million, with gross profit margin increasing to 87.3% compared to 68.0% for the same period last year. We also made significant AI advancements in 2023, through the introduction of cutting-edge capabilities and features that are a first-in-kind by any AdTech company and are the direct result of our proprietary and patented large language, generative artificial intelligence. We expect these new features and enhancements will contribute to higher gross margins and improve our bottom line in 2024.”
Mr. Howe continued, “With the demise of the third-party cookie in 2024, led by Apple and Google, IntentKey stands ready to power the next generation of digital advertising through privacy-forward, cookieless audience discovery and targeting capabilities that more accurately reflect why audience segments convert, and adapt faster to changes within those segments driving better results for advertisers. Consequently, I am pleased to report that our sales pipeline is robust and the outlook for 2024 is quite promising.”
Financial Results for the Fourth Quarter and Full Year Ended December 31, 2023
Net revenue for the fourth quarter of 2023 totaled $20.8 million, compared to $17.3 million for the same period last year, a 21% year-over-year increase. Net revenue for the year-ended December 31, 2023 totaled $73.9 million, a slight decrease as compared to $75.6 million during the same period in 2022.
Cost of revenue for the fourth quarter of 2023, totaled $2.6 million compared to $5.5 million for the same period last year. Cost of revenue for the full year ended December 31, 2023, totaled $10.5 million, as compared to $30.2 million for the same period last year. The decrease in the cost of revenue for the three months and full year ended December 31, 2023, as compared to the same period last year, was due to the change in revenue mix. Cost of revenue is primarily composed of payments to advertising exchanges that provide access to digital inventory where we serve advertisements.
Gross profit for the fourth quarter of 2023 and full year ended December 31, 2023 totaled $18.2 million and $63.4 million, respectively, as compared $11.7 million and $45.4 million, respectively, for the same periods last year. Gross profit margin for the fourth quarter of 2023 and full year ended December 31, 2023 was approximately 87.3% and 85.8%, respectively, as compared to 68.0% and 60.0%, respectively, for the same periods last year. As mentioned above, the higher gross margin in the current year as compared to the prior year is due to the change in revenue mix where a greater percent of the revenue this year was from Platforms (large consolidators of advertising demand), which typically have higher gross margins.
Operating expenses for the fourth quarter of 2023 totaled $20.6 million, compared to $15.7 million for the same period last year. Operating expenses for the full year ended December 31, 2023 totaled $73.8 million, compared to $58.0 million for the same period last year. In 2023, we heavily invested in the go-to-market team and marketing programs to increase exposure for our solution.
Other expense/income for the fourth quarter of 2023 and the full year ended December 31, 2023 contributed $0 and approximately $15 thousand, respectively, compared to an expense of approximately $34 thousand and $436 thousand for the same periods last year. The income this year and the expense from the prior year was due to unrealized and realized losses on trading securities.
Net loss for the fourth quarter of 2023 was $2.4 million, or $0.02 per basic and diluted share, as compared to net loss of $4.0 million, or $0.03 per basic and diluted share, for the same period last year. Net loss for the full year ended December 31, 2023 totaled $10.4 million, or $0.08 per basic and diluted share, as compared to net loss of $13.1 million, or $0.11 per basic and diluted share, for the same period last year.
Adjusted EBITDA [see reconciliation table below] was a loss of approximately $1.2 million in the fourth quarter of 2023, compared to an Adjusted EBITDA loss of approximately $1.8 million for the same period last year. Adjusted EBITDA was a loss of approximately $5.3 million for the full year ended December 31, 2023, compared to a loss of approximately $5.0 million for the same period last year.
Liquidity and Capital Resources:
On December 31, 2023, Inuvo had $4.4 million in cash and cash equivalents, $211 thousand of working capital, an unused working capital facility of $5.0 million and no debt.
As of December 31, 2023, Inuvo had 137,983,918 common shares issued and outstanding.
Conference Call Details:
Date: Thursday, February 29, 2024
Time: 4:15 p.m. Eastern Standard Time
Toll-free Dial-in Number: 1- 888-886-7786
International Dial-in Number: 1- 416-764-8658
Conference ID: 21240883
Webcast Link: HERE
A telephone replay will be available through Thursday, March 14, 2024. 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 21240883 followed by the # sign. You will then be prompted for your name, company, and phone number. Playback will then automatically begin.
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