Fluent, Inc. (NASDAQ: FLNT), a leading data-driven performance
marketing company, today reported financial results for
the second quarter ended June 30, 2023.
Don Patrick, Fluent’s Chief Executive Officer,
commented, "Our second quarter results continue to
reinforce the imperative behind our commitment to enhance the
quality of consumer engagements within our Performance
Marketplace, while also reflecting the more volatile macro-economic
and evolving regulatory environment we are operating within.
Our successful FTC settlement gives us important clarity on our
strategic roadmap, and we will continue to appropriately invest in
our growth agenda – 'Quality as our North Star'. We are
excited about a future with a level competitive playing field that
will allow Fluent to return to growth, at or above industry growth
rates. However, in the immediate term, and as the market
reacts to the new industry standard Fluent has chosen to establish,
we believe it will take a few quarters or more for our competitors
to implement new industry compliance standards, and some may try to
take financial advantage of their current lower compliance posture.
Fluent is prepared to gain market share with our media partners in
future periods as the market evolves to incorporate the new
compliance environment we are leading."
Second Quarter Financial Highlights
• |
Revenue
decreased 16% to $82.1 million,
from $98.4 million in Q2 2022 |
|
• |
Gross profit (exclusive of depreciation and
amortization) of $22.6 million, a decrease of 20% over
Q2 2022 and representing 28% of
revenue |
|
• |
Net income
of $1.2 million, or $0.01 per share,
compared to net loss of $56.9 million, or $0.70 per
share, for Q2 2022 |
|
• |
Media margin of
$25.9 million, a decrease
of 20% over Q2 2022 and
representing 31.5% of revenue |
|
• |
Adjusted EBITDA
of $5.6 million, a decrease
of $3.8 million over Q2 2022 and
representing 6.8% of revenue |
|
• |
Adjusted net income of
$1.0 million, or $0.01 per share,
compared to adjusted net income of $0.6 million,
or $0.01 per share, for Q2 2022 |
|
Six Months Ended June 30, 2023 Financial
Highlights
• |
Revenue
decreased 15% to $159.4 million,
from $187.4 million for the six months ended June
30, 2022 |
|
• |
Gross profit (exclusive of depreciation and
amortization) of $41.6 million, a decrease
of 17% over the six months ended June 30,
2022 and representing 26% of revenue |
|
• |
Net
loss of $30.8 million, or $0.37 per share,
compared to net loss of $59.0 million, or $0.73 per
share, for the six months ended June 30, 2022, reflecting a
larger goodwill impairment in the prior period |
|
• |
Media margin of
$47.9 million, a decrease of 18% over
the six months ended June 30, 2022 and
representing 30.0% of revenue |
|
• |
Adjusted EBITDA
of $6.0 million, a decrease
of $8.1 million over the for the six months
ended June 30, 2022 and representing 3.8% of revenue |
|
• |
Adjusted net loss of
$1.7 million, or $0.02 per share, compared to adjusted
net income of $1.6 million, or $0.02 per share,
for the six months ended June 30, 2022 |
|
Media margin, adjusted EBITDA, and adjusted net income are
non-GAAP financial measures, as defined and reconciled
below.
Business Goals
• |
Leverage our leadership
position with the new compliance standards we have set to
level the industry playing field, create additional competitive
differentiation and increase market share. |
• |
Ensure we source customer
traffic that meets our internal quality and regulatory
requirements, leading to higher quality consumer engagement. |
• |
Strengthen our Performance
Marketplace through leveraging our Influencer Platform, and
vertical expansion in our Call Solutions and AdFlow
businesses. |
• |
In the current economic
environment, continue to be prudent in managing our growth, margin,
and investment initiatives for long-term success. |
Conference Call
Fluent, Inc. will host a conference call on Monday, August 14,
2023, at 4:30 PM ET to discuss its 2023 second
quarter financial results. The conference call can be accessed by
phone after registering online at
https://register.vevent.com/register/BI5074a47802e64f8bbe5a221b3f7002be
. The call will also be webcast simultaneously on the Fluent
website at https://investors.fluentco.com/. Following the
completion of the earnings call, a recorded replay of the webcast
will be available for those unable to participate. To listen to the
telephone replay, please connect via
https://edge.media-server.com/mmc/p/bvmdcboj. The replay will be
available for one year, via the Fluent
website https://investors.fluentco.com/.
About Fluent, Inc.
Fluent, Inc. (NASDAQ: FLNT) is a leader in customer
acquisition, leveraging its direct response expertise to drive
engagement and power discovery for leading brands. Backed by
proprietary data science, Fluent drives opted-in consumers to
targeted offers, allowing them to find new opportunities, content,
and products that enhance their lives. Established in 2010 and
headquartered in New York City, Fluent’s team of experts has
spent over $1B in media across its digital media portfolio to build
a global audience available through 500+ DSPs, DMPs, online
publishers, and programmatic platforms. For more information,
visit www.fluentco.com.
Safe Harbor Statement Under the Private Securities
Litigation Reform Act of 1995
The matters contained in this press release may be considered to
be "forward-looking statements" within the meaning of the
Securities Act of 1933 and the Securities Exchange Act of 1934.
Those statements include statements regarding the intent, belief or
current expectations or anticipations of Fluent and members of our
management team. Factors currently known to management that could
cause actual results to differ materially from those in
forward-looking statements include the following:
|
• |
Compliance with a significant
number of governmental laws and regulations, including those laws
and regulations regarding privacy and data; |
|
• |
The financial impact of
compliance changes to our business, including changes to our
employment opportunities marketplace and programmatic advertising
businesses, and whether and when our competitors will implement
similar changes; |
|
• |
The outcome of litigation,
regulatory investigations or other legal proceedings in which we
may become involved in the future; |
|
• |
Failure to safeguard the
personal information and other data contained in our database; |
|
• |
Failure to adequately protect
intellectual property rights or allegations of infringement of
intellectual property rights; |
|
• |
Unfavorable global economic
conditions, including as a result of health and safety concerns
around the ongoing COVID-19 pandemic; |
|
• |
Dependence on our key
personnel; |
|
• |
Dependence on third-party service
providers; |
|
• |
Management of the growth of our
operations, including international expansion and the integration
of acquired business units or personnel; |
|
• |
The impact of the Traffic Quality
Initiative, including our ability to replace lower quality consumer
traffic with traffic that meets our quality requirements; |
|
• |
Ability to compete and manage
media costs in an industry characterized by rapidly-changing
internet media and advertising technology and evolving
industry standards; |
|
• |
Regulatory uncertainty, and
changing user and client demands; management of unfavorable
publicity and negative public perception about our industry; |
|
• |
Failure to compete effectively
against other online marketing and advertising companies; |
|
• |
The competition we face for web
traffic; |
|
• |
Dependence on third-party
publishers, internet search providers and social media platforms
for a significant portion of visitors to our websites; |
|
• |
Dependence on emails, text
messages and telephone calls, among other channels, to reach users
for marketing purposes; |
|
• |
Liability related to actions of
third-party publishers; |
|
• |
Limitations on our or our
third-party publishers’ ability to collect and use data derived
from user activities; |
|
• |
Ability to remain competitive
with the shift to mobile applications; |
|
• |
Failure to detect click-through
or other fraud on advertisements; |
|
• |
The impact of increased
fulfillment costs; |
|
• |
Increased dependence on a
single advertiser client; |
|
• |
Failure to meet our clients’
performance metrics or changing needs; |
|
• |
The effect of pricing
pressure by certain clients and the ability of our marketplace to
respond through allocating traffic to higher paying clients; |
|
• |
Compliance with the covenants of
our credit agreement in light of current business conditions;
and |
|
• |
The potential for failures in our
internal control over financial reporting. |
These and additional factors to be considered are set forth
under "Risk Factors" in our Annual Report on Form 10-K for the
fiscal year ended December 31, 2022 and in our other filings
with the Securities and Exchange Commission. Fluent undertakes no
obligation to update or revise forward-looking statements to
reflect changed assumptions, the occurrence of unanticipated events
or changes to future operating results or expectations.
FLUENT, INC.CONSOLIDATED
BALANCE SHEETS(Amounts in thousands, except share
and per share data)(unaudited)
|
|
June 30, 2023 |
|
|
December 31, 2022 |
|
ASSETS: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
20,983 |
|
|
$ |
25,547 |
|
Accounts receivable, net of
allowance for doubtful accounts of $209 and $544, respectively |
|
|
58,120 |
|
|
|
63,164 |
|
Prepaid expenses and other
current assets |
|
|
5,920 |
|
|
|
3,506 |
|
Total current assets |
|
|
85,023 |
|
|
|
92,217 |
|
Property and equipment,
net |
|
|
783 |
|
|
|
964 |
|
Operating lease right-of-use
assets |
|
|
4,278 |
|
|
|
5,202 |
|
Intangible assets, net |
|
|
28,525 |
|
|
|
28,745 |
|
Goodwill |
|
|
30,966 |
|
|
|
55,111 |
|
Other non-current assets |
|
|
1,486 |
|
|
|
1,730 |
|
Total
assets |
|
$ |
151,061 |
|
|
$ |
183,969 |
|
LIABILITIES AND
SHAREHOLDERS' EQUITY: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
13,303 |
|
|
$ |
6,190 |
|
Accrued expenses and other
current liabilities |
|
|
26,525 |
|
|
|
35,626 |
|
Deferred revenue |
|
|
895 |
|
|
|
1,014 |
|
Current portion of long-term
debt |
|
|
5,000 |
|
|
|
5,000 |
|
Current portion of operating
lease liability |
|
|
2,309 |
|
|
|
2,389 |
|
Total current liabilities |
|
|
48,032 |
|
|
|
50,219 |
|
Long-term debt, net |
|
|
32,989 |
|
|
|
35,594 |
|
Operating lease liability |
|
|
2,734 |
|
|
|
3,743 |
|
Other non-current
liabilities |
|
|
2,249 |
|
|
|
458 |
|
Total
liabilities |
|
|
86,004 |
|
|
|
90,014 |
|
Contingencies (Note 10) |
|
|
|
|
|
|
|
|
Shareholders' equity: |
|
|
|
|
|
|
|
|
Preferred stock — $0.0001 par
value, 10,000,000 Shares authorized; Shares outstanding — 0 shares
for both periods |
|
|
— |
|
|
|
— |
|
Common stock — $0.0005 par
value, 200,000,000 Shares authorized; Shares issued — 85,751,226
and 84,385,458, respectively; and Shares outstanding — 81,139,657
and 80,085,306, respectively (Note 7) |
|
|
43 |
|
|
|
42 |
|
Treasury stock, at cost —
4,611,569 and 4,300,152 Shares, respectively (Note 7) |
|
|
(11,407 |
) |
|
|
(11,171 |
) |
Additional paid-in
capital |
|
|
425,491 |
|
|
|
423,384 |
|
Accumulated deficit |
|
|
(349,070 |
) |
|
|
(318,300 |
) |
Total shareholders'
equity |
|
|
65,057 |
|
|
|
93,955 |
|
Total liabilities and
shareholders' equity |
|
$ |
151,061 |
|
|
$ |
183,969 |
|
FLUENT, INC.CONSOLIDATED
STATEMENTS OF OPERATIONS(Amounts in thousands,
except share and per share
data)(unaudited)
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Revenue |
|
$ |
82,145 |
|
|
$ |
98,361 |
|
|
$ |
159,399 |
|
|
$ |
187,424 |
|
Costs and
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue (exclusive of depreciation and amortization) |
|
|
59,540 |
|
|
|
70,026 |
|
|
|
117,812 |
|
|
|
137,589 |
|
Sales and marketing |
|
|
4,215 |
|
|
|
4,484 |
|
|
|
9,028 |
|
|
|
8,336 |
|
Product development |
|
|
4,615 |
|
|
|
4,802 |
|
|
|
9,553 |
|
|
|
9,357 |
|
General and administrative |
|
|
7,962 |
|
|
|
11,688 |
|
|
|
20,287 |
|
|
|
22,975 |
|
Depreciation and amortization |
|
|
3,095 |
|
|
|
3,332 |
|
|
|
5,454 |
|
|
|
6,639 |
|
Goodwill impairment and write-off of intangible assets |
|
|
— |
|
|
|
55,400 |
|
|
|
25,700 |
|
|
|
55,528 |
|
Loss on disposal of property and equipment |
|
|
— |
|
|
|
21 |
|
|
|
— |
|
|
|
21 |
|
Total costs and
expenses |
|
|
79,427 |
|
|
|
149,753 |
|
|
|
187,834 |
|
|
|
240,445 |
|
Income (loss) from
operations |
|
|
2,718 |
|
|
|
(51,392 |
) |
|
|
(28,435 |
) |
|
|
(53,021 |
) |
Interest expense, net |
|
|
(795 |
) |
|
|
(430 |
) |
|
|
(1,484 |
) |
|
|
(814 |
) |
Income (loss) before
income taxes |
|
|
1,923 |
|
|
|
(51,822 |
) |
|
|
(29,919 |
) |
|
|
(53,835 |
) |
Income tax expense |
|
|
(750 |
) |
|
|
(5,122 |
) |
|
|
(851 |
) |
|
|
(5,122 |
) |
Net income
(loss) |
|
|
1,173 |
|
|
|
(56,944 |
) |
|
|
(30,770 |
) |
|
|
(58,957 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
income (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.01 |
|
|
$ |
(0.70 |
) |
|
$ |
(0.37 |
) |
|
$ |
(0.73 |
) |
Diluted |
|
$ |
0.01 |
|
|
$ |
(0.70 |
) |
|
$ |
(0.37 |
) |
|
$ |
(0.73 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
82,727,971 |
|
|
|
81,493,821 |
|
|
|
82,323,854 |
|
|
|
81,193,107 |
|
Diluted |
|
|
82,752,646 |
|
|
|
81,493,821 |
|
|
|
82,323,854 |
|
|
|
81,193,107 |
|
FLUENT, INC.CONSOLIDATED
STATEMENTS OF CASH FLOWS(Amounts in
thousands)(unaudited)
|
|
Six Months Ended June 30, |
|
|
|
2023 |
|
|
2022 |
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(30,770 |
) |
|
$ |
(58,957 |
) |
Adjustments to
reconcile net loss to net cash provided by (used in) operating
activities: |
|
|
|
|
|
|
|
|
Depreciation and
amortization |
|
|
5,454 |
|
|
|
6,639 |
|
Non-cash loan amortization
expense |
|
|
133 |
|
|
|
135 |
|
Share-based compensation
expense |
|
|
1,997 |
|
|
|
1,851 |
|
Goodwill impairment |
|
|
25,700 |
|
|
|
55,400 |
|
Write-off of intangible
assets |
|
|
— |
|
|
|
128 |
|
Loss on disposal of property
and equipment |
|
|
— |
|
|
|
21 |
|
Provision for bad debt |
|
|
(92 |
) |
|
|
158 |
|
Deferred income taxes |
|
|
— |
|
|
|
— |
|
Changes in assets and
liabilities, net of business acquisitions: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
5,136 |
|
|
|
(7,913 |
) |
Prepaid expenses and other
current assets |
|
|
(2,414 |
) |
|
|
488 |
|
Other non-current assets |
|
|
244 |
|
|
|
(25 |
) |
Operating lease assets and
liabilities, net |
|
|
(165 |
) |
|
|
(85 |
) |
Accounts payable |
|
|
7,113 |
|
|
|
913 |
|
Accrued expenses and other
current liabilities |
|
|
(10,091 |
) |
|
|
(451 |
) |
Deferred revenue |
|
|
(119 |
) |
|
|
(177 |
) |
Other |
|
|
(75 |
) |
|
|
(72 |
) |
Net cash provided by
(used in) operating activities |
|
|
2,051 |
|
|
|
(1,947 |
) |
CASH FLOWS FROM
INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
Capitalized costs included in
intangible assets |
|
|
(2,370 |
) |
|
|
(2,199 |
) |
Business acquisitions, net of
cash acquired |
|
|
(1,250 |
) |
|
|
(971 |
) |
Acquisition of property and
equipment |
|
|
(22 |
) |
|
|
(6 |
) |
Net cash used in
investing activities |
|
|
(3,642 |
) |
|
|
(3,176 |
) |
CASH FLOWS FROM
FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
Repayments of long-term
debt |
|
|
(2,500 |
) |
|
|
(2,500 |
) |
Debt financing costs |
|
|
(237 |
) |
|
|
— |
|
Taxes paid related to net
share settlement of vesting of restricted stock units |
|
|
(236 |
) |
|
|
(448 |
) |
Net cash used in
financing activities |
|
|
(2,973 |
) |
|
|
(2,948 |
) |
Net decrease in cash
and cash equivalents |
|
|
(4,564 |
) |
|
|
(8,071 |
) |
Cash and cash equivalents at
beginning of period |
|
|
25,547 |
|
|
|
34,467 |
|
Cash and cash equivalents at
end of period |
|
$ |
20,983 |
|
|
$ |
26,396 |
|
Definitions, Reconciliations and Uses of Non-GAAP
Financial Measures
The following non-GAAP measures are used in this release:
Media margin is defined as that
portion of gross profit (exclusive of depreciation and
amortization) reflecting the variable costs paid for media and
related expenses and excluding non-media cost of revenue. Gross
profit (exclusive of depreciation and amortization) represents
revenue minus cost of revenue (exclusive of depreciation and
amortization). Media margin is also presented as percentage of
revenue.
Adjusted EBITDA is defined as net
income (loss) excluding (1) income taxes, (2) interest
expense, net, (3) depreciation and amortization, (4) share-based
compensation expense, (5) goodwill impairment, (6) write-off
of intangible assets, (7) acquisition-related costs, (8)
restructuring and other severance costs, and (9) certain litigation
and other related costs.
Adjusted net income (loss) is
defined as net income (loss) excluding (1) share-based compensation
expense, (2) goodwill impairment, (3) write-off of intangible
assets, (4) acquisition-related costs, (5) restructuring and
other severance costs, and (6) certain litigation and other related
costs. Adjusted net income (loss) is also presented on a per
share (basic and diluted) basis.
Below is a reconciliation of media margin from gross profit
(exclusive of depreciation and amortization), which we believe is
the most directly comparable GAAP measure.
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Revenue |
|
$ |
82,145 |
|
|
$ |
98,361 |
|
|
$ |
159,399 |
|
|
$ |
187,424 |
|
Less: Cost of revenue (exclusive of depreciation and
amortization) |
|
|
59,540 |
|
|
|
70,026 |
|
|
|
117,812 |
|
|
|
137,589 |
|
Gross profit
(exclusive of depreciation and amortization) |
|
$ |
22,605 |
|
|
$ |
28,335 |
|
|
$ |
41,587 |
|
|
$ |
49,835 |
|
Gross profit
(exclusive of depreciation and amortization) % of
revenue |
|
|
28 |
% |
|
|
29 |
% |
|
|
26 |
% |
|
|
27 |
% |
Non-media cost of revenue (1) |
|
|
3,300 |
|
|
|
3,974 |
|
|
|
6,281 |
|
|
|
8,423 |
|
Media
margin |
|
$ |
25,905 |
|
|
$ |
32,309 |
|
|
$ |
47,868 |
|
|
$ |
58,258 |
|
Media margin % of
revenue |
|
|
31.5 |
% |
|
|
32.8 |
% |
|
|
30.0 |
% |
|
|
31.1 |
% |
(1) Represents the portion of cost of revenue (exclusive of
depreciation and amortization) not attributable to variable costs
paid for media and related expenses.
Below is a reconciliation of adjusted EBITDA from net
loss for the three and six months ended June 30, 2023 and
2022, respectively, which we believe is the most directly
comparable GAAP measure.
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Net income (loss) |
|
$ |
1,173 |
|
|
$ |
(56,944 |
) |
|
$ |
(30,770 |
) |
|
$ |
(58,957 |
) |
Income tax expense |
|
|
750 |
|
|
|
5,122 |
|
|
|
851 |
|
|
|
5,122 |
|
Interest expense, net |
|
|
795 |
|
|
|
430 |
|
|
|
1,484 |
|
|
|
814 |
|
Depreciation and
amortization |
|
|
3,095 |
|
|
|
3,332 |
|
|
|
5,454 |
|
|
|
6,639 |
|
Share-based compensation
expense |
|
|
936 |
|
|
|
863 |
|
|
|
1,997 |
|
|
|
1,851 |
|
Goodwill impairment |
|
|
— |
|
|
|
55,400 |
|
|
|
25,700 |
|
|
|
55,400 |
|
Write-off of intangible
assets |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
128 |
|
Loss on disposal of property
and equipment |
|
|
— |
|
|
|
21 |
|
|
|
— |
|
|
|
21 |
|
Acquisition-related
costs(1)(2) |
|
|
562 |
|
|
|
579 |
|
|
|
1,185 |
|
|
|
1,137 |
|
Restructuring and other
severance costs |
|
|
— |
|
|
|
38 |
|
|
|
480 |
|
|
|
38 |
|
Certain litigation and other
related costs |
|
|
(1,715 |
) |
|
|
596 |
|
|
|
(337 |
) |
|
|
1,998 |
|
Adjusted
EBITDA |
|
$ |
5,596 |
|
|
$ |
9,437 |
|
|
$ |
6,044 |
|
|
$ |
14,191 |
|
(1) Balance includes compensation expense related to
non-competition agreements entered into as a result of certain
acquisitions.
(2) Balance includes earn-out expense of $24 and
$110 for the three and six months ended June 30, 2023,
respectively, as a result of certain acquisitions.
Below is a reconciliation of adjusted net income (loss) and
adjusted net income (loss) per share from net loss for the
three and six months ended June 30, 2023 and 2022,
respectively, which we believe is the most directly comparable GAAP
measure.
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
(In thousands, except
share and per share data) |
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Net income (loss) |
|
$ |
1,173 |
|
|
$ |
(56,944 |
) |
|
$ |
(30,770 |
) |
|
$ |
(58,957 |
) |
Share-based compensation
expense |
|
|
936 |
|
|
|
863 |
|
|
|
1,997 |
|
|
|
1,851 |
|
Goodwill impairment |
|
|
— |
|
|
|
55,400 |
|
|
|
25,700 |
|
|
|
55,400 |
|
Write-off of intangible
assets |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
128 |
|
Loss on disposal of property
and equipment |
|
|
— |
|
|
|
21 |
|
|
|
— |
|
|
|
21 |
|
Acquisition-related
costs(1)(2) |
|
|
562 |
|
|
|
579 |
|
|
|
1,185 |
|
|
|
1,137 |
|
Restructuring and other
severance costs |
|
|
— |
|
|
|
38 |
|
|
|
480 |
|
|
|
38 |
|
Certain litigation and other
related costs |
|
|
(1,715 |
) |
|
|
596 |
|
|
|
(337 |
) |
|
|
1,998 |
|
Adjusted net income
(loss) |
|
$ |
956 |
|
|
$ |
553 |
|
|
$ |
(1,745 |
) |
|
$ |
1,616 |
|
Adjusted net income
(loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.01 |
|
|
$ |
0.01 |
|
|
$ |
(0.02 |
) |
|
$ |
0.02 |
|
Diluted |
|
$ |
0.01 |
|
|
$ |
0.01 |
|
|
$ |
(0.02 |
) |
|
$ |
0.02 |
|
Weighted average
number of shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
82,727,971 |
|
|
|
81,493,821 |
|
|
|
82,323,854 |
|
|
|
81,193,107 |
|
Diluted |
|
|
82,752,646 |
|
|
|
81,575,329 |
|
|
|
82,323,854 |
|
|
|
81,233,586 |
|
(1) Balance includes compensation expense related to
non-competition agreements entered into as a result of certain
acquisitions.
(2) Balance includes earn-out expense of $24 and
$110 for the three and six months ended June 30, 2023,
respectively, as a result of certain acquisitions.
We present media margin, media margin as a percentage of
revenue, adjusted EBITDA, adjusted net income (loss), and
adjusted net income (loss) per share as supplemental measures of
our financial and operating performance because we believe they
provide useful information to investors. More specifically:
Media margin, as defined above, is a
measure of the efficiency of the Company’s operating model. We use
media margin and the related measure of media margin as a
percentage of revenue as primary metrics to measure the financial
return on our media and related costs, specifically to measure the
degree by which the revenue generated from our digital marketing
services exceeds the cost to attract the consumers to whom offers
are made through our services. Media margin is used extensively by
our management to manage our operating performance, including
evaluating operational performance against budgeted media margin
and understanding the efficiency of our media and related
expenditures. We also use media margin for performance evaluations
and compensation decisions regarding certain personnel.
Adjusted EBITDA, as defined above, is
another primary metric by which we evaluate the operating
performance of our business, on which certain operating
expenditures and internal budgets are based and by which, in
addition to media margin and other factors, our senior management
is compensated. The first three adjustments represent the
conventional definition of EBITDA, and the remaining adjustments
are items recognized and recorded under GAAP in particular periods
but might be viewed as not necessarily coinciding with the
underlying business operations for the periods in which they are so
recognized and recorded. These adjustments include certain
litigation and other related costs associated with legal matters
outside the ordinary course of business. We consider items one-time
in nature if they are non-recurring, infrequent or unusual and have
not occurred in the past two years or are not expected to recur in
the next two years, in accordance with SEC rules. There were no
adjustments for one-time items in the periods presented in this
Quarterly Report on Form 10-Q.
Adjusted net income (loss), as
defined above, and the related measure of adjusted net income
(loss) per share exclude certain items that are recognized and
recorded under GAAP in particular periods but might be viewed as
not necessarily coinciding with the underlying business operations
for the periods in which they are so recognized and recorded. We
believe adjusted net income (loss) affords investors a
different view of our overall financial performance as compared to
adjusted EBITDA and the GAAP measure of net income (loss).
Media margin, adjusted EBITDA, adjusted net income (loss), and
adjusted net income (loss) per share are non-GAAP financial
measures with certain limitations regarding their usefulness.
They do not reflect our financial results in accordance with
GAAP, as they do not include the impact of certain expenses that
are reflected in our condensed consolidated statements of
operations. Accordingly, these metrics are not indicative of our
overall results or indicators of past or future financial
performance. Further, they are not financial measures of
profitability and are neither intended to be used as a proxy
for the profitability of our business nor to imply
profitability. The way we measure media margin, adjusted
EBITDA, and adjusted net income (loss) may not be comparable to
similarly titled measures presented by other companies and may not
be identical to corresponding measures used in our various
agreements.
Contact Information: Investor
RelationsFluent, Inc.(212)
785-0431InvestorRelations@fluentco.com
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