Fluent (FLNT) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was $58.7M, down 29% year-over-year, with a net loss of $11.6M versus net income of $4.3M in Q2 2023.

• Six-month revenue totaled $124.7M, down 22% year-over-year; net loss improved to $17.9M from $27.7M in 1H 2023.

• Strategic pivot to higher-margin syndicated performance marketplaces is progressing, with these marketplaces exceeding internal forecasts and driving growth.

• Declines driven by regulatory impacts, macroeconomic headwinds, and reduced client spend, especially in Media & Entertainment and insurance.

• Management concluded substantial doubt exists about the company's ability to continue as a going concern due to ongoing losses and liquidity constraints.

Financial highlights

• Q2 2024 gross profit (excl. D&A) was $12.6M (21% of revenue), down 44% year-over-year.

• Media margin was $15.7M (26.7% of revenue), down from $25.9M (31.5%) last year.

• Adjusted EBITDA was -$4.5M in Q2 2024, impacted by a $3.1M ACA accounts receivable write-down.

• Adjusted net loss for Q2 2024 was $7.3M ($0.47/share) versus breakeven in Q2 2023.

• Cash, cash equivalents, and restricted cash totaled $6.4M at June 30, 2024, down from $15.8M at year-end.

Outlook and guidance

• Expect single-digit consolidated year-over-year growth in Q3 and double-digit growth in Q4 2024.

• Anticipate double-digit revenue and gross profit growth in fiscal year 2025.

• Return to positive Adjusted EBITDA projected for the back half of 2024.

• Management expects improved performance in 2H 2024, driven by growth in syndicated performance marketplaces and expense discipline.

• Company expects to comply with new financial covenants for the next twelve months but warns that any non-compliance could trigger default and liquidity shortfall.