Q4 2024 Inuvo Inc Earnings Call
<unk> answer session.
If at any time during this call you require immediate assistance. Please press star zero for operator.
This call is being recorded on Thursday February 27th 2025.
Italian Rudman: I would now like to turn the conference over to the Italian Rudman of Crescendo Communications. Please go ahead.
Speaker Change: Thank you Andrew and good afternoon, everyone I'd like to thank everyone for joining us today for the annual fourth quarter and year end 2024 shareholder update call today, Andrew Lewis 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 planned for.
Speaker Change: File our 10-K with the Securities and Exchange Commission. This evening before we begin I'm going to review the Companys 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.
Speaker Change: These forward looking statements are subject to risks and uncertainties and actual results may differ materially when he isn't on this call. The words anticipate could enable estimate intend expect believe potential will should project and.
Speaker Change: Similar expressions as they relate to <unk> are such forward looking statements investors are cautioned that all forward looking statements involve risks and uncertainties, which may cause actual results to differ from those anticipated by <unk>. At this time. In addition, other risks are more fully described in our new world public filings with the U S Securities and Exchange Commission, which can be reviewed.
Good day, ladies and gentlemen, and welcome to the a Nouvel, Inc. Fourth quarter 2024 conference call.
At this time all lines are in listen only mode.
Following the presentation, we will conduct a question and answer session.
If at any time during this call. If you require immediate assistance. Please press star zero for operator.
Speaker Change: And it's always always always that SEC Doc 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 hyster.
This call is being recorded on Thursday February 27th 2025.
I would now like to turn the conference over to the Italian Rudman of Crescendo Communications. Please go ahead.
Italian Rudman: Thank you Andrew and good afternoon, everyone I'd like to thank everyone for joining us today for the fourth quarter and year end 'twenty 'twenty four shareholder update call today, and he was Chief Executive Officer, Mr. Collins, Chief Financial Officer, Wally Ruiz will be your presenters on the call. We would also like to remind our shareholders that we plan.
Speaker Change: Normal comparison of its performance.
Affiliation of the non-GAAP measures to the most directly comparable GAAP measures is available in today's news release on our website with that or the way I'll now turn the call over to CEO Richard Howe. Please go ahead rich.
Richard Howe: Thank you and Italia and welcome everyone. We're thrilled to announce our record breaking fourth quarter ending December 31.
Italian Rudman: While our 10-K with the Securities and Exchange Commission. This evening before we begin I'm going to review the company's Safe Harbor statement. The statements. In this conference calls are not a description of the circle backs 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.
Speaker Change: 2024.
We achieved 26% year over year growth generating $26 2 million in revenue our largest quarter ever.
Speaker Change: Importantly, we also delivered positive net income and adjusted EBITDA within the quarter.
Italian Rudman: These forward looking statements are subject to risks and uncertainties and actual results may differ materially when he isn't on this call. The words anticipate could enable estimate intend expect believe potential wells shut for shock and saw similar expressions as they relate to <unk> are such forward looking statements investors are cautioned that all forward looking statements.
This strong Q4 performance validates our continued investment in proprietary technologies.
Speaker Change: Especially our large language generative AI in turnkey.
Speaker Change: In 2024.
Speaker Change: Our new go to 13, 4% revenue increase for the year, reaching approximately $84 million.
Italian Rudman: Involve risks and uncertainties, which may cause actual results to differ from those anticipated by you well at this time. In addition to other risks are more fully described in and it goes public filings with the U S Securities and Exchange Commission, which can be reviewed and it's always always always got a C. C. Dot Gov. The company makes no commitment to disclose any revisions to forward looking statements or any facts.
Speaker Change: As Wally will elaborate the net loss adjusted EBITDA gross profit and operating cash flows all improved year over year.
Speaker Change: This solid performance capped by a strong finish positions <unk> for an even stronger.
Italian Rudman: 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.
2025, which I will discuss further.
Speaker Change: In my later comments.
Speaker Change: <unk> success in achieving key objectives. During 2024 has laid the foundation for continued growth into 2025.
Italian Rudman: At least on our website with that or the way I'll now turn the call over to CEO Richard Howe. Please go ahead rich.
Speaker Change: For platform clients the focus in 2024 was on enhancing the support.
Richard Howe: Thank you and Italia and welcome everyone. We're thrilled to announce our record breaking fourth quarter ending December 31 2024.
Speaker Change: And technologies will provide in a manner that aligns.
Speaker Change: To their evolving marketplace.
Speaker Change: By late 2023, this roughly $10 billion market that we serve was undergoing a major shifts.
Richard Howe: We achieved 26% year over year growth generating $26 2 million in revenue our largest quarter ever.
Speaker Change: Changes, we had anticipated and prepared for as early as 2022.
Richard Howe: Importantly, we also delivered positive net income and adjusted EBITDA within the quarter.
Many of our competitors.
Speaker Change: Built their businesses around advertising policies that were being phased out.
Richard Howe: This strong Q4 performance validates our continued investment in proprietary technologies.
Speaker Change: As a smaller more agile company.
Richard Howe: Especially our large language generative AI in turnkey.
Speaker Change: We had the advantage of innovating for the future.
Richard Howe: In 2020 for a Newbuild achieved 13, 4% revenue increase for the year, reaching approximately $84 million.
Speaker Change: As opposed to overhaul and new technology and infrastructure designed for the past.
Speaker Change: This forward thinking approach fueled our growth throughout 2024.
Richard Howe: As Wally will elaborate the net loss.
Richard Howe: Adjusted EBITDA gross profit and operating cash flows all improved year over year.
Speaker Change: As we entered 2020 for our platform clients began prioritizing richer more engaging experiences for both users and advertisers.
Speaker Change: This solid performance capped by a strong finish.
Speaker Change: Our background in publishing gave us a unique edge in helping them achieve these goals.
Richard Howe: <unk>, a new bow for an even stronger two.
Richard Howe: 2025, which I'll discuss further in my.
Speaker Change: We integrated AI tools into our internal systems to streamline and enhance how these experiences were created and delivered.
Richard Howe: Later comments.
Richard Howe: <unk> success in achieving key objectives. During 2024 has laid the foundation for continued growth into 2025.
Speaker Change: With a long history of shaping high quality digital environments, we moved quickly to provide relevant immersive and end market experiences that connect our clients advertisers with engaged audiences.
Richard Howe: For platform clients. The focus in 2024 was on enhancing the support and technologies will provide in a manner that aligns.
Speaker Change: Beyond delivering better experiences our deep expertise in behavior analytics and artificial intelligence further strengthened our position.
Richard Howe: To their evolving marketplace.
Richard Howe: By late 2023, this roughly $10 billion market that we serve was undergoing a major shifts.
Speaker Change: By analyzing how users interact with website designed to meet our clients requirements.
Richard Howe: Changes, we had anticipated and prepared for as early as 2022.
Speaker Change: We're able to refine our approach and optimize engagement navigation and interaction.
Richard Howe: Many of our competitors adult their businesses around advertising policies that were being phased out.
Speaker Change: These insights translated into stronger outcomes for our platform clients and ultimately better quality leads for advertisers and higher revenues for <unk>.
Richard Howe: As a smaller more agile company, we had the advantage of innovating for the future.
Richard Howe: As opposed to overhaul and new technology and infrastructure designed for the past.
Speaker Change: This fusion of experienced design and behavior analytics positions us as a key player in a rapidly transforming market.
Richard Howe: This forward thinking approach fueled our growth throughout 2024.
Speaker Change: And the results.
Speaker Change: They speak for themselves.
Richard Howe: As we entered 2020 for our platform clients began prioritizing richer more engaging experiences for both users and advertisers.
Speaker Change: <unk> thousand 24 for our platform clients, we successfully delivered roughly 89 million AD clicks and.
Speaker Change: An increase of 60% year over year.
Speaker Change: The largest industries served.
Richard Howe: Our background in publishing gave us a unique edge in helping them achieve these goals.
Speaker Change: For our platform clients included travel E Commerce automotive business and software tools.
Richard Howe: We integrated AI tools into our internal systems to streamline and enhance how these experiences were created and delivered.
Speaker Change: As the market continues to realign our 2024 investments in services and technology will drive even greater opportunities into 2025 and beyond.
Richard Howe: With a long history of shaping high quality digital environments, we moved quickly to provide relevant immersive.
Richard Howe: And in market experiences that connect our clients advertisers with engaged audiences.
Speaker Change: With the strong momentum behind US, we are well positioned to capitalize on the shifts and further expand our market share.
Richard Howe: Beyond delivering better experiences our deep expertise in behavior analytics and artificial intelligence further strengthened our position.
Speaker Change: For our agency and brand clients. The focus was on enhancing our go to market strategy growing our client base, while strengthening our AI is competitive advantage.
Richard Howe: By analyzing how users interact with website designed to meet our clients requirements.
Speaker Change: In 2024, we deepened engagements with existing brands.
Richard Howe: We were able to refine our approach and optimize engagement.
Speaker Change: While onboarding 33, new brands and achieving exceptional results across the board.
Richard Howe: Obligation and interaction.
Richard Howe: These insights translated into stronger outcomes for our platform clients and ultimately <unk>.
Speaker Change: Our retention rate for existing agency and brand clients year over year was 85%.
Richard Howe: Quality leads for advertisers.
Speaker Change: And performance across those clients exceeded kpis on average by 42%.
Richard Howe: Higher revenues for <unk>.
Richard Howe: This fusion of experienced design and behavior analytics positions us as a key player in a rapidly transforming market.
Speaker Change: We successfully contracted with.
Speaker Change: Served.
Speaker Change: And our scaling and one of the largest retailers in the world.
Richard Howe: And the results.
Richard Howe: They speak for themselves.
Speaker Change: We also realized a 40% increase in our average order size.
Richard Howe: <unk> 2024 for our platform clients, we successfully delivered roughly 89 million ad clicks.
Speaker Change: In 2024, we streamlined operations and empowered clients.
Richard Howe: An increase of 60% year over year.
Speaker Change: The largest industry served.
Speaker Change: And prospecting teams.
Speaker Change: For our platform clients included travel E Commerce automotive business and software tools.
Speaker Change: We reorganized client facing personnel into dedicated pods each comprised of a campaign manager an account manager.
Speaker Change: As the market continues to realign our 2024 investments in services and technology will drive even greater opportunities into 2025 and beyond.
Speaker Change: And our solutions engineer, who collectively now provide clients with a better experience.
Speaker Change: We made significant investments in education empowering our teams at every level.
Speaker Change: With the strong momentum behind US, we are well positioned to capitalize on the shifts and further expand our market share.
Speaker Change: Dollars became smarter and better equipped to provide consultative selling support.
Speaker Change: While account managers evolved beyond performance recaps, delivering true campaign insights that help clients make better decisions.
Speaker Change: For our agency and brand clients. The focus was on enhancing our go to market strategy growing our client base, while strengthening our AI is competitive advantage.
Speaker Change: Additionally, we doubled down on the marketing of the Novo ensuring that our brand was epicenter of discussions around AI advertising and programmatic media.
Speaker Change: In 2024, we deepened engagements with existing brands.
While onboarding 33, new brands and achieving exceptional results across the board.
Speaker Change: By actively engaging in industry conversations we strengthened our position as a thought leader and reinforced our competitive edge.
Speaker Change: Our retention rate for existing agency and brand clients year over year was 85%.
Speaker Change: We had over 3000 media mentions in 2024.
Speaker Change: And performance across those clients exceeded kpis on average by 42%.
Speaker Change: Including our recent exclusive article written by AD exchanger related to the enhancements of our turnkey self serve platform.
Speaker Change: We successfully contracted with.
Speaker Change: Served.
Speaker Change: And our scaling and one of the largest retailers in the world.
Speaker Change: Our subscriber base also grew to nearly 10000 for our twice monthly newsletter.
Speaker Change: We also realized a 40% increase in our average order size.
Speaker Change: In 2024, we streamlined operations and empowered clients.
Speaker Change: We made a number of significant technological advancements in 2024.
Speaker Change: And prospecting teams.
Speaker Change: Most notably with the enhancements to the intent key self serve platform.
Speaker Change: We reorganized client facing personnel into dedicated pods each comprised of the campaign manager an account manager.
Speaker Change: This groundbreaking innovation democratizes advertising by.
Speaker Change: And our solutions engineer, who collectively now provide clients with a better experience.
Speaker Change: By allowing anyone to describe their target audience in simple terms.
Speaker Change: We made significant investments in education empowering our teams at every level.
Speaker Change: <unk> AI, then instantly builds and executes the custom audience model.
Speaker Change: Dollars became smarter and better equipped to provide consultative selling support.
Speaker Change: Forget about complex analytics and data segmentation in cookies and Onboarding.
Speaker Change: While account managers involved beyond performance recaps delivering true campaign insights that help clients make better decisions.
Speaker Change: Simply tell our AI, what you want and intelligently fans and adapt your audience in real time.
Speaker Change: This is truly the most empowering innovation in advertising to date.
Speaker Change: Additionally, we doubled down on the marketing of the Novo ensuring that our brand was that the center of discussions around AI advertising and programmatic media.
Speaker Change: Addressing the second most important challenge facing marketers in 2024.
By actively engaging in industry conversations we strengthened our position as a thought leader and reinforced our competitive edge.
Speaker Change: We worked on automating and deploying our proprietary AI for media measurement.
Speaker Change: With growing privacy concerns identifying and targeting the right audience across channels, while accurately measuring campaign effectiveness is now paramount.
Speaker Change: We had over 3000 media mentions in 2024.
Speaker Change: Including our recent exclusive article written by AD exchanger related to the enhancements of our.
Speaker Change: Our client proven algorithms provide a solution to these challenges and are now integrated directly into our product suite.
Speaker Change: Turnkey self serve platform.
Speaker Change: Our subscriber base also grew to nearly 10000 for our twice monthly newsletter.
Speaker Change: Another key achievement in 2024 was expanding the revenue potential of our AI through.
Speaker Change: We made a number of significant technological advancements in.
Speaker Change: Through an internal project, we call the concept bricks.
Speaker Change: This initiative structured our AI knowledge into modular bricks that could be associated with each concept the AI understands.
Speaker Change: 2024.
Speaker Change: Most notably with the enhancements to the intent key self serve platform.
Speaker Change: This groundbreaking innovation democratizes advertising by.
Speaker Change: Enabling flexibility through the development of an API.
Speaker Change: By allowing anyone to describe their target audience in simple terms.
Speaker Change: We are currently exploring the potential beta clients for this promising new revenue stream.
Speaker Change: Our AI, then instantly builds and executes the custom audience model.
Speaker Change: But in the interim it has facilitated product launches like our recent self serve platform enhancements.
Speaker Change: Forget about complex analytics and data segmentation in cookies and Onboarding.
And we will further enable a number of technological enhancements with our core market within our core market in.
Speaker Change: Simply tell our AI, what you want and intelligently spans and adapt your audience in real time.
Speaker Change: In 2025.
Speaker Change: And finally for.
Speaker Change: This is truly the most empowering innovation in advertising to date.
Speaker Change: For the past two years, we've discussed the growing trend towards consumer privacy and our industry.
Speaker Change: Addressing the second most important challenge facing marketers in 2024.
Speaker Change: This trend driven by both legislation and technology.
Speaker Change: We worked on automating and deploying our proprietary AI for media measurement.
Speaker Change: While these changes are likely to accelerate the demand for privacy focused solutions like the intent key.
Speaker Change: With growing privacy concerns identifying and targeting the right audience across channels.
Speaker Change: Our success our success has never been dependent on them given our performance relative to conventional AD tech.
Accurately measuring campaign effectiveness is now Paramount.
Speaker Change: The remaining holdout on privacy has been the chrome browser, we're tracking remains prevalent.
Speaker Change: Our client proven algorithms provide a solution to these challenges and are now integrated directly into our product suite.
Speaker Change: While Google Hasnt officially announced its plans industry consensus suggests they may offer users.
Speaker Change: Another key achievement in 2024 was expanding the revenue potential of our AI through.
Speaker Change: A onetime opportunity to opt into.
Through an internal project, we call the concept bricks.
Speaker Change: Cooking tracking sometime in 2025.
Speaker Change: This initiative structured our AI knowledge into modular bricks that could be associated with each concept the AI understands.
Speaker Change: In a similar manner Apple did with App tracking.
Speaker Change: This shift if enacted is likely to strengthen the opportunity for the turnkey.
Speaker Change: Enabling flexibility through the development of an API.
Speaker Change: At this time I would like to turn the call over to Wally for a more detailed assessment of our financial performance within the quarter.
Speaker Change: We are currently exploring the potential beta clients for this promising new revenue stream.
Speaker Change: But in the interim it has facilitated product launches.
Wally Ruiz: Thank you rich and good afternoon.
Speaker Change: Like our recent self serve platform enhancements.
Wally Ruiz: We delivered an outstanding quarter marked by significant revenue growth, new clients and improved cash efficiency.
Speaker Change: And we will further enable a number of technological.
Speaker Change: <unk> with our core market within our core market.
Wally Ruiz: Our continued focus on innovation client partnerships and financial management drove strong performance across all key metrics.
Speaker Change: In 2025.
And finally for.
Speaker Change: For the past two years, we've discussed the growing trend towards consumer privacy and our industry.
Speaker Change: <unk> reported revenue of $26 $2 million in the fourth quarter of 2024.
Speaker Change: This trend driven by both legislation and technology.
Speaker Change: 26% increase over the $28 million.
Speaker Change: While these changes are likely to accelerate the demand for privacy focused solutions like the turnkey.
Speaker Change: In the fourth quarter last year.
Speaker Change: We saw growth in both client categories and agencies and brands and platforms.
Speaker Change: Our success our success has never been dependent on them given our performance relative to conventional AD tech.
Speaker Change: We had strong demand for our services from platform clients platform revenue was approximately $21 million.
Speaker Change: The remaining sold out on privacy has been the chrome browser, we're tracking remains prevalent.
Speaker Change: New products that launched last year, emphasizing improved technology quality content and compliance fuel the revenue growth.
Speaker Change: While Google Hasnt officially announced its plans industry consensus suggests they may offer users.
Speaker Change: Agencies and brands revenue was approximately $5 million in the fourth quarter.
Speaker Change: A one time opportunity to opt into.
Speaker Change: 2024.
Speaker Change: Cooking tracking sometime in 2025.
Speaker Change: The growth in revenue was driven primarily by the signing of 33 new clients during 2024.
Speaker Change: Similar manner, Apple did with App tracking.
Speaker Change: This shift is enacted is likely to strengthen the opportunity for the turnkey.
Speaker Change: The reorganization of our go to market and support.
Speaker Change: Two the higher agencies and brands revenue.
Speaker Change: At this time I would like to turn the call over to Wally for a more detailed assessment of our financial performance within the quarter.
Speaker Change: In the fourth quarter.
Speaker Change: We expect the revenue mix from agencies and brands and platforms to continue relatively stable throughout 2025.
Wally Ruiz: Thank you rich and good afternoon.
Wally Ruiz: We delivered an outstanding quarter marked by significant revenue growth, new clients and improved cash efficiency.
Speaker Change: Cost of revenue increased to $4 4 million up from $2 6 million in Q4 of 2023.
Wally Ruiz: Our continued focus on innovation client partnerships and financial management drove strong performance across all key metrics.
Speaker Change: Primarily due to higher agencies and brands revenue and a new campaign with one of our platform clients.
Speaker Change: <unk> reported revenue of $26 2 million in the fourth quarter of 2024 two.
Speaker Change: Cost of revenue was primarily composed of immediate payments made on behalf of our agencies and brands clients.
Speaker Change: And to a lesser extent includes payments made to website publishers and app developers that hosts our advertisements.
Wally Ruiz: 26% increase over the $28 million.
Speaker Change: In the fourth quarter last year.
Speaker Change: We saw growth in both client categories to agencies and brands and platforms.
Speaker Change: We reported a gross profit of $21 8 million, 20% higher compared to $18 2 million for the same quarter last year.
Speaker Change: We had strong demand for our services from platform clients platform revenue was approximately $21 million.
Speaker Change: However, gross margin declined to 83, 1% in Q4 of 2024 compared to 87, 3% last year.
Speaker Change: New products launched last year emphasizing approved technology.
Speaker Change: All of the content and compliance fuel the revenue growth.
Speaker Change: Agencies and brands revenue was approximately $5 million in the fourth quarter of.
Speaker Change: The decrease in gross margin was due partially to a new campaign with a platform client.
Speaker Change: 2024.
Speaker Change: We anticipate a small decline in gross margin in 2025 due to an increase due to the increasing revenue from that platform client.
Speaker Change: The growth in revenue was driven primarily by the signing of 33 new clients during 2024.
Speaker Change: The reorganization of our go to market and support.
Speaker Change: Okay.
Speaker Change: Two the higher agencies and brands revenue.
Speaker Change: Operating expenses for the fourth quarter of 2024 totaled $21 5 million compared to $26 million for the same period last year.
Speaker Change: The fourth quarter.
Speaker Change: We expect the revenue mix from agencies and brands and platforms to continue relatively stable throughout 2025.
Speaker Change: Marketing costs, primarily media costs.
Speaker Change: Incurred on behalf of clients.
Speaker Change: Cost of revenue increased to $4 4 million up from $2 6 million in Q4 of 2023.
Speaker Change: $17 1 million in the fourth quarter of 2024 compared to $15 2 million in the same quarter last year.
Speaker Change: Primarily due to higher agencies and brands revenue and a new campaign with one of our platform clients.
Speaker Change: Marketing costs were higher because.
Speaker Change: Revenue.
Speaker Change: Compensation expense decreased in the fourth quarter of 2024 to $2 $7 million compared to $3 6 million.
Speaker Change: Cost of revenue was primarily composed of immediate payments made on behalf of our agencies and brands clients.
Speaker Change: In the same quarter last year.
Speaker Change: And to a lesser extent includes payments made to website publishers and app developers that hosts our advertisements.
Speaker Change: The lower compensation expense was due primarily to a lower incentive accrual and to a lesser extent lower commission expense and to lower payroll.
We reported a gross profit of $21 8 billion, 20% higher compared to $18 2 million for the same quarter last year.
Speaker Change: At the end of the second quarter 2024, we extreme line operations by eliminating 13 redundant positions.
Speaker Change: However, gross margin declined to 83, 1% in Q4 of 2024 compared to 87, 3% last year.
Speaker Change: Our total employment, both full and part time was 81 at the end of the fourth quarter in 2024.
Speaker Change: And that's compared to 93 at the end of 2023.
Speaker Change: The decrease in gross margin was due partially to a new campaign with a platform client.
Speaker Change: Our 2025 budget includes hiring seven additional employees to support growth.
Speaker Change: We anticipate a small decline in gross margin in 2025 due to an increase due to the increasing revenue from that platform client.
Speaker Change: General and administrative expense for the fourth quarter of 2024 declined slightly to $1 7 million from $1 $8 million last year.
Speaker Change: Okay.
Speaker Change: Operating expenses for the fourth quarter of 2024 totaled $21 5 million compared to $26 million for the same period last year.
Speaker Change: Reflecting lower travel and entertainment expense and lower amortization expense.
Speaker Change: Net interest.
Speaker Change: <unk> expense was approximately $103000 in the fourth quarter of 2024.
Speaker Change: Marketing costs, primarily media cost.
Speaker Change: Incurred on behalf of clients.
Speaker Change: Compared to our net interest income of approximately $8000 last year.
$17 1 million in the fourth quarter of 2024 compared to $15 $2 million in the same quarter last year.
Speaker Change: Interest expense this year is due to higher borrowings within the quarters or within the fourth quarter.
Speaker Change: Marketing costs were higher because.
Speaker Change: Revenue.
Compensation expense decreased in the fourth quarter of 2024 to $2 $7 million compared to $3 6 million.
Speaker Change: Net income for the fourth quarter of 2024 was $141000.
Speaker Change: Fair to a net loss of $2 4 million for the fourth quarter last year.
Speaker Change: In the same quarter last year.
Speaker Change: The lower compensation expense was due primarily to a lower incentive accrual and to a lesser extent lower commission expense and to lower payroll.
Speaker Change: Adjusted EBITDA in the fourth quarter of 2024.
Speaker Change: It was $1 2 million.
Speaker Change: Compared to a loss of $1 $2 million in the prior year.
At the end of the second quarter 2024, we extreme line operations by eliminating 13 redundant positions.
Speaker Change: Improvement of $2 4 million.
Speaker Change: As of December 31, 2024, we had cash and cash equivalents.
Speaker Change: Our total employment, both full and part time was 81 at the end of the fourth quarter in 2024.
Speaker Change: $2 $5 million in July 2024, we secured a $10 million asset base working capital line of credit.
Speaker Change: And that's compared to 93 at the end of 2023.
Speaker Change: As of December 31, there was no debt outstanding.
Speaker Change: Our 2025 budget includes hiring seven additional employees to support growth.
Our capital structure is composed of 141 million common shares outstanding and 30 million restricted stock units outstanding.
General and administrative expense for the fourth quarter of 2024 declined slightly to $1 7 million from $1 $8 million last year.
Speaker Change: Effective cash management allowed us to reduce the cash burn.
Speaker Change: Reflecting lower travel and entertainment expense and lower amortization expense.
Speaker Change: $2 $6 million in 2024 over.
Speaker Change: Over the prior year, and we expect to generate cash in the second half of 2025.
Speaker Change: Yes.
Speaker Change: Net interest expense was approximately $103000 in the fourth quarter of 2024.
Richard Howe: Before I return the call over to rich.
Rich: I'd like to point out that for the full year 2024.
Speaker Change: Compared to our net interest income of approximately $8000 last year.
Richard Howe: Revenue increased 13%.
Speaker Change: The interest expense this year is due to higher borrowings within the quarters or within the fourth quarter.
Rich: Gross profit increased 13% also.
Richard Howe: Net loss decreased 45%.
Richard Howe: Adjusted EBITDA loss.
Richard Howe: The adjusted EBITDA loss improved six four.
Speaker Change: Net income for the fourth quarter of 2024 was $141000 compared to a net loss of $2 4 million for the fourth quarter last year.
Richard Howe: Net cash provided by operating activities was $230000.
Richard Howe: That's a $2 $8 million improvement.
Speaker Change: Adjusted EBITDA in the fourth quarter of 2024.
Richard Howe: Over the net cash used by operating activities in 2023.
Speaker Change: It was $1 $2 million.
Rich: With that I'd like to turn the call back over to rich for closing remarks.
<unk> to a loss of $1 $2 million in the prior year.
Richard Howe: Thank you Wally.
Speaker Change: <unk> of $2 4 million.
Speaker Change: We achieved a 26% growth in the fourth quarter of 2024 and a 13.
Speaker Change: As of December 31, 2024, we had cash and cash equivalents of $2 $5 million in July 2024, we secured a $10 billion asset base working capital line of credit and as of December 31, There was no debt outstanding.
Speaker Change: Most 13, 5% growth for the fiscal year 2024.
Speaker Change: Over the last 18 quarters, we've had a roughly 7% compounded quarterly growth rate.
Speaker Change: All financial metrics improved year over year, and we hit another all time revenue high of $26 2 million in Q4 2024 with positive net income.
Speaker Change: Our capital structure is composed of 141 million common shares outstanding and 13 million restricted stock units outstanding.
Speaker Change: Effective cash management allowed us to reduce the cash burn by $2 6 million in 2024.
Speaker Change: And we entered 2025 with trailing 12 month revenue of roughly $84 million.
Speaker Change: Our upgraded self serve platform now puts the vast knowledge of our AI directly into the hands of marketers of any caliber.
Speaker Change: Over the prior year, and we expect to generate cash in the second half of 2025.
Richard Howe: Before I return the call over to rich.
Richard Howe: I'd like to point out that for the full year 2024.
Speaker Change: Trained on hundreds of billions of pages of content.
Speaker Change: Enhanced capability has the potential to significantly boost our bottom line.
Richard Howe: Revenue increased 13%.
Richard Howe: Gross profit increased 13% also.
Speaker Change: As we scale its adoption.
Richard Howe: Net loss decreased 45%.
Speaker Change: Building on strong momentum on.
Richard Howe: Adjusted EBITDA loss.
Speaker Change: Unaudited on audited January and February results point to continued strength.
Richard Howe: The adjusted EBITDA loss improved six fall.
Richard Howe: And the net cash provided by operating activities was $230000.
Speaker Change: Consequently, we are projecting first quarter 2025 revenue growth to be roughly 40% year over year.
Richard Howe: That's a $2 $8 million improvement.
Over the net cash used by operating activities in 2023.
Speaker Change: Finally.
Speaker Change: I'd like to take a minute and thank Charles Morgan.
Rich: With that I'd like to turn the call back over to rich for closing remarks.
Speaker Change: Who has decided to retire from our board of directors.
Richard Howe: Thank you Wally.
Richard Howe: We achieved a 26% growth in the fourth quarter of 2024 and a 13.
Speaker Change: Charles has been a director since 2009.
Speaker Change: And remains under Novo shareholder.
Speaker Change: Almost 13, 5% growth for the fiscal year 2024.
Speaker Change: Charles has also been an instrumental voice in the strategy and vision of this company.
Speaker Change: Over the last 18 quarters, we've had a roughly 7% compounded quarterly growth rate.
Speaker Change: His judgment and counsel will be missed.
Speaker Change: All financial metrics improved year over year, and we hit another all time revenue high of $26 2 million in Q4 of 2024 with positive net income.
Speaker Change: I am also delighted to announce that Rob Buckner will be joining our board.
Speaker Change: Rob successful entrepreneurial ventures.
Speaker Change: His vast relationships.
Speaker Change: And we entered 2025 with trailing 12 month revenue of roughly $84 million.
Speaker Change: And impressive leadership background.
Speaker Change: At prominent agencies, including Campbell must soon.
Speaker Change: Our upgraded self serve platform now puts the vast knowledge of our AI directly into the hands of marketers of any caliber.
And Fallon worldwide, where he was CEO and CE ammo.
Speaker Change: It makes him a strong new addition to the board.
Speaker Change: Trained on hundreds of billions of pages of content.
Speaker Change: This enhanced capability has the potential to significantly boost our bottom line as we scale adoption.
Speaker Change: And with that I will now turn the call back over to the operator Andrew for questions.
Speaker Change: Thank you.
Speaker Change: Building on strong momentum.
Speaker Change: Ladies and gentlemen, we will now begin the question and answer session.
Speaker Change: On on it on audited January and February results point to continued strength.
Speaker Change: Should you have a question. Please press the star followed by the number one on your Touchtone phone.
Speaker Change: Consequently.
We are projecting first quarter 2025 revenue growth to be roughly 40% year over year.
You'll hear a prompt that youre having been raised.
Speaker Change: Should you wish to decline from the polling process. Please press the star followed by the number too.
Speaker Change: Finally.
Speaker Change: If you are using a speaker phone please lift the handset before pressing any keys.
Speaker Change: I'd like to take a minute and thank Charles Morgan.
Speaker Change: Who has decided to retire from our board of directors.
Speaker Change: One moment. Please for your first question.
Speaker Change: Charles has been a director since 2009.
Speaker Change: Your first question is from Brian <unk> from <unk>. Please go ahead.
Speaker Change: And remains under Nouveau shareholder.
Speaker Change: Charles has also been an instrumental voice in the strategy and vision of this company.
Speaker Change: Great. Thank you so much.
Speaker Change: The outlook for the first quarter of two on top of everything else.
Speaker Change: Can you discuss the progress for both the large retailer in car manufacturer you discussed on a few recent earnings calls because theyre already been in the fourth quarter a significant contribution from these customers is it going to be a ramp in the first quarter and maybe talk about anything you can as it relates in 2025.
Speaker Change: His judgment and counsel will be missed.
Speaker Change: Im also delighted to announce that Rob Buckner will be joining our board.
Speaker Change: Rob successful entrepreneurial ventures.
Speaker Change: Vast relationships.
Speaker Change: And impressive leadership background at prominent agencies, including Campbell Mr. Soon.
Speaker Change: Yes, Brian.
Speaker Change: I think there are two separate issues.
Speaker Change: And Fallon worldwide, where he was CEO and CE ammo.
Speaker Change: I think we've said on prior.
Speaker Change: Cause that.
Speaker Change: We do have a large.
Speaker Change: Automotive client and large retail client.
Makes him a strong new addition to the board.
Speaker Change: And yes in the fourth quarter both were.
Speaker Change: And with that I will now turn the call back over to the operator Andrew for questions.
Speaker Change: Hum.
Speaker Change: Year over year.
Speaker Change: Well actually I should say the auto case, he was up both year over year and the retailer case. It was the first year.
Thank you.
Speaker Change: Ladies and gentlemen, we will now begin the question and answer session.
Speaker Change: Should you have a question. Please press the star followed by the number one on your Touchtone phone.
Speaker Change: Of activity with them.
Speaker Change: We expect.
Speaker Change: You'll hear a prompt that you haven't been raised.
Speaker Change: Based on.
Speaker Change: Our discussions with these two clients.
Speaker Change: Should you wish to decline from the polling process. Please press the star followed by the number too.
Speaker Change: That both will be up.
Speaker Change: In 2025 over 2024.
If you are using a speaker phone please lift the handset before pressing any keys.
Speaker Change: And minus the large search engines will these be your two biggest customers do you think in 2025.
Speaker Change: One moment. Please for your first question.
Speaker Change: Your first question is from Brian <unk> from <unk>. Please go ahead.
Speaker Change: No no.
Speaker Change: Our biggest.
Speaker Change: Well, we'll stay the same client which.
Speaker Change: Great. Thank you so much.
Speaker Change: We disclose in our Ks and Qs I'm, saying outside of those those are always going to be on the search side. There is so much I'm wondering.
Speaker Change: The outlook for the first quarter or two on top of everything else.
Speaker Change: Can you discuss the progress for both the large retailer in car manufacturer you discussed on a few recent earnings calls because theyre already been in the fourth quarter a significant contribution from these customers is it going to be a ramp in the first quarter and maybe talk about anything you can as it relates in 2025.
Yeah, Brian brand perfect yes.
Speaker Change: Yes, yes.
Speaker Change: Will.
Speaker Change: Yes, they will be our two largest clients in 2025 as well.
Speaker Change: Great and then can you talk about business development outside of that are you beginning to attract more brands. It sounds like 40% higher average deal size I assume that's because of these two customers but.
Speaker Change: Yes, Brian.
Speaker Change: I think there are two separate issues.
Speaker Change: I think we've said on prior.
Speaker Change: And business development of new logos continuing to be solid in the last few months.
Speaker Change: Cause that.
Speaker Change: We do have a large.
Speaker Change: Automotive client and large retail client.
Speaker Change: Thinking about how you are.
Speaker Change: And yes in the fourth quarter both were.
Speaker Change: Adoption of technology is going.
Speaker Change: Yes.
Speaker Change: As we said on the call we signed 33 new brands in the year.
Speaker Change: Hum.
Year over year.
Speaker Change: And so those are all opportunities to expand.
Well actually I should say the auto case, he was up both year over year and the retailer case. It was the first year.
Speaker Change: And.
Speaker Change: As I said we spent.
Speaker Change: Of activity with them.
Speaker Change: <unk>.
Speaker Change: A lot of time in the year.
Speaker Change: We expect.
Speaker Change: The best I can define it is.
Speaker Change: Based on.
Speaker Change: Our discussions with these two clients.
Speaker Change: Professionalizing our go to market organization.
Speaker Change: That both will be up.
Speaker Change: And.
Speaker Change: <unk>.
Speaker Change: In 2025 over 2024.
Speaker Change: Retooled some salespeople in another various roles and I think we're in a really good shape right now to be able to.
And minus the large search engines will these be your two biggest customers do you think in 2025.
Speaker Change: The scale as a consequence of the professionalism and the investment in that professionalism in 2024, that's what we're counting on and there is enough in the pipeline.
Speaker Change: No no.
Speaker Change: Our biggest.
Speaker Change: Well, we'll stay the same client which.
Speaker Change: Give me that.
Speaker Change: And that 33, new brands what was that in 2023, if you could remind us.
Speaker Change: We disclose in our Ks and Qs well im saying outside of those those are always going to be on the search side. There is so much I'm wondering.
Speaker Change: I don't remember what it is I think I'll get walid to looked at up I don't remember what the number was great and my last question before I get back in the queue, maybe one other one.
Brian: Yeah, Brian brand perfect yes.
Speaker Change: Yes, yes.
Brian: Will.
Brian: Yes, they will be our two largest clients in 2025 as well.
Speaker Change: 40% growth in the first quarter puts you at $23 million, which.
Great and then can you talk about business development outside of that are you beginning to attract more brands. It sounds like 40% higher average deal size I assume that's because of these two customers but.
Speaker Change: You are.
Speaker Change: A seasonally.
Speaker Change: Demand is very seasonal here in Netflix revenue at.
Speaker Change: Quite a nice point to start the year is there any reason to believe that this year any different where the first quarter is normally your seasonally weakest.
Brian: The business development of new logos continuing to be solid in the last few months.
Brian: Thinking about how you are.
Brian: Adoption of technology is going.
It makes sense, we got too many words.
Brian: Yes.
Speaker Change: As we said on the call we signed 33 new brands in the year.
Speaker Change: Yes.
Speaker Change: So it was no harm.
Speaker Change: Hi, Brian.
And so those are all opportunities to expand.
Speaker Change: Go ahead, Walter in answering that.
Speaker Change: It is.
Speaker Change: And.
Speaker Change: No.
Speaker Change: As I said we spent.
The seasonality is going to continue to be there.
Speaker Change: <unk>.
Speaker Change: But.
A lot of time in the year.
Speaker Change: It may not be as.
Speaker Change: Steep as we saw this year or last year, but yes, I think it will continue.
Speaker Change: The best I can define it is.
Speaker Change: Professionalizing our go to market organization.
Speaker Change: We'll continue to have the second half of the year greater than the first half of the year.
Speaker Change: With me.
Speaker Change: Retooled some salespeople in another various roles and I think we're in a really good shape right now to be able to.
Speaker Change: Okay. Thank you I'll get back in the queue.
Speaker Change: Okay.
Speaker Change: The scale as a consequence of the professionalism and the investment in that professionalism in 2024, that's what we're counting on and there is enough in the pipeline.
Speaker Change: Your next question is from Jakob <unk> from the Maxim Group. Please go ahead.
Speaker Change: To give you that yet.
Speaker Change: Okay, great Congrats on a strong <unk> and full year results.
Speaker Change: And that 33, new brands what was that in 2023, if you could remind us.
Speaker Change: Appreciate the comments on your 2025 outlook it sounds like Youre pretty confident in growth ramping momentum continuing to build so.
Speaker Change: I don't remember what it is I think I'll get Walid looked at up I don't remember what the number was great and my last question before I get back into queue, maybe one other one.
Richard Howe: I guess rich how do you feel entering 2025, just from a confidence and visibility perspective.
Speaker Change: 40% growth in the first quarter puts you at $23 million, which you are.
Richard Howe: Relative to when Youre entering 2024, just how would you compare and contrast, and it seems like things are leveling up quite a bit here.
A seasonally.
Speaker Change: Demand is very seasonal here in Netflix revenue at.
And quite a nice point to start the year is there any reason to believe that this year any different where the first quarter is normally your seasonally weakest.
Speaker Change: I feel real good Jack.
Speaker Change: And and optimistic based on all of the signals.
Speaker Change: That I have available to me.
Speaker Change: Not.
Speaker Change: Not the least.
Speaker Change: It makes sense, we've got too many words.
Speaker Change: The reasons why I'm, feeling maybe more optimistic as I've been saying.
Okay.
Speaker Change: It's always hard to know.
Speaker Change: Hi, Brian.
Speaker Change: For some.
Speaker Change: Two three years now that the $100 million Mark for US was really an important mark.
Speaker Change: Go ahead, Walter in answering that.
Speaker Change: It's.
Speaker Change: No I think the seasonality is going to continue to be there.
Speaker Change: And it's just the level at which the inertia of our technological cost resource cost computing costs kind of get overcome and.
Speaker Change: But.
Speaker Change: It may not be as steep as we saw this year or last year, but yes, I think it will continue.
Speaker Change: We approved a few times now that when we get through that $25 million a quarter number that we start to generate cash in.
Speaker Change: Let's continue to have the second half of the year greater than the first half of the year.
Speaker Change: That provides a whole bunch of other solves a whole bunch of other challenges for a business like ours. So I feel good about that I feel good about where we are I feel good about our our our ability in 2025.
Speaker Change: Okay. Thank you I'll get back in the queue.
Speaker Change: Okay.
Speaker Change: Your next question is from Jakob <unk> from the Maxim Group. Please go ahead.
Speaker Change: To grow.
Speaker Change: Okay, great Congrats on a strong <unk> and full year results.
Speaker Change: Into the year.
Speaker Change: With some confidence as we are.
Speaker Change: Appreciate the comments on your 2025 outlook it sounds like Youre pretty confident in growth ramping momentum continuing to build so I guess rich how do you feel entering 2025, just from a confidence and visibility perspective.
Speaker Change: We're obviously, giving to you I think does set us up pretty well for.
Speaker Change: A year, where we are.
Speaker Change: We can start to get past those numbers that we've.
Speaker Change: That is a ceiling.
Speaker Change: I'm optimistic.
Excellent.
Speaker Change: You've talked about I think in the past.
Speaker Change: Relative to when Youre entering 2024.
Speaker Change: I think on the platform side as Youre kind of touching wires with ramping up these new platform customers.
Speaker Change: Could you compare and contrast.
Speaker Change: Seems like things are leveling up quite a bit here.
Speaker Change: Jim.
Jack: I feel real good Jack.
Speaker Change: Better sense of maybe what that sales cycle timeline is I think as we're thinking around nine months kind of before but I'm sure if things change.
Jack: And optimistic based on all of the signals.
Jack: I have available to me.
Jack: Not.
Jack: Not the least.
Speaker Change: Can you just touch on your sales cycle process, just in general how that I guess relative to quarters prior and maybe in both segments to be interested in.
Jack: The reasons why I'm, feeling maybe more optimistic as I've been saying.
Jack: For some.
Jack: Two three years now that the $100 million Mark for US was really an important mark.
Speaker Change: Its going with your head count.
Speaker Change: So.
Jack: And it's just the level at which the inertia of our technological cost resource cost computing costs kind of get overcome.
Speaker Change: Actually the question Youre, asking is mostly related to agencies and brands, where we have a direct sales organization that's trying to recruit.
Speaker Change: Either brands directly or our agencies and the brands that they manage again thats why we call it agencies and brands on.
Jack: We approved a.
Jack: A few times now that when we get through that $25 million a quarter number that we start to generate cash and debt.
Speaker Change: On the platform side, we have three clients now there and they are among the biggest companies in the world.
Jack: That provides a whole bunch of other.
Jack: Solves a whole bunch of other challenges for a business like ours. So I feel good about that I feel good about where we are I feel good about our our ability in 2025.
Speaker Change: And there is no sales effectively there.
Speaker Change: We get access to.
Jack: To grow.
Speaker Change: Advertisers through them, that's the whole purpose of that business model.
Jack: Coming into the year.
Jack: With some confidence is.
We're obviously, giving to you I think does set us up pretty well for.
Speaker Change: And so the limits to scalability there are more related to the technological.
Jack: A year, where we're going.
Jack: We can start to get past those numbers that we've had.
Speaker Change: Capabilities and the services that we have to serve those clients and the reason why it's scaling.
Jack: That is a ceiling.
Jack: I'm optimistic.
Jack: Excellent.
You've talked about I think in the past.
Speaker Change: Rapidly right now is because of the investments that we made going back into 2023.
Jack: I think on the platform side as you're kind of touching wires with ramping up these new platform customers.
Jack: As a better sense of maybe what that sales cycle timeline is I think we're.
Speaker Change: And so.
Speaker Change: Thats all that that business needs. Its the scalability issue not a demand issue. There is we have plenty of demand for for what we're providing to those clients. The agency and brands is your nine month sales cycle.
Jack: We're thinking around nine months kind of before but I'm.
Jack: I am sure if things change.
Speaker Change: Can you just touch on your sales cycle process just in general how is that I guess relative to quarters prior and maybe in both segments just be interested to know how thats going with your head count.
Speaker Change: That business model has always been and it hasnt changed with us.
Speaker Change: Yes, so youre actually the question, you're asking is mostly related to agencies and brands, where we have a direct sales organization that's trying to recruit.
Speaker Change: We're selling a technological capability too.
Speaker Change: Two agencies to empower them to serve their clients better or to the clients directly.
Speaker Change: These are brands directly or our agencies and the brands that they manage again thats why we call it agencies and brands.
Speaker Change: And we have clients in both categories.
Speaker Change: And the idea is can can that that technology, which is the intent key outperform.
On the platform side, we have three clients now there.
Speaker Change: They are existing media providers.
Speaker Change: As a result get them more sales of whatever it is they are selling.
Speaker Change: They are among the biggest companies in the world.
Speaker Change: There's no sales effectively there.
Speaker Change: And.
Speaker Change: Given that the market. We go after there is mature.
Speaker Change: We get access to.
Speaker Change: It does take some time and nine months has been.
Speaker Change: Advertisers through them and Thats the whole purpose of that business model.
Speaker Change: No.
Speaker Change: And so the limits to scalability there are more related to the technological.
Speaker Change: The number we've thrown out in the past it can be six sometimes it's three Jack sometimes it's 12 right, but its in the six to nine months period, where when we hire a.
Speaker Change: Capabilities and the services that we have to serve those clients.
Speaker Change: Sales person they start actually closing some deals for us.
Speaker Change: And the reason why it's scaling.
Speaker Change: Rapidly right now is because of the investments that we made going back.
Speaker Change: And the reason for that is because it's a very relationship driven sale are consultative in our relationship driven sale. So it just takes some time.
Speaker Change: Into 2023.
Got it I appreciate that and then maybe just one more maybe for Wally.
Speaker Change: And and so.
Speaker Change: Thats, all that that business needs its the scalability issue.
Speaker Change: Looking at the outlook in your comments you provided some some new comments in more details than in years past.
Speaker Change: Not a demand issue. There is we have plenty of demand for for what we're providing to those clients. The agency brands as your nine months sales cycle.
Speaker Change: D cash generally I think you said cash generating you expect to be in the back half of 2025 does that refer to adjusted EBITDA free cash flow both.
Speaker Change: That business model has always been and it hasnt changed with us.
Speaker Change: Just to clarify that comment.
Speaker Change: Yes actually both.
Speaker Change: We're selling a technological capability too.
Speaker Change: I was specifically referring to free cash flow.
Speaker Change: Two agencies to empower them to serve their clients better or to the clients directly.
Speaker Change: But but certainly adjusted EBITDA also or EBITDA itself.
Speaker Change: And we have clients in both categories.
Speaker Change: Yes.
Speaker Change: And the idea is can can that that.
Speaker Change: Okay, Great and then you guys. You did mention you expect the mix the segment mix to be roughly roughly similar in 2025 relative to 2024.
Speaker Change: And that technology, which is the intent key outperform.
Speaker Change: They are existing media providers and as a result get them more sales of whatever it is they are selling.
Speaker Change: If I kind of get ahead of myself here looking further down the road as you know youre guys are strategies continuing to executing.
Speaker Change: And.
Speaker Change: Given that the market. We go after there is mature.
Speaker Change: And ramp in two years three years out how would you how do you how do you feel like the landscape of your mix is going to change it's still going to stay similar to this current mix or just be curious to hear your thoughts.
Speaker Change: It does take some time and nine months has been.
Speaker Change: No.
Speaker Change: The number we thrown out in the past it can be six sometimes it's three Jack sometimes it's 12 right, but its in the six to nine months period, where when we hire.
Speaker Change: Strategically Jack we we want.
Speaker Change: Our sales person they start actually closing some deals for us.
Speaker Change: The.
Speaker Change: We want.
Speaker Change: The technology that serves the agencies and brand side.
Speaker Change: And the reason for that is because it's a very relationship driven sale is consultative and relationship driven sale.
Speaker Change: The markets we serve is so <unk>.
Speaker Change: It takes some time.
Speaker Change: Revolutionary.
Speaker Change: Got it I appreciate that and then maybe just one more maybe for Wally.
Speaker Change: And because we have such a commanding.
Speaker Change: Advantage.
Speaker Change: Looking at the outlook in your comments you provided some some new comments in more details than in years past.
Speaker Change: <unk> and head start.
Speaker Change: Yeah.
Speaker Change: We want and we think it's possible that we could command.
Speaker Change: The cash generally I think you said cash generating you expect to be in the back half of 2025 does that refer to adjusted EBITDA free cash flow both.
Speaker Change: A bigger market share than we have and the size of that market is bigger.
Speaker Change: These numbers are not perfect Jack but the agencies and brands market is roughly $150 billion market for US right. So you can look at that and say Hey, you know we should be growing that side of our business given the performance that we achieved.
Speaker Change: Just to clarify that comment.
Speaker Change: Yes actually both.
Speaker Change: I was specifically referring to free cash flow.
Speaker Change: But.
Speaker Change: But certainly adjusted EBITDA also or EBITDA itself.
Speaker Change: To some significant numbers.
Speaker Change: Yes.
That forms side of our business, while the clients are big.
Speaker Change: Okay, Great and then you guys. You did mention you expect the mix the segment mix to be roughly roughly similar in 2025 relative to 2024.
Speaker Change: Problems, we're helping them with is there's only a $10 billion market.
Speaker Change: Now it sounds like that small, but its still gigantic and theres only a few players who do what we do in that area. So theres still plenty of upside there and as you know it's scaling right now.
Speaker Change: If I kind of get ahead of myself here looking further down the road as you know Youre guys are strategy continuing to execute and ramp in two years three years out.
Speaker Change: But we would prefer a mix closer to 50 50, that's what we're kind of trying to get so we're trying to advance the agencies and brands stuff as fast as we can recognizing that we can scale. The other side too and there are some real advantages to the scale on the platform side, not the least of which is the.
Speaker Change: How do you how do you feel like the landscape of your mix is going to change it's still going to stay similar to this current mix or I'd just be curious to hear your thoughts.
Speaker Change: Strategically Jack we we want.
Speaker Change: We want because.
Hmm.
Speaker Change: The security of the receivables and the.
Speaker Change: The technology that serves the agencies and brand side.
Speaker Change: On the working capital that is generated from that side of it.
Speaker Change: Market.
Speaker Change: The markets we serve is so revolutionary.
Speaker Change: Great well I appreciate the color on I might have a few more I'll hop back in the queue. Thanks guys.
Speaker Change: And because we have such a commanding.
You bet.
Speaker Change: Advantage and in head start.
Jon Hickman: Your next question is from Jon Hickman from Ladenburg. Please go ahead.
Speaker Change:
Speaker Change: Yeah.
Speaker Change: And we think it's possible that we could command.
Speaker Change: Hi.
Speaker Change: A bigger market share than we have and the size of that market is bigger.
Speaker Change: Rich.
Speaker Change: Could you tell us what about the momentum or talk about the momentum on the self serve side I know, it's only been a few months that it's really been.
Speaker Change: These numbers are not perfect Jack but the agencies and brands market is roughly $150 billion market for US right. So you can look at that and say hey, we should be growing that side of our business given the performance that we achieved.
Speaker Change: Up and running but can you talk about that because there isn't that aimed more at your brands and agencies.
Speaker Change: To some significant numbers.
Sean: Yes, Thanks, Sean.
Speaker Change: That forms side of our business, while the clients are big.
Sean: We have I think at last I checked there was like somewhere between a half dozen and a dozen clients that have signed up for that self serve.
Speaker Change: Problem, we are helping them with is it's only a $10 billion market.
Sean: Yes.
Speaker Change: Now it sounds like that small, but it is still gigantic and theres only a few players who do what we do in that area. So there is still plenty of upside there and as you know it's scaling right now.
Sean: It's really designed for.
Sean: For anyone.
Sean: So theres not one target audience for that.
Sean: The agencies can use it the ones that want to run their own campaigns.
Speaker Change: But we would prefer a mix closer to 50 50, that's what we're kind of trying to get so we're trying to advance the agencies and brands stuff as fast as we can recognizing that we can scale the other side too.
Sean: They have access to the AI intelligence have at it.
Sean: And at the brand.
John: He is doing the same John which some brands are starting to do where they want to run their own campaigns in house now.
Speaker Change: And there are some real advantages to the scale on the platform side, not the least of which is the.
Sean: They can do the same.
Speaker Change: The.
John: So yes, there is no.
Speaker Change: The security of the receivables and the.
Sean: Can sell to both to categories.
Speaker Change: On the working capital that is generated from that side of it.
Sean: And we're starting to see some traction in both cases I mean this.
Speaker Change: Market.
Sean: Sweet spot for us has been up until now.
Speaker Change: Great well I appreciate the color on I might have a few more I'll hop back in the queue. Thanks guys.
Sean: Agencies.
Sean: Most if not all of the revenue or large a large part of the revenue generated from agencies and brands market for US has been managed service to agency Survey agency clients.
Speaker Change: You bet.
Speaker Change: Your next question is from Jon Hickman from Ladenburg. Please go ahead.
Speaker Change: Hi.
Sean: <unk>.
Okay, and then Wally.
Speaker Change: Rich.
Speaker Change: Could you.
Speaker Change: So you said youre going to hire seven more people.
Speaker Change: Tell us what about the momentum or talked about the momentum on the self serve side I know, it's only been a few months that it's really been.
Speaker Change: I imagine that's mostly on the marketing side, but so other than that operating expenses are going to stay about.
Speaker Change: <unk> been running but can you talk about that because isn't that a more of your brands and agencies.
Speaker Change: The same.
Speaker Change: For the year.
Speaker Change: Well.
Sean: Yes, Thanks, Sean.
No operating expenses will go up right.
Sean: We have I think last I checked there was like somewhere between a half dozen and it doesn't clients that have signed up for that self serve.
Speaker Change: Compensation.
Speaker Change: We will increase.
Speaker Change: Certainly because we will be hiring.
Sean: Yes.
Sean: It's really designed for.
Speaker Change: Southern new people by the way two of them are engineers one of them is that data scientists.
Sean: For anyone.
Sean: So theres not one target audience for that.
Sean: The agencies can use it the ones that want to run their own campaigns.
Speaker Change: And some of our campaign.
And support people.
Sean: They have access to the AI intelligence have at it.
Speaker Change: So there will be an increase in compensation in 2025 over 2024.
Sean: And at the brand.
Sean: He is doing the same John which some brands are starting to do where they want to run their own campaigns in house now.
Speaker Change: General and administrative.
Speaker Change: Generally increases modestly, but nothing significant and of course marketing cost will increase.
Sean: They can do the same.
Sean: So yes, there is no.
Sean: Can sell to both to categories.
Sean: And we're starting to see some traction in both cases I mean, the sweet spot for US has been up until now.
Speaker Change: Revenue increases.
Speaker Change: Oh yeah.
Speaker Change: Okay.
Speaker Change: Okay. Thank you.
Sean: <unk>.
Sean: Most if not all of the revenue or large a large part of the revenue generated from agencies and brands market for US has been managed service to agency Survey agency clients.
You bet.
Speaker Change: Ladies and gentlemen, as a reminder, should you have any questions. Please press the star key followed by the number one.
Speaker Change: Yeah.
Okay, and then Wally.
Speaker Change: Okay. Your next question is from Jack Vander Ark from the Maxim Group. Please go ahead.
Speaker Change: So you said youre going to hire seven more people.
Speaker Change: And just sneaking one more in there maybe I missed this I apologize if I did but in turnkey self serve gross margin profile.
Speaker Change: I imagine that's mostly on the marketing side, but so other than that operating expenses are going to stay about.
Speaker Change: The same for the year.
Speaker Change: Is there any nuances to just talk about that a little bit is it a higher margin than the other than the managed service and turnkey and does it depend also on the format of wherever those ads are being placed.
Speaker Change: Well.
Speaker Change: No operating expenses will go up right.
Speaker Change: Compensation.
Speaker Change: We will increase.
Speaker Change: Yes, just touch on that to juxtapose. Thanks.
Speaker Change: Certainly because we will be hiring.
Speaker Change: I got that.
Seven new people by the way two of them are.
Speaker Change: So.
Speaker Change: The margin is the highest margin product we have in the company.
Speaker Change: Engineers, one of them is that data scientists.
Speaker Change: North of 90%.
Speaker Change: And in some of our campaign.
Speaker Change: Effectively almost 100% and to some degree.
Speaker Change: And support people.
Speaker Change: Jack because if you think about it.
Speaker Change: So there will be an increase in compensation in 2025 over 2024.
Speaker Change: It's really the AI brain and all of the costs.
General and administrative.
Speaker Change: Associated with generating.
Speaker Change: Generally increases modestly, but nothing significant and of course marketing costs will increase.
Speaker Change: Targeting model.
Speaker Change: As already sunk by us in the in the infrastructure and the software that's running on the computer systems that we have.
So when a client uses the self serve they're effectively accessing the AI and it's telling them.
Speaker Change: Revenue increases.
Speaker Change: Oh yeah.
Speaker Change: Okay.
Okay. Thank you.
Speaker Change: When they should buy.
Speaker Change: You bet.
Speaker Change: Immediate placement and when they shouldnt.
Speaker Change: And we really don't have a lot of cost of revenue associated with that almost none very small amount.
Ladies and gentlemen, as a reminder, should you have any questions. Please press the star key followed by the number one.
Speaker Change: So that's why we're we've been building that thing out and why we're excited about it because in many respects.
Speaker Change: Okay. Your next question is from Jack Vander Ark from the Maxim Group. Please go ahead.
Speaker Change: Even two or three or $4 million worth of that of that product with <unk>.
Speaker Change: And just sneaking one more in there maybe I missed this I apologize if I did but the intent key self serve gross margin profile.
Speaker Change: Obviously land most of that down to the bottom line of the company.
Speaker Change: So we'd like to see some traction on that.
Speaker Change: This year.
Speaker Change: Is there any nuance to that could you just talk about that a little bit is it a higher margin than the other than the managed service and turnkey and does it depend also on the format of wherever those ads are being placed.
Speaker Change:
Speaker Change: The format.
Speaker Change: Yes.
Speaker Change: Format is probably I think what youre asking really is liking how flexible is it for people, who maybe have different kind of campaign systems and whatnot and if that wasn't it just let me know, but we built this thing.
Speaker Change: Just touch on that to juxtapose. Thanks.
Speaker Change: I got that.
Speaker Change: So.
Speaker Change: Affectively, so it could be used with whatever.
Speaker Change: The margin is the highest margin product we have in the company.
Speaker Change: Campaign system, the the client whether that be an agency client <unk> client.
Speaker Change: North of 90%.
Speaker Change: Effectively almost 100% to some degree.
Speaker Change: <unk> wants to use.
Speaker Change: Jack because if you think about it.
And the reality is is really just a handful of them that.
Speaker Change: It's really the AI brain and all of the costs.
That are used by 90% of people so.
Speaker Change: It doesn't matter from our perspective as you think about the 90%.
Speaker Change: Associated with generating.
Speaker Change: Targeting model.
Speaker Change: We've got that covered so pretty much anybody who would want to use this thing on whatever platform. They are using it can get access to it.
Speaker Change: As already sunk by us in the in the infrastructure and the software that's running on the computer systems that we have.
Speaker Change: When a client uses the self serve they're effectively accessing the AI and it's telling them.
Speaker Change: Yes.
Speaker Change: That was that was what I was asking in another parts of that maybe just in terms of the channel I guess AD channels, it's connected television or short form tictoc videos or if it does that because I know that can really have jurassic different margin profiles for the managed service solution is that also the case with <unk> with <unk>.
When they should buy immediate placement and when they shouldnt and we really don't have a lot.
Speaker Change: Sort of cost of revenue associated with that almost none very small amount.
Speaker Change: So thats why we are.
Speaker Change: We've been building that thing out and why we're excited about it because in many respects.
Speaker Change: Or does that is that not an impact from you guys.
Speaker Change: Even two or three or $4 million worth of that.
Speaker Change: CTV.
Speaker Change: Connected TV online video display advertising streaming audio.
Speaker Change: Of that product with obviously land most of that down to the bottom line of the company.
Speaker Change: And our native advertising all the formats are provided the AI provides.
Speaker Change: So we'd like to see some traction on that.
Speaker Change: This year.
Speaker Change: Provided recommendations across all of that beauty channel and even.
Speaker Change:
Speaker Change: Format.
Speaker Change: <unk> provides offline recommendations.
Speaker Change: Yes.
Speaker Change: Matt, It's probably I think what youre asking really is liking how flexible is it for people, who maybe have different kind of campaign systems and whatnot and if that wasn't it because just let me know, but we built this thing.
Speaker Change: Television for example, which is still a market and quite quite a lot of spend it's a very concentrated market typically older individuals, but thats, a really good market and it's a cheap chief market to buy in the AI. When people are using it will in effect spit out along with everything else Thats doing a list of the TV.
Speaker Change: <unk>, so it could be used with whatever.
Speaker Change: Campaign system, the the client whether that be an agency client or brand client.
Speaker Change: <unk> programming that should be purchased in cable TV should should one of our clients want to do that is pretty impressive amazing.
Speaker Change: Wants to use.
Speaker Change: And the reality is there's really just a handful of them.
Speaker Change: That are used by 90% of people so.
Speaker Change: Excellent and Nick maybe just one more so I guess.
Speaker Change: It doesn't matter from our perspective as you think about the 90%.
Speaker Change: What's kind of baked into your <unk>.
Speaker Change: We've got that covered so pretty much anybody who would want to use this thing on whatever platform. They are using it can get access to it.
Speaker Change: Could maybe is there any expectations you could point to if you could quantify at all for that self serve solution how that kind of connects back to your <unk> 25 kind of guide for <unk>.
Speaker Change: Yes.
Speaker Change: That was that was what I was asking in another parts of that maybe just in terms of the channel I guess AD channels, it's connected television or short form tictoc videos or if it does that because I know that can really a drastic different margin profiles for the managed service solution is that also the case with <unk>.
Speaker Change: It being cash generating is it assuming.
Incremental ramp or just curious.
Speaker Change: I would put it this way because we haven't.
Speaker Change: Obviously disclose but we've been we would have a modest.
Speaker Change: Goal for the for the sales of that.
Speaker Change: Or does that is that not an impact from you guys.
Speaker Change: In 2025.
Speaker Change: CTV.
Speaker Change: Mostly.
Speaker Change: Jack because we haven't.
Speaker Change: Connected TV online video display advertising streaming audio.
Speaker Change: We haven't done it we haven't been out trying to scale the sale of that product.
Speaker Change: And if a native advertising all the formats are provided the AI provides.
Speaker Change: The sales that we did have an earlier on you can hardly think of them as beta clients.
Speaker Change: <unk> provides recommendations across all of that beauty channel and even.
Speaker Change: And we had a number of them.
Speaker Change: <unk> provides offline recommendations.
Speaker Change: So the answer is it's a modest.
Speaker Change: Television for example, which is still a market and quite quite a lot of spend it's a very concentrated market typically older individuals, but thats, a really good market and it's a cheap cheap market to buy and the AI. When people are using it will in effect spit out along with everything else Thats doing a list of the TV.
Speaker Change: And our overall strategic plan and our budget for the year, it's a modest number.
Speaker Change: That's the best I can tell you.
Speaker Change: That's more than helpful. I appreciate the color and congrats again on the strong momentum. Thanks.
Speaker Change: Thank you.
Yes.
Speaker Change: In programming that should be purchased in cable TV should should one of our clients want to do that is pretty impressive amazing.
Speaker Change: There are no further questions at this time. Please proceed with closing remarks.
Speaker Change: Thank you Andrew and thank you everybody for joining us today on the call we.
Speaker Change: Excellent.
Speaker Change: Maybe just one more so I guess.
Speaker Change: As always we appreciate your continued interest in our company.
Speaker Change: What's kind of baked into your <unk>.
Speaker Change: Could maybe is there any expectations you could point to if you could quantify at all for that self serve solution how that kind of connects back to your <unk> 25 kind of guide for <unk>.
Speaker Change: Ladies and gentlemen, this concludes your conference call for today we.
Speaker Change: We thank you for participating and ask that you. Please disconnect your lines.
Speaker Change: Keeping cash generating is it assuming.
Speaker Change: Incremental ramp or just curious.
Speaker Change: I would put it this way because we haven't.
Speaker Change: Obviously disclose but we've been we have a modest.
Speaker Change: Goal for the for the sales of that.
Speaker Change: In 2025.
Speaker Change: Mostly.
Speaker Change: Jack because we haven't.
Speaker Change: We haven't done it we haven't been out trying to scale the sale of that product.
Speaker Change: The sales that we did have an earlier on you can hardly think of them as data clients.
Speaker Change: And we had a number of them.
Speaker Change: So the answer is it's a modest.
Speaker Change: And our overall strategic plan and our budget for the year, it's a modest number.
Speaker Change: That's the best I can tell you.
Speaker Change: That's more than helpful. I appreciate the color and congrats again on the strong momentum.
Speaker Change: Thank you.
Speaker Change: There are no further questions at this time. Please proceed with closing remarks.
Speaker Change: Thank you Andrew and thank you everybody for joining us today on the call we.
As always we appreciate your continued interest in our company.
Speaker Change: Ladies and gentlemen, this concludes your conference call for today we.
Speaker Change: We thank you for participating and ask that you. Please disconnect your lines.