Q4 2024 Fluent Inc Earnings Call
Speaker Change: Good morning and welcome. Thank you for joining us to discuss Fluent's fourth quarter and year-end 2024 earnings results.
Speaker Change: With me today are Fluence Chief Executive Officer Don Patrick, Chief Financial Officer Ryan Perfit, and Chief Strategy Officer Ryan Schuelke. Our call today will begin with comments from Don and Ryan Perfit
via the webcast and it's also available on Fluent's website.
Speaker Change: Before we begin, I would like to advise listeners that certain information discussed by management during this conference call will contain forward-looking statements covered under the safe hardware provisions of the
Private Security Litigation Reform Act of 1995.
Speaker Change: Any forward-looking statements made during this call only speak as of the date hereof. Actual results could differ materially from those stated or implied by such forward-looking statements due to risk and uncertainties associated with the company's business.
Speaker Change: These statements may be identified by words such as expects, plans, projects, could, will, estimates,
Speaker Change: and other words of similar meaning. The company undertakes no obligation to update the information provided on this call for a discussion of risks and uncertainties associated with Fluence Business. We encourage you to review the company's filings with the Securities and Exchange Commission, including the company's most recent annual report on Form 10-K and quarterly reports on Form 10-Q.
Speaker Change: Management evaluates the financial performance of the company's business on a variety of indicators including these non-GAAP metrics.
Speaker Change: The definition of these metrics and reconciliations to the most directly comparable gap financial measure are provided in the earnings press release issued earlier today. With that, I'm pleased to introduce Fluence CEO Don Patrick.
Don Patrick: Good morning. Thank you all for joining our call today. I'm here together with Ryan Schuelke, our chief strategy officer and company co-founder, and Ryan Perfit, our chief financial officer.
Don Patrick: We achieved 139% growth in Commerce Media Solutions revenue in the fourth quarter compared to Q4-23, and 284% growth for the full year.
Don Patrick: As of December 31st, 2024, our Commerce Media Solutions business surpassed an annual revenue run rate, calculated as explained in our earnings press release, in excess of 60 million, up from 50 million as of September 31st, 2024.
Don Patrick: and we continue to expand our model and grow market share.
Don Patrick: The key driver of this growth has been our growing list of major brands that see our value proposition and continue to join our roster of partners and advertisers.
Don Patrick: In 2024, we announced several key partnerships with leading brands during the fiscal year, with significantly more in the pipeline as we move into fiscal 2025.
Don Patrick: Our strategic plan is grounded in shifting our business mix to the commerce media solutions, where we've invested our financial and human resources to win big.
of strategic significance and a fluent competitive differentiator.
Don Patrick: We are providing tremendous value to consumers, partners, and advertisers with margins that are accretive to our consolidated business.
Don Patrick: As we invested in growing commerce media solutions, we've also embarked on a parallel path, contracting our larger nucleus of owned and operated properties to focus on fewer targeted businesses that we find strategically compelling in the longer term.
Don Patrick: And as we continue to stabilize and ultimately strengthen our own and operated market-based position against businesses we can grow, Q4 revenue and media margins were negatively impacted by significant increases media costs on the biddable platforms.
Don Patrick: So, we consciously chose not to chase this volume until media pricing came back to more traditional levels post-election.
But make no mistake...
Don Patrick: We still maintain our leadership position and own and operate a marketplace.
Don Patrick: and provides us market credibility and unique client access based on those capabilities we bring to market and at a level that is effective, efficient, and higher quality than any of our competitive assets.
Don Patrick: Still, this has cost us profitability in 2024 that we see as a required investment in our future.
Don Patrick: Furthermore, as part of our broader strategic repositioning, we discontinued the ACA portion of our call solutions business.
Don Patrick: In Q4, adjustments made by insurance companies in response to widespread fraudulent activity in the government ACA marketplace necessitated a $2.5 million non-recurring write-down of revenue.
Don Patrick: This write-down caused adjusted EBITDA to be negative for the quarter.
Don Patrick: All this being said, the consolidated Q4 performance was a disappointment, particularly the continued industry-wide issues affecting call solutions.
Don Patrick: However, we see this as having no additional effect on our longer term strategy to drive value through our strategic pivot to commerce media solutions.
Don Patrick: We are confident in our ability to return to year-over-year double-digit consolidated revenue growth, profit growth, and enhance our enterprise margins in 2025.
Don Patrick: Partnerships like these validate fluids products and are driving the growth of our commerce media solutions business.
Don Patrick: We're honored to be working with such an impressive roster of media partners across diverse verticals.
Don Patrick: Including retail.
Don Patrick: Grocery tick.
Ticketing and quick serve restaurants.
Don Patrick: Our line goals are consistent.
Don Patrick: As we aim to maximize revenue opportunities for our partners.
Don Patrick: Increased conversion rates for advertisers.
Don Patrick: And build more meaningful.
Don Patrick: Higher quality experiences for our consumers.
Don Patrick: To put our ongoing shift in business mix into perspective in 2023, Commerce media solutions accounted for 4% of <unk>.
Don Patrick: <unk> consolidated revenue compared to 16% in 2024.
Don Patrick: That trend line shifts continued in Q4, where commerce media solutions represented 26% of consolidated revenue its strongest seasonal quarter.
Don Patrick: And we certainly expect this healthy growth to continue as we've delivered triple digit year over year percentage growth in Commerce media segment since its inception.
Don Patrick: This growth is supported by our proprietary first party data that we've collected over 14 years as a leader in the customer acquisition services via our owned and operated marketplace.
Don Patrick: As well as embedded AI power technology.
Don Patrick: That allows us to establish long term contracts and mutually beneficial revenue share agreements with our commerce media partners.
Don Patrick: Accordingly, and as we continue to place our financial and human resources against our growth strategy while.
Don Patrick: Our owned and operated will continue to play a vital role in our business.
Don Patrick: Revenue will continue to decrease as a percentage of sales.
Don Patrick: It's high margin Commerce media solution revenue grows as advertisers lean into our higher quality consumer engagement platform.
Don Patrick: Before I turn the call over to our Chief Financial Officer, Ryan Perfect I wanted to provide a brief quarter by quarter comparison of the performance of our Commerce media solutions dating back to its launch in the first quarter of 2023.
Don Patrick: As you can see in the graph on slide seven.
Don Patrick: Commerce Media solutions revenue has demonstrated exponential growth with steadily improving gross margins.
Don Patrick: This segment was launched in the first quarter of 2023.
Don Patrick: And the business, obviously continues to represent a growing share of our consolidated revenue mix.
Don Patrick: Looking ahead, we expect to see flat year over year consolidated revenue in the first half of 2025.
Don Patrick: Primarily due to revenue declines related to the businesses, we discontinued or shifted investment away from in 2024.
Don Patrick: As well as seasonality in the many commerce media verticals that we presently serve.
Don Patrick: As you progress through the year, we expect total company revenue growth will accelerate in the second half of 2025.
Don Patrick: Driven by strong performance in our Commerce media segment.
Don Patrick: The corresponding impact on the fiscal year will be significant.
Don Patrick: As we expect to deliver double digit year over year growth in fluid consolidated revenue and gross profit.
Don Patrick: We remain bullish about the momentum we've generated in our strategic pivot.
Don Patrick: As we leverage the competitive advantages of our owned and operated marketplaces and accelerate into exciting and significant high growth opportunity in the large and growing commerce media industry.
Don Patrick: Importantly, we are expanding our strategic value proposition to world class partners beyond customer acquisition.
Don Patrick: Delivering higher quality consumer engagement across the entire marketing funnel.
Don Patrick: As our strategic trend line continues in 2025, we believe shareholder value will follow.
Don Patrick: And with that.
Don Patrick: I will turn it to Ryan perfect to provide more detail to our financial results.
Thank you, Dan and thanks to everyone for joining us today.
Don Patrick: I'll now provide some additional color on our Q4 and full year results.
Don Patrick: We generated revenue of $65 4 million in the fourth quarter of 2024, a decrease of 10% from prior year.
Don mentioned in his remarks, we are intently focused on our strategic shift in revenue mix to Commerce media. We believe this represents a significant opportunity for client as more and more of our media partners and advertisers are turning to this dynamic advertising medium to maximize customer monetization and return on ad spend.
Don Patrick: Commerce media solutions achieved triple digit year over year growth to cap off an exceptional year for this business.
Don Patrick: In the fourth quarter of 2020 for Commerce media solutions revenue increased 139% to $17 2 million over fourth quarter of 2023.
Don Patrick: For the full year Commerce media solutions revenue totaled $41 3 million, an increase of 284% over fiscal 2023.
Don Patrick: And as Don mentioned, we anticipate triple digit year over year growth rates to continue through 2025.
Don Patrick: With Commerce media solutions, serving as a key driver for the year over year double digit companywide revenue growth that we expect in the back of the year.
Don Patrick: As Don mentioned, while owned and operated revenue continues to stabilize we expect revenue from this business to decrease and Commerce media solutions to become a larger portion of the overall revenue mix.
Don Patrick: We saw a decrease in <unk> revenue of 23% in the fourth quarter of 2024, when compared with the prior year period, and a decrease in full year <unk> revenue of 29% compared to full year 2023.
Don Patrick: Media margin in the fourth quarter was $16 5 million, which represents 25, 3% of revenue compared to $24 2 million or 33, 1% of revenue last year for the full year of 2020 for media margin totaled $72 5 million.
Don Patrick: Presenting 28, 5% of revenues compared with $91 3 million or 36% of revenues in 2023.
Don Patrick: Media margin was particularly low in the fourth quarter of 2024 due to two unrelated factors. The first being the previously mentioned ACA revenue write off and the second being a function of increased media costs in our health insurance vertical in the core solutions business.
Don Patrick: Our commerce media Escalations media margin in the fourth quarter of 2024 was $6 8 million or 39, 3% of revenues compared with $1 3 million or 18, 5% of revenues in the fourth quarter of 2023 demonstrated.
Don Patrick: Strong growth in this business.
Don Patrick: On an annual basis Commerce media media margin.
Don Patrick: Total $14 5 million.
Don Patrick: Or 35, 1% compared with 912000 or eight 5% of revenues in 2023.
Don Patrick: On a GAAP basis total operating expenses for the fourth quarter of 2024 totaled $16 9 million a decrease of $2 9 million compared to the fourth quarter of 2023.
Don Patrick: Full year 2024, total operating expenses totaled $72 3 million compared with $72 4 million in 2023.
Don Patrick: We recognized no goodwill and intangible asset impairment charges in the fourth quarter of 2024 or the fourth quarter of 2023.
For the full year, we recognized goodwill impairment charges of $1 3 million compared with $55 4 million in 2023.
Don Patrick: Additionally, we recognized impairment of intangible assets of 980000 in full year 2024, compared to no impairment of intangible assets in 2023.
Don Patrick: Adjusted EBITDA in the fourth quarter of 2024 was negative $1 7 million compared with adjusted EBITDA of a positive $2 5 million in the fourth quarter of 2023.
Don Patrick: As Don stated in his remarks.
Don Patrick: We recorded an ACA related write off of accounts receivable and an equal offset a revenue of $2 5 million, which drove adjusted EBITDA into negative territory for the quarter.
Don Patrick: Adjusted EBITDA for the full year was negative $5 6 million compared with adjusted EBITDA of $6 8 million in 2023.
Don Patrick: As we continue to drive our shift in revenue mix to focus on Commerce media solutions, we expect adjusted EBITDA margin to improve over time.
Don Patrick: The company cannot provide a reconciliation to expected net income or net loss as a percentage of revenue for 2025 due to the unknown effect timing and potential significance of certain operating costs and expenses share based compensation expense and the provision for or benefit from income taxes.
Don Patrick: Interest expense in the fourth quarter increased to $1 million from $784000, primarily due to a higher average interest rate on our term loan with SLR compared to our term loan with citizens bank in the prior year period.
Don Patrick: For the full year interest expense was $4 7 million compared with $3 2 million in 2023.
We recognized an income tax benefit in the quarter of $1 9 million compared to an income tax benefit of 667000 in the fourth quarter of 2023.
Don Patrick: In the full year, we recognized an income tax benefit of $1 8 million and an effective tax rate of five 8% compared with an income tax benefit of 116000, and an effective tax rate of 2%.
Don Patrick: We reported a net loss of $3 4 million in the fourth quarter compared with a net loss of $1 9 million in the prior year period.
Don Patrick: And adjusted net loss, a non-GAAP measure up $3 3 million equivalent to a loss of <unk> 18 per share compared with an adjusted net loss of 386000 or a loss of <unk> <unk> per share in the fourth quarter of 2023.
Don Patrick: For the full year, we reported net loss of $29 3 million compared with a net loss of $63 2 million in the full year of 2023.
Don Patrick: And an adjusted net loss of $18 5 million or a loss of $1 14 per share compared with adjusted net loss of $7 2 million or a loss of 52 cents per share in 2023.
Don Patrick: Importantly, the full year of 2023 included goodwill impairment charges of approximately $55 million, which significantly impacted net income in this period.
Shifting now to our balance sheet.
Don Patrick: We ended the quarter with $10 7 million in cash and cash equivalents, including restricted cash.
Total debt as reflected on the balance sheet as of December 31, 2024 was $31 9 million.
Don Patrick: One 4 million higher than the $35 million at December 31, 2023.
Don Patrick: As of December 31, 2024, we had an outstanding principal balance of $31 5 million on our credit facility with SLR credit solutions. This facility provides us with a $20 million term loan and a revolving credit facility of up to 30 million that matures on April <unk> 2029.
Don Patrick: We're very pleased with the growth of our Commerce media business in 2024, and our results reflect the ongoing strategic shifts that we've been driving for the past several quarters now.
Don Patrick: Looking ahead to 2020, our focus is on the continued execution of our strategic pivot to grow our commerce media solutions.
Don Patrick: To do this we're entering into partnerships with leading advertising brands and media partners, which we detailed earlier in this call to enhance influence credibility and market recognition as a leading provider of products and services in the commerce media space.
Don Patrick: We're also bringing on leading the industry talent to help us further our goals subsequent to the close of the quarter and the fiscal year, We announced the addition of Adrian stack as our new Chief product Officer.
Don Patrick: <unk> has extensive experience in product development leadership, and the Commerce media space and we are thrilled to welcome him to the fluent team.
Don Patrick: As we execute on this strategy, we believe that we're positioning for us to drive revenue growth margin expansion and enhanced profitability metrics underscored by the growth and success of our Commerce media solutions.
Don Patrick: With that we'll be happy to take questions at this time.
Don Patrick: Thank you as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, one moment for questions.
Don Patrick: Our first question comes from Maria <unk> with Canaccord you May proceed.
Maria: Great. Good morning, Thanks for taking my questions.
Don Patrick: First scale.
Don Patrick: <unk> pretty nicely last year, so now that helpful.
Don Patrick: Finally, I guess, what's the right way to think about sort of the pull through.
Don Patrick: So im just talking about partnerships.
Don Patrick: What are some of the key drivers on building blocks humps here.
Don Patrick: Can you help the necessary infrastructure in place.
Don Patrick: This business further.
Maria: Hi, Maria Thanks for your question.
Maria: So I'll hit a couple of different things in your questions around the CMS revenue. So as you know we started this business in the first quarter 2023.
Maria: And we built it off the I'll say really strong competitive assets that we have within the owned and operated business. So from a data perspective technology perspective, et cetera et cetera, We were building off a foundation that we had built over 14 years.
Maria: So.
Maria: <unk> is growing aggressively.
Maria: You can see the numbers and we do see visibility that we can continue to grow.
Maria: At at a triple digit rate in 2025.
Maria: And we actually see that continuing on into 2026, two primary drivers as you know one commerce media is one of the most transplant transformational.
Maria: <unk> digital advertising in the last 10 years. So there's a lot of Greenfield here, where partners are coming in and brands are coming in to participate in commerce media and the second is that we are in we have now and building our brand and building our ability to drive superior results and the competition based on our competitive advantages in there.
Maria: We're starting to get out in the market to accelerate where we are so that's.
Maria: That's part of why we have really came out in Q3 to start to talk more about the numbers on commerce media, because we do see that visibility and we are confident.
Maria: It does two things into our business model. The first one is obviously, it's more seasonal based on the verticals that we.
Maria: That we serve within commerce media on the retail side that obviously is changing our business model and how we look at quarter to quarter, but the more important piece is that revenue is more predictable and it's more it's more valuable right. We are we're embedding our technology onto our commerce media partners.
Maria: Websites, we're getting all of their transactions they are getting into post transaction environment and it's a very favorable rev share so compared relative to the <unk>.
Maria: Legacy and owned and operated business of fluent is much more predictable. So we have great visibility in terms of how to grow that.
Maria: You asked a question around how the building blocks and infrastructure partners. So.
Maria: I'll hit the infrastructure, we are leveraging off the core of what fluid has built.
Maria: Both from a both from a technology and data perspective, but equally important from a cultural perspective.
Maria: We come at it as a marketing company, we have been marketing to our own consumers and interacting with them and we have tons of great first party data to leverage and we're bringing that to bear for our new partners on the <unk>.
Maria: <unk> media side so.
Maria: Infrastructure.
Maria: <unk> seen it in our financial numbers the last two years in 'twenty three 'twenty four was a heavy investment.
Maria: On the technology and the analytics side.
Maria: Build out specifically for Commerce media versus are our core owned and operated business and we see that as we grow this business, it's a much more.
Maria: It will be able to manage those expenses those investments much easier.
Maria: And as the business grows the revenue comes in.
Maria: Did I answer all your questions Maria or.
Maria: Yes, Jeff. Thank you that's very helpful and then I look for.
Elyse: Elyse to you Glenn.
Elyse: Is that a portion of the $100 million in revenue that you generated last year, perhaps a little more durable and I.
Elyse: I guess what are your thoughts on maybe stabilizing that segment or some parts of that segment and returning to that yes.
Elyse: So again as we talk.
Elyse: It's a huge competitive advantage for us.
Elyse: But it is not a growth engine and we don't we don't look at it growing again Maria and we look at it is really just do we how do we stabilize that and how do we leverage those assets.
Elyse: Some of it has to do with the regulatory changes that we talked through.
Elyse: At length in the past couple of years about the headwinds there, but equally important.
Elyse: It's primarily around where do we allocate our priorities and we've continued.
Continue to invest and move capital and move people towards E Commerce media side because of the opportunity. There. So that really has been our or context around that business. It's a huge competitive advantage and if we keep it flat or we keep it decline.
Elyse: And a lower percentage, we will we will win big on the commerce side.
Elyse: Got it thank you Tom.
Maria: Thank you Maria.
Elyse: Thank you.
Patrick: Our next question comes from Patrick <unk> with Barrington Research you May proceed.
Elyse: Hi.
Elyse: Kind of following up on the.
Elyse: <unk> segment, our O&M business is do you include the call centers within that and I guess just on the call Center side.
Elyse: If you're stepping away from like the ACA marketplace, Okay, maybe just talk about.
Elyse: Where else you have.
Kind of scale within within that business.
Elyse: Sure. Thanks for the question. So no we do not include call center and the <unk> business.
Elyse: As we outlined in our last earnings call. We now look at our business as as the <unk> business marketplace.
Elyse: Commerce Media solutions, and then agency services, where call solutions, it's under that agency services line.
Elyse: Just to take a step back.
Elyse: You've been with us for a while but strategically.
Elyse: Strategically call solutions expands the size of the <unk> marketplace, because it allows fluid to live agent capabilities to direct our consumers to higher value higher consideration categories like health and life and home services.
Elyse: So we do continue to grow that business and historically it has been a very consistent steady performer for us.
Elyse: And Thats really the same same.
Elyse: Proposition on the <unk>.
Elyse: Places, where we're bringing quality consumers to health care providers, primarily Medicare.
Elyse: And also in HCA in terms of leads that are going to aggregators.
Elyse: For the insurance company so.
Elyse: We have it's been a steady performer theres been two huge obviously changing sweeping changes that we are working our way through.
Elyse: And in that happened in 2020 for the first one was the FCC and the CMS came out with new new regulations that caused the demand in our market from our from our <unk>.
Elyse: For my clients to shift from taking warm transfer as to taking inbound calls so we didn't make that shifts successfully in Q2.
Elyse: And we did we were able to drive significant margin in the business, but in Q4.
Elyse: The fact that we are buying media to drive those inbound costs.
Elyse: Immediate cost caused us to have.
<unk> in Q4 in that in that business. It's continued on in Q1 that elevated level of media costs.
Elyse: We have a very.
Elyse: Good plan around diversifying that it can take us a couple of quarters to work through but the high quality consumer and the demand and the high quality partners that we work with.
Elyse: Continue to continue to be in place for us to drive that business forward.
Elyse: Okay.
Elyse: Then on Commerce Media solutions I think you had mentioned that you are able to.
Elyse: Leverage.
Elyse: On the <unk> side to support that.
Elyse: I'm just kind of curious with the continued softness in <unk> is that kind of limits the ability to have that data.
Elyse: Bolster.
Elyse: The commerce media side, and any sort of like if maybe sort of like an inflection where like you have enough scale in commerce media Ware.
Elyse: Weakness in the O&M side wouldn't necessarily be of kind of risk to continuing to grow that.
Elyse: Business, Yes, yes, so youre absolutely right. Obviously, there is as we've as we've.
Elyse: Really focused and repositioned ono around the quality side, rather than on the gross side.
Elyse: The data that comes in on a daily basis is less than it was in the past, but we have 14 years of first party data and consumers coming.
Elyse: Over 200 million unique email addresses and that that database, obviously incredibly deepened incredibly.
Elyse: Large breadth in terms of campaigns and things like that so even with the smaller traffic and consumers coming on or or know that database data continues to be very relevant and fresh for us really for the.
Elyse: E Commerce media.
Elyse: And I think your second question there is too big.
Elyse: Business model.
Elyse: Things that we're seeing one is in the second half of this year, we get significant seasonality in that in that Commerce media solutions. So we see the second half, where we will return to growth.
Elyse: Double digit growth that will drive double digit growth across the consolidated side affluent.
Elyse: And I think that is the inflection point that we see based on based on where we are in the growth and the wins that we're getting in that commerce media platform.
Speaker Change: Okay. Thank you thanks Pat.
Speaker Change: Thank you and as a reminder to ask a question. Please press star one on your telephone. Our next question comes from Bill <unk> with Titan Capital Management you May proceed.
Speaker Change: All right. Thank you.
Speaker Change: Pleased to expand further on the comment in your opening remarks relative to the to.
Speaker Change: The pipeline in the Commerce media business, both in terms of.
Speaker Change: The size of that pipeline.
Speaker Change: A number of prospects, but also the size of.
Speaker Change: Those prospects relative to the customers that you're currently currently have on board.
Bill: Thanks, Bill Thanks for the question.
Speaker Change: So as I was.
Maria: Talking a little bit me answering Maria.
Our pipeline continues to grow very very.
Maria: Successfully based on the fact that we are obviously building our brand around driving better results and also by the fact that the industry. We're sitting in the middle of a fantastic transformative industry with a lot of headwinds with a lot of tailwind. So the pipeline continues to grow.
Maria: It is a great place for us to provide that visibility of triple digit growth rate for that business in 2025. So.
Maria: And as we continue to land. These brands these new wins in the verticals, we're able obviously from a marketing perspective penetrate that vertical with great case studies and great.
Maria: Great marketing materials to accelerate the sales side so.
Maria: It is fantastic momentum in the pipeline is significant in size for us to deliver on our commitment.
Maria: We've made in terms of growth rig.
Regarding size there is there is obviously from a.
Maria: Different size brands that we work with.
Maria: There is large one that will that can have.
Maria: Millions of consumers there are some that have smaller ones that come in.
Maria: We manage those the pipeline based on the breadth of that and how do we segment that.
Maria: But there are some very large transformative.
Maria: Partners that were that were discussing anywhere in the midst of the pipeline that could accelerate that growth rate that we've positioned well.
Maria: We don't factor that into our business Bill, we don't factor that into our forecast, but as we build our brand and we build our results that we've been able to drive for our partners were very pleased with some strategic partnerships that we could train.
Maria: Be transformational for us and grow and accelerate that business revenue.
Maria: Revenue that we've done.
Maria: We've laid out to you, but we do not plan our business around that and we do not run our business by those big deals.
Dan: Dan would you please quantify.
Maria: Okay.
Maria: Transformative would be.
Maria: Is there any way that you can that can scale that for us and.
Maria: And what's the timeline.
Maria: Generally speaking larger.
Maria: It leads to a longer.
Maria: Longer sales cycle, and so is this something that might happen next year or near term, yes, okay great questions. So.
Maria: If you look at an average it depends a lot on the verticals were in but I'll just take retail vertical.
Maria: That's our largest vertical.
Maria: Average size.
Maria: Partner that we work with might have 10 million post transactions sessions, a year right, but that could mean, we have very valuable partners that are doing $1 million. We are very valid partners theyre doing 30 million or $50 million right. So thats the range in which you see.
Maria: In the mix of our portfolio and in the mix of our current clients also.
Maria: The transformative deals that we're talking about will be a multiple of the high end of that of that range.
So if we're talking about things that could literally significantly change.
Maria: The growth trajectory that we have.
Maria: Regarding timing.
Maria: They do take a little bit longer.
Maria: At times, but I.
Maria: Im going to tell you guys will be the first to hear when we closed on <unk>.
Maria: So we there is things in the pipeline that we think that will happen.
Maria: Can happen obviously in 2025.
Maria: Great. Thank you and.
Maria: Could you please talk about what your.
Maria: Conversion is so once you have one customer.
Maria: And and their customer has purchased a product and youre presenting the post sale add what's your conversion rate versus the competition and the rest of the industry.
Maria: Yes.
Maria: We don't do well, we do have we do have some case studies build that we've given that we've made public around.
Maria: Around the conversions in revenue.
Maria: In our investor deck.
Maria: Obviously some of this is as competitive that we don't want to disclose but.
Maria: Theres two important pieces of this right. One is is the size of the how would the quality of the consumer that we're connecting to our brands our world class brands like.
Maria: A disney or Apple et cetera.
Maria: We've seen compared to head to head competition.
That are that the consumer is.
Maria: Over 25% more valuable.
Maria: Then than the ones that the consumers are.
Maria: Or the brands, we're connecting the consumers to with our competitors. So that's a significant value proposition for us is higher quality consumers based on our based on our technology and our data and our and our ability to identify and serve the right ad.
Maria: On the partner side, we also have a very similar increase in.
Maria: Uptick in the revenue that we provide our ecommerce partners up and down over 20%. So.
Maria: Significant uplift.
Maria: In the competitive advantage that we have head to head against our competition.
Maria: And so when you think about these large.
Maria: These large prospects or frankly, the rest of the pipeline that's maybe.
Maria: Not necessarily transformative, but all part of the pipeline.
Maria: Is there anything about that pipeline that would.
Maria: Different so that you would not be able to generate for them.
Maria: 25% more value.
My mind is going is it seems like your <unk>.
Maria: <unk> ability of winning.
Maria: If theyre basing their decision on the <unk>.
Maria: On the financial aspect of the transaction.
Maria: It really increases your chance of winning those deals right. So.
Maria: So the answer is we believe that we are heavily as we've talked about we're not in all the verticals Bill.
Maria: And obviously, even within the verticals may be take retail example.
Maria: Is there a different audience segments and different things that we've got to work through in terms of getting that same sort of return, but again that sort of fits to where our value proposition and how we go to market, we're a marketing company.
Maria: We've been doing it for one for one owned and operated properties for 14 years.
Maria: Know how to drive consumer engagement, and we know how to drive results. So.
Maria: Confident that that DNA and that expertise.
Maria: And operated will translate into the different verticals that we enter into so there are we've laid out in the presentation. We've not we're not in some of the verticals that we believe we are going to get into and grow it's going to take a little bit of time to work through that if we get into for example, travel we're not into travel right now, but we're confident.
Maria: That marketing DNA and first party data will drive those results across every vertical and across different types of.
Maria: Partners within those verticals.
Maria: That is helpful.
Maria: And.
Maria: Thank you for all the color one additional question your gross profit dollars approximately half came from the from the Commerce and media business.
Maria: And you all have been very clear about seasonality within your business.
Maria: The question is as you look over the course of the next four quarters do you see the gross profit dollars coming from Commerce media.
Maria: Holding and or growing.
Maria: And particularly in Q1 and Q2.
Maria: Or due to the seasonality that would be.
Maria: Under pressure as a percentage of the total gross profit.
Maria: Bill.
Speaker Change: I think I understand your question I'll answer it two different ways first the business mix right is going to be.
Speaker Change: We're very transparent on the business mix, that's been happening around that commerce media. So we see that business mix continuing to increase.
Speaker Change: As a percentage of the total all total value of the fluent business. So.
Speaker Change: So that business mix will continue to drive the margin itself in that Commerce media business is relatively consistent and predictable.
Speaker Change: Based on that revenue share that we have so we will see margin the margin percent be consistent but we will see the mix of that business continue to drive and.
Speaker Change: It would be more significant part of fluid overall.
Speaker Change: And in Q1.
Speaker Change: Typically do you anticipate commerce media.
Speaker Change: Percentage of the business.
Speaker Change: To increase or decrease in net im really trying to get my head wrapped around the seasonality from that perspective, yes, yes.
Speaker Change: So it will increase as a percentage.
Speaker Change: The overall fluid.
Speaker Change: Yes in Q1.
Speaker Change: We do we do go down sequentially from Q4 to Q1, the Commerce media business will continue to grow at the rates that we've talked about it shifts the seasonality from Q4 to Q1.
Speaker Change: The revenue will decline based on that seasonality.
Speaker Change: Great. Thank you.
Speaker Change: Good luck closing some of these large prospects.
Speaker Change: Thank you Bill.
Speaker Change: Thank you I would now like to turn the call back over to Don Patrick for any closing remarks.
Don Patrick: Thank you for joining our call today.
The key headline is reinforcing why we're so confident about our strategic commitment to win in the rapidly growing commerce media industry.
Don Patrick: And it leaves us poised for growth.
Don Patrick: Through execution to deliver breakout performance in the second half of this year.
Don Patrick: Thank you for your continued support and we look forward to giving you an update.
Don Patrick: After Q1.
Don Patrick: Yes.
Don Patrick: Thank you. This concludes the conference. Thank you for your participation you may now disconnect.
Don Patrick: Okay.
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Don Patrick: Yes.
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Don Patrick: Thank you.
Don Patrick: Okay.
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Don Patrick: Okay.
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Don Patrick: Sure.
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Don Patrick: Yes.
Don Patrick: Yes.