• Revenue: $26.2 million in Q4 2024, a 26% increase year-over-year.
• Annual Revenue: Approximately $84 million for the fiscal year 2024, a 13.4% increase.
• Gross Profit: $21.8 million in Q4 2024, a 20% increase from the previous year.
• Gross Margin: 83.1% in Q4 2024, down from 87.3% in the previous year.
• Net Income: $141,000 in Q4 2024, compared to a net loss of $2.4 million in Q4 2023.
• Adjusted EBITDA: $1.2 million in Q4 2024, an improvement of $2.4 million from the previous year.
• Cash and Cash Equivalents: $2.5 million as of December 31, 2024.
• Operating Expenses: $21.5 million in Q4 2024, up from $20.6 million in Q4 2023.
• Net Cash Provided by Operating Activities: $230,000 for the full year 2024, a $2.8 million improvement over 2023.
• Employment: 81 employees at the end of Q4 2024, down from 93 at the end of 2023.

• Warning! GuruFocus has detected 4 Warning Signs with INUV.

Release Date: February 27, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Inuvo Inc (INUV) achieved a record-breaking fourth quarter with a 26% year-over-year revenue growth, reaching $26.2 million.
• The company delivered positive net income and adjusted EBITDA in Q4 2024, indicating improved financial health.
• Inuvo Inc (INUV) successfully onboarded 33 new brands in 2024, enhancing its client base and market reach.
• The IntentKey self-serve platform, a significant technological advancement, offers high margins and democratizes advertising by simplifying audience targeting.
• The company reported a 60% year-over-year increase in ad clicks for platform clients, showcasing strong engagement and demand.

Negative Points

• Gross margin declined to 83.1% in Q4 2024 from 87.3% the previous year, partly due to a new campaign with a platform client.
• Operating expenses increased to $21.5 million in Q4 2024, up from $20.6 million in the same period last year.
• The cost of revenue rose to $4.4 million, primarily due to higher media payments for agencies and brands.
• Net interest expense was approximately $103,000 in Q4 2024, compared to a net interest income of $8,000 last year, due to higher borrowing.
• The company anticipates a small decline in gross margin in 2025 due to increasing revenue from a platform client.

Q & A Highlights

Q: Can you discuss the progress for both the large retailer and car manufacturer you mentioned in recent earnings calls? Have they contributed significantly in Q4, and what are the expectations for 2025? A: Yes, both clients showed growth in Q4. The automotive client was up year-over-year, and the retailer was new in 2024. We expect both to continue growing in 2025. (Richard Howe, CEO)

Q: Are you attracting more brands, and how is business development progressing outside of these major clients? A: We signed 33 new brands in 2024, and we've professionalized our go-to-market strategy, which positions us well for scaling. There's a strong pipeline, and we're optimistic about continued growth. (Richard Howe, CEO)

Q: How do you feel entering 2025 compared to 2024 in terms of confidence and visibility? A: I feel optimistic due to our technological advancements and the $100 million revenue mark, which helps overcome cost inertia. We are confident in our ability to grow and surpass previous ceilings. (Richard Howe, CEO)

Q: Can you elaborate on the sales cycle for platform and agency/brand clients? A: For agencies and brands, the sales cycle is typically six to nine months, driven by relationship-building. For platforms, it's more about scalability and technological capability, with strong demand already present. (Richard Howe, CEO)

Q: What is the margin profile for the IntentKey self-serve platform, and how does it compare to managed services? A: The self-serve platform has a margin north of 90%, as it leverages existing AI infrastructure with minimal additional costs. It's designed to be flexible across various campaign systems and media channels. (Richard Howe, CEO)

For the complete transcript of the earnings call, please refer to the full earnings call transcript.