Inuvo, Inc.

Good day and welcome to the ANUVO Second Quarter 2021 Financial Results Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Valter Pinto, Managing Director of KCSA Strategic Communications. Please go ahead, sir.

Thank you, Operator, and good morning. I'd like to thank everyone for joining us today for the ANUVO Second Quarter 2021 Shareholder Update Conference Call. On today's call, ANUVO's Chief Executive Officer, Richard Howe, and Chief Financial Officer Raleigh Woodreese will be your presenters. We would also like to remind our shareholders that we anticipate filing our 10-Q with the Securities and Exchange Commission this evening. Before we begin, I'm going to review the company's safe harbor statement. 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. These forward-looking statements are subject to risks and uncertainties, and actual results may differ materially. When using this call, the words anticipate, could, enable, estimate, intend, expect, believe, potential, will, should, project, and similar expressions as they relate to ANUVO are, as such, a forward-looking statement. Investors are cautioned that all forward-looking statements involve risks and uncertainties, which may cause actual results to differ from those anticipated by ANUVO at this time. In addition, other risks are more fully described in ANUVO's public filings, with these U.S. Securities and Exchange Commission, which can be reviewed at www.scc.gov. With that, I'd now like to turn the call over to CEO Richard Howe.

Thank you, Walter, and thanks, everyone, for joining us today. We had a strong second quarter. The three months ended June 30th, 2021. We delivered $12.6 million in revenue, which was up 66% year-over-year and up 19% sequentially. At our current gross margins, We expect to break even on an adjusted EBITDA basis when monthly revenue run rates exceed $5.5 million, which we expect to be able to deliver before the year ends. Adjusted EBITDA in the second quarter was a loss of $965,000, which was roughly flat sequentially. The balance sheet remains strong with no debt, over $18 million in cash and marketable securities. and an unused $5 million financing facility. The company is not currently in need of additional operating capital. Of the 12.6 million delivered, the ValClick platform contributed 9.7 million, which was up year over year by 72%. That platform's growth rate has been roughly 8% compounded monthly through June 2021 off the COVID-related low in May of 2020. As we have previously mentioned, ValidClick's services have been materially revised post-pandemic, and this is most evident in the mix of revenue, where of the three main clients for ValidClick, the largest is now Google. As the most dominant advertising marketplace in the world, we decided in 2020 to refocus our effort towards serving the objectives of this client. a strategy we believe offers the most attractive growth prospects. I will remind our shareholders that this client relationship for Anuvo goes back more than a decade, more on ValidClick later in the conference. The IntentKey platform contributed roughly $2.9 million of revenue in the quarter, growing 50% year over year and 37% sequentially. The client performance results associated with this product are nothing short of astounding. In the second quarter, we exceeded our client goals on average by 74%. We would expect this product line to continue its double digit growth rates year over year for the foreseeable future. For the third quarter of 2021, we expect strong continuing year over year and sequential revenue growth within both product lines. Let me now provide some additional insights for both the intent key and valid click. As a result of the continuing performance results associated with the Intent-Key platform through the first half of 2021, we have seen a 56% increase in the number of prospective client presentations given and a 70% increase in the number of deals won as compared to the same period in 2020. Market momentum appears to be building. We had 18 new campaigns launch within the quarter, including a first deal sold by our sales rep in Canada as part of our announced expansion into that market. We had 84 total campaigns running in the second quarter. In April, we put out a release about a retail client where the intent key had delivered a staggering 88 to 1 return on ad spend. Results for that client have only improved since then and as a result, they are now allocating more budget towards our service. We also announced recently that we had closed our first casino client and I'm pleased to report that the client continues to spend media dollars with us as their growth accelerates, having recently surpassed their largest competitor in the state in monthly gaming revenues. We are currently working on an additional proposal for this client And Casino International, a leading publication within the gaming world, will be highlighting our technology in a September article. Within the quarter, we added state agencies looking to promote COVID and vaccination awareness, a financial services company, a healthcare company, a recreational vehicle company, a large retailer, and some tourism clients. We are in active implementations associated with the SAS version of the intent key and we are in discussions with numerous prospects for the same. Because our solution uses artificial intelligence and is therefore not reliant on third party data, cookies, or IP addresses to make its advertising decisions, we have been experiencing increased interest from prospects resulting from this competitive differentiation. as those companies look to select technology providers who can future-proof their ad spend. We would expect continuing interest over the next few years related to this differentiation, as brands begin to appreciate the scale of the performance challenges associated with what is fundamentally a change in the very way online advertising is delivered. Google recently extended their timeline for the deprecation of third-party cookies to allow the market additional time to prepare. Since we are already prepared, this added time gives us the opportunity to be working on the next advancement of our platform while our competitors worry about reengineering their current platforms. With a growing list of clients and prospects, hiring within the intent key to support clients and sales has continued throughout Q2. We now have 20 people in sales, account management, and sales support roles. Anuvo currently has 78 full and part-time employees. On the development front, we made several scalability improvements designed to accommodate our growing client base and our expansion into Canada. We are also rebuilding and streamlining our internal dashboards as an efficiency improvement for client-facing personnel and as a way to reduce the ramp-up time associated with new hires as our growth continues. We also recently started to enhance our web crawler. Within our system, this crawler is akin to a librarian. It continuously pulls content from the internet, which it then sends to our artificial intelligence for interpretation. In this regard, Our AI already has learned from over 6 billion web pages covering most of humanity's knowledge. It also interprets millions of new web pages every single day. We are working towards enhancing this crawler in a manner that would allow our AI to understand what the sentiment is related to any individual concept within the English language. For example, is the sentiment towards a given brand, or a place, or a product, or a person, or a thing. Concurrently, and given the predominance of things like emojis and hashtags, we are updating the crawler so it can understand these new language constructs. Turning now to ValidClick, where as I mentioned earlier, we had a strong 8% compounded monthly growth since the COVID low in May of 2020. Increasing scale within ValidClick's competitive market is often about making small enhancements that can improve yield. This was our main development and operational focus within the quarter. There were two such enhancements that are worth noting. First, we continued to enhance the A-B testing infrastructure we put in place and launched last year. We haven't talked about this before, but it's a good example of the power that incremental improvements can have on revenues. In concert with the needs of our largest client, we ran 17 different individual experiments within the quarter where we made small adjustments on landing pages to things like color and font size and content spacing. Of these 17 experiments, 11 resulted in positive increases in revenue. While each improvement typically represents around 1% to 3%, this ability to quickly test in this manner at scale can add up over time. In 2021 so far, we estimate that we've increased value of revenues by about eight to 10% using this continuous experimentation capability. This increase enables us to better promote websites, be more competitive in the marketplace, and ultimately serve the needs of our clients while scaling our services to those clients. A second focus I'd like to highlight this quarter was a set of enhancements to our proprietary media buying tools, a technology update that makes managing advertising campaigns more efficient. Using these internally developed tools, we were able to double the number of campaigns each of our campaign managers can build every day. This is critical because being effective in online advertising at scale requires optimization, which is achieved by developing campaigns across a wide variety of topics, a process without technology that is manually prohibitive. One of the ValidClick measures we track that might be interesting to our shareholders is the number of web pages into which we serve ads viewed by consumers in any given month. In this regard, ValidClick hit an all-time monthly high within the first half of the year by serving ads into roughly 100 million page views. I would now like to turn the call over to Wally for a more detailed assessment of our financial performance within the quarter. Thank you, Rich.