Inuvo, Inc.

Good day and welcome to the Inuvo first quarter 2022 financial results conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Natalia Rudman, Investor Relations. Please go ahead.

Thank you, Operator, and good afternoon, everyone. I'd like to thank everyone for joining us today for the Inuvo first quarter 2022 shareholder update call. Today's ANUVO's 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 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. The statements in this conference call that are nondescriptions 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 made different 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 Nouveau Inc. are such forward-looking statements. Investors are cautioned that all forward-looking statements involve risks of 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 the U.S. Securities and Exchange Commission, which can be reviewed at www.fcc.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 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 release on our website. With that, I'll now turn the call over to CEO Richard Howe. Please go ahead, Rich.

Thank you, Natalia, and thanks, everyone, for joining us today. we had another very strong quarter where for the three months ended March 31st, 2022, we delivered 18.6 million in revenue, which was up 75% year over year. Our trailing 12 month year over year growth rate now stands at an impressive 69%. Both product lines experienced significant growth in the first quarter with the intent key and valid click up roughly 280% and 24% respectively. To put this growth in perspective, in the prior year period, the intent key was roughly 20% of overall company revenues and valid click was 80%. In the current period, that split was 44% and 56% respectively. For those shareholders new to our story, the ValidClick platform delivers ads principally through social and search channels, while IntentKey delivers mostly connected television, online video, and display channels. Increasingly, the two platforms are used to deliver multi-channel media solutions to joint clients. Our artificial intelligence technology influences decisions across channels. Typically, within our industry, there is seasonality associated with media budgeting that generally leads to less advertising spending in the first half of the year versus the second half of the year. Delivering $18.6 million in the first quarter sets the foundation for yet another strong year overall in 2022. Unaudited April revenues are coming in north of $7 million, which if continued, would set the second quarter up nicely for a continuation of our strong year-over-year growth. As was mentioned on the year-end conference call, we have significantly reduced our revenue concentration risks. In Q1, Our largest client represented 22% of our total revenues. In fiscal year 2019, 65% of our revenue was concentrated in a single client. Gross margins remained healthy in the first quarter at roughly 53.5%. Adjusted EBITDA was a loss of roughly $703,000. With the strong demand we are experiencing, the 2022 plan is to optimize for growth while keeping growth margins steady throughout the year to produce an overall positive adjusted EBITDA, which should also keep our cash and marketable securities roughly flat throughout the year. A positive adjusted EBITDA on the year would be a material improvement over the $2.1 million adjusted EBITDA loss we experienced in 2021. The balance sheet remained strong on March 31, 2022, with no debt and approximately $9 million in cash and marketable securities. The company is also in the final stages of securing an $8 million financing facility. The combination of cash, marketable securities, and financing availability means we are well positioned to internally fund our growth and are therefore not currently in need of additional capital. Strategically, we could not be in a better position. The advertising market we serve is on the verge of a significant change. the consequence of which is almost certainly to be diminishing returns on approximately $200 billion worth of annual advertising spend that occurs across the open web. The catalyst for this change is privacy. The real issue behind privacy is the use of consumer data for target and brand marketing. This consumer data is the cornerstone of virtually every competing service and or technology provider that serves this industry. This consumer-centered view of marketing permeates every aspect of advertising. And from what we can tell, the market remains ill-prepared and confused about the technical implications of this ensuing change. If you can't identify an individual, you can't attach data to that individual, and therefore you can't make an advertising decision about that individual. This new paradigm for advertising is already playing itself out across Safari and Firefox, whose browsers control roughly 40% of the market. The advertising community is largely ignoring media within these browsers encountering web content. And the reason they aren't bidding is because these browsers have already eliminated the cookie, and in some cases, have defaulted their browsers to hide IP address, which again means our competitor's technology can no longer identify the consumer. This in turn suggests our competitors' advertising technologies still lack the means to make an educated decision about whether to show their clients ads when these browsers are present. And in many cases, they are simply opting to ignore the ad inventory entirely. This is a precursor for what will occur in 2023 when Google, who owns roughly 50% of the U.S. browser market, follows suit. The intent key is already taking advantage of this disruption by purchasing iOS inventory at attractive prices on behalf of our clients. Optimizing our business for growth now allows us to capture as much of this early adopter market share prior to the industry change while also setting ourselves up for the more important post-change period when we believe advertisers will be experiencing significant performance degradation that we can then capitalize upon competitively. We continue to add new clients in the quarter while growing existing clients. Performance has now exceeded, on average, client goals by over 50% for the last nine straight quarters. We ran our largest campaign to date in the first quarter and we rolled out a custom performance dashboard reporting capability for many of our key clients. The growth and the demands of an increasing client base have identified product and process opportunities. One of the challenges with our technology is succinctly presenting in an automated fashion the insights being generated by the artificial intelligence. The product team is in the process of rolling out a graphical user interface into these insights in the second quarter that we believe will be a game changer for our clients and prospects, ultimately making it easier to visualize and action the audience groups the AI is exposing as potential opportunities. We hired an experienced head of sales in the first quarter and we recently had our first company-wide sales rally in two years, the delay a consequence of COVID. Our sales teams have once again started attending more in-person events, and we are the premier sponsor for a first-ever conference on artificial intelligence in advertising, which is now scheduled for June 8th at the brand-new Hard Rock Hotel in New York City. We have also been invited to and will be attending the prestigious Cannes Leon Festival of Creativity in late June. Collectively, these tactics are designed to raise the awareness of our company and its solutions within our markets ahead of the 2023 date when Google makes the final changes to its browser. As was mentioned on the year-end call, we now have many clients where we are the multi-channel advertising product and service provider. The ability to meet this market need is only possible because of the skills we have developed within ValidClick. In the fourth quarter, 11.5% of overall revenues were generated because of the ValidClick services offered to intent key clients. That number has risen to 14% in the first quarter. I would now like to turn the call over to Wally for a more detailed assessment of our financial performance within the quarter.