Inuvo, Inc.

Please stand by. We're about to begin. Good day, everyone, and welcome to the Innovo Incorporated Second Quarter 2022 Financial Results Conference Call. Today's call is being recorded. And now at this time, I'd like to turn the call over to Natalia Redman of Crescendo Communications. Please go ahead.

Thank you, April, and good morning. I'd like to thank everyone for joining us today for the Innovo Second Quarter 2022 Shareholder Update Call. Today's new 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 today. Before we begin, I'm going to review the company's safe harbor statement. The statements in this conference call that are non-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, Inc. 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 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.sec.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 a consistent historical comparison of its performance reconciliation of the non-GAAP measures to the most directly comparable GAAP measures available on today's website. With that, I'll now turn the call over to CEO Richard Howe. Please go ahead, Richard.

Thank you, Natalia, and thanks, everyone, for joining us here today. We had another exceptionally strong quarter where for the three months ended June 30th, 2022, we delivered $22.7 million in revenue. which was up 79% year over year. Our trailing 12 month year over year growth rate now stands at an impressive 72%. And we have delivered approximately a 15% compounded quarterly growth rate over the last two year period between the second quarter of 2020 and Q2 of 2022. As you know, Inubo provides digital advertising technology and services across channels. Our ValidClick platform principally serves advertising within the search and social channels, while the intent key principally serves within the programmatic channels. Both platforms experienced significant growth in the second quarter, with the intent key and ValidClick up roughly 197 percent and 44 percent respectively year over year the social and search related revenues from valid click represent roughly 62 percent of revenues while the programmatic revenues associated with the intent key represent 38 percent the company's top three clients accounted for approximately 27.4 percent 27.2%, and 13.6% of overall revenue, respectively. The second quarter was seasonally higher than is typical. The second and third quarter periods within advertising tend to be difficult to predict. There is variability year over year in both the timelines associated with advertiser budgets for the year, typically occurring in the first quarter, And there is some inconsistency in consumer purchasing behavior because of the summer months, typically in Q3. We believe this variability has been compounded this year due to various uncertainties related to the economic environment. This seasonality tends to lead to years where sometimes the second quarter is higher than the third quarter and sometimes the opposite sequentially. Gross margins remained healthy in the second quarter at roughly 59%. Adjusted EBITDA was a loss of roughly $100,000. There were extenuating circumstances associated with expenses in the quarter that Wally will discuss in his review of the financials. The company's core strategy remains a growth-oriented strategy. As we have messaged on previous calls, we believe the industry we serve is not prepared for the implications of a consumer privacy-led future where consumer data is no longer available to facilitate behavioral targeting of advertising. Most of an advertiser's return on advertising spend is related to the use of this data. Currently, approximately 75% of the media purchase opportunities within the open web either do not have a consumer cookie ID or that cookie ID does not persist the next day and as a result is no longer targetable.