Fluent, Inc.

Good afternoon. Thank you for attending the Fluent Inc. Q1 2022 earnings call. My name is Matt and I will be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star followed by one on your telephone keypad. I would now like to pass the conference over to our host, Dan Barsky with Fluent. Dan, please go ahead.

Good afternoon and welcome. Thank you for joining us to discuss our first quarter 2022 earnings results. Joining me today on today's call are Fluent CEO, Don Patrick, our CFO, Segunda Kondiwal, and Ryan Schilke, our co-founder and chief strategy officer. Our call will begin with comments from Don Patrick and Segunda Kondiwal, followed by a question and answer session. I would like to remind you that today's call is being webcast live and recorded. A replay of the event will be available following the call on our website. To access the webcast, please visit our investor relations page on our website, www.fluentco.com. Before we begin, I would like to advise listeners that certain information discussed by management during this conference call will contain forward-looking statements which are covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any forward-looking statements made during this call speak only as of the date hereof. Actual results could differ materially from those stated or implied by our forward-looking statements due to risks and uncertainties associated with the company's business. These statements may be identified by words such as expects, plans, projects, could, will, may, anticipates, believes, should, intend, estimates, and other words of similar meaning. The company undertakes no obligation to update the information provided on this call. For a discussion of the risks and uncertainties associated with Fluent's 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. During the call, we will also present certain non-GAAP financial information relating to median margin, adjusted EBITDA, and adjusted net income. Management evaluates the financial performance of our business on a variety of indicators, including a median margin, adjusted EBITDA, and adjusted net income. The definitions of these metrics and reconciliations to the most directly comparable GAAP financial measures are provided in the earnings release issued later today. With that, I'm pleased to introduce Fluent's CEO, Don Patrick.

Thank you, Danny. Good afternoon. Thanks to all of you for joining our call today. I'm here together with Ryan Schuelke, our Chief Strategy Officer, Chairman of the Board and Company Founder, and Segunda Condewall, our Chief Financial Officer. Our first quarter results are consistent with what we articulated in our 2021 year-end earnings release and represent the continued progress we're making towards our long-term strategic growth plan. focused on building high-quality digital experiences for consumers while creating more effective, efficient, and sustainable customer acquisition solutions for marketers. We continue to invest in strategic platforms where we remain confident that as we establish fluent presence and gain market share, we'll also be able to expand our margin over time by way of our operational capabilities. In Q1 2022, Our financial results are as follows. Revenue of $89.1 million represents 27% year-over-year growth and is a positive reflection of prioritizing our long-term growth strategies. We continue to lean into opportunities where we can establish and leverage freelance brand credentials in the marketplace. Our median margin of $26 million is up 4% year-over-year at 29.1% of revenue. This reflects our ongoing strategic investments focused on expanding our media footprint. An adjusted EBITDA of $4.8 million represents 5.3% of revenue. As we've consistently stated throughout 2021, our strategic growth plan is focused squarely on consumers and the quality of their experience in our performance marketplace. We believe this consumer-centric strategy represents the winning road forward and provides us a competitive advantage. Fluent inherent brand strength and a foundational principle of our business model through creating a more effective and sustainable customer acquisition solutions for our clients while successfully positioning Fluent as a market leader in a rapidly evolving industry environment. Our strategic growth plan, along with our voracious appetite to test and learn, has validated two major hypotheses. First, delivering consumers more meaningful quality grounded experiences has enabled Fluent to more frequently re-engage them after their initial visits to our owned and operated media properties, all based on their needs and wants. In turn, we're enhancing consumer lifetime value for our clients as well as Fluent. Second, as we connect the more engaged consumer to our client's brand platform, it's enabled us to more efficiently and effectively deliver against our clients' customer acquisition goals while improving their ROI. In turn, our total alignment with consumers and clients is driving improved monetization across our fluent performance marketplace, while enhancing our brand equity with clients. We will continue to focus on revenue growth, leaning into a variety of strategic growth initiatives that we believe are sustainable. As we continue to learn, evolve, and scorecard our business initiatives, We also assess where we believe we have a competitive advantage utilizing market share gain as a consumer validator of our longer term potential. We believe this is the road to strategic revenue growth and opens the door for expanding margins over time. So in the near term, our quarterly margin profile will reflect our strategic investments and growth. As we consistently articulated, Fluent's competitive advantage is grounded in three strategic growth pillars, our media footprint, our platform, and our performance marketplace. Strengthening our go-to-market capabilities with each individual pillar is our everyday mission. Where Fluent is differentiated is in building out our preferred marketplace while determining the logical points of intersection across each strategic pillar. With that operational scale for growth, while enhancing client performance via our cross-functional team play. The end result is exceeding clients' performance expectations by way of delivering a more targeted and engaged consumer audience, which also increases client ROI. In the past, we've discussed our media footprint and performance marketplace. Today, I'll spend a little more time on our platform and strategic relevance. Our platform, at its highest level, is a proprietary and integrated data, analytics, and technology marketing solutions and capabilities. We previously outlined investments we've made to expand and strengthen our marketing position. At the core is our first-party data asset, which given the ongoing and well-documented data privacy changes, designed to provide a significant competitive advantage in delivering higher quality, interactions, and value for consumers and clients within our performance marketplace. Apple's move to enhance consumer privacy on its devices and Google's announcement of 2023 being the year to end third-party cookies is forcing marketers to take action shifting away from third-party data. Data from outside sources can improve short-term performance and marketing, but unlike first-party data, can't explain the relationship with consumers and their path to purchase. The breadth and depth of Fluent's first-party data gives us an important advantage that it offers the kind of insight to give us real control over our long-term strategic growth plan. The power of our first-party data and our ability to gather and enable real-time insights through analytics and technology is critical to driving meaningful, higher quality consumer engagements tied to measurable performance-based outcomes. When a new consumer visits a property with Influence Digital Media Portfolio, we ask simple questions to determine individual interests, needs, and preferences, and then present relevant offers from our world-class clients, ultimately creating a more meaningful and rewarding experience. When a consumer returns, they proactively enable us with their prior survey responses and performance marketplace experience, which allows us to utilize these key insights as a strategy to strengthen relevancy and improve consumer engagement. In essence, increasing lifetime value. In this manner, the consumer wins, as does our roster of clients. As you can see, our platform is foundational, and we believe it's a clear competitive advantage that differentiates us in the industry. Our platform efficiently and effectively connects our media footprint with our performance marketplace. In turn, we've established fluid capability that solves a marketing problem that every advertiser chases, delivering the right offer at the right time to the right consumer and in real time with the convenience of automation. Over time, as our media footprint and performance marketplace strengthen and expand, Our platform is strategically positioned to drive long-term value to consumers and our clients, which represents a key revenue and margin path to our operating business units. Given the strategic value data plays within our ecosystem, we recently completed our Q1 data evaluation with TruSet, who measures data accuracy in several popular demographic attributes and provides scoring against their current cohort of data providers. across 19 top tier data providers, including Axiom, Epsilon, B12, and DataAxle. Fluent ranked number one for accuracy in more attributes than any other data provider except one. The accuracy of our first party data is a reflection of higher quality consumer experiences in the Fluent marketplace and further enhances our relationship with them while enabling us to competitively leverage relevant strategic insights with our clients. In Q1, we were also encouraged by our continued progress with our other two strategic growth pillars, our media footprint and our performance marketplace. We're actively expanding our media footprint via strategic growth initiatives that extend and reach into new media channels, where we can provide more relevant content and offers to consumers and our clients. This leaves us strategically and financially motivated as we explore longer-term growth opportunities that a larger fluid media footprint will create while we concurrently extend our reach into new media channels. We'll discuss this further as we learn more. Relative to our performance marketplace, our key strategic growth initiatives continue to primarily be driven by building out fluid sales solutions and separately our CRM capabilities. both of which are grounded in higher quality consumer experiences. These strategic initiatives provide a significant marketplace in creating meaningful downstream experiences for consumers while expanding our relationship with world-class clients in key industry verticals. Critically inherent to our strategic framework is that we're enhancing each consumer's lifetime value. More to follow here in subsequent quarters. In closing, We remain fixated on our well-defined pillars and will continue leaning into strategically compelling 2022 revenue opportunities where we believe we have a differentiated position and significant consumer runway. Earning market share where we can leverage our consumer-centric core and execute via our operational capabilities will be the key driver of our longer-term growth agenda. These are the strategic bets we are constantly making, prudently investing as we launch and establish our longer-term path in a growing marketplace. In parallel, we'll manage the business mix across our investment profiles with a clear goal of expanding fluent business margins as we scale and establish a competitive advantage. Overall, we believe our 2022 financial results will show revenue growth returning at or above industry growth rates and required priority number one. We are then shifting our sights on sequential margin improvement as we scale. And with that, I'll turn to Segunda to provide more details on our financial results.