AiAdvertising Reports Second Quarter 2024 Financial Results

Rhea-AI Summary

AiAdvertising (OTC: AIAD) reported Q2 2024 financial results with revenue growing 45% to $2.3 million compared to Q1 2023. The company saw growth across all segments: Platform License revenues up 77% to $0.3M, Creative Services up 43% to $0.4M, and Digital Marketing up 41% to $1.6M. Despite improvements in gross loss margin from -22.6% to -6.6%, the company recorded a net loss of ($1.5M). Operating expenses decreased 37% sequentially to $1.3M. Management expects FY2024 revenue between $9-10 million, driven by customer retention and new wins.

Positive

• Revenue growth of 45% YoY to $2.3M in Q2 2024
• Platform License revenue increased 77% to $0.3M
• Creative Services revenue up 43% to $0.4M
• Digital Marketing revenue grew 41% to $1.6M
• Operating expenses reduced by 37% from Q1 2024
• Improved gross loss margin from -22.6% to -6.6%
• Reduced cash burn from $3.2M to $2.1M YoY

Negative

• Net loss of $1.5M in Q2 2024
• Negative gross margin of -6.6%
• Low cash position of $0.5M as of June 30, 2024

Momentum Across Business Segments Drives 45% Revenue Growth in Second Quarter to $2.3 Million

SAN ANTONIO, Texas--(BUSINESS WIRE)-- AiAdvertising, Inc. (OTC: AIAD), an industry leader in AI-powered digital advertising solutions, has reported its financial and operational results for the second quarter ended June 30, 2024.

Key Second Quarter and Subsequent 2024 Highlights and Business Update

• Revenue for Q2 2024 was $2.3 million, compared to $1.6 million in Q2 2023, an increase of 45%.
• Gross loss margin of (6.6%) in Q2 2024, compared to (22.6%) in the same year ago period.
• Platform License revenues for Q2 2024 increased 77% to $0.3 million due to our continued sales efforts towards platform license customers.
• Creative Services revenues for Q2 2024 increased by 43% to $0.4 million due to customer wins from the second half of 2023.
• Digital Marketing revenues for Q2 2024 increased by 41% to $1.6 million due to increased budgets from customers over last year.
• Q2 2024 Total Operating Expenses of $1.3 million decreased 37% sequentially from Q1 2024.
• Net Loss for Q2 2024 was ($1.5) million.
• Net Cash used in operating activities for the six months ended June 30, 2024, was $2.1 million, compared to cash used of $3.2 million the year ago due to changes in the components of working capital.
• FY 2024 revenue expected to be in the $9 to $10 million range on continued strong momentum driven by high customer retention, increased digital marketing budgets, and new customer wins.

Management Commentary

"The second quarter of 2024 was highlighted by increased revenue across our business segments, and an improved bottom line as we focused on efforts to reduce costs across all expense categories, while maintaining momentum,” said Jerry Hug, Chairman and CEO of AiAdvertising. “Revenue in the second quarter for our Campaign Performance Platform segment improved 77% year over year, as clients continue to experience superior results from its targeting capabilities and benefits. Our branding and creative design services segment continued to showcase our clients’ brands uniquely and creatively to infuse the public with curiosity to learn more, improving 43% year over year. In the Digital Marketing segment, strong client activity from our efforts to acquire new customers also provided 41% increased revenue from the prior year quarter.

“Operationally, during the second quarter we focused on improving efficiencies across the organization including efforts to reduce costs across all expense categories, including payroll, promotion, and research and development. These measures are aimed at increasing efficiency and improving scalability while continuing to invest in our AI and ML technologies, and marketing, without sacrificing growth.

“Looking ahead, we are building revenue and executing on our backlog while managing costs efficiently. We believe our strategy will enable us to reach cashflow breakeven in the near term. We are focused on the further development and scale of our AI-powered targeting solutions, and sales and marketing efforts that highlight how our platform generates more engaging, higher-impact campaigns that drive superior results. We continue to expect FY 2024 revenue to be in the $9 to $10 million range, driven by high customer retention, increased digital marketing budgets, and new customer wins. We look forward to reporting our third quarter 2024 results in the very near term,” concluded Hug.

Q2 2024 Financial Results

Revenue for the quarter ended June 30, 2024, and 2023 was $2.3 million and $1.6 million, respectively, an increase of 45%. The increase was across all business lines. The Platform License segment revenues for the quarter ended June 30, 2024, increased 77% to $0.3 million from the prior year due to management’s focus on a hybrid model of lower platform fees to drive higher customer budget spend. Digital Marketing revenues for the quarter ended June 30, 2024, increased 41% to $1.6 million as a result of this strategic shift. The Creative Design segment revenues for the quarter ended June 30, 2024, increased 43% to $0.4 million from the prior year due to customer wins in the second half of 2023.

Gross loss in the second quarter of 2024 was ($0.2) million, or (6.6%) of revenues, compared to a gross loss of ($0.4) million, or (22.6%) of revenues, in the comparable year ago quarter. Gross loss and gross margin percentage improved due to on-going cost reductions and gross margin leverage.

Total operating expenses for the quarter ended June 30 2024, were $1.3 million, compared to $2.0 million in the prior year, due to concerted efforts to reduce costs across all expense categories, including payroll, promotion, and research and development.

Net loss for the quarter ended June 30, 2024, was ($1.5) million, as compared to a net loss of ($1.9) million in 2023.

Operating activities for continuing operations used $2.1 million in net cash for the six months ended June 30, 2024, compared to $3.2 million for the six months ended June 30, 2023. The increase in cash flow used in operating activities was primarily due to changes in the components of working capital including changes in accounts receivable balances and changes in deferred revenue.

Cash and cash equivalents totaled $0.5 million at June 30, 2024, as compared to $0.1 million at December 31, 2023.

About AiAdvertising

AiAdvertising is an AI-powered solutions leader employing the industry’s most scientifically advanced, patent-pending AI targeting process. Transforming marketing and customer experiences, allowing marketers to personify client data and scientifically target their ideal customers with hyper-personalized campaigns. By harnessing artificial intelligence (AI) and machine learning (ML), we empower brands to easily target, predict, create, scale, measure campaign performance and reduce waste. Our clients gain the intelligence they need to prove advertising’s impact on the bottom line. This means more engaging, higher-impact campaigns that drive conversions and results.

For more information about the Company, please visit www.AiAdvertising.com or our LinkedIn or Twitter pages.

Forward-Looking Statements

This press release may contain "forward-looking statements." Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations, and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements are included in our filings with the Securities and Exchange Commission, including the "Risk Factors" section of our annual report on Form 10-K for the year ended December 31, 2023. Any forward-looking statement made by us in this release is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments, or otherwise, except as may be required under applicable law.

AIADVERTISING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
		June 30, 2024				December 31, 2023
		(Unaudited)
ASSETS
Current assets:
Cash		$	465,957			$	110,899
Accounts receivable, net			504,827				517,344
Prepaid and other current Assets			104,379				58,982
Total current assets			1,075,163				687,225
Property and equipment, net			58,776				72,948
Right-of-Use assets			125,692				147,480
Other assets:
Lease deposit			10,369				8,939
Goodwill and other intangible assets, net			-				20,202
Total other assets			10,369				29,141
Total assets			1,270,000				936,794
LIABILITIES AND SHAREHOLDERS’ DEFICIT
Current liabilities:
Accounts payable			1,245,529				1,567,751
Accrued expenses			216,652				46,430
Operating lease liability			37,657				33,572
Deferred revenue and customer deposit			781,399				533,386
Total current liabilities			2,281,237				2,181,139
Operating lease obligation, net of current portion			93,868				113,907
Total liabilities			2,375,105				2,295,046
Shareholders’ deficit:
Preferred stock, $0.001 par value; 5,000,000 Authorized shares:
Series A Preferred stock; 10,000 authorized; zero shares issued and outstanding			-				-
Series B Preferred stock; 25,000 authorized; 18,025 shares issued and outstanding			18				18
Series C Preferred stock; 25,000 authorized; 14,425 shares issued and outstanding			14				14
Series D Preferred stock; 90,000 authorized; 86,021 and 90,000 shares issued and outstanding			86				86
Series E Preferred stock; 10,000 authorized; 10,000 shares issued and outstanding			10				10
Series F Preferred stock; 800,000 authorized; zero shares issued and outstanding			-				-
Series G Preferred stock; 2,600 authorized; 2,597 shares issued and outstanding			3				3
Series H Preferred stock; 1,000 authorized; zero shares issued and outstanding			-				-
Series I Preferred stock; 3,000,000 authorized; 2,272,727 shares issued and outstanding			2,273				2,273
Series J Preferred stock; 700 authorized; zero shares issued and outstanding			-				-
Series K Preferred stock; 1,000 authorized; zero shares issued and outstanding			-				-
Common stock, $0.001 par value; 10,000,000,000 and 2,000,000,000 authorized shares; 1,344,231,504 and 1,175,324,203 shares issued and outstanding, respectively			1,344,238				1,334,415
Additional paid in capital			57,933,119				56,865,961
Common stock payable, consisting of 5,000,000 shares valued at $0.1128			564,000				564,000
Preferred stock payable, consisting of 892,857 shares of Series I Preferred stock valued at $2.80			2,500,000				-
Accumulated deficit			(63,448,866	)			(60,125,032	)
TOTAL SHAREHOLDERS’ EQUITY (DEFICIT)			(1,105,105	)			(1,358,252	)
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)		$	1,270,000			$	936,794

AIADVERTISING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
		Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
		(Unaudited)								(Unaudited)
Revenue		$	2,307,729			$	1,594,041			$	4,327,052			$	3,768,793
Cost of Revenue			2,459,866				1,953,936				4,255,139				3,609,385
Gross Profit (loss)			(152,137	)			(359,895	)			71,913				159,408
Sales, general, and administrative expenses			1,306,990				1,965,349				3,371,647				3,367,945
Impairment of intangible assets			-				-				20,202				-
Total operating expenses			1,306,990				1,965,349				3,391,849				3,367,945
Loss from operations			(1,459,127	)			(2,325,244	)			(3,319,936	)			(3,208,537	)
Other income (expense):
Other income (expense)			(3,898	)			435,021				(3,898	)			435,026
Total other income (expense)			(3,898	)			435,021				(3,898	)			435,026
Loss from operations before income taxes			(1,463,025	)			(1,890,223	)			(3,323,834	)			(2,773,511	)
Provision for income taxes			-				-				-				-
Net Loss			(1,463,025	)			(1,890,223	)			(3,323,834	)			(2,773,511	)
Dividends on preferred stock			-				-				-				-
Net loss attributable to common shareholders		$	(1,463,025	)		$	(1,890,223	)		$	(3,323,834	)		$	(2,773,511	)
Net loss per share:
Basic		$	(0.00	)		$	(0.00	)		$	(0.00	)		$	(0.00	)
Diluted		$	(0.00	)		$	(0.00	)		$	(0.00	)		$	(0.00	)
Weighted-average common shares outstanding:
Basic			1,348,367,967				1,329,921,400				1,343,888,370				1,281,214,213
Diluted			1,348,367,967				1,329,921,400				1,343,888,370				1,281,214,213

AIADVERTISING, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
		For the Six				For the Six
		Months Ended				Months Ended
		June 30,				June 30,
		2024				2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss		$	(3,323,834	)		$	(2,773,511	)
Adjustment to reconcile net loss to net cash used in operating activities:
Loss on impairment of intangible asset			20,202				-
Depreciation and amortization			14,172				16,099
Stock based compensation			1,076,982				836,261
Provision for doubtful accounts			(80,469	)			-
Changes in assets and liabilities:
Accounts receivable			92,986				(632,632	)
Amortization of ROU asset			21,788				-
Prepaid expenses and other assets			(46,827	)			(97,783	)
Accounts payable			(322,222	)			(624,520	)
Accrued expenses			170,222				(15,688	)
Customer deposit			-				46,162
Operating lease liability			(15,954	)			-
Deferred revenue			248,013				-
Net cash used in operating activities			(2,144,941	)			(3,245,612	)
INVESTING ACTIVITIES
Cash paid for fixed assets			-				-
Proceeds from sale of discontinued operations			-				-
Net cash provided by (used in) investing activities			-				-
FINANCING ACTIVITIES
Proceeds from sale of common stock, net			-				599,427
Proceeds from sale of preferred stock			2,500,000				5,000,000
Redemption of Series K Preferred stock			(1	)			-
Net cash provided by financing activities			2,499,999				5,599,427
Net increase in cash and cash equivalents			355,058				2,353,815
Cash and cash equivalents at beginning of period			110,899				55,831
Cash and cash equivalents at end of period		$	465,957			$	2,409,646
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid		$	-			$	-
Income taxes paid		$	-			$	-
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Right of use asset exchanged for lease liability		$	-			$	6,655
Exercise of stock options		$	9,823			$	3,931

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241112791485/en/

Investor Contact:

Larry Holub/Chris Tyson

312-261-6412

AIAD@mzgroup.us

www.mzgroup.us

Source: AiAdvertising, Inc.

FAQ

What was AiAdvertising's (AIAD) revenue growth in Q2 2024?

AiAdvertising reported a 45% year-over-year revenue growth to $2.3 million in Q2 2024, compared to $1.6 million in Q2 2023.

What is AiAdvertising's (AIAD) revenue guidance for FY 2024?

The company expects FY 2024 revenue to be in the range of $9 to $10 million, driven by high customer retention, increased digital marketing budgets, and new customer wins.

What was AIAD's net loss in Q2 2024?

AiAdvertising reported a net loss of $1.5 million for Q2 2024, an improvement from the $1.9 million net loss in Q2 2023.

How much cash did AIAD have as of June 30, 2024?

AiAdvertising had cash and cash equivalents of $0.5 million as of June 30, 2024, compared to $0.1 million at December 31, 2023.