Fluent Announces Third Quarter 2020 Financial Results

Rhea-AI Summary

Fluent, Inc. (NASDAQ: FLNT) reported strong Q3 2020 results, with revenue reaching $78.3 million, a 21% increase from Q3 2019. The company achieved a net income of $1.2 million, or $0.01 per share, reversing a loss of $4.5 million in the previous year. Media margin improved to $29.7 million, a 39% rise, representing 37.9% of revenue. Adjusted EBITDA soared to $11.6 million, a 167% increase year-over-year. Looking ahead, Q4 shows potential for seasonal growth, though uncertainties remain due to the pandemic and election season.

Positive

• Q3 2020 revenue increased by 21% to $78.3 million.
• Net income was $1.2 million, improving from a net loss of $4.5 million in Q3 2019.
• Media margin rose by 39% to $29.7 million, representing 37.9% of revenue.
• Adjusted EBITDA increased by 167% to $11.6 million, comprising 14.8% of revenue.

Negative

• Visibility for Q4 is constrained due to the pandemic and external factors like the election.

• Q3 2020 revenue of $78.3 million, up 21% over Q3 2019
• Net income of $1.2 million, or $0.01 per share  
• Media margin of $29.7 million, up 39% over Q3 2019 and representing 37.9% of revenue  
• Adjusted EBITDA of $11.6 million, up 167% over Q3 2019 and representing 14.8% of revenue  
• Adjusted net income of $6.3 million, or $0.08 per share

NEW YORK, Oct. 29, 2020 (GLOBE NEWSWIRE) -- Fluent, Inc. (NASDAQ: FLNT), a leading data-driven performance marketing company, today reported financial results for the third quarter ended 2020.

Ryan Schulke, Fluent’s Chief Executive Officer, commented, "We are pleased to post a solid third quarter in terms of performance and results, as we continue to leverage and expand our business and performance marketplace, as well as evolve best practices for the long term.”

“Innovation was an important theme underpinning the quarter’s results, particularly relating to Fluent’s product and platform, which we see as a reflection of our team’s agility and adaptability through these highly unusual times. I again want to thank all of our employees for their exceptional work under the most difficult of circumstances and to reiterate that Fluent remains resilient and steadfast in striving to support our colleagues, clients, consumers and communities.”

Third Quarter Financial Summary

• Q3 2020 revenue of $78.3 million, up 21% over Q3 2019
  
  
• Net income of $1.2 or $0.01 per share, compared to net loss of $4.5 million, or $0.06 per share, in Q3 2019
  
  
• Media margin of $29.7 million, an increase of 39% over Q3 2019 and representing 37.9% of revenue
  
  
• Adjusted EBITDA of $11.6 million, an increase of 167% over Q3 2019 and representing 14.8% of revenue
  
  
• Adjusted net income of $6.3 million, or $0.08 per share

Media margin, adjusted EBITDA and adjusted net income (loss) are non-GAAP financial measures, as defined and reconciled below. 

Business Outlook

• Early indicators for Q4 2020 point to seasonal lift, albeit with visibility constrained by unique circumstances regarding the election, the COVID-19 pandemic and holiday shopping patterns.  
• The Media & Entertainment vertical remains the Company’s most significant growth driver, underpinned by direct relationships in the Streaming Services and Mobile Gaming categories.  
• Q3 2020 revenue from engaging consumers in international markets, primarily the UK, grew sequentially as compared with Q2 2020, and represented more than 5% of total company revenue in the quarter.  
• Notwithstanding the extraordinary challenges imposed by the global pandemic, the Company's business and operations have remained on solid footing. 

Conference Call

Fluent, Inc. will host a conference call on Thursday, October 29, 2020 at 4:30 PM ET to discuss its 2020 third quarter financial results. To listen to the conference call on your telephone, please dial (888) 339-0797 for domestic callers, or (412) 317-5248 for international callers. To access the live audio webcast, visit the Fluent website at investors.fluentco.com. Please login at least 15 minutes prior to the start of the call to ensure adequate time for any downloads that may be required. Following completion of the earnings call, a recorded replay of the webcast will be available for those unable to participate. To listen to the telephone replay, please dial (877) 344-7529 or (412) 317-0088 with the replay passcode 10149165. The replay will also be available for one week on the Fluent website at investors.fluentco.com. 

About Fluent, Inc.

Fluent (NASDAQ: FLNT) is a leading performance marketing company with expertise in creating meaningful connections between consumers and brands. Leveraging our proprietary first-party database of opted-in consumer profiles, Fluent drives intelligent growth strategies that deliver superior outcomes. Founded in 2010, the company is headquartered in New York City. For more information, visit www.fluentco.com.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995

The matters contained in this press release may be considered to be “forward-looking statements” within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. Those statements include statements regarding the intent, belief or current expectations or anticipations of Fluent and members of our management team. Factors currently known to management that could cause actual results to differ materially from those in forward-looking statements include the following: compliance with a significant number of governmental laws and regulations, including those laws and regulations regarding privacy and data; failure to safeguard the personal information and other data contained in our database; unfavorable global economic conditions, including as a result of health and safety concerns around the ongoing COVID-19 pandemic; failure to compete effectively against other online marketing and advertising companies; dependence on third-party publishers, internet search providers and social media platforms for a significant portion of visitors to our websites; dependence on our key personnel; dependence on emails, text messages and telephone calls, among other channels, to reach users for marketing purposes; competition we face for web traffic; ability to compete and manage media costs in an industry characterized by rapidly-changing internet media and advertising technology, evolving industry standards, regulatory uncertainty, and changing user and client demands; liability related to actions of third-party publishers; limitations on our or our third-party publishers’ ability to collect and use data derived from user activities; ability to remain competitive with the shift of online interactions from computers to mobile devices; dependence on third-party service providers; management of the growth of our operations, including the integration of the AdParlor and Winopoly businesses and other acquired business units or personnel; management of unfavorable publicity and negative public perception about our industry; failure to meet our clients’ performance metrics or changing needs; risks associated with the expansion of our international operations; failure to detect click-through or other fraud on advertisements; achievement of some or all of the benefits that we expect to achieve as a stand-alone company; failure to adequately protect intellectual property rights or allegations of infringement of intellectual property rights; compliance with the covenants of our credit agreement; and the potential for failures in our internal control over financial reporting. These and additional factors to be considered are set forth under “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and in our other filings with the Securities and Exchange Commission. Fluent undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results or expectations.

FLUENT, INC.
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share and per share data)
(unaudited)

		September 30, 2020				December 31, 2019
ASSETS:
Cash and cash equivalents		$	15,394			$	18,679
Accounts receivable, net of allowance for doubtful accounts of $334 and $1,967, respectively			59,411				60,915
Prepaid expenses and other current assets			2,878				1,921
Total current assets			77,683				81,515
Restricted cash			1,480				1,480
Property and equipment, net			2,396				2,863
Operating lease right-of-use assets			8,665				9,865
Intangible assets, net			48,149				55,603
Goodwill			165,088				164,774
Other non-current assets			1,852				993
Total assets		$	305,313			$	317,093
LIABILITIES AND SHAREHOLDERS' EQUITY:
Accounts payable		$	7,478			$	21,574
Accrued expenses and other current liabilities			26,229				20,358
Deferred revenue			2,440				1,140
Current portion of long-term debt			4,750				6,873
Current portion of operating lease liability			2,283				2,282
Total current liabilities			43,180				52,227
Long-term debt, net			36,388				44,098
Operating lease liability			7,736				9,056
Other non-current liabilities			1,865				775
Total liabilities			89,169				106,156
Contingencies
Shareholders' equity:
Preferred stock — $0.0001 par value, 10,000,000 Shares authorized; Shares outstanding — 0 shares for both periods			—				—
Common stock — $0.0005 par value, 200,000,000 Shares authorized; Shares issued — 80,260,475 and 78,642,078, respectively; and Shares outstanding — 76,323,720 and 75,873,679, respectively			40				39
Treasury stock, at cost — 3,936,755 and 2,768,399 shares, respectively			(9,974	)			(8,184	)
Additional paid-in capital			411,165				406,198
Accumulated deficit			(185,087	)			(187,116	)
Total shareholders' equity			216,144				210,937
Total liabilities and shareholders' equity		$	305,313			$	317,093

FLUENT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except share and per share data)
(unaudited)

		Three Months Ended September 30,								Nine Months Ended September 30,
		2020				2019				2020				2019
Revenue		$	78,280			$	64,552			$	228,723			$	201,673
Costs and expenses:
Cost of revenue (exclusive of depreciation and amortization)			52,771				44,568				158,402				138,530
Sales and marketing (1)			2,925				2,717				8,643				9,209

FAQ

What were Fluent's Q3 2020 financial results?

Fluent reported Q3 2020 revenue of $78.3 million, up 21% from Q3 2019, with a net income of $1.2 million or $0.01 per share.

How did Fluent perform compared to Q3 2019?

Fluent showed significant improvement, reversing a net loss of $4.5 million in Q3 2019 to a net income of $1.2 million in Q3 2020.

What is Fluent's outlook for the fourth quarter of 2020?

Fluent anticipates a seasonal lift in Q4 2020, although visibility is limited due to the COVID-19 pandemic and upcoming election.

What were the key metrics for Fluent's media margin in Q3 2020?

Fluent's media margin in Q3 2020 was $29.7 million, an increase of 39% from Q3 2019, representing 37.9% of total revenue.

What is the adjusted EBITDA for Fluent in Q3 2020?

Fluent reported an adjusted EBITDA of $11.6 million for Q3 2020, a 167% increase year-over-year.