Inuvo(INUV)2023-11-11 00:35Financial Data and Key Metrics Changes - Inuvo reported the highest quarterly revenue in its history for Q3 2023, growing 44% year-over-year and 48% sequentially to 17.1 million in Q3 2022 and 22.3 million, with a gross profit margin of 91%, up from 60% in the same quarter last year [38] - The company reported a net loss of 0.01 per basic share, an improvement from a net loss of 0.03 per basic share in Q3 2022 [41] Business Line Data and Key Metrics Changes - Revenue from indirect customers constituted 88% of total revenue in Q3 2023, compared to 55% in the same quarter last year, indicating a significant shift in revenue mix [15] - Cost of revenue decreased to 6.8 million in the same quarter last year, primarily due to lower payments to advertising platforms [16] Market Data and Key Metrics Changes - The company has contracted with approximately 40 new customers since the start of the year, indicating strong demand in the market [37] - The sales team has focused on empowering midsized agencies, which has led to improved performance and differentiation for these agencies [11] Company Strategy and Development Direction - The company has shifted its go-to-market strategy to focus on indirect channels, which has resulted in a favorable revenue mix and increased gross margins [32][15] - Inuvo is positioned to capitalize on the transformation in the advertising industry, particularly regarding privacy concerns and the use of consumer data for ad targeting [34][35] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing numerous initiatives underway that are expected to contribute to strong revenue growth into Q4 and 2024 [67] - The company has been generating positive monthly free cash flow since May 2023, averaging approximately 7 million at the end of September 2023, with no debt and a 5 million unused borrowing facility [10][20] Q&A Session Summary Question: What drove the dramatic growth in such a challenging ad market? - Management indicated that both existing customers becoming more comfortable with IntentKey technology and ad agencies pushing the technology to their customer base contributed to the growth [45][63] Question: How is the company building its brand in the market? - The company has engaged a public relations agency to enhance brand awareness, which has been effective in generating more recognition [48] Question: How much of the incremental revenue falls to the bottom line as the business scales? - Management suggested that as the company scales past 100 million, around 5% of incremental revenue could fall to the bottom line, indicating improved scalability [52][58]