Fluent, Inc. (NASDAQ: FLNT) Q2 2025 Earnings | 08/20/2025

1 day ago

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Earnings Calls

AI Summary

Fluent is in a strategic transition, intentionally shifting its business mix from its legacy "Owned & Operated" (O&O) performance marketing business to a new, high-growth Commerce Media Solutions division. This pivot is creating short-term financial headwinds but is expected to build a more valuable long-term business.

Q2 2025 Financial Highlights

Total Revenue: $44.7 million (a 19% decline from Q1 2025 and a 24% decline year-over-year).
Commerce Media Revenue: $16.1 million (a 121% increase year-over-year). It now represents 36% of total revenue, up from 12% a year ago.
Annual Run Rate: Commerce Media has surpassed an $80 million annual revenue run rate.
Media Margin: $11.9 million (a 13% decrease from Q1). Commerce Media margin was 20%, down due to competitive pricing and investments to win new partners.
Profitability: Adjusted EBITDA was a loss of $2.8 million, an improvement from a $4.5 million loss in Q2 2024. Net loss was $7.2 million, also an improvement year-over-year.

Key Business Updates

Strategic Pivot: The decline in the larger O&O segment (-31% QoQ) is due to media cost volatility on restricted platforms and is an expected result of the company's intentional shift in focus.
Commerce Media Growth: This segment is the primary growth driver. The company added 15 new partners in Q2 and announced major expansions with Authentic Brands Group (Reebok, Champion) and a strategic partnership with Rebuy (a Shopify e-commerce platform), providing access to over 12,000 brands.
Financing: Fluent secured over $10 million in equity financing from new investors and insiders to bolster its balance sheet and fuel the growth of its commerce media business.
Path to Profitability: Management expects Commerce Media to become the majority of revenue by the end of 2025. They forecast:
- Positive Adjusted EBITDA in Q4 2025.
- Double-digit consolidated revenue growth and full-year Adjusted EBITDA profitability in 2026.

Leadership Confidence

CEO Don Patrick expressed strong confidence, stating the company is approaching a "tipping point." He emphasized the large market opportunity in commerce media, which is projected to be a $100+ billion market and account for 25% of digital ad spend by 2026. Fluent's competitive advantage is its proprietary first-party data, which allows it to drive better results for advertiser partners.

About this video

Fluent, Inc. reported second quarter 2025 revenue of $44.7 million, a 24% year-over-year decline and notably below analyst expectations of $52.7 million. The net loss for the quarter narrowed to $7.2 million ($0.30 per share), compared to an $11.6 million loss ($0.75 per share) in Q2 2024, reflecting improved cost control and operational efficiencies. Adjusted EBITDA remained negative at $2.8 million, although losses have narrowed sequentially. Gross profit for the quarter was $10.3 million, with gross margin compressing to 23% due to strategic incentives in the company’s fastest-growing segment and declining legacy-business margins. Fluent’s Commerce Media Solutions (CMS) segment was a bright spot, surging 121% year-over-year to $16.1 million, now making up 36% of total revenue and achieving an $80 million+ annual run rate. However, this rapid ramp came at the cost of lower margins, falling to 18% amid partner integration costs and early-term incentive contracts. The company is deliberately reallocating resources away from its declining Owned and Operated division, whose revenue dropped 49%, to fuel long-term CMS growth. Operational highlights included the closing of new media partner contracts, expansion into direct commerce placements, and a successful $10.3 million capital raise after the quarter’s end. Management reaffirmed its guidance for a return to adjusted EBITDA profitability by Q4 2025 and full-year profitability in 2026, with double-digit revenue growth targeted for next year. Strategic priorities remain focused on scaling the CMS segment, improving gross margins, and optimizing cash flow amid market and regulatory headwinds. Risks include continued legacy drag, near-term margin pressure in CMS, and ongoing negative cash burn ($15.5 million net loss in H1 2025), offset by the company’s confidence in its data-driven platform and scaling client partnerships. The stock is rated “hold” by analysts with a median 12-month price target of $3.00, reflecting both cautious optimism and sector-wide competition. About Inside Ticker: Inside Ticker delivers timely, in-depth financial news and earnings analysis to empower investors with actionable insights on global companies across sectors. For comprehensive video analysis and real-time updates, visit https://www.insideticker.com/. HashTags: #Fluent #FLNT #Q22025 #Earnings #FinancialResults #Revenue #NetLoss #EPS #CommerceMedia #DigitalMarketing #AdTech #Growth #Guidance #GrossMargin #AdjustedEBITDA #StrategicPivot #SaaS #MediaSolutions #TechStocks #CostManagement #MediaPartners #DigitalAdvertising #OwnedAndOperated #Platform #Innovation #DataSolutions #FutureGrowth #StockMarket #Investing #InsideTicker #RegTech #CapitalMarkets #AI #RevenueGrowth #ShareholderValue

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