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01/10 16:34
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Despite some uncertainties in management's responses, the earnings call highlights strong growth in Commerce Media Solutions, strategic partnerships, and improved financial health. The company's shift towards high-margin segments and reduced debt are promising. While there are challenges in Owned and Operated segments, the overall outlook is optimistic with positive EBITDA expected. The market is likely to react positively, with a potential stock price increase of 2% to 8% over the next two weeks.
Total consolidated revenue $47 million in Q3 2025, compared with $64.5 million in Q3 2024, a decrease due to a decline in owned and operated revenue.
Commerce Media Solutions revenue $18.8 million in Q3 2025, up 81% from $10.4 million in Q3 2024, driven by new partnerships and market share growth.
Owned and operated revenue Decreased 52% year-over-year in Q3 2025, attributed to advertising and regulatory headwinds and a strategic focus on Commerce Media growth.
Media margin $12.8 million in Q3 2025 (27.2% of revenue), compared to $18.2 million in Q3 2024 (28.1% of revenue), reflecting a decline in revenue and strategic pricing adjustments.
Commerce Media Solutions media margin $4.6 million in Q3 2025 (25% of CMS revenue), compared to $3.5 million in Q3 2024 (34% of CMS revenue), impacted by flexible pricing strategies to attract new partners.
Net loss $7.6 million in Q3 2025, compared to $7.9 million in Q3 2024, showing a slight improvement.
Adjusted net loss $6.5 million in Q3 2025 ($0.23 per share), compared to $3.7 million in Q3 2024 ($0.22 per share), reflecting increased investment in Commerce Media Solutions.
Adjusted EBITDA Loss of $3.4 million in Q3 2025, compared to a loss of $71,000 in Q3 2024, due to strategic investments in Commerce Media Solutions.
Cash and cash equivalents $9.2 million as of September 30, 2025, supported by a $10.3 million equity raise to fund Commerce Media Solutions growth.
Total net long-term debt $26 million as of September 30, 2025, down from $35.6 million as of December 31, 2024, due to reduced loan balances.
Commerce Media Solutions revenue growth: Revenue grew over 80% year-over-year, increasing its contribution to consolidated enterprise revenue from 16% in Q3 2024 to 40% in Q3 2025. The annual revenue run rate surpassed $85 million.
New partnerships: Fluent announced partnerships with Databricks, Authentic Brands Group, and Rebuy Engine, expanding capabilities and market reach.
Platform performance: Rebuy Monetize powered by Fluent saw over 1 million ad unit sessions in September, a 79% month-over-month increase.
Market share expansion: Fluent expanded its position in the Commerce Media industry, with Commerce Media Solutions expected to overtake owned and operated business as the main revenue driver in Q4 2025.
New channels: The partnership with Rebuy Engine opened access to over 12,000 e-commerce brands on the Shopify ecosystem.
Operational efficiencies: Margins for Commerce Media Solutions improved sequentially, with gross profit margins increasing from 18% in Q2 2025 to 22% in Q3 2025.
Cost management: Operating expenses decreased to $14.7 million in Q3 2025 from $17.2 million in Q3 2024.
Strategic pivot: Fluent is focusing on Commerce Media Solutions as the primary growth driver, shifting resources away from owned and operated marketplaces.
Financial strategy: Completed a $10.3 million equity raise to strengthen the balance sheet and support Commerce Media Solutions growth.
Timing delays in onboarding new partners: The company's financial results were negatively impacted by delays in onboarding new partners, which reduced revenue and gross profit for the quarter.
Advertiser pricing and budget pullback: There was a pullback in advertiser pricing and budgets in the later part of Q3, which continued into early Q4, affecting revenue.
Decline in owned and operated marketplaces: Owned and operated marketplaces experienced a significant 50% year-over-year revenue decline, exacerbated by advertising and regulatory headwinds.
Compressed margins in Commerce Media Solutions: Margins in Commerce Media Solutions were compressed due to offering more flexible pricing structures to attract new partners, though this is expected to improve over time.
Net loss and adjusted EBITDA loss: The company reported a net loss of $7.6 million and an adjusted EBITDA loss of $3.4 million in Q3 2025, reflecting ongoing financial challenges.
Debt levels and reliance on credit facilities: The company has $26 million in net long-term debt and continues to rely on credit facilities, which could pose financial risks if growth expectations are not met.
Commerce Media Solutions Revenue Growth: Commerce Media Solutions revenue grew 81% year-over-year in Q3 2025, reaching $18.8 million. The annual revenue run rate now exceeds $85 million, and this segment is expected to overtake owned and operated business as the main driver of consolidated revenue in Q4 2025. Management anticipates continued triple-digit revenue growth year-over-year in the second half of 2025 and double-digit consolidated revenue growth in 2026.
Gross Profit and Adjusted EBITDA: Fluent expects gross profit to grow by double digits quarter-over-quarter in Q4 2025, marking the first such increase in 10 quarters. Adjusted EBITDA is projected to turn positive in Q4 2025, with full-year adjusted EBITDA profitability anticipated in 2026.
Market Trends and Strategic Positioning: The company sees a convergence between owned and operated and Commerce Media capabilities, creating unique opportunities in the Commerce Media marketplace. This convergence is expected to accelerate consolidated business growth significantly.
Partnerships and Expansion: Fluent has entered into new partnerships with Databricks, Authentic Brands Group, and Rebuy Engine, which are expected to drive growth in Commerce Media Solutions. These partnerships are anticipated to enhance data collaboration, expand market reach, and increase transaction volumes.
Capital and Liquidity: The company completed a $10.3 million equity raise in Q3 2025, strengthening its balance sheet and providing additional capital to invest in Commerce Media Solutions. Fluent plans to strategically utilize debt as a source of capital as the business scales.
The selected topic was not discussed during the call.
Despite some uncertainties in management's responses, the earnings call highlights strong growth in Commerce Media Solutions, strategic partnerships, and improved financial health. The company's shift towards high-margin segments and reduced debt are promising. While there are challenges in Owned and Operated segments, the overall outlook is optimistic with positive EBITDA expected. The market is likely to react positively, with a potential stock price increase of 2% to 8% over the next two weeks.
The earnings call highlights a strategic shift towards Commerce Media Solutions, with significant revenue growth and improved margins anticipated. Despite a current negative EBITDA, the reduction in net loss and strategic debt management are positives. The partnership with Rebuy shows potential for future growth, and the company expects strong revenue growth in upcoming years. While there are concerns about O&O segment declines and unclear timelines, the overall sentiment is optimistic, driven by strategic initiatives and market expansion.
The earnings call reveals several concerns: a 16% revenue decline, increased net loss, and reduced gross margins. While Commerce Media Solutions shows growth, other segments like Owned and Operated are struggling. The lack of a shareholder return plan and unclear guidance on new partnerships further contribute to uncertainty. Despite some positive elements, such as reduced debt and potential from the Rebuy partnership, the overall sentiment leans negative due to financial underperformance and economic uncertainties.
The earnings call reveals several negative indicators: a significant decrease in total revenue and owned and operated revenue, an adjusted EBITDA loss, and increased net loss. Despite strong growth in Commerce Media Solutions, the gross margin decline and lack of shareholder return plans are concerning. The Q&A section highlights uncertainties, especially regarding the Rebuy partnership's financial impact and O&O segment stabilization. While new partnerships and debt reduction are positive, the overall sentiment leans negative due to financial performance and market uncertainties.
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