Inuvo — Second Quarter 2026 Earnings Summary

Financial Performance

• Net revenue decreased 67% year-over-year to $7.5 million in Q2 2026, compared to $22.7 million in Q2 2025.
• Audience Modeling revenue grew 19% year-over-year, partially offsetting an 80% decline in Legacy Search revenue.
• Gross profit declined $13.8 million to $3.3 million in Q2 2026, driven by a shift in revenue mix away from higher-margin Legacy Search.
• Operating expenses decreased 67% year-over-year to $6.4 million in Q2 2026, down from $19.1 million in Q2 2025, due to lower marketing and compensation costs.
• Operating loss widened to $3.0 million in Q2 2026 from $2.0 million in Q2 2025.
• Net loss for Q2 2026 was $4.0 million ($0.27 per share), compared to a net loss of $1.5 million ($0.10 per share) in Q2 2025.
• Adjusted EBITDA loss for Q2 2026 was $1.8 million, compared to a loss of $0.6 million in Q2 2025.
• Other expenses included a $0.9 million charge for debt extinguishment.
• As of June 30, 2026, the company held $886,000 in cash and cash equivalents and $6.2 million in restricted cash.
• Total assets were $27.3 million as of June 30, 2026, compared to $24.9 million as of December 31, 2025.
• Total liabilities were $19.0 million as of June 30, 2026, compared to $14.8 million as of December 31, 2025.
• Stockholders' equity was $8.3 million as of June 30, 2026, down from $10.0 million as of December 31, 2025.

Guidance and Future Outlook

• Inuvo expects continued year-over-year revenue growth for Audience Modeling in the remainder of 2026, supported by a healthy sales pipeline.
• Legacy Search revenue is expected to stabilize quarterly, with margins anticipated to improve as the business operates at positive cash flow.
• Operating expenses are expected to remain lower year-over-year due to reduced traffic acquisition costs and compensation expenses.
• Strategic priorities for the second half of the year include deepening IntentKey adoption, expanding applications, product innovation, and focusing on higher-margin revenue.

Business Segments and Product Lines

• Audience Modeling revenue growth was driven by recent client wins and increased investment from existing IntentKey customers.
• The company added five new brand-direct relationships, including two with Fortune Global 500 companies.
• Legacy Search was streamlined to eliminate cash and margin drag through cost reductions.
• IntentKey intelligence applications were expanded beyond traditional consumer advertising.
• Product innovation continues to focus on broadening access to the technology.

Market and Competitive Landscape

• The company is pivoting towards an IntentKey-focused future, positioning itself as a leader in AI advertising technology.
• IntentKey is described as a patented technology that identifies customer engagement based on real-time media consumption, refreshing models every 5 minutes.
• The company's language-based AI does not rely on consumer IDs, distinguishing it from legacy programmatic systems that respond to buying signals 24 hours later.
• Legacy Search revenue decline was attributed to the 2025 strategic reset of the Bonfire platform and ongoing structural changes in the industry.

Risks and Challenges

• Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from expectations, including those detailed in the company's Form 10-K for the fiscal year ended December 31, 2025.
• The company faces structural changes in the advertising industry impacting Legacy Search revenue.
• Actual results may vary if underlying assumptions regarding strategic execution and market trends prove incorrect.

Management Commentary and Tone

• Rob Buchner, Chairman and CEO, stated the company made "meaningful progress" in its strategic pivot and took "decisive steps" to strengthen the business.
• Management highlighted that the sharpened go-to-market strategy yielded growth in both Audience Modeling revenue and the sales pipeline.
• Buchner expressed confidence that the company is better positioned to operate from a place of strength in the back half of the year.
• Management emphasized priorities to deepen IntentKey adoption and build a higher-margin, more resilient business.

Other Key Points

• The company completed financing transactions with combined gross proceeds of approximately $13 million; $10 million was received in Q2 2026 and $3 million in July.
• Proceeds were used to retire prior debt facilities and add working capital.
• During the quarter, the company issued two secured promissory notes for gross proceeds of $10.3 million.
• Subsequent to the quarter end, the company completed a registered direct offering of common stock and pre-funded warrants for gross proceeds of $3.0 million.
• As of June 30, 2026, the company's prior convertible promissory note and receivables-based credit facility had been extinguished.
• A conference call regarding these results was scheduled for August 11, 2026, at 4:15 PM ET.