Inuvo — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net revenue decreased 70% year-over-year to $6.8 million for the third quarter of 2026, compared to $22.6 million in the same period in 2025.
• Audience Modeling revenue declined 24% year-over-year, while Legacy Search revenue fell 80% year-over-year due to industry structural changes and the Bonfire platform reset.
• Gross margin contracted to 44% in Q3 2026 from 73% in Q3 2025, driven by the shift in revenue mix away from higher-margin Legacy Search.
• Operating expenses were $7.8 million, including a $2.4 million non-cash impairment charge for Legacy Search intangible and long-lived assets; marketing costs decreased 90% and compensation costs decreased 35% year-over-year.
• Operating loss widened to $4.8 million in Q3 2026 from $1.7 million in Q3 2025.
• Net loss was $5.0 million ($0.28 per share) in Q3 2026, compared to a net loss of $1.7 million ($0.12 per share) in Q3 2025.
• Adjusted EBITDA loss was $1.6 million in Q3 2026, compared to a loss of $0.7 million in Q3 2025.
• Financing expense, net increased to $0.4 million in Q3 2026 from $0.1 million in the prior year due to secured promissory notes issued in June 2026.
• As of September 30, 2026, the company held $1.0 million in cash and cash equivalents and $6.2 million in restricted cash.

Guidance and Future Outlook:

• For the fourth quarter of 2026, Audience Modeling revenue is expected to increase compared to the third quarter, supported by a healthy sales pipeline.
• Legacy Search quarterly revenue and margins are expected to remain in line with the third quarter of 2026.
• Fourth quarter operating expenses are expected to remain lower year-over-year due to reduced compensation and traffic acquisition costs.
• Management plans to aggressively execute on closing the growing sales pipeline, growing the client base, and embedding data into next-generation agentic workflows during Q4.
• The company indicated a need to raise additional capital, continue cost reductions, and expand revenue to fund operations over the next twelve months.

Business Segments and Product Lines:

• The sales pipeline for Audience Modeling expanded across automotive, travel, healthcare, and financial verticals, despite a four-to-six-month sales cycle resulting in fewer conversions during the quarter.
• Legacy Search revenue streams stabilized, with the segment now covering its direct operating costs following strategic rationalization.
• Completed IntentKey MCP integration with Anthropic's Claude to enable seamless AI and agentic workflow integration.
• Launched a White-Label Partner Program allowing agency partners to offer IntentKey under their own brand.
• Introduced privacy-first neighborhood targeting that updates hourly to identify rising interest and reach CTV audiences without user-level identifiers.
• IntentKey maintained uninterrupted service for clients on Safari despite Apple's latest iOS updates impacting identity-based ad delivery for competitors.

Market and Competitive Landscape:

• The company positions itself as benefiting from industry turbulence where legacy ad tech platforms struggle to adapt, with demand concentrating around privacy-first AI solutions.
• IntentKey's value proposition is described as resonating due to its privacy-by-design approach, precision, speed, and ability to discover net-new audiences.
• Competing adtechs are significantly impacted by Apple's iOS updates choking identity-based ad delivery, whereas IntentKey continues to perform.

Risks and Challenges:

• The company faces the risk of substantial doubt regarding its ability to continue as a going concern, necessitating additional capital raises.
• Revenue conversion is impacted by the typical four-to-six-month sales cycle following the overhaul of the sales team and go-to-market strategy.
• Legacy Search revenue continues to face structural industry changes and platform resets.
• Forward-looking statements are subject to risks including the ability to raise capital, execute strategic plans, and market uncertainties detailed in SEC filings.

Management Commentary and Tone:

• Chairman and CEO Rob Buchner characterized the third quarter as a "decisive inflection point" with Legacy Search stabilized after several quarters of negative cash flow.
• Management expressed confidence in accelerating into an advertising environment requiring privacy-first AI solutions.
• The tone indicates an aggressive execution plan for the fourth quarter to capitalize on the growing sales pipeline and product innovation.

Other Key Points:

• The company completed a registered direct offering and concurrent private placement of warrants for gross proceeds of $3.0 million during the quarter.
• Notes payable increased, with $3.7 million in current portion and $6.2 million in long-term portion as of September 30, 2026, reflecting secured promissory notes issued in June 2026.
• The company recorded a net gain on the change in fair value of notes payable of $0.3 million in the third quarter.
• A $6.2 million settlement agreement was recorded as a non-cash adjustment in the nine-month period of 2026.
• Conference call details were provided for November 12, 2026, at 4:15 PM ET, including dial-in numbers and webcast links.