Fluent (FLNT) Q2 2025 Earnings Call Transcript

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DATE

Tuesday, Aug. 19, 2025 at 4:30 p.m. ET

CALL PARTICIPANTS

Chief Executive Officer — Don Patrick

Chief Financial Officer — Ryan Perfit

Chief Strategy Officer — Ryan Schulke

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RISKS

Owned and Operated Segment Decline— Don Patrick said, "our owned and operated marketplace decline of 31% quarter over quarter, exacerbated by strong regulatory headwinds."

Media Margin Compression— Ryan Perfit stated, "commerce media margin in 2025 was $3.2 million or 20% of commerce media solutions revenue, compared with $2.2 million or 30.4% of revenues in 2024. Commerce media margin (non-GAAP) was compressed due to increased flexibility in our pricing structure during Q2 2025.

Continued Limitations on Media Supply— Don Patrick noted, "FTC settlement really restricted our ability to buy on in certain media channels profitably, and it was primarily on the biddable platforms."

TAKEAWAYS

Revenue-- Revenue was $44.7 million for fiscal Q2 2025 (period ended June 30, 2025), a 24% year-over-year decrease.

Commerce Media Solutions Revenue-- $16.1 million, up 121% year-over-year, representing 36% of consolidated revenue in fiscal Q2 2025, compared to 12% in fiscal Q2 2024.

Media Margin-- Media margin was $11.9 million, representing 26.7% of revenue for fiscal Q2 2025 (non-GAAP), down from $15.7 million in fiscal Q2 2024 at the same margin rate.

Commerce Media Solutions Margin-- $3.2 million, or 20% of segment revenue in fiscal Q2 2025, down from $2.2 million, or 30.4% in fiscal Q2 2024, as pricing concessions were made for long-term partner acquisition.

Adjusted EBITDA-- Adjusted EBITDA was ($2.8) million for fiscal Q2 2025, a $1.7 million improvement from the prior year and a $0.3 million sequential improvement.

GAAP Net Loss-- GAAP net loss was $7.2 million in fiscal Q2 2025, an improvement from $11.6 million in fiscal Q2 2024 and $8.3 million in fiscal Q1 2025.

Adjusted Net Loss-- Adjusted net loss, a non-GAAP measure, was $5.9 million (24¢ per share) in fiscal Q2 2025, an improvement from $7.3 million (47¢ per share) in fiscal Q2 2024.

Operating Expenses-- GAAP operating expenses totaled $14.9 million in fiscal Q2 2025, down from $18.2 million in fiscal Q2 2024.

Interest Expense-- Interest expense in fiscal Q2 2025 decreased to $702,000 from $1 million in the prior year period.

Cash and Restricted Cash-- $7.3 million ($4.9 million in cash and $2.4 million in restricted cash) as of June 30, 2025.

Total Net Long-term Debt-- $19.9 million in total net long-term debt at the end of fiscal Q2 2025, down from $31.9 million at year-end 2024.

Equity Financing-- Over $10 million in new private placement was secured from a high-quality and diversified group of fundamental investors, joined by insiders, providing sufficient capital to reach adjusted EBITDA profitability in Q4 and for the full year 2026 and beyond.

Commerce Media Revenue Run Rate-- Commerce media revenue exceeded an $80 million annualized run rate as of June 30, 2025, representing more than 20% sequential growth from Q1.

New Partnerships-- Fifteen new commerce media partners were added since the beginning of fiscal Q2 2025, including an expanded relationship with Authentic Brands and a strategic partnership with Revi Engine, providing access to over 12,000 Shopify brands.

Profitability Outlook-- Management expects to achieve adjusted EBITDA positivity (non-GAAP) in Q4 2025 and for the full year 2026 and beyond.

2026 Guidance-- Management expects "full-year double-digit consolidated revenue growth and full-year adjusted EBITDA profitability in 2026."

SUMMARY

Fluent(NASDAQ:FLNT) reported a significant shift in business mix, as commerce media revenue surged 121% year-over-year and accounted for 36% of total revenue in fiscal Q2 2025. Management cited ongoing strategic execution as the main driver of results, with deliberate actions to reduce exposure to owned and operated channels amid continued regulatory and supply-side headwinds. A private placement exceeding $10 million was announced after fiscal Q2 2025 to support the transition and anticipated growth into 2026.

Don Patrick directly stated that owned and operated revenues continued to be challenged by "strong regulatory headwinds" and a constrained media supply resulting from the FTC settlement.

Ryan Perfit explained that margin compression in commerce media (non-GAAP) in fiscal Q2 2025 resulted from flexible pricing to secure long-term partnerships and entry into new, lower-margin verticals, with improvements already noted in fiscal Q3 2025.

Management highlighted rapid onboarding of enterprise partners and new sales channels, with 15 added since the start of fiscal Q2, enhancing the future revenue base.

Weekly volume seasonality, particularly in retail, partially masked the near-term impact of the commerce media segment’s gains on a consolidated basis.

The company expects commerce media revenues to become the majority of total revenue during 2026, outpacing legacy segment contributions.

INDUSTRY GLOSSARY

Commerce Media: Digital marketing solutions enabling brands to target and engage consumers at or near the point of purchase, often integrated into e-commerce platforms and transaction flows.

Owned and Operated: Company-owned web properties and marketing channels where the full consumer experience and advertising inventory are managed internally.

Biddable Platforms: Online advertising channels where inventory is allocated through real-time auctions, such as major social media and search platforms.

Media Margin: The difference between revenue and media costs, serving as a proxy for gross profit from advertising campaign execution.

Full Conference Call Transcript

Operator: Good afternoon, and welcome. Thank you for joining us to discuss Fluent's second quarter 2025 Earnings Results. With me today are Fluent's Chief Executive Officer, Don Patrick, Chief Financial Officer, Ryan Perfit, and Chief Strategy Officer, Ryan Schulke. Our call today will begin with the comments from Don and Ryan Perfit, followed by a question and answer session. I would like to remind you that this call is being webcast live and recorded. A replay of the event will be available following the call on Fluent's website. To access the webcast, please visit the Investor Relations page at www.fluentco.com.

Before we begin, I would like to advise listeners that certain information discussed by management during this conference call will contain forward-looking statements covered under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Any forward-looking statements made during this call speak only as of the date hereof. Actual results could differ materially from those stated or implied by such forward-looking statements due to risks and uncertainties associated with the company's business. These statements may be identified by words such as expects, plans, projects, could, will, and estimates, and other words of similar meaning. The company undertakes no obligation to update the information provided on this call.

For a discussion of the risks and uncertainties associated with Fluent's business, I encourage you to review the company's filings with the Securities and Exchange Commission, including the company's most recent annual report on Form 10-K and quarterly reports on Form 10-Q. During the call, management will also present certain non-GAAP financial information relating to media margin, adjusted EBITDA, and adjusted net income. Management evaluates the financial performance of the company's business on a variety of indicators, including these non-GAAP metrics. The definition of these metrics and reconciliations to the most directly comparable GAAP financial measures are provided in the earnings press release issued earlier today. With that, I'm pleased to introduce Fluent's CEO, Don Patrick. Please go ahead.

Don Patrick: Good afternoon. Thank you all for joining our call today. Here together with Ryan Schulke, our Chief Strategy Officer and company cofounder, and Ryan Perfit, our Chief Financial Officer. As we projected during our last earnings call, our second quarter consolidated financial results continue to reflect the investment we've made over the last thirty months to shift our mix into the commerce media growth strategies. While this has created expected difficult consolidated comps for our business, as expected, we are executing a very intentional strategy that we are confident will build a more valuable business. We are approaching a tipping point.

We're in 2025, we believe we will begin seeing the financial impact of our commerce media solutions business as the revenue and gross profit mix shift begins to show in the consolidated Fluent financials. Our Q2 consolidated financial results were as follows: revenue of $44.7 million, representing a 19% decline versus 2025. Our median margin of $11.9 million was a decrease of 13% versus Q1 2025. And adjusted EBITDA of negative $2.8 million, representing a $300k improvement versus Q1 2025. Our positive commerce media revenue growth trend in the quarter was not yet enough to offset our owned and operated marketplace decline of 31% quarter over quarter, exacerbated by strong regulatory headwinds.

One of our key strategic motivators behind our shift to mix strategy. We expect commerce media to become the majority of our revenue as we move into 2026. To be clear, owned and operated remains core to our long-term growth strategy, albeit with a much tighter nucleus. And while we continue to reduce our strategic reliance on owned and operated, it represents the strong brand equity we built in the marketplace over the last decade that is still highly leverageable by our commerce media business. Put simply, owned and operated provides an essential operational and capability platform that our competitors can't rival, which acts as a springboard for our commerce media marketplace expansion.

And the cash flow our owned and operated business generates fuels our long-term growth strategies. That said, the key driver to our business trajectory right now is the growth in commerce media solutions. We fundamentally believe we are creating a differentiated commerce media business that represents a transformational pivot for Fluent while delivering a competitive advantage in a rapidly growing higher gross profit marketplace. As of 06/30/2025, our commerce media revenue grew 121% compared to the prior year, representing 36% of our consolidated revenue and has surpassed an annual revenue run rate of $80 million, over 20% sequential increase from Q1.

As we continue to expand our model and grow market share based on the consumer value we are creating for our clients and advertisers, we are on a decided path to deliver sustainable growth with margins that are accretive to our core business. To support the strategic pivot we are executing, today, we announced over $10 million equity financing with a high-quality and diversified group of fundamental investors who are also joined by insiders. This financing bolsters our balance sheet and will fuel the growth of profitability. We appreciate the support of such a solid group of investors who got to know us and became confident in our strategy and growth trajectory.

I just want to take a minute to stand back and remind everyone of the market opportunity that we are going after. Commerce media is projected to grow over $100 billion over the next five years and is expected to account for 25% of all digital media spend in 2026. This is a considerably larger market than our legacy owned and operated business, and the growth we are seeing in the commerce media segment reflects how we are squarely positioned as a leader in this quickly growing marketplace.

In Q2, commerce media solutions revenue grew 121% year over year while increasing its percent of consolidated enterprise revenue from virtually zero two years ago to now account for 36% of our consolidated revenue as we aggressively establish Fluent's equity in the commerce media marketplace. Its impact on Fluent's consolidated annual financials was actually partially masked by the seasonality-driven lower marketplace volume that is reflective of the retail vertical.

As such, its growth is not yet enough to offset the decline in our still larger owned and operated marketplace where revenue and media margins continue to be negatively impacted by the volatility in media costs on the biddable platforms, which affect our ability to buy media at scale at acceptable margins. We will more aggressively shift the mix to commerce media in the second half as we onboard new partners and continue to scale our marketplace. In turn, our shareholders will begin to see the financial momentum behind our strategic pivot, and that momentum will carry into fiscal year 2026.

Importantly, our strategic premise continues to be validated by the staple of iconic brands who are choosing to partner with us. We are energized by the world-class brands that continue to engage us in partnership. We added 15 new partners to our commerce media platform since the beginning of Q2. This growing list of partners recognizes the fundamental value we are creating in building consumer loyalty as we are consistently exceeding their revenue and advertiser return on ad spend expectations. As one example, subsequent to the quarter, we expanded our relationship with Authentic Brands, a leading sports, lifestyle, and entertainment brand owner generating more than $32 billion in global retail sales.

This expanded relationship supports additional brands like Reebok, Champion, and more. Also, our recently announced strategic partnership with Revi Engine, a leading e-commerce personalization platform for Shopify brands, has opened an expansive network of over 12,000 plus active e-commerce brands on the Shopify ecosystem, which is a new channel for us. That execution is progressing as planned, but the strategic partnership also creates an oasis of upside as we cultivate new business relationships. What's most important to the business and our shareholders is ultimately having our financial scorecard reflect our strategic wisdom. We expect to see strong momentum in the second half of the year and into 2026.

Specifically, we expect the commerce media solutions will continue to grow at a triple-digit rate this year and next. These results are a testament to the investment we've made in the marketplace platform this Fluent team has built, which is validated by the world-class brand partnerships we are establishing and that trend is accelerating. As commerce media scales, we expect to be adjusted EBITDA positive in Q4 and achieve positive adjusted EBITDA for the full year 2026 and beyond. I will now turn the call over to Ryan to review the financial results.

Ryan Perfit: Thank you, Don, and thanks to everyone for joining us today. I'll now provide a review of our second quarter results. While total revenue of $44.7 million in 2025 reflects a decrease of 24% from the prior year, as Don just mentioned, commerce media solutions revenue grew 121% to $16.1 million, consistent with our expectation of triple-digit growth of this business for 2025. Commerce Media Solutions represents 36% of our total consolidated revenue in 2025, compared with just 12% in the second quarter last year.

We're optimistic about the growth we're seeing in Commerce Media Solutions and believe the segment is positioned to displace our owned and operated business as the main component of our consolidated revenues before the end of the year. Owned and operated decreased approximately 49% in the quarter as our long-term strategy has shifted to focus on commerce media. Media margin in the second quarter was $11.9 million, which represented 26.7% of revenue, compared to $15.7 million or 26.7% of revenue last year. Our commerce media margin in 2025 was $3.2 million or 20% of commerce media solutions revenue, compared with $2.2 million or 30.4% of revenues in 2024.

Second quarter commerce media margin was compressed related to flexibility around our pricing structure to remain competitive and win long-term partners and gain traction in new verticals. As we improve monetization in those new verticals and move past short-term pricing incentives, we expect media margin to return to the high twenties. On a GAAP basis, total operating expense in 2025 totaled $14.9 million compared with $18.2 million in 2024. Interest expense in the second quarter decreased to $702,000 from $1 million in the prior year period. We reported a net loss of $7.2 million in the second quarter compared with a net loss of $11.6 million in the prior year period.

Net loss also improved on a sequential basis compared to $8.3 million in 2025. Adjusted net loss, a non-GAAP measure, was $5.9 million, equivalent to a loss of 24¢ per share, compared with an adjusted net loss of $7.3 million or a loss of $0.47 per share in 2024. Adjusted EBITDA in 2025 was a loss of $2.8 million compared with an adjusted EBITDA loss of $4.5 million in 2024. As we continue to drive our shift in revenue mix to focus more on commerce media solutions, we expect adjusted EBITDA margin to improve over time. Now shifting to our balance sheet.

We ended the quarter with $4.9 million in cash and cash equivalents and an additional $2.4 million of restricted cash. We also announced today a private placement in excess of $10 million with multiple quality new investors as well as participation from insiders. This private placement gives us the working capital to support the continued growth of our commerce media business and gives us sufficient capital to reach adjusted EBITDA profitability in Q4 and for the full year of 2026 and beyond. Our total net long-term debt was $19.9 million at 06/30/2025, compared with $31.9 million at 12/31/2024. We had an outstanding principal balance of $20 million on our credit facility with SLR Credit Solutions.

This facility provides us with a $20 million term loan and a revolving credit facility of up to $30 million that matures on 04/02/2029. We will continue to strategically utilize debt as a source of capital as our business scales. We're encouraged by the progress we've made so far this year, and we believe that we're well positioned for success as we move through 2025. Commerce Media Solutions has consistently grown at a triple-digit pace and we're approaching a key inflection point where revenue from this segment is set to surpass owned and operated revenue as the main contributor to consolidated revenue.

With that shift, we expect to deliver increased revenue, enhanced margin performance, positive adjusted EBITDA, and positive cash flow for our business. With our current visibility, we expect positive adjusted EBITDA in 2025 as well as full-year double-digit consolidated revenue growth and full-year adjusted EBITDA profitability in 2026. With that, we'll be happy to take questions at this time.

Operator: Thank you. And as a reminder, to ask a question, you will need to press 11 on your telephone and wait for your name to be announced. To withdraw your question, please press 11 again. Please standby while we compile the Q&A roster. One moment for our first question. Our first question will come from the line of Maria Ripps from Canaccord. Your line is open.

Maria Ripps: Great. Thanks so much for taking my questions. Can you maybe expand a little bit more on what drove some of the steeper declines in your owned and operated segment here in Q2? And just given the run rate of the business now, what are your thoughts on stabilizing the segment from here?

Don Patrick: Thanks, Maria. Thanks for your question. So I'll unpack it a little bit. You guys know that, like, the owned and operated business, we've been operating for fifteen years now. The first twelve, we were able to drive it and grow it on a compounded average growth rate of double digits until the FTC settlement. We had very diversified media channels across, you know, a very wide group. So as media moved up and down in pricing, we were able to obviously adjust that and be much more adept in terms of managing across the media channels. The FTC settlement really restricted our ability to buy on in certain media channels profitably, and it was primarily on the biddable platforms.

And those biddable platforms are even more evolved than the other channels that we're on. So if you think about it, the owned and operated the advertiser side, the demand has stayed very, very strong. The media supply is now, very, very much narrowed in terms of our diversification, and there's a lot more variability in that. So we had a steep increase in pricing on those biddable platforms that happened in the later part of Q1 and launched and continued into Q2. And we managed the margin. So that business has always managed to margin. We've obviously lowered the revenue, but kept the margin percentage in line as we manage it.

So it's a combination of, obviously, the volatility of those billable platforms. But equally important, it's obviously our lack of diversification in those media channels right now, Maria.

Maria Ripps: Got it. That's very helpful. And then on your commerce media solutions, can you maybe talk about how your partnership with Revise is progressing? And are you fully engaged with the majority of brands on the platform on the rebuy platform, or maybe talk about some of the pace of them adopting your offerings?

Don Patrick: Sure. Yep. And we are obviously still very young. We announced it in June. We're two months in. But we're very, very happy with the progress that we have with the partnership. The teams are working well and have great cultural fit. I'd say we are ahead on the product and operational side of the partnership. And, you know, we've started the partnership. It had no meaningful effect in Q2. Obviously, if it started in June. We're starting to see it show up on our staff page. It's still less than 10% of our commerce media volume, but there's good momentum with onboarding the merchant partners. So there's a lot of acceleration in that piece. It's still very early days.

We see tremendous upside in terms of accessing all of their 12,000 merchants and equally important, their large the large sort of top 50 that they go after. So, we're very early stage here. We think this is something that will drive not only our growth in 2025, but significantly in 2026 also.

Maria Ripps: Great. Thanks so much for the color, Don.

Don Patrick: Thanks, Maria. One moment for the next question.

Operator: Our next question will come from the line of Patrick Scholl from Barrington Research. Your line is open.

Patrick Scholl: Hi. Thank you. I just wanted to follow-up on the commerce media side. So on the new agreements that you're reaching with firms, are those mostly like revenue share in nature, or are they more like minimum guarantee? I'm just kind of curious, like, how long should we think of, like, these margin pressures easing? Is that kind of just improved monetization helping and automatically lift that, or is that I guess, what are some of the dynamics there that it yeah, should improve the margin profile?

Don Patrick: Yep. Yep. Pat, yeah, thanks for the question. And, obviously, our margin did decline as you saw in Q2 on the commerce media side. There's really three things that are driving that. The first is that we have launched into some adjacent commerce media solutions that are very early stage. That we are starting to scale. So much like when we got first into the post transaction side, margins were lower. But as we scaled up, those margins came back in line to where the industry's at. So the first piece has been some, you know, some additional solutions that we're working with existing partners on. To establish and continue to build our strategic relationship.

In Q3 we've already seen those margins increase significantly compared to Q2, close to doubling that. So we see that opportunity that margins improving from Q2 over that over the new solutions that we're that we're scaling. The second piece is, as you talked about, depending on how competitive the sales process is, we will provide some different revenue splits in a very short-term targeted way to encourage them to come onto our platform faster or some guarantees to get them to move. They hit harder in Q1 in Q2 because of the lower volume. Those are fixed dollars that obviously over the course of the year will equal out.

But when they're lower volume and lower margins, they have a bigger impact into that. So that obviously is gonna continue to trend. And then the third one is there is tremendous upside in the rebuy and the other channel partnerships that we are working on, but they tend to have slightly lower margins than the enterprise side. So those are the three moving pieces in there. As we head into Q3 in the second half here, Pat, we have significant new enterprise clients coming on, the new enterprise solutions that we're excited about, and we'll talk more about later this year. Obviously, it's starting to scale back up to the margins.

So we see us getting back to historical margins in the Q4 time frame.

Patrick Scholl: Okay. And then just on the new solutions, does that change some of the I guess, advertiser relationships that you've had to that you've have, or have you had to, you know, find additional advertising partners to digest that inventory?

Don Patrick: For the most part, it's the same advertising group. There might be a different concentration or mix depending on the solution. But one of the one obviously, one of the benefits of the owned and operated businesses, we used a lot of the advertiser relationship to launch into commerce media. And then we've been able to use those advertisers from both to launch and continue to have that strong demand in our newer solutions also.

Patrick Scholl: Okay. Thank you.

Don Patrick: Alright. Thanks, Pat.

Operator: Thank you. Once again, that's star one for questions. Star one. Our next question will come from the line of Bill Dezellem from Titan Capital Management. Your line is open.

Bill Dezellem: Thank you. I have a group of questions. First of all, would you please discuss the new placements beyond post transactions that you referenced in the press release?

Don Patrick: Hi, Bill. Thanks for the question. We've talked about this in other earnings releases and we've sort of hinted at exciting opportunities that we're being asked to move into it with our partners that we have now. We've talked about a loyalty play, which allows us to really bring our commerce media post play to help transaction technology and solution into a loyalty retain existing customers of our partners. We have a couple of opportunities there that we're building. And then in general, what I'll call post event. So other things like post receipt or post registration, we're helping our commerce partners monetize within those other consumer experiences.

So it is still pretty early days on those, but obviously, they are big very large, big opportunities beyond post transaction that we think is a very strong roadmap for continued growth.

Bill Dezellem: Don, would you like to expand on the post receipt and how that might work and practically kinda how we could envision that?

Don Patrick: Yeah. The post receipt is much like the post transaction, Bill. So there's obviously, as a consumer goes in and is going through the flow of getting a receipt, there's like in the post transaction, there's an ad module. That will pop up. They'll be very targeted based on our data and our one-to-one marketing of what the next most relevant ad is. So from that perspective, it's very similar to the consumer flow and a consumer experience that we have now. The only difference, obviously, is in the post transaction, that consumer has its credit card out.

They're purchasing, and they are obviously much more engaged consumer than if it's a post receipt or post registration or things like that. There's still they you have to get they're not as intended as a post transaction consumer. On the loyalty side that we talked about, it's actually quite exciting where instead of serving up an ad for, for example, Hulu's streaming services to one of the consumers, we will bring offers to them to bring loyalty currency, whatever that partner is, to allow them to wing currency coins or points or scorecard points, etcetera. It allows them to obviously use that back into the loyalty program of our partners. So it does two things.

One is it turns loyalty into a you know, to a weapon rather than a, like, a loss statement for our partners, and it allows us to really help them drive consumer engagement and higher loyalty throughout that. So these are still very early stages. We have, obviously, not a we have a small handful of clients that we're scaling with. But we from an external perspective, we know the demand and the need is there, and our solution can drive that pretty successfully and move this to scale.

Bill Dezellem: Great. Thank you. And then I believe in prior press releases, you may have also alluded to this, but you explicitly stated it here in this release that your first-party data differentiates you from competitors in this market. Would you please discuss how that becomes important and the implications from I guess, a winning of business perspective and as a shareholder, the shareholders benefit. So I guess, really, the question is, what's the benefit to your customer? What's the benefit to your bottom line?

Don Patrick: Right. Got it, Bill. So we announced, obviously, Sonic Brands Group, we announced rebuy. We will announce a number of other very large partnerships that we've that are coming onto our platform over the next sort of four to six weeks. So we continue to win and win aggressively. The core at the very core of it, Bill, it comes down to very simply, is that we drive better results than our competitors. Right? At the end of the day, it's does the consumer experience meaningful and additive to our partners? And number two, how does it monetize and how the results come from a financial perspective?

So we've been in these two short years, we've been able to really build up a very strong brand around driving results. And underneath that results, there's really two things that drive that significantly. The first as you mentioned, is our first-party data asset that we built over fifteen years. So if you were on a website you're purchasing sneakers, we as you know, we have to determine who you are. Your purchasing behavior has been and will be. And how do we serve the next most relevant ad to you that whatever amount of data that gets passed from our partner to us, then goes against our fluent identity graph.

So that first-party data asset allows us to better identify who you are, better understand your purchasing history and your needs, and then serve the most relevant ad to you. So that along with the second piece, which is our DNA of fifteen years from our owned and operated being a performance marketer, we know how to work with our advertisers. We know how to understand audiences, what audiences monetize better versus others versus different offers and etcetera. Those are the two things that allow us to drive better results. So that first-party data asset is proprietary.

Nobody else has a first-party data asset in the post transaction space that we're working on, and we believe that is our competitive advantage and competitive moat to driving better results.

Bill Dezellem: And so just said very directly, that first-party data allows you to essentially have more of your customers convert over and take one of your ads, that means your customer makes more money. And when they make more money, so do you since it's just a revenue or profit split.

Don Patrick: Yes. Basically, that's right, Bill.

Bill Dezellem: Okay. That's helpful. And if you allow me a couple more I realize I'm taking more than my share of time here. The Commerce Media second quarter revenues you stated were $16.1 million annualized. Or then it's $16.1 million. If you annualize that, that's $64 million. The press release says that your run rate exceeds $80 million. So that implies to me there's that there's been new business won just in the last six weeks. Is that the right way to read that? Or am I somehow comparing apples and oranges?

Ryan Perfit: Hi, Bill. This is Ryan. The annual revenue run rate, we use that metric because we believe that it better references kind of, what the next twelve months would look like if we didn't grow from there. It takes into account seasonality that you wouldn't see but it doesn't take into account anything that happened after the end of the quarter. So as of 06/30, that would count all of the media partners that we had brought on through that point. And take into account their annual sessions. We then take what we earn per session and kind of annualize that over a full twelve-month period.

So any new partners that we add in Q3 will add to that number additionally on top of that. But the difference you're seeing between Q2 and that annual number is seasonality. Generally speaking.

Bill Dezellem: That's really helpful. Thank you. And then maybe you can help me make sure I'm doing some math correctly here. You said that you anticipate having double-digit revenue growth in 2025. Last year, you had $255 million of revenues. So if we take the very lowest possible double-digit number as 10%, 10% growth on $255 million is $280 million. And if we remove what you have had for revenues in the first half, that would mean you need another $180 million in the second half or to split evenly, which I understand it won't be. But if it were, that'd be $90 million a quarter between Q3 and Q4.

So Q3 will be something less than $90 million and Q4 something greater than $90 million to hit your target. Is that the correct math in the way you're thinking about that? Those are really massive numbers.

Ryan Perfit: Sorry, Bill. I think you misunderstood. We've been doing triple-digit growth in Commerce Media. And what we said on the call is that we expect to have double-digit growth in 2026 from a consolidated basis. So that's 2026 over 2025.

Bill Dezellem: It's 2026, not 2025.

Ryan Perfit: Correct.

Bill Dezellem: So, basically, the math that I did will work in six months when we know what the 2025 revenues are.

Ryan Perfit: Yeah.

Bill Dezellem: That's very helpful. Okay. Thank you.

Ryan Perfit: Thank you, Bill.

Operator: Thank you. I'm not showing any further questions at this time. I would now like to turn it back over to Don Patrick for closing remarks.

Don Patrick: Thank you. This month marks an incredible milestone. It's the fifteenth anniversary of Fluent. I just want to extend a heartfelt thank you to every team member, every partner, and every shareholder for your invaluable contributions to this journey. Over the last fifteen years, we've had incredible growth and have witnessed great milestones achieved, all thanks to your dedication and your support. We remain very bullish on our agenda and excited about the momentum we've generated. We continue to lean into significant MEG opportunity in the rapidly growing commerce media industry, where we're expanding our strategic value proposition to world-class partners beyond customer acquisition and delivering higher quality consumer engagement across the entire marketing funnel.

As our strategic trend line continues throughout 2025, we believe shareholder value will follow. Thanks, everyone, and we look forward to speaking to you again next quarter.

Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Everyone, have a great day.

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