AiAdvertising Reports 7% Revenue Growth in Q3 2024, Faces Net Loss and Working Capital Deficit

AiAdvertising, Inc. reported its financial results for the third quarter and the first nine months of 2024, showing a revenue increase of 7% to $2.24 million for the three months ended September 30, compared to $2.09 million in the same period of 2023. For the nine months, revenue rose by 12% to $6.56 million from $5.86 million year-over-year. The company achieved a gross profit of $379,434 for the third quarter, significantly up from $90,517 in the prior year, while gross profit for the nine months increased to $451,347 from $249,925. The gross profit margin improved to 17% for the third quarter, up from 3% in the same quarter last year.

Despite the revenue growth, AiAdvertising reported a net loss of $986,977 for the third quarter, a reduction from a loss of $1.53 million in the same period of 2023. For the nine months, the net loss was $4.31 million, slightly higher than the $4.31 million loss recorded in the same period last year. The decrease in quarterly net loss was attributed to improved gross profit and reduced operating expenses, which fell to $1.37 million from $1.62 million in the prior year, primarily due to lower stock-based compensation and reduced salaries and benefits.

Operationally, AiAdvertising has seen a strategic shift with increased customer engagement on its platform, which has contributed to the revenue growth. The company reported a reduction in headcount, which has also helped lower costs. The total operating expenses for the nine months decreased to $4.76 million from $4.99 million in the previous year. The company recorded an impairment of $20,202 related to an intangible asset, specifically a domain name, which it did not renew.

Looking ahead, AiAdvertising faces challenges with a working capital deficit of $1.88 million and cash reserves of only $630 as of September 30, 2024. The company has indicated that it may need to raise additional capital to support its operations and growth plans. The management has expressed concerns about the ability to continue as a going concern if sufficient revenues are not generated. The company is exploring options for future financing, which may include the issuance of equity or equity-backed securities, although this could dilute existing shareholders' ownership.

In recent developments, AiAdvertising amended its Certificate of Designation for its Series I Preferred Stock, increasing the authorized shares from 3 million to 3.4 million. The company also issued 892,857 shares of Series I Preferred Stock at $2.80 per share, raising $2.5 million. However, the company continues to navigate a challenging financial landscape, with ongoing efforts to stabilize its operations and enhance its market position.