Fluent, Inc. Reports 29% Revenue Decline and $11.6 Million Net Loss in Q2 2024

Fluent, Inc. reported a significant decline in financial performance for the second quarter of 2024, with revenues falling 29% to $58.7 million compared to $82.1 million in the same period last year. The company also recorded a net loss of $11.6 million, or $0.75 per share, a stark contrast to the net income of $4.3 million, or $0.31 per share, reported in the prior year. For the first half of 2024, revenues decreased by 22% to $124.7 million, while the net loss was $17.9 million, compared to a loss of $27.7 million in the first half of 2023.

The decline in revenue was attributed to a contraction in Fluent's owned and operated marketplaces, exacerbated by a challenging macroeconomic environment and reduced media supply due to compliance changes following the Federal Trade Commission (FTC) Consent Order. The company faced a write-off of $3.1 million in accounts receivable related to unauthorized changes made to health insurance policies, which further impacted revenue. Despite these challenges, Fluent noted some recovery in its media supply and growth in its new syndicated performance marketplaces after the quarter ended.

Operationally, Fluent has made strategic adjustments, including a reduction in workforce to align resources with its strategic initiatives. The company reported a total employee count reduction of 59 in the first half of 2024. Additionally, Fluent has focused on improving traffic quality and diversifying its client base to mitigate the impact of individual advertiser pullbacks. The company also divested a non-core business unit and transferred another business unit to streamline operations.

As of June 30, 2024, Fluent's total assets stood at $98.5 million, down from $111.9 million at the end of 2023. The company reported total liabilities of $71.0 million, with a significant increase in the current portion of long-term debt, which rose to $32.5 million from $5.0 million at the end of the previous fiscal year. Fluent's cash and cash equivalents decreased to $4.9 million from $15.8 million, raising concerns about its liquidity and ability to meet financial covenants under its credit agreement.

Looking ahead, Fluent anticipates continued challenges due to economic conditions and regulatory pressures. The company has entered into amendments with its lenders to address compliance issues and has raised additional capital through convertible subordinated notes. However, management has expressed substantial doubt about the company's ability to continue as a going concern over the next twelve months, emphasizing the need for ongoing cost-saving measures and strategic adjustments to navigate the evolving market landscape.