Good day, ladies and gentlemen and welcome to Fluent’s Second Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] As a reminder, this call is being recorded. I would now like to introduce your host for today’s conference, Jordyn Tarazi, Investor Relations. Please go ahead.

Good afternoon and welcome. Thank you for joining us to discuss our second quarter 2019 earnings results. With me today are Ryan Schulke, CEO; and Alex Mandel, CFO. Our call today will begin with comments from Ryan Schulke and Alex Mandel, 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 our website. To access the webcast, please visit our Investor Relations page on our website, 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 our 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, may, anticipate, believes, should, intense, estimates, and other words of similar meaning. The Company undertakes no obligation to update the information provided on this call. For a discussion of 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, we will also present certain non-GAAP financial information relating to media margin, adjusted EBITDA and adjusted net income. Management evaluates the financial performance of our business on a variety of key indicators including media margin, adjusted EBITDA and adjusted net income. The definitions of these metrics and reconciliations to most directly comparable GAAP financial measure is provided an earnings press release issued earlier today. With that, I'm pleased to introduce Fluent’s CEO, Ryan Schulke.

Good afternoon, and thanks for joining our second quarter 2019 earnings call. We’re encouraged by our results from the period with 70.6 million, 22.9 million and 9.7 million in revenue, media margin and adjusted EBITDA respectively. This represents 24% and 4% growth in revenue and media margin and a 12% decline in adjusted EBITDA year-over-year. We’re quite pleased with our ability to scale business with our performance marketing client base, who continue to show high demand for Fluent’s primary offering, new customers at predictable pricing. With that said, as we apply greater focus to new supply channels and approaches to deliver those customers, we're seeing this growth come at higher costs. While acceptable now, we must be diligent in our test and learn approach in order to ensure that media we are acquiring will eventually be optimized to adequate margins for Fluent and its shareholders. Of course, this will take us some time, but it’s energy well invested based on our expected future returns. We’re quite encouraged that the growth we're experiencing is coming from verticals we believe are strategically sustainable, such as the media and entertainment sector, where we're partnered with some of the most prominent Fortune 500 brands in the world, in addition to fast growing disruptors who are emerging onto the scene. We’re incredibly proud of the company we keep and believe that growing share of wallet with these marquee clients will create opportunities for new product offerings, giving us the ability to expand more rapidly in the longer term. Our shareholders should understand that while every business model has its upside, there's also some downside that we need to continue to successfully navigate. Our performance marketing model affords our client base de-risked access to new customers, hence our ability to scale our own business with agility…

Thanks, Ryan, and good afternoon. In the second quarter, the company generated 70.6 million of revenue, representing 24% growth year-over-year. Our growth derived primarily from our performance campaigns, through which we deliver specific actions or outcomes specified by our clients, which in turn drive customer acquisition and growth for their businesses. As we experienced increased demand in the quarter from some of our highest profile clients, we leaned in to fulfill the volume and quality they saw. We saw this as an important opportunity to fortify strategic partnerships, capture share that we believe will be sustainable, and build Fluent’s brand equity in the marketplace. At the same time, satisfying our clients’ demand came at a relatively higher cost of media in the quarter. We went deeper into our traditional supply channels than we have historical from a seasonal standpoint, and experienced higher costs. Ironically, in our business, incremental volume often comes at incremental costs rather than volume discounts. And we continued to invest into newer supply channels to accelerate our learnings, which while profitable and strategic, produce lower margins as we test and learn and played a bigger role from a mix perspective. As a result, the company produced media margin of 22.9 million, representing growth of 4% year-over-year and a margin of 32% of revenue. Ryan also noted that we invested in the quarter into our compliance protocols relative to the dynamic regulatory environment we operate within to demonstrate our ongoing commitment to industry best practices. While we anticipate this investment will support our future growth ambitions, it did have an in quarter impact of approximately 700,000 of high margin revenue, and consequently media margin and adjusted EBITDA. This effect was specific to a limited period of time during the quarter, and we don't anticipate further costs at this…

[Operator Instructions] Mr. Goss, your line is open.

This is Pat on for Jim. I was just wondering if you could provide a little bit more information on the supply channels that you're pulling back on -- that are kind of hitting revenue growth.

Yeah, Pat. Just to give a little color there, we're actively driving into new types of channels where we've been historically a little less active. And, those range from social media channels, some of them being some of the more traditional social media, but that are opening up new inventory to us, like messaging apps and things like that. So we're really bullish on those areas, but just want to be disciplined and cautious in terms of how we're approaching it and making sure that the economics are a win-win for both Fluent and our clients.

Once again, you may disconnect your line. Thank you.