Good day, and welcome to the Inuvo First Quarter 2022 Financial Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to [Indiscernible], Investor Relations. Please go ahead.

Thank you, Operator. And good afternoon, everyone. I'd like to thank everyone for joining us today for the Inuvo first quarter 2022 shareholder update call. Today's Inuvo's Chief Executive Officer, Richard Howe, and Chief Financial Officer, Wally Ruiz will be your presenters on the call. We would also like to remind our shareholders that we anticipate filing our 10-Q with the Securities and Exchange Commission this evening. Before we begin, I'm going to review the company's safe harbor statement. The statements in this conference call that are not descriptions of historical facts are forward-looking statements relating to future events. And as such, all forward-looking statements are made pursuant to the Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties, and actual results may differ materially. When used in this call, the words anticipate, could, unable, estimate, intend, expect, believe, potential, will, should, project, and similar expressions as they relate to Inuvo Inc. are such forward-looking statements. Investors are cautioned that all forward-looking statements involve risks and uncertainties, which may cause actual results to differ from those anticipated by Inuvo at this time. In addition, other risks are more fully described in Inuvo's public filings with the U.S. Securities and Exchange Commission, which can be reviewed on www.sec.gov. The company makes no commitment to disclose any revisions to forward-looking statements or any facts, events, or circumstances after the date hereof that bear upon forward-looking statements. In addition, today's discussion will include references to non-GAAP measures. The company believes that such information provides an additional measurement and consistent historical comparison of its performance. A reconciliation of the non-GAAP measures to the most directly comparable GAAP measures is available in today's news release on our website. With that, I'll now turn the call over to CEO, Richard Howe. Please go ahead, Rich.

Thank you, Natalya, and thanks everyone for joining us today. We had another very strong quarter where for the three months ended March 31, 2022, we delivered $18.6 million in revenue, which was up 75% year-over-year. Our trailing 12-month year-over-year growth rate now stands at an impressive 69%. Both product lines experienced significant growth in the first quarter. With the IntentKey and ValidClick up roughly 280% and 24% respectfully. To put this growth in perspective, in the prior year period, the IntentKey was roughly 20% of overall company revenues and ValidClick was 80%. In the current period, that split was 44% and 56% respectively. For those shareholders new to our story, the ValidClick platform delivers ads principally through social and search channels, while IntentKey delivers mostly connected television, online video, and display channels. Increasingly, the two platforms are used to deliver multichannel media solutions to joint clients. Our artificial intelligence technology influences decisions across channels. Typically within our industry, there is seasonality associated with media budgeting that generally leads to less advertising spending in the first half of the year versus the second half of the year. Delivering $18.6 million in the first quarter sets the foundation for yet another strong year overall in 2022. Unaudited April revenues are coming in north of $7 million, which have continued, would set the second quarter up nicely for a continuation of our strong year-over-year growth. As was mentioned on the year-end conference call, we have significantly reduced our revenue concentration risks. In Q1, our largest client represented 22% of our total revenues. In fiscal year 2019, 65% of our revenue was concentrated in a single client. Gross margins remained healthy in the first quarter at roughly 53.5%. Adjusted EBITDA was a loss of roughly $703,000. With a strong demand we are experiencing,…

Thank you, Rich. Good afternoon. I'll recap the financial results of our first quarter of 2022. As Rich mentioned, Inuvo reported revenue of $18.6 million for the quarter ended March 31, 2022, an increase of 75.3% compared to $10.6 million reported in the first quarter of the prior year. Both platforms, ValidClick and IntentKey, exceeded the prior year. ValidClick revenue exceeded the first quarter of last year by 24%. And the IntentKey revenue exceeded the prior year quarter by approximately 280%, primarily due to the addition of new customers. Revenue split between IntentKey and ValidClick was 44% versus 56%, respectively, in the current period and that compares favorably to the 20% and 80%, respectively, in the same period of last year. We expect the IntentKey revenue to continue to grow as a percent of total revenue. Our revenue was less concentrated in 2022 than ever before. Our largest client represents 22% of our total revenue in the quarter and is a retail consumer product manufacturer and marketer. The same quarter last year, our largest client, Google, represented 40% of our revenue. Though Google represent still remains as an important customer, in the current year quarter, it represented only 14% of the total revenue. Gross profit for the first quarter ended March 31st, 2022 totaled $9.9 million as compared to $9.2 million for the same period last year. Gross profit margins for the first quarter of 2022 was 53.5%, as compared to 86.3% in the same period last year. The IntentKey platform has lower gross margins than the ValidClick platform, but has a greater overall net margin. The Inuvo gross margin decreased as IntentKey revenue became a greater percentage of the total revenue. In quarters past, cost of revenue was predominantly payments to website publishers and app developers that hosted advertisements…

Thanks, Wally. At 75% year-over-year growth, we had a very strong start to the 2022 year. Our trailing 12-month growth rate [Indiscernible]. Growth rate now stands at 69%. With April's unaudited revenue north of $7 million, we would expect second quarter growth year-over-year to also remain strong. With over $200 billion in annual advertising spend across the open web, we plan to capitalize on this unprecedented change that is underway within the industry as a means to rapidly gain market share, and establish a dominant market position. We have a proprietary technology that has proven itself to be superior time and time again, complemented by a transformational market catalyst for which that technology was in fact designed. Our balance sheet is currently strong enough to accommodate the working capital needs of the growing business. And as a result, we have no immediate plans to raise capital. I will now turn the call over to the operator for questions.

Thank you. [Operator Instructions]. Our first question comes from Jack Vander Aarde of Maxim Group.

Hi, this is Jack C. calling for Jack Vander Aarde. Thank you for taking my questions. On IntentKey rather, I think in Q4, you referenced growth being an accelerated by bigger clients with bigger budgets. Can you speak on that trend and give any color on client retention and renewal. Thank you.

That trend continues. Yes, we're signing clients up now who decides for which is material. And by material, I mean, in the 250,000 to 1.5 million a month range, at which is where we expected to be ultimately with the product. As part of its evolution. And so that's a big positive. As we've said in the past, we rarely lose clients. And when we do lose them, it's almost always because we were doing business with an agency who lost the client.

Yeah. That's amazing. I was kind of -- seem like -- I was wondering how you're feeling on new customer orders coming in 2Q '22 and the rest of '22. And also wondering if you're seeing any further pickup in terms of IntentKey SaaS revenue?

Yeah. Clearly, demand continues to be strong within the company. And I think that's probably most notable by the performance that we saw year-over-year for the first quarter. And as I pointed out in my script, April came in north of $7 million, which if you just flatten to that, you could see that the growth trend year-over-year would be continuing compared to the $12.6 million we did in the second quarter of 2021. So that's the best indication I can give you about adding new clients and the demand for the products or services. The second question there that I've forgotten, forgive me.

Yeah. I'm just wondering if there's anything material changes in the SaaS revenue part of the business?

No, there's -- nothing changing there and we're adding SaaS clients slowly. But I believe I said something about this on the year-end call, so maybe it's worth restating it here. There's so much demand for the full service capability that we do see a continuation of the majority of the growth, at least for the foreseeable 12 -- next 12 months coming from services. And it's not because we couldn't be selling the SaaS version of the product. It's just we can only focus our attention in so many places and right now there's a lot of demand on the services side, so we're focusing there.

Understood. And if I could ask one last -- a lot of tech companies are struggling to find talent. It doesn't seem to be affecting you guys ' ability to get revenues, but are you seeing any problems on that front with acquiring adequate talent?

The labor market is tight and the salaries all-in with benefits and whatnot for sure are moving up and yes, it's harder to find and hire qualified talent. Probably about as hard as I've seen it in decades. With that being said, it's not slowing us down and we're still hiring. The good news with the way our model works right now, we've got a very strong overall engineering and data science team and we really don't need a lot more people on those teams. Don't get me wrong. We're still hiring on those teams, but it's not a situation where we suddenly need 40 more data science [Indiscernible] and engineers. We can probably solve that problem. The place where we're growing our resources is really on the sales account management and the marketing areas of the go-to-market component of our business, where we just need more bodies and more awareness in the marketplace. And those people are also harder to find and hire right now, but they're not nearly as hard as the engineers. That gives you some perspective.

Yes, that's amazing. I appreciate the color and I'll hop back in the queue.

Thank you.

And the next question comes from Nicole Kaufman, of Black Rich Capital.

Hi, guys. Thanks and congratulations on the strong growth in the first quarter. So I know you talked about it a bit during the call, but how big is the problem when cookies go away? And specifically as it relates to Google, which is really the 900-pound gorilla in the space? And along those lines, can you talk about how companies are preparing?

Yes. Thank you, Nicole. The market problem is substantial and it's a little bit like the ostrich with its head in the sand. As we canvas the marketplace and we're out. It doesn't seem in talking to CMOs and heads of agencies that they quite understand the full implications of the changes that are coming. And we surmise that that's in large part because the existing vendors that are serving those clients are telling them that they've got the situation under control, which we believe to not be the case, based on our experience. And one of the reasons people don't understand is because fundamentally, it's a very technical thing that's going on. But it does very much attack the very foundation of the way marketing is done. And that makes it a transformational change. So I think we see acceleration of demand in part because I guess the early adopters of the change are starting to realize they should do something. And then we expect in 2023 when Google finally does make the shift in their browser, that our demand will only increase at that point because all of those companies that are being served by existing providers today who have been telling them they have it solved; I guess the proof will show up then, and we expect the performance to degrade and then we can jump in and give those clients a solution that performs even better than what they used to have before the cookie and the IP address and consumer data were being used.

Thank you, I appreciate that color. I'll hop in the queue if I have another question.

Thank you.

[Operator Instructions]. No further questions at this time.

All right. Well, thank you very much, Operator. And I'd like to thank everybody who joined us on today's call. We appreciate your continued interest in our company.

Ladies and gentlemen, that concludes today's conference call. We thank you for your participation. You may now disconnect.