Inuvo, Inc. 2026 Q2 Earnings Call

Thank you, operator, and good afternoon. I'd like to thank everyone for joining us today for the Inuvo second quarter 2026 shareholder update call. Today, Inuvo's Chief Executive Officer, Rob Buchner, and Chief Financial Officer, Wally Ruiz, will be your presenters on the call. We would also like to remind our shareholders that we plan to file our 10-Q with the Securities and Exchange Commission this evening. Before we begin, I'd like to remind you that the statements in this conference call that are not descriptions of historical facts are forward-looking statements relating to future events. As such, all forward-looking statements are made pursuant to the Private 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, enable, estimate, intend, expect, believe, potential, will, should, project, and similar expressions as they relate to Inuvo, Inc. are, as such, a forward-looking statement. Investors are cautioned that all forward-looking statements involve risk 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 at 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 discussions 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 will now turn the call over to CEO Rob Buchner.

Thank you, Katie, and good afternoon, everyone, and thanks for joining the call. I will begin today with brief remarks on our second quarter results and our progress on the key tenets of our growth agenda. Then I will hand it over to Wally for a review of the financials and our recent capital raise. I will then close with a few thoughts and open the call for your questions. All right, let us start with the second quarter. Second quarter results tell a story that continues to underscore the strategic choices we made over the last several months. Audience modeling revenue increased 19% from a year ago, driven once again by deepening investment from existing clients and recent client wins. At the same time, legacy search revenue has slowed more than expected, and recovery has been slower, reflecting ongoing industry-wide disruption.

These dynamics are emblematic of a broader structural evolution occurring across the open web. Digital advertising is undergoing a fundamental shift away from an identity economy, which relies on degrading personal IDs, third-party cookies, and static historical segments toward a context economy. As match rates fall and tracking mechanisms fail, chasing who someone was yesterday is yielding diminishing returns. Value on the open web is migrating to platforms that understand what is happening around a user in real time. Contextual signals from content being consumed in the moment, mapped with broader patterns of collective interest, are far better predictors of consumer motivation and true engagement. The old open web search model is fracturing, but the flight to quality, context, and immediate user intent is exactly the race IntentKey was built to win.

The speed of this change underscores the urgency for execution against a backdrop of favorable dynamics for our algorithm. Said simply, the marketplace is more receptive to our value proposition than ever before. With respect to legacy search, an honest look resulted in some tough decisions this quarter. We further lowered legacy search headcount and right-sized the operation to a level we believe is sustainable. These decisions were not easy, but they were the right moves, and they free us to concentrate fully on what matters, building a cleaner, more profitable business with IntentKey at its center. We also executed financing transactions totaling $13 million, enabling us to strengthen our balance sheet and pay off existing debt, all while providing needed working capital for the business.

Today, I am confident we are now operating from a stronger position, fewer distractions, and a greater cash runway, giving us more time and resources to pursue the significant opportunity in front of us with full conviction. I will be frank, there is still a lot to do, but now we are better equipped to elevate our IntentKey offering and drive higher margin compounding growth into the business. I want to take a few minutes to review the progress we have made on our strategic pillars and frame up priorities for the back half of the year. As a reminder, our four strategic pillars are go-to-market focus, raising IntentKey's industry profile, continuing product innovation, and high margin growth. Turning to our go-to-market focus. Since January, we have overhauled our sales organization, bringing in enterprise-grade talent with deep programmatic expertise and brand direct relationships.

These individuals are now fully embedded in our organization and raising the bar on every aspect of our commercial execution. Inuvo is also strengthening its market automation, vertical positioning, and sales enablement to support this expanded commercial organization. These go-to-market upgrades are accelerating test-to-expansion conversion and IntentKey's differentiated audience intelligence into scalable, recurring growth. We are seeing tangible commercial activity as a result. During the second quarter, we brought on five new brand direct relationships, including two Fortune 500 companies that are now completing the pilot phase. At the same time, our upskilled sales team is advancing opportunities across government and specialized workforce recruitment, healthcare, automotive, travel, and entertainment. A number of these opportunities are following the test-to-expansion model we are building, beginning with targeted pilots that can scale into broader enterprise relationships based on performance.

We are also seeing agency relationships create opportunities to expand beyond individual campaigns and brands into broader portfolios. Importantly, we are building this growth across three distinct paths to market. Managed service for more complex enterprise campaigns, self-service for direct activation, and portable data and white label solutions for channel partners. We are also experiencing deeper adoption in self-service, including increased campaign activity, repeat utilization, broader cross-platform activation, and additional enterprise brands activating through brand direct private marketplaces. That breadth matters. It gives us multiple ways to monetize the same underlying IntentKey intelligence based on how an advertiser, agency, or partner prefers to work with us. We are also looking at new strategic applications of IntentKey signal intelligence beyond traditional product advertising. Specifically, we have announced expansions into workforce recruitment, marketing, and healthcare open enrollment, both of which suffer from the same structural dysfunction plaguing consumer advertising.

For workforce recruitment, the market is hungry for disruptive, effective technologies. The war for specialized, high-value talent drives billions in annual recruiting marketing spend. But the tools, job boards, applicant databases, static segments, are inefficient and ineffective in areas of tight labor supply, including the skilled trades in the manufacturing sector that are increasingly in demand. IntentKey's ability to identify prospective candidates with precision before other competing employers gives us a compelling value proposition in a market where legacy tools are becoming less and less effective. IntentKey can identify vocational interests before that person realizes they are an actual candidate. Likewise, as open enrollment approaches, we have launched a coordinated go-to-market plan to drive acquisition during what is effectively an annual market share event for health insurers. Last year, 30% of the 23 million people who entered the marketplace switched carriers.

Following our successful 2025 pilot with Blue Shield of California, IntentKey demonstrated its ability to identify and target intent well before purchasing decisions are made, allowing insurers to win market share before the market becomes saturated. Crucially, because IntentKey requires no personal IDs, it offers a secure, compliant technology to capture subscriber growth across a $150 billion addressable market. These are just two examples of how we are opening the aperture on the strategic application of IntentKey to drive greater addressable market and a more diversified compounding revenue pipeline. Okay. Turning to our next strategic pillar, raising IntentKey's industry profile. After a busy quarter rationalizing cost and securing financing, we now have the bandwidth and momentum to tell the IntentKey story more broadly. Our third quarter calendar reflects this focus.

From an industry perspective, we will be attending both the Marketecture Live Conference in Chicago as well as the Programmatic I/O Conference in New York, both in September. These conferences are important venues to demonstrate our technology leadership, communicate our market differentiation, and engage industry influencers who are at the forefront of emerging trends in marketing technology. We also have investor events planned for the third and fourth quarters. We will be able to announce more details as they are available. As you may remember from our May call, we launched a new intentkey.com website early in the second quarter. I am pleased to say that this site, which showcases the IntentKey platform through interactive tutorials, test drives, and a clearly articulated value proposition, appears to be resonating. Following the launch, new users increased by more than 300%.

We also saw nearly a tenfold increase in activity around generated audience models, reflecting greater use of the technology across both external engagement and internal sales and client support efforts. We continue to be very active in our marketing efforts and look forward to providing more color on our third quarter call. Turning to continuous product innovation. In today's market, speed, accessibility, and real-time execution are increasingly in demand. We continue to refine and innovate around IntentKey, building upon the significant R&D foundation behind the technology and the years of research that preceded its commercialization. While it is still early, I am pleased to say that we are in advanced testing phases of a new model context protocol or MCP server that would allow us to bring IntentKey intelligence directly into AI native and agentic workflows like Claude and ChatGPT.