Inuvo Q2 2026 Earnings Report

Inuvo EPS Results

• Actual EPS: -$0.27
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Inuvo Revenue Results

• Actual Revenue: $7.54 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Inuvo Announcement Details

• Quarter: Q2 2026
• Date: 8/11/2026
• Time: After Market Closes
• Conference Call Date: Tuesday, August 11, 2026
• Conference Call Time: 4:15PM ET

Inuvo (NYSEAMERICAN:INUV). (NYSE: INUV) is a marketing technology company specializing in artificial intelligence–driven digital advertising solutions. The company’s platforms leverage machine learning and proprietary algorithms to analyze consumer intent and deliver targeted advertising across desktop, mobile and connected TV channels. Inuvo’s core technology is designed to help advertisers optimize campaign performance and improve return on ad spend by focusing on contextual relevance rather than relying solely on cookie-based tracking.

Through its Pulpo Media division, Inuvo offers programmatic advertising services that reach both English- and Spanish-speaking audiences in the United States and select Latin American markets. This unit combines audience insights and AI-powered content matching to serve display, video and native ads on premium publisher sites. In addition, Inuvo’s AdHawk platform provides small and medium-sized businesses with a self-service tool for managing and reporting on Google and Facebook ad campaigns, incorporating automated recommendations to streamline media buying and budget allocation.

Originally founded in 2000 as TARGUSinfo, the company rebranded to Inuvo in 2015 to reflect its focus on user intent visualization and data democratization. Headquartered in Little Rock, Arkansas, Inuvo maintains operations across North America and has expanded its reach into Europe and Latin America through strategic partnerships and platform enhancements. Its technology stack has evolved over two decades, guided by ongoing investments in machine learning, artificial intelligence and data science capabilities.

Inuvo’s leadership team brings together expertise in technology and digital marketing. The company continues to develop new AI-based methodologies for identifying consumer behavior signals and delivering relevant advertising at scale. By combining proprietary data insights with automated campaign management tools, Inuvo aims to provide advertisers and agencies with a more efficient and transparent approach to planning, executing and measuring online marketing initiatives.

Inuvo Q2 2026 Earnings Call Transcript

Key Takeaways

• Negative Sentiment: Second-quarter revenue fell 67% year over year to $7.5 million, driven by an 80% decline in legacy search revenue; net loss widened to $4.0 million from $1.5 million a year ago.
• Positive Sentiment: Audience modeling revenue increased 19% year over year, supported by deeper spending from existing clients and new customer wins, including five brand-direct relationships and two Fortune 500 companies in pilot phases.
• Positive Sentiment: Inuvo raised approximately $13 million, used part of the proceeds to retire existing debt, and expects improved margins and cash flow as it reduces the loss-making legacy search operation and focuses investment on IntentKey.
• Positive Sentiment: Management said the IntentKey pipeline is robust, with opportunities in advertising, government workforce recruitment, healthcare enrollment, and other verticals; it expects audience-modeling revenue to grow in 2026 and legacy search revenue and margins to improve sequentially during the remainder of the year.
• Neutral Sentiment: Management is testing an integration that would bring IntentKey intelligence into AI-native workflows such as Claude and ChatGPT, while CFO Wally Ruiz retires and industry veteran Derric Ciccone becomes President and CFO on August 17.

Presentation

[Operator]

This call is being recorded on Tuesday, August 11th, 2026. I would now like to turn the conference over to Katie Cooper, Head of Brand and Communications. Thank you. Please go ahead.

[Katie Cooper, Head of Brand and Communications at Inuvo]

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.

[Katie Cooper, Head of Brand and Communications at Inuvo]

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.

[Katie Cooper, Head of Brand and Communications at Inuvo]

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.

[Rob Buchner, CEO at Inuvo]

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.

[Rob Buchner, CEO at Inuvo]

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.

[Rob Buchner, CEO at Inuvo]

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.

[Rob Buchner, CEO at Inuvo]

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.

[Rob Buchner, CEO at Inuvo]

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.

[Rob Buchner, CEO at Inuvo]

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.

[Rob Buchner, CEO at Inuvo]

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.

[Rob Buchner, CEO at Inuvo]

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.

[Rob Buchner, CEO at Inuvo]

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%.

[Rob Buchner, CEO at Inuvo]

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.

[Rob Buchner, CEO at Inuvo]

Once ready, this protocol-based integration would make the IntentKey more portable signal intelligence layer, meeting consumers, customers, and their AI agents where they already operate, in turn, delivering net new demand intelligence within the workflows they already use. We believe this has the potential to remove an important barrier for adoption. Rather than requiring users to leave their existing workflows and enter a separate interface to access IntentKey, MCP gives us a path to make the intelligence available wherever customers are already working. This native integration is an important part of how we see IntentKey evolving. Lastly, our fourth strategic pillar, high margin growth.

[Rob Buchner, CEO at Inuvo]

As I discussed in my opening remarks, we have made several important strategic moves to lengthen our cash runway and position the business to support higher margin growth, including rationalizing our legacy search business and raising capital, both of which advance our progress on this strategic pillar. With respect to legacy search, the rationalization of our revenue and our support infrastructure, while painful, frees us from the pressures caused by a business that was generating negative net margins and a net cash burn, and for which a viable path for full recovery was becoming less likely as the industry continues to shift. To be clear, legacy search remains part of our business, but we are now operating from a cleaner, more resilient foundation, one that generates better margins and positive cash flow and no longer weighs on our ability to invest behind my long-term strategic vision.

[Rob Buchner, CEO at Inuvo]

With respect to our recent capital transactions, we secured $13 million that enabled us to repay existing debt and secure working capital, which we can use to advance our IntentKey offering and execute on our strategic vision. More recently, in July, we sold Ranger, our AI-powered quality assurance tool, subject to a 60-day trial period. In exchange, we will receive $450,000 and a perpetual use license that enables us to continue using this technology within our legacy search business. Together, these moves enable us to concentrate fully on execution with the financial flexibility to invest in our core priorities. We are moving with urgency, remaining prudent with our spending, and building with conviction towards a stronger, higher margin, more resilient Inuvo. As you saw in the press release this afternoon, Wally will be retiring after 16 years of steady, capable leadership, collaboration, and prudent financial stewardship.

[Rob Buchner, CEO at Inuvo]

I've been so fortunate to have Wally beside me through what has been one of the most consequential periods in this company's history. I'm grateful for his insight and cool-headedness as we made tough decisions to rationalize the Bonfire business, raise capital, and reposition the company to benefit from the sea changes in the industry. Wally's last day as CFO will be August 17th, when industry veteran Derric Ciccone will start as our new President and CFO. More on that shortly. I'm pleased to say that Wally will remain with us through the end of the year, serving in an advisory role to the company. Wally, you'll be missed. Thanks for all you've done for Inuvo. It's been a true pleasure working with you. Thanks, Wally. I'm going to send it over to you now.

[Wally Ruiz, CFO at Inuvo]

Thank you, Rob. It's been a real pleasure working with you and the Inuvo team. I know I leave you in good hands. To those listening, good afternoon, and thank you for joining us. I'll begin with a review of the quarter's financial results. We'll touch on liquidity and the outlook, and then I'll turn it back to Rob. Second quarter results reflect the ongoing impacts of our strategic pivot as we rightsize the legacy search business while growing audience modeling. Second quarter revenue was $7.5 million, down 67% compared with the record revenue we experienced in the second quarter of last year. This decline was due entirely to lower legacy search revenue, which was down 80% compared to the year ago second quarter, reflecting the continued impacts of the fourth quarter Bonfire reset and the ongoing industry-wide pressure on web search.

[Wally Ruiz, CFO at Inuvo]

For audience modeling, revenue was up 19% in the second quarter compared with the same quarter last year, due to recent client wins and deepening commitment from existing IntentKey customers. The change in revenue mix resulted in the second quarter gross margin of 44%, compared with 75% a year ago in the second quarter. This is primarily driven by the contraction in legacy search. As a reminder, much of the legacy search expense is marketing, and is therefore recognized in operating expenses, yielding a higher gross margin than we find in audience modeling. Audience modeling expenses are largely reflected in the cost of revenue. Historically, from an operating margin perspective, audience modeling is more profitable than legacy search. Second quarter operating expenses were $6.4 million, down $12.8 million, or 67%, from the second quarter of last year.

[Wally Ruiz, CFO at Inuvo]

This decline was entirely due to lower legacy search revenue, which drove down traffic acquisition cost and compensation cost. Compensation cost was $337,000 lower in this year's quarter compared to last year, in spite of a $470,000 severance charge. Our headcount at June 30th of this year was 51. This compares with 82 at June last year. Most of the reduction in headcount was associated with legacy search. At the end of the quarter, we executed a pair of financing transactions with combined gross proceeds of $13 million. The financing consisted of two discrete transactions. The first was a purchase agreement consisting of two underlying notes with combined gross proceeds to Inuvo of approximately $10 million. Inuvo received $3.8 million from these notes on June 29th, which the company used to repay and retire our outstanding convertible promissory note and our receivable-based credit facility.

[Wally Ruiz, CFO at Inuvo]

The remaining cash received after the extinguishment of debt was retained for working capital purposes. The second transaction closed in early July. It was a registered direct offering of common stock and pre-funded warrants, yielding gross proceeds to the company of approximately $3 million. As a result of these transactions, we recognized a charge of $870,000 in other income and expense during the quarter, representing the combined effect of a loss on extinguishment of the convertible promissory note and the working capital line of credit. Net loss for the quarter was $4 million, or $0.27 per share, compared with a loss of $1.5 million, or $0.10 per share in the second quarter of last year. We ended the quarter with $886,000 in cash and cash equivalents and $6.2 million in restricted cash.

[Wally Ruiz, CFO at Inuvo]

Our previous financing, a convertible promissory note, and a receivables-based credit facility, both had been extinguished by quarter end. Note that our quarter end balance sheet does not reflect the $3 million sale of common stock and pre-funded warrants that we closed at the beginning of July. It also does not reflect monies received from the sale of Ranger, which we also closed in July. Before I hand the call back over to Rob, I just want to give some color about how we're thinking about the balance of the year. We continue to forecast year-over-year revenue growth for audience modeling in 2026, driven by a healthy sales pipeline. We continue to expect quarterly legacy search revenue to improve for the balance of the year, with quarter-over-quarter improvement in margins and cash flow.

[Wally Ruiz, CFO at Inuvo]

We expect operating expenses to remain substantially lower year-over-year, primarily as a result of lower traffic acquisition costs associated with lower legacy search revenue, as well as lower compensation costs as we start to realize the cost savings from the recent headcount reductions. I'll turn the call back over to Rob.

[Rob Buchner, CEO at Inuvo]

Thanks, Wally. Before I wrap up, I want to take a minute to tell you a bit about our incoming President and CFO, Derric Ciccone, and celebrate the promotion of Alicia Parish to Chief Accounting Officer. Derric is an industry veteran that is uniquely equipped to lead us through Inuvo's next chapter. He's a savvy veteran of the business and has spent his entire career at the intersection of marketing, digital media, and AdTech, and he brings to Inuvo a rare combination of strategic vision and operational precision. Most recently, Derric served as Global CFO and COO of Omnicom Commerce Group, a multibillion-dollar division of one of the world's largest marketing organizations, where he delivered sustainable improvements across business operations, profitability, and revenue growth. He also brings meaningful experience in corporate development that will matter as we scale.

[Rob Buchner, CEO at Inuvo]

Derric's first day is August 17, and I could not be more excited to welcome him to the Inuvo team. I also want to take a moment to celebrate Alicia Parish, whose promotion from Controller to Chief Accounting Officer is 11 years in the making. 11 years of exceptional dedication, leadership, and hard work that has positively impacted and strengthened our organization. This promotion is well-deserved, and I'm excited to see her flourish in her new role. With Derric stepping in as President and CFO and Alicia stepping up as Chief Accounting Officer, we will have a financial leadership team whose strength is built on leveraging their complementary strengths, ensuring both strategic financial management and operational depth. Add to that high-caliber talent we've hired on the sales side, and I believe we're building a team that can execute.

[Rob Buchner, CEO at Inuvo]

The opportunity in front of us requires just not the right technology and the right strategy, but the right team. I believe we're assembling exactly that. To close, the underlying landscape of the digital media ecosystem is undergoing permanent structural realignment. AI-driven search and walled gardens are keeping users within closed environments, while cookie loss and degraded match rates are dissolving traditional identity across the open web. This macro environment plays directly into IntentKey's structural design. IntentKey isn't an incremental update to legacy AdTech. It's a fundamentally distinct context-first architecture built to prosper in identity blind environments.

[Rob Buchner, CEO at Inuvo]

Rather than relying on historical click streams or static audience profiles that fail as identity resolution degrades, IntentKey's large language model interprets semantic context and user mindset in real time as intent is actively forming. In a context economy where supply is scarce and expensive, advertisers cannot afford to chase ghost profiles with high data waste. They need the precision, speed, and real-time execution that IntentKey provides to win high-intent inventory before it becomes out of reach. With a longer cash runway, an optimized cost structure, and an industry landscape moving directly towards our core technology, we believe we have significant room to run, and we intend to. I look forward to updating you on our progress. Operator, I'd like to now turn the call over for Q&A.

[Operator]

Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the one on your telephone keypad. You will hear a prompt that your hand has been raised. Should you wish to cancel your request, please press star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment please for your first question. Thank you. Your first question comes from the line of Jack Vander Aarde from Maxim Group. Please go ahead.

[Jack Vander Aarde, Analyst at Maxim Group]

Okay, great. Good evening. Thank you, and congrats to Wally on your well-deserved retirement. Appreciate all the hard work you have put in and our conversations. Rob, thanks for kind of giving us the lay of the land of what has been playing out here. I guess I will just jump into the audience modeling segment. It was good to see the growth there, as you were expecting growth there. I think you touched on five new brands that were signed, if I heard that correctly.

[Rob Buchner, CEO at Inuvo]

Yep.

[Jack Vander Aarde, Analyst at Maxim Group]

I guess I just want to follow up on the pipeline, how you have seen that kind of transform as well. Is there any growth in the pipeline that is meaningful since the last quarter we talked? Any more context you can provide? How does that five compare to what you have kind of in the pipeline for the rest of this year?

[Rob Buchner, CEO at Inuvo]

Right. Last quarter, we brought on two new car brands, one tourism account, one pharma brand, one medical device company, and those are in test modes. Now, as our enterprise sales team are fully embedded, the pipeline looks really robust right now, and I think it is a result of one, we recruited senior-level, enterprise-level people who come with a book of business, so their impact is immediate. Our pipeline looks really healthy going into Q3 and Q4. Again, it is this sales cycle where you go to this test to scale kind of mode. Our vertical strategy, again, our salespeople, their remit is not to go and chase everything, but we are trying to focus their energies against our vertical priorities, where we have got good history and where our privacy-first technology prevails.

[Jack Vander Aarde, Analyst at Maxim Group]

Okay, great. I appreciate the color there. I wasn't sure, maybe I missed it, but I know we've been kind of talking about this large government contract or potential contract. I think it was disrupted at one point because of a shutdown, as tends to be the case. Is there any update on Inuvo and how you're looking at the, I guess, the government sector in terms of IntentKey?

[Rob Buchner, CEO at Inuvo]

Well, without sounding cliché, it's government, and the procurement process is long and tedious, and there are intermediaries involved. But we fully expect for that business. That contract's been signed. The money hasn't been released. It's a workforce recruitment thing, and the government's dealing with workforce issues all over the map. So they're getting their priorities so that when we go into our pilot phase, which is substantial, that we're focused against their priority jobs that they need to fill within workforce. That's about as much as I can say. We don't see that business right now being at risk. It's just taking a long time.

[Jack Vander Aarde, Analyst at Maxim Group]

Okay. That's helpful. Just one more follow-up to that, if I may. Contract's been signed, but no revenue's been recognized from that contract yet. But I guess it's dry powder, if you will, assuming it does kick in at some point. Is that fair?

[Rob Buchner, CEO at Inuvo]

That's accurate, Jack.

[Jack Vander Aarde, Analyst at Maxim Group]

Okay, great. Just one more for Wally. Hey, Wally.

[Wally Ruiz, CFO at Inuvo]

Yeah.

[Jack Vander Aarde, Analyst at Maxim Group]

I guess as I wait for the 10-Q, can you just maybe help spell out the dollar amounts for each of those revenue segments in the quarter? I think legacy search down 80% is roughly about $4 million, and that leaves audience modeling with about $3.6 million. Does that sound right?

[Wally Ruiz, CFO at Inuvo]

You hit it right on the head, Jack.

[Jack Vander Aarde, Analyst at Maxim Group]

All right, good. My math is still working out then. Okay, good to hear.

[Wally Ruiz, CFO at Inuvo]

That's right.

[Jack Vander Aarde, Analyst at Maxim Group]

Just one more, Wally. From the capital that's come in from the recent financings, on a gross basis, is it $3 million that's still going to hit in the third quarter then from the common stock offering?

[Wally Ruiz, CFO at Inuvo]

Yes, that's right. That's the gross proceeds from the RDO, and we actually did that on July 1st. So it was immediately at the beginning of the third quarter.

[Jack Vander Aarde, Analyst at Maxim Group]

Okay, excellent. Okay, great. That's it for me, guys. Congrats again, Wally, on retirement, and thanks a lot, Rob. I appreciate it. I'll hop back in the queue.

[Rob Buchner, CEO at Inuvo]

Thanks, Jack.

[Operator]

Thank you. Your next question comes from the line of Brian Kinstlinger from Alliance Global Partners. Please go ahead.

[Kevin Pimental, Analyst at Alliance Global Partners]

Hi, this is Kevin for Brian. Thanks for taking our questions. First, could you provide some more detail into what Inuvo is doing to increase brand awareness?

[Rob Buchner, CEO at Inuvo]

Well, most of our profile is a result of what our guys are in the field doing and their go-to-market materials and how we approach thought leadership. We have overhauled everything. The first wave of refreshed materials that are making its way into lunch and learns at agencies and within brand organizations is hitting this summer. That has all been retooled. Our CRM systems, all overhauled. The website has been overhauled. I think I mentioned during my little update there, we are fanning out across all these key trade events where we will have appointments set up day after day. Right now, that is what the business affords us to do. I anticipate that we will amplify our story through other means in the months ahead, but that is right now while we are working our way through the new crew coming on and resetting the business.

[Rob Buchner, CEO at Inuvo]

This is what we're able to do right now. We've got other plans.

[Kevin Pimental, Analyst at Alliance Global Partners]

Yeah. Thank you. Sorry if I missed, could you talk a little bit about how enterprises are responding to IntentKey and what are the sales cycles looking like, including the POCs?

[Rob Buchner, CEO at Inuvo]

Yeah. The sales cycles remain the same. What I will say is we're getting the audiences. That's the first thing, is getting access to those audiences. We're getting those meetings. They're more receptive because the market, in effect, is turning our direction. Because privacy first or privacy by design. We've been beating that drum for a couple of years now because that's what we engineered several years ago to be ahead of this. The market now has caught up to us. We're getting the meetings. They're more receptive to the story, and we get them onboarded. We go into this test to expansion mode, and hopefully, that has a compounding effect in future quarters.

[Rob Buchner, CEO at Inuvo]

Our retention rates are terrific, and so you got to get those meetings, and right now, we're getting all the meetings, and we've got a lot of tests lined up in the months ahead. They're higher-profile brands with bigger budgets, even in test mode. Again, they're not $10,000, $5,000 tests. They're $50,000, $70,000 tests that scale into that six-figure range, which become recurring, which on an annualized basis, you can do the math. That's the sales cycle. That's where we're at in our journey right now. I'm really happy that we've upskilled the enterprise sales team to get these opportunities and convert more at an accelerated pace.

[Kevin Pimental, Analyst at Alliance Global Partners]

Got it. Thank you. Last question. In terms of the $6.2 million of restricted cash on the balance sheet, can you walk through the release mechanics and what conditions or milestones free up that cash?

[Rob Buchner, CEO at Inuvo]

Sure. So of it, $1.2 million is. Look, one of the reasons we're keeping it sitting there is that it costs a lot less than. We have two notes, right? The first note, A note, is at 9%, and that one we have taken down already. The B note, which is the $6.2 million that you're referring to, is at 5%. So we're going to take it down as we need it. We haven't drawn anything out of that note yet. The first tranche would be $1.2 million, and when we're ready to pull that will be sometime probably in the fourth quarter, something like that. The remaining amount is subject to a number of milestones, mostly revolving around redemptions and our ability to make redemptions.

[Kevin Pimental, Analyst at Alliance Global Partners]

Got it. Thank you for taking our questions.

[Rob Buchner, CEO at Inuvo]

Thanks, Kevin.

[Operator]

Thank you. Your next question comes from the line of Michael Penzari. Please go ahead.

[Analyst]

Thank you very much. Rob, I just wanted to ask, what is now the break-even for Inuvo? I know Rich was saying for a little while about it being around $100 million. Has that changed without the other side of the business in play as much, or what are your thoughts on that?

[Rob Buchner, CEO at Inuvo]

Yeah. You kind of have to recalibrate all your thinking because that legacy search business is what was driving us towards that $100 million milestone. That is future. IntentKey, as our primary growth driver, that side of the business starts to become cash neutral to cash positive in the mid-20s kind of a range. We would love to find our way to that mark at some point in 2027.

[Analyst]

Okay. How many brands are currently spending money with Inuvo? I know they are all at different levels with where they are at, but I remember we had that number on some past calls, and I have not had an update on that.

[Rob Buchner, CEO at Inuvo]

Yeah, I don't have those off the top of my head, Michael. I think we onboarded 88 new clients last year. I really haven't speculated.

[Analyst]

That sounds right.

[Rob Buchner, CEO at Inuvo]

There's a number along those lines, and we're keeping at that pace. Some are smaller, some have some carryover from last year because we retain them. But what we're driving toward are juicier contracts with bigger brands with recurring revenue in the six-figure kind of range that builds quarter over quarter. I don't have those numbers at my fingertips right now.

[Analyst]

No, that's okay. Appreciate it. Love all the moves, and congratulations on your retirement, Wally.

[Wally Ruiz, CFO at Inuvo]

Thank you, Michael.

[Rob Buchner, CEO at Inuvo]

Thanks, Michael.

[Operator]

Thank you. Once again, should you have a question, please press star followed by the one on your telephone keypad. There are no further questions at this time. I will now hand the call back to Rob Buchner for any closing remarks.

[Rob Buchner, CEO at Inuvo]

I just want to thank everyone for joining us today. Thanks for your patience as we go through this transition. Again, I really want to sincerely thank Wally for his years of dedication, and I wish him all the best in his retirement. I look forward to bringing on our new President and CFO, which will be really soon. You will meet him at our next quarterly meeting, if not sooner. Thank you everyone.

[Operator]

This concludes today's call. Thank you for participating. You may all disconnect.

Participants

Executives

• Katie Cooper, Head of Brand and Communications
• Rob Buchner, CEO
• Wally Ruiz, CFO

Analysts

• Jack Vander Aarde, Analyst at Maxim Group
• Kevin Pimental, Analyst at Alliance Global Partners
• Analyst