0001654954-26-001943
SEC filingInuvo reported FY 2025 net revenue of $86.2 million, a 2.9% increase from $83.8 million in FY 2024. However, gross profit declined 10.5% to $64.2 million due to a significant 82.8% increase in cost of revenue, primarily from a change in Platform revenue mix. The company reported an operating loss of $6.7 million and a net loss of $5.1 million. Platform clients represented 83.8% of total revenue, with the two largest Platform clients accounting for 64.2% and 19.3% respectively. Cash used in operations was $1.8 million, while financing activities provided $3.8 million primarily from the Financing Agreement and ATM sales. The company had a net working capital deficit of $5.1 million and an accumulated deficit of $178.3 million as of December 31, 2025.
Inuvo reported FY 2025 net revenue of $86.2 million, representing a 2.9% increase from $83.8 million in FY 2024. Despite revenue growth, the company experienced significant margin compression, with gross profit declining 10.5% to $64.2 million due to an 82.8% increase in cost of revenue. Operating expenses decreased 8.2% to $70.9 million, primarily driven by a 13.0% reduction in marketing costs. The company reported an operating loss of $6.7 million and a net loss of $5.1 million, compared to an operating loss of $5.8 million in FY 2024. Platform clients represented 83.8% of total revenue, with the two largest Platform clients accounting for 64.2% and 19.3% respectively.
Revenue growth of 2.9% was driven by increased revenue from one Platform client due to a new product introduced in Q4 2024, partially offset by reduced advertising activity from the largest Platform client in H2 2025. Platform revenue represented 83.8% of total revenue, up from 82.8% in FY 2024. The company's revenue concentration remains high, with the top two clients accounting for 83.5% of total revenue. Agencies & Brands revenue represented the remaining 16.2% of total revenue. The company signed 15 new Agencies/Brands clients during 2025 and introduced new products including IntentPath and Ranger.
Gross margin declined significantly to 74.5% from 85.6% in FY 2024, primarily due to changes in Platform revenue mix and higher cost of revenue associated with new product offerings. Cost of revenue increased 82.8% to $22.0 million, primarily composed of payments to website publishers and app developers. Operating expenses decreased 8.2% to $70.9 million, with marketing costs declining 13.0% to $51.9 million due to lower revenue from the largest Platform client. Compensation expense remained flat at $12.1 million, while general and administrative expenses increased 25.0% to $6.9 million primarily due to a reduction in allowance for expected credit losses.
Net cash used in operating activities was $1.8 million, driven by a net loss of $5.1 million partially offset by non-cash expenses including depreciation and amortization of $2.2 million and stock-based compensation of $1.1 million. Investing activities used $1.6 million primarily for capitalized internal development costs. Financing activities provided $3.8 million from utilization of the Financing Agreement ($3.3M) and ATM sales ($1.1M). The company had cash of $2.8 million, total assets of $24.9 million, and total liabilities of $14.9 million as of December 31, 2025. The net working capital deficit was $5.1 million with an accumulated deficit of $178.3 million.
Management expects current cash position, availability under the $10 million credit facility, and proceeds from subsequent events including a $6.2 million class action settlement and $3.33 million subordinated convertible note issued in January 2026 to be sufficient to sustain operations for at least the next twelve months. The company plans to focus resources on marketing IntentKey technology where it has technological advantages and higher margins. Key risks include high customer concentration (top two clients account for 83.5% of revenue), recurring losses and cash outflows from operations, and dependence on the credit facility for liquidity. The company must comply with NYSE American listing standards and faces competitive pressures in the rapidly evolving AI and advertising technology landscape.