Marketing technology provider Inuvo Inc. of Little Rock (NYSE American: INUV) on Thursday afternoon reported a net loss of $1.7 million, or 12 cents per basic and diluted share, compared to a net loss of $2 million, or 15 cents per share, in the third quarter of 2024.
Net revenue for the company increased 1% to $22.6 million from $22.4 million in the same quarter last year. The increase in revenue was due to agencies and brands clients, which grew 7% year-over-year.
Operating expenses declined 16% to $18.2 million from $21.7 million in the third quarter of 2024. Marketing costs were $13.4 million, down from $17 million in the third quarter of 2024, which the earnings release attributed to lower revenue from its largest platform client.
The quarterly results were affected by a change in revenue mix within Inuvo’s platform business. Cost of revenue rose to $6 million from $2.6 million in the third quarter of 2024, related to a new campaign that began “in earnest” this year.
This also led to gross profit declining 15% to $16.6 million, with gross margin falling to 73.4% from 88.4% a year ago.
“While we are up 25% year-over-year through the first nine months, Q3 came in less than we expected,” Richard Howe, CEO of Inuvo, said in the earnings release. “In mid-August, we deliberately scaled back our advertising in order to comply with new requirements by our largest platform client.”
The company said in the release that it onboarded 23 new customers in the quarter, and 65 new customers for the nine month period ending with the quarter.
Though third-quarter growth was “restrained,” Howe said in the release that the company has completed upgrades that “bolster our ability to ensure campaign compliance and drive sustainable long-term scalable growth. Our pipeline of prospects across the business has never been stronger.”
Shares of Inuvo fell 9% Thursday, closing at $2.71. Shares continued falling in after-hours trading, dropping more than 7%. Over the past 12 months, shares were up nearly 13%.
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