Marketing technology provider Inuvo Inc. of Little Rock (NYSE American: INUV) on Thursday posted smaller losses on rising revenue, but the results weren’t enough to please investors.
Shares of the company fell nearly 16% Friday morning to 43 cents. Year to date, shares were down more than 6%.
The company reported a fourth-quarter net loss of $2.4 million, or 2 cents per share, compared to a net loss of $4 million in the same quarter the previous year.
Revenue in the period increased 21% to $20.8 million, compared to $17.9 million the previous year, due to scaling of one of the company’s largest customers.
For the full year, Inuvo’s losses narrowed from $13.1 million to $2.4 million and revenue dipped 2.2% from $75.6 million to $73.9 million.
Inuvo’s products include IntentKey, an AI-powered platform that maps concepts, not individuals, to deliver connected television, online video and native advertising campaigns. The company believes that as internet users seek more privacy and the use of web-tracking browser cookies declines, services like IntentKey will see higher demand.
“With the demise of the third-party cookie in 2024, led by Apple and Google, IntentKey stands ready to power the next generation of digital advertising … .,” CEO Richard Howe said in a statement.
Inuvo said it signed 56 new agencies/brands, the largest of which are in the auto and retail industries, and one new platform in 2023. Howe said all of those clients are likely to remain customers in 2024 and expand their business with Inuvo.
The company invested heavily in marketing programs to increase its exposure last year, which pushed annual operating expenses up 27.2% from $58 million to $73.8 million.
Still, analysts questioned how a company of Inuvo’s size, with a market capitalization of just over $62 million, would grow awareness of its products. Howe acknowledged in an earnings call that Inuvo has a fraction of the total sales force of some competitors, but it plans to continue investing in marketing and is already seeing momentum build.
“I actually believe most of the increase in media exposure that we’ve gotten in 2023 or at least some large component of it is just simply the result of the reality at the end [of cookies] is near and as a result, you know, media is starting to jump on the story more than they have in the past,” Howe said.
How also fielded a question about why some Inuvo clients haven’t spent more with the company. Howe said that some companies have been reluctant to change, but two catalysts are expected to drive revenue higher: data privacy legislation in the U.S. and Google phasing out cookies for all Chrome users by the third quarter of 2024.
In the future, Inuvo plans to disclose revenue across two client categories: agencies/brands and platforms. It defines platforms as large consolidators of advertising demand that require less investment in sales and support while providing broad access to advertiser budgets.
In 2023, the revenue split was 21% agencies and brands and 79% platforms.