v3.25.2
Note 9 - Segment Information
 6 Months Ended
Jun. 30, 2025
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

9. Segment information

 

The Company identifies operating segments as components of an entity for which discrete financial information is available and are regularly reviewed by the Chief Executive Officer, who is the Company’s Chief Operating Decision Maker ("CODM"), who has final authority in making decisions regarding resource allocation and performance assessment. The profitability measure employed by CODM is earnings before interest, taxes, depreciation and amortization ("EBITDA"). The use of EBITDA as a financial metric provides management and investors with a clearer view of the core business performance and profitability, excluding the effects of financing and other non-operational expenses.

 

 

As of  June 30, 2025, the Company had three operating segments: a) "Fluent", which is Owned and Operated and Commerce Media Solutions revenue, b) "Call Solutions", and c) "AdParlor." The Company determined that there was one reportable segment, "Fluent," for the purposes of segment reporting. The Fluent reporting segment combines Fluent with the Call Solutions operating segment. This reporting unit works with advertisers to then bring consumers to their products through multiple media channels and earn revenue when a consumer completes an action as agreed upon with the advertisers. The "All Other" segment represents the operating results of AdParlor, LLC, which mainly performs media buying, and those businesses sold or in run-off, which are included for purposes of reconciliation of the respective balances below to the consolidated financial statements.

 

The Company determined its segments based on revenue sources and its agreements with advertisers. Some advertisers span multiple segments, which are managed consistently with shared management.

 

As of  December 31, 2024, the Company adopted ASU 2023-07. Accordingly, the segment disclosures provided have been updated in accordance with the current presentation and accounting standard requirements. The significant expense categories and amounts align with the segment-level information that is regularly provided to and used by the CODM in evaluating performance and EBITDA profitability and were identified as a) cost of revenue b) salaries and benefits, c) professional fees, and d) IT and software.

 

The Company does not allocate certain shared expenses such as interest expense and other non-recurring items. The allocation methodology is regularly assessed, evaluated and subject to future changes.

 

Summarized financial information concerning the Company's segments for the three and six months ended June 30, 2025 and 2024 are shown in the following tables below, noting prior period amounts have been recast to conform to the Company's current period segment presentation:

 

  

Three Months Ended June 30,

  

Three Months Ended June 30,

 
  

2025

  

2024

 
  

Fluent

  

All Other

  

Total

  

Fluent

  

All Other

  

Total

 

Revenue(1):

                        

United States

 $27,897  $1,594  $29,491  $34,221  $3,585  $37,806 

International

  15,215   —   15,215   20,911   —   20,911 

Total segment revenue

 $43,112  $1,594  $44,706  $55,132  $3,585  $58,717 

Costs of revenue

                        

Cost of revenue (exclusive of depreciation and amortization)

  34,301   125   34,426   43,014   3,095   46,109 
                         

Costs and expenses:

                        

Salaries and benefits

  7,343   930   8,273   9,144   2,357   11,501 

Professional fees

  1,501   82   1,583   2,029   311   2,340 

IT and software

  1,071   53   1,124   952   229   1,181 

Other segment items(2)

  3,830   97   3,927   2,773   2,624   5,397 

EBITDA

 $(4,934) $307  $(4,627) $(2,780) $(5,031) $(7,811)

Depreciation and amortization

  2,424   55   2,479   2,299   268   2,567 

Total (loss) income from operations

 $(7,358) $252  $(7,106) $(5,079) $(5,299) $(10,378)
                         

Reconciliation of profit or loss

                        

Interest Expense

          (702)          (1,015)

Fair value adjustment of Convertible Notes with related parties

          478           — 

Loss on early extinguishment of debt

          —           (1,009)

Loss before income taxes

         $(7,330)         $(12,402)

(1) Revenue aggregation is based upon location of the customer.

(2) Balance includes sales and marketing expense, travel and entertainment expense, office overhead, restructuring and severance, goodwill impairment and impairment of intangible assets, and other operating costs.

 

  

Six Months Ended June 30,

  

Six Months Ended June 30,

 
  

2025

  

2024

 
  

Fluent

  

All Other

  

Total

  

Fluent

  

All Other

  

Total

 

Revenue(1):

                        

United States

 $63,802  $2,983  $66,785  $69,320  $11,607  $80,927 

International

  33,131   —   33,131   43,773   —   43,773 

Total segment revenue

 $96,933  $2,983  $99,916  $113,093  $11,607  $124,700 

Costs of revenue

                        

Cost of revenue (exclusive of depreciation and amortization)

  78,033   168   78,201   85,331   8,126   93,457 
                         

Costs and expenses:

                        

Salaries and benefits

  15,032   2,047   17,079   18,001   5,551   23,552 

Professional fees

  3,660   164   3,824   4,113   576   4,689 

IT and software

  2,257   145   2,402   1,932   470   2,402 

Other segment items(2)

  7,163   489   7,652   6,298   3,495   9,793 

EBITDA

 $(9,212) $(30) $(9,242) $(2,582) $(6,611) $(9,193)

Depreciation and amortization

  4,830   110   4,940   4,387   751   5,138 

Total loss from operations

 $(14,042) $(140) $(14,182) $(6,969) $(7,362) $(14,331)
                         

Reconciliation of profit or loss

                        

Interest Expense

          (1,582)          (2,430)

Fair value adjustment of Convertible Notes with related parties

          398           — 

Loss on early extinguishment of debt

          —           (1,009)

Loss before income taxes

         $(15,366)         $(17,770)

(1) Revenue aggregation is based upon location of the customer.

(2) Balance includes sales and marketing expense, travel and entertainment expense, office overhead, restructuring and severance, goodwill impairment and impairment of intangible assets, and other operating costs.

 

  

June 30,

  

December 31,

 
  

2025

  

2024

 

Total assets:

        

Fluent

 $65,529  $84,373 

All Other

  8,942   9,244 

Total assets

 $74,471  $93,617 

 

As of June 30, 2025, long-lived assets are all located in the United States.

 

For the six months ended  June 30, 2025, 18.6% of the Company's consolidated revenue was earned from customers located in Israel.