v3.26.1
Note 9 - Segment Information
 6 Months Ended
Jun. 30, 2026
Notes to Financial Statements  
Segment Reporting [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") and 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, 2026, the Company had two continuing operating segments: a) "Fluent", which reflects Owned and Operated and Commerce Media Solutions revenue, and b) "AdParlor d/b/a Trevant." The Company determined that it has one reportable segment, "Fluent," for the purposes of segment reporting. The Fluent reporting segment combines Fluent with the Call Solutions operating segment. The Call Solutions business was divested on January 31, 2026 (refer to Note 12, Divestiture, below for details); however, the divestiture did not trigger a re-assessment under ASC 280. This reporting unit works with advertisers to 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 remaining activity 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 and included within "Unallocated" below. 

 

The Company determined its segments based on revenue sources and its agreements with advertisers. In addition, certain advertisers overlap within the different operating segments and they are managed consistently with shared management.  The Company considered other qualitative factors, such as the environment operated in, and quantitative factors to determine its reportable segment.

 

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, 2026 and 2025 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,

 

 

 

2026

 

 

2025

 

 

 

Fluent

 

 

Total

 

 

Fluent

 

 

Total

 

Revenue(1):

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

United States

 

$

27,810

 

 

 

 

​

 

$

27,897

 

 

 

 

​

International

 

 

19,037

 

 

 

 

​

 

 

15,215

 

 

 

 

​

Total segment revenue

 

$

46,847

 

 

 

 

​

 

$

43,112

 

 

 

 

​

 

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

Reconciliation of revenue

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

Unallocated revenue

 

 

 

​

 

 

1,602

 

 

 

 

​

 

 

1,594

 

Total revenue

 

 

 

​

 

$

48,449

 

 

 

 

​

 

$

44,706

 

 

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

Costs of revenue

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

Cost of revenue (exclusive of depreciation and amortization)

 

 

33,993

 

 

 

 

​

 

 

34,301

 

 

 

 

​

 

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

Costs and expenses:

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

Salaries and benefits

 

 

9,039

 

 

 

 

​

 

 

7,343

 

 

 

 

​

Professional fees

 

 

1,477

 

 

 

 

​

 

 

1,501

 

 

 

 

​

IT and software

 

 

1,284

 

 

 

 

​

 

 

1,071

 

 

 

 

​

Other segment items(2)

 

 

3,826

 

 

 

 

​

 

 

3,830

 

 

 

 

​

Segment EBITDA

 

$

(2,772

)

 

 

 

​

 

$

(4,934

)

 

 

 

​

 

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

Reconciliation of Segment EBITDA to loss before income taxes

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

Segment EBITDA (from above)

 

 

 

​

 

$

(2,772

)

 

 

 

​

 

$

(4,934

)

Plus: Unallocated revenue

 

 

 

​

 

 

1,602

 

 

 

 

​

 

 

1,594

 

Less:

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

Unallocated cost of revenue (exclusive of depreciation and amortization)

 

 

 

​

 

 

447

 

 

 

 

​

 

 

125

 

Unallocated salaries and benefits

 

 

 

​

 

 

1,053

 

 

 

 

​

 

 

930

 

Unallocated professional fees

 

 

 

​

 

 

111

 

 

 

 

​

 

 

82

 

Unallocated IT and software

 

 

 

​

 

 

70

 

 

 

 

​

 

 

53

 

Unallocated other operating items(2)

 

 

 

​

 

 

390

 

 

 

 

​

 

 

97

 

Depreciation and amortization

 

 

 

​

 

 

1,710

 

 

 

 

​

 

 

2,479

 

Interest expense, net

 

 

 

​

 

 

637

 

 

 

 

​

 

 

702

 

Fair value adjustment of Convertible Notes, with related parties

 

 

 

​

 

 

584

 

 

 

 

​

 

 

(478

)

Loss before income taxes

 

 

 

​

 

$

(6,172

)

 

 

 

​

 

$

(7,330

)

 

(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, impairment of intangible assets, and other operating costs.

 

 

 

Six Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2026

 

 

2025

 

 

 

Fluent

 

 

Total

 

 

Fluent

 

 

Total

 

Revenue(1):

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

United States

 

$

53,694

 

 

 

 

​

 

$

63,802

 

 

 

 

​

International

 

 

35,978

 

 

 

 

​

 

 

33,131

 

 

 

 

​

Total segment revenue

 

$

89,672

 

 

 

 

​

 

$

96,933

 

 

 

 

​

 

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

Reconciliation of revenue

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

Unallocated revenue

 

 

 

​

 

 

3,629

 

 

 

 

​

 

 

2,983

 

Total revenue

 

 

 

​

 

$

93,301

 

 

 

 

​

 

$

99,916

 

 

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

Costs of revenue

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

Cost of revenue (exclusive of depreciation and amortization)

 

 

68,457

 

 

 

 

​

 

 

78,033

 

 

 

 

​

 

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

Costs and expenses:

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

Salaries and benefits

 

 

16,605

 

 

 

 

​

 

 

15,032

 

 

 

 

​

Professional fees

 

 

3,022

 

 

 

 

​

 

 

3,660

 

 

 

 

​

IT and software

 

 

2,340

 

 

 

 

​

 

 

2,257

 

 

 

 

​

Other segment items(2)

 

 

4,277

 

 

 

 

​

 

 

7,163

 

 

 

 

​

Segment EBITDA

 

$

(5,029

)

 

 

 

​

 

$

(9,212

)

 

 

 

​

 

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

Reconciliation of Segment EBITDA to loss before income taxes

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

Segment EBITDA (from above)

 

 

 

​

 

$

(5,029

)

 

 

 

​

 

$

(9,212

)

Plus: Unallocated revenue

 

 

 

​

 

 

3,629

 

 

 

 

​

 

 

2,983

 

Less:

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

Unallocated cost of revenue (exclusive of depreciation and amortization)

 

 

 

​

 

 

796

 

 

 

 

​

 

 

168

 

Unallocated salaries and benefits

 

 

 

​

 

 

2,115

 

 

 

 

​

 

 

2,047

 

Unallocated professional fees

 

 

 

​

 

 

294

 

 

 

 

​

 

 

164

 

Unallocated IT and software

 

 

 

​

 

 

127

 

 

 

 

​

 

 

145

 

Unallocated other operating items(2)

 

 

 

​

 

 

737

 

 

 

 

​

 

 

489

 

Depreciation and amortization

 

 

 

​

 

 

3,391

 

 

 

 

​

 

 

4,940

 

Interest expense, net

 

 

 

​

 

 

1,242

 

 

 

 

​

 

 

1,582

 

Fair value adjustment of Convertible Notes, with related parties

 

 

 

​

 

 

1,421

 

 

 

 

​

 

 

(398

)

Loss before income taxes

 

 

 

​

 

$

(11,523

)

 

 

 

​

 

$

(15,366

)

 

(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, impairment of intangible assets, and other operating costs.

 

 

 

June 30,

 

 

December 31,

 

 

 

2026

 

 

2025

 

Total assets:

 

 

 

​

 

 

 

​

Fluent

 

$

65,626

 

 

$

79,570

 

Unallocated

 

 

9,507

 

 

 

9,563

 

Total assets

 

$

75,133

 

 

$

89,133

 

 

As of  June 30, 2026, long-lived assets are all located in the United States.

 

For the six months ended June 30, 2026, 27.3% of the Company's consolidated revenue was earned from customers located in Israel. In addition, the Company identified two international customers within the Fluent segment that represented 11.2% and 10.2% of the Company’s consolidated revenue.