Campaign Performance Platform License Revenue up 32% in Q1 2024 on Customer Adoption of AI-Powered AdTech Software and Optimization Services
October 17, 2024 05:46 PM Eastern Daylight Time
SAN ANTONIO, Texas–(BUSINESS WIRE)–AiAdvertising, Inc. (OTC: AIAD), an industry leader in AI-powered digital advertising solutions, has reported its financial and operational results for the first quarter ended March 31, 2024.
“The first quarter of 2024 was highlighted by strong revenue and growth momentum in our Campaign Performance Platform segment as its targeting capabilities and benefits continued to garner interest among clients”Post this
Key First Quarter and Subsequent 2024 Highlights and Business Update
- Revenue for Q1 2024 was $2.0 million, compared to $2.2 million in Q1 2023.
- Gross profit margin of 11.1% in Q1 2024, compared to 23.9% in the same year ago period.
- Platform License revenues for Q1 2024 increased 32.0% to $147,849 due to a business model shift.
- Creative Services revenues for Q1 2024 increased by 75.6% to $0.5 million due to customer wins in the second half of 2023.
- Digital Marketing revenues for Q1 2024 decreased by 21.2% to $1.4 million.
- Net Loss for Q1 2024 was ($1.9) million.
- Net Cash used in operating activities for the three months ended March 31, 2024, was $1.4 million, compared to cash used of $0.6 million the year ago period as the company paid down outstanding payables.
- Completed the second tranche of its securities purchase agreement with Hexagon Partners, Ltd., a Texas-based investment company, for a strategic investment of $2.5 million.
- Customer retention rate was a strong 94% year-over-year as of March 31, 2024.
- First half 2024 revenue expected to be in the $4.1 to $4.3 million range and FY 2024 revenue expected to be in the $9 to $10 million range on continued strong momentum driven by high customer retention, increased digital marketing budgets, and new customer wins.
Management Commentary
“The first quarter of 2024 was highlighted by strong revenue and growth momentum in our Campaign Performance Platform segment as its targeting capabilities and benefits continued to garner interest among clients,” said Jerry Hug, Chairman and CEO of AiAdvertising. “Our branding and creative design services, which we believe sets apart our clients from their competitors and establishes them in their specific markets, also drove results for the quarter with a 76% improvement in revenue year over year.
“The Campaign Performance Platform applies AI and ML technologies to marketing and advertising solutions, a key benefit as cookie-based tracking becomes more in doubt. Our AI-powered AdTech software and optimization services allow advertisers to eliminate guesswork, predict creative, and prove performance. We expect continued adoption as we continue to scale our platform and the industry shifts toward solutions leveraging AI.
“Looking ahead, we are focused on further development and scale of our AI-powered targeting solutions to generate more engaging, higher-impact campaigns that drive superior results for new and current clients. We are investing in sales efforts and executing on our revenue backlog, and believe our strategy will enable us to reach cashflow breakeven in the near term. We continue to expect first half 2024 revenue to be in the $4.1 to $4.3 million range and FY 2024 revenue is expected to be in the $9 to $10 million range, driven by high customer retention, increased digital marketing budgets, and new customer wins. We expect to provide second quarter 2024 financial results, along with updates on new business initiatives and new business traction soon,” concluded Hug.
Q1 2024 Financial Results
Revenue for the quarter ended March 31, 2024, and 2023 was $2.0 million and $2.2 million, respectively, a decrease of 7%. The decrease was primarily due to a decrease in client activity in Digital Marketing and Web Development, which was partially offset by increases in Creative Services and Platform revenues. The Platform License segment revenues for the quarter ended March 31, 2024, increased 32% to $147,849 from the prior year due to management’s focus on a hybrid model of lower platform fees to drive higher customer budget spend. Digital Marketing revenues for the quarter ended March 31, 2024, decreased 21% to $1.4 million as a result of this strategic shift. The Creative Design segment revenues for the quarter ended March 31, 2024, increased 76% to $0.5 million from the prior year due to customer wins in the second half of 2023.
Gross profit in the first quarter of 2024 was $0.2 million, or 11.1% of revenues, compared to a gross profit of $0.5 million, or 23.9% of revenues, in the comparable year ago quarter. Gross profit and gross margin percentage were lower due to lower recognized revenue in 1Q versus a year ago.
Total operating expenses for the quarter ended March 31, 2024, were $2.1 million, compared to $1.4 million in the prior year.
Operating activities for continuing operations used $1.4 million in net cash for the three months ended March 31, 2024, compared to $0.6 million for the three months ended March 31, 2023. The increase in cash flow used in operating activities was primarily due to increased net loss for the period, decrease in accounts payable to vendors from paying invoices faster, and a reduction in customer deposits from activating media budgets faster.
Net loss for the quarter ended March 31, 2024, was ($1.9) million, as compared to a net loss of ($0.9) million in 2023.
Cash and cash equivalents totaled $1.2 million at March 31, 2024, as compared to $0.1 million at December 31, 2023.
About AiAdvertising
AiAdvertising is an AI-powered solutions leader employing the industry’s most scientifically advanced, patent-pending AI targeting process. Transforming marketing and customer experiences, allowing marketers to personify client data and scientifically target their ideal customers with hyper-personalized campaigns. By harnessing artificial intelligence (AI) and machine learning (ML), we empower brands to easily target, predict, create, scale, measure campaign performance and reduce waste. Our clients gain the intelligence they need to prove advertising’s impact on the bottom line. This means more engaging, higher-impact campaigns that drive conversions and results.
For more information about the Company, please visit www.AiAdvertising.com or our LinkedIn or Twitter pages.
Forward-Looking Statements
This press release may contain “forward-looking statements.” Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations, and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements are included in our filings with the Securities and Exchange Commission, including the “Risk Factors” section of our annual report on Form 10-K for the year ended December 31, 2023. Any forward-looking statement made by us in this release is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments, or otherwise, except as may be required under applicable law.
| AIADVERTISING, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| March 31, 2024 | December 31, 2023 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash | $ | 1,187,895 | $ | 110,899 | ||||
| Accounts receivable, net | 647,940 | 517,344 | ||||||
| Prepaid and other current Assets | 15,577 | 58,982 | ||||||
| Total current assets | 1,851,412 | 687,225 | ||||||
| Property and equipment, net | 65,643 | 72,948 | ||||||
| Right-of-Use assets | 134,269 | 147,480 | ||||||
| Other assets: | ||||||||
| Lease deposit | 10,369 | 8,939 | ||||||
| Goodwill and other intangible assets, net | – | 20,202 | ||||||
| Total other assets | 10,369 | 29,141 | ||||||
| Total assets | 2,061,693 | 936,794 | ||||||
| LIABILITIES AND SHAREHOLDERS’ DEFICIT | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | 1,088,156 | 1,567,751 | ||||||
| Accrued expenses | 38,798 | 46,430 | ||||||
| Operating lease liability | 34,922 | 33,572 | ||||||
| Deferred revenue and customer deposit | 739,696 | 533,386 | ||||||
| Total current liabilities | 1,901,572 | 2,181,139 | ||||||
| Operating lease obligation, net of current portion | 104,679 | 113,907 | ||||||
| Total liabilities | 2,006,251 | 2,295,046 | ||||||
| Shareholders’ deficit: | ||||||||
| Preferred stock, $0.001 par value; 5,000,000 Authorized shares: | ||||||||
| Series A Preferred stock; 10,000 authorized; zero shares issued and outstanding | – | – | ||||||
| Series B Preferred stock; 25,000 authorized; 18,025 shares issued and outstanding | 18 | 18 | ||||||
| Series C Preferred stock; 25,000 authorized; 14,425 shares issued and outstanding | 14 | 14 | ||||||
| Series D Preferred stock; 90,000 authorized; 86,021 shares issued and outstanding | 86 | 86 | ||||||
| Series E Preferred stock; 10,000 authorized; 10,000 shares issued and outstanding | 10 | 10 | ||||||
| Series F Preferred stock; 800,000 authorized; zero shares issued and outstanding | – | – | ||||||
| Series G Preferred stock; 2,600 authorized; 2,597 shares issued and outstanding | 3 | 3 | ||||||
| Series H Preferred stock; 1,000 authorized; zero shares issued and outstanding | – | – | ||||||
| Series I Preferred stock; 3,000,000 authorized; 2,272,727 shares issued and outstanding | 2,273 | 2,273 | ||||||
| Series J Preferred stock; 700 authorized; zero shares issued and outstanding | – | – | ||||||
| Series K Preferred stock; 1,000 authorized; 1,000 and zero shares issued and outstanding | 1 | – | ||||||
| Common stock, $0.001 par value; 10,000,000,000 and 2,000,000,000 authorized shares; 1,334,408,773 and 1,334,408,773 shares issued and outstanding, respectively | 1,334,415 | 1,334,415 | ||||||
| Additional paid in capital | 57,640,463 | 56,865,961 | ||||||
| Preferred stock payable, consisting of 892,857 shares of Series I Preferred stock valued at $2.80 | 2,500,000 | – | ||||||
| Common stock payable, consisting of 5,000,000 shares valued at $0.1128 | 564,000 | 564,000 | ||||||
| Accumulated deficit | (61,985,841 | ) | (60,125,032 | ) | ||||
| TOTAL SHAREHOLDERS’ EQUITY (DEFICIT) | 55,442 | (1,358,252 | ) | |||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT) | $ | 2,061,693 | $ | 936,794 | ||||
| AIADVERTISING, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(UNAUDITED) | ||||||||
| Three Months Ended March 31, | ||||||||
| 2024 | 2023 | |||||||
| (Unaudited) | ||||||||
| Revenue | $ | 2,019,323 | $ | 2,174,752 | ||||
| Cost of Revenue | 1,795,273 | 1,655,449 | ||||||
| Gross Profit | 224,050 | 519,303 | ||||||
| Sales, general, and administrative expenses | 2,064,657 | 1,402,596 | ||||||
| Impairment of intangible assets | 20,202 | – | ||||||
| Total operating expenses | 2,084,859 | 1,402,596 | ||||||
| Loss from operations | (1,860,809 | ) | (883,293 | ) | ||||
| Other income (expense) | ||||||||
| Other expense | – | (5 | ) | |||||
| Total other income (expense) | – | (5 | ) | |||||
| Loss from operations before income taxes | (1,860,809 | ) | (883,288 | ) | ||||
| Provision for income taxes | – | – | ||||||
| Net Loss | (1,860,809 | ) | (883,288 | ) | ||||
| Dividends on preferred stock | – | – | ||||||
| Net loss attributable to common shareholders | $ | (1,860,809 | ) | $ | (883,288 | ) | ||
| Net loss per share: | ||||||||
| Basic | $ | (0.00 | ) | $ | (0.00 | ) | ||
| Diluted | $ | (0.00 | ) | $ | (0.00 | ) | ||
| Weighted-average common shares outstanding: | ||||||||
| Basic | 1,339,408,773 | 1,231,401,433 | ||||||
| Diluted | 1,339,408,773 | 1,231,401,433 | ||||||
| AIADVERTISING, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(UNAUDITED) | ||||||||
| For the | For the | |||||||
| Three Months Ended | Three Months Ended | |||||||
| March 31, | March 31, | |||||||
| 2024 | 2023 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net Loss | $ | (1,860,809 | ) | $ | (883,288 | ) | ||
| Adjustment to reconcile net (loss) income to net cash used in operating activities: | ||||||||
| Loss on impairment of intangible asset | 20,202 | – | ||||||
| Depreciation and amortization | 7,305 | 8,050 | ||||||
| Stock based compensation | 774,503 | 462,163 | ||||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable | (130,596 | ) | (784,769 | ) | ||||
| Amortization of ROU asset | 13,211 | – | ||||||
| Prepaid expenses and other assets | 41,975 | 11,076 | ||||||
| Accounts payable | (479,595 | ) | (34,714 | ) | ||||
| Accrued expenses | (7,632 | ) | 117,315 | |||||
| Customer deposit | – | 493,086 | ||||||
| Operating lease liability | (7,878 | ) | – | |||||
| Deferred revenue | 206,310 | – | ||||||
| Net cash (used in) provided by operating activities | (1,423,004 | ) | (611,081 | ) | ||||
| INVESTING ACTIVITIES | ||||||||
| Net cash provided by (used in) financing activities | – | – | ||||||
| FINANCING ACTIVITIES | ||||||||
| Proceeds from sale of common stock, net | – | 556,006 | ||||||
| Cash received for Preferred stock payable | 2,500,000 | – | ||||||
| Net cash provided by (used in) financing activities | 2,500,000 | 556,006 | ||||||
| Net increase in cash and cash equivalents | 1,076,996 | (55,075 | ) | |||||
| Cash and cash equivalents at beginning of period | 110,899 | 55,831 | ||||||
| Cash and cash equivalents at end of period | $ | 1,187,895 | $ | 756 | ||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
| Interest paid | $ | – | $ | – | ||||
| Income taxes paid | $ | – | $ | – | ||||
Contacts
Investor Contact:
Larry Holub/Chris Tyson
312-261-6412
AIAD@mzgroup.us
www.mzgroup.us
source link – AiAdvertising Reports First Quarter 2024 Financial Results | Business Wire