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What changed in Fluent, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Fluent, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+430 added−459 removedSource: 10-K (2026-03-31) vs 10-K (2025-03-31)

Top changes in Fluent, Inc.'s 2025 10-K

430 paragraphs added · 459 removed · 287 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

59 edited+43 added−34 removed6 unchanged
Biggest changeBy using the consumer data in our proprietary first-party database, our advertiser clients are able to reach the precise audiences they are targeting through the modes of contact these consumers prefer and at the times they are most receptive to being contacted. • Performance Campaigns For clients who seek the completion of certain actions by consumers, such as a trial subscription of a good or service, the submission of a registration form, or the installation of a mobile app, we provide performance campaigns that meet the criteria specified by the client.
Biggest changeLeveraging consumer data from our proprietary first-party database, we are able to target precise audiences through preferred communication channels at optimal points of engagement. • Performance Campaigns For clients seeking completion of specified consumer actions, such as a trial subscription, submission of a registration form, or installation of a mobile app, we execute performance campaigns tailored to meet the client defined criteria.
Item 1. Business. This business description should be read in conjunction with our audited consolidated financial statements and accompanying notes thereto appearing elsewhere in this Annual Report on Form 10-K for the year ended December 31, 2024 (the "2024 Form 10-K"), which are incorporated herein by this reference. Company Overview Fluent, Inc.
Item 1. Business. This business description should be read in conjunction with our audited consolidated financial statements and accompanying notes thereto appearing elsewhere in this Annual Report on Form 10-K for the year ended December 31, 2025 (the "2025 Form 10-K"), which are incorporated herein by this reference. Company Overview Fluent, Inc.
We differentiate ourselves from other marketing alternatives by our ability to provide clients with a cost-effective and measurable return on advertising spend ("ROAS"), a measure of profitability of sales compared to the money spent on ads, and to manage highly targeted and highly fragmented online media sources.
We differentiate ourselves from other marketing alternatives through our ability to provide clients with a cost-effective and measurable return on advertising spend ("ROAS"), a measure of profitability of sales compared to the money spent on ads, and to manage highly targeted and fragmented online media sources.
Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended, are available, free of charge, on our Investor Relations website at investors.fluentco.com/ as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Exchange Act are available, free of charge, on our Investor Relations website at investors.fluentco.com/ as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
The website address provided in this 2024 Form 10-K is not intended to function as a hyperlink and information obtained on the website is not and should not be considered part of this 2024 Form 10-K and is not incorporated by reference in this 2024 Form 10-K or any filing with SEC.
The website address provided in this 2025 Form 10-K is not intended to function as a hyperlink and information obtained on the website is not and should not be considered part of this 2025 Form 10-K and is not incorporated by reference in this 2025 Form 10-K or any filing with SEC.
("we," "us," "our," "Fluent," or the "Company") is a commerce media solutions provider connecting top-tier brands with highly engaged consumers. Leveraging diverse ad inventory, robust first-party data, and proprietary machine learning, Fluent unlocks additional revenue streams for partners and empowers advertisers to acquire their most valuable customers at scale.
("we," "us," "our," "Fluent," or the "Company") is a commerce media solutions provider connecting top-tier brands with highly engaged consumers. Leveraging diverse ad inventory, robust first-party data, and proprietary machine learning, we unlock additional revenue streams for partners and empower advertisers to acquire their most valuable customers at scale.
Our commerce media platform utilizes our existing technology to extend our ad network for our clients. Commerce Media Solutions affords our advertiser clients exposure to a pool of users with strong buying power who, having just completed a transaction, are in "purchase mode".
Our commerce media platform utilizes our technology to extend our ad network for clients. Commerce Media Solutions affords our advertiser clients exposure to users with strong buying power who, having just completed a transaction, are in "purchase mode".
We sign agreements with our media partners with one to five year terms, typically remunerating them on a revenue share and/or impression basis. We also attract consumers at scale to our O&O Sites primarily through promotional offerings, through which consumers are rewarded for completing activities on our sites.
We enter into exclusive agreements with our media partners with one-to-five year terms, typically remunerating them on a revenue share and/or impression basis. We also attract consumers at scale to our O&O Sites primarily through promotional offerings, through which consumers are rewarded for completing activities on our sites.
From internal Fluent University courses to company-wide workshops and memberships to corporate networking organizations, such as She Runs It, we offer continuous opportunities for personal and professional development. In 2024, we created approximately 1,000 hours of learning for our employees through these courses.
From internal Fluent University courses to company-wide workshops and memberships to corporate networking organizations, such as She Runs It, we offer continuous opportunities for personal and professional development. In 2025, we created approximately 1,500 hours of learning for our employees through these courses.
We solicit our users' consent to be contacted by us and/or our advertisers via various contact methods including email, telephone, SMS/text, and push messaging.
We solicit our users' consent to be contacted by us and/or our advertisers via various channels including email, telephone, SMS/text, and push messaging.
Our Competitive Strengths We believe our competitive strengths will continue to enable us to provide a compelling value proposition to our clients and drive differentiation of our offerings in the marketplace. • Proprietary and Innovative Technology Platform - Our internally developed technology platforms are unique in the industry, having been purpose-built for performance marketing and developed with a mobile-first user experience in mind.
Our Competitive Strengths We believe our competitive strengths enable us to provide a compelling value proposition to our clients and differentiate our offerings in the marketplace. • Proprietary and Innovative Technology Platform - Our internally developed technology platforms are unique in the industry, having been purpose-built for performance marketing with a mobile-first user experience in mind.
By presenting consumers with a broad array of offers curated to their preferences, as informed by their responses to our surveys and our platform’s ad serving logic, we seek to facilitate transactions that are beneficial for the advertiser, the consumer, and our media partners.
By presenting consumers with a broad array of offers curated to their preferences, as informed by our first-party data and our platform’s ad serving logic, we seek to facilitate transactions that are beneficial for the advertiser, the consumer, and our media partners.
Risk Factors –— "Our failure to recruit or the loss of management and highly trained and qualified personnel could adversely affect our business." for further information about the risks of our hybrid work model. Investing in our People As a performance-based organization, Fluent offers competitive salaries and bonus/commission plans to both attract, reward, and retain our employees.
Risk Factors — "Our failure to recruit or the loss of management and highly trained and qualified personnel could adversely affect our business." for further information about the risks related to our ability to recruit and retain qualified personnel. 5 Table of Contents Investing in our People As a performance-based organization, Fluent offers competitive salaries and bonus/commission plans to both attract, reward, and retain our employees.
We are predominantly paid on a negotiated or market-driven "per click," "per lead," or other "per action" basis that aligns with the customer acquisition cost targets of our clients.
We are predominantly compensated on a negotiated or market-driven "per click," "per lead," or other "per action" basis aligned with the customer acquisition cost targets of our clients.
As new users register and engage with our sites and existing registrants re-engage, the enrichment of our database expands our addressable advertiser client base and improves the effectiveness of our performance-based campaigns. Since our inception, we have amassed a large, proprietary database of first-party, self-declared user information and preferences.
As new users register and existing registrants re-engage, our database is enriched and improves the effectiveness of our performance-based campaigns, thus expanding our addressable advertiser client base. Since inception, we have amassed a large, proprietary database of first-party, self-declared user information and preferences.
Our periodic reports are filed or furnished electronically with the SEC under SEC File Number 001-37893 and can be accessed at the SEC’s website at www.sec.gov, and specifically at www.sec.gov/edgar/browse/?CIK=1460329. 5 Table of Contents
Our periodic reports are filed or furnished electronically with the SEC under SEC File Number 001-37893 and can be accessed at the SEC’s website at www.sec.gov. 6 Table of Contents
While we believe the competitive landscape is changing and becoming more complex, we believe our data and our ad serving and customer acquisition technologies enable our clients to better target, engage, qualify, and communicate with relevant consumers, in a more measurable and profitable manner than our competitors.
While we believe the competitive landscape is becoming more complex, we believe our proprietary first-party database, our ad serving, and our customer acquisition technologies enable our clients to better target, engage, qualify, and communicate with relevant consumers, in a more measurable and cost-effective manner than our competitors.
Client Concentration We have an extensive list of clients across a wide range of industries. For the year ended December 31, 2024, there was no individual advertiser client of the Company that accounted for more than 10% of the consolidated revenue or net accounts receivable.
Client Concentration We have an extensive list of clients across a wide range of industries. For each of the years ended December 31, 2025 and 2024, no individual advertiser client accounted for more than 10% of the consolidated revenue or net accounts receivable.
Since our inception, we have deployed more than $2 billion in media spend to our O&O Sites and those of our clients. Our team has gained significant knowledge and experience in creating content that allows us to generate higher levels of profitability from given media sources, thereby enabling us to acquire media more competitively than others.
Since inception, we have deployed more than $2 billion in media spend. Our team has significant knowledge and experience in creating content that generates higher levels of profitability from given media sources, enabling us to acquire media more competitively.
We deploy our 'ad modals', which are overlay ad units delivered electronically primarily on the transaction confirmation page of the e-commerce and digital media websites that display a series of curated offers to consumers. We compensate our media partners by either sharing revenue proceeds or by remunerating them on an impression basis.
We deploy overlay ad units that display a series of curated offers to consumers primarily on the transaction confirmation page of e-commerce and digital media websites. We compensate our media partners through revenue sharing agreements or by compensating them on an impression basis.
Since the beginning of 2024, we have delivered data and performance-based customer acquisition services for over 500 consumer brands, direct marketers, and agencies across a wide range of industries, including Media & Entertainment, Financial Products & Services, Health & Life Sciences, Retail & Consumer, and Staffing & Recruitment.
In 2025, we delivered data and performance-based customer acquisition services for approximately 400 consumer brands, direct marketers, and agencies across a wide range of industries, including Media & Entertainment, Financial Products & Services, Health & Life Sciences, Retail & Consumer, and Staffing & Recruitment.
When registering on our sites, consumers provide their name, contact information, and opt-in permission for telemarketing and email marketing. Approximately 90% of these users engage with our media on their mobile devices or tablets.
Upon registration, consumers provide their name, contact information, and opt-in consent for telemarketing and email marketing. Over 90% of these users engage with our media on their mobile devices or tablets.
For example, this enhanced data is used by our Commerce Media platform to optimize ad serving when a Commerce Media consumer is in our database. • Scale and Experience in Purchasing Media and Creating Content - Our ability to effectively access, at scale, channels and sources of media that supply consumer traffic and build meaningful experiences and relationships with those consumers has been critical to our growth.
Importantly, enhanced consumer profiles are used by our commerce media platform to optimize ad serving. • Scale and Experience in Purchasing Media and Creating Content - Our ability to effectively access, channels and sources of consumer traffic at scale and build meaningful relationships with consumers has been critical to our growth.
We bear the cost of paying some media partners in our commerce media platform and media sources to generate consumer traffic to our owned and operated digital media properties, without the assurance of a subsequent revenue-generating event from such activity.
We bear the cost of acquiring consumer traffic from media partners within our commerce media platform and other media sources for our owned and operated digital media properties, without the assurance of a subsequent revenue-generating event.
By leveraging the scale of our media network and expertise in acquiring consumer traffic, we work with our clients to define billable events and pricing tolerances that meet both our and our clients' profitability objectives. • Consumer Data Through our O&O Sites, we generate revenue by providing clients with qualifying data of consumers who have opted to be marketed to directly via means such as direct mail, email, telephone, messaging, and other channels.
By leveraging the scale of our media network and our expertise in consumer traffic acquisition, we collaborate with clients to define billable events and pricing parameters that support the profitability objectives of all parties. • Consumer Data Through our O&O Sites, we generate revenue by providing clients with qualifying data of consumers who have opted into direct marketing via channels such as direct mail, email, telephone, messaging, and other communication methods.
This capability allows us to run thousands of campaigns simultaneously and cost-effectively for our clients, at acceptable media costs and margins to us. Our Growth Strategy We believe that the performance marketing industry has significant opportunities for growth. Elements of our strategy include: • Expanding our Network through Development of Commerce Media Solutions.
This capability allows us to run thousands of concurrent cost-effective client campaigns, at acceptable media margins. 3 Table of Contents Our Growth Strategy We believe the performance marketing and commerce media industries present significant opportunities for growth. Elements of our strategy include: • Expanding our Network through Development of Commerce Media Solutions.
As part of the FTC settlement, we have made and continue to make additional changes to our business practices that have adversely affected our results of operations for the years ended December 31, 2024 and 2023. See Item 1A. Risk Factors - Risks Relating to Legal and Regulatory Matters and Item 3.
These investigations and claims have all been settled as of December 31, 2023. As part of the FTC settlement, we have made and continue to make additional changes to our business practices that have adversely affected our results of operations for the years ended December 31, 2025 and 2024. See Item 1A.
As we continue to improve consumer engagement on our platforms, we will continue to strengthen our relationships with existing advertisers and build relationships with new advertisers. We continuously seek to enhance our product offerings for consumers and targeting capabilities for advertisers to ensure we are optimizing the value of our network. • H igher Quality Traffic to Our O&O Sites.
As we continue to improve consumer engagement on our platforms, we expect to strengthen relationships with existing advertisers and build relationships with new advertisers. Continuous enhancement to our product offerings and targeting capabilities are used to ensure optimization of the value of our network and higher per-unit profitability. • H igher Quality Traffic to Our O&O Sites.
We operate our Commerce Media Solutions on partner sites and mobile apps where we embed our proprietary ad-serving technology to identify and acquire consumers for our advertiser clients. Our technology is integrated at key moments in the consumer experience to capitalize on high engagement and improve conversion.
We operate our Commerce Media Solutions on partner sites and mobile apps where we embed our proprietary ad-serving technology to identify and acquire consumers for our advertiser clients.
For example, our post-transaction solution connects our advertisers to consumers on e-commerce websites and apps after a purchase or similar transaction. These syndicated Commerce Media Solutions generate meaningful income for our media partners, while driving high-quality customer acquisition for our advertiser clients.
Our technology is integrated at key moments in the consumer experience to capitalize on high engagement and improve conversion; for example, our post-transaction solution connects advertisers to consumers on e-commerce websites and apps after a purchase or similar transaction. Commerce Media Solutions generates meaningful revenue for our media partners, while driving high-quality customer acquisition for our advertiser clients.
These laws, rules, and regulations are generally designed to regulate and prevent deceptive practices in advertising, online marketing, and telemarketing, protect individual privacy rights and prevent the misuse and unauthorized disclosure of personal information. They are complex, change frequently and have tended to become more stringent over time.
These laws, rules, and regulations are generally designed to regulate and prevent deceptive practices in advertising, online marketing, and telemarketing, to limit the use of telemarketing without sufficient prior express consent, and to protect individual privacy rights and prevent the misuse and unauthorized disclosure of personal information.
We then leverage their self-declared data in our array of performance offerings primarily in two ways: (1) to serve advertisements that we believe will be relevant to users based on the information they provide when they engage on our O&O Sites or other partner sites through our commerce media marketplace and (2) to provide our clients with users' contact information so that such clients may communicate with them directly.
We leverage their self-declared data primarily in two ways: (1) to serve advertisements we believe will be relevant to users based on the information they provide on our O&O Sites and our Commerce Media Solutions, and (2) to provide clients with users' contact information for direct outreach.
We may also leverage our existing technology and database to drive new revenue streams, including utilization-based models ( e.g. , programmatic advertising). Additionally, we operate a call center-supported performance marketplace ("Call Solutions") that provides live, call-based performance campaigns to help clients increase engagement. In some cases, we have sold products and services directly on behalf of our clients.
We may also leverage our technology and database to drive non-core revenue streams, including utilization-based models ( e.g. , programmatic advertising). Additionally, we operated a call center-supported performance marketplace ("Call Solutions") that provided live, call-based performance campaigns to help clients increase customer acquisition.
By improving the quality of consumer traffic sourced to our media properties, we have increased user participation and conversion rates, ultimately, increased revenue from more "name brand" advertiser clients and created a more sustainable foundation for our business. In an effort to source more high-quality traffic, we have also built out an influencer marketing platform.
By improving the quality of consumer traffic sourced to our media properties, we have increased user participation and conversion rates, ultimately increasing payouts from "name brand" advertiser clients, creating a more sustainable foundation for our business. • Developing and Enhancing Products to Increase the Quality of Our Solutions.
We believe our solutions are well-aligned with the needs and objectives of our clients, notably due to our ability to provide them with ROAS, scalability, and flexibility within our O&O Sites and Commerce Media Solutions.
We believe our solutions are well positioned to address the needs and objectives of our clients, given our ability to deliver measurable ROAS, scalability, and campaign flexibility through our O&O Sites and Commerce Media Solutions.
We believe our first-party data is more reliable and reflective of consumers' current interests and preferences. • Programmatic Data Offerings Since 2018, we have been offering modeled data sets pertaining to certain audience segments in programmatic environments, thereby enabling advertisers, such as those in the healthcare industry, to leverage the modeled data in an anonymized, privacy-minded manner to target high-intent prospects for their offerings.
Unlike many providers whose consumer data is largely inferred from observed behavior, our data is self-reported and, as a result, we believe it is more reliable and reflective of consumers' current interests and preferences. • Programmatic Data Offerings Since 2018, we have offered, declared and modeled data sets for select audience segments within programmatic environments, enabling advertisers, such as those in the healthcare industry, to leverage the anonymized, privacy-compliant data to target high-intent prospects for their offerings.
Commerce Media Solutions has been operating since the first quarter of 2023, with year-over-year growth in every quarter in 2024. We intend to continue to invest into the growth of this network in 2025 and beyond. • Increasing Monetization of Our Media Network.
Commerce Media Solutions has been operating since the first quarter of 2023, delivering year-over-year growth in every quarter since 2024. We intend to continue to invest in both sales efforts and product development to grow our media network and extend our product offering to capture more touch points in the consumer journey. • Increasing Monetization of Our Media Network.
We are proud to foster a learning and coaching culture to support the development and growth for all of our employees. Available Information Fluent’s principal executive offices are located at 300 Vesey Street, 9th Floor, New York, New York 10282, and our telephone number is (646) 669-7272. Our internet website is www.fluentco.com.
These programs also help to build/deepen relationships across the organization. Available Information Fluent’s principal executive offices are located at 300 Vesey Street, 9th Floor, New York, New York 10282, and our telephone number is (646) 669-7272. Our internet website is www.fluentco.com.
This consumer data is also stored and analyzed and can be further enhanced as consumers return to our sites and declare and exhibit preferences and behaviors through additional surveying, allowing for the development of deeper insights and additional monetization opportunities.
This data is generated in real-time, as consumers respond to dynamically populated survey questions, thereby enabling targeted ads to be served in response. Consumer data is also stored, analyzed and further enhanced as consumers return to our sites and provide additional preferences and behaviors, allowing for the development of deeper insights and additional monetization opportunities.
For our O&O Sites and Call Solutions business, we bear the responsibility and cost of acquiring consumers from media partners that ultimately generate qualified clicks, leads, calls, app downloads, or customers for our clients. Our Commerce Media Solutions business does not bear media inventory risk.
For our O&O Sites and, prior to its sale, our Call Solutions business, we bear the cost of acquiring consumers from media partners that ultimately generate qualified clicks, leads, calls, app downloads, or customers for our clients. Our Commerce Media Solutions business operates under exclusive long-term contracts with media partners that generally remunerate the partner on a revenue share basis.
We maintain a portfolio of perpetual common law and federally registered trademark rights across several brands and domains relating to our business units, products, services, and solutions. We claim copyright protection in our original content that is published on our websites and included in our marketing materials.
Intellectual Property We rely on trade secrets, trademark and copyright law, confidentiality agreements, and technical measures to protect our intellectual property rights. We maintain a portfolio of perpetual common law and federally registered trademark rights across several brands and domains relating to our business units, products, services, and solutions.
Competition in the recruitment of top talent within our industry remains constant and our future success will depend in part on our continued ability to hire, motivate, and retain exceptional colleagues across the business. As the business evolves, we continue to source talent to complement the existing team with different strengths, experience, and ideas. See Item 1A.
We continue to operate under a hybrid strategy based around flexibility and collaboration. Competition in the recruitment of top talent within our industry remains constant and our future success will depend in part on our continued ability to hire, incentivize, and retain exceptional colleagues across the business.
None of our employees are represented by a labor organization, and none are party to any collective bargaining agreement with us. We have not experienced any work stoppages and strive to maintain a positive relationship with our team. In 2020, we transitioned to a work-from-home model, and we continue to operate under a hybrid strategy based around flexibility and collaboration.
This represents a decrease of 13% over the number of employees as of December 31, 2024. None of our employees are represented by a labor organization, and none are party to any collective bargaining agreement with us. We have not experienced any work stoppages and strive to maintain a positive relationship with our team.
We are proud to have been the recipients of many awards for our corporate culture including regularly being listed on Crain ’ s Best Places to Work . As of December 31, 2024, we had 210 employees, of which 208 were full-time employees. This represents a decrease of 24% over the number of employees as of December 31, 2023.
We embrace challenges and welcome opportunities to make improvements in our corporate culture and employee benefits. We are proud to have been the recipients of many awards for our corporate culture including regularly being listed on Crain’s Best Places to Work. As of December 31, 2025, we had 186 employees, of which 185 were full-time employees.
Within commerce media, we compete against an array of ad technology companies that provide non-endemic advertising offerings. Specifically, we compete against one private US company for post transaction e-commerce inventory. Some of our competitors have substantially greater financial, technical, sales and marketing resources, better name recognition and a larger customer base than us.
More specifically, we compete against a small group of private U.S. companies for post-transaction commerce media inventory, with one larger enterprise that represents a significant share of the market. Some of our competitors have substantially greater financial, technical, sales and marketing resources, as well as greater name recognition and a larger customer base.
We primarily perform customer acquisition services by operating highly scalable digital marketing campaigns, through which we connect our advertiser clients with consumers they are seeking to reach. We access these consumers through both our commerce media solutions marketplace ("Commerce Media Solutions"), and our owned and operated digital media properties ("O&O Sites").
We primarily perform customer acquisition services by operating highly scalable digital marketing campaigns, through which we connect our advertiser clients with targeted consumers.
Through AdParlor, LLC ("AdParlor"), our wholly-owned subsidiary, we conduct our non-core business which offers advertiser clients a managed service for creator marketing and media buying on different social platforms.
Notwithstanding occasional minimum guarantees, Commerce Media Solutions does not bear significant media inventory risk. Through AdParlor, LLC ("AdParlor"), our wholly-owned subsidiary, we operate our non-core business which offers advertiser clients managed creator marketing and media buying services across social media platforms.
We are constantly striving to make Fluent a more inclusive and compassionate place to work. We make a concerted effort to post roles and source top candidates to present a diverse candidate slate for our hiring teams, and our dedicated Diversity, Equity, & Inclusion ("DEI") team is designed to create opportunities for connection, education, and service.
We are constantly striving to make Fluent a more supportive place to work. We make a concerted effort to post roles and source top candidates to present a diverse candidate slate for our hiring teams. We know the importance of coming together. We hold regular town halls and team building activities.
Our clients then use this customer data to conduct their own marketing campaigns. The data records we provide contain varying depths of user profiles depending on what consumers self-declare to us, ranging from basic contact information to detailed preferences and behaviors.
Our clients then utilize this data to conduct their own marketing campaigns. The data records we provide contain varying depths of consumer profiles based on self-declared information, ranging from basic contact information to behavioral attributes. Because consumers provide their information to us directly, we believe the scale and depth our first-party data represents a meaningful competitive advantage within the industry.
Regulatory Matters Our business is subject to a significant number of federal, state, local and international laws, rules, and regulations applicable to online or digital advertising, commercial email marketing, telemarketing, and text messaging. We are also subject to laws, rules, and regulations regarding data collection, privacy and data security, intellectual property ownership and infringement, and promotions and taxation, among others.
We claim copyright protection in our original content that is published on our websites and included in our marketing materials. 4 Table of Contents Regulatory Matters Our business is subject to a significant number of federal, state, local and international laws, rules, and regulations applicable to online or digital advertising, commercial email marketing, telemarketing, and text messaging.
To further increase our value proposition to clients and to fortify our leadership position in relation to the evolving regulatory landscape of our industry, we implemented a Traffic Quality Initiative ("TQI") in 2020 to remove lower quality consumer traffic, including traffic that did not consistently meet regulatory standards from our marketplaces.
As our business has grown, we have attracted larger and more sophisticated clients to our platform. To further increase our value proposition to clients and strengthen our position in the regulatory landscape, we have implemented various initiatives to remove lower quality consumer traffic, including traffic that did not consistently meet self-imposed regulatory standards.
We were involved in investigations with federal and state regulators over our practices including the FTC and the Pennsylvania Office of the Attorney General ("PAAG"). These investigations and claims have all been settled as of December 31, 2023.
Compliance with each of these various laws could impose significant costs, as well as legal, regulatory, or financial exposure if we are found not to be in compliance. We were involved in investigations with federal and state regulators over our practices including the FTC and the Pennsylvania Office of the Attorney General.
Some of our clients operate in regulated industries, such as financial services, credit repair, gambling, consumer and mortgage lending, secondary education, healthcare and medical services, and health insurance including Medicare Advantage and related Medicare insurance plans (collectively, "Health Plans") and Affordable Care Act ("ACA") plans.
We are also subject to laws, rules, and regulations regarding data collection, AI, privacy and data security, intellectual property ownership and infringement, and promotions and taxation, among others. Some of our clients operate in regulated industries, such as financial services, credit repair, gambling, consumer and mortgage lending, secondary education, healthcare and medical services, and health insurance.
Fluent is committed to providing our employees with opportunities to grow and develop in their careers, supported by competitive compensation and comprehensive medical and wellness benefits. We embrace challenges and welcome opportunities to make improvements in our corporate culture and employee benefits.
Human Capital Fluent is dedicated to certain core principles and values which include being fast to create solutions, collaboration, focus on deliverables and being growth minded to drive innovation. Fluent is committed to providing our employees with opportunities to grow and develop in their careers, supported by competitive compensation and comprehensive medical and wellness benefits.
We service established clients and partners through our in-house account directors and managers, who seek to optimize results for and expand our business with these clients and partners. Our Competition Our competitors to the owned and operated business have been digital marketing and database marketing services providers, online and traditional media companies, and advertising agencies.
We service established clients and partners through in-house account directors and managers, who seek to optimize results and expand our relationships. Our Competition In the commerce media space, we compete against an array of ad technology companies that provide non-endemic advertising offerings.
Although representing a small percentage of our overall revenue, we believe it represents a strategically significant and incremental revenue stream. 2 Table of Contents • Call Solutions Marketplace Through our Call Solutions service, we maintain a call center operation and a marketplace for call-ready data records, which serves as a marketplace to connect consumers we have sourced with our advertising clients.
While our programmatic data offering represents a small percentage of our total consolidated revenue, we believe this business line signifies a strategically significant and incremental revenue stream. • Call Solutions Marketplace Prior to its sale on January 31, 2026, through our Call Solutions business, we offered a live-agent capability and maintained call-ready data records, which served as a marketplace that connected consumers with our advertiser clients.
Legal Proceedings for further discussion of the impacts of these proceedings and various laws, rules, and regulations on our business. 4 Table of Contents Human Capital Fluent is dedicated to certain core principles and values which include continuous learning, efficiency, collaboration, and high performance.
Risk Factors — Risks Relating to Legal and Regulatory Matters and Item 3. Legal Proceedings for further discussion of the impacts of these proceedings and various laws, rules, and regulations on our business.
Through this capability, we provide a positive and high-quality consumer experience enabling us to capture greater value from the leads we initially source. • Social Media Campaigns Through AdParlor, we conduct our non-core business which offers advertiser clients a managed service for creator marketing and media buying on different social platforms.
This service provided clients high-value live call transfers of phone verified prospective customers. For additional information regarding the sale of this business, see Note 16, Subsequent Events, in the Notes to the consolidated financial statements. • Social Media Campaigns Through AdParlor, we operate our non-core business which offers advertiser clients managed-service creator marketing and media buying across social media platforms.
The Call Solutions business serves clients across an array of industries but has had a heavy focus on the health insurance sector. We generate revenue by delivering measurable marketing results to our clients.
Our Call Solutions business served clients across an array of industries with a particular focus on the health insurance sector. On January 31, 2026, we completed the sale of our Call Solutions business through the sale of all the membership interests of Winopoly, LLC, an indirect subsidiary.
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Market Opportunity According to eMarketer reports, digital ad spending in the US is expected to grow 12.5% to $347.8 billion in 2025, and will reach $460.5 billion by 2028, surpassing $1 trillion globally.
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We access these consumers through both our commerce media marketplace ("Commerce Media Solutions"), which delivers targeted advertising within e-commerce and digital media transaction flows on partner sites and mobile apps, and our owned and operated digital media properties ("O&O Sites").
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The landscape is undergoing a major shift with the rise of commerce media, which leverages e-commerce transactions and first-party customer data to enable smarter ad placements across retailers' e-commerce platforms and broader retail media networks ("RMNs"). Through commerce media, retailers can deliver a unified, data-driven approach to advertising that spans on-site, off-site, and in-store touchpoints.
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For additional information, see Note 16, Subsequent Events, in the Notes to the consolidated financial statements. Across our business we generate revenue by delivering measurable results to our clients.
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According to McKinsey & Company (“McKinsey”), commerce media is expected to generate more than $1.3 trillion in enterprise value in the U.S. by 2026, with over $100 billion in advertising spend on RMNs alone. By 2027, PubMatic expects global commerce media advertising spend to reach $220 billion, representing more than 20% of global advertising revenues.
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Market Opportunity The global advertising market is undergoing a structural shift driven by the evolution of the attention economy, as consumer engagement becomes increasingly fragmented across digital, physical, and commerce-driven environments.
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The industry is undergoing further transformations as publishers increasingly invest in proprietary media networks (i.e., a collection of digital channels owned by a retail company), foster direct engagements with brands, and emphasize the value of their first-party data. This shift is particularly noteworthy considering growing concerns about data privacy.
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As brands compete across online platforms, retail media networks, and in-store environments, advertisers are reallocating spend toward channels that offer measurable outcomes, access to first-party data, and proximity to transaction events.
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As the use of cookies continues to become more limited, marketers and businesses must realign their operations with this evolving landscape. 1 Table of Contents Commerce media meets advertiser demand for a scalable, measurable, and brand-safe channel to connect with engaged consumers.
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According to eMarkerter’s September 2025 forecast, U.S. digital advertising spend is projected to reach approximately $381.99 billion in 2026, representing 10.6% year-over-year growth, with a projected four-year compound annual growth rate of approximately 9% through 2029. Digital advertising continues to represent the majority of total media investment, reflecting sustained advertiser demand for performance-driven, measurable environments.
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It also offers an opportunity for non-endemic brands (i.e. those that do not sell their products through a retailer’s platform) to tap into a retailer’s first-party data to reach highly targeted audiences at the top or middle of the purchase funnel.
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A growing portion of this expansion is attributable to commerce media and retail media networks (“RMNs”), which leverage retailers’ first-party customer data and transactional insights to enable targeted advertising across owned and operated digital properties, off-site media, and physical retail environments. eMarketer projects that retail media will grow at a 13.6% CAGR through 2029, the highest among major digital channels.
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According to eMarketer, 53% of US brands have taken advantage of data or a retail media network offering at a retailer where they are not an endemic brand, highlighting growing interest from non-retail advertisers to maximize the potential of this channel.
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U.S. commerce media advertising spend is projected to increase from approximately $68 billion in 2025 to nearly $117 billion by 2029, underscoring advertisers’ continued migration toward commerce-oriented environments that offer closed-loop measurement and clearer linkage between marketing investment and business outcomes. 1 Table of Contents Industry participants expect this structural shift to continue as retailers and publishers expand proprietary media networks and deepen direct brand relationships, emphasizing the strategic value of first-party data amid tightening privacy regulations and the continued deprecation of third-party cookies.
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Key Challenges Facing our Clients In today’s rapidly evolving digital landscape, advertisers face mounting challenges in proving return on investment ("ROI"), adapting to artificial intelligence ("AI") advancements, and keeping pace with shifting consumer behaviors — all while navigating economic uncertainty.
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As advertising investment expands across new digital and physical environments, marketers must realign their strategies, measurement frameworks, and technology investments to effectively activate, measure, and monetize consumer engagement in a fragmented and privacy-constrained ecosystem.
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According to McKinsey, with global digital ad spending continuing to climb, brands must contend with increasingly fragmented customer journeys that complicate attribution, while rising ad costs and privacy restrictions limit data-driven insights. At the same time, according to PwC, AI-driven automation is reshaping media strategies, requiring constant adaptation to stay competitive.
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Key Challenges Facing our Clients Advertisers operate in an increasingly competitive attention economy, in which consumer engagement is finite and fragmented across digital, physical, and commerce-driven environments including online platforms, streaming media, mobile devices, and in-store experiences.
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According to Deloitte, as consumer expectations evolve, brands must strike a delicate balance—delivering highly personalized, yet privacy-conscious experiences that align with shifting media consumption habits. ROI & Attribution – Proving ad effectiveness is harder than ever with fragmented customer journeys and privacy restrictions limiting data tracking.
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As brands compete across these touchpoints, they face heightened pressure to demonstrate measurable return on investment (“ROI”), adapt to advances in artificial intelligence (“AI”) and automation, respond to shifting consumer behaviors, and manage marketing investments amid ongoing macroeconomic uncertainty.
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According to eMarketer, 45% of marketing professionals worldwide say the decline in the ability to measure campaign effectiveness on tech platforms and the open web is their largest area of concern for media and marketing initiatives. Keeping Up with AI & Technology – Rapid advancements in AI-driven automation and analytics require constant adaptation to stay competitive.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn addition, the FTC Consent Order (as defined herein) required us to obtain "affirmative express consent" for e-mail marketing, a more stringent level of consent similar to the consent required under the existing TCPA. Our competitors are not subject to this enhanced consent requirement and we may not be able to cost-effectively generate email data for our clients.
Biggest changeAs discussed above, we are subject to CAN-SPAM and the California Business and Professions Code Sec. 17529.5 on our domestic email marketing activities. In addition, the FTC Consent Order (as defined herein) required us to obtain "affirmative express consent" for e-mail marketing, which may be more stringent than industry practices.
There is substantial competition for web traffic among both established media buyers and smaller operators, and we expect this competition to continue to increase, given the limited barriers to entry into the market. A portion of our revenue on our O&O Sites is from to visitor traffic originating from third-party publishers, including ad networks, social media platforms, and search engines.
There is substantial competition for web traffic among both established media buyers and smaller operators, and we expect this competition to continue to increase, given the limited barriers to entry into the market. A portion of our revenue on our O&O Sites is from visitor traffic originating from third-party publishers, including ad networks, social media platforms, and search engines.
In addition to risks associated with purchasing online media from third-party publishers discussed above, we utilize numerous third-party service providers in our operations such as cloud-based hosting services, enterprise resource planning systems and other software as a service ("SaaS") platforms and services.
In addition to risks associated with purchasing online media from third-party publishers discussed above, we utilize numerous third-party service providers in our operations such as cloud-based hosting services, enterprise resource planning systems and other software as a service platforms and services.
These potential strategic alternatives may result in many strategic transactions that could be material to our financial condition and results of operations. The process of evaluating strategic alternatives involves a number of risks and uncertainties and may distract management from our other businesses or result in significant expenses.
These potential strategic alternatives may result in strategic transactions that could be material to our financial condition and results of operations. The process of evaluating strategic alternatives involves a number of risks and uncertainties and may distract management from our other businesses or result in significant expenses.
If any of these platforms or applications malfunctions for an extended time period, we may lose clients and/or incur significant costs to either internalize some of these services or find suitable alternatives, which could have a material adverse effect on our business or results of operations. 12 Table of Contents Risks Relating to Legal and Regulatory Matters The regulatory landscape in which we and our clients operate is constantly evolving and subject to significant change.
If any of these platforms or applications malfunctions for an extended time period, we may lose clients and/or incur significant costs to either internalize some of these services or find suitable alternatives, which could have a material adverse effect on our business or results of operations. 13 Table of Contents Risks Relating to Legal and Regulatory Matters The regulatory landscape in which we and our clients operate is constantly evolving and subject to significant change.
However, we expect to incur additional costs to maintain compliance with the evolving data privacy and data protection laws and regulations. 15 Table of Contents Risks Related to Financial Matters We may require additional capital in the future to pursue our business objectives and respond to business opportunities, challenges, or unforeseen circumstances, and such capital may not be available to us on acceptable terms, or at all.
However, we expect to incur additional costs to maintain compliance with the evolving data privacy and data protection laws and regulations. 16 Table of Contents Risks Related to Financial Matters We may require additional capital in the future to pursue our business objectives and respond to business opportunities, challenges, or unforeseen circumstances, and such capital may not be available to us on acceptable terms, or at all.
Further, our stock price could be subject to significant fluctuation or otherwise be adversely affected by the events, risks and uncertainties of any securities litigation and stockholder activism. 17 Table of Contents The concentration of our stock ownership presents risks, including lack of liquidity in the trading market for our common stock and limitations on any individual stockholder's ability to influence corporate matters.
Further, our stock price could be subject to significant fluctuation or otherwise be adversely affected by the events, risks and uncertainties of any securities litigation and stockholder activism. 18 Table of Contents The concentration of our stock ownership presents risks, including lack of liquidity in the trading market for our common stock and limitations on any individual stockholder's ability to influence corporate matters.
We derive substantially all of our revenue from digital marketing services, which is an intensely competitive industry characterized by rapidly evolving industry standards, user and client demands, laws and regulations, and technology. We compete for advertiser clients against other digital marketing companies and online and traditional media companies based on many factors, including ROAS, price, and client service.
We derive substantially all of our revenue from digital marketing services, which is an intensely competitive industry characterized by rapidly evolving industry standards, user and client demands, laws and regulations, and technology. We compete for advertiser clients against other digital marketing companies and online and traditional media companies based on many factors, including ROAS, scale, and client service.
Consequently, it may be more challenging for investors to analyze our results of operations and financial prospects, as the information we provide to investors is less robust than the disclosure investors receive from public companies that are not a smaller reporting company. 18 Table of Contents Item 1B. Unresolved Staff Comments. Not applicable.
Consequently, it may be more challenging for investors to analyze our results of operations and financial prospects, as the information we provide to investors is less robust than the disclosure investors receive from public companies that are not a smaller reporting company. 19 Table of Contents Item 1B. Unresolved Staff Comments. Not applicable.
There can be no assurance that we will be able to maintain or enhance our reputation, and failure to do so would harm our business growth prospects and operating results. A sudden reduction in online marketing spend by our clients, a loss of clients or lower advertising yields may seriously harm our business.
There can be no assurance that we will be able to maintain or enhance our reputation, and failure to do so would harm our business growth prospects and results of operations. A sudden reduction in online marketing spend by our clients, a loss of clients or lower advertising yields may seriously harm our business.
A material percentage of our consolidated revenue is derived from gaming (apps) advertisers, so we are exposed to risks associated with the gaming industry in general. Approximately 35% and 38% of our consolidated revenue was derived from gaming advertisers in 2024 and 2023, respectively. This revenue derives from app installations and app-related user actions.
A material percentage of our consolidated revenue is derived from gaming (apps) advertisers, so we are exposed to risks associated with the gaming industry in general. Approximately 38% and 35% of our consolidated revenue was derived from gaming advertisers in 2025 and 2024, respectively. This revenue derives from app installations and app-related user actions.
The platforms adjust their pricing based on market demand as well as many other factors, known and unknown, most of which are outside of our control. If we lose access to a platform or the pricing increases, our results of operations may be adversely affected.
The platforms adjust their pricing based on market demand as well as many other factors, known and unknown, most of which are outside of our control. If we lose access to a platform or the pricing increases, our results of operations would be adversely affected.
Any negative outcomes from such regulatory actions or litigation, including monetary penalties or damages, could have a material adverse effect on our financial condition, results of operation and reputation.
Any negative outcomes from such regulatory actions or litigation, including monetary penalties or damages, could have a material adverse effect on our financial condition, results of operations and reputation.
A decline in the supply of media available to us through third parties or an increase in the price of this media could increase the cost of attracting consumers and reduce our profitability. Our success depends on our ability to attract users to our O&O Sites and generate revenue from their activities in a cost-effective manner.
A decline in the supply of media available to us through third parties or an increase in the price of this media would increase the cost of attracting consumers and reduce our profitability. The success of our O&O Sites depends on our ability to attract users to such sites and generate revenue from their activities in a cost-effective manner.
In addition, others may independently discover trade secrets and proprietary information, and in such cases, we could not assert any trade secret rights against such parties. 14 Table of Contents Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our website features, software and functionality or obtain and use our proprietary information.
In addition, others may independently discover trade secrets and proprietary information, and in such cases, we could not assert any trade secret rights against such parties. Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our website features, software and functionality or obtain and use our proprietary information.
The full extent to which these factors may negatively affect our business and operations, results of operations, financial condition and cash flows will depend on future developments that are highly uncertain and cannot be predicted. Our international operations subject us to increased challenges and risks.
The full extent to which these factors may negatively affect our business and operations, results of operations, financial condition and cash flows will depend on future developments that are highly uncertain and cannot be predicted. 12 Table of Contents Our international operations subject us to increased challenges and risks.
Geygan serves as the Interim Chief Executive Officer and President of one of our institutional investors, Global Value Investment Corporation. As a result, these stockholders could exert significant influence over all matters requiring stockholder approval, including the election of directors and determination of significant corporate actions.
Geygan serves as the Chief Executive Officer and Director of one of our institutional investors, Global Value Investment Corporation. As a result, these stockholders could exert significant influence over all matters requiring stockholder approval, including the election of directors and determination of significant corporate actions.
If our advertiser clients or partners experience difficulties developing or promoting their apps, our revenue and growth may be impaired. Our use of CRM may be hindered, which in turn could harm our business. We and our third-party publishers use email, text messages, and telephone calls, among other channels, to reach users for re-engagement and other marketing purposes.
If our advertiser clients or partners experience difficulties developing or promoting their apps, our revenue and growth may be impaired. Our use of CRM may be hindered, which in turn could harm our business. We and our third-party publishers use email, text messages, and push notifications, among other channels, to reach users for re-engagement and other marketing purposes.
We, or any of our third-party partners or service providers, could experience compromises to security that result in the decreased performance or availability of our websites or mobile applications; the loss or unauthorized disclosure, access, acquisition, alteration; or the use of confidential information.
We, or any of our third-party partners or service providers, could experience compromises to security that result in the decreased performance or availability of our websites, mobile applications, the platforms and systems; the loss or unauthorized disclosure, access, acquisition, alteration; or use of confidential information.
Impairment charges to our intangible assets could have a material adverse effect on our financial condition, and results of operations. Risks Related to Our Common Stock and the Securities Markets We are currently listed on The Nasdaq Capital Market ( “ Nasdaq ” ).
Impairment charges to our intangible assets could have a material adverse effect on our financial condition, and results of operations. 17 Table of Contents Risks Related to Our Common Stock and the Securities Markets We are currently listed on The Nasdaq Capital Market ( “ Nasdaq ” ).
We currently operate our O&O Sites in the U.S., UK, Canada, and Australia from servers in the Cloud. We plan to expand our Commerce Media Solutions internationally as well and may need to reassess the locations of our servers to mitigate potential latency issues that could impact the performance of these solutions.
We currently operate our O&O Sites in the U.S., UK, Canada, and Australia from servers in the Cloud. As we continue to expand our Commerce Media Solutions internationally, we need to reassess the locations of our servers to mitigate potential latency issues that could impact the performance of these solutions.
Based upon the foregoing, management concluded that there exists a substantial doubt about our ability to continue as a going concern, and our independent registered public accounting firm included in its opinion for the year ended December 31, 2024 an explanatory paragraph expressing substantial doubt in our ability to continue as a going concern.
Management has concluded that there exists a substantial doubt about our ability to continue as a going concern, and our independent registered public accounting firm included in its opinion for the year ended December 31, 2025 an explanatory paragraph expressing substantial doubt in our ability to continue as a going concern.
Lower conversion rates could be even more likely as we expand our services and relationships with our clients by moving our conversion point further "down the funnel," closer to where our clients are able to monetize the users we provide.
Lower conversion rates may become more likely as we expand our services and relationships with our clients by moving our conversion point further "down the funnel," closer to where our clients are able to monetize the users we provide.
As of March 17, 2025, our executive officers, directors, and holders of 10% or more of our outstanding common stock, in the aggregate, beneficially owned and have the ability to exercise some voting control over approximately 64.9% of our outstanding shares of common stock. On January 17, 2025, the Board appointed James P. Geygan to the Board. Mr.
As of December 31, 2025, our executive officers, directors, and holders of 10% or more of our outstanding common stock, in the aggregate, beneficially owned and have the ability to exercise some voting control over approximately 60.5% of our outstanding shares of common stock. On January 17, 2025, the Board appointed James P. Geygan to the Board. Mr.
Our ability to do so is dependent on many factors, including having the right media sources to drive users who engage with our O&O Sites and providing content and experiences that retain users' attention. Conversely, although the majority of our commerce media business operates on a revenue share basis, some media partners have guaranteed minimum arrangements.
Our ability to do so is dependent on many factors, including having the right media sources to drive users who engage with our O&O Sites and providing content, experiences and advertisements that retain users' attention. While the majority of our commerce media business operates on a revenue share basis, certain media partners include guaranteed minimum arrangements.
If we are unable to achieve the optimal mix of these and other factors, we may not be able to generate sufficient revenue to achieve profitability from our Commerce Media Solutions business. Our results are also subject to fluctuation from seasonality and cyclicality in ours and our clients' businesses.
If we are unable to achieve the optimal mix of these and other factors, we may not be able to generate sufficient revenue to achieve profitability from our commerce media partners with minimum guarantee arrangements. Our results are also subject to fluctuation from seasonality and cyclicality in ours and our clients' businesses.
Email service providers ("ESPs") or internet service providers may implement new or more restrictive email or content delivery or accessibility policies.
Email service providers ("ESPs"), internet service providers and mobile carriers may implement new or more restrictive email or content delivery or accessibility policies.
As of December 31, 2024, there were an additional 884,851 shares of restricted stock and options granted under the 2022 Plan, as well as other compensatory arrangements that might vest and be delivered through 2031.
As of December 31, 2025, there were an additional 368,563 shares of restricted stock and options granted under the 2022 Plan, as well as other compensatory arrangements that might vest and be delivered through 2031.
Such events or factors could include war, terrorism and other international conflicts, public health issues including health epidemics or pandemics, and natural disasters such as fire, hurricanes, earthquakes, tornados or other adverse weather and climate conditions, whether occurring in the U.S. or elsewhere. Additionally, the Federal Reserve may further raise the Federal Funds Rate.
Such events or factors could include war, terrorism and other international conflicts, public health issues including health epidemics or pandemics, and natural disasters such as fire, hurricanes, earthquakes, tornados or other adverse weather and climate conditions, whether occurring in the U.S. or elsewhere.
The concentration of stock ownership may also serve to limit the trading volume of our common stock and lead to greater volatility in our stock price. As of March 17, 2025, our largest stockholder, Dr. Phillip Frost, owned, directly or indirectly, approximately 39.1% of our outstanding common stock. Dr.
The concentration of stock ownership may also serve to limit the trading volume of our common stock and lead to greater volatility in our stock price. As of December 31, 2025, our largest stockholder, Dr. Phillip Frost, owned, directly or indirectly, approximately 25.3% of our outstanding common stock. Dr.
The performance of Commerce Media Solutions is typically measured on a revenue per session or on an impression basis, both of which are dependent on access to user information and the performance of our ad serving technology. We have invested in developing our solutions and plan to continue to invest in our technology to maintain and grow our business.
We will need to continue to invest in technology for our Commerce Media Solutions business. The performance of Commerce Media Solutions is typically measured on a revenue per session or on an impression basis, both of which are dependent on access to user information and the performance of our ad serving technology.
Although our common stock is currently listed on Nasdaq, we may not be able to continue to meet the exchange’s minimum listing requirements or those of any other national exchange. The Listing Rules of Nasdaq require listing issuers to comply with certain standards in order to remain listed on its exchange.
Although our common stock is currently listed on Nasdaq, there is no assurance that we will continue to meet the exchange’s minimum listing requirements or those of any other national exchange. The Listing Rules of Nasdaq require listing issuers to comply with certain standards in order to remain listed on its exchange.
If we fail to maintain the quality and user acceptance and expectations of our O&O Sites and Commerce Media Solutions, our reputation could be harmed, damaging our ability to attract and retain users, media partners, and advertiser clients, which could adversely affect our business, financial condition, and results of operations.
If we fail to maintain the quality and user acceptance and expectations of our O&O Sites and Commerce Media Solutions, or our advertiser clients misuse consumer data or fail to comply with applicable marketing and privacy requirements, our reputation could be harmed, damaging our ability to attract and retain users, media partners, and advertiser clients, which could adversely affect our business, financial condition, and results of operations.
This decline in traffic volume has negatively impacted our owned and operated business, while other reward site operators with more lenient standards have seen increased traffic, often sourced from our former publishers. We have not, and do not expect to, increase our registration volume back to levels prior to 2020 when we first implemented the TQI.
This decline in traffic volume has negatively impacted our owned and operated business, while other reward site operators with more lenient standards have seen increased traffic, often sourced from our former publishers. We currently do not expect registration volume to return to prior levels.
See risk factor "The regulatory landscape in which we and our clients operate is constantly evolving and subject to significant change" within Risks Relating to Legal and Regulatory Matters for additional information. In response to declining results of our owned and operated business, we launched Commerce Media Solutions in the first quarter of 2023.
See risk factor "The regulatory landscape in which we and our clients operate is constantly evolving and subject to significant change" within Risks Relating to Legal and Regulatory Matters for additional information. As part of our strategic evolution, we launched Commerce Media Solutions in the first quarter of 2023.
AI development or deployment practices by us or third-party providers could result in incidents that could increase the resources we need to implement cybersecurity measures to protect the security of our data.
AI algorithms and training methodologies may be flawed, ineffective or inadequate. AI development or deployment practices by us or third-party providers could result in incidents that could increase the resources we need to implement cybersecurity measures to protect the security of our data.
As a result, we could be subject to costly litigation and, if we are unsuccessful in defending ourselves, could incur damages for the unauthorized or unlawful acts of third-party publishers, strategic partners, or vendors. Our use of email marketing is subject to laws and rules in each of the jurisdictions in which we operate.
As a result, we could be subject to costly litigation and, if we are unsuccessful in defending ourselves, could incur damages for the unauthorized or unlawful acts of third-party publishers, strategic partners, or vendors.
Should we fail to do so, our competitive position could suffer and our results of operation could be adversely affected. 9 Table of Contents Risks Related to Our Owned and Operated Media Properties We are at a competitive disadvantage to other rewards sites because we are more selective in our traffic sources.
Should we fail to have the required resources to develop and improve our technology, our competitive position could suffer, and our results of operations could be adversely affected. 10 Table of Contents Risks Related to Our Owned and Operated Media Properties We are at a competitive disadvantage to other rewards sites because we are more selective in our traffic sources.
We regularly extend payment terms to our clients, which exposes us to risk of bad debt. Some of our clients are thinly capitalized and pose credit risks, and some of our clients may challenge the determination of amounts we believe they owe or may refuse to pay because of performance-related or other claims.
We regularly extend payment terms to our clients, which exposes us to risk of bad debt. Some of our clients are thinly capitalized and pose credit risks, and some of our clients may challenge the determination of amounts we believe they owe or may dispute payments, including due to performance-based pricing arrangements, attribution determinations, or other claims.
The line between exempt services and enumerated services subject to sales tax is unclear and varies from state to state. While our advertising services are generally not subject to sales tax, some states, like New York, impose sales tax on information services and some of lead generation services may be characterized to be sales taxable information services.
While our advertising services are generally not subject to sales tax, some states, like New York, impose sales tax on information services and some of our lead generation services may be characterized as sales taxable information services.
In the U.S., while there is no federal version of GDPR yet, as of March 14, 2025, approximately 20 states have enacted data privacy laws, including the California Consumer Privacy Act of 2018 ("CCPA"). As of March 14, 2025, similar bills are being considered in approximately a dozen additional states.
In the U.S., while there is no federal version of GDPR yet, as of March 13, 2026, approxi mately 20 states have enacted data privacy laws, including the CCPA. As of March 13, 2026, similar bills are being considered in approximately sixteen additional states.
Our future success depends in part on the efficient performance of our ad serving consumer data collection platforms and technology infrastructure used in our O&O Sites and Commerce Media Solutions. As we shift focus to Commerce Media Solutions, we are adapting our technology infrastructure to meet the evolving needs of this business.
Our future success depends in part on the efficient performance of our ad serving consumer data collection platforms and technology infrastructure used in our O&O Sites and Commerce Media Solutions.
Regardless of whether any current or future claims in which we are involved have merit, or whether we are ultimately held liable or subject to payment of penalties or consumer redress, such investigations and claims have been and may continue to be expensive to defend, may divert management's time away from our operations and may result in changes to our business practices that adversely affect our results of operations. 13 Table of Contents Our business and the businesses of our advertiser clients may be subject to sales and use taxes and other taxes.
Regardless of whether any current or future claims in which we are involved have merit, or whether we are ultimately held liable or subject to payment of penalties or consumer redress, such investigations and claims have been and may continue to be costly and may result in changes to our business practices that adversely affect our results of operations.
We rely more heavily on a "walled garden" social media platforms for users. These platforms change their algorithms and rules on acceptable ads frequently and without notice. We may lose access to a platform without knowing the reasons for such loss or knowledge how to regain access.
We obtain a meaningful portion of our user traffic through "walled garden" social media platforms. These platforms change their algorithms and rules on the acceptability of ads frequently and without notice. We may lose access to a platform without knowing the reasons for such loss or how to regain access.
The FTC Consent Order (as defined herein) requires us to monitor and discipline our publishers. Users or clients may raise concerns about the content of publisher ads or the methods used by third-party publishers to deliver ads.
We may also face liability for any failure of our third-party publishers, strategic partners, or vendors to comply with legal and regulatory requirements. The FTC Consent Order (as defined herein) requires us to monitor and discipline our publishers. Users or clients may raise concerns about the content of publisher ads or the methods used by third-party publishers to deliver ads.
The reaction of investors to the inclusion of a going concern statement in the accompanying financial statement, and our potential inability to continue as a going concern, could materially adversely affect our share price, which could negatively impact our ability to obtain stock-based financing or enter into strategic transactions.
The reaction of investors to the inclusion of a going concern statement in the accompanying financial statements, and our potential inability to continue as a going concern, could materially adversely affect our share price, which could negatively impact our ability to obtain stock-based financing or enter into strategic transactions. 7 Table of Contents Risks Related to Our Industry We operate in a competitive, rapidly changing industry, which makes it difficult to evaluate our business and prospects.
We have relied upon financing provided by our officers, directors and largest stockholders, and such holders may be unwilling or unable to continue providing financing should additional financing be required. Other financing sources may be unwilling to provide such funding to us on commercially reasonable terms, or at all.
We have relied upon financing provided by our officers, directors and largest stockholders, and such holders may be unwilling or unable to provide financing should additional financing be required.
If we are unsuccessful in enhancing and upgrading our websites, products, services, and back-end systems, we may fail to maintain our profitability, attract new clients, or grow our revenue, or we may suffer service disruptions. Additionally, we have begun introducing some new technologies, including AI and machine learning.
If we are unsuccessful in enhancing and upgrading our websites, products, services, and back-end systems, we may fail to maintain our profitability, attract new clients, or grow our revenue, or we may suffer service disruptions. Additionally, we rely on AI and machine learning to optimize the performance of our digital marketing campaigns and performance analytics.
We have made significant investments and reallocated valuable management resources to support these upgrades. This includes substantial costs for secure hosting services, additional technical support, expanding data storage, and upgrading our technology and network infrastructure to accommodate the traffic on our O&O Sites and the growing user interactions with Commerce Media Solutions.
This includes substantial costs for secure hosting services, additional technical support, expanding data storage, and upgrading our technology and network infrastructure to accommodate the traffic on our O&O Sites and the growing user interactions with Commerce Media Solutions. These interactions increase with each new media partner and higher user session volume.
While Commerce Media Solutions has already become an important part of our future strategy, this is a relatively new business for Fluent. There are many established dominant players in commerce media and entry into the commerce media business has its own challenges and risks as further discussed below.
While Commerce Media Solutions has already become an important part of our strategy, it represents an expansion of our business into a highly competitive segment of the digital advertising industry. There are many established dominant players in commerce media and entry into the commerce media market has its own challenges and risks as further discussed below.
The stability and potential growth of this client base depends in part on the state of the app-based gaming industry, which is subject to numerous risks including: ● the relative availability and popularity of other gaming apps and forms of entertainment compared to those offered by our advertisers; ● changes in consumer demographics, tastes, spending habits, and preferences; ● social perceptions of gaming, especially those related to the impact of gaming on health and social development; and ● the introduction of legislation or other regulatory restrictions on gaming, such as restrictions addressing violence in video games and addiction to video games. 7 Table of Contents One of our gaming advertiser clients, which accounted for 7.1% of consolidated revenue in 2024, experienced a steep decline from 18.1% of consolidated revenue in 2023.
The stability and potential growth of this client base depends in part on the state of the app-based gaming industry, which is subject to numerous risks including: ● the relative availability and popularity of other gaming apps and forms of entertainment compared to those offered by our advertisers; ● changes in consumer demographics, tastes, spending habits, and preferences; ● social perceptions of gaming, especially those related to the impact of gaming on health and social development; ● the introduction of legislation or other regulatory restrictions on gaming, such as restrictions addressing violence in video games and addiction to video games; and ● changes in platform policies, app store rules, or mobile operating system requirements that affect user acquisition or monetization.
There are several factors that determine the performance of a deployment of our commerce media solution that include the e-commerce site owners we partner with, the placement of our solution on their post-transaction confirmation page and their users’ receptivity to the offers we select to deploy.
The performance of our commerce media placements depends on several factors, including the quality and scale of the e-commerce site owners we contract with, the placement of our solution on their post-transaction confirmation page and their users’ receptivity to the offers we select to deploy.
We use a combination of internal and third parties to do this and will need sufficient capital and resources to develop the capabilities, reliability, and enhancements the market demands to remain competitive.
We have invested in developing our solutions and plan to continue to invest in our technology to maintain and grow our business. We use a combination of internal and third parties to do this and will need sufficient capital and resources to develop the capabilities, reliability, and enhancements the market demands to remain competitive.
Continued international expansion will require us to invest significant funds and other resources and may subject us to additional risks, including those related to cross-border data transfers; retooling our consumer facing product offerings to better align with local customs, practices, and consumer preferences; compliance with anti-bribery laws; recruiting, training, managing, and retaining contractors and service providers in foreign countries; increased competition from local providers; economic and political instability; and less protective or restrictive intellectual property laws. 11 Table of Contents Our ability to manage our business and conduct our operations internationally requires considerable management attention and resources and is subject to the challenges of supporting a growing business in an environment of multiple languages, cultures, legal and regulatory systems, taxation regimes, and commercial infrastructures.
Continued international expansion will require us to invest significant funds and other resources and may subject us to additional risks, including those related to cross-border data transfers; retooling our consumer facing product offerings to better align with local customs, practices, and consumer preferences; compliance with anti-bribery laws; recruiting, training, managing, and retaining contractors and service providers in foreign countries; increased competition from local providers; economic and political instability; and less protective or restrictive intellectual property laws.
During 2024 and 2023, we issued 319,933 and 255,406 shares of common stock, respectively, in connection with prior acquisitions, vesting of awards made under our 2018 Stock Incentive Plans, our 2022 Omnibus Equity Incentive Plan (the "2022 Plan"), and for other business purposes.
During 2025 and 2024, we issued 485,276 and 319,933 shares of common stock, respectively, in connection with prior acquisitions, vesting of awards made under our 2018 Stock Incentive Plan, our 2022 Omnibus Equity Incentive Plan (the "2022 Plan"), and for other business purposes. On June 18, 2025, our stockholders authorized for issuance under the 2022 Plan an additional 2,000,000 shares.
However, these upgrades and expansions are both costly and complex and could result in inefficiencies or operational challenges that could damage our reputation, result in the loss of current and potential users and clients, and/or harm our operating results.
We have also deployed new products, services, and third-party solutions addressing the rising volume of data privacy requests. However, these upgrades and expansions are both costly and complex and could result in inefficiencies or operational challenges that could damage our reputation, result in the loss of current and potential users and clients, and/or harm our operating results.
Moreover, the mobile ecosystem is controlled by two operating systems, Apple iOS and Google Android. More than 90% of our users access our O&O Sites from mobile devices, and we believe a similar percentage access our Commerce Media Solutions from mobile devices as well.
More than 90% of our users access our O&O Sites from mobile devices, and we believe a similar percentage access our Commerce Media Solutions from mobile devices as well.
We, our third-party publishers', and our clients' businesses operate in highly regulated industries, subject to many federal, state, and local laws and regulations regarding telemarketing and other consumer media channels.
We, our third-party publishers', and our clients' businesses operate in highly regulated industries, subject to many federal, state, and local laws and regulations governing data privacy, consumer protection, advertising, telemarketing, text messaging, and personal information.
This database, coupled with user information from our media partners and third-party data sources, enables us to provide robust user profiles to our AI-enabled technology to enhance our solutions’ performance.
We attract hundreds of thousands of consumers to our O&O sites on a daily basis and maintain a large, proprietary database of first-party user information. This database, coupled with user information from our media partners and third-party data sources, enables us to provide robust user profiles to our AI-enabled technology to enhance our solutions’ performance.
Unfavorable changes in the business climate or competitive environment, our revenue forecasts, our market capitalization, capital structure, capital expenditure levels, operating cash flows, as well as adverse legal or regulatory actions or developments could cause further material impairments to the carrying value of our intangible assets or intangible assets we may obtain in future periods. 16 Table of Contents We will continue to monitor indicators of possible impairment that would cause a triggering event requiring us to complete an interim impairment analysis and possibly recognize additional impairment charges in the future.
Unfavorable changes in the business climate or competitive environment, our revenue forecasts, our market capitalization, capital structure, capital expenditure levels, operating cash flows, as well as adverse legal or regulatory actions or developments could cause material impairments to the carrying value of our intangible assets or intangible assets we may obtain in future periods.
In addition to revenue from business operations and proceeds from the SLR Credit Agreement, the Company's primary source of working capital to date has been through the sale of equity and subordinated debt securities to officers, directors and a principal stockholder.
In addition, our revenue from business operations and proceeds from our transaction with Bay View, the Company's primary source of working capital to date has been through the sale of equity and subordinated convertible notes to officers, directors and the largest stockholder of the Company.
As a result, we have faced and may continue to face potential liability based on a variety of legal theories, including copyright or trademark infringement.
We display original and third-party content, including advertisements, on our O&O Sites and Commerce Media Solutions and in our marketing messages. As a result, we have faced and may continue to face potential liability based on a variety of legal theories, including copyright or trademark infringement.
If our current plans are not successful, we may need to consider other strategic alternatives, including restructuring or refinancing our debt, seeking additional equity or debt financing, reducing or delaying our business activities and strategic initiatives, selling assets, and other strategic transactions and/or other measures.
If our expected facility becomes limited by the lender or our business does not perform to expectations, we may need to consider other strategic alternatives, including seeking additional equity or debt financing, reducing or delaying our business activities and strategic initiatives, selling assets, or other measures.
Our owned and operated business is largely dependent on consumer-facing websites, which could become inaccessible due to service interruptions or attacks. If our websites are unavailable when users attempt to access them, or if they do not load as quickly as expected, users may not return as often in the future, or at all.
If our websites are unavailable when users attempt to access them, or if they do not load as quickly as expected, users may not return as often in the future, or at all.
While we have gained a foothold in the U.S. and are starting to expand internationally, this space is highly competitive, with new entrants entering the field and existing e-commerce site owners building their own commerce media solutions.
While we have established a presence in the U.S. and are continuing to expand internationally, this space is highly competitive, with new entrants entering the field and existing e-commerce site owners building their own commerce media networks. Certain competitors have longer operating histories, greater scale, and more established relationships, which may provide them with competitive advantages.
Moreover, with a heightened aversion to marketing calls and emails, consumers increasingly screen or block their incoming telephone calls, texts, and emails, so users may not reliably receive our messaging. If we are unable to contact users effectively by email, telephone, text, or other means, our business, operating results, and financial condition would be harmed.
Moreover, with a heightened aversion to marketing calls and emails, consumers increasingly screen or block their incoming telephone calls, texts, and emails, so users may not reliably receive our messaging.
We have also transitioned to cloud-based technology and migrated our database to a new environment. These new technologies may contain design or performance defects that are not readily apparent. If the new proprietary technologies we implement fail to achieve their intended purpose or are less effective than technologies used by our competitors, our business could be harmed.
Our platforms also operate on cloud-based infrastructure. These technologies may contain design or performance defects that are not readily apparent. If the proprietary technologies, cloud infrastructure, or related systems fail to operate as intended, do not scale effectively, or are less effective than technologies used by our competitors, our business could be harmed.
These challenges to our owned and operated business have had, and are expected to continue to have, a material adverse effect on our results of operations and liquidity.
These challenges to our owned and operated business have had, and are expected to continue to have, a material adverse effect on our business and may negatively impact our results of operations and liquidity, particularly if registration volume declines more significantly or more rapidly than we currently expect.
The application of sales and use taxes, business taxes, and gross receipts taxes on our digital marketing/advertising services is complex and evolving. Because of changes in the state laws governing our business, we are potentially subject to taxes in many more states than was previously the case.
Because of changes in the state laws governing our business, we are potentially subject to taxes in more states than was previously the case. The line between exempt services and enumerated services subject to sales tax is unclear and varies from state to state.
Equity or debt financings may have a dilutive effect on the holdings of our existing stockholders, and debt financings may subject us to restrictive covenants, operational restrictions, or security interests in our assets. If we are unable to raise additional capital when required or on acceptable terms, we may have to significantly delay, scale back or discontinue certain operations.
Equity or debt financings may have a dilutive effect on the holdings of our existing stockholders, and debt financings may subject us to restrictive covenants, operational restrictions, or security interests in our assets. Any of these events could significantly harm our business and results of operations.
Any or all of these issues could adversely affect our ability to attract new users and increase engagement by existing users, cause advertisers to not use our services or cause publishers to stop providing media, disrupt our business operations or subject us to governmental or third-party lawsuits, investigations, regulatory fines or other actions or liability, thereby harming our business.
Any or all of these issues could disrupt our business operations or subject us to governmental or third-party lawsuits, investigations, regulatory fines or other actions or liability, thereby harming our business.
Additionally, our Credit Agreement prohibits us from paying cash dividends on our common stock and contains limitations on our ability to redeem or repurchase shares of our common stock. As a result, stockholders may only receive a return on their investment in our common stock if the trading price of their shares increases.
As a result, stockholders may only receive a return on their investment in our common stock if the trading price of their shares increases.
Other Business Risks It may be difficult to effectively manage any future growth and scale our infrastructure and products quickly enough to meet the needs of our business while maintaining profitability.
If we are unable to contact users effectively by email, telephone, text, or other means, our business, results of operations, and financial condition would be harmed. 11 Table of Contents Other Business Risks It may be difficult to effectively manage any future growth and scale our infrastructure and products quickly enough to meet the needs of our business while maintaining profitability.
Despite our efforts to monitor the internet for look-alike sites, there can be no assurance that we will be able to quickly detect and remove all look-alike sites, which could impair our reputation, expose us to regulatory scrutiny, and adversely affect our business.
Despite our efforts to monitor the internet for look-alike sites, there can be no assurance that we will be able to quickly detect and remove all look-alike sites, which could impair our reputation, expose us to regulatory scrutiny, and adversely affect our business. 15 Table of Contents As a creator and a distributor of digital media content, we face liability and expenses for legal claims based on the nature and content of the materials that we create or distribute, including materials provided by third parties.
If we seek additional financing to fund our operations and there remains substantial doubt about our ability to continue as a going concern, we may find it especially difficult to raise funds on commercially reasonable terms, or at all.
Other financing sources may be unwilling to provide such funding to us, especially if there remains substantial doubt about our ability to continue as a going concern, on commercially reasonable terms, or at all.
In such circumstances, we may be exposed to risks of significant bad debt, which could have a material adverse effect on our results of operations. 8 Table of Contents Risks Related to Commerce Media Solutions Business We are a relatively new entrant to the post-transaction commerce media business, which is currently dominated by a major player.
In such circumstances, we may be exposed to risks of significant bad debt, which could have a material adverse effect on our results of operations. 9 Table of Contents Risks Related to Our Commerce Media Solutions We operate in the commerce media segment of the digital advertising ecosystem, which is highly competitive and dominated by larger, well-capitalized competitors with existing advertiser and media partner relationships.
Our ability to protect such information and to provide services using such information without unauthorized disclosure is critical. A breach of the security measures on our systems or on those of our third-party vendors could result in the misappropriation of either our proprietary information or our users' personal information, or the interruption or breakdown of our operations.
A breach of the security measures on our systems or on those of our third-party vendors could result in the misappropriation of either our proprietary information or our users' personal information, or the interruption or breakdown of our operations. Our owned and operated business is largely dependent on consumer-facing websites, which could become inaccessible due to service interruptions or attacks.
Many of our competitors have greater resources and may be part of larger organizations through which they could deploy their solutions across affiliated media properties. There can be no assurance that we will have the resources to be able to invest sufficient capital to continue to further develop and improve our technology to keep pace with our competitors.
Many of our competitors have greater resources and may be part of larger organizations through which they could deploy their solutions across affiliated media properties.
In addition, the FTC Consent Order (as defined herein) necessitated a heightened level of vigilance in monitoring our publishers, many of whom opted to discontinue their partnership with us and also reduced registrations.
In addition, the FTC Consent Order (as defined herein) necessitated a heightened level of vigilance in monitoring our publishers, which contributed to reduced consumer traffic sources and, as a result, lower registration volume.
In addition to the TCPA and "mini TCPAs" of various states, we are subject to, the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (CAN-SPAM) and the California Business and Professions Code Sec. 17529.5, among others.
In addition to the TCPA and "mini TCPAs" of various states, we are subject to CAN-SPAM and the California Business and Professions Code Sec. 17529.5, among others. Many of these laws and regulations are frequently changing and can be subject to various interpretations, and the extent and evolution of future government regulation is uncertain.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWhile we did not experience a material cybersecurity incident during the year ended December 31, 2024, the scope and impact of any future incident cannot be predicted.
Biggest changeMateriality determinations are based on applicable legal and regulatory standards and consider both quantitative and qualitative factors, including the potential impact on our operations, financial condition, customers, and reputation. While we did not experience a material cybersecurity incident during the year ended December 31, 2025, cybersecurity incidents are inherently unpredictable, and the effectiveness of preventive controls cannot be assured.
Risk Management & Strategy Our cyber risk management program is designed to identify, assess, manage, mitigate, and respond to cybersecurity threats.
Risk Management & Strategy Our cybersecurity risk management program is designed to identify, assess, manage, mitigate, and respond to cybersecurity risks that may arise from internal or external threats.
Notwithstanding the approach we take to cybersecurity, we may not be successful in preventing or mitigating a cybersecurity incident that could have a material adverse effect on our business, results of operations, or financial condition. See Item 1A. "Risk Factors" for more information on our cybersecurity-related risks.
A future cybersecurity incident could have a material adverse effect on our business, results of operations, or financial condition. See Item 1A. "Risk Factors" for additional discussion of cybersecurity-related risks.
Removed
Item 1C. Cybersecurity. We have made cybersecurity and the protection of our customers' data a top priority .
Added
Item 1C. Cybersecurity. We maintain a cybersecurity risk management program designed to protect the confidentiality, integrity, and availability of our information systems and the data we process in support of our business operations. Our cybersecurity program is risk-based and is designed to evolve in response to changes in our operating environment, technology infrastructure, regulatory obligations, and the cybersecurity threat landscape.
Removed
The critical areas that we consider for our evolving cybersecurity program include access control; data encryption; SSDLC/change management; BCP/DRP; endpoint security; patch management; vulnerability assessments; compliance management; data privacy; incident response; monitoring, alerting, and logging; employee training (ingrained in our onboarding process, and mandatory online and in person training annually); and cyber insurance (coverage areas include ransomware, and business interruption which are critical to our clients and availability of business operations).
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Our approach to cybersecurity focuses on managing risks that could materially affect our operations, financial condition, or reputation.
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To help protect our company from a major cybersecurity incident that could have a material impact on operations or our financial results, we have implemented policies, procedures, programs and controls, including investments in technology that focus on cybersecurity incident prevention, identification and mitigation. These investments include best practice applications such as CrowdStrike, Okta, Intune and Kandji.
Added
Key components of our program include identity and access management; data protection and encryption; secure software development and change management practices; business continuity and disaster recovery planning; endpoint and network security; vulnerability and patch management; monitoring, logging, and alerting; incident response preparedness; employee cybersecurity training; and the use of cyber insurance as a risk transfer mechanism.
Removed
These tools also strengthen our overall IT posture as well as our monitoring and alerting and patching processes. The underlying controls of the cyber risk management program are based on recognized best practices and standards for cybersecurity and information technology, including the continuous monitoring such as National Institute of Standards and Technology ("NIST").
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Cybersecurity risks are evaluated as part of our broader enterprise risk management processes and are prioritized based on the potential impact to business operations, financial results, legal and regulatory compliance, and reputation.
Removed
We execute an NIST 800-53 review annually and use the results of existing cyber risks to prioritize projects designed to address these gaps and create a go-forward strategy. Our internal and external auditors review our IT and cybersecurity controls annually for design and operating effectiveness. Governance Our Cybersecurity Program is governed by the Company's IT, Legal, and Compliance teams.
Added
We maintain policies, procedures, and technical safeguards that are informed by recognized cybersecurity frameworks and best practices, including those published by the National Institute of Standards and Technology ("NIST"), which we use as a reference to assess and enhance our controls over time.
Removed
Our Chief Technology Officer ("CTO") has over 20 years of experience in marketing technology and analytics. Our Vice President of IT Governance, Risk and Compliance ("VP of IT") has over 20 years of experience in IT internal and external audits, IT consulting, and governance, risk, and compliance.
Added
We periodically evaluate cybersecurity risks and control effectiveness through risk assessments, testing activities, and internal reviews, and we use the results of these activities to inform remediation efforts and cybersecurity investment decisions.
Removed
Our General Counsel regularly coordinates with the IT team on data security and compliance issues.
Added
Certain information technology and cybersecurity controls are subject to review by internal audit and external auditors as part of their respective audit activities, including reviews related to internal control over financial reporting and information security practices, as applicable. Governance Oversight of cybersecurity risk is managed through a cross-functional governance structure involving our information technology, compliance, and legal functions.
Removed
The CTO and General Counsel report directly to the Chief Executive Officer ("CEO"), so any material issues are raised to the CEO, and a status update of key cybersecurity projects and any material breaches is provided quarterly to the Board's Audit Committee, which includes both an internal and external audit.
Added
These teams are responsible for the day-to-day management of our cybersecurity program, including risk assessments, control implementation, and incident response preparedness. Corporate counsel and external legal advisors work closely with management on data security, privacy, and regulatory compliance matters. Day-to-day responsibility for cybersecurity operations is delegated to senior information technology leadership, with cross-functional coordination among compliance and legal teams.
Removed
Incident Disclosure and Materiality Our incident management procedures include identification, evaluation, definition, and escalation based on the determination of materiality. This determination involves the Company's IT, Legal, and Compliance teams, executive officers, and cyber insurance provider. Breach notifications and escalation to the Audit Committee would also be based on the materiality determination.
Added
Management provides quarterly updates to the Audit Committee of the Board of Directors regarding cybersecurity risks, initiatives, and incidents, if any. The Audit Committee oversees cybersecurity risk as part of its broader oversight of enterprise risk management and receives information designed to enable informed oversight, including updates on significant cybersecurity initiatives, risk trends, and any material incidents.
Removed
The collaboration among IT, Legal, and Compliance helps ensure and prevent gaps with laws and regulations. Each quarter, the VP of IT provides an update on key cybersecurity projects and any material breaches at the quarterly Audit Committee meeting, at which both the internal and external auditors are present.
Added
Incident Disclosure and Materiality We maintain incident response and escalation procedures designed to enable timely identification, assessment, containment, and remediation of cybersecurity incidents. The determination of whether a cybersecurity incident is material for disclosure purposes is made by management based on a cross-functional assessment that includes representatives from information technology, compliance, corporate counsel, executive leadership, and external advisors, as appropriate.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties. Our headquarters are located at 300 Vesey Street, 9 th Floor, New York, NY 10282, where we lease 42,685 square feet of office space under an 84-month sublease, which is scheduled to terminate on November 7, 2025.
Biggest changeItem 2. Properties. Our headquarters are located at 300 Vesey Street, 9 th Floor, New York, NY 10282, where we lease 17,928 square feet of office space, which is scheduled to terminate on April 14, 2029.
Our AdParlor business operates out of a shared co-working space located at 200 Bay Street, North Tower Suite 1200, Toronto, Ontario M5J 2J2, Canada under a 12-month lease, effective as of August 1, 2024. We believe our present facilities are suitable and adequate for our current operating needs. 19 Table of Contents
Our AdParlor business operates out of a shared co-working space located at 200 Bay Street, North Tower Suite 1200, Toronto, Ontario M5J 2J2, Canada under a 12-month lease, effective as of August 1, 2025. We believe our present facilities are suitable and adequate for our current operating needs. 20 Table of Contents

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeCertain Legal Matters On January 28, 2020, the Company received a Civil Investigative Demand from the Federal Trade Commission ("FTC") regarding compliance with the FTC Act and the Telemarketing Sales Rule. On May 26, 2023, the Company agreed to the terms of a Stipulated Order for Permanent Injunction, Monetary Judgment, Civil Penalty Judgment, and Other Relief (the "FTC Consent Order").
Biggest changeCertain Legal Matters On January 28, 2020, the Company received a Civil Investigative Demand from the Federal Trade Commission ("FTC") regarding compliance with the FTC Act and the Telemarketing Sales Rule.
Item 3. Legal Proceedings. Other than as disclosed below under "Certain Legal Matters," the Company is not currently a party to any legal proceeding, investigation or claim which, in the opinion of the management, is likely to have a material adverse effect on our business, financial condition, results of operations or cash flows.
Item 3. Legal Proceedings. Other than as disclosed below under "Certain Legal Matters," the Company is not currently a party to any legal proceeding, investigation or claim which, in the opinion of management, is likely to have a material adverse effect on our business, financial condition, results of operations or cash flows.
On July 17, 2023, the FTC and the Company filed a Joint Motion for Entry of Proposed Stipulated Order in the United States District Court for the Southern District of Florida. The FTC Consent Order was entered by the Court on August 11, 2023, and the escrow funds were released on August 15, 2023.
On July 17, 2023, the FTC and the Company filed a Joint Motion for Entry of Proposed Stipulated Order (the "FTC Consent Order") in the United States District Court for the Southern District of Florida. The FTC Consent Order was entered by the Court on August 11, 2023, and the escrow funds were released on August 15, 2023.
To satisfy its obligations under the Berman Settlement Agreement, the Company made a cash payment of $1.1 million on March 15, 2024 and issued a junior secured promissory note in the principal amount of $2.0 million payable to the co-defendant, Freedom Debt Relief, LLC. Item 4. Mine Safety Disclosures. Not Applicable. 20 Table of Contents PART II
To satisfy its obligations under the Berman Settlement Agreement, the Company made a cash payment of $1.1 million on March 15, 2024 and issued a junior secured promissory note in the principal amount of $2.0 million payable to the co-defendant, Freedom Debt Relief, LLC. Item 4. Mine Safety Disclosures. Not Applicable. 21 Table of Contents PART II
Legal fees associated with such legal proceedings are expensed as incurred. We review legal proceedings and claims on an ongoing basis and follow appropriate accounting guidance, including FASB Accounting Standards Codification 450 ("ASC 450"), Contingencies , when making accrual and disclosure decisions.
Legal fees associated with such legal proceedings are expensed as incurred. We review legal proceedings and claims on an ongoing basis and follow appropriate accounting guidance, including the Financial Accounting Standards Board ("FASB") Accounting Standards Codification 450 ("ASC 450"), Contingencies , when making accrual and disclosure decisions.
We do not believe that the ultimate resolution of any such matters currently pending will have a material adverse effect on our business, financial condition, results of operations or cash flows.
In addition, we may be involved in litigation from time to time in the ordinary course of business. We do not believe that the ultimate resolution of any such matters currently pending will have a material adverse effect on our business, financial condition, results of operations or cash flows.
We do not accrue liabilities when the likelihood that the liability has been incurred is probable, but the amount cannot be reasonably estimated. In addition, we may be involved in litigation from time to time in the ordinary course of business.
We do not accrue liabilities when the likelihood that the liability has been incurred is probable, but the amount cannot be reasonably estimated. Legal proceedings and other contingencies for which no accrual has been established are disclosed to the extent required by ASC 450.
Removed
The FTC Consent Order imposed a civil penalty of $2.5 million, required additional changes to the Company's employment opportunities marketplace and programmatic advertising business, and resulted in the implementation of compliance measures across the business.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures. 20 PART II 21 Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. 21 Item 6. [Reserved]. 21 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 22 Item 7A. Quantitative and Qualitative Disclosures About Market Risk. 35 Item 8.
Biggest changeItem 4. Mine Safety Disclosures. 21 PART II 22 Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. 22 Item 6. [Reserved]. 22 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 23 Item 7A. Quantitative and Qualitative Disclosures About Market Risk. 36 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeDividend Policy During our fiscal year ended December 31, 2024, we paid no dividends and made no other distributions in respect of our common stock. We have no plans to pay any cash dividends or make any other cash distributions in the foreseeable future.
Biggest changeDividend Policy During our fiscal year ended December 31, 2025, we paid no dividends and made no other distributions in respect of our common stock. We have no plans to pay any cash dividends or make any other cash distributions in the foreseeable future. Issuer Purchases of Equity Securities None.
Market Information On October 5, 2023, we applied to transfer the listing of our common stock to The Nasdaq Capital Market ("Nasdaq") under the symbol "FLNT." Prior to such time, our common stock traded on The Nasdaq Global Market under the symbols "FLNT" and "COGT." Stockholders As of March 27, 2025, there were 228 record holders of our common stock.
Market Information On October 5, 2023, we applied to transfer the listing of our common stock to The Nasdaq Capital Market ("Nasdaq") under the symbol "FLNT." Prior to such time, our common stock traded on The Nasdaq Global Market under the symbols "FLNT" and "COGT." Stockholders As of March 26 , 2026, there were 274 record holders of our common stock.
Removed
Our Credit Agreement prohibits us from paying dividends on our equity securities, other than dividends on common stock which accrue (but are not paid in cash) or are paid in kind, or dividends on preferred stock which accrue (but are not paid in cash) or are paid in kind. Issuer Purchases of Equity Securities None.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe following tables show our results of operations for the periods presented and express the relationship of certain line items as a percentage of revenue for those respective periods: Year Ended December 31, (in thousands) 2024 2023 Revenue $ 254,623 100 % $ 298,399 100 % Costs and expenses: Cost of revenue (exclusive of depreciation and amortization) 193,821 76.1 219,884 73.7 Sales and marketing 17,317 6.8 18,576 6.2 Product development 17,281 6.8 18,454 6.2 General and administrative 37,697 14.8 35,334 11.8 Depreciation and amortization 9,926 3.9 10,876 3.6 Goodwill impairment and impairment of intangible assets 2,241 0.9 55,405 18.6 Total costs and expenses 278,283 109.3 358,529 120.2 Loss from operations (23,660 ) (9.3 ) (60,130 ) (20.2 ) Interest expense, net (4,749 ) (1.9 ) (3,204 ) (1.1 ) Fair value adjustment of Convertible Notes, with related parties (1,670 ) (0.7 ) — — Loss on early extinguishment of debt (1,009 ) (0.4 ) — — Loss before income taxes (31,088 ) (12.2 ) (63,334 ) (21.2 ) Income tax benefit 1,811 — 116 — Net loss $ (29,277 ) (11.5 ) $ (63,218 ) (21.2 ) 26 Table of Contents Year ended December 31, 2024 compared to year ended December 31, 2023 Revenue.
Biggest changeGross profit (exclusive of depreciation and amortization) was positively affected in 2025 by a one-time non-media revenue adjustment of $4.3 million in connection with the early termination settlement agreement as described above. • Media margin decreased 21% to $57.6 million, representing 27.6% of revenue for the year ended December 31, 2025, from $72.5 million, representing 28.5% of revenue for the year ended December 31, 2024. • Adjusted EBITDA was negative $9.0 million, compared to negative $5.6 million. • Adjusted net loss was $21.8 million, or $0.84 per share, compared to $18.5 million, or $1.14 per share. 27 Table of Contents The following tables show our results of operations for the periods presented and express the relationship of certain line items as a percentage of revenue for those respective periods: Year Ended December 31, (in thousands) 2025 2024 Revenue $ 208,764 100 % $ 254,623 100 % Costs and expenses: Cost of revenue (exclusive of depreciation and amortization) 157,523 75.5 193,821 76.1 Sales and marketing 14,492 6.9 17,317 6.8 Product development 11,843 5.7 17,281 6.8 General and administrative 34,702 16.6 37,697 14.8 Depreciation and amortization 9,752 4.7 9,926 3.9 Goodwill impairment and impairment of intangible assets 774 0.4 2,241 0.9 Total costs and expenses 229,086 109.7 278,283 109.3 Loss from operations (20,322 ) (9.7 ) (23,660 ) (9.3 ) Interest expense, net (3,074 ) (1.5 ) (4,749 ) (1.9 ) Fair value adjustment of Convertible Notes, with related parties (14 ) (0.0 ) (1,670 ) (0.7 ) Loss on early extinguishment of debt (3,759 ) (1.8 ) (1,009 ) (0.4 ) Loss before income taxes (27,169 ) (13.0 ) (31,088 ) (12.2 ) Income tax benefit 2 — 1,811 — Net loss $ (27,167 ) (13.0 ) $ (29,277 ) (11.5 ) Year ended December 31, 2025 compared to year ended December 31, 2024 Revenue.
Our Commerce Media Solutions cost of revenue consists of fees and revenue share payments made to media partners for ads served on their digital properties. The increase in cost of revenue (exclusive of depreciation and amortization) in the Commerce Media Solutions was driven by increased impressions from new media partners added over the period.
Our Commerce Media Solutions cost of revenue consists of fees and revenue share payments made to media partners for ads served on their digital properties. The increase in cost of revenue (exclusive of depreciation and amortization) in Commerce Media Solutions was driven by increased impressions from new media partners added over the period.
Changes in recognition or measurement are based on factors, including but not limited to, change in known facts and circumstances, changes in tax law, and new guidance and interpretation, all of which a change in factors could result in a change in our income tax, which could materially impact our consolidated financial statements in future periods.
Changes in recognition or measurement are based on factors, including but not limited to, change in known facts and circumstances, changes in tax law, and new guidance and interpretation, all of which could result in a change in our income tax, which could materially impact our consolidated financial statements in future periods.
We may, in the future, enter into arrangements to acquire or invest in complementary businesses, services, technologies, and intellectual property rights. In order to finance such acquisitions or investments, it may be necessary for us to raise additional funds through public or private financings or draw upon our revolving facility.
We may, in the future, enter into arrangements to acquire or invest in complementary businesses, services, technologies, and intellectual property rights. In order to finance such acquisitions or investments, it may be necessary for us to raise additional funds through public or private financings or draw upon our facility.
Risk Factors — "Economic or political instability could adversely affect our business, financial condition, and results of operations," and "We are exposed to credit risks from our clients, and we may not be able to collect on amounts owed to us." for further discussion of current economic conditions.
Risk Factors — "Economic or political instability could adversely affect our business, financial condition, and results of operations," and "We are exposed to credit risk from our clients, and we may not be able to collect on amounts owed to us." for further discussion of current economic conditions.
Our owned and operated marketplaces cost of revenue (exclusive of depreciation and amortization) primarily consists of media and related costs associated with acquiring traffic from third-party publishers, digital media platforms, and influencers for our O&O Sites and fulfillment costs related to rewards earned by consumers.
Our owned and operated marketplaces cost of revenue (exclusive of depreciation and amortization) primarily consists of media and related hosting costs associated with acquiring traffic from third-party publishers, digital media platforms, and influencers for our O&O Sites and fulfillment costs related to rewards earned by consumers.
On an ongoing basis, we evaluate our estimates, including those related to revenue recognition, recoverability of the carrying amounts of goodwill and intangible assets, fair value of Convertible Notes, share-based compensation, income taxes, and contingencies.
On an ongoing basis, we evaluate our estimates, including those related to revenue recognition, recoverability of the carrying amounts of intangible assets, fair value of Convertible Notes, share-based compensation, income taxes, and contingencies.
The preparation of these consolidated financial statements requires us to make certain estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities.
GAAP. The preparation of these consolidated financial statements requires us to make certain estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities.
Factors that could cause or contribute to those differences include, but are not limited to, those discussed in the section titled "Cautionary Note Regarding Forward-Looking Statements" and in Part I, "Item 1A. Risk Factors" of this 2024 Form 10-K. Overview Fluent, Inc.
Factors that could cause or contribute to those differences include, but are not limited to, those discussed in the section titled "Cautionary Note Regarding Forward-Looking Statements" and in Part I, "Item 1A. Risk Factors" of this 2025 Form 10-K. Overview Fluent, Inc.
We differentiate ourselves from other marketing alternatives by our ability to provide clients with a cost-effective and measurable return on advertising spend ("ROAS"), a measure of profitability of sales compared to the money spent on ads, and to manage highly targeted and highly fragmented online media sources.
We differentiate ourselves from other marketing alternatives through our ability to provide clients with a cost-effective and measurable return on advertising spend ("ROAS"), a measure of profitability of sales compared to the money spent on ads, and to manage highly targeted and fragmented online media sources.
Inflation, rising interest rates, and reduced consumer confidence have caused our clients and their customers to be cautious in their spending. The full impact of these macroeconomic events and the extent to which these macro factors may impact our business, financial condition, and results of operations in the future remains uncertain.
Inflation, rising interest rates, global hostilities, and reduced consumer confidence have caused our clients and their customers to be cautious in their spending. The full impact of these macroeconomic events and the extent to which these macro factors may impact our business, financial condition, and results of operations in the future remains uncertain.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included in this Annual Report on Form 10-K ("2024 Form 10-K").
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included in this Annual Report on Form 10-K ("2025 Form 10-K").
We then applied the Black Scholes methodology to determine the conversion date stock price based on assumptions for volatility, risk free-rate, the current stock price, and term, noting that if any of these assumptions were to change driven by macro-economic factors as well as Company specific results, the impact to the fair value may be significant.
We then applied the Black Scholes methodology to determine the conversion date stock price based on assumptions for volatility, risk free-rate, the current stock price, and term, noting that if any of these assumptions were to change driven by macroeconomic factors as well as Company specific results, the impact to the fair value may be significant.
In determining whether a loss should be accrued, we evaluate, among other factors, the degree of probability and the ability to reasonably estimate the amount of any such loss. If the probability changes or the estimates used are incorrect, we may need to record adjustments to our contingencies, which could material impact on our consolidated financial statements in future periods.
In determining whether a loss should be accrued, we evaluate, among other factors, the degree of probability and the ability to reasonably estimate the amount of any such loss. If the probability changes or the estimates used are incorrect, we may need to record adjustments to our contingencies, which could materially impact our consolidated financial statements in future periods.
This 2024 Form 10-K contains certain forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from any future results expressed or implied by such forward-looking statements.
This 2025 Form 10-K contains certain forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from any future results expressed or implied by such forward-looking statements.
Since 2022, however, we have experienced challenges maintaining traffic volume to our O&O Sites, primarily due to the FTC inquiry and subsequent FTC Consent Order that mandated that we tighten our standards for media sourcing and put us at a competitive disadvantage to our competitors in the performance marketing market.
Since 2022, however, we have experienced challenges maintaining traffic volume to our O&O Sites, primarily due to the FTC inquiry and subsequent FTC Consent Order that mandated that we tighten our standards for ad serving media sourcing. This put us at a competitive disadvantage to our competitors in the performance marketing market.
("we," "us," "our," "Fluent," or the "Company") is a commerce media solutions provider connecting top-tier brands with highly engaged consumers. Leveraging diverse ad inventory, robust first-party data, and proprietary machine learning, Fluent unlocks additional revenue streams for partners and empowers advertisers to acquire their most valuable customers at scale.
("we," "us," "our," "Fluent," or the "Company") is a commerce media solutions provider connecting top-tier brands with highly engaged consumers. Leveraging diverse ad inventory, robust first-party data, and proprietary machine learning, we unlock additional revenue streams for partners and empower advertisers to acquire their most valuable customers at scale.
For more information regarding our lease obligations, refer to Note 4 of the Notes to our consolidated financial statements included in this 2024 Form 10-K.
For more information regarding our lease obligations, refer to Note 4 of the Notes to our consolidated financial statements included in this 2025 Form 10-K.
Release of some or all of the valuation allowance would result in the recognition of certain deferred tax assets and an increase in deferred tax benefit for any period in which such a release may be recorded; however, the exact timing and amount of any valuation allowance release are subject to change, depending upon the level of profitability we are able to achieve and the net deferred tax assets available.
Release of some or all of the valuation allowance would result in the recognition of certain deferred tax assets and an increase in deferred tax benefit for any period in which such a release may be recorded; however, the exact timing and amount of any valuation allowance release are subject to change depending upon the level of profitability that the Company is able to achieve and the net deferred tax assets available.
Our financial statements as of December 31, 2024 did not include any adjustments that might result from the outcome of this uncertainty.
Our financial statements as of December 31, 2025 did not include any adjustments that might result from the outcome of this uncertainty.
We sign agreements with our media partners with one to five year terms, typically remunerating them on a revenue share and/or impression basis. We also attract consumers at scale to our O&O Sites primarily through promotional offerings, through which consumers are rewarded for completing activities on our sites.
We enter into exclusive agreements with our media partners with one-to-five year terms, typically remunerating them on a revenue share and/or impression basis. We also attract consumers at scale to our O&O Sites primarily through promotional offerings, through which consumers are rewarded for completing activities on our sites.
There were changes in assets and liabilities consuming cash of $2.9 million in the current year period, as compared with sourcing cash of $0.9 million in the prior period, primarily due to ordinary-course changes in working capital, largely involving the timing of receipt of amounts owing from clients and disbursements of amounts payable to vendors .
There were changes in assets and liabilities generating cash of $7.6 million in the current year period, as compared with consuming cash of $2.9 million in the prior period, primarily due to ordinary-course changes in working capital, largely involving the timing of receipt of amounts owing from clients and disbursements of amounts payable to vendors .
We solicit our users' consent to be contacted by us and/or our advertisers via various contact methods including email, telephone, SMS/text, and push messaging.
We solicit our users' consent to be contacted by us and/or our advertisers via various channels including email, telephone, SMS/text, and push messaging.
Recently Issued Accounting Standards See Note 2, Summary of significant accounting policies, under the caption " (t) Recently issued and adopted accounting standards" in the Notes to consolidated financial statements for further information on certain accounting standards that have been adopted during 2024 or that have not yet been required to be implemented and may be applicable to our future operations. 34 Table of Contents
Recently Issued Accounting Standards See Note 2, Summary of significant accounting policies, under the caption " (r) Recently issued and adopted accounting standards" in the Notes to consolidated financial statements for further information on certain accounting standards that have been adopted during 2025 or that have not yet been required to be implemented and may be applicable to our future operations. 35 Table of Contents
Traffic acquisition costs incurred with the major digital media platforms have historically been higher than affiliate traffic sources and the mix and profitability of our media channels, strategies, and partners reflect evolving market dynamics, the impact of our Traffic Quality Initiative, and the increased compliance obligations from the FTC Consent Order.
Traffic acquisition costs incurred with the major digital media platforms have historically been higher than other traffic sources and the mix and profitability of our media channels, strategies, and partners reflect evolving market dynamics and the increased compliance obligations from the FTC Consent Order.
The industry-leading compliance measures we implemented on our O&O Sites in response to such FTC Consent Order, in addition to the TQI, continue to negatively impact our revenues and gross profit. Current Economic Conditions We are subject to risks and uncertainties caused by events with significant macroeconomic impacts.
The industry-leading compliance measures we implemented on our O&O Sites in response to such FTC Consent Order continue to negatively impact our revenues and gross profit. 24 Table of Contents Current Economic Conditions We are subject to risks and uncertainties caused by events with significant macroeconomic impacts.
Gross profit (exclusive of depreciation and amortization) represents revenue minus cost of revenue (exclusive of depreciation and amortization). Media margin is also presented as a percentage of revenue.
Gross profit (exclusive of depreciation and amortization) represents revenue minus cost of revenue, and one-time items (exclusive of depreciation and amortization). Media margin is also presented as a percentage of revenue.
Considering the slowed macro-economic environment, we continue to prioritize strategic investments that have near-term benefits to revenue while also streamlining our organization through targeted workforce reductions. 23 Table of Contents Please see " Results of Operations " below, and "Item 1A.
Considering the slowed macroeconomic environment, we continue to prioritize strategic investments that have near-term benefits to revenue while also streamlining our organization through targeted workforce reductions. Please see " Results of Operations " below, and "Item 1A.
Although past levels of cost of revenue (exclusive of depreciation and amortization) as a percentage of revenue are not indicative of future percentages in the owned and operated and Call Solutions businesses, we expect revenue share agreements in the Commerce Media Solutions to create more stability in the long-term. 27 Table of Contents Sales and marketing .
Although past levels of cost of revenue (exclusive of depreciation and amortization) as a percentage of revenue are not necessarily indicative of future percentages in the owned and operated businesses, we expect revenue share agreements in Commerce Media Solutions to create more stability in the long-term.
In connection with the first quarter 2023 reductions, we incurred $0.5 million in exit-related restructuring costs, consisting primarily of one-time termination benefits and associated costs, fully settled in cash by March 31, 2024.
In connection with the third quarter 2024 reductions, we incurred $0.5 million in exit-related restructuring costs, consisting primarily of one-time termination benefits and associated costs, fully settled in cash by March 15, 2025.
Year Ended December 31, (In thousands) 2024 2023 % Change General and administrative $ 37,697 $ 35,334 7 % For the years ended December 31, 2024 and 2023, general and administrative expense consisted mainly of employee salaries and benefits of $17.1 million and $18.5 million, professional fees of $6.3 million and $6.6 million, office overhead of $4.2 million and $4.3 million, software license and maintenance costs of $3.1 million and $2.6 million, acquisition-related costs of $2.1 million and $2.7 million, non-cash share-based compensation expense of $1.5 million and $2.6 million, restructuring and severance costs of $0.6 million and $0.3 million, and certain litigation and related costs of $0.0 million and a credit of ($6.3) million, respectively.
Year Ended December 31, (In thousands) 2025 2024 % Change General and administrative $ 34,702 $ 37,697 (8 %) For the years ended December 31, 2025 and 2024 , general and administrative expense consisted mainly of employee salaries and benefits of $15.3 million and $17.1 million, professional fees of $6.6 million and $6.3 million, office overhead of $3.7 million and $4.2 million, software license and maintenance costs of $3.2 million and $3.1 million, non-cash share-based compensation expense of $1.4 million and $1.5 million, acquisition-related costs of $1.1 million and $2.1 million, restructuring and severance costs of $0.8 million and $0.6 million and certain litigation and related costs of $0.3 million and $0.0 million, respectively.
We are predominantly paid on a negotiated or market-driven "per click," "per lead," or other "per action" basis that aligns with the customer acquisition cost targets of our clients.
We are predominantly compensated on a negotiated or market-driven "per click," "per lead," or other "per action" basis aligned with the customer acquisition cost targets of our clients.
To confront these headwinds, we are continuing to invest in securing additional media partners for our Commerce Media Solutions marketplace and by diversifying our client base. We also continue to develop our "ROAS program" across additional segments of advertisers in an effort to gain additional allocations and pricing increases to further improve our user monetization.
In response to these conditions, we are continuing to invest in securing additional media partners for Commerce Media Solutions and by diversifying our client base. We also continue to develop ROAS-focused initiatives across additional segments of advertisers in an effort to gain additional allocations and pricing increases to further improve our user monetization.
As new users register and engage with our sites and existing registrants re-engage, the enrichment of our database expands our addressable advertiser client base and improves the effectiveness of our performance-based campaigns. Since our inception, we have amassed a large, proprietary database of first-party, self-declared user information and preferences.
As new users register and existing registrants re-engage, our database is enriched and improves the effectiveness of our performance-based campaigns, thus expanding our addressable advertiser client base. Since inception, we have amassed a large, proprietary database of first-party, self-declared user information and preferences.
Liquidity and Capital Resources Cash flows and liquidity position Cash flows (used in) provided by operating activities . For the years ended December 31, 2024 and 2023, net cash used in operating activities was $14.1 million, compared to net cash provided by operating activities of $8.1 million, respectively.
Liquidity and Capital Resources Cash flows and liquidity position Cash flows used in operating activities . For the years ended December 31, 2025 and 2024, net cash used in operating activities was $1.5 million, compared to net cash used in operating activities of $14.1 million, respectively.
Year Ended December 31, (In thousands) 2024 2023 % Change Product development $ 17,281 $ 18,454 (6 %) For the years ended December 31, 2024 and 2023, product development expense consisted primarily of employee salaries and benefits of $12.7 million and $13.6 million, professional fees of $1.6 million and $1.7 million, software license and maintenance costs of $1.5 million and $1.9 million, restructuring and severance costs of $0.7 million and $0.1 million, and non-cash share-based compensation expense of $0.2 million and $0.6 million, respectively.
Year Ended December 31, (In thousands) 2025 2024 % Change Product development $ 11,843 $ 17,281 (31 %) For the years ended December 31, 2025 and 2024 , product development expense consisted primarily of employee salaries and benefits of $8.3 million and $12.7 million, software license and maintenance costs of $1.4 million and $1.5 million, professional fees of $1.2 million and $1.6 million, non-cash share-based compensation expense of $0.3 million and $0.2 million and restructuring and severance costs of $0.2 million and $0.7 million, respectively.
Adjusted EBITDA is defined as net income (loss), excluding (1) income taxes, (2) interest expense, net, (3) depreciation and amortization, (4) share-based compensation expense, (5) loss on early extinguishment of debt, (6) accrued compensation expense for Put/Call Consideration, (7) goodwill impairment, (8) impairment of intangible assets, (9) loss (gain) on disposal of property and equipment, (10) fair value adjustment of Convertible Notes with related parties, (11) acquisition-related costs, (12) restructuring and other severance costs, and (13) certain litigation and other related costs.
Adjusted EBITDA is defined as net income (loss), excluding (1) income taxes, (2) interest expense, net, (3) depreciation and amortization, (4) share-based compensation expense, (5) loss on early extinguishment of debt, (6) goodwill impairment, (7) impairment of intangible assets, (8) fair value adjustment of Convertible Notes (as defined herein) with related parties, (9) acquisition-related costs, (10) restructuring and other severance costs, (11) certain litigation and other related costs, and (12) one-time items.
Net loss in the current year period of $29.3 million represents a decrease of $33.9 million, as compared with net loss of $63.2 million in the prior period.
Net loss in the current year period of $27.2 million represents a decrease of $2.1 million, as compared with net loss of $29.3 million in the prior period.
However, these efforts have not fully offset the decrease in volume to our O&O Sites and increasing costs for acquiring that traffic, and as a result we have seen lower revenue and lower gross profit in our owned and operated business.
However, these efforts have not fully offset the decrease in revenue to our O&O Sites and increasing costs for acquiring that traffic, and as a result we have seen lower revenue and lower gross profit in our O&O Sites. For more information, "Item 1A.
Our customers simultaneously receive and consume the benefits provided, as we satisfy our performance obligations. Furthermore, we elected the "right to invoice" practical expedient available within ASC 606-10-55-18 as the measure of progress, because we have a right to payment from a customer in an amount that corresponds directly with the value of the performance completed to date.
Furthermore, we elected the "right to invoice" practical expedient available within ASC 606-10-55-18 as the measure of progress, because we have a right to payment from a customer in an amount that corresponds directly with the value of the performance completed to date.
The decrease in O&O Sites media cost was largely attributable to the challenges in acquiring media due to changes in our business practices to comply with the FTC Consent Order. Such costs increased as a percentage of revenue.
The decrease in O&O Sites media cost was largely attributable to the continued challenges in acquiring media due to changes in our business practices to comply with the FTC Consent Order. Cost of revenue (exclusive of depreciation and amortization) for O&O Sites increased as a percentage of revenue.
Adjusted net income (loss) is defined as net income (loss), excluding (1) share-based compensation expense, (2) loss on early extinguishment of debt, (3) accrued compensation expense for Put/Call Consideration, (4) goodwill impairment, (5) impairment of intangible assets, (6) loss (gain) on disposal of property and equipment, (7) fair value adjustment of Convertible Notes with related parties, (8) acquisition-related costs, (9) restructuring and other severance costs, and (10) certain litigation and other related costs.
Adjusted net income (loss) is defined as net income (loss), excluding (1) share-based compensation expense, (2) loss on early extinguishment of debt, (3) goodwill impairment, (4) impairment of intangible assets, (5) fair value adjustment of Convertible Notes with related parties, (6) acquisition-related costs, (7) restructuring and other severance costs, (8) certain litigation and other related costs, and (9) one-time items.
Apart from these exit-related restructuring costs, these reductions in workforce are expected to result in corresponding reductions in future salary and benefits within sales and marketing, product development, and general and administrative expenses. 28 Table of Contents Depreciation and amortization.
Apart from these exit-related restructuring costs, these reductions in workforce have resulted in corresponding reductions in future salary and benefits within sales and marketing, product development, and general and administrative expenses. 29 Table of Contents Depreciation and amortization.
Net loss . Year Ended December 31, (In thousands) 2024 2023 % Change Net loss $ (29,277 ) $ (63,218 ) (54% ) For the years ended December 31, 2024 and 2023, net loss was $29.3 million and $63.2 million, respectively, as a result of the factors described above.
Net loss . Year Ended December 31, (In thousands) 2025 2024 % Change Net loss $ (27,167 ) $ (29,277 ) (7% ) For the years ended December 31, 2025 and 2024, net loss was $27.2 million and $29.3 million, respectively, as a result of the factors described above.
Adjustments to reconcile net loss to net cash provided by operating activities of $18.1 million in the current year period decreased by $52.3 million, as compared with $70.4 million in the prior period, primarily due to a goodwill impairment of $1.3 million and as compared to the goodwill impairment of $55.4 million in the prior period, offset by the current year period loss on the fair value adjustment of Convertible Notes of $1.7 million, loss on early extinguishment of debt of $1.0 million, and an increase in amortization of debt.
Adjustments to reconcile net loss to net cash provided by operating activities of $18.1 million in the current year period remained consistent with the $18.1 million in the prior period, primarily due to a goodwill impairment of $0.0 million as compared to the goodwill impairment of $1.3 million in the prior period and the current year period loss on the fair value adjustment of Convertible Notes of $0.0 million compared to $1.7 million in prior period, mainly offset by loss on early extinguishment of debt of $3.8 million compared to $1.0 million in the prior period.
Year Ended December 31, (In thousands) 2024 2023 % Change Income tax benefit $ 1,811 $ 116 1,461 % For the twelve months ended December 31, 2024, the effective income tax rate of 5.8% differed from the statutory federal income tax rate of 21% primarily due to losses for which no tax benefit is recognized and is fully offset with a valuation allowance, which was partly offset by the benefit of the reversal of uncertain tax positions from the prior year.
For the twelve months ended December 31, 2024, our effective income tax rate of 5.8% was primarily due to losses for which no tax benefit is recognized and is fully offset with a valuation allowance, which was partly offset by the benefit of the reversal of uncertain tax positions from the prior year.
Our material cash requirements from known contractual and other obligations consist of our term loan and obligations under operating leases for office space. For more information regarding our SLR Credit Facility, refer to Note 8 of the Notes to our consolidated financial statements included in this 2024 Form 10-K.
We have no other committed sources of capital. Our material cash requirements from known contractual and other obligations consist of our term loan and obligations under operating leases for office space. For more information regarding our Financing Agreement, refer to Note 8 of the Notes to our consolidated financial statements included in this 2025 Form 10-K.
Since the beginning of 2024, we have delivered data and performance-based customer acquisition services for over 500 consumer brands, direct marketers, and agencies across a wide range of industries, including Media & Entertainment, Financial Products & Services, Health & Life Sciences, Retail & Consumer, and Staffing & Recruitment.
In 2025, we delivered data and performance-based customer acquisition services for approximately 400 consumer brands, direct marketers, and agencies across a wide range of industries, including Media & Entertainment, Financial Products & Services, Health & Life Sciences, Retail & Consumer, and Staffing & Recruitment.
In 2023, we launched our Commerce Media Solutions business to access additional high value consumers for our advertiser clients and help media owners and ecommerce businesses generate additional revenue from their existing consumer traffic.
Risk Factors — Risks Relating to Our Business - Risks Related to Our Owned and Operated Media Properties". In 2023, we launched our Commerce Media Solutions business to access additional high-value consumers for our advertiser clients and help media owners and e-commerce businesses generate additional revenue from their existing consumer traffic.
When registering on our sites, consumers provide their name, contact information, and opt-in permission for telemarketing and email marketing. Approximately 90% of these users engage with our media on their mobile devices or tablets.
Upon registration, consumers provide their name, contact information, and opt-in consent for telemarketing and email marketing. Over 90% of these users engage with our media on their mobile devices or tablets.
Once users have registered on our sites, we integrate our proprietary direct marketing technologies and analytics to engage them with surveys, polls, and other experiences, through which we learn about their lifestyles, preferences, and purchasing histories, among other matters. Based on these insights, we serve users targeted, relevant offers on behalf of our clients.
Once users have registered consumers are engaged through our proprietary direct marketing technologies and analytics with surveys, polls, and other experiences, through which we capture information about their lifestyles, preferences, and purchasing histories, among other attributes. Based on these insights, we serve users targeted, relevant offers on behalf of our clients.
Year Ended December 31, (In thousands) 2024 2023 % Change Loss on early extinguishment of debt $ 1,009 $ — 100 % The change was due to a $1.0 million loss on early extinguishment of debt related to the Citizens Credit Agreement on April 2, 2024 due on September 30, 2025, as compared to no loss on debt extinguishment in the prior year.
Year Ended December 31, (In thousands) 2025 2024 % Change Loss on early extinguishment of debt $ 3,759 $ 1,009 273 % The increase was due to a $3.8 million loss on early extinguishment of debt related to the SLR Credit Facility on November 25, 2025 due on April 2, 2029, as compared to a $1.0 million loss on debt extinguishment related to the Citizens Credit Agreement on April 2, 2024 due on September 30, 2025 in the prior year.
Year Ended December 31, (In thousands) 2024 2023 % Change Sales and marketing $ 17,317 $ 18,576 (7 %) For the years ended December 31, 2024 and 2023, sales and marketing expense consisted primarily of employee salaries and benefits of $14.8 million and $15.8 million, restructuring costs of $0.6 million and $0.1 million, advertising costs of $0.6 million and $0.9 million, professional fees of $0.5 million and $0.4 million, travel and entertainment expense of $0.4 million and $0.4 million, and non-cash share-based compensation expense of $0.2 million and $0.5 million, respectively.
Year Ended December 31, (In thousands) 2025 2024 % Change Sales and marketing $ 14,492 $ 17,317 (16 %) For the years ended December 31, 2025 and 2024, sales and marketing expense consisted primarily of employee salaries and ben efits of $11.4 million and $14.8 million, restructuring costs of $0.4 million and $0.6 million, advertising costs of $1.0 million and $0.6 million, professional fees of $0.6 million and $0.5 million, travel and entertainment expense of $0.3 million and $0.4 million, and non-cash share-based compensation expense of $0.5 million and $0.2 million, r espectively.
The exit-related restructuring costs are expected to be approximately $1.3 million, consisting primarily of one-time termination benefits and associated costs, to be fully settled in cash by March 31, 2026.
In connection with the first quarter of 2025 reductions, we incurred $1.3 million in exit-related restructuring costs, consisting primarily of one-time termination benefits and associated costs, to be fully settled in cash by March 31, 2026.
The decrease in owned and operated marketplaces revenue was primarily attributable to a challenging macro-economic environment and a decrease in media supply resulting from changes in our business practices to comply with the FTC Consent Order, which drove a reduction in spend from key clients in the Media & Entertainment and Staffing & Recruitment sectors.
T he decrease in owned and operated marketplaces revenue was mainly attributable to a decrease in media supply resulting from changes in our business practices to comply with the FTC Consent Order, which drove a reduction in spend from key clients across a variety of sectors.
The decrease was primarily due to a decline in salaries driven by lower headcount and lower spend on IT-related vendors and a decline in non-cash share-based compensation due to lower grants, partly offset by an increase in restructuring and severance costs in the current year period due to the reductions in workforce, as described below. General and administrative.
The decrease was primarily due to a decline in salaries driven by lower headcount and lower spend on IT-related vendors, and a decline in restructuring and severance costs as a result of the prior year period reductions in workforce, as described below. General and administrative.
We consider items one-time in nature if they are non-recurring, infrequent or unusual and have not occurred in the past two years or are not expected to recur in the next two years, in accordance with SEC rules.
Adjusted net income (loss) is also presented on a per share (basic and diluted) basis. We consider items one-time in nature if they are non-recurring, infrequent or unusual and have not occurred in the past two years or are not expected to recur in the next two years, in accordance with SEC rules.
Further, they are not financial measures of profitability and are neither intended to be used as a proxy for the profitability of our business nor to imply profitability.
Accordingly, these metrics are not indicative of our overall results or indicators of past or future financial performance. Further, they are not financial measures of profitability and are neither intended to be used as a proxy for the profitability of our business nor to imply profitability.
The decrease was primarily due to lower salaries and other employee related costs driven by a decline in headcount and lower non-cash share-based compensation as a result of lower grants, partly offset by an increase in restructuring costs driven by the current year reductions in workforce, as described below. Product development.
The decrease was primarily due to lower salaries and other employee-related costs driven by a decline in headcount, partly offset by an increase in advertising costs as a result of attending more conferences and seminars to grow Commerce Media Solutions and non-cash share-based compensation as a result of new grants. Product development.
Year Ended December 31, (In thousands) 2024 2023 % Change Fair value adjustment of Convertible Notes, with related parties $ 1,670 $ — 100 % The change was due to a $1.7 million unrealized loss related to the fair value of Convertible Notes entered into in the current year as compared to none in the prior year.
Year Ended December 31, (In thousands) 2025 2024 % Change Fair value adjustment of Convertible Notes, with related parties $ 14 $ 1,670 (99 %) The decrease was due to a nominal unrealized loss related to the fair value of Convertible Notes entered into in the current year as compared to the prior year, generally due to the change in share price within those periods.
Cash flows used in investing activities . For the years ended December 31, 2024 and 2023, net cash used in investing activities was $6.2 million and $7.1 million, respectively. The decrease was mainly due to the impact of the 2023 TAPP consolidation, compared to the increase in investment in capitalized software in the current year period.
Cash flows used in investing activities . For the years ended December 31, 2025 and 2024, net cash used in investing activities was $6.4 million and $6.2 million, respectively. The slight increase was mainly due to the increase in investment in capitalized software in the current year period. Cash flows provided by financing activities .
Adjusted net income (loss) is also presented on a per share (basic and diluted) basis. Below is a reconciliation of media margin from gross profit (exclusive of depreciation and amortization), which we believe is the most directly comparable U.S.
Below is a reconciliation of media margin from gross profit (exclusive of depreciation and amortization), which we believe is the most directly comparable U.S.
Year Ended December 31, (In thousands) 2024 2023 % Change Cost of revenue (exclusive of depreciation and amortization) $ 193,821 $ 219,884 (12 %) For the year ended December 31, 2024 and 2023, cost of revenue (exclusive of depreciation and amortization) consisted mainly of owned and operated media and fulfillment costs of $130.6 million and $173.6 million, Commerce Media Solutions media cost of $27.0 million and $9.9 million, media and enablement costs related to our other revenue streams of $31.8 million and $32.5 million, and indirect costs of revenue of $4.4 million and $3.9 million, respectively.
Year Ended December 31, (In thousands) 2025 2024 % Change Cost of revenue (exclusive of depreciation and amortization) $ 157,523 $ 193,821 (19 %) For the year ended December 31, 2025 and 2024, cost of revenue (exclusive of depreciation and amortization) consisted of owned and operated media, fulfillment, and hosting costs of $74.5 million and $130.6 million, Commerce Media Solutions media, fulfillment, and hosting costs of $61.2 million and $27.0 million, and media hosting and other costs related to our other revenue streams of $21.8 million and $36.2 million , respectively.
For the year ended December 31, 2024, O&O Sites digital media spend continued to be a mix of affiliate traffic, paid media from major digital platforms, influencer activations, and inventory from strategic media partners.
In the normal course of executing paid media campaigns to source consumer traffic for our O&O Sites, we regularly evaluate new channels, strategies, and partners. For the year ended December 31, 2025, O&O Sites digital media spend continued to be a mix of affiliate traffic, paid media from major digital platforms, influencer activations, and inventory from strategic media partners.
We operate our Commerce Media Solutions on partner sites and mobile apps where we embed our proprietary ad-serving technology to identify and acquire consumers for our advertiser clients. Our technology is integrated at key moments in the consumer experience to capitalize on high engagement and improve conversion.
We operate our Commerce Media Solutions on partner sites and mobile apps where we embed our proprietary ad-serving technology to identify and acquire consumers for our advertiser clients.
Loss before income taxes . Year Ended December 31, (In thousands) 2024 2023 % Change Loss before income taxes $ (31,088 ) $ (63,334 ) (51 %) The decrease in loss before income taxes of $32.2 million was a result of the foregoing. 29 Table of Contents Income tax benefit.
Loss before income taxes . Year Ended December 31, (In thousands) 2025 2024 % Change Loss before income taxes $ (27,169 ) $ (31,088 ) (13% ) The decrease in loss before income taxes of $3.9 million was a result of the foregoing. 30 Table of Contents Income tax (loss) benefit.
If our current plans are not successful, we may need to consider other strategic alternatives, including restructuring or refinancing our debt, seeking additional equity or debt financing, reducing or delaying our business activities and strategic initiatives, selling assets, and other strategic transactions and/or other measures. See Item 1A.
If our expected facility becomes limited by the lender or our business does not perform to expectations, we may need to consider other strategic alternatives, including seeking additional equity or debt financing, reducing or delaying our business activities and strategic initiatives, selling assets, or other measures. See Item 1A.
Cash flows provided by (used in) financing activities . For the years ended December 31, 2024 and 2023, net cash provided by financing activities was $15.2 million for the current year period, compared to net cash used in financing activities of $10.8 million in the prior period, respectively.
For the years ended December 31, 2025 and 2024, net cash provided by financing activities was $10.8 million and $15.2 million, respectively.
Year Ended December 31, (In thousands) 2024 2023 % Change Revenue $ 254,623 $ 298,399 (15 %) For the year ended December 31, 2024 and 2023, revenue was comprised of owned and operated marketplaces of $168.4 million and $235.7 million, Commerce Media Solutions of $41.3 million and $10.7 million, and other streams of $44.9 million and $52.0 million, respectively.
Year Ended December 31, (In thousands) 2025 2024 % Change Revenue $ 208,764 $ 254,623 (18 %) For the year ended December 31, 2025 and 2024, revenue w as comprised of owned and operated marketplaces of $94.5 million and $168.4 million, Commerce Media Solutions of $82.3 million and $41.3 million, and other streams of $32.0 million and $44.9 million, respectively.
As the timeframe of the policy is expected to be greater than a year, a re-assessment of the estimated LTV based on updated data due to experience, industry changes, and/or commission rate changes, could result in an increase or decrease in revenue and corresponding asset in the period the change is made, and materially impact our consolidated financial statements.
As the timeframe of the policy is expected to be greater than a year, a re-assessment of the estimated LTV based on updated data due to experience, industry changes, and/or commission rate changes, could result in an increase or decrease in revenue and corresponding asset in the period the change is made, and materially impact our consolidated financial statements. 34 Table of Contents Convertible Notes, at fair value with related parties We evaluated the terms of our Convertible Notes to determine whether the debt instrument contained an embedded derivative, and therefore a hybrid instrument, in which then the fair value option can be elected.
For example, our post-transaction solution connects our advertisers to consumers on e-commerce websites and apps after a purchase or similar transaction. These syndicated Commerce Media Solutions generate meaningful income for our media partners, while driving high-quality customer acquisition for our advertiser clients.
Our technology is integrated at key moments in the consumer experience to capitalize on high engagement and improve conversion; for example, our post-transaction solution connects advertisers to consumers on e-commerce websites and apps after a purchase or similar transaction. Commerce Media Solutions generates meaningful revenue for our media partners, while driving high-quality customer acquisition for our advertiser clients.
If we do not meet the conditions to draw, or additional financing is not accessible from outside sources, we may not be able to raise additional capital on terms acceptable to us, or at all. If we are unable to raise additional capital when desired, our business, results of operations, and financial condition would be adversely affected.
However, if we do not meet the conditions to draw on the facility, or additional financing is not accessible from outside sources, we may not be able to raise additional capital on terms acceptable to us, or at all.
GAAP measure: Year Ended December 31, (In thousands, except percentages) 2024 2023 Revenue $ 254,623 $ 298,399 Less: Cost of revenue (exclusive of depreciation and amortization) 193,821 219,884 Gross Profit (exclusive of depreciation and amortization) $ 60,802 $ 78,515 Gross Profit (exclusive of depreciation and amortization) % of revenue 24 % 26 % Non-media cost of revenue (1) 11,710 12,785 Media margin $ 72,512 $ 91,300 Media margin % of revenue 28.5 % 30.6 % (1) Represents the portion of cost of revenue (exclusive of depreciation and amortization) not attributable to variable costs paid for media and related expenses.
GAAP measure: Year Ended December 31, (In thousands, except percentages) 2025 2024 Revenue $ 208,764 $ 254,623 Less: Cost of revenue (exclusive of depreciation and amortization) 157,523 193,821 Gross Profit (exclusive of depreciation and amortization) $ 51,241 $ 60,802 Gross Profit (exclusive of depreciation and amortization) % of revenue 25 % 24 % Non-media cost of revenue (1) 10,608 11,710 One- time item (2) (4,254 ) — Media margin $ 57,595 $ 72,512 Media margin % of revenue 27.6 % 28.5 % (1) Represents the portion of cost of revenue (exclusive of depreciation and amortization) not attributable to variable costs paid for media and related expenses.
Based upon the foregoing and uncertainty of our ability to satisfy covenants in the SLR Credit Agreement (see "SLR Credit Agreement" below), management concluded that there exists a substantial doubt about our ability to continue as a going concern, and our independent registered public accounting firm included in its opinion for the year ended December 31, 2024 an explanatory paragraph expressing substantial doubt in our ability to continue as a going concern.
As a result, management has concluded that there exists a substantial doubt about our ability to continue as a going concern for one year after the date of issuance of this 2025 Form 10-K, and our independent registered public accounting firm included in its opinion for the year ended December 31, 2025 an explanatory paragraph expressing substantial doubt in our ability to continue as a going concern.
The first quarter of 2025 has continued to be characterized by tepid economic conditions and media supply uncertainty in the O&O Sites marketplaces and rising media costs in the Call Solutions business that have depressed gross profit in recent quarters.
We observed an expansion in gross margin for Commerce Media Solutions in the third quarter of 2025 that continued through the fourth quarter of 2025. The fourth quarter of 2025 continued to be characterized by tepid economic conditions and media supply uncertainty in the O&O Sites marketplaces and rising media costs in the Call Solutions business.
We then leverage their self-declared data in our array of performance offerings primarily in two ways: (1) to serve advertisements that we believe will be relevant to users based on the information they provide when they engage on our O&O Sites or other partner sites through our commerce media marketplace and (2) to provide our clients with users' contact information so that such clients may communicate with them directly.
We leverage their self-declared data primarily in two ways: (1) to serve advertisements we believe will be relevant to users based on the information they provide on our O&O Sites and our Commerce Media Solutions, and (2) to provide clients with users' contact information for direct outreach.
We may also leverage our existing technology and database to drive new revenue streams, including utilization-based models ( e.g. , programmatic advertising). Additionally, we operate a call center-supported performance marketplace ("Call Solutions") that provides live, call-based performance campaigns to help clients increase engagement. In some cases, we have sold products and services directly on behalf of our clients.
We may also leverage our technology and database to drive non-core revenue streams, including utilization-based models ( e.g. , programmatic advertising). Additionally, we operated a call center-supported performance marketplace ("Call Solutions") that provided live, call-based performance campaigns to help clients increase customer acquisition.
On December 2, 2024, the Company issued 2,483,586 shares of common stock pursuant to a registered direct offering and issued pre-funded warrants to purchase up to 1,187,802 shares of the Company’s common stock, at a purchase price of $2.3147 per warrant. The aggregate gross proceeds totaled $8.5 million before deducting offering expenses payable by the Company.
On May 15, 2025, the Company issued (i) pre-funded warrants to purchase up to 1,829,956 shares of the Company’s common stock at a purchase price of $2.1995 per warrant and (ii) common stock warrants to purchase up to 1,829,956 shares of the Company’s common stock. The aggregate gross proceeds totaled $4.0 million before deducting offering expenses payable by the Company.
See our audited consolidated financial statements and accompanying notes thereto appearing elsewhere in this 2024 Form 10-K for further discussion and analysis of our results of operations.
GAAP, adding back income taxes, interest expense, depreciation and amortization, share-based compensation expense, and other adjustments. See our audited consolidated financial statements and accompanying notes thereto appearing elsewhere in this 2025 Form 10-K for further discussion and analysis of our results of operations.
Adjusted net income (loss), as defined above, and the related measure of adjusted net income (loss) per share exclude certain items that are recognized and recorded under U.S. GAAP in particular periods but might be viewed as not necessarily coinciding with the underlying business operations for the periods in which they are so recognized and recorded.
GAAP in particular periods but might be viewed as not necessarily coinciding with the underlying business operations for the periods in which they are so recognized and recorded. We believe adjusted net income (loss) affords investors a different view of the overall financial performance of the Company than adjusted EBITDA and the U.S. GAAP measure of net income (loss).

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeOur consolidated financial statements and the Notes thereto, together with the report thereon of our independent registered public accounting firm, are filed as part of this report, beginning on page F-1. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. Not applicable.
Biggest changeOur consolidated financial statements and the Notes thereto, together with the report thereon of our independent registered public accounting firm, are filed as part of this report, beginning on page F-1. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None.

Other FLNT 10-K year-over-year comparisons