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Fluent, Inc. (FLNT)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 revenue was $47.0M, down 27% YoY; Commerce Media Solutions (CMS) grew 81% to $18.8M and reached a >$85M annual run-rate, now 40% of total revenue .
  • GAAP net loss was $7.6M ($0.27 per share); adjusted net loss was $6.5M ($0.23 per share); adjusted EBITDA loss was $3.4M, with CMS gross margin improving 400 bps sequentially to 22% .
  • Management reiterated an inflection in Q4 2025: expecting positive adjusted EBITDA and CMS to surpass Owned & Operated (O&O) as the largest revenue contributor, supported by holiday seasonality .
  • Key catalysts: expanded ABG portfolio partnership, Databricks collaboration, and new enterprise wins like Dick’s Sporting Goods; momentum tempered by late partner onboarding and advertiser pricing/budget pullbacks late in Q3 .

What Went Well and What Went Wrong

What Went Well

  • CMS revenue grew 81% YoY to $18.8M and rose to 40% of total revenue; annual run-rate exceeded $85M, with gross margin up to 22% (+400 bps QoQ) .
  • Partnership momentum: expanded ABG portfolio (Reebok, Vince Camuto, Volcom, Champion, RVCA, DC Shoes) adding “millions of annual transactions”; Databricks strengthens data collaboration; Rebuy Monetize scaled to over 1M ad unit sessions in September (+79% m/m) .
  • Strategic wins: Dick’s Sporting Goods switched from the “largest competitor” to Fluent in September; expected to be a top-five partner by sessions, bolstering enterprise mix and future quarters .

Management quotes:

  • “Commerce Media Solutions' annual revenue run rate now exceeds $85 million, with gross margins of 22%… sequential improvement of around 400 basis points” .
  • “We expect CMS to overtake our owned and operated business in Q4 2025 as the main driver of consolidated revenue” .
  • “Winning Authentic Brands… was a conquest over the largest competitor in the marketplace” .

What Went Wrong

  • Consolidated revenue fell 27% YoY to $47.0M as O&O revenue declined 52% YoY to $20.7M amidst advertising and regulatory headwinds .
  • Late-quarter onboarding of new partners reduced Q3 contribution; advertiser pricing and budget pullbacks late in Q3 further pressured results and continue into early Q4 .
  • Adjusted EBITDA loss widened YoY to -$3.4M (vs -$0.07M last year); adjusted net loss rose to $6.5M (vs $3.7M last year), reflecting mix shift investments and O&O weakness .

Financial Results

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$55.210 $44.706 $47.029
GAAP EPS (Basic & Diluted, $USD)$(0.39) $(0.30) $(0.27)
Adjusted EPS (Basic, $USD)$(0.31) $(0.24) $(0.23)
Gross Profit ($USD Millions, ex-D&A)$11.435 $10.280 $10.874
Gross Profit Margin (%)21% 23% 23%
Media Margin ($USD Millions)$13.731 $11.943 $12.797
Media Margin (%)24.9% 26.7% 27%
Adjusted EBITDA ($USD Millions)$(3.084) $(2.773) $(3.367)

Segment breakdown:

Segment MetricQ1 2025Q2 2025Q3 2025
Commerce Media Solutions (CMS) Revenue ($USD Millions)$12.660 $16.080 $18.808
CMS Gross Profit Margin (%)22% 18% 22%
CMS Media Margin ($USD Millions)$3.111 $3.217 $4.611
O&O Revenue ($USD Millions)$31.1 $21.4 $20.7
CMS % of Total Revenue23% 36% 40%
CMS Annual Run-Rate ($USD Millions)>$65 >$80 >$85

Vs. Wall Street estimates (S&P Global):

MetricQ1 2025 EstimateQ1 2025 ActualQ2 2025 EstimateQ2 2025 ActualQ3 2025 EstimateQ3 2025 Actual
Revenue ($USD)$57,293,000*$55,210,000 $52,690,500*$44,706,000 $52,919,500*$47,029,000
Primary EPS (Normalized, $USD)$(0.325)*$(0.31)*$(0.285)*$(0.24)*$(0.135)*$(0.23)*

Values retrieved from S&P Global.*

Highlights:

  • Q3 Revenue: Miss vs. $52.9M estimate (actual $47.0M) — bold miss; EPS normalized: Miss vs. $(0.135) (actual $(0.23)) — bold miss.*
  • Q2 Revenue: Miss vs. $52.7M; EPS normalized: Beat (less negative than expected) — bold beat.*
  • Q1 Revenue: Slight miss vs. $57.3M; EPS normalized: Beat (less negative) — bold beat.*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EBITDAQ4 2025Expect positive adjusted EBITDA in Q4 2025 Expect positive adjusted EBITDA in Q4 2025 Maintained
Consolidated Revenue GrowthFY 2026Double-digit YoY revenue growth in 2026 Double-digit YoY revenue growth in 2026 Maintained
Adjusted EBITDA ProfitabilityFY 2026Full-year adjusted EBITDA profitability in 2026 Full-year adjusted EBITDA profitability in 2026 Maintained
CMS Gross Margin TargetOngoingReturn to “high twenties” over time 22% in Q3 (+400 bps QoQ); returning to “high 20s” over time Progressing (maintained target)
CMS Share of RevenueQ4 2025CMS to be majority contributor in H2 2025 CMS expected to surpass O&O in Q4 2025 Clarified (specific quarter)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
CMS Scale & Mix ShiftCMS run-rate >$65M; CMS 23% of revenue; Rebuy partnership launched CMS run-rate >$85M; 40% of revenue; expected to overtake O&O in Q4 Accelerating shift to CMS
Margins & PricingQ2 CMS margins compressed due to flexible pricing and new placements; target high-20s over time CMS gross margin improved to 22% (+400 bps QoQ); aiming for high-20s Sequential improvement
Data/AI InitiativesPlan to leverage AI and first-party data to improve monetization Databricks partnership to expand data collaboration; leadership hire to scale capabilities Building capabilities
Partnerships/Go-to-MarketRebuy Ads powered by Fluent launched (Shopify channel) Expanded ABG portfolio; Rebuy sessions >1M in Sept; Dick’s win from competitor Broadening network; enterprise wins
Macro/TariffsRisk factor disclosures (tariff impacts) Advertiser pricing/budget pullbacks late Q3 tied to industry-specific issues; ongoing into early Q4 Near-term headwind
Regulatory/LegalFTC constraints impacting O&O media supply O&O stabilization sequentially; FTC impacts persist Stabilizing but constrained
O&O TrajectoryDeclines ongoing (Q1-Q2) -3% sequential change Q2→Q3 noted; similar trend expected in Q4 Stabilizing sequentially

Management Commentary

  • “We expect to achieve adjusted EBITDA profitability in the fourth quarter of 2025, as well as full-year double-digit consolidated revenue growth and full-year adjusted EBITDA profitability in 2026” .
  • “Some new partner wins launched… later in the quarter than anticipated… and we saw some advertiser pricing and budget pullback in the later part of Q3” .
  • “Our partnership with Databricks allows us to enhance and expand our data collaboration capabilities” .
  • “Rebuy Monetize… saw more than one million ad unit sessions in September alone, representing a 79% increase month-over-month” .
  • “Dick’s… ran an RFP… selected the largest competitor in 2024… came back to us… conversion took place in September… will be a top five partner” .

Q&A Highlights

  • Rebuy and Shopify channel: Early days but rapidly scaling; efficient access to >12,000 merchants; ad load tuned to consumer experience; expansion into pre-checkout placements planned for 2026 .
  • Advertiser pullbacks: Late-Q3 pricing/budget reductions were advertiser/industry-specific; macro volatility and tariffs caused short-term conservatism; Fluent offset with proprietary demand from O&O advertisers entering CMS (>40% of Q3 monetization) .
  • Margin trajectory: Expect continued sequential improvement Q3→Q4; normalization to high-20s as incentives roll off and enterprise mix grows; channel partnerships like Rebuy carry lower margins but scale .
  • O&O stabilization: Sequential decline narrowed (-3% Q2→Q3); ongoing FTC headwinds, but convergence strategy supports stabilization .
  • Guidance clarification: Q4 2025 adjusted EBITDA positive; 2026 full-year adjusted EBITDA positive and double-digit revenue growth; no claim of 2025 full-year profitability .

Estimates Context

  • Q3: Revenue missed ($47.0M vs $52.9M*); Primary EPS missed ($(0.23)* vs $(0.135)*) — driven by late partner launches and advertiser pricing/budget pullbacks .
  • Q2: Revenue missed; Primary EPS beat (less negative than expected) — reflecting cost control and media margin stability .
  • Q1: Revenue slightly missed; Primary EPS beat — CMS scaling and mix shift despite O&O headwinds .
    Values retrieved from S&P Global.*

Key Takeaways for Investors

  • CMS is the growth engine: run-rate progressed from >$65M (Q1) to >$80M (Q2) to >$85M (Q3), now 40% of revenue; expected to surpass O&O in Q4 — a structural mix inflection .
  • Margin normalization underway: CMS gross margin improved to 22% (+400 bps QoQ) with a path back to high-20s as incentives roll off and enterprise mix expands .
  • Near-term setup: Management targets positive adjusted EBITDA in Q4 2025; holiday seasonality and new enterprise wins (e.g., Dick’s) support the setup .
  • Partnership flywheel: ABG portfolio expansion and Databricks collaboration enhance supply and data capabilities; Rebuy scales Shopify channel reach and session volume .
  • O&O: Still declining YoY but stabilizing sequentially; convergence strategy turns O&O advertisers into proprietary demand for CMS, aiding resilience .
  • Risk checks: Advertiser-specific pullbacks and tariff-related uncertainty remain near-term headwinds; FTC constraints continue to affect O&O .
  • Actionable: Expect estimate revisions to reflect lower near-term revenue and EPS for Q3, but anticipate upward bias to margin/EBITDA trajectory for Q4 and 2026 if CMS mix shift and enterprise wins continue.*
All non-estimate financial data and quotes sourced from FLNT’s Q3 2025 8-K press release and earnings call transcript. 
Estimates and consensus figures marked with * are retrieved from S&P Global.