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The call highlights a clear and accelerating strategic shift toward Commerce Media, with strong top-line growth (Commerce Media +104% YoY), improving media margins, meaningful new partnerships and improved operating cash flow and net-debt reduction. However, the company is still in transition: consolidated revenue declined (largely due to divestiture), owned & operated revenue contracted sharply (-49% YoY), consolidated gross profit is down, adjusted EBITDA remains negative and Q1 is seasonally weak. Management is confident in mid-year acceleration and margin recovery as incentives roll off and adjacencies scale, but results depend on execution and second-half seasonality. Overall, the positives around Commerce Media traction and cash/debt improvements are balanced by ongoing profitability and structural challenges in the owned & operated business.
Fluent guided to double-digit year‑over‑year consolidated revenue growth in 2026 on its aggregate continuing businesses and an improvement in full‑year adjusted EBITDA, driven by Commerce Media which in Q1 generated $25.9M (up 104% YoY), represented 58% of consolidated revenue (vs. 23% in Q1 2025) and is operating at an approximate $110M annual run rate; management expects Q2 revenue to be similar to Q1 (Q1 consolidated revenue was $44.9M, down 19% YoY including the Call Solutions divestiture, and down ~3% ex‑divestiture) with improving margins, gross margins to expand as Commerce Media scale increases (Commerce Media gross profit was $5.0M, +78% YoY, and management expects its CMS gross margin to return to the mid‑20s during 2026), and the strongest seasonal performance to come in the second half of the year, all of which should drive adjusted EBITDA improvement from the Q1 adjusted EBITDA loss of ~$3.6M.
Total operating expense declined to $12.3M in Q1 2026 from $16.1M in Q1 2025. Management cites a $2.4M noncash gain from the Call Solutions divestiture plus ~$1.4M of other operating expense reductions reflecting active cost discipline.
Company has intentionally repositioned its owned & operated marketplaces as an enabler of Commerce Media; Commerce Media has moved from ~10% of revenue a year after launch (Q1 2024) to a majority of revenue (58% in Q1 2026). Management reiterates guidance for double-digit consolidated revenue growth on continuing businesses and improved adjusted EBITDA in 2026 driven by Commerce Media acceleration.
Commerce Media Solutions revenue of $25.9M in Q1 2026, up 104% year-over-year; Commerce Media now represents 58% of consolidated revenue (up from 23% in Q1 2025) and marks the ninth consecutive quarter of double- to triple-digit growth. Management reports an annualized Commerce Media revenue run rate of ~$110M.
Commerce Media gross profit was $5.0M in Q1 2026, up 78% year-over-year. Commerce Media media margin was $7.7M (30% of Commerce Media revenue). Total media margin was $14.0M (31% of consolidated revenue), up versus $13.7M or 25% in the prior year period.
Company added Wyndham Hotels and Squire (barbershop booking platform) during Q1, validating expansion beyond retail into travel and marketplace verticals; management is piloting adjacent Commerce Media solutions (ticketing, grocery, travel) to broaden addressable market and reduce seasonality.
Operating cash flow was positive $5.1M in Q1 2026 versus $2.1M in Q1 2025 (a $3.0M improvement). Accounts receivable declined to $31.8M (from $46.7M year-end), enabling a $6.3M paydown on the revolving facility and reducing net debt to $23.5M from $30.8M at year-end. Interest expense declined 31% to $605K.
Good afternoon, and welcome. Thank you for joining us to discuss Fluent's First Quarter 2026 Earnings Results. With me today are Fluent's Chief Executive Officer, Don Patrick; Chief Financial Officer, Ryan Perfit; and Chief Strategy Officer, Ryan Schulke. Our call today will begin with comments from Don Patrick and Ryan Perfit, followed by a question-and-answer session. I would like to remind you that this call is being webcast live and recorded. Additionally, there is a slide presentation that accompanies today's remarks, which can be accessed via the webcast and is also available on Fluent's website. A replay of the event will also be made available following the call on Fluent's website. To access the webcast and slide presentation, please visit the Investor Relations page at www.fluentco.com.
Before we begin, I would like to advise listeners that certain information discussed by management during the conference call will contain forward-looking statements covered under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any forward-looking statements made during this call only speaks as of the date hereof. Actual results could differ materially from those stated or implied by such forward-looking statements due to risks and uncertainties associated with the company's business. These statements may be identified by words such as expects, plans, projects, could, will, estimates and other words of similar meaning. The company undertakes no obligation to update the information provided on this call. For a discussion of the risks and uncertai...