FT Markets Data
Aiadvertising Inc

AiAdvertising Reports Second Quarter 2024 Financial Results

Momentum Across Business Segments Drives 45% Revenue Growth in Second Quarter to $2.3 Million

SAN ANTONIO, Texas--(BUSINESS WIRE)--Nov. 12, 2024-- AiAdvertising, Inc. (OTC: AIAD), an industry leader in AI-powered digital advertising solutions, has reported its financial and operational results for the second quarter ended June 30, 2024.

Key Second Quarter and Subsequent 2024 Highlights and Business Update

  • Revenue for Q2 2024 was $2.3 million, compared to $1.6 million in Q2 2023, an increase of 45%.
  • Gross loss margin of (6.6%) in Q2 2024, compared to (22.6%) in the same year ago period.
  • Platform License revenues for Q2 2024 increased 77% to $0.3 million due to our continued sales efforts towards platform license customers.
  • Creative Services revenues for Q2 2024 increased by 43% to $0.4 million due to customer wins from the second half of 2023.
  • Digital Marketing revenues for Q2 2024 increased by 41% to $1.6 million due to increased budgets from customers over last year.
  • Q2 2024 Total Operating Expenses of $1.3 million decreased 37% sequentially from Q1 2024.
  • Net Loss for Q2 2024 was ($1.5) million.
  • Net Cash used in operating activities for the six months ended June 30, 2024, was $2.1 million, compared to cash used of $3.2 million the year ago due to changes in the components of working capital.
  • FY 2024 revenue expected to be in the $9 to $10 million range on continued strong momentum driven by high customer retention, increased digital marketing budgets, and new customer wins.

Management Commentary

"The second quarter of 2024 was highlighted by increased revenue across our business segments, and an improved bottom line as we focused on efforts to reduce costs across all expense categories, while maintaining momentum,” said Jerry Hug, Chairman and CEO of AiAdvertising. “Revenue in the second quarter for our Campaign Performance Platform segment improved 77% year over year, as clients continue to experience superior results from its targeting capabilities and benefits. Our branding and creative design services segment continued to showcase our clients’ brands uniquely and creatively to infuse the public with curiosity to learn more, improving 43% year over year. In the Digital Marketing segment, strong client activity from our efforts to acquire new customers also provided 41% increased revenue from the prior year quarter.

“Operationally, during the second quarter we focused on improving efficiencies across the organization including efforts to reduce costs across all expense categories, including payroll, promotion, and research and development. These measures are aimed at increasing efficiency and improving scalability while continuing to invest in our AI and ML technologies, and marketing, without sacrificing growth.

“Looking ahead, we are building revenue and executing on our backlog while managing costs efficiently. We believe our strategy will enable us to reach cashflow breakeven in the near term. We are focused on the further development and scale of our AI-powered targeting solutions, and sales and marketing efforts that highlight how our platform generates more engaging, higher-impact campaigns that drive superior results. We continue to expect FY 2024 revenue to be in the $9 to $10 million range, driven by high customer retention, increased digital marketing budgets, and new customer wins. We look forward to reporting our third quarter 2024 results in the very near term,” concluded Hug.

Q2 2024 Financial Results

Revenue for the quarter ended June 30, 2024, and 2023 was $2.3 million and $1.6 million, respectively, an increase of 45%. The increase was across all business lines. The Platform License segment revenues for the quarter ended June 30, 2024, increased 77% to $0.3 million from the prior year due to management’s focus on a hybrid model of lower platform fees to drive higher customer budget spend. Digital Marketing revenues for the quarter ended June 30, 2024, increased 41% to $1.6 million as a result of this strategic shift. The Creative Design segment revenues for the quarter ended June 30, 2024, increased 43% to $0.4 million from the prior year due to customer wins in the second half of 2023.

Gross loss in the second quarter of 2024 was ($0.2) million, or (6.6%) of revenues, compared to a gross loss of ($0.4) million, or (22.6%) of revenues, in the comparable year ago quarter. Gross loss and gross margin percentage improved due to on-going cost reductions and gross margin leverage.

Total operating expenses for the quarter ended June 30 2024, were $1.3 million, compared to $2.0 million in the prior year, due to concerted efforts to reduce costs across all expense categories, including payroll, promotion, and research and development.

Net loss for the quarter ended June 30, 2024, was ($1.5) million, as compared to a net loss of ($1.9) million in 2023.

Operating activities for continuing operations used $2.1 million in net cash for the six months ended June 30, 2024, compared to $3.2 million for the six months ended June 30, 2023. The increase in cash flow used in operating activities was primarily due to changes in the components of working capital including changes in accounts receivable balances and changes in deferred revenue.

Cash and cash equivalents totaled $0.5 million at June 30, 2024, as compared to $0.1 million at December 31, 2023.

About AiAdvertising

AiAdvertising is an AI-powered solutions leader employing the industry’s most scientifically advanced, patent-pending AI targeting process. Transforming marketing and customer experiences, allowing marketers to personify client data and scientifically target their ideal customers with hyper-personalized campaigns. By harnessing artificial intelligence (AI) and machine learning (ML), we empower brands to easily target, predict, create, scale, measure campaign performance and reduce waste. Our clients gain the intelligence they need to prove advertising’s impact on the bottom line. This means more engaging, higher-impact campaigns that drive conversions and results.

For more information about the Company, please visit www.AiAdvertising.com or our LinkedIn or Twitter pages.

Forward-Looking Statements

This press release may contain "forward-looking statements." Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations, and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements are included in our filings with the Securities and Exchange Commission, including the "Risk Factors" section of our annual report on Form 10-K for the year ended December 31, 2023. Any forward-looking statement made by us in this release is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments, or otherwise, except as may be required under applicable law.

AIADVERTISING, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

June 30,
2024

 

December 31,
2023

 

 

(Unaudited)

 

 

 

 

 

 

 

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash

 

$

465,957

 

 

$

110,899

 

Accounts receivable, net

 

 

504,827

 

 

 

517,344

 

Prepaid and other current Assets

 

 

104,379

 

 

 

58,982

 

Total current assets

 

 

1,075,163

 

 

 

687,225

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

58,776

 

 

 

72,948

 

Right-of-Use assets

 

 

125,692

 

 

 

147,480

 

 

 

 

 

 

 

 

Other assets:

 

 

 

 

 

 

Lease deposit

 

 

10,369

 

 

 

8,939

 

Goodwill and other intangible assets, net

 

 

-

 

 

 

20,202

 

Total other assets

 

 

10,369

 

 

 

29,141

 

 

 

 

 

 

 

 

Total assets

 

 

1,270,000

 

 

 

936,794

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ DEFICIT

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

 

1,245,529

 

 

 

1,567,751

 

Accrued expenses

 

 

216,652

 

 

 

46,430

 

Operating lease liability

 

 

37,657

 

 

 

33,572

 

Deferred revenue and customer deposit

 

 

781,399

 

 

 

533,386

 

Total current liabilities

 

 

2,281,237

 

 

 

2,181,139

 

 

 

 

 

 

 

 

Operating lease obligation, net of current portion

 

 

93,868

 

 

 

113,907

 

 

 

 

 

 

 

 

Total liabilities

 

 

2,375,105

 

 

 

2,295,046

 

 

 

 

 

 

 

 

Shareholders’ deficit:

 

 

 

 

 

 

Preferred stock, $0.001 par value; 5,000,000 Authorized shares:

 

 

 

 

 

 

Series A Preferred stock; 10,000 authorized; zero shares issued and outstanding

 

 

-

 

 

 

-

 

Series B Preferred stock; 25,000 authorized; 18,025 shares issued and outstanding

 

 

18

 

 

 

18

 

Series C Preferred stock; 25,000 authorized; 14,425 shares issued and outstanding

 

 

14

 

 

 

14

 

Series D Preferred stock; 90,000 authorized; 86,021 and 90,000 shares issued and outstanding

 

 

86

 

 

 

86

 

Series E Preferred stock; 10,000 authorized; 10,000 shares issued and outstanding

 

 

10

 

 

 

10

 

Series F Preferred stock; 800,000 authorized; zero shares issued and outstanding

 

 

-

 

 

 

-

 

Series G Preferred stock; 2,600 authorized; 2,597 shares issued and outstanding

 

 

3

 

 

 

3

 

Series H Preferred stock; 1,000 authorized; zero shares issued and outstanding

 

 

-

 

 

 

-

 

Series I Preferred stock; 3,000,000 authorized; 2,272,727 shares issued and outstanding

 

 

2,273

 

 

 

2,273

 

Series J Preferred stock; 700 authorized; zero shares issued and outstanding

 

 

-

 

 

 

-

 

Series K Preferred stock; 1,000 authorized; zero shares issued and outstanding

 

 

-

 

 

 

-

 

Common stock, $0.001 par value; 10,000,000,000 and 2,000,000,000 authorized shares; 1,344,231,504 and 1,175,324,203 shares issued and outstanding, respectively

 

 

1,344,238

 

 

 

1,334,415

 

Additional paid in capital

 

 

57,933,119

 

 

 

56,865,961

 

Common stock payable, consisting of 5,000,000 shares valued at $0.1128

 

 

564,000

 

 

 

564,000

 

Preferred stock payable, consisting of 892,857 shares of Series I Preferred stock valued at $2.80

 

 

2,500,000

 

 

 

-

 

 

 

 

 

 

 

 

Accumulated deficit

 

 

(63,448,866

)

 

 

(60,125,032

)

 

 

 

 

 

 

 

TOTAL SHAREHOLDERS’ EQUITY (DEFICIT)

 

 

(1,105,105

)

 

 

(1,358,252

)

 

 

 

 

 

 

 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)

 

$

1,270,000

 

 

$

936,794

 

AIADVERTISING, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

 

(Unaudited)

 

(Unaudited)

 

 

 

 

 

 

 

 

 

Revenue

 

$

2,307,729

 

 

$

1,594,041

 

 

$

4,327,052

 

 

$

3,768,793

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of Revenue

 

 

2,459,866

 

 

 

1,953,936

 

 

 

4,255,139

 

 

 

3,609,385

 

Gross Profit (loss)

 

 

(152,137

)

 

 

(359,895

)

 

 

71,913

 

 

 

159,408

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales, general, and administrative expenses

 

 

1,306,990

 

 

 

1,965,349

 

 

 

3,371,647

 

 

 

3,367,945

 

Impairment of intangible assets

 

 

-

 

 

 

-

 

 

 

20,202

 

 

 

-

 

Total operating expenses

 

 

1,306,990

 

 

 

1,965,349

 

 

 

3,391,849

 

 

 

3,367,945

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

(1,459,127

)

 

 

(2,325,244

)

 

 

(3,319,936

)

 

 

(3,208,537

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense)

 

 

(3,898

)

 

 

435,021

 

 

 

(3,898

)

 

 

435,026

 

Total other income (expense)

 

 

(3,898

)

 

 

435,021

 

 

 

(3,898

)

 

 

435,026

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from operations before income taxes

 

 

(1,463,025

)

 

 

(1,890,223

)

 

 

(3,323,834

)

 

 

(2,773,511

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Loss

 

 

(1,463,025

)

 

 

(1,890,223

)

 

 

(3,323,834

)

 

 

(2,773,511

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends on preferred stock

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable to common shareholders

 

$

(1,463,025

)

 

$

(1,890,223

)

 

$

(3,323,834

)

 

$

(2,773,511

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.00

)

 

$

(0.00

)

 

$

(0.00

)

 

$

(0.00

)

Diluted

 

$

(0.00

)

 

$

(0.00

)

 

$

(0.00

)

 

$

(0.00

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

1,348,367,967

 

 

 

1,329,921,400

 

 

 

1,343,888,370

 

 

 

1,281,214,213

 

Diluted

 

 

1,348,367,967

 

 

 

1,329,921,400

 

 

 

1,343,888,370

 

 

 

1,281,214,213

 

AIADVERTISING, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

 

 

For the Six

 

For the Six

 

 

Months Ended

 

Months Ended

 

 

June 30,

 

June 30,

 

 

2024

 

 

2023

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

Net Loss

 

$

(3,323,834

)

 

$

(2,773,511

)

Adjustment to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

Loss on impairment of intangible asset

 

 

20,202

 

 

 

-

 

Depreciation and amortization

 

 

14,172

 

 

 

16,099

 

Stock based compensation

 

 

1,076,982

 

 

 

836,261

 

Provision for doubtful accounts

 

 

(80,469

)

 

 

-

 

Changes in assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

92,986

 

 

 

(632,632

)

Amortization of ROU asset

 

 

21,788

 

 

 

-

 

Prepaid expenses and other assets

 

 

(46,827

)

 

 

(97,783

)

Accounts payable

 

 

(322,222

)

 

 

(624,520

)

Accrued expenses

 

 

170,222

 

 

 

(15,688

)

Customer deposit

 

 

-

 

 

 

46,162

 

Operating lease liability

 

 

(15,954

)

 

 

-

 

Deferred revenue

 

 

248,013

 

 

 

-

 

Net cash used in operating activities

 

 

(2,144,941

)

 

 

(3,245,612

)

 

 

 

 

 

 

 

INVESTING ACTIVITIES

 

 

 

 

 

 

Cash paid for fixed assets

 

 

-

 

 

 

-

 

Proceeds from sale of discontinued operations

 

 

-

 

 

 

-

 

Net cash provided by (used in) investing activities

 

 

-

 

 

 

-

 

 

 

 

 

 

 

 

FINANCING ACTIVITIES

 

 

 

 

 

 

Proceeds from sale of common stock, net

 

 

-

 

 

 

599,427

 

Proceeds from sale of preferred stock

 

 

2,500,000

 

 

 

5,000,000

 

Redemption of Series K Preferred stock

 

 

(1

)

 

 

-

 

Net cash provided by financing activities

 

 

2,499,999

 

 

 

5,599,427

 

 

 

 

 

 

 

 

Net increase in cash and cash equivalents

 

 

355,058

 

 

 

2,353,815

 

 

 

 

 

 

 

 

Cash and cash equivalents at beginning of period

 

 

110,899

 

 

 

55,831

 

 

 

 

 

 

 

 

Cash and cash equivalents at end of period

 

$

465,957

 

 

$

2,409,646

 

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

 

 

 

 

 

 

Interest paid

 

$

-

 

 

$

-

 

Income taxes paid

 

$

-

 

 

$

-

 

 

 

 

 

 

 

 

NON-CASH INVESTING AND FINANCING ACTIVITIES:

 

 

 

 

 

 

Right of use asset exchanged for lease liability

 

$

-

 

 

$

6,655

 

Exercise of stock options

 

$

9,823

 

 

$

3,931

 

 

Investor Contact:
Larry Holub/Chris Tyson
312-261-6412
AIAD@mzgroup.us
www.mzgroup.us

Source: AiAdvertising, Inc.