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Note 9 - Segment Information
 9 Months Ended
Sep. 30, 2025
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

9. Segment information

 

The Company identifies operating segments as components of an entity for which discrete financial information is available and are regularly reviewed by the Chief Executive Officer, who is the Company’s Chief Operating Decision Maker ("CODM"), who has final authority in making decisions regarding resource allocation and performance assessment. The profitability measure employed by CODM is earnings before interest, taxes, depreciation and amortization ("EBITDA"). The use of EBITDA as a financial metric provides management and investors with a clearer view of the core business performance and profitability, excluding the effects of financing and other non-operational expenses.

 

 

As of  September 30, 2025, the Company had three operating segments: a) "Fluent", representing Owned and Operated and Commerce Media Solutions revenue, b) "Call Solutions", and c) "AdParlor". The Company determined that there was one reportable segment, "Fluent," for the purposes of segment reporting. The Fluent reporting segment combines the Fluent operating segment with the Call Solutions operating segment. This reporting unit works with advertisers to then bring consumers to their products through multiple media channels and earn revenue when a consumer completes an action as agreed upon with the advertisers. The "All Other" segment represents the operating results of AdParlor, LLC, which mainly performs media buying, and those businesses sold or in run-off, which are included for purposes of reconciliation of the respective balances below to the consolidated financial statements.

 

The Company determined its segments based on revenue sources and its agreements with advertisers. Some advertisers span multiple segments, which are managed consistently with shared management.

 

As of  December 31, 2024, the Company adopted ASU 2023-07. Accordingly, the segment disclosures provided have been updated in accordance with the current presentation and accounting standard requirements. The significant expense categories and amounts align with the segment-level information that is regularly provided to and used by the CODM in evaluating performance and EBITDA profitability and were identified as a) cost of revenue b) salaries and benefits, c) professional fees, and d) IT and software.

 

The Company does not allocate certain shared expenses such as interest expense and other non-recurring items. The allocation methodology is regularly assessed, evaluated and subject to future changes.

 

Summarized financial information concerning the Company's segments for the three and nine months ended September 30, 2025 and 2024 are shown in the following tables below, noting prior period amounts have been recast to conform to the Company's current period segment presentation:

 

  

Three Months Ended September 30,

  

Three Months Ended September 30,

 
  

2025

  

2024

 
  

Fluent

  

All Other

  

Total

  

Fluent

  

All Other

  

Total

 

Revenue(1):

                        

United States

 $28,330  $2,194  $30,524  $42,017  $3,039  $45,056 

International

  16,505   —   16,505   19,460   —   19,460 

Total segment revenue

 $44,835  $2,194  $47,029  $61,477  $3,039  $64,516 

Costs of revenue

                        

Cost of revenue (exclusive of depreciation and amortization)

  35,858   297   36,155   47,824   1,037   48,861 
                         

Costs and expenses:

                        

Salaries and benefits

  7,805   1,024   8,829   8,843   1,478   10,321 

Professional fees

  2,391   87   2,478   1,810   244   2,054 

IT and software

  1,142   65   1,207   967   124   1,091 

Other segment items(2)

  1,840   345   2,185   3,316   392   3,708 

EBITDA

 $(4,201) $376  $(3,825) $(1,283) $(236) $(1,519)

Depreciation and amortization

  2,422   56   2,478   2,319   50   2,369 

Total (loss) income from operations

 $(6,623) $320  $(6,303) $(3,602) $(286) $(3,888)
                         

Reconciliation of profit or loss

                        

Interest Expense

          (711)          (1,281)

Fair value adjustment of Convertible Notes with related parties

          (554)          (2,810)

Loss on early extinguishment of debt

          —           — 

Loss before income taxes

         $(7,568)         $(7,979)

(1) Revenue aggregation is based upon location of the customer.

(2) Balance includes sales and marketing expense, travel and entertainment expense, office overhead, restructuring and severance, goodwill impairment and impairment of intangible assets, and other operating costs.

 

  

Nine Months Ended September 30,

  

Nine Months Ended September 30,

 
  

2025

  

2024

 
  

Fluent

  

All Other

  

Total

  

Fluent

  

All Other

  

Total

 

Revenue(1):

                        

United States

 $92,132  $5,177  $97,309  $111,337  $14,646  $125,983 

International

  49,636   —   49,636   63,233   —   63,233 

Total segment revenue

 $141,768  $5,177  $146,945  $174,570  $14,646  $189,216 

Costs of revenue

                        

Cost of revenue (exclusive of depreciation and amortization)

  113,891   465   114,356   133,155   9,163   142,318 
                         

Costs and expenses:

                        

Salaries and benefits

  22,837   3,071   25,908   26,844   7,029   33,873 

Professional fees

  6,051   251   6,302   5,923   820   6,743 

IT and software

  3,399   210   3,609   2,899   594   3,493 

Other segment items(2)

  9,003   834   9,837   9,614   3,887   13,501 

EBITDA

 $(13,413) $346  $(13,067) $(3,865) $(6,847) $(10,712)

Depreciation and amortization

  7,252   166   7,418   6,706   801   7,507 

Total (loss) income from operations

 $(20,665) $180  $(20,485) $(10,571) $(7,648) $(18,219)
                         

Reconciliation of profit or loss

                        

Interest Expense

          (2,293)          (3,711)

Fair value adjustment of Convertible Notes with related parties

          (156)          (2,810)

Loss on early extinguishment of debt

          —           (1,009)

Loss before income taxes

         $(22,934)         $(25,749)

(1) Revenue aggregation is based upon location of the customer.

(2) Balance includes sales and marketing expense, travel and entertainment expense, office overhead, restructuring and severance, goodwill impairment and impairment of intangible assets, and other operating costs.

 

  

September 30,

  

December 31,

 
  

2025

  

2024

 

Total assets:

        

Fluent

 $67,521  $84,373 

All Other

  8,539   9,244 

Total assets

 $76,060  $93,617 

 

As of September 30, 2025, long-lived assets are all located in the United States.

 

For the nine months ended  September 30, 2025, 20.2% of the Company's consolidated revenue was earned from customers located in Israel.