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Segment Reporting
 9 Months Ended
Sep. 30, 2025
Segment Reporting  
Segment Reporting

Note 11 – Segment Reporting

 

The Company operates as a single reportable segment that places digital advertising throughout devices, websites, applications and browsers across social, search and programmatic advertising channels, facilitating the delivery of millions of advertising messages monthly. The Chief Operating Decision Maker ("CODM"), identified as the Chief Executive Officer, evaluates the Company's financial performance and makes resource allocation decisions based on consolidated financial information.

 

Measure of Segment Profit or Loss

The CODM evaluates performance and allocates resources based on contribution margin, which is calculated as revenue after deducting marketing expenses, exchange fees, and publisher payments. Exchange fees and publisher payments are classified as cost of revenue. The resulting contribution margin covers Inuvo’s fixed costs and profit.

 

Significant Segment Expenses

The Company reports total revenue and significant expenses provided to the CODM, which include cost of revenue, marketing, and compensation expenses. These expenses are regularly reviewed to assess operating performance. The following table presents these expenses:

 

 

 

For the Nine Months Ended

September 30,

 

 

 

2025

 

 

2024

 

Revenue

 

$71,949,937

 

 

$57,603,935

 

Cost of Revenue

 

 

17,199,909

 

 

$7,599,872

 

Marketing

 

$45,026,458

 

 

$42,540,355

 

Professional Fees

 

 

1,532,180

 

 

$1,385,295

 

IT Costs

 

$948,557

 

 

$936,127

 

Provision (reversal of provision) for bad debts

 

$4,455

 

 

$(1,454,533)

Depreciation and Amortization

 

$1,703,043

 

 

$1,999,513

 

Other

 

$1,072,930

 

 

$968,760

 

Compensation

 

$9,945,452

 

 

$9,362,474

 

Segment Operating Profit (Loss)

 

$(5,483,047)

 

$(5,733,928)

 

Other segment expenses include facilities costs, travel and entertainment expenses and various other corporate expenses.

 

Geographic Information

The Company's operations are based in the United States, and substantially all revenue is derived from U.S. clients.