Fluent, Inc. Segments Disclosure

13. 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 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.

 

During the quarter ended December 31, 2024, the Company completed its reassessment of its segments and determined that it had three operating segments: a) "Fluent", which is 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 Fluent 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 how revenue is earned as well as the agreements entered into with its advertisers. In addition, certain advertisers overlap within the different operating segments. Further, they are managed consistently with shared management.

 

As of  December 31, 2024, the Company adopted ASU 2023-07 (see Note 2, Summary of significant accounting policies, under the caption “(s) Recently issued and adopted accounting standards” for further discussion). 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 twelve months ended twelve months ended December 31, 2024 and 2023 are shown in the following tables below, noting prior period amounts have been recast to conform to the Company's current period segment presentation:

 

		Year Ended December 31,												Year Ended December 31,
		2024												2023
		Fluent				All Other				Total				Fluent				All Other				Total
Revenue(1):
United States		$	158,871			$	13,812			$	172,683			$	165,579			$	19,265			$	184,844
International			81,940				—				81,940				113,555				—				113,555
Total segment revenue		$	240,811			$	13,812			$	254,623			$	279,134			$	19,265			$	298,399
Costs of revenue
Cost of revenue (exclusive of depreciation and amortization)			184,109				9,712				193,821				202,548				17,336				219,884
Costs and expenses:
Salaries and benefits			36,194				8,347				44,541				38,657				9,270				47,927
Professional fees			7,425				1,034				8,459				7,912				777				8,689
IT and software			3,967				661				4,628				3,960				646				4,606
Other operating expense items (2)			12,354				4,554				16,908				61,598				4,949				66,547
EBITDA		$	(3,238	)		$	(10,496	)		$	(13,734	)		$	(35,541	)		$	(13,713	)		$	(49,254	)
Depreciation and amortization			9,072				854				9,926				9,507				1,369				10,876
Loss from operations		$	(12,310	)		$	(11,350	)		$	(23,660	)		$	(45,048	)		$	(15,082	)		$	(60,130	)
Reconciliation of profit or loss:
Interest Expense, net										$	(4,749	)										$	(3,204	)
Fair value adjustment of Convertible Notes, with related parties											(1,670	)											—
Loss on early extinguishment of debt											(1,009	)											—
Loss before income taxes										$	(31,088	)										$	(63,334	)

 

(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.

 

		December 31,				December 31,
		2024				2023
Total assets:
Fluent		$	84,373			$	90,395
All Other			9,244				21,472
Total assets		$	93,617			$	111,867

As of December 31, 2024, long-lived assets are all located in the United States.

 

For the year ended  December 31, 2024, 18.2% of the Company’s revenue is earned from customers located in Israel.