Inuvo Inc.'s (INUV:NYSE.American) Q1/25 revenue and adjusted EBITDA surpassed expectations, due to growing demand for the company's artificial intelligence (AI)-powered advertising services as well as additional new clients, reported Maxim Group Analyst Jack Vander Aarde in a May 12 research note.
On the results, Maxim reiterated its Buy rating and $1.50 per share target price on Inuvo, the analyst noted. Its current share price is about $0.41 per share. The company is trading at a discount to peers, at a 2026 enterprise value:revenue multiple of 0.5x versus their 2x.
Maxim's target reflects a 266% return for investors.
The company has 143.6 million outstanding shares and 80.8% float. Its market cap is $58.6 million (58.6M). Its 52-week range is $0.19–0.79 per share.
Strong First Quarter
Vander Aarde reviewed Inuvo's Q1/25 financial results. He highlighted revenue, $26.7 million ($26.7M), which was up 57% over Q1/24 revenue. Also, revenue beat Maxim and consensus' estimate of $23.7M. Agency and Brand client revenue was $3M, up 11% year over year (YOY), and Platform client revenue was $23.7M, up 65% YOY.
Adjusted EBITDA was almost break even and slightly exceeded Maxim's estimate.
Gross margin was 79%, about 870 basis points lower YOY. This was attributed to changes in product mix, as expected, noted Vander Aarde. Gross margin was slightly better than Maxim's projected 78%.
Total opex was $22.9M, slightly higher than Maxim's forecast but consistent with the opex in the previous quarter.
Overall, Inuvo recorded an adjusted EBITDA loss of $21,900 in Q1/25, better than consensus and Maxim's estimated loss of $600,000.
The adtech firm ended the quarter with a healthy balance sheet, having $2.6M in cash and no debt.
"We do not believe the company will require additional capital," Vander Aarde commented.
Product Developments
During Q1/25, Inuvo launched the self-serve version of its IntentKey platform, allowing agencies and markets to build and activate custom audience models themselves, through their preferred demand-side platform. Also, the adtech firm enhanced its custom-designed and AI-powered Insights Dashboard. Now, for instance, it illustrates how brand awareness drives user conversion, shows audience-preferred podcasts and predicts advertising campaign impact.
During the first quarter, Inuvo signed 20 new Agency and Brand customers, 15 of which were self-serve IntentKey customers.
Looking Forward
For Q2/25 Inuvo guided to revenue of $22.8M-plus, which would be up 25% YOY. The company still anticipates achieving positive cash flow and positive adjusted EBITDA in H2/25. Maxim, for Q2/25, decreased its revenue forecast to match that of Inuvo's ($22.8M), previously $24.2M, and its adjusted EBITDA estimate is ($1.5M).
Maxim's 2025 and 2026 revenue and adjusted EBITDA estimates for Inuvo remain the same. For 2025, they are $106M of revenue, which would reflect a 27% YOY increase and compares to consensus' $103.6M, and adjusted EBITDA (positive) of $1M versus consensus' $2.8M.
For 2026, Maxim's estimates are $118M of revenue, for an anticipated 11% YOY increase, and adjusted EBITDA of $4M.
Vander Aarde purported that Inuvo is nicely positioned for long-term growth and capturing additional market share. This is especially the case, he wrote, because the advertising industry (in which $600 billion-plus are spent annually on digital media worldwide) is shifting away from using consumer data and demographics in ad targeting as consumers push for privacy. At least 13 U.S. states enacted consumer privacy laws and another 17 states are considering the same. In a corporate move in this direction, Apple eliminated the use of cookies within its browser Safari, and according to Inuvo management, this led to 90% or more of its customers choosing to block third-party cookies and tracking.
"Given that IntentKey's AI technology performs without requiring third-party cookies, we view Inuvo as well-positioned for sustainable market share gains, and we expect a significant ramp in Agency and Brand demand for Inuvo's services going forward," Vander Aarde wrote.
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