This article first appeared on GuruFocus .
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Gross Revenue:Approximately $3 million, essentially flat year-over-year and sequentially.
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Net Revenue:Increased 16% sequentially to approximately $1.24 million from $1.08 million in Q1.
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Gross Margin:Improved to 41%, up from 36% in Q1.
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Adjusted EBITDA:Loss improved approximately 20% year-over-year to approximately $1.7 million, compared with a loss of approximately $2.1 million in the prior year quarter.
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Cash and Investments:Approximately $6.7 million at end of Q2, compared with approximately $475,000 at June 30 of last year.
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Weighted Pipeline per Seller:Increased to approximately $2.8 million at end of Q2, up from approximately $1.78 million at Q1 report.
Release Date: August 14, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Net revenue increased 16% sequentially to approximately $1.24 million, with gross margin improving to 41% from 36% in Q1.
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Adjusted EBITDA loss improved approximately 20% year-over-year to about $1.7 million, reflecting better operational efficiency.
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Successfully integrated Misfits Ads assets without increasing overall cost base, and total headcount remains below pre-acquisition levels.
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Weighted pipeline per seller increased significantly to approximately $2.8 million from $1.78 million in Q1, driven by new leadership, broader product set, and inherited pipeline.
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Closed six first-time clients in Q2 and Q3 to date, including Dodge, and secured renewals with key partners like USGA, Logitech, GoGo squeeZ, and Regal Cinemas.
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Ended Q2 with approximately $6.7 million in cash and investments, up from $475,000 a year ago, and eliminated all preferred stock, simplifying the capital structure.
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Launched a youth and family marketplace for programmatic advertising, expanding revenue diversification and offering higher-margin, more predictable revenue streams.
Negative Points
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Gross revenue was approximately $3 million, essentially flat year-over-year and sequentially, indicating lack of top-line growth.
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Adverse macro factors, including World Cup spending, tariff uncertainty, geopolitical events like the Iran war, and evolving Roblox policies, negatively impacted advertising budgets and brand activations.
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Adjusted EBITDA remained negative at approximately $1.7 million loss, indicating continued unprofitability.
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The company still relies on converting a growing pipeline into revenue, with no guarantee of sustained growth, as revenue conversion remains a key challenge.
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GAAP OpEx was approximately $5 million in the quarter, and management indicated limited flexibility to reduce costs further, suggesting high fixed costs.
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The business faces uncertainty from evolving platform policies (e.g., Roblox) and a fragmented advertising environment, which could continue to pressure revenue stability.
Q & A Highlights
Q: What's behind the 57% jump in weighted pipeline per seller, and how much is from new sales leadership versus the broader product set? A: Matt Edelman, CEO, attributes the increase to three factors: new leadership opening up opportunities, a broader product set enabling conversations with more potential brand partners, and an attractive pipeline inherited from the Misfits Ads acquisition.
Q: What is the road map to achieving adjusted EBITDA profitability in Q4? A: Edelman states that while maintaining cost discipline is key, the path relies on converting the growing volume of opportunities and leveraging the broader product set. The upgraded sales and strategy teams are expected to deliver revenue based on the opportunities brought in, supported by the current cost structure.
Q: Can you provide an update on the CTV advergaming inventory partnership and when it might show up in pipeline or revenue? A: Edelman explains that the CTV inventory is within a gaming application available in 100 million US households. It offers standard media inventory and custom advertising opportunities, and is becoming a highly desirable feature in programs, especially for streamers and entertainment apps looking for tune-in opportunities by appealing to gamers.
Q: How does the Misfits integration lead to a more predictable or recurring revenue stream, and how sticky is the client base? A: Edelman clarifies that "predictable" is a better term than "recurring." Programmatic advertising solutions offer consistent daily inventory that can be purchased easily, allowing for a more seamless flow of revenue. Once it works for a client, it becomes a staple, and the company expects programmatic and managed services buying to become a healthy revenue source.
Q: Do you have any commentary on specific channels improving, and are there targets for them to contribute a major percentage of revenue? A: Edelman notes the business has evolved to help brand partners design programs optimized across multiple channels (mobile, Roblox, CTV, web games, influencers). Instead of pitching specific products, they pitch reaching a specific audience, so offerings across the board are expected to rise in concert depending on campaign needs.
Q: Is the current GAAP OpEx level of approximately $5 million the new baseline, or do you expect it to go down? A: Edelman says they are probably close to the baseline but continue to look for efficiencies. The primary opportunity is shifting more resources into revenue-generating, billable activity (cost of goods) rather than OpEx, maximizing team utilization. Otherwise, the current cost structure is what's needed to support the path to adjusted EBITDA profitability.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
