1H 2023 Revenue up 34% to $3.8 Million Driven by Platform Licensing and Digital Marketing

SAN ANTONIO, Texas–(BUSINESS WIRE)–AiAdvertising, Inc. (OTC: AIAD), a next-generation AdTech company focused on harnessing the power of artificial intelligence (AI) and machine learning (ML) for today’s marketing leaders, has reported its financial and operational results for the second quarter Ended June 30, 2023.

Key Second Quarter and Subsequent 2023 Highlights and Business Update

• Revenue for Q2 2023 was $1.6 million, down slightly from $1.6 million in Q2 2022
• Revenue for the six months ended June 30, 2023, and 2022 was $3.8 million and $2.8, respectively, an increase of 34%.
• Platform License revenues for the quarter ended June 30, 2023, decreased by 31% to $0.2 million.
• Digital Marketing revenues for the quarter ended June 30, 2023, increased by 22% to $1.2 million.
• Net Loss for the quarter ended June 30, 2023 decreased by 8% to ($1.8) million.
• Net Loss for the six months ended June 30 2023 decreased by 41% to ($2.7) million.
• Net Cash used in the six months ended June 30, 2023 was $3.3 million, compared to cash used of $2.9 million a year ago.
• Received a $5.0 million equity investment to fuel the next phase of growth, including further development of AiAdvertising’s Campaign Performance Platform and to create a new focus area serving customers valuing founding American principles.

Management Commentary

“The first half of 2023 was marked by continued improvement for our top and bottom lines, highlighted by a 34% increase in revenue from 2022,” said Jerry Hug, Chairman and CEO of AiAdvertising. “While our second quarter revenue remained essentially flat, strong client activity in Digital Marketing again pulled revenue forward into Q3. This variable revenue recognition has driven a record revenue backlog that now stands at nearly $2.0 million.

“During the quarter we received a strategic investment of $5.0 million from Hexagon Partners to enable us to focus on further development of our Campaign Performance Platform, applying AI and ML technologies to marketing and advertising solutions. Our AI-powered AdTech software and optimization services allow advertisers to eliminate guesswork, predict creative, and prove performance. We continue to see interest from direct-to-consumer brands that are looking to deploy large budgets at scale without having to add headcount.

“In conjunction with today’s filing of our 10-Q for the period ended June 30, 2023, we have regained compliance with our filing requirements and our team is working with counsel, regulators and the exchange to regain our listing and resume trading as soon as possible.

“Looking to the second half of 2023, we are focused on delivering superior results to our clients with our revolutionary Campaign Performance Platform and executing on our revenue backlog. We expect to provide updates on new business initiatives and new business traction in the near future as we continue to build shareholder value,” concluded Hug.

Second Quarter 2023 Financial Results

Revenue for the Quarter Ended June 30, 2023, and 2022 was $1.6 million and $1.6 million, respectively, a decrease of 2%. The decrease was primarily due to strong client activity in Digital Marketing for the first fiscal quarter, pulling revenue forward. The Platform License segment revenues for the quarter ended June 30, 2023, decreased by 31% to $0.2 million from the prior year. Digital Marketing revenues for the quarter ended June 30, 2023, increased 22% to $1.2 million.

Revenue for the six months ended June 30, 2023, and 2022 was $3.8 million and $2.8 million, respectively, an increase of 34%. The increase was primarily due to strong client activity in Digital Marketing and Platform license revenue. The Platform License segment revenues for the six months ended June 30, 2023, decreased by 0% to $0.3 million from the prior year. Digital Marketing revenues for the six months ended June 30, 2023, increased 62% to $2.9 million.

Total operating expenses for the quarter ended June 30, 2023, were $2.0 million, compared to $2.0 million in the prior year. Total operating expenses for the six months ended June 30, 2023, were $3.4 million, compared to $4.3 million in the prior year.

Operating activities for continuing operations used $3.4 million in net cash for the six months ended June 30, 2023, compared to $2.9 million for the quarter ended June 30, 2022.

Net loss for the quarter ended June 30, 2023, was ($1.8) million, as compared to a net loss of ($2.0) million in 2022. The decrease in net loss for the period was primarily due to recognition of ERC tax credits and reduced employee and SG&A expenses. Net loss for the six months ended June 30, 2023, was ($2.7) million, as compared to a net loss of ($4.6) million in 2022.

Cash and cash equivalents totaled $2.1 million at June 30, 2023, as compared to $0.1 million at December 31, 2022. In April 2023, the Company received a $5.0 million equity investment from Hexagon Partners.

John C. Small, Chief Financial Officer of AiAdvertising, added, “As of today, we believe that our existing cash, together with the recent strategic investment of $5.0 million from Hexagon Partners, the $0.7 million in short term receivables, and $9.2 million that currently remains available under our $10.0 million Equity Line of Credit with GHS Investments LLC (“GHS”), will be sufficient to meet our anticipated capital requirements to fund planned operations.”

About AiAdvertising

AiAdvertising, Inc. (OTC: AIAD) is a next-generation AdTech company that is harnessing the power of artificial intelligence (AI) and machine learning (ML) to build software for today’s marketing leaders. We are focused on eliminating waste and maximizing the return on digital ad spend.

Our flagship product, the Campaign Performance Platform, is a subscription-based, end-to-end Ad Management solution. The platform empowers brands and agencies to easily target, predict, create, scale, and measure hyper-personalized campaigns.

For more information about the Company, please visit www.AiAdvertising.com or our LinkedIn or Twitter pages.

Forward-Looking Statements

This press release may contain “forward-looking statements.” Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations, and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy, and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements are included in our filings with the Securities and Exchange Commission, including the “Risk Factors” section of our annual report on Form 10-K for the year ended December 31, 2022. Any forward-looking statement made by us in this release is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments, or otherwise, except as may be required under applicable law.