VerticalScope Q2 Earnings Call Highlights

VerticalScope TSE: FORA reported second-quarter 2026 revenue of $13.8 million, down 5% from a year earlier but up 20% sequentially, as the company cited improving programmatic advertising trends, growth in paid audience acquisition and expanding AI-driven commerce initiatives. Adjusted EBITDA rose 4% year over year to $4.5 million, while adjusted EBITDA margin expanded by 270 basis points to 32%. Net loss narrowed to $800,000 from $1.8 million in the prior-year quarter. Chief Executive Officer Chris Goodridge said the quarter showed that work undertaken over the past year was beginning to appear in the company’s financial results. Revenue trends are improving, adjusted EBITDA is growing, and margins are expanding, Goodridge said, adding that the company was funding AI initiatives while maintaining cost discipline. Audience growth driven by paid traffic Monthly active users averaged 103 million during the quarter, an increase of 14% from a year earlier and the company’s first year-over-year MAU growth since changes in the search environment affected traffic. Goodridge said most of the increase came from AudienceEngine, VerticalScope’s paid traffic source, with a smaller contribution from direct users. Google Search traffic has stabilized in recent months but remained significantly below the prior-year level, according to management. Goodridge said recent Google product changes intended to surface links to first-hand discussions had not yet contributed to VerticalScope’s growth. Management said traffic acquired through AudienceEngine is profitable but monetizes at a lower rate than organic search traffic, contributing to a 16% year-over-year decline in average revenue per user to $0.045. Chief Financial Officer Vince Bellissimo said the reported ARPU decline also reflects the program’s accounting presentation: acquired visitors are included in MAU at their full count, while related revenue is recorded net of traffic acquisition costs. Bellissimo said AudienceEngine is currently managed for yield and return on investment, with each campaign subject to a return threshold. The next stage, he said, will focus on directing acquired audiences toward VerticalScope products and apps to increase engagement on its platform. Advertising decline narrows as commerce initiatives scale Digital advertising revenue was $10.9 million in the quarter, down 5% year over year. Programmatic advertising revenue declined 8% from a year earlier, narrowing from a 34% decline in the first quarter. Goodridge characterized the move into a single-digit decline as the quarter’s most important trend, citing improved CPM and impression trends as well as the AudienceEngine ramp. Direct advertising revenue was flat in the second quarter and increased 3% during the first half. Management said campaign launch timing affected quarterly results, while direct bookings as of the end of July were pacing 7% above the prior year. The company also added two new insurance ad...