Fluent (FLNT) Q3 2025: Commerce Media Solutions Jumps to 40% of Revenue, Reshaping Growth Mix
Fluent’s commerce media business surged to 40% of total revenue, overtaking legacy declines and setting up a pivotal mix shift for 2026. The company’s rapid expansion into commerce media, highlighted by new top-tier partnerships and channel wins, is driving a structural pivot in both revenue and profitability trajectory. Investors should watch for sustained margin recovery and operational leverage as Fluent’s platform scales into new solution areas and holiday seasonality intensifies.
Summary
- Commerce Media Inflection: Commerce Media Solutions now comprises a transformative share of Fluent’s revenue base.
- Partnership Flywheel: New enterprise wins and channel integrations are accelerating platform reach and competitive moat.
- Profitability Turn: Management signals imminent EBITDA break-even as mix shift matures in Q4 and beyond.
Performance Analysis
Fluent’s Q3 results reflect a business in the midst of a high-velocity transition. While total consolidated revenue contracted year-over-year, Commerce Media Solutions (CMS) revenue soared 81% to $18.8 million and now represents 40% of total revenue, up from just 16% a year ago. This surge is powered by both new enterprise partner launches—such as Dick’s Sporting Goods and Rebuy Engine—and the expansion of existing relationships with major brands like Authentic Brands Group.
However, this growth was not enough to offset a steep 52% decline in the owned and operated (O&O) marketplace segment, which continues to face advertising and regulatory headwinds. Media margin compressed slightly on a percentage basis as Fluent prioritized flexible pricing and partner onboarding, but sequential CMS gross margins rebounded by 400 basis points to 22%. The company’s ongoing mix shift is expected to deliver double-digit gross profit growth and positive adjusted EBITDA in Q4, marking the first such inflection in ten quarters.
- Revenue Mix Transformation: CMS now drives 40% of total revenue, up from just 4% two years ago.
- Margin Rebound: CMS gross margin improved sequentially, reflecting early returns on new partner integration and solution scaling.
- Balance Sheet Strengthened: A $10.3 million equity raise and reduced net long-term debt provide capital for continued CMS investment.
The quarter’s results make clear that Fluent’s value proposition is resonating with large brands and channel partners, but the transition period continues to pressure consolidated results until CMS fully overtakes O&O as the dominant revenue engine.
Executive Commentary
"Our strategic momentum continues to accelerate in establishing an industry leadership position in commerce media. Commerce Media Solutions revenue in the third quarter grew over 80% year over year, while increasing its portion of contribution to consolidated enterprise revenue from 16% in Q3 2024 to 40% in Q3 2025."
Don Patrick, Chief Executive Officer
"Commerce Media Solutions has demonstrated continued momentum with the annual revenue run rate from this business now exceeding $85 million, and its revenue representing 40% of our total consolidated revenue in the third quarter of 2025, compared with just 16% in the third quarter last year and 4% in the third quarter of 2023."
Ryan Perfit, Chief Financial Officer
Strategic Positioning
1. Commerce Media Platform Scale and Convergence
Fluent’s pivot centers on building a commerce media platform—technology that enables brands to monetize digital transactions and loyalty audiences. The rapid rise of CMS is underpinned by both direct enterprise wins and channel partnerships, such as Rebuy Engine, which unlocks the Shopify merchant ecosystem. Management highlighted the convergence of O&O and CMS, leveraging first-party data and rewards expertise to create proprietary demand and supply for advertisers and partners.
2. Enterprise and Channel Partner Expansion
Recent wins with Dick’s Sporting Goods and Authentic Brands Group validate Fluent’s competitive position, with Dick’s representing a “conquest” from the largest competitor and quickly becoming a top five partner. The Rebuy Engine partnership, only five months old, is already one of Fluent’s top five media partners, providing access to over 12,000 Shopify merchants and driving a 79% month-over-month increase in ad unit sessions in September.
3. Margin Management and Strategic Investment
Margin dynamics are in flux as Fluent balances short-term incentives and solution launches with longer-term profitability. Management expects CMS gross margins to return to the high 20s as incentives roll off and solution mix stabilizes. The company is also investing in data collaboration capabilities, including a new partnership with Databricks and key leadership hires, which are expected to enhance CMS performance and partner value.
4. Owned & Operated Stabilization and Strategic Value
The O&O segment, though declining, is showing early signs of stabilization, aided by the ability to migrate advertisers into commerce media channels. This “flywheel” effect leverages the legacy asset base to build proprietary audiences and differentiated supply, reinforcing Fluent’s platform advantage as the market converges around commerce and rewards-driven experiences.
Key Considerations
Fluent’s Q3 underscores a decisive inflection in business model and market positioning. As CMS overtakes O&O, the company’s long-term strategy, capital allocation, and operational focus are being reshaped for sustainable growth and margin recovery.
Key Considerations:
- Revenue Mix Shift: CMS’s rapid growth is fundamentally altering Fluent’s financial profile and risk exposure.
- Partner Onboarding Timing: Delays in enterprise partner launches create quarter-to-quarter volatility but build future revenue visibility.
- Margin Expansion Levers: Margin improvement is tied to scaling new solutions and phasing out onboarding incentives.
- O&O Convergence: The ability to migrate O&O advertisers into CMS channels creates a proprietary flywheel for demand and supply.
- Balance Sheet Flexibility: Recent capital raise and debt reduction increase investment capacity for CMS scaling and innovation.
Risks
Fluent faces execution risk as it transitions from a declining O&O business to a CMS-led model, including the need to maintain partner momentum, manage margin recovery, and navigate advertiser budget volatility. Regulatory and platform concentration risks remain in O&O, while CMS is subject to partner onboarding delays and competitive pricing pressure. Management’s forward guidance depends on continued CMS scaling and successful solution expansion.
Forward Outlook
For Q4 2025, Fluent guided to:
- Double-digit quarter-over-quarter gross profit growth
- Positive adjusted EBITDA for the first time in ten quarters
For full-year 2026, management maintained guidance:
- Double-digit consolidated revenue growth
- Triple-digit CMS revenue growth
- Full-year adjusted EBITDA profitability
Management highlighted several factors that will shape the outlook:
- CMS is expected to surpass O&O as the main revenue driver in Q4, catalyzed by holiday seasonality
- Margin expansion is anticipated as new solutions scale and onboarding incentives fade
Takeaways
Fluent’s Q3 marks a structural turning point as commerce media becomes the company’s primary growth engine. The business is leveraging new partnerships and channel access to drive scale, while operational discipline and capital investment are setting up a path to sustained profitability.
- Commerce Media Momentum: CMS is now the core of Fluent’s growth narrative, reshaping the company’s revenue and margin trajectory.
- Strategic Convergence: The integration of O&O and CMS creates a differentiated, proprietary platform with expanding advertiser and partner value.
- 2026 Watchpoint: Investors should monitor CMS margin trends, partner onboarding cadence, and the pace of O&O stabilization as key signals for long-term upside.
Conclusion
Fluent’s Q3 results confirm the company’s transformation into a commerce media platform with growing strategic relevance to major brands and channel partners. As CMS overtakes legacy segments, the business is positioned for improved profitability and durable growth, provided execution on margin and partner expansion remains on track.
Industry Read-Through
Fluent’s accelerating mix shift and enterprise partner wins highlight the growing importance of commerce media—technology that monetizes digital transactions and loyalty audiences—across retail and digital advertising sectors. The company’s channel integrations, such as with Shopify via Rebuy Engine, signal a broader trend of performance marketing platforms embedding deeper into ecommerce ecosystems. For other industry players, the convergence of owned and operated assets with commerce media capabilities will be critical for competitive differentiation, especially as advertiser budgets become more fluid and regulatory scrutiny persists. The ability to deliver proprietary demand and optimize consumer experience at the point of transaction is emerging as a key moat for scaled digital marketing players.