Q2 revenue fell 5% year over year to $13.8 million, but rose 20% sequentially, while adjusted EBITDA increased 4% to $4.5 million and margin expanded to 32%. Net loss narrowed to $800,000. Monthly active users grew 14% to 103 million, driven primarily by paid AudienceEngine traffic.
Programmatic advertising's decline narrowed to 8%, while AI-driven affiliate-commerce initiatives approached a $1 million annual revenue run rate. VerticalScope reduced operating expenses by 13% and repaid $12 million of debt, while investing $400,000 in AI during the quarter and maintaining its plan for roughly $2 million of AI investment in 2026. The company also advanced discussions on a potential ongoing AI-content licensing deal.
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. → Lumentum Just Delivered the AI Growth Investors Wanted "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. 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. → Joby's Defense Pivot Accelerates With $500M Resonant Sciences Deal 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. → Ryman Checks Into a $1.38B Hospitality Upgrade 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. 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.
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