Good afternoon, and welcome to Kubient's Second Quarter 2022 Earnings Conference Call. Joining us for today's call are Kubient's Founder, Chairman, Chief Executive Officer, Chief Strategy Officer, and President, Paul Roberts, and Chief Financial Officer, Josh Weiss. Following their remarks, we will open the call for your questions. Before we get started, I need to alert you to our safe harbor statements under the Private Securities Litigation Reform Act of 1995. During this call, we will be making forward-looking statements, including statements related to future events or to our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
Listeners should not place undue reliance on forward-looking statements since they involve known or unknown risks, uncertainties and other factors which are in some cases beyond our control and which could and likely will materially affect actual results, levels of activity, performance or achievements. Any forward-looking statements reflect our current views with respect to future events and are subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. These statements are subject to known and unknown risks, uncertainties and assumptions that could cause actual results to differ materially from those projected or implied during the call.
Furthermore, listeners are referred to the documents filed by Kubient, Inc. with the SEC, including our annual report on Form 10-K filed with the SEC on June 30, 2022, with the understanding that our actual future results may be materially different from what we expect, which includes these and certain other important risk factors. We qualify all of our forward-looking statements by these cautionary statements. Also note that the forward-looking statements on this call are based on information available to us as of today's date. Except as required by law, we assume no obligation to publicly update or revise these forward-looking statements for any reason or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.
Please refer to Kubient's SEC filings, specifically its registration statement on Form S-1, initially filed on December 12, 2020, for a more detailed description of risk factors that may affect the company's results. During the call today, management will discuss adjusted EBITDA and non-GAAP financial measure. In the company's press release and filings with the SEC, both of which are posted on the company's website, you will find additional disclosures regarding this non-GAAP measure, including reconciliation of this measure with its comparable GAAP measure. Non-GAAP financial measures are not intended to be considered in isolation from, a substitute for, or superior to GAAP results. The company encourages you to consider all measures when analyzing its performance. Now I would like to turn the call over to Paul Roberts. Sir, please proceed.
Thanks, operator, and thanks to everyone who's joined us today. On our last call or midway through the second quarter, we discussed a dramatic shift in our short-term operations by transitioning to a sustainable low cash burn model in order to better position Kubient to the existing global headwinds and to better position ourselves for strategic alternatives. To briefly reiterate, we began the process of pulling back on certain non-essential positions in evaluating whether our divisions within our business might be streamlined further in order to conserve the company's resources. This translated to direct savings in our operating expenses, something we've been recognizing in early August and subsequently allows Kubient to present the market with predictable and conservative burn looking ahead to the coming quarters and years.
During the implementation of these measures, close care was kept to maintaining the necessary components of our organization on the development and operation side of our core technologies. Over the previous quarter, we spent time further cleaning up our balance sheet and securing our cash position, a point Josh will touch on a bit later in the call. The goal of these measures was to extend Kubient's runway, allotting greater time to further grow top-line revenues via organic measures, minimize our operating expenses, and take advantage of strategic alternatives via inorganic measures. On that note, a key emphasis has been on the optimization of KAI, the artificial intelligence-powered fraud protection technology operating within the Audience Cloud. To this point, we've received great feedback on KAI, especially from the enterprise level. However, the largest hurdle in unveiling the true potential of this technology faces is scalability.
As the returns of implementing this comprehensive tool into a company's digital advertising strategy truly shines when there's larger amounts of data processed for a single entity. This results in greater opportunity for KAI to catch and filter out fraudulent activity and dead ends at a significant and undeniable scale. It's because of this success and utility of KAI that this technology has been the centerpiece for Kubient's M&A related strategic alternative initiatives. This further validates the angle that we've positioned ourselves as an extremely attractive target for reputable advertising centric companies looking to find the proper solution to the storied fraud-ridden digital advertising ecosystem.
Our comprehensive supply side platform with direct publisher integrations coupled with KAI is primed to be a prominent divider for companies looking to lead the current and next generation of ad tech. One thing we've learned over the last few months is M&A discussions differ depending on the size and scope of the conversations. Larger enterprise-level discussions require a much deeper, thorough layer of due diligence while we explore opportunities. Additionally, we continue to field commercial opportunities synergistic to our core business that have the potential to bolster both our supply and demand side of our Audience Cloud offering. With these efforts, we look to deliver lasting value for our shareholders. We look forward to providing further updates on our acquisition and strategic alternative efforts when appropriate. The focus on inorganic opportunities has not stopped Kubient from operating and delivering at a high level and servicing our existing client base.
This quarter was highlighted by multiple wins, emphasized by some renewals where the scope of work with existing customers expanded. The first example I want to share is with an entertainment company that increased their budget by over 50% from the start of 2022 due to the positive results they have seen via the direct media spend with Kubient. Next, another client in the entertainment vertical has started putting on live events again at a larger capacity post-COVID and has decided to increase their direct media spend through 2022 with Kubient. The increase in media spend is a direct confirmation of the results Kubient can provide advertisers.
Additionally, a client in the large mattress retail space that tested direct media spend with Kubient in Q1 decided to renew for Q2 and beyond, increasing their overall budget for 2022 as well based on the result of the initial media spend. Finally, we also have a deal with a well-known printer manufacturer and distribution company where the client decided to expand the scope of work. These, among others not mentioned, point to the quality of results we've delivered via our engineering and Kubient managed services teams despite the smaller staff. We look to continue this trend of cash conservation while growing our top line through quantity and quality of client relationships through the close of 2022 and far into 2023.
Our value partnerships with Yahoo and Google have continued on the DSP front, and we've expanded those partnerships over the quarter to include a new integration with Viant to help deliver targeted, fraud-free CTV inventory for their tier one advertising clients. While we celebrate winning partnerships with industry leaders such as Yahoo and Google, the connection with these partners is one part of the revenue generation equation. As an example, once Google was able to vet Kubient and our technology, we completed an integration between the Kubient SSP, which includes KAI, and Google's DSP. Once that is done, our team then needs to contact the brands and agencies using the Google DSP and direct them to spend media dollars on the Kubient marketplace.
We are confident based on these current conversations that KAI, combined with a direct marketplace of publishers, is a big advantage compared to other offerings within the ad tech ecosystem. Now, I'll hand this call over to Josh, who will provide additional color on the quarter from a financial perspective. Josh?
Thanks, Paul, and good afternoon, everyone. Thanks for joining our call. I wanted to start off by piggybacking off of Paul's previous point in that we've made strategic efforts on the financial front to clean up our balance sheet and ensure we're in the best possible position for any strategic alternative that may come along. That said, due to severance and cancellation costs incurred from certain third-party vendors and services during the second quarter, the normalization of our burn rate did not take effect until the beginning of August. Kubient expects that our third quarter results and beyond will reflect the lower cash burn rate. We have a very strong cash position with over two years of runway and are pleased with our financial status for the time being. Now to our financial results for the second quarter ended June 30, 2022.
Net revenues for the second quarter of 2022 were approximately $400 thousand compared to approximately $498 thousand in the same period last year. The decrease was primarily due to a decrease of net revenues associated with a major customer whose contract renewed in the first quarter of 2022 at a reduced scope as compared to the 2021 period, partially offset by revenues generated in the 2022 period related to the customer contracts acquired in connection with the acquisition of MediaCrossing Inc. in November 2021. Net revenues for the six-month period ending June 30, 2022 were approximately $1.6 million, compared to approximately $1.2 million in the same period last year. The increase in net revenue was primarily attributable to customer contracts acquired in connection with the acquisition of MediaCrossing Inc. in November 2021.
Now, turning to our expense line items. Technology expenses increased to approximately $959,000 from approximately $620,000 in the same period last year. The increase was primarily due to an increase in headcount costs, hosting fees, non-cash stock-based compensation, amortization, and software expenses, partially offset by a decrease in consulting expenses. General and administrative expenses increased to approximately $1.5 million, compared to approximately $1.1 million in the same period last year. The increase was primarily due to an increase in headcount costs, state taxes, non-cash stock-based compensation, insurance expense, office expense, director fees, dues and software subscriptions, all partially offset by a decrease in professional services and consulting expenses. During the three months ended June 30, 2022, we recognized a one-time GAAP accounting non-cash impairment loss on intangible assets of approximately $3 million.
GAAP net loss attributable to common shareholders was approximately $5.8 million, or 41-cent loss per basic and diluted share, compared to a net loss of approximately $1.7 million, or 12-cent loss per basic and diluted share in the same period last year. Adjusted EBITDA loss, a non-GAAP measure, increased to approximately $2.2 million or 16 cents per basic and diluted share for the three months ended June 30, compared to an adjusted EBITDA loss of approximately $1.6 million or 12 cents per basic and diluted share in the same period last year.
On a six-month basis, our adjusted EBITDA loss increased to approximately $5.9 million or $0.41 per basic and diluted share, compared to an adjusted EBITDA loss of approximately $3.1 million or $0.24 per basic and diluted share in the same six-month period last year. As of June 30, 2022, we had a cash balance of approximately $17.7 million. That concludes my financial summary. For a more detailed analysis, please reference our Form 10-Q, which we plan to file today. I will now turn the call back over to Paul. Paul?
Thanks, Josh. Our recent efforts have successfully put us in a position to maintain operations at a productive and high level, all the while expanding our client base and partnerships to lead to partnership growth. Kubient will continue conversations while looking at strategic inorganic growth opportunities that align with our overall market capture plan to enhance our product portfolio or customer base within our targeted market. We appreciate you all for your support. Now I'll turn it over to the operator for Q&A.
Thank you. At this time, the floor is open for questions. If you'd like to ask a question, please press star and one on your touch tone phone. You may remove yourself from the queue at any time by pressing star two. Once again, that is star and one to ask a question. We'll take a question from Jack Vander Aarde from Maxim Group.
Hi, this is Jack C. calling in for Jack Vander Aarde. Thank you for taking my questions. It sounds like you're really well-positioned for capital preservation moving forward, but I was wondering if you could share any expectations for other workforce changes over the next 12 months. Just if you could clarify the updated headcount number. Thank you so much.
Hey, Jack. Good to hear from you. We don't plan in the near or long-term on additional cuts. I think we've really done a great job at getting us to a place, as you mentioned, on cash conservation while being able to grow the platform, the technology, and also manage our current roster of clients. As of today, you know, we sit right around 21 full-time employees. You know, like Josh had mentioned, with that head count and the burn rate, you know, we expect that to last well into around 24-36 months of runway.
Yeah. That's amazing color. Awesome. Yeah, next, if you could give any more color into the relationship with PubMatic and Yahoo. I know you kinda mentioned a little bit, but how those are developing and if there's any other traction on the demand side with new brands or agencies related to that relationship.
Sure. Like I mentioned in my prepared remarks, you know, when we integrate with these much larger platforms, they typically will do some due diligence on us, on the technology. Once we actually integrate, the real work then begins. We have to reach out to all of the advertisers, all of the agencies that are using these platforms and really start to almost sell them on the concept of why a fraud-free direct marketplace makes so much sense. Then we start to see, you know, small buys come through, which is great. Again, it's a relationship business where we have to continue to reach out and stay on top of them so they know, okay, we have these direct publishers, we have this KAI product that can actually remove the fraud before you buy it.
You know, we get more and more budget as the year goes on. We mentioned in our prepared remarks, a few partners have used and understood why this is so powerful, and we have seen increases, which is a direct indication that this is working. It's just a very challenging decision because as you know, Jack, the entire world changed in 2020. Obviously with COVID and the markets acting the way they have, we made a very, very hard decision to cut our workforce, maintain the relationships we have and attempt to grow them while we explore, you know, some of these inorganic opportunities around M&A, et cetera.
The market performing the way it has, in some ways, was actually beneficial for Kubient because a lot of much larger enterprise-level companies that were exploring the public markets found that the markets were not, you know, open to public offerings. Having Kubient well prepared with a very, very clean balance sheet and a completely experienced team with cash on our balance sheet, we've gotten into some very, very good conversations around, you know, what would it look like for a much larger company to use KAI, potentially own KAI, and potentially, you know, merge with Kubient. Blessings and curses at the same time, if you will. It's been a very interesting two years, to say the least.
Yeah, sure. Yeah, just to kinda go off that point on the other side, so less about like kinda M&A activity, but more big picture macro question. You kinda mentioned how COVID has really shaken everything up. What are you noticing on the demand side for overall ad traffic? And, you know, if you can give any color on how that's impacting your strategy or any general expectations moving forward, that'd be awesome.
Sure. I think what you saw was a lot of large Tier 1 brands pull back on spending for a while. They got a lot more strategic on where they're spending their dollars. We're starting to see some of those pipelines unkink, if you will, start to flow. You know, what they found while they were retracting a bit on their spend, they were able to find pockets of inventory, pockets of partnerships like Kubient, where we're able to demonstrate at a very high level, here's the amount of fraud we prevented, here's the results we generated. We're expecting the hard work that we did during those leaner times during COVID will reward the company, you know, for the future because we delivered results while they are spending less.
Now as the budgets start to open up, we hope to see, you know, larger revenue streams come through those partnerships.
Yeah. Thank you. Thank you so much. I appreciate the update and answering my questions. I'll hop back in queue.
Thank you.
At this time, this concludes the company's question and answer session. If your question was not taken, you may contact Kubient's investor relations team at Kubient@gatewayir.com. I'd now like to turn the call back over to Mr. Roberts for his closing remarks.
Thanks, operator, and thank you everyone for joining us today on our Q2 2022 earnings call. I especially wanna take a moment and thank our employees, our partners, investors and customers for their continued support. Appreciate your continued interest in Kubient and look forward to updating you on our next call.
Thank you for joining us today for Kubient's second quarter and 2022 earnings conference call. You may now disconnect.