Rumble (US:RUM)2024-11-12 21:10User Metrics and Analytics - MAUs (GA4) averaged 67 million in Q3 2024, a 26% increase from Q2 2024, driven by heightened interest in political news ahead of the U.S. presidential election[143] - The company transitioned from Universal Analytics (UA) to Google Analytics 4 (GA4) in Q3 2023, which may affect the comparability of MAU metrics between periods[138] - Connected TV users, now included in MAUs (GA4), are estimated to be fewer than 1 million and considered immaterial[141] - The company relies on significant paid advertising to attract users but acknowledges potential overstatement of MAUs due to spam and fraudulent activity[142] Revenue and ARPU - ARPU decreased by 11% to $0.33 in Q3 2024, as revenue growth slightly lagged behind strong MAU growth during the same period[146] - ARPU calculations exclude Other Initiatives revenue and are based on Audience Monetization revenue divided by MAUs for the relevant quarter[145] - Revenues increased by $7.1 million (39%) to $25.1 million in Q3 2024 compared to Q3 2023, driven by a $5.9 million increase in Audience Monetization revenues and $1.2 million from Other Initiatives[151] - Revenues increased by $4.7 million (8%) to $65.3 million in the nine months ended September 30, 2024, with $2.4 million from Audience Monetization and $2.3 million from Other Initiatives[165] - Total revenue for the quarter ended September 30, 2024 was $25.1 million, compared to $17.98 million in the same quarter of 2023[185] Expenses and Costs - The company expects sales and marketing expenses to increase as it promotes its platform, expands marketing activities, and grows domestic and international operations[131] - Research and development expenses primarily include payroll, bonuses, and share-based compensation for engineering and development teams, as well as consultant fees[130] - General and administrative expenses are expected to rise due to compliance costs, including audit, legal, and investor relations expenses[129] - Cost of services includes programming and content costs, third-party service provider fees, and payment processing fees, all expected to increase in absolute dollar amounts[128] - Cost of services decreased by $3.3 million (8%) to $36.4 million in Q3 2024, primarily due to a $5.4 million reduction in programming and content costs[153] - Research and development expenses decreased by $0.5 million (9%) to $4.7 million in Q3 2024, mainly due to lower payroll and related expenses[154] - Sales and marketing expenses increased by $0.8 million (24%) to $4.0 million in Q3 2024, driven by higher payroll and related expenses[155] - Amortization and depreciation increased by $1.8 million (131%) to $3.1 million in Q3 2024, due to infrastructure build-out and intangible asset amortization[156] - Cost of services decreased by $2.7 million (3%) to $103.9 million in the nine months ended September 30, 2024, primarily due to a $7.6 million reduction in programming and content costs[166] - Research and development expenses increased by $2.4 million (20%) to $14.5 million in the nine months ended September 30, 2024, driven by higher payroll and related expenses[169] - Sales and marketing expenses increased by $3.3 million (32%) to $13.5 million in the nine months ended September 30, 2024, due to higher payroll, consulting services, and marketing activities[169] Financial Performance and Losses - Net loss increased by $2.5 million (9%) to $31.5 million in Q3 2024 compared to Q3 2023[151] - Adjusted EBITDA for the nine months ended September 30, 2024 was $(78.7) million, compared to $(85.3) million in the same period of 2023[188] Cash Flow and Investments - As of September 30, 2024, the company's cash, cash equivalents, and marketable securities balance was $132.0 million[179] - Net cash used in operating activities for the nine months ended September 30, 2024 was $74.7 million, an increase of $14.8 million compared to the same period in 2023[181][182] - Net cash used in investing activities for the nine months ended September 30, 2024 was $11.3 million, including $7.3 million in purchases of property, equipment, and intangible assets[183] Customer Concentration and Revenue Recognition - For the three months ended September 30, 2024, one customer accounted for $3,192,053 or 13% of revenue, compared to $5,751,157 or 32% in the same period in 2023[203] - For the nine months ended September 30, 2024, one customer accounted for $11,671,470 or 18% of revenue, compared to $29,762,071 or 49% in the same period in 2023[203] - As of September 30, 2024, one customer accounted for 11% of accounts receivable, down from 35% as of December 31, 2023[203] - Trade and barter revenue is recognized based on the fair value of products and services received, or standalone selling price if fair value is not estimable[200] Tax and Interest Rate Sensitivity - The company reviews its tax positions in various jurisdictions and records additional liabilities if events change the status of its tax liability[199] - An immediate 10% change in interest rates would not materially affect the fair market value of the company's cash, cash equivalents, and marketable securities due to their short-term maturities and low-risk profile[203] Contractual Commitments and Fair Value Adjustments - The company had entered into programming and content agreements with a minimum contractual cash commitment of $38 million as of September 30, 2024[180] - Change in fair value of contingent consideration increased by $3.1 million, resulting in a loss of $1.4 million for the nine months ended September 30, 2024[172] - Interest income decreased by $3.9 million to $6.6 million for the nine months ended September 30, 2024 compared to the same period in 2023[173] - Other income (expense) decreased by $0.2 million to $0.1 million for the nine months ended September 30, 2024[175] - Change in fair value of warrant liability decreased by $2.1 million, resulting in a loss of $1.5 million for the nine months ended September 30, 2024[176]