Arena (AREN) - 2025 Q2 - Quarterly Results

Executive Summary & Highlights The Arena Group reported significant Q2 2025 financial growth, with revenue up 67% and Adjusted EBITDA up 375%, and initiated a share repurchase program Q2 2025 Financial Highlights The Arena Group reported significant financial growth in Q2 2025, with revenue increasing by 67% and Adjusted EBITDA by 375% year-over-year, while income from continuing operations per share improved substantially, and a share repurchase program was authorized Q2 2025 Financial Performance | Metric | Q2 2025 | Q2 2024 | Change | | :-------------------------------- | :------ | :------ | :----- | | Revenue | $45,012k | $27,183k | +67% | | Income from continuing operations per share | $0.26 | -$0.24 | +$0.50 | | Adjusted EBITDA | $19M | $4M | +375% | - Trailing Twelve Months (TTM) EPS: Over $0.60, a five-fold increase from $0.12 (for the prior TTM ended March 31, 2025)[5] - Share Repurchase Program: Board authorized repurchase of up to 3 million shares of common stock through July 31, 2026[5] Operational Highlights & Strategic Initiatives The company continued to scale its competitive publishing model, driving profitable growth across key brands, expanded its portfolio by launching TravelHost, and the CEO highlighted the stock as undervalued compared to peers - Competitive Publishing Model: Successfully rolled out to Men's Journal, TheStreet, and Parade, following Athlon Sports, resulting in significant growth in revenue and earnings[4] - Brand Expansion: Launched the travel brand, TravelHost, to expand its portfolio and diversify content verticals, with a goal to add one new brand per quarter[4][7] - CEO's Valuation Perspective: Believes the stock represents tremendous value, trading at approximately 10x P/E, significantly below Russell 2000® peers (average >30x P/E)[4] Company Overview & Brand Performance The Arena Group, an innovative tech platform and media company, empowers creators, aggregates diverse brands, and achieved strong Q2 2025 brand traffic growth About The Arena Group The Arena Group is an innovative technology platform and media company that empowers creators and publishers to monetize content through a unified platform, aggregating content across a diverse portfolio of recognizable brands, reaching over 100 million monthly users - Business Model: An innovative technology platform and media company with a proven cutting-edge playbook that transforms media brands[8] - Platform Functionality: Unified technology platform empowers creators and publishers with tools to publish and monetize their content[8] - Key Brands: Home to many recognizable media brands, including TheStreet, Parade, Men's Journal, Athlon Sports, Surfer, Powder, Bike, and Snowboarder[8] - Audience Reach: Aggregates content across a diverse portfolio of brands, reaching over 100 million users monthly[8] Brand Performance Metrics Key brands demonstrated strong audience traffic growth in Q2 2025 compared to Q2 2024, with Men's Journal leading with a 479% increase in pageviews, and Parade also saw significant growth in non-advertising revenue Q2 2025 Brand Traffic Growth (YoY) | Brand | Pageview Growth (Q2 2025 vs Q2 2024) | Monthly Pageviews (Q2 2025) | | :---------- | :----------------------------------- | :-------------------------- | | Athlon Sports | +38% | N/A | | Men's Journal | +479% | >165 million (quarterly) | | TheStreet | +100% | 89 million (average monthly) | | Parade | +70% | >131 million (average monthly) | - Parade Non-Advertising Revenue: More than doubled (+107%) vs. Q2 2024, including performance marketing and syndication efforts[9] Financial Statements This section details consolidated balance sheets and statements of operations, showing significant asset growth, reduced liabilities, and a Q2 2025 net income turnaround Consolidated Balance Sheets As of June 30, 2025, The Arena Group's total assets increased to $127.78 million from $116.35 million at December 31, 2024, while total liabilities significantly decreased, primarily due to a reduction in current liabilities from discontinued operations, leading to a substantial improvement in stockholders' deficiency Balance Sheet Snapshot (in thousands of dollars) | Metric | June 30, 2025 (Unaudited) | December 31, 2024 | Change | | :-------------------------------- | :-------------------------- | :---------------- | :----- | | Total Assets | $127,781 | $116,352 | +$11,429 | | Total Liabilities | $144,941 | $246,512 | -$101,571 | | Total Stockholders' Deficiency | $(17,328) | $(130,328) | +$113,000 | - Key Asset Changes: Cash and cash equivalents increased from $4,362k to $6,771k, and accounts receivables, net, increased from $31,115k to $40,077k[11] - Key Liability Changes: Current liabilities from discontinued operations decreased from $96,159k to $0, and Simplify loan decreased from $10,651k to $2,651k[11] Condensed Consolidated Statements of Operations For Q2 2025, the company reported a net income of $108.64 million, a significant turnaround from a net loss of $8.19 million in Q2 2024, driven by a 67% increase in revenue and substantial income from discontinued operations, with income from continuing operations also turning positive Q2 2025 vs Q2 2024 Performance (in thousands of dollars) | Metric | Q2 2025 | Q2 2024 | Change | | :-------------------------------- | :------ | :------ | :----- | | Revenue | $45,012 | $27,183 | +67% | | Gross Profit | $25,435 | $10,718 | +137% | | Income (loss) from operations | $16,412 | $(2,578) | Turnaround | | Income (loss) from continuing operations | $12,412 | $(6,938) | Turnaround | | Income (loss) from discontinued operations, net of tax | $96,227 | $(1,249) | Turnaround | | Net income (loss) | $108,639 | $(8,187) | Turnaround | Basic Net Income (Loss) Per Common Share | Metric | Q2 2025 | Q2 2024 | | :-------------------------------- | :------ | :------ | | Continuing operations | $0.26 | $(0.24) | | Discontinued operations | $2.03 | $(0.04) | | Basic net income (loss) per common share | $2.29 | $(0.28) | Non-GAAP Financial Measures This section details Adjusted EBITDA reconciliation, a non-GAAP measure, highlighting its significant Q2 2025 increase and utility in assessing core operating performance Adjusted EBITDA Reconciliation Adjusted EBITDA for Q2 2025 was $18.55 million, a significant increase from $3.67 million in Q2 2024, with this non-GAAP measure used by management to provide insight into underlying operating performance by excluding non-cash items and those not related to core business operations Adjusted EBITDA Performance (in thousands of dollars) | Metric | Q2 2025 | Q2 2024 | Change | | :-------------- | :-------- | :-------- | :----- | | Adjusted EBITDA | $18,552 | $3,669 | +405.6% | Reconciliation of Adjusted EBITDA to Net Income (Loss) (in thousands of dollars) | Item | Q2 2025 | Q2 2024 | | :-------------------------------- | :-------- | :-------- | | Net income (loss) | $108,639 | $(8,187) | | (Income) loss from discontinued operations | $(96,227) | $1,249 | | Income (loss) from continued operations | $12,412 | $(6,938) | | Add: Interest expense (net) | $2,945 | $4,249 | | Add: Income taxes | $979 | $35 | | Add: Depreciation and amortization | $1,989 | $2,420 | | Add: Stock-based compensation | $151 | $499 | | Add: Liquidated damages | $76 | $76 | | Add: Employee restructuring payments | $0 | $3,328 | - Purpose of Adjusted EBITDA: Provides visibility to the underlying continuing operating performance by excluding the impact of certain items that are noncash in nature or not related to core business operations[14] Forward-Looking Statements This section provides a cautionary disclaimer regarding forward-looking statements, emphasizing inherent risks, uncertainties, and the company's limited obligation to update Disclaimer This section serves as a cautionary statement regarding forward-looking statements made in the press release, emphasizing that they are based on current information and assumptions, subject to known and unknown risks and uncertainties, and actual results may differ materially, with the company not undertaking to update these statements unless required by law - Nature of Statements: Relate to future events or performance, including business strategy, future revenues and income from continuing operations, cost reductions, market growth, capital requirements, product introductions, expansion plans, stock price relative to peers, and share repurchase program[19] - Risks and Uncertainties: Actual outcomes are affected by known and unknown risks, trends, uncertainties, and factors beyond the company's control or ability to predict, as detailed in SEC filings (Form 10-K and 10-Q)[20][22] - No Obligation to Update: The company does not undertake any obligation to release publicly any revisions to forward-looking statements to reflect events or circumstances after the date of the press release, except as may be required by law[23]