Rumble (RUM) - 2022 Q4 - Annual Report

User Growth and Engagement - Rumble achieved an average of 80 million monthly active users (MAUs) in Q4 2022, a 142% increase from 33 million MAUs in Q4 2021[30] - The total minutes watched on Rumble's platform increased from 0.2 billion in Q3 2020 to 11.1 billion in Q4 2022[30] - Average hours of uploaded video per day reached 10,373 in Q4 2022, a 216% increase from Q4 2021[31] Revenue and Financial Performance - Revenues for the year ended December 31, 2022, were $39,384,284, a significant increase from $9,466,363 in 2021, representing a growth of approximately 316%[288] - Total expenses for 2022 amounted to $75,033,662, compared to $19,978,776 in 2021, indicating an increase of about 275%[288] - The net loss for 2022 was $11,403,994, a decrease in loss compared to $13,413,532 in 2021, reflecting an improvement of approximately 15%[288] Advertising and Monetization Strategies - Rumble plans to launch its advertising marketplace, RAC, commercially later in 2023, which is currently in beta mode[25] - Rumble's advertising strategy includes developing its own network to drive value and expand its advertiser base, transitioning all ads to be served through RAC[50] - The company aims to enhance the integration of Rumble, Locals, and RAC to provide a seamless monetization toolkit for creators[46] Acquisitions and Strategic Investments - The company acquired Locals in October 2021, adding approximately 86,000 subscribers to its platform and enhancing its subscription revenue model[63] - The acquisition of Locals Technology Inc. was completed for a total consideration of $7,039,110, with goodwill recorded at $662,899[388] - The company plans to continue investing in infrastructure to support its products, with significant investments expected to grow proportionately as the business scales[60] Financial Position and Assets - As of December 31, 2022, cash, cash equivalents, and marketable securities totaled $338.3 million, consisting of investments in money market funds, treasury bills, and term deposits[273] - The company’s total assets as of December 31, 2022, were $366,982,638, compared to $55,801,181 in 2021, reflecting an increase of about 558%[290] - Cash and cash equivalents as of December 31, 2022, were $337,169,279, a substantial increase from $46,847,375 in 2021[290] Operational and Employee Insights - As of December 31, 2022, Rumble had 70 full-time employees, with a focus on recruiting and retaining key talent[51] - The company has made initial investments in IT equipment, servers, bandwidth, and data centers to support billions of minutes of video consumption monthly[60] - Rumble's share-based compensation expenses increased to $1,933,403 in 2022 from $1,414,479 in 2021, indicating a rise in employee incentives[295] Risk Factors and Credit Management - A meaningful portion of the company's revenue is attributable to service agreements with one customer, highlighting potential credit risk[272] - The allowance for credit losses at December 31, 2022, was $nil, indicating no expected credit losses[362] - The company maintains an allowance for credit losses based on historical collectability and market conditions[360] Compliance and Governance - The independent auditor's report confirmed that the consolidated financial statements present fairly the financial position of Rumble Inc. as of December 31, 2022, and 2021[281] - The company is implementing an updated content moderation process, with changes expected to be finalized by the end of 2023[66] - The company emphasizes a politically neutral content policy to ensure a safe exchange of views on its platform[65] Shareholder and Warrant Information - The Company issued 48,970,404 shares of Class A Common Stock and 168,762,214 shares of Class C Common Stock[6] - The warrant liability was valued at $3.86 per warrant on September 16, 2022, and revalued at $1.25 per warrant on December 31, 2022, resulting in a gain of $21,010,500[419] - The Company may redeem the warrants at a price of $0.01 per warrant if the common stock price exceeds $18.00 per share for 20 trading days[418]