Rumble (US:RUM)2023-11-13 21:08User Engagement and Growth - Average Monthly Active Users (MAUs) reached 58 million in Q3 2023[150] - Estimated Minutes Watched Per Month (MWPM) is used to measure user engagement, calculated from bandwidth consumption[151] - Estimated MWPM was 10.7 billion in Q3 2023, a 19% increase from Q3 2022 but a 9% decrease from Q2 2023[152] - Average hours of uploaded video per day were 15,700 in Q3 2023, representing a 78% increase from Q3 2022 and a 19% increase from Q2 2023[154] - The company continues to focus on user growth and engagement rather than maximizing revenue, experimenting with various revenue growth strategies[126] Acquisitions and Investments - The company acquired 100% of Callin Corp. on May 15, 2023, expanding its podcasting and live streaming capabilities[124] - On October 3, 2023, the company acquired North River Project Inc., which holds intellectual property[125] - The company plans to use a substantial portion of raised funds to acquire content and grow user engagement, which may not maximize profitability in the short term but is expected to position the business for long-term success[188] Financial Performance - Revenues increased by $7.0 million to $18.0 million in Q3 2023 compared to Q3 2022, with $2.3 million from higher advertising revenue and $4.7 million from higher licensing and other revenue[158] - Revenues for the nine months ended September 30, 2023, increased by $41.1 million to $60.6 million compared to the same period in 2022[174] - Total revenue for the quarter ended September 30, 2023, was $17,982,150, compared to $10,983,182 in the same quarter of 2022, reflecting significant growth[194] Expenses and Losses - Cost of services rose by $27.5 million to $39.8 million in Q3 2023, primarily due to a $26.1 million increase in programming and content costs[160] - General and administrative expenses increased by $6.8 million to $9.7 million in Q3 2023, driven by payroll and related expenses[161] - Research and development expenses increased by $3.4 million to $5.1 million in Q3 2023, mainly due to a $3.0 million increase in payroll and related expenses[162] - Net loss for Q3 2023 was $29.0 million, a 1462% increase compared to a net loss of $1.9 million in Q3 2022[157] - Net loss for the nine months ended September 30, 2023, was $87.1 million, a 733% increase compared to a net loss of $10.5 million in the same period in 2022[172] - Net loss for the nine months ended September 30, 2023, was $(29,021,042), compared to $(1,858,452) in the same period of 2022, indicating increased losses[194] Cash and Securities - Cash, cash equivalents, and marketable securities balance was $267.0 million as of September 30, 2023, consisting of cash on deposit and amounts held in money market funds, treasury bills, and term deposits[187] - The company had cash, cash equivalents, and marketable securities totaling $267.0 million as of September 30, 2023[222] - Interest income rose by $10.3 million to $10.5 million for the nine months ended September 30, 2023, attributed to a higher balance in cash and marketable securities due to the Business Combination[182] - An immediate 10% change in interest rates would not have a material effect on the fair market value of cash, cash equivalents, and marketable securities due to their short-term maturities and low-risk profile[222] Customer Concentration and Risk - One customer accounted for $5.8 million and $29.8 million, representing 32% and 49% of revenue for the three and nine months ended September 30, 2023, respectively[221] - For the three and nine months ended September 30, 2022, one customer accounted for $5.8 million and $5.8 million, or 53% and 30% of revenue, respectively[221] - As of September 30, 2023, one customer represented 36% of accounts receivable, down from 66% as of December 31, 2022[221] - The company is exposed to credit risk, particularly from one customer, which significantly impacts revenue and accounts receivable[221] Accounting and Compliance - The company is classified as an emerging growth company under the JOBS Act, allowing it to delay adopting new or revised accounting standards[219] - The financial condition, results of operations, and capital resources are influenced by market conditions and the competitive environment[216] - The measurement of warrants issued to purchase shares of Class A common stock is based on the Nasdaq closing price as of the date of measurement[217] - Warrants from Legacy Rumble were exchanged for 14,153,048 shares of Class A Common Stock as part of the Business Combination, valued at a par value of $731,281[217] Other Financial Metrics - Total expenses for the nine months ended September 30, 2023, increased by $123.1 million to $158.9 million compared to the same period in 2022[172] - Acquisition-related transaction costs decreased by $0.2 million to $1.2 million for the nine months ended September 30, 2023, compared to $1.4 million in the same period of 2022[179] - Amortization and depreciation increased by $2.2 million to $3.1 million for the nine months ended September 30, 2023, as the company continues to build out its infrastructure[180] - The change in fair value of warrant liability resulted in a loss of $0.6 million for the nine months ended September 30, 2023, a decrease of $5.1 million compared to the previous year[184]