Rumble (RUM) - 2024 Q3 - Earnings Call Transcript

Financial Data and Key Metrics - Q3 2024 revenue was $25.1 million, up$ 7.1 million from Q3 2023, driven by a $5.9 million increase in audience monetization and$ 1.2 million from other initiatives [28] - ARPU decreased to $0.33 in Q3 2024 from$ 0.37 in Q2 2024 due to revenue growth lagging behind strong MAU growth [29] - Cost of services decreased to $36.4 million in Q3 2024 from$ 39.8 million in Q3 2023, primarily due to a $5.4 million reduction in content costs [31] - Cash, cash equivalents, and marketable securities stood at$ 132 million at the end of Q3 2024, down from $219.5 million at the end of 2023 [32] - Adjusted EBITDA loss improved to$ 23.5 million in Q3 2024 from $35.4 million in Q3 2023 [33] Business Line Performance - Rumble Premium exceeded expectations, with strong subscriber growth following the introduction of mid-roll ads in September 2024 [17][18] - The Rumble Advertising Center (RAC) saw significant growth, particularly during the U.S. presidential election, with record live streams, concurrent views, and revenue [11][12] - Rumble Cloud demonstrated its technical capabilities during the election, supporting high concurrent viewership and attracting enterprise customers [14][15] Market Performance - Rumble captured 17.8% of live hours watched in the U.S. on election day, compared to 71.2% for YouTube and 10% for Twitch [12] - The Rumble app ranked 3 in the Photo and Video category on the Apple App Store, ahead of YouTube [13] - Traditional TV networks saw ratings drop by up to 50% compared to the 2020 election, highlighting Rumble's growing influence [12] Strategic Direction and Industry Competition - Rumble positioned itself as a leader in the independent creator space, with a focus on free speech and monetization opportunities [7][10] - The company introduced a hybrid model combining YouTube's ad-free experience and Netflix's exclusive content, aiming to provide superior economics for creators [20] - The dismantling of GARM (Global Alliance for Responsible Media) removed a significant barrier to brand advertising, with the first major brand partnership set for December 2024 [23][25] Management Commentary on Operating Environment and Future Outlook - Management expressed optimism about the company's trajectory, citing strong user growth, monetization progress, and the potential for brand advertising partnerships [5][22] - The election results were seen as a turning point, with Rumble's user base now representing a majority that brands cannot ignore [22][26] - The company expects continued revenue growth in Q4 2024 and is targeting adjusted EBITDA breakeven by 2025 [30][33] Other Key Information - Rumble's programming and content agreements had a minimum contractual cash commitment of$ 38 million as of September 30, 2024, down from $106 million at the end of 2023 [31] - The company's cash usage improved by 25% in Q3 2024 compared to Q2 2024, reflecting better financial management [32] Q&A Session Summary Question: Visibility into forward advertising revenue and potential for formal guidance - Management highlighted the shift from direct response advertising to brand advertising, with the first major brand partnership set for December 2024 [36][38] - The company expects continued growth in advertising revenue, driven by the introduction of mid-roll ads and the dismantling of GARM [37][39] Question: Plans to retain high engagement post-election - Management emphasized product improvements and the premium offering as key drivers of user stickiness [45][47] - Early signs indicate strong retention of engagement, particularly among premium subscribers [46][48] Question: Status of Rumble Advertising Center tools and user interface - The Rumble Advertising Center is in its best state, with mid-roll ads significantly boosting both RAC and Premium revenue [50][52] - Further optimizations are planned, but the current setup is delivering strong results [52] Question: Sales cycle for Rumble Cloud and future prospects - The sales cycle for Rumble Cloud remains long but is progressing, with potential deals involving large enterprises and government clients [53][54] - Recent wins, such as the Miami Dolphins deal, demonstrate the platform's growing appeal [53] Question: Revenue seasonality expectations for Q4 2024 - Management expects continued sequential revenue growth in Q4 2024, driven by the full-quarter impact of mid-roll ads and strong performance in RAC [57][58]