On November 12, 2024, Rumble Inc (RUM, Financial) released its 8-K filing detailing the financial results for the third quarter of 2024. Rumble Inc, a video-sharing platform, reported a revenue of $25.1 million, which, despite being a 39% increase year-over-year, fell short of the analyst estimate of $29.25 million. The company also reported a net loss of $31.54 million, translating to a loss per share of $0.15, which was above the estimated loss of $0.13 per share.
Company Overview
Rumble Inc is a free-to-use video-sharing platform where users can engage with content by watching, sharing, liking, commenting, and uploading videos. The platform allows users to subscribe to channels for the latest content from creators, including video-on-demand and live-streamed content. The majority of Rumble's revenue is generated in the United States.
Performance and Challenges
Rumble Inc's performance in Q3 2024 highlights both growth and challenges. The company achieved a record revenue of $25.1 million, driven by a significant increase in audience monetization revenues, primarily from advertising and subscriptions. However, the revenue fell short of analyst expectations, indicating potential challenges in scaling monetization efforts to meet market forecasts.
The company also reported a reduction in cash usage for the fourth consecutive quarter, using 25% less cash than the previous quarter. This reduction is crucial for maintaining financial stability as the company continues to invest in growth and infrastructure.
Financial Achievements and Industry Context
Rumble Inc's financial achievements include a 26% quarter-over-quarter growth in Monthly Active Users (MAUs) to 67 million, marking the eleventh consecutive quarter with MAUs exceeding 40 million. This growth is significant in the software industry, where user engagement is a key driver of revenue potential.
Rumble’s Chairman and CEO Chris Pavlovski stated, “We broke records on Election Night. We delivered record revenues for the third quarter, with $25.1 million, a 39% increase compared to a year ago. The American people have spoken. Cancel culture is dead. Free Speech is now mainstream, and Rumble is in the driver’s seat with the best lineup of independent creators with the best economics.”
Income Statement and Key Metrics
The income statement reveals a decrease in the cost of services by $3.3 million to $36.4 million, attributed to a reduction in programming and content costs. However, general and administrative expenses saw a slight increase, while research and development expenses decreased by $0.5 million. Sales and marketing expenses rose by $0.8 million, reflecting increased payroll and related expenses.
Key metrics such as Average Revenue Per User (ARPU) are crucial for assessing Rumble's ability to monetize its user base. The company's focus on increasing advertising inventory and cloud services offerings contributed to revenue growth, although challenges remain in aligning these efforts with market expectations.
Balance Sheet and Cash Flow
As of September 30, 2024, Rumble Inc reported cash and cash equivalents of $130.78 million, down from $218.34 million at the end of 2023. The decrease in cash reserves highlights the importance of continued cash management and operational efficiency as the company navigates its growth trajectory.
The balance sheet also shows an increase in accounts receivable to $11.30 million, indicating higher sales activity, while deferred revenue rose to $12.59 million, reflecting future revenue recognition from existing contracts.
Analysis and Outlook
Rumble Inc's Q3 2024 results underscore the company's growth potential and the challenges it faces in meeting market expectations. The increase in MAUs and revenue growth are positive indicators, yet the shortfall in revenue against analyst estimates suggests the need for enhanced monetization strategies.
Looking ahead, Rumble Inc aims to continue its revenue growth trajectory while moving towards Adjusted EBITDA breakeven in 2025. The company's ability to balance growth investments with cost management will be critical in achieving these goals.
Explore the complete 8-K earnings release (here) from Rumble Inc for further details.
