Rumble Inc. (NASDAQ:RUM) Q4 2024 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call reveals significant financial instability with a large net loss, despite revenue growth. While the Tether investment provides liquidity, it introduces dependency risks. Competitive pressures and regulatory issues add to uncertainties. The Q&A section highlights unclear management responses, especially on strategic matters. Considering a $1.6 billion market cap, the stock is likely to see a negative reaction, driven by financial losses, competitive challenges, and strategic uncertainties.
Key Financial Performance
Revenue (Q4 2024) $30.2 million, an increase of 48% from $20.4 million in Q4 2023, driven by a $7.9 million increase in audience monetization revenues and $1.9 million from other initiatives.
Revenue (Full Year 2024) $95.5 million, an increase of 18% from $81 million in 2023.
ARPU (Q4 2024) $0.39, an increase from $0.33 in Q3 2024, attributed to higher advertising and subscription revenue.
Cost of Services (Q4 2024) $34.5 million, a decrease from $39.5 million in Q4 2023, primarily due to a $5.3 million reduction in programming and content costs.
Net Loss (Q4 2024) $236.8 million, compared to a net loss of $29.3 million in Q4 2023, including $184.7 million related to the change in fair value of derivative expense from the Tether investment.
Adjusted EBITDA (Q4 2024) $13.4 million, a 55% improvement compared to a loss of $30 million in Q4 2023.
Adjusted EBITDA (Full Year 2024) Loss of $92.1 million, improved from a loss of $115.3 million in 2023.
Cash Position (End of 2024) Approximately $114 million, down from $132 million as of September 30, 2024.
Cash Usage (Q4 2024) $18 million, representing a 19% decrease compared to the third quarter.
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Operating Highlights
Rumble Wallet: Rumble Inc. is developing a crypto wallet in collaboration with Tether to facilitate transactions in USDT, Tether Gold, and Bitcoin for the creator community.
International Expansion: Rumble Inc. plans to leverage Tether's global presence to accelerate international expansion, starting with a partnership with the government of El Salvador.
Audience Growth: Rumble Inc. reported a 21% increase in MAUs in the US and Canada, growing from 43 million to 52 million.
Revenue Growth: Rumble Inc. achieved a record revenue of over $30 million in Q4 2024, marking consecutive quarters of revenue growth.
Cost Reduction: Cost of services decreased to $34.5 million in Q4 2024, down from $39.5 million in Q4 2023, primarily due to reduced programming and content costs.
Strategic Investment: Rumble Inc. secured a $775 million strategic investment from Tether, aimed at strengthening its balance sheet and enhancing competitive positioning against Google.
Sales Focus Shift: Rumble Inc. will aggressively expand its sales focus to target brands more effectively, anticipating a shift from advertising headwinds to tailwinds.
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Risk or Challenges
Earnings Expectations: Rumble Inc. reported an EPS of $-0.44, missing expectations of $-0.13, indicating potential financial instability.
Regulatory Issues: The company anticipates changes in advertising dynamics due to the political environment, which may affect brand advertising.
Competitive Pressures: Rumble Inc. aims to compete aggressively with Google’s product suite, indicating a significant competitive challenge ahead.
Investment Risks: The $775 million investment from Tether introduces risks related to dependency on a single investor and the volatility of the cryptocurrency market.
Operational Challenges: While Rumble Cloud infrastructure performed well, the company still needs to prove its international expansion strategy, particularly in new markets like El Salvador.
Financial Losses: Rumble reported a net loss of $236.8 million in Q4 2024, significantly higher than the previous year, raising concerns about financial sustainability.
Market Positioning: The company is repositioning to target brands more aggressively, which may involve risks associated with market acceptance and execution.
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Guidance & Outlook
Strategic Investment from Tether: Rumble Inc. announced a $775 million strategic investment from Tether, aimed at strengthening the company's balance sheet and enhancing liquidity for stockholders.
International Expansion: Rumble plans to leverage Tether’s international presence to expand Rumble Video and Rumble Cloud, with initial efforts in El Salvador.
Rumble Cloud Customer Base Expansion: The company aims to onboard Tether's portfolio companies onto Rumble Cloud to increase its customer base.
Crypto Community Engagement: Rumble is developing a crypto wallet in collaboration with Tether to serve the creator community, facilitating transactions in USDT, Tether Gold, and Bitcoin.
Competitive Positioning: With Tether's backing, Rumble aims to compete aggressively with Google across various product suites, including video and cloud services.
Revenue Growth Expectations: For Q1 2025, Rumble expects revenue growth of at least 25% compared to Q1 2024.
Adjusted EBITDA Breakeven: Rumble aims to move materially towards adjusted EBITDA breakeven in 2025, supported by the Tether investment.
Cash Position: Rumble ended 2024 with approximately $114 million in cash, cash equivalents, and marketable securities, not including the $250 million from Tether.
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Shareholder Return Plan
Strategic Investment from Tether: Rumble Inc. announced a $775 million strategic investment from Tether, aimed at fortifying the company's balance sheet and providing liquidity opportunities for stockholders.
Cash Position: Rumble ended the year with approximately $114 million in cash, cash equivalents, and marketable securities, not including the $250 million in gross proceeds from the Tether transaction.
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Key Q&A
Q:How should we think about the impact on your monthly active users and other engagement metrics from Dan Bongino being named FBI deputy director?
A:We launched something called the Rumble lineup and introduced a technology called the rating rate feature. We’ve seen enormous success with this, and while losing Dan is a huge loss, we think we filled the gap very well with other creators stepping up.
Q:Are there other influencers on your platform that may take roles in the administration that may negatively impact their ability to provide content on Rumble Inc.?
A:I’m not aware of any other current content creators that may take on roles.
Q:What’s the strategy behind your Bitcoin treasury purchases?
A:We’re adopting a Bitcoin treasury strategy of up to $20 million in Bitcoin purchases, having invested around $17.1 million so far. This aligns us with the community and is seen as a good long-term investment.
Q:Who is gonna be kind of doing the development of the Rumble wallet? Is Tether gonna be bearing the cost of that?
A:Tether is helping with the development and bearing their own costs, while we are also bearing some costs for implementation.
Q:Are there other strategic rationale that Tether has for making this investment?
A:The Rumble wallet allows us to enter international markets and tap into Tether's user base, which is a significant growth opportunity.
Q:How are you able to get Doctor Disrespect in the White House to join the platform?
A:Rumble Inc. is the lead in the independent creator space for streaming in the political sphere, and we have a new creator program that is showing tremendous early results.
Q:What gives you confidence about the business?
A:Having a partner like Tether instills confidence, along with a great election cycle and the potential for advertisers to open up.
Q:Review of Unclear Management Responses
A:Management did not provide a direct answer regarding other influencers potentially taking roles in the administration that could impact content provision. Additionally, there was a lack of clarity on the specific strategic rationale behind Tether's investment beyond the Rumble wallet.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
El Salvador
Number
advertising subscription
balance sheet
brand
community
completion
cost service
ecosystem
election coverage
expansion
expectation
fee publisher
increase audience
increase cost
investment
metal
monetization revenue
payment processing
portfolio company
presence
proceeds
processing fee
product suite
reduction programming
revenue advertising
service payment
service reduction
tailwind
transaction
usage
value
video platform
vision
wallet
RUM Transcript
Rumble Inc. (RUM) Q2 2025 Earnings Call Transcript
Unknown8-11
Despite positive revenue growth and liquidity improvements, challenges such as competitive pressures in AI and cloud, regulatory risks, and reliance on partnerships temper the outlook. The Q&A highlighted management's focus on growth over short-term profitability, with no specific guidance on gross profit margins. Given the market cap, these mixed signals suggest a neutral impact on stock price.
Rumble Inc. (NASDAQ:RUM) Q1 2025 Earnings Call Transcript
Positive5-12
Rumble's earnings call reveals strong financial performance with a 34% revenue increase and improved EBITDA. The Tether investment enhances liquidity, supporting international expansion and new partnerships with Netflix and others. Despite regulatory and competitive risks, optimistic guidance and strategic initiatives in crypto and advertising sectors are promising. The market cap suggests a moderate reaction, leading to a positive stock movement of 2% to 8%.
Rumble Inc. (RUM) Q1 2025 Earnings Call Transcript
Positive5-8
Rumble's earnings call shows strong financial performance with a 34% revenue growth and a significant cash position increase. While there are operational cost concerns and user retention risks, the strategic partnership with Tether and international expansion plans are promising. The Q&A section revealed cautious optimism about Bitcoin and crypto integration, with positive brand partnership feedback. Despite challenges, the overall sentiment leans positive due to strong growth metrics and strategic initiatives, likely resulting in a 2% to 8% stock price increase over the next two weeks.
Rumble Inc. (NASDAQ:RUM) Q4 2024 Earnings Call Transcript
Unknown3-27
The earnings call reveals significant financial instability with a large net loss, despite revenue growth. While the Tether investment provides liquidity, it introduces dependency risks. Competitive pressures and regulatory issues add to uncertainties. The Q&A section highlights unclear management responses, especially on strategic matters. Considering a $1.6 billion market cap, the stock is likely to see a negative reaction, driven by financial losses, competitive challenges, and strategic uncertainties.
RUM Report
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