On August 12, 2024, Rumble Inc (RUM, Financial) released its 8-K filing for the second quarter of 2024. Rumble Inc is a free-to-use video-sharing platform where users can watch, share, like, comment, and upload their own videos. The company generates a majority of its revenue from the United States.
Performance Overview
Rumble Inc reported a sequential revenue growth of 27%, reaching $22.5 million for Q2 2024, surpassing the analyst estimate of $19.69 million. However, this represents a 10% decline compared to the $25.0 million reported in Q2 2023. The decrease was primarily due to a $3.0 million drop in Audience Monetization revenues, partially offset by a $0.5 million increase in Other Initiatives revenues.
Despite the revenue growth, the company faced significant challenges, including a high cost of services and increased expenses in general and administrative, research and development, and sales and marketing. These challenges highlight the importance of cost management and efficient monetization strategies for the company.
Financial Achievements
Rumble Inc introduced a new key performance indicator (KPI), Average Revenue Per User (ARPU), which increased by 19% over the first quarter to $0.37. This shift in focus from Minutes Watched Per Month and hours of uploaded video per day to ARPU underscores the company's commitment to monetization.
"The second quarter evidenced proof and traction that our audience is ripe for monetization. With the appropriate user base for monetization, we moved forward and introduced a new key performance indicator in the second quarter - Average Revenue Per User (ARPU) - and delivered a 19% increase in ARPU to $0.37 when compared to the first quarter of 2024," commented Chris Pavlovski, Chairman and CEO of Rumble.
Income Statement Highlights
| For the three months ended June 30 | 2024 | 2023 | Variance ($) | Variance (%) |
|---|---|---|---|---|
| Revenues | $22,469,543 | $24,974,054 | $(2,504,511) | (10%) |
| Cost of services | $35,692,133 | $40,849,816 | $(5,157,683) | (13%) |
| General and administrative | $10,415,016 | $9,199,183 | $1,215,833 | 13% |
| Research and development | $5,319,230 | $4,348,760 | $970,470 | 22% |
| Sales and marketing | $6,274,749 | $3,697,312 | $2,577,437 | 70% |
Balance Sheet and Cash Flow
As of June 30, 2024, Rumble Inc had cash, cash equivalents, and marketable securities totaling $154.2 million. The company reported a net loss of $26.8 million for the quarter, compared to a net loss of $29.5 million in Q2 2023. The loss per share was $0.13, better than the analyst estimate of -$0.15.
Analysis and Outlook
Rumble Inc's focus on monetization through ARPU is a strategic move that could drive future revenue growth. However, the company must address its high operating expenses to achieve profitability. The introduction of ARPU as a KPI is a positive step, indicating a shift towards more sustainable revenue streams.
Looking ahead, Rumble Inc expects revenues to increase sequentially throughout 2024, driven by political advertising and sponsorship agreements. The company aims to move towards Adjusted EBITDA breakeven in 2025, emphasizing the need for disciplined cost management and effective monetization strategies.
Explore the complete 8-K earnings release (here) from Rumble Inc for further details.
