10-K/A: Newsmax Inc. Files Amended 10-K, Reports Revenue Growth and Strategic Shifts

Newsmax Inc.'s amended 10-K reveals a year of revenue growth driven by broadcasting and digital expansion, alongside strategic shifts in distribution and a settlement in a defamation lawsuit.

Summary

• Newsmax Inc., a television broadcaster and multi-platform content publisher, filed an amendment to its 10-K report for the fiscal year ended December 31, 2024.
• The company experienced revenue growth, increasing from $135.3 million in 2023 to $171.0 million in 2024, a 26.4% increase.
• Broadcasting revenue increased by 41.0%, driven by affiliate fees and advertising, while digital revenue decreased by 5.4%.
• The company settled a defamation lawsuit with Smartmatic for approximately $40 million, payable over time, and a warrant to purchase 2,000 shares of Series B preferred stock.
• Newsmax Inc. launched Newsmax+, a streaming service, and is focusing on expanding its television and digital distribution offerings.
• The company identified material weaknesses in its internal control over financial reporting and is taking steps to remediate them.
• Newsmax Inc. completed a private placement of Series B Preferred Stock, raising approximately $206.7 million in net proceeds.
• The company completed its Reg A IPO on March 28, 2025, having sold 7,500,000 shares of its Class B Common Stock, resulting in net proceeds to the Company of approximately $57.0 million.
• A forward stock split of 6,765.396:1 was effectuated on March 28, 2025.
• The company's Class B Common Stock began trading on the New York Stock Exchange (the NYSE) under the symbol 'NMAX' on March 31, 2025.

Sentiment

Score: 5

Explanation: The document presents a mixed picture. While revenue is growing, the company is still operating at a loss and faces significant risks. The settlement of the lawsuit is a positive, but the financial impact is substantial.

Positives

• Significant revenue growth driven by broadcasting and digital expansion.
• Successful launch of Newsmax+ streaming service.
• Completion of a private placement and Reg A IPO, raising substantial capital.
• Addition of affiliate fee revenue stream.
• Increase in television advertisement sales by 1.2% while competitors decreased by 0.4%.

Negatives

• Net loss of $72.2 million in 2024.
• Decrease in digital revenue by 5.4%.
• Identification of material weaknesses in internal control over financial reporting.
• Settlement of a defamation lawsuit with Smartmatic for approximately $40 million and a warrant.
• Reliance on a limited number of distributors for a significant portion of revenues.

Risks

• Potential for future losses and inability to achieve profitability.
• Changes in consumer behavior and evolving technologies may adversely affect the company.
• Declines in advertising expenditures could cause revenues and operating results to decline.
• Competition in the media industry.
• Damage to brand or reputation.
• Cybersecurity threats and data breaches.
• Unfavorable litigation outcomes, including the ongoing Dominion lawsuit.
• Inability to protect intellectual property.
• Volatility in the market price of Class B Common Stock.

Future Outlook

Newsmax Media plans to continue investing in talent acquisition and programming, expand its television and digital distribution offerings, and increase its subscriber base for Newsmax+.

Industry Context

The media industry is rapidly evolving with changes in technology and consumer behavior. Newsmax is adapting to these changes by expanding its digital presence and offering streaming services.

Comparison to Industry Standards

• According to Kagan, Fox News, CNN, CNBC, Fox Business and MSNBC have average monthly affiliate fees per subscriber equal to $2.52, $1.30, $0.64, $0.39 and $0.83, respectively.
• Newsmax Media sees the potential for significant revenue growth in this area given that Newsmax Media has audience numbers equal to or better than such competitors.
• According to MediaPost, the combined television advertising revenue of Fox News, CNN and MSNBC decreased by 0.4% from 2023 to 2024, while Newsmax Medias television advertisement sales revenue grew by 1.2%.

Legal Proceedings

• Dominion Voting Systems Corporation filed a defamation complaint against Newsmax Media in the Superior Court of the State of Delaware for defamation in connection with our coverage of the 2020 Presidential election, seeking up to $1.6 billion in compensatory damages as well as punitive damages.
• Newsmax Media reached a settlement agreement with Smartmatic on September 26, 2024, pursuant to which all claims will be released by Smartmatic for consideration, including a cash amount of approximately $40 million payable over time and granted a five year warrant to purchase 2,000 of class B preferred stock at an exercise price of $5,000 per share.

Stakeholder Impact

• Shareholders face risks related to the company's financial performance and potential volatility in the stock price.
• Employees may be affected by changes in the company's operations and financial condition.
• Customers may be impacted by changes in content offerings and distribution platforms.
• Suppliers and creditors may be affected by the company's ability to meet its financial obligations.

Next Steps

• Remediate material weaknesses in internal control over financial reporting.
• Continue to invest in talent acquisition and programming.
• Expand television and digital distribution offerings.
• Increase subscriber base for Newsmax+.
• Vigorously defend against the Dominion lawsuit.

Key Dates

Keywords

Newsmax, revenue, broadcasting, digital, advertising, affiliate fees, Newsmax+, lawsuit, Smartmatic, Dominion, preferred stock, IPO, stock split, internal control, risk factors