8-K: Rumble Inc. Reports Q1 2024 Results, Launches Cloud and Livestreaming Products, and Announces Barstool Sports Partnership

Rumble Inc. announced its Q1 2024 financial results, highlighted by the launch of Rumble Cloud and Rumble Studio livestreaming, and a strategic partnership with Barstool Sports.

Summary

• Rumble's revenue for the first quarter of 2024 was $17.7 million, a slight increase from $17.6 million in the same quarter of 2023, but down from $20.4 million in the fourth quarter of 2023.
• The company's average global Monthly Active Users (MAUs) were 50 million in Q1 2024, down from 67 million in Q4 2023, with 35 million of those users based in the U.S. and Canada.
• Average estimated Minutes Watched Per Month (MWPM) were 8.6 billion in Q1 2024, compared to 10.5 billion in Q4 2023.
• Hours of uploaded video per day increased by 11% year-over-year to 12,429 in Q1 2024.
• Rumble launched Rumble Cloud, an infrastructure-as-a-service solution, and Rumble Studio, a livestreaming tool, during the quarter.
• A strategic partnership with Barstool Sports was announced, including content access, cloud services, and a mutual advertising sales agreement.
• The company plans to introduce a new key business metric, Average Revenue Per User (ARPU), later in 2024 and phase out reporting of MWPM and hours of uploaded videos per day.
• Rumble's cash, cash equivalents, and marketable securities balance was approximately $183.8 million as of March 31, 2024.
• The company expects revenue to increase sequentially starting in the second quarter of 2024 and is moving towards breakeven in 2025.

Sentiment

Score: 5

Explanation: The document presents a mixed picture with positive developments like product launches and partnerships, but also concerning trends such as declining user engagement and a significant net loss. The company is making progress but faces challenges.

Positives

• Rumble successfully launched Rumble Cloud and Rumble Studio, completing its core product portfolio.
• The company secured a strategic partnership with Barstool Sports, which should provide new revenue streams and content.
• Rumble's revenue increased slightly year-over-year, despite a decrease in advertising revenue.
• The company's cash balance remains strong at $183.8 million.
• Rumble expects sequential revenue growth starting in Q2 2024 and is moving towards breakeven in 2025.
• Hours of uploaded video per day increased 11% year-over-year.

Negatives

• Rumble's revenue decreased from $20.4 million in Q4 2023 to $17.7 million in Q1 2024.
• Average global MAUs decreased from 67 million in Q4 2023 to 50 million in Q1 2024.
• Average estimated Minutes Watched Per Month (MWPM) decreased from 10.5 billion in Q4 2023 to 8.6 billion in Q1 2024.
• Advertising revenue decreased by $3.1 million in Q1 2024.
• Cost of services increased to $31.8 million in Q1 2024, up from $26.0 million in Q1 2023.
• The company reported a net loss of $43.29 million for the quarter.

Risks

• The company's recent and rapid growth may not be indicative of future performance.
• Rumble may not continue to grow or maintain its active user base, and may not be able to achieve or maintain profitability.
• There are risks relating to the company's ability to attract new advertisers, or the potential loss of existing advertisers.
• Rumble Cloud, the recently launched cloud business, may not achieve success.
• Negative media campaigns may adversely impact the company's financial performance.
• The company is subject to cybersecurity risks and interruptions or failures in its information technology systems.
• Rumble may face liability for hosting a variety of tortious or unlawful materials uploaded by third parties.
• The company depends on third-party vendors, including internet service providers, advertising networks, and data centers, to provide core services.
• The company has offered and intends to continue to offer incentives, including economic incentives, to content creators to join the platform, which may impact financial performance.

Future Outlook

Rumble expects revenue to increase sequentially starting in the second quarter of 2024 and is moving materially towards breakeven in 2025.

Management Comments

• Rumble's Chairman and CEO, Chris Pavlovski, stated that the team's focus on execution was impressive, building a foundation of four fully functional revenue drivers.
• Mr. Pavlovski noted that the second quarter is on target to deliver a sequential increase in revenue.
• Management plans to shift focus to ARPU to measure monetization progress and intends to phase out reporting of MWPM and hours of uploaded videos per day.

Industry Context

Rumble is positioning itself as a competitor to established video platforms and cloud service providers, emphasizing its commitment to free speech and independence from cancel culture. The partnership with Barstool Sports is a move to attract a broader audience and content creators.

Comparison to Industry Standards

• Rumble's MAU of 50 million is significantly lower than YouTube's reported 2.5 billion monthly active users, indicating a substantial gap in user base.
• The company's revenue of $17.7 million is small compared to the revenue of major cloud providers like Amazon Web Services (AWS), Microsoft Azure, and Google Cloud, which generate billions of dollars in revenue per quarter.
• Rumble's focus on ARPU is a common metric used by social media and content platforms to measure monetization effectiveness, similar to how companies like Meta and Twitter measure their revenue per user.
• The launch of Rumble Cloud is an attempt to compete with established cloud infrastructure providers, but it is still in its early stages and will need to demonstrate its ability to attract and retain customers.
• The strategic partnership with Barstool Sports is similar to other content platforms partnering with media companies to expand their reach and content offerings.

Legal Proceedings

• Rumble filed a second antitrust lawsuit against Google based on Google's monopolization of the online advertising market, with damages estimated in excess of $1 billion (before trebling).
• The self-preferencing lawsuit filed in January 2021 against Google remains in discovery with trial scheduled for May 2025.

Stakeholder Impact

• Shareholders may be concerned about the net loss and declining user engagement metrics.
• Employees may be impacted by the company's focus on monetization and potential changes in reporting metrics.
• Content creators may benefit from the new monetization features and the partnership with Barstool Sports.
• Customers may benefit from the new Rumble Cloud and Rumble Studio products.
• Suppliers and creditors may be impacted by the company's financial performance and future growth.

Next Steps

• Rumble plans to introduce Average Revenue Per User (ARPU) as a key metric later in 2024.
• The company intends to phase out the reporting of estimated MWPM and hours of uploaded videos per day.
• Rumble will continue to focus on monetization of its user base.
• The company will continue to develop and enhance its Rumble Cloud and Rumble Studio products.

Key Dates

Keywords

Rumble, video platform, cloud services, Rumble Cloud, Rumble Studio, livestreaming, Barstool Sports, MAU, ARPU, advertising, monetization, content creators