Q4 2023 Rumble Inc Earnings Call
Yeah.
None: Greetings and welcome to Rumble, Inc, fourth quarter 2023 earnings call.
None: At this time all participants are in a listen only mode.
None: Question and answer session will follow the formal presentation, if anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad. Please note. This conference is being recorded I will now turn the conference over to Shannon Devine Investor Relations. Thank you you may begin.
Thank you operator, I'm here today, with Chris Pawlowski, founder Chairman and CEO Rumble, Brendan Alexandra the CFO entire Hughes.
Shannon Devine: A press release detailing our fourth quarter and full year 2023 results was released today and available on the Investor Relations section of our company website before we begin the formal presentation I would like to remind everyone that statements made on the call and webcast may include predictions estimates or other information that might be considered forward looking all.
Shannon Devine: All forward looking statements are made only as of the date of this webcast and should be considered in conjunction with the cautionary statements in our earnings release and the risk factors included in our filings with the SEC future company updates will be available via press releases and company updates via the Companys identified social media channels.
Ill now turn the call over to Rumbles, founder Chairman and CEO, Chris Pawlowski. Thank you Shannon to start I want to talk about 2023, our building here as a company. In addition to successfully diversifying our content library with several key signings across sports comedy and entertainment we were relentless.
Shannon Devine: We focus on delivering on our product commitments.
Christopher Pavlovski: Let me recap this extraordinary year for our world class product and engineering teams.
Christopher Pavlovski: First we completely transform the user experience on Rumble dot com launching a fully redesigned user interface across all major viewing platforms, while integrating our premium subscription service local dot com to offer more robust monetization opportunities for creators.
Christopher Pavlovski: Second we acquired Collyn in May of last year, which gave rise to the beta launch of our new patent pending live streaming tool Rumble studio.
Christopher Pavlovski: Which is an incredible product that will lay the foundation for future monetization.
Christopher Pavlovski: Third we built and launched Rumble advertising center, which we often call rack I am excited to say within the last 90 days rack began deploying pre rolled video ads across our mobile apps. While we are also expanding our inventory by Onboarding other publishers to the network.
Christopher Pavlovski: Fourth on top of all this we built the infrastructure necessary to support rumbled Dot com laying the foundation for Rumble cloud, which we publicly launched just two weeks ago.
Christopher Pavlovski: Our completely revamped user interface and integration of a major video platform.
Christopher Pavlovski: <unk> live streaming tool and advertising network.
And our cloud all in one year.
Christopher Pavlovski: Today, what we have is a beautiful business with four top of the line products. Our team has worked tirelessly around the clock to build the products and services, our audience desires and im not only in all of these products, but the team behind the colossal effort.
Christopher Pavlovski: What we have built is essentially a mini Google and when you look at how long it took Google to build their offerings and the capital investment required it really puts everything into perspective.
Christopher Pavlovski: <unk> purchased Doubleclick for 3 billion. This compares to the Rumble advertising center.
Christopher Pavlovski: Google purchased Youtube for 165 billion back in 2006, which compares to the Rumble video platform. Google has also invested billions into Google cloud, which compares to our Rumble cloud and by the way we did all of this with fewer than 250 people in.
In terms of our expansion into the cloud business, it's important to understand wire business was so well positioned to launch our cloud offering.
Christopher Pavlovski: Since day, one we have not relied on third party cloud platforms, we've built and subsequently scaled our core video platform Rumble dot com on bare metal since 2013.
Christopher Pavlovski: It really hit me when parlor got shot shut down.
Christopher Pavlovski: Especially because big Tech platforms had more violations then parlor did but parlor was the only company that had severe consequences the.
Christopher Pavlovski: The gatekeeper in this case was the cloud provider Amazon AWS, who ultimately turned off the lights.
Christopher Pavlovski: <unk> had no recourse and had no options to get back online, we realise that building rumbles infrastructure was existential to our business. So we decided to do it in 2021.
Christopher Pavlovski: This undertaking allowed us to build a full stack, which not only allowed us to protect their business, but also enabled us to enjoy the favorable long term economics of running our own infrastructure and avoiding being locked into the unfair pricing of the incumbent Hyperscale.
Christopher Pavlovski: This infrastructure serves as the backbone that powers Rumble dot com and has laid the technical foundation for Rumble cloud.
Christopher Pavlovski: While building our own infrastructure was critical to protect Rumble. It also presented an incredible opportunity to leverage the size of Rumble dot com and build out our cloud offering at scale to address the market saturated by customer pain points related to vendor lock in strategies unfair pricing mistrust with data and privacy.
Christopher Pavlovski: The complexity and the acts of censorship.
Christopher Pavlovski: With the launch of Rumble cloud to the public earlier. This month the market now has an exciting new option from a cloud provider, who is first devoted to protecting a free and open internet and we will not turn off the lights for any kind of subjective and arbitrary reasoning.
Christopher Pavlovski: Second built on our latest generation hardware capable of delivering top network speeds and quality and third disrupting the market with our pricing strategy. Our vision is to provide the most predictable pricing to the market. So businesses can regain control of their it spend.
Christopher Pavlovski: Just as Rumble has taken market share from Youtube, we plan for Rumble cloud to do the exact same in the cloud market going after the excess profits and revenues at the infrastructure layer currently cornered by Big Tech.
Christopher Pavlovski: We are running on a singular highway of free and open Internet and its an uncontrollable highway when big Tech goes down we remain untouched this position secures rumble and by natural extension, our ecosystem of users creators advertisers subscribers publishers cloud partners.
Christopher Pavlovski: And shareholders in a massive way while protecting the data independence of businesses we.
Christopher Pavlovski: Our offering an opportunity to all companies to.
Christopher Pavlovski: To support our go market go to market strategy in the mid market and enterprise space, We recently announced partnerships with kinship a premier leader in many T systems.
Christopher Pavlovski: Okay.
Christopher Pavlovski: Scale and accelerate our go to market approach and ACP creative.
Christopher Pavlovski: Strengthening our focus on North America, while expanding our offering with a wider range of complementary services and solutions using the cloud infrastructure.
Christopher Pavlovski: While we launched the high performance compute tiers with dedicated V. Cpus, we will expand our offering to include lower cost tiers with shared V Cpus, which will better serve developers and small businesses.
Christopher Pavlovski: As with all of our products, we will iterate as the market demands, but at this moment, we feel that the medium to large enterprise customers is where significant opportunity exists.
Christopher Pavlovski: Although purchasing decisions for these companies can take time, we are encouraged by the aforementioned partnerships with kinship and ACP creative.
Christopher Pavlovski: And the entry level of interest among Midmarket and enterprise prospects.
Christopher Pavlovski: Today, the focus of the company is transitioning from building the products to generating revenue now.
Christopher Pavlovski: Now that our products are in full production, we anticipate seeing sequential revenue growth beginning in the second quarter, which much of this revenue growth weighted towards the back half of 2024 as our monetization products begin to ramp.
Christopher Pavlovski: In particular, our confidence in this outlook is bolstered by the strong results we are experiencing in Iraq throughout the month of March.
Christopher Pavlovski: The Rumble way begins with the right assets and products over the last two years, we have held our core audience of $40 million plus meus and with this audience, we are able to hit our future revenue goals.
Christopher Pavlovski: To this point it should be noted that our fourth quarter benefited from an outperformance in <unk> due to high profile sporting events, such as Street League skateboarding, which did extremely well pushing <unk> to $67 million for the quarter due to the nature of one off sporting events. This trend did not continue into the first quarter to date.
Christopher Pavlovski: Today, we have the right products in core offerings fully positioned to scale and start generating incremental revenues, we have the audience to monetize with the appropriate products and keep in mind. We did this with fewer than 250 team members, while ending the year with north of $200 million in cash on our balance sheet.
Brandon Alexandroff: We are competing against big Tech on all fronts with the most dedicated team and an enviable market position to drive revenue on the most driven and most excited I ever have been the team is also incredibly motivated and I look forward to updating you as our amazing progress continues with that I'll turn it over the call to our CFO Brendan.
Brandon Alexandroff: Alexandra.
Brendan: Thanks, Chris.
Brendan: I'll now take you through our fourth quarter and full year financials at a very high level before turning the call over to the operator for Q&A for.
Brendan: For the full year of 2023, we reported revenues of $81 million, an increase of 106% when compared to $39 4 million in 2022 for.
Brendan: For the fourth quarter, we reported revenues of $20 4 million. This compares to $20 million for Q4 2022.
Brendan: 2023 fourth quarter revenue reflects an increase in other services revenue of $3 5 million offset by a decrease in advertising revenue of $3 1 million. The increase in other services revenue was driven mainly by subscriptions content licensing tipping features and provision of onetime content.
Brendan: Cost of services was $39 5 million for the quarter compared to $23 5 million for the fourth quarter of 2022 due to an increase in programming and content costs of $14 million and an increase in hosting expenses and other service costs of $2 million.
Brendan: For the full year cost of services increased by $102 4 million to $146 2 million due to an increase in programming and content costs of $98 9 million hosting expenses of $2 7 million and other service cost of zero point $8 million.
Brendan: Moving to our cash position, we ended the year with $219 5 million in cash cash equivalents in marketable securities compared to $267 million as of September 32023.
Brendan: We are sitting on sufficient cash to meet our ongoing capital needs.
Brendan: With our monetization assets coming online late in the first quarter, we are transitioning from manual processes with a small number of creators to automated processes that scale more easily and therefore yield more predictable revenue generation.
Brendan: First quarter revenues still largely reflect this volatility and as a result will be down slightly from the fourth quarter. However, with the benefits of improved automation, we expect to see a sequential quarterly increase in revenues beginning in the second quarter specifically.
Brendan: Specifically this anticipated increase in revenues is supported by our experience with rack throughout the month of March.
None: Before I conclude I want to reiterate what I stated on our third quarter earnings call with.
None: With a revenue engines coming online and our guaranteed creator commitments set to significantly decrease during 2024 and 2025, we continue to move materially towards breakeven in 2025.
None: That concludes my prepared remarks before I turn the call over to the operator I invite you all to join Chris. This evening at seven PM Eastern time for an exclusive post earnings interview with Mac cores to be streamed live on the Mac quarters Rumble channel I will now turn the call over to the operator to open up the line for questions.
Operator: Thank you.
Operator: If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two if he would like to remove your question from the queue and for participants using speaker equipment may be necessary to pick up your handset before pressing the star keys.
Operator: Our first question is from Jason <unk> with Oppenheimer <unk> company. Please.
Operator: Proceeds.
Jason: Hey, everybody. So I'll ask several questions and ill go back in the queue and depending.
Jason: Depending if there are other questions I can kind of asking more so so.
None: And maybe just.
Jason: Just talk about the drivers of the lower.
Jason: Just some of the engagement drivers in the fourth quarter. So.
Jason: As far as I know, maybe weaker minutes was <unk>.
Jason: Most of that Youtube related or did some of that have to do which is less premium content from your Adriana is I'll just do them one at a time.
Jason: Hey, Jason This is Chris have lawsky.
Chris: With respect to the uploaded hours that definitely at <unk>, we had an impact when the Youtube cut off the auto sync that we disclosed back in January I think it was so that definitely had an impact on ours uploaded.
Chris: With respect to the estimated bandwidth consumption minutes watched based on bandwidth consumption.
Chris: You'll notice that in the if you remember in Q3, we've been migrating over to our CDN.
Chris: We continued that migration in the fourth quarter and that also had an impact.
Chris: If you recall.
Chris: The.
Chris: That's an estimate based on bandwidth consumption. So the CDN had at an impact on that.
Chris: And also in addition to that the Army is were really strong based off of.
Chris: One off sporting events, such as the Street League skateboarding that did extremely well in the fourth quarter and December in specific.
Chris: So yes, the focus anymore you Didnt manage is given some of those factors and then.
Chris: You beat our gross profit estimate.
Chris: By a nice amount even on lower revenue.
Chris: Which would suggest.
Chris: You manage content costs pretty well in the quarter I mean, just maybe.
Chris: Randy can you talk a little bit about that.
Chris: How much of that was you were able to manage it versus.
Randy: Just had less content that had minimum guarantees.
Randy: And just.
Randy: Just to talk about the dynamics on gross profit in the quarter, Yes, sure. So just as a reminder of what the components are of cost of services is there are three main components. So the first one is the revenue share that we give to the creator so for advertising we share of 60%.
Randy: Of the revenues of the greater so thats one component of cost of services, the second component, which at the moment is the largest component or the guaranteed contracts that were giving to those creators and so as we scale. We expect those to decline over time and a third component of cost of services, which is the smallest amount relates to network hosting costs.
Randy: So yeah I mean, we're continuing as we said two to focus on those minimum guaranteed contracts and as they come off of contract. The plan is that we don't have to renew those because as the monetization tools start kicking in the creators will actually start earnings.
Randy: That 60% AD revenue and we don't have to extend those contracts.
And then I'll do one and when we go back in the queue.
Randy: So again, maybe give us an update on reducing creator guarantees later in 'twenty, four and you've talked about meaningful progress towards breakeven in 'twenty fives or just given the EBITDA I think it was better EBITDA and cash burn was better than I think we were looking for in the quarter.
Randy: Just how should we think about I guess those metrics.
Randy: The rest of this year and are you want to say, if you're targeting positive EBITDA in 'twenty five.
Randy: Yeah.
Our plan is to move materially towards breakeven in 2025, and as I said, it's coming from two main reasons number one we're turning on the monetization engine. So that's going to start kicking in you'll see sequential growth starting in the second quarter of this year. So the revenue starts kicking in and then those minimum guaranteed cost start declining through the rest of 'twenty four and into.
Randy: <unk> 25, which allows us to get towards.
Randy: Breakeven in 2025.
None: Okay I'll go back in the queue. Thanks.
None: Yeah.
None: Our next question is from Tom Forte with Maxim Group. Please proceed.
Thomas Ferris Forte: Great Thanks, Chris and team congrats on the quarter and year.
Thomas Ferris Forte: <unk> several I'm going to ask three and then I'll get back in the queue as well and I'll go one at a time so.
Thomas Ferris Forte: The first question I had was.
Thomas Ferris Forte: Red Hat's off to a very impressive start as a public company. Chris I was wondering how you see the mission of Rumble as similar to read it and how you think it's different.
Chris: Yes, so <unk>.
Chris: It's been around for a very long time.
Chris: When I look at read it and compare it to Rumble there in a way it started or lots.
Chris: I would say 10 years ago, one of the one of the original founders was there was a lot.
Chris: And comment in terms of free speech and freedom of expression, but I think thats changed a lot as the business has changed over the last decade.
Chris: But one of the things that kind of like stick out to me with read it is that I.
Chris: I think they did like was it $400 million in R&D.
Chris: Whereas with Rumble R&D, our R&D spend and building the cloud and building the Rumble advertising Center and building, Nevada. The video platform really kind of stands out in terms of what our team is capable of doing versus what a company thats been around for several decades almost now.
Chris: <unk> has been doing so I see theres like heavy contrast, there and I'm very proud full about that and what we've done with this with the size team that we've done in the amount of capital needed to get it done in comparison to read it.
Great and then my second question is historically, you've experienced spikes in usage and engagement on your platform during elections.
Chris: Should investors think about the potential for that to occur again this year with the upcoming presidential election.
Chris: Yes, so I think that like what we saw in the 2000 22022 mid terms was.
Chris: A good was a good picture of what we can see in the <unk>.
Chris: Thousand 24, obviously this is a presidential so it's going to be different.
Chris: And how that how that shapes out to be remains to be seen.
Chris: Definitely the major difference here between 2022 and 2024 is that in 2022, our products was lacking and needed a lot of changes a lot of updates a lot of upgrades. We are now there. So what excites me about this year is that we have a real opportunity to capture that growth and hopefully.
Chris: Confident that we're going to be able to not only capture it but be able to keep it and be able to really grow.
Chris: Subsequent to that so.
Chris: I think that's the major difference we have a solid product now the video product has really come a long way and we're really looking forward to taking advantage of this election year into <unk> into the future years.
None: Great. So one more and then I'll get back in the queue. So RFK juniors running as an independent for president and it's on your platform. How have you done a rumble and can you provide an update on left wing independent and influencers outside of politics, joining and using Rumble.
None: Yes, so we recently announced that <unk> not only is he an accounts on Rumble, where he's live streaming he just live streamed as it is.
None: As events yesterday, where he announced his VP, but he also has become a cloud customer using our cloud. So that's been an important development with respect to like expanding content into different areas that are not political.
None: <unk>.
None: And this quarter in the first quarter of 2024, we closed a partnership with Barstool sports.
None: Which was a very important one in the sports category and what I like most about that partnership with Dave Portnoy is that he was more interested in taking equity in Rumble and really believing in the mission than taking more cash. So the deal is mostly is most is mostly equity and some cash and.
None: On the equity side, it's not.
None: It's not material.
None: On the share issuance side of things.
Yeah.
None: Great I'll get back in the queue.
None: We now have a follow up from Jason from Oppenheimer. Please proceed.
Jason: Thanks <unk>.
Jason: So maybe just on barstool.
Jason: I mean, obviously, there's a lot of content on the platform.
Jason: All right.
Jason: Could we actually see the bar so distribution partnership as a potential driver of engagement.
None: I don't know like.
None: In second quarter or just.
None: You have a lot of content and while its quality content.
None: It doesn't move the needle just can you give some perspective.
None: Should we expect a bump on that distribution deal.
None: Hi, Jason so.
Jason: With respect to Barstool, what we did see in January versus over February as they definitely grew on the platform.
None: And pushed more viewers in terms of like providing like guidance on them, specifically I can't do that.
None: But generally speaking what we're trying to do here is really kind of build the Rumble sports category in a way that kind of really allows and keeps the sports users onto the platform for longer and that has kind of been the that was kind of a strategy with politics as you grow the political side.
None: Yeah, there's one creator that someone might watch they find another creator and it's all kind of within the same area. The same thing we kind of see with sports you bring in a massive sporting event like power slap or or Street League skateboarding and you kind of want to keep them you kind of want to know you want to use or to know that.
None: You can also find barstool and they can find 75 different podcasts barstool might do so I'd call that drifting into different categories, a little bit in different types of content, but that's kind of the reason why we are we wanted barstool onto the platform on the platform to really kind of broaden that sports category, but like as a whole.
None: The amount of content in all the different verticals I don't see a single.
None: <unk> well in the sense.
None: Moving the needle in any significant way, although we did see Street League skateboarding.
None: <unk>.
None: In the fourth quarter really kind of move the needle in December so it could happen, but hard to say.
None: Okay, and then just on rack.
None: Obviously, there is always risks in any business, but I mean, just given where you are with the product development and it sounded like the numbers you've seen in March I mean is that what's ultimately driving your confidence in the second quarter revenue ramp just that like rack is out and you've actually seen kind of numbers now that it.
None: In full execution.
None: Yes, that's right rack is.
None: <unk> is doing a lot of different things now that we werent doing in the fourth quarter of last year.
None: Really.
None: Adding a lot of publishers and bringing a lot more inventory we have.
None: Sites like the Drudge report testing rack, we have breitbart testing rack we have.
None: Countless different publishers now testing rack you also have Rumble, which is starting to open up pre roll inventory within the App and.
None: And thats, bringing inventory in so we're seeing kind of like the perfect storm of inventory really kind of adding in and we see a very good path when it comes to being able to add inventory into the system, both through Rumble and publishers.
None: And we see a lot of open ground there.
None: And just also on the flip side, we see the advertiser growth happening too as we bring in more more advertisers into the system.
None: We're not seeing the drop off on the CPM that.
None: One might expect we're seeing very <unk> are holding.
None: As we add inventory, which means we're going to continue to add inventory and we've really seen a clear picture here in the last couple of months in particular March as is.
None: <unk> is showing.
None: It is really strengthening our confidence on <unk> right now.
None: And last question is Brandon we noticed there was an acquisition North River and the <unk>.
None: K, just a little color there.
Brandon Alexandroff: Yes, that's the that's the components of rack basically so there is.
Brandon Alexandroff: Some technology and human capital.
Brandon Alexandroff: It's a company that we acquired and that's.
Brandon Alexandroff: That's the foundation for Us building out rack.
None: Thank you.
None: Our next question is a follow up from Tom with Maxim Group. Please proceed.
Thomas Ferris Forte: So lastly for me true social dispatch and he was one of your first cloud computing enterprise customers since the Destocking has any positive implications for Rumble, especially your cloud computing efforts.
Thomas Ferris Forte: Hi, Tom This is Chris so, yes, I think that.
Chris: The <unk> is a is a great development for true social it puts a lot of capital.
Chris: And their bank and allows them to.
Chris: Grow the platform now so then being R. R.
Chris: One of our largest.
Chris: Tenants on our on the Rumble clouding, the first major one to come onto Rumble cloud.
Chris: That's pretty exciting for us that they can they have the capital now to grow and do what they need to do to take a true social to the next level. So as a long term clients and also as an advertising partner.
Chris: <unk>, where we're monetizing them, they're one of our first publishers as well.
Chris: This is a very positive development for us that we're very excited about internally.
None: Excellent and then this one Chris you're going to have to indulge me I know you've talked a lot about sports content, but I'm still in disbelief that Mike Tyson is going to fight Jake calling a live stream on Netflix.
None: Full thing there, it's just crazy, but that's not your general while in the past and sports content.
None: Can you provide an update on your sports related content, including its popularity.
None: Yes, so we saw.
None: An incredibly successful event from Street League skateboarding that kind of surprised us all in the fourth quarter in December.
None: Is that.
None: Typically we didn't see <unk> skateboarding kind of move the needle for us in any way, but they definitely move the needle in Q4 December.
None: With their latest event and on the on the other sporting we also have Nitro Raleigh costs racing and then we also have power slap that's exclusive what we're seeing with power slap is we're seeing a very good trajectory on the power slap front as well the last event that we had was.
None: Super Bowl weekend, where we.
None: We had people from Lake Travis Scott.
None: Charles Barkley too.
None: Many many even icos feeding Tyson that show up so we had a lot of influencers come to that event really push the event to new levels. So we're seeing some nice trajectory also in power slot.
None: So in terms of sports and then obviously attaching barstool one.
None: The Rumble sports category is doing is doing quite well at this point and.
None: Some good trajectory, especially with the most recent events at a time.
None: Great all right. So last one from me and thanks again for taking all my question. So wanted an updated updated thoughts on antitrust regulation, including laws being considered in Canada was wondering what impact if any there would be useful rumble. If tictoc is banned from U S. App stores, and lastly would you benefit if apple hadn't.
None: Lower take rates for its App store.
None: I'll start with the take rate absolutely.
None: For rats and tipping within.
None: It was in the App that would be very helpful to have a lower.
None: Percentage there.
None: With respect to.
None: With Tic Toc.
None: We we obviously put that letter out publicly we're very interested in being a technology partner and any consortium that goes forward with Tic Toc, we want to be part of that conversation I do believe that companies like Google.
None: And.
None: Meda or would have antitrust concerns that they can't be part of that in my opinion and the only company out there that has the experience and video and the experience in managing a video platform and even experienced in working on a recommendation engines and algorithms for video the one that it comes to mind is rumble. So obviously we.
None: Feel like there is a.
None: There is opportunity there with the with Tic Toc if.
None: Something happens in terms of divestiture, we'd love to be part of the part of a consortium on that and the third thing if I remember correctly, you were mentioning antitrust in Canada.
None: We're concerned but nothing decided yet.
None: Thanks, Chris Thanks for taking my questions.
None: Thank you Tom.
None: That is the end of our question and answer session. We will conclude today's conference. Thank you for your participation you may now disconnect.
Okay.
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None: Greetings and welcome to Rumble, Inc, fourth quarter 2023 earnings call.
None: At this time all participants are in a listen only mode.
None: Question and answer session will follow the formal presentation, if anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad. Please note. This conference is being recorded.
None: Now I'll turn the conference over to Shannon Devine Investor Relations. Thank you you may begin.
Shannon Devine: Thank you operator, I'm here today, with Chris Pawlowski, founder Chairman and CEO verbal Brendan Alexandra the CFO and tower here is the C. O L. A press release detailing our fourth quarter and full year 2023 results was released today and available on the Investor Relations section of our company website before we begin the formal presentation I would like to remind.
Shannon Devine: Everyone that statements made on the call and webcast may include predictions estimates or other information that might be considered fourth bucket all.
Shannon Devine: All forward looking statements are made only as of the date of this webcast and should be considered in conjunction with the cautionary statements in our earnings release and the risk factors included in our filings with the SEC future company updates will be available via press releases and company updates via the company has identified social media channels.
Shannon Devine: Now I'll turn the call over to Rumbles, founder Chairman and CEO of crisp about it. Thank.
Thank you Shannon.
Rumbles: To start I want to talk about 2023, our building here as a company. In addition to successfully diversifying our content library with several key signings across sports comedy Entertainment, we were relentlessly focused on delivering on our product commitments. Let me recap this extraordinary year for our world class.
Rumbles: Product and engineering teams first we completely transform the user experience on Rumble dot com launching a fully redesigned user interface across all major viewing platforms, while integrating our premium subscription service local dot com to offer more robust monetization opportunities for creators.
Rumbles: Second we acquired Collyn in May of last year, which gave rise to the beta launch of our new patent pending live streaming tool Rumble studio.
Rumbles: Which is an incredible product that will lay the foundation for future monetization.
Rumbles: Third we built and launched Rumble advertising center, which we often call rack I am excited to say within the last 90 days rack began deploying pre rolled video ads across our mobile apps. While we are also expanding our inventory by Onboarding other publishers to the network.
Rumbles: Fourth on top of all this we built the infrastructure necessary to support rumbled Dot com laying the foundation for Rumble cloud, which we publicly launched just two weeks ago.
Rumbles: Completely revamped user interface and integration of a major video platform.
Rumbles: <unk> live streaming tool and advertising network.
Rumbles: And our cloud all in one year.
Rumbles: Today, what we have is a beautiful business with four top of the line products. Our team has worked tirelessly around the clock to build the products and services, our audience desires and I'm not only in all of these products, but the team behind the colossal effort what.
Rumbles: What we have built is essentially a mini Google and when you look at how long it took Google to build their offerings and the capital investment required it really put everything into perspective.
Rumbles: <unk> purchased Doubleclick for 3 billion. This compares to the Rumble advertising center.
Rumbles: Google purchased Youtube for 165 billion back in 2006, which compares to the Rumble video platform. Google has also invested billions into Google cloud, which compares to our Rumble cloud and by the way we did all of this with fewer than 250 people in.
Rumbles: In terms of our expansion into the cloud business, it's important to understand wire business was so well positioned to launch our cloud offering.
Rumbles: Since day, one we have not relied on third party cloud platforms, we've built and subsequently scaled our core video platform Rumble dot com on bare metal since 2013.
Rumbles: It really hit me when partner got shot shut down.
Rumbles: Especially because big Tech platforms had more violations then parlor did but parlor was the only company that had severe consequences.
Rumbles: The gatekeeper in this case was the cloud provider Amazon AWS, who ultimately turned off the lights.
Rumbles: <unk> had no recourse and had no options to get back online, we realise that building rumbles infrastructure was exit essential to our business. So we decided to do it in 2021.
Rumbles: This undertaking allowed us to build a full stack, which not only allowed us to protect our business, but also enabled us to enjoy the favorable long term economics of running our own infrastructure and avoiding being locked into the unfair pricing of the incumbent hyper scaler.
This infrastructure serves as the backbone that powers Rumble dot com and has laid the technical foundation for Rumble cloud.
Rumbles: While building our own infrastructure was critical to protect rumbled. It also presented an incredible opportunity to leverage the size of Rumble dot com and build out our cloud offering at scale to address the market saturated by customer pain points related to vendor lock in strategies unfair pricing mistrust with data and privacy.
Rumbles: The complexity and the acts of censorship.
Rumbles: With the launch of Rumble cloud to the public earlier. This month the market now has an exciting new option from a cloud provider, who is first devoted to protecting a free and open internet and we will not turn off the lights for any kind of subjective and arbitrary reasoning.
Rumbles: Second built on the list generation hardware capable of delivering top network speeds and quality and third disrupting the market with our pricing strategy. Our vision is to provide the most predictable pricing to the market. So businesses can regain control of their it spend.
Rumbles: Just as Rumble has taken market share from Youtube, we plan for Rumble cloud to do the exact same in the cloud market going after the excess profits and revenues at the infrastructure layer currently cornered by Big Tech.
Rumbles: We are running on a singular highway of the free and open Internet and its an uncanny global highway when Big Tech goes down we remain untouched this position secures rumble and by natural extension, our ecosystem of users creators advertisers subscribers publishers cloud partners.
Rumbles: And shareholders in a massive way while protecting the data independence of businesses we.
Rumbles: We're offering an opportunity to all companies to.
To support our go market go to market strategy in the mid market and enterprise space, We recently announced partnerships with kinship a premier leader and managed it services and solutions with 7000 employees, allowing rumble to meaningfully scale and accelerate our go to market approach and ACP creative <unk>.
Rumbles: Strengthening our focus on North America, while expanding our offering with a wider range of complementary services and solutions using the cloud infrastructure.
Rumbles: While we launched the high performance compute tiers with dedicated V. Cpus, we will expand our offering to include lower cost tiers with shared V Cpus, which will better serve developers and small businesses.
Rumbles: As with all of our products, we will iterate as the market demands, but at this moment, we feel that the medium to large enterprise customers is where significant opportunity exists.
Rumbles: Although purchasing decisions for these companies can take time, we are encouraged by the aforementioned partnerships with kinship and ACP creative.
Rumbles: And the entry level of interest among mid market and enterprise prospects.
Rumbles: Today, the focus of the company is transitioning from building the products to generating revenue.
Rumbles: Now that our products are in full production, we anticipate seeing sequential revenue growth beginning in the second quarter, which much of this revenue growth weighted towards the back half of 2024 as our monetization products begin to ramp in particular, our confidence in this outlook is bolstered by the strong results we're experiencing.
Rumbles: In Iraq throughout the month of March.
Rumbles: The Rumble way begins with the right assets and products over the last two years, we have held our core audience of $40 million plus meus and with this audience, we are able to hit our future revenue goals.
Rumbles: To this point it should be noted that our fourth quarter benefited from an outperformance in <unk> due to high profile sporting events, such as Street League skateboarding, which did extremely well pushing <unk> to $67 million for the quarter due to the nature of one off sporting events. This trend did not continue into the first quarter to date.
Rumbles: Today, we have the right products in core offerings fully positioned to scale and start generating incremental revenues, we have the audience to monetize with the appropriate products and keep in mind. We did this with fewer than 250 team members, while ending the year with north of $200 million in cash on our balance sheet.
Brandon Alexandroff: We are competing against big Tech on all fronts with the most dedicated team and an enviable market position to drive revenue on the most driven and most excited I ever have been the team is also incredibly motivated and I look forward to updating you as our amazing progress continues with that I'll turn it over the call to our CFO Brendan.
Brandon Alexandroff: Alexandra.
Thanks, Chris.
Brandon Alexandroff: I'll now take you through our fourth quarter and full year financials at a very high level before turning the call over to the operator for Q&A for.
Brandon Alexandroff: For the full year of 2023, we reported revenues of $81 million, an increase of 106% when compared to $39 4 million in 2022 for.
Brandon Alexandroff: For the fourth quarter, we reported revenues of $20 4 million. This compares to $20 million for Q4 2020 to the.
Brandon Alexandroff: For 2023 fourth quarter revenue reflects an increase in other services revenue of $3 5 million offset by a decrease in advertising revenue of $3 1 million. The increase in other services revenue was driven mainly by subscriptions content licensing tipping features and provision of onetime content.
Brandon Alexandroff: Cost of services was $39 5 million for the quarter compared to $23 5 million for the fourth quarter of 2022 due to an increase in programming and content costs of $14 million and an increase in hosting expenses and other service costs of $2 million.
Brandon Alexandroff: For the full year cost of services increased by $102 4 million to $146 2 million due to an increase in programming and content costs of $98 9 million hosting expenses of $2 7 million and other service costs of <unk> 8 million.
Brandon Alexandroff: Moving to our cash position, we ended the year with $219 5 million in cash cash equivalents and marketable securities compared to $267 million as of September 32023, we are sitting on sufficient cash to meet our ongoing capital needs.
Brandon Alexandroff: With our monetization assets coming online late in the first quarter, we are transitioning from manual processes with a small number of creators to automated processes that scale more easily and therefore yield more predictable revenue generation.
Brandon Alexandroff: First quarter revenues still largely reflect this volatility and as a result, we'll be down slight.