Q3 2024 Rumble Inc Earnings Call
Mhm.
Good afternoon, and 80 Sunshine for men and won't come to Rumble Incorporated's third quarter 2024 earnings call.
Speaker Change: All participants are in listen only mode.
Speaker Change: A question and answer session will follow the formal presentation.
Speaker Change: If anyone should require operator assistance during the conference. Please press the star key and zero punish telephone keypad.
Speaker Change: Please note that this event is being recorded.
Speaker Change: I would now like to turn the conference over to Shannon Devine Investor Relations for Rumble.
Speaker Change: Okay.
Shannon Devine: Thank you operator, I'm here today, with Chris Pawlowski, founder Chairman and CEO from ball and Brandon Alexandra CFO.
Shannon Devine: A press release detailing our third quarter 2024 results was released today and available on the Investor Relations section of our website before we begin the formal presentation.
Shannon Devine: I would like to remind everyone that statements made on this call and webcast may include predictions estimates or other information that might be considered forward looking all forward looking statements are made only as of the date of this call 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.
Speaker Change: With your company updates will be available via press release and updates via the company's identified social media channels I will now turn the call over to Rumble, founder Chairman and CEO, Chris Pawlowski.
Chris Pawlowski: Thanks, Shannon Wow, what a couple of weeks, it's been two years since we first became public and since we hosted our first earnings call.
Can honestly say that I've never been more optimistic about our opportunity and more importantly, it has never felt more real than it does today.
Chris Pawlowski: With the U S presidential election, now in the rearview mirror and on the heels of.
Chris Pawlowski: Our two year public anniversary I feel this presents the perfect time to reflect on where where we were what has transpired over the two years since our public debut and explain where we go from here on our first earnings call I shared with you our mission to protect a free and open internet. The DNA of our community are used.
Chris Pawlowski: <unk>, our creators our partners and our employees are reflected on how Rumble held the line on free speech when no one else had the courage. It was lonely at times. It was even scary at times, we were canceled by technology partners commercial partners put off by the so called mainstream enforced.
Chris Pawlowski: Cut off countries.
Chris Pawlowski: We faced hit piece after hit piece, we even faced illegal advertising boycott.
Chris Pawlowski: Most importantly, I shared the pain of our creators who have had their voices suppressed and even eliminated from society.
Chris Pawlowski: It was out of control can you imagine that our current president elect was canceled.
Chris Pawlowski: But rumble held the line we allowed these voices to be heard we could see the movement when no one else did.
Chris Pawlowski: We saw the momentum as our creators grew their audience from thousands to tens of thousands to even hundreds of thousands of users every day, we set out on our growth strategy to build our teams our infrastructure our products and our revenue engine for our creators 2023 was a building year and 2024 has been.
Chris Pawlowski: <unk> focused on bringing the revenue engines online and monetizing this incredible audience, we have and we have delivered.
Chris Pawlowski: We perfectly position our business for this moment.
Chris Pawlowski: Turning to the election, we cemented ourselves as the leader in the independent greater space on the evening of November 5th it into the morning of November six we set new high marks in a variety of categories, including number of livestreams live concurrent views consumption total rubble prime.
Chris Pawlowski: Liam subscribers and revenue generated through the Rumble advertising center known as Iraq. Meanwhile, traditional TV networks saw ratings plummet by as much as 50% versus the 2020 election.
Chris Pawlowski: This was the nail in the coffin for traditional media in the dawn of a new era, where the independent greater because the new source of truth and Rumble is at the forefront. According to streams charts, which tracks livestream metrics Rumble set a new peak number of concurrent views concurrent viewers and took a 17, 8% share.
Chris Pawlowski: <unk> of live hours watched in the United States on election day to put this in perspective, our 17, 8% 17, 8% compares to 71, 2% for Youtube and 10% for Twitch. Additionally, the Rumble App also reached number three in the photo and video video category.
Chris Pawlowski: The Apple App store ahead of Youtube not bad considering that Youtube is estimated to be worth over 400 billion.
Dan von Gino set a new high for individual stream with over 515000 concurrent viewers and host Steven Crowder nonstop notched a personal best of over 460000 concurrent views viewers.
Chris Pawlowski: These were the two biggest independent crater live streams in the world at the time.
Speaker Change: And keep in mind. This was all running on Rumble cloud, an amazing amazing technical feat by our incredible team of engineers and proof that our cloud belongs in the big leagues are cloud offering has taken hold and we are continuing to have conversations with large enterprise customers in all various stages of the sales cycles.
Speaker Change: The progress here is encouraging and the elections proof of just how mission critical products.
Speaker Change: Turning to Q3, we saw strong growth across our core business, reaching monthly active users of $67 million and I can confidently say, we are advancing our business from a more volatile testing phase to a more scalable and predictable phase I mentioned that 2023 was focused on expanding our gold.
Speaker Change: Secure and sustain our audience well, we certainly have the audience monetization has taken the majority of our focus for 2024, and we have been progressing nicely with quarterly revenues increasing sequentially. Since Q2 importantly, the headwinds we have experienced on the monetization front are being over.
Speaker Change: Taken by election related tailwind with the goals of expanding our content offering and cultivating a loyal audience avenues for monetization opportunities opened wider and sooner than I could have anticipated. One example of this is rumbled premium which has exceeded our expectations. We launched this service is a no Arctic.
Speaker Change: Experienced back in May this year similar to the Youtube premium model as we increased our AD load by introducing minerals in September we saw strong growth in premium subscribers and we're very pleased with the progress.
Speaker Change: However, we are now stepping on the gas by adding exclusive contents of the Rumble premium offer on election night, we announced that Steven Crowder Mug club one of the largest subscription communities on the Internet is now included in the rubble premium offering with crowds exclusive content. This proved to be a very strong driver of subscription growth and <unk>.
Speaker Change: Recent weeks and we are looking to continually add content and creators to the offer such as Street League skateboarding, which we'll be adding some rumble premium shortly.
Speaker Change: One easy way to think of this is that we are now offering a combination of youtube's no AD experience and Netflix subscription to exclusive content with this hybrid model, we feel that we have an opportunity to provide superior economics to the creator versus any other platform.
Speaker Change: The fourth quarter has been something special to watch is the first full quarter that our entire revenue mouse trap is live across rack in premium and the early results have been very promising I feel that Rumble is now in the lead with the best monetization engine and the greater economy.
Speaker Change: For all of these reasons I continue to be excited about our performance in the fourth quarter, which marked another quarter of consecutive revenue growth.
As we look forward the elephant in the room is how much longer can brand advertisers ignore and more than half the country.
Speaker Change: We in our user base are now majority, although many platforms that appeal back their policies on strict moderation the audiences have not gone back to them. They have stayed loyal to Rumble and during this time, we've grown our user base.
Speaker Change: <unk> cannot ignore this forever and in fact, we have we have signed a proof that it's finally changing image.
Speaker Change: <unk>. After we saw garment spanned rumble landed its first major brand advertising partnership which is set for December of 2024 for those who may not be familiar I previously spoke about garb, the global alliance for responsible media conspiracy effectively.
Creating an advertising cartel more powerful than most of the media buying agencies in the world. The so-called standards manufactured by GARP. We're in fact, an agreement among competing advertisers and AD agencies not to advertise with platforms like Rumble and apps, which created an artificial headwinds for our business within days of our.
Speaker Change: Our suite of loss Aipac's Garden was dismantled not only is corporate America has started to turn prior to the election, but I believe the results of the election will only accelerate this onset of brand partnerships across both advertising and cloud I have already seen early signs.
Speaker Change: And we are a week out from the election.
Speaker Change: <unk> always said 2024 is our Super Bowl and now I can say, we won the Super Bowl Rumble set new records in New Heights, and corporate media viewership dropped as much as 50% over 2020. The World has forever changed in corporate America is going to change with it they don't have a choice.
Speaker Change: Our courageous employees helped change the course of history and I could not be more proud.
The American people have spoken cancel culture is dead re speech is now mainstream enrolls in the driver's seat with the best lineup of independent creators with the best Economics.
Now I will pass the Brennan Alexandra to walk through the financials.
Brennan Alexandra: Thank you Chris I'll now take you through our third quarter financials at a very high level before turning the call over to the operator for Q&A.
Brennan Alexandra: The third quarter of 2024, we reported revenues of $25 1 million compared to $18 million for Q3, 2023, an increase of $7 1 million of which $5 9 million was attributable to an increase in audience monetization revenues and $1 $2 million is attributable to higher other initiative roofing revenues.
Brennan Alexandra: For the third quarter, we reported <unk> 33, compared to 37 in the second quarter given that we are currently in the early stages of monetizing our user base, we expect to see some lag in revenue relative to users.
Brennan Alexandra: Barely during periods of high user growth as a result in the third quarter Rumble saw a decrease in our view as revenue growth slightly lagged our strong <unk> growth from lead up to the United States presidential election.
Brennan Alexandra: As we've previously stated our expectation for revenues in 2024 for the sequential quarter over quarter increase beginning in the second quarter of the year. So far we have achieved.
Brennan Alexandra: And we continue to expect revenue growth for the remainder of 2024.
Brennan Alexandra: Cost of services decreased to $36 4 million for the quarter compared to $39 8 million in the third quarter of 2023 to $3 $3 million decrease is due to a decrease in <unk>.
Brennan Alexandra: And content costs of $5 4 million offsetting increase of $1 7 million in share based compensation and $4 million in other cost of services as of September 30 of 2020 for our programming and content agreements had a minimum contractual cash commitment of $38 million down from $106 million.
Brennan Alexandra: At December 31, 2023.
Brennan Alexandra: Moving to our cash position, we ended the third quarter of 2024 with approximately $132 million in cash cash equivalents and marketable securities compared to $219 5 million as.
As of December 31, 2023.
Brennan Alexandra: I would like to draw your attention to a specific item in our press release the trend in cash cash equivalents and marketable securities usage, which has improved in each of the last four quarters for the third quarter. Our cash usage was $22 3 million, 25% lower usage compared to the second quarter, we continued to maintain so.
<unk> cash to meet our ongoing capital needs.
Brennan Alexandra: Before I conclude I would like to reiterate our expectation to continue to move materially towards adjusted EBITDA breakeven in 2025 to that end, we started reporting adjusted EBITDA. This quarter adjusted EBITDA loss for the third quarter 2024 was $23 5 million compared to a loss of $35 4 million.
Brennan Alexandra: In the third quarter of 2023.
Brennan Alexandra: That concludes my prepared remarks before I turn the call over to the operator I invite you all to join Christmas evening at 630 PM Eastern time for an exclusive post earnings interview with Mac courts to be streamed live on the <unk> Rumbled Chairman I will now turn the call over to the operator to open up the line for questions.
Speaker Change: Thank you Sir.
Speaker Change: We will now be conducting the question and answer session.
Speaker Change: If you ask a question. Please press star and then one on your telephone keypad.
Speaker Change: A confirmation tone will indicate that <unk> is in the question queue.
You may still choose to leave the question queue.
Speaker Change: For participants, making use of speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
Speaker Change: Our first question comes from Scott Devitt.
Speaker Change: Securities. Please go ahead.
Hey, thanks.
Speaker Change: Yes.
Speaker Change: Traditional mediums.
Speaker Change: Exposed with the.
Speaker Change: Election and.
Speaker Change: This is kind of your time as you described it.
Speaker Change: In the call.
Speaker Change: I don't know what type of visibility that you <unk>.
Speaker Change: <unk> in terms of like forward advertising revenue, but as we try to get a better understanding of kind of the trajectory of the business beyond usage metrics and things like that and the ability to.
Speaker Change: Attach revenue as you kind of.
Speaker Change: Go into this new period is there a way to quantify that more in giving formal guidance or.
Speaker Change: Or just something to allow us to better understand like whats happening financially in the business versus waiting until end of quarter. When you report numbers.
Speaker Change: Cognizant of kind of the commentary that you gave around it but I was just wondering if there's ways.
Speaker Change: <unk> visibility in ways that you can quantify it it would be interesting to understand that earlier.
Speaker Change: Yes. Thanks for the question this is Chris.
Speaker Change: With respect to the advertising business up until now it's been very dependent on direct response and performance based advertising, which I would say is a pretty good line in the sand in terms of.
Speaker Change: Where we are I don't foresee direct response faltering in any major way are being as Volta volatile as it was in the past and I see tremendous upside now going forward in terms of how brands can kind of start coming in the major question is with the advertisers.
Speaker Change: Do they start moving in and when do they start moving in on the brand side like I said, we did want brand partnership.
Speaker Change: Pretty immediately after our GARP.
Speaker Change: Disbanded.
Speaker Change: And the major questions still still holds as like how many others are going to follow once this happens going into 2025, but I definitely see this as a tailwind and we kind of have a line in the sand with respect to the direct performance or direct response type of ads that we already see I don't see those going away and putting pushing us lower at any point so.
Speaker Change: I do see that.
Speaker Change: What I am seeing in Q4, obviously with our first brand partnership coming in December and what were currently seeing even with direct.
Speaker Change: Direct response is.
Speaker Change: Is going very well at this point.
Speaker Change: I hope that answers your question.
Speaker Change: Yes, it does.
Speaker Change: <unk>.
Speaker Change: Central and my congratulations to you for.
Speaker Change: Pressing through this period when the business has been suppressed in the way that it has on <unk>.
Speaker Change: Congrats to you and the team.
Thank you really appreciate that.
Speaker Change: The next question comes from Jason Holstein.
Jason Holstein: Hi, Matt.
Speaker Change: Please go ahead.
Speaker Change: Jason Your line is open you can ask your question.
Speaker Change: Unfortunately, we are not getting any response from Jason's line going onto the next question, which comes from Thomas Forte of Maxim Group. Please go ahead.
Thomas Forte: Great. So first off congratulations on everything worked out.
<unk> been very impressed with your mission.
Encouraging to see.
Thomas Forte: I think moving in your direction and in their favor.
Thomas Forte: I think you talked about some of your content plans earlier in the call.
Speaker Change: But I wanted to know.
Speaker Change: I wanted to follow up on a question I think I asked last quarter, which is.
Speaker Change: What are your plans in general.
Speaker Change: <unk> routine your high levels of engagement.
Speaker Change: Now that we're on the other side of the election. So that's my first question.
Chris Pawlowski: Thanks, Tom This is Chris.
Speaker Change: So with respect to the engagement levels.
Speaker Change: What we're seeing now I think is much different than what we saw in 2022. During the mid term elections are product is far superior than it was back then and we've really kind of built the product in a way to try to stick this audience better than we ever have.
Speaker Change: We're seeing.
Speaker Change: Obviously up until the election and even until now we're seeing a lot of these big channels retain a lot of engagement and retain a lot of their users and ways that we haven't seen in the past it's still early.
Speaker Change: I'd like to see this kind of play out in Q4, and Q1 to really kind of get a sense of where everything kind of sticks and how it sticks, but generally speaking.
Speaker Change: From our point of view the product is really going to engage a lot more stickiness, especially as we ramp up the premium offering we're seeing really high engagement for them from the premium cohort and real stickiness with that premium cohort and as we add more content to that I expect that to only.
Speaker Change: Increase that engagement on the platform so up until now I would say, it's still too early to say, but the early signs in there and all the product improvements I'm very hopeful and optimistic that we're going to stick and audience and a much bigger way than we ever have in the past.
Speaker Change: And I think we're kind of in that throughout the course of the year as well as we move quarter after quarter here in 2024.
Speaker Change: And then for my second question, maybe three total is you've talked historically about.
Speaker Change: I guess the tools to be the Rumble at center.
Speaker Change: We're getting your user interface, where you wanted it to be on all the different platforms.
So you've talked about how.
Speaker Change: A large impediment to advertising revenue has been removed, but I wanted to talk about your current feeling on.
Speaker Change: Do you have the tools, where you want them do you have your user interface.
Speaker Change: Wanted huh. So that's my second question.
Speaker Change: Yes.
Speaker Change: I believe we do at this point in time I feel like the Rumble advertising center is in the best places ever been we introduced mid rolls in the middle of September of which is only a couple of months ago and what we noticed is that and kind of surprised us a little bit.
Speaker Change: Is that once we added the minerals it really kind of need everything clicked for us in terms of Rumble premium we saw traction on premium kind of move quite nicely. Once we introduce drip minerals and obviously, we saw an uptick in revenue because we started introducing minerals. So not only did we see the boost on rack, but we started to see it.
Speaker Change: On premium, which really kind of created this flywheel in terms of the crater economics in a way that we didn't quite foresee until we introduced those those those minerals so the minerals.
A much bigger impact than we initially thought it would.
Speaker Change: Both sides of the business for premium and rack. So we think at this point right now the mouse trap that we do have for the creator is in the best shape. We've ever had it obviously there is room for improvement and optimizations, but we are really really excited with how things are turning out we've brought in.
Speaker Change: Steven Crowder into the Rumble premium experience and it is.
Speaker Change: Is this something I really really want to lean into going forward because the numbers are proving to be very fruitful for us.
Speaker Change: Great and then my last question and thanks for taking my questions. So you earlier this year the great win on the cloud front with the Miami Dolphins can you just talk about the sales cycle for cloud and so if you think it's your I guess staying the same or getting any shorter.
Speaker Change: So how should we think about the sales cycle in the.
Speaker Change: Monetization going forward.
Speaker Change: Yeah, absolutely so.
Speaker Change: We did do the mine orphans deal and more recently.
Speaker Change: We started selling some nvidia with each $100 to sticker meal on the AI front and we see the opportunity for Rumble cloud Thats ahead of us right now.
Speaker Change: And I think being network post election, now as well I think there is like a real opportunity here with some large enterprises potentially government clients that were in.
Speaker Change: We're in talks with that I've mentioned in the past and it's something that we're very excited excited about because any of these large clients or governments would move the needle pretty dramatically on the on the cloud front. So.
Speaker Change: These sales cycles do take long, but they are all moving forward and we're cautiously optimistic here that we'll be able to start to see some traction on that front on the cloud front.
Speaker Change: So there is some material material traction.
Speaker Change: Thanks, Chris Thanks for taking my questions.
Chris Pawlowski: Thank you Tom.
Ladies and gentlemen, just to reminder, you can ask answer Christian Q Volkmann from my stall and then one to place yourself in the question queue.
Chris Pawlowski: We've been returning to find Jason Holstein.
Speaker Change: Please go ahead.
Jason Holstein: Hi, everybody not sure. If this was answered already but just.
Jason Holstein: And Youre thinking about fourth quarter, given that you don't.
Jason Holstein: Guys can we expect similar or better.
Jason Holstein: Revenue seasonality when you think about the seasonality last year and kind of how do you expect this year to play out just any kind of help with that directionally. Thank you.
Speaker Change: Yes, yes, so we.
Speaker Change: And I think as we said earlier in the year, we expected quarter after quarter revenue growth in 2024, and we've achieved that so far and.
Speaker Change: We do expect that to continue into the balance of the year as well.
Jason Holstein: Jason One thing I wanted to ask.
Jason Holstein: Is that.
Speaker Change: We're really really positive on on rack rate now we introduced mid rolls back in the middle of September.
Jason Holstein: We don't really get to see in Q3.
But in in Q4 that will be a full a full quarter with rack kind of really humming on the on the advertising side and as Brandon reiterated we do expect sequential quarterly growth.
Jason Holstein: We went into Q4.
Speaker Change: Jason does that conclude your questions.
Speaker Change: Thank you ladies and gentlemen, it appears we have reached the end of the question and answer session.
Speaker Change: Thank you for attending and you may now disconnect your lines.
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Speaker Change: Good afternoon, ladies and gentlemen, and welcome to Rumble incorporated first quarter 'twenty 'twenty four earnings call.
Speaker Change: All participants are in listen only mode.
Speaker Change: A question and answer session will follow the formal presentation.
Speaker Change: If anyone should require operator assistance during the conference. Please press the star key I mean zero punished telephone keypad.
Speaker Change: Please note that this event is being recorded.
Speaker Change: I would now like to turn the conference over to Shannon Devine Investor Relations for Grumble.
Speaker Change: Okay.
Thank you operator, I'm here today, with Chris Pawlowski, founder Chairman and CEO from ball and Brandon Alexandra CFO.
Speaker Change: A press release detailing our third quarter 2024 results was released today and available on the Investor Relations section of our website before we begin the formal presentation.
Speaker Change: I would like to remind everyone that statements made on this call and webcast may include predictions estimates or other information that might be considered forward looking all forward looking statements are made only as of the date of this call 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.
Speaker Change: To accompany updates will be available available via press release and updates via the company's identified social media channel I will now turn the call over to Rumble, founder Chairman and CEO, Chris Pawlowski.
Chris Pawlowski: Thanks, Shannon Wow, what a couple of weeks, it's been two years since we first became public and since we hosted our first earnings call.
Chris Pawlowski: Can honestly say that I've never been more optimistic about our opportunity and more importantly, it has never felt more real than it does today.
Chris Pawlowski: With the U S presidential election, now in the rearview mirror and on the heels of.
Chris Pawlowski: Our two year public anniversary I feel this presents the perfect time to reflect on where where we were what has transpired over the two years since our public debut and explain where we go from here on our first earnings call I shared with you our mission to protect a free and open internet the DNA of our community.
Chris Pawlowski: <unk>, our creators our partners and our employees are reflected on how Rumble held the line on free speech when no one else had the courage. It was lonely at times. It was even scary at times, we were canceled by technology partners commercial partners put off by the so called mainstream enforced.
Chris Pawlowski: Shut off countries.
Chris Pawlowski: We faced hit piece after hit piece, we even faced illegal advertising boycotts. Most importantly, I shared the pain of our creators who have had their voices suppressed and even eliminated from society.
It was out of control can you imagine that our current president elect was canceled.
Chris Pawlowski: But rumble held the line we allowed these voices to be heard we can see the movement when no one else did.
Chris Pawlowski: We saw the momentum as our creators grew their audience from thousands to tens of thousands to even hundreds of thousands of users every day, we set out on our growth strategy to build our teams our infrastructure our products and our revenue engine for our creators 2023 was a building year and 2024 has been.
Chris Pawlowski: <unk> focused on bringing the revenue engines online and monetizing this incredible audience, we have and we have delivered.
Chris Pawlowski: We perfectly positioned our business for this moment.
Chris Pawlowski: Turning to the election, we cemented ourselves as the leader in the independent greater space on the evening of November 5th and into the morning of November six we set new high marks in a variety of categories, including number of livestreams live concurrent views consumption total rubble prime.
Chris Pawlowski: Liam subscribers and revenue generated through the Rumble advertising center known as Iraq. Meanwhile, traditional TV networks saw ratings plummet by as much as 50% versus the 2020 election.
This was the nail in the coffin for traditional media in the dawn of a new era, where the independent crater is the new source of truth and Rumble is at the forefront. According to streams charts, which tracks livestream metrics Rumble set a new peak number of concurrent views concurrent viewers and took a 17, 8% share.
<unk> of live hours watched in the United States on election day to put this in perspective, our 17, 8% 17, 8% compares to 71, 2% for Youtube and 10% for Twitch. Additionally, the Rumble App also reached number three in the photo and video video category.
Chris Pawlowski: The Apple App store ahead of Youtube not bad considering that Youtube is estimated to be worth over 400 billion.
Chris Pawlowski: Dan von Gino set a new high for individual stream with over 515000 concurrent viewers and host Steven Crowder notch notch the personal best of over 460000 concurrent users viewers.
Chris Pawlowski: These were the two biggest independent greater live streams in the world at the time.
Speaker Change: And keep in mind. This was all running on Rumble cloud, an amazing amazing technical feat by our incredible team of engineers improve that our cloud belongs in the big leagues are cloud offering has taken hold and we are continuing to have conversations with large enterprise customers in all various stages of the sales cycles.
Speaker Change: The progress here is encouraging and the elections proof of just how mission critical product.
Speaker Change: Turning to Q3, we saw strong growth across our core business, reaching monthly active users of $67 million and I can confidently say, we are advancing our business from a more volatile testing phase to a more scalable and predictable phase I mentioned that 2023 was focused on expanding our gold <unk>.
Speaker Change: <unk> and sustain our audience well, we certainly have the audience monetization has taken the majority of our focus for 2024, and we have been progressing nicely with quarterly revenues increasing sequentially. Since Q2 importantly, the headwinds we have experienced on the monetization front are being overtake.
Speaker Change: And by election related tailwind with.
With the goals of expanding our content offering and cultivating a loyal audience avenues for monetization opportunities opened wider and sooner than I could have anticipated. One example of this is rumbled premium has exceeded our expectations. We launched this service is a no add experienced back in May this year similar to the <unk>.
Speaker Change: To premium model as we increased our AD load by introducing mid rolls in September we saw strong growth in premium subscribers and we're very pleased with the progress. However.
Speaker Change: However, we are now stepping on the gas by adding exclusive content to the Rumble premium offer on election night, we announced that Steven Crowder Mug club one of the largest subscription communities on the Internet is now included in the rubble premium offering with Crowder exclusive content. This proved to be a very strong driver of subscription growth and <unk>.
Speaker Change: In the weeks and we're looking to continually add content and creators to the offer such as Street League skateboarding, which we'll be adding some rumble premium shortly.
Speaker Change: One easy way to think of this is that we are now offering a combination of youtube's no AD experience and Netflix subscription to exclusive content with this hybrid model, we feel that we have an opportunity to provide superior economics to the creator versus any other platform.
The fourth quarter has been something special to watch is the first full quarter that our entire revenue mouse trap is live across rack in premium and the early results have been very promising I feel that Rumble is now in the lead with the best monetization engine and the creator economy.
Speaker Change: For all of these reasons I continue to be excited about our performance in the fourth quarter, which marked another quarter of consecutive revenue growth.
Speaker Change: As we look forward the elephant in the room is how much longer can brand advertisers ignore more than half the country.
Speaker Change: In our user base are now majority, although many platforms have peeled back their policies on strict moderation the audiences have not gone back to them. They have stayed loyal to Rumble and during this time, we've grown our user base.
<unk> cannot ignore this forever and in fact, we have we have signed a proof that it's finally changing.
Speaker Change: Mediately after we saw garbed it spanned rumble landed its first major brand advertising partnership which is set for December of 2024 for those who may not be familiar I previously spoke about garb, the global alliance for responsible media conspiracy effectively.
Speaker Change: Creating an advertising cartel more powerful than most of the media buying agencies in the world. The so-called standards manufactured by garb. We're in fact, an agreement among competing advertisers and AD agencies not to advertise with platforms like Rumble and apps, which created an artificial headwinds for our business within days of our.
Speaker Change: Our suite of loss Aipac's Garden was dismantled not only is corporate America has started to turn prior to the election, but I believe the results of the election will only accelerate this onset of brand partnerships across both advertising and cloud I have already seen early signs.
Speaker Change: And we are a week out from the election.
Speaker Change: Always said 2024 is our Super Bowl and now I can say, we won the Super Bowl Rumble set new records in new hoist and corporate media viewership dropped as much as 50% over 2020. The World has forever changed in corporate America is going to change with it they don't have a choice.
Speaker Change: Our courageous employees helped change the course of history and I could not be more proud.
Speaker Change: The American people have spoken Canfor culture is dead brief speech is now mainstream enrolls in the driver's seat with the best lineup of independent creators with the best Economics.
Speaker Change: Now I will pass the Brandon Alexandra to walk through the financials.
Brennan Alexandra: Thank you Chris I'll now take you through our third quarter financials at a very high level before turning the call over to the operator for Q&A.
Brennan Alexandra: For the third quarter of 2024, we reported revenues of $25 1 million compared to 18 million for Q3 2023, an increase of $7 1 million of which $5 9 million was attributable to an increase in audience monetization revenues and $1 2 million is attributable to higher other initiative roofing revenues.
For the third quarter, we reported <unk> of <unk> 33, compared to 37 in the second quarter given that we are currently in the early stages of monetizing our user base, we expect to see some lag in revenue relative to users, particularly during periods of high user growth as a result in the third quarter Rumble saw a decrease in our view as rep.
Brennan Alexandra: New growth slightly lagged our strong Mou growth from lead up to the United States presidential election.
As we've previously stated our expectation for revenues in 2024 with a sequential quarter over quarter increase beginning in the second quarter of the year. So far we have achieved.
Brennan Alexandra: And we continue to expect revenue growth for the remainder of 2024.
Brennan Alexandra: Cost of services decreased to $36 4 million for the quarter compared to $39 8 million in the third quarter of 2023 to $3 $3 million decrease is due to a decrease in <unk>.
Brennan Alexandra: And content costs of $5 4 million offsetting increase of $1 7 million in share based compensation and $4 million in other cost of services as of September 32020 for our programming and content agreements at a minimum contractual cash commitment of $38 million down from $106 million.
Brennan Alexandra: At December 31, 2023.
Brennan Alexandra: Moving to our cash position, we ended the third quarter of 2024 with approximately $132 million in cash cash equivalents and marketable securities compared to $219 5 million.
As of December 31, 2023.
Brennan Alexandra: I would like to draw your attention to a specific item in our press release the trend in cash cash equivalents and marketable securities usage, which has improved in each of the last four quarters for the third quarter. Our cash usage was $22 3 million, 25% lower usage compared to the second quarter, we continued to maintain.
Brennan Alexandra: <unk> cash to meet our ongoing capital needs before.
Brennan Alexandra: Before I conclude I would like to reiterate our expectation to continue to move materially towards adjusted EBITDA breakeven in 2025 to that end, we started reporting adjusted EBITDA. This quarter adjusted EBITDA loss for the third quarter 2024 was $23 5 million compared to a loss of $35 4 million.
In the third quarter of 2023.
That concludes my prepared remarks before I turn the call over to the operator I invite you all to join Christmas evening at 630 PM Eastern time for an exclusive post earnings interview with Mac courts to be streamed live on the <unk> Rumbled Chairman I will now turn the call over to the operator to open up the line for questions.
Speaker Change: Thank you Sir.
Speaker Change: We'll now be conducting the question and answer session.
Speaker Change: I'd like to ask a question. Please press star one on your telephone keypad.
Speaker Change: A confirmation tone will indicate your line is in the question queue.
Speaker Change: You may still choose to leave the question queue.
Speaker Change: For participants, making use of speaker equipment.
Speaker Change: To be necessary to pick up your handset before pressing the star keys.
Speaker Change: Our first question comes from Scott Devitt with <unk> Securities. Please go ahead.
Speaker Change: Hey, thanks.
Speaker Change: Yes.
Speaker Change: On traditional mediums.
Exposed with the <unk>.
Speaker Change: Election and.
Speaker Change: This is kind of your time as you described it.
Speaker Change: In the call.
Speaker Change: I don't know what type of visibility that you.
Speaker Change: <unk> in terms of like forward advertising revenue, but as we try to get a better understanding of kind of the trajectory of the business.
Speaker Change: Beyond usage metrics and things like that and the ability to.
Speaker Change: Attach revenue.
Speaker Change: Kind of.
Speaker Change: Go into this new period is there a way to quantify that more in giving formal guidance or.
Speaker Change: Or just something to allow us to better understand like whats happening financially in the business versus waiting until end of quarter. When you report numbers.
Speaker Change: Cognizant of kind of the commentary that you gave around it but I was just wondering if there's ways if youre gaining visibility in ways that you can quantify it it would be interesting to understand that earlier.
Chris Pawlowski: Yes. Thanks for the question this is Chris.
Speaker Change: With respect to the advertising business up until now it's been very dependent on direct response and performance based advertising, which I would say is a pretty good line in the sand in terms of.
Speaker Change: Where we are I don't foresee direct response.
Speaker Change: Turning in any major way being as volatile volatile as it was in the past and I see tremendous upside now going forward in terms of how brands can kind of start coming in the major question is with the advertisers.
Speaker Change: <unk> two they start moving in and when do they start moving in on the brand side like I said, we did want brand partnership.
Speaker Change: Pretty immediately after a garment.
Speaker Change: Disbanded.
Speaker Change: And the major questions still hold as like how many others are going to follow once this happens going into 2025, but I definitely see this as a tailwind and we kind of have a line in the sand with respect to the direct performance.
Speaker Change: Direct response type of ads that we already see I don't see those going away and putting pushing us lower at any point so.
Speaker Change: I do see that.
Speaker Change: What I'm seeing in Q4, obviously with our first brand partnership coming in December and what were currently seeing even with.
Speaker Change: Direct response is is going very very well at this point.
I hope that answers your question.
Speaker Change: Yes, it does.
Speaker Change: <unk>.
Speaker Change: Central on my congratulations to you for.
Speaker Change: Pressing through this period when the business has been suppressed in the way that it has so congrats to you and the team.
Speaker Change: Thank you.
Speaker Change: I appreciate that.
Speaker Change: The next question comes from Jason <unk> of Oppenheimer and co. Please go ahead.
Jason: Jason Your line is open you can ask your question.
Jason: Unfortunately, we are not getting any response from Jason's line getting onto the next question, which comes from Thomas Forte of Maxim Group. Please go ahead.
Thomas Forte: Great. So first off <unk> congratulations on that.
Thomas Forte: They worked out I've been very impressed with your mission.
Thomas Forte: Encouraging.
Thomas Forte: Since moving in your direction and in their favor.
Thomas Forte: I think you talked about some of your content plans earlier in the call.
Speaker Change: But I wanted to know.
Speaker Change: I wanted to follow up on a question I think I asked last quarter, which is.
Speaker Change: What are your plans in general.
Speaker Change: To retain your high level of engagement.
Now that we're on the other side of the election. So that's my first question.
Speaker Change: Yeah.
Chris Pawlowski: Thanks, Tom This is Chris so with respect to the engagement levels.
Chris Pawlowski: What we're seeing now I think is much different than what we saw in 2022. During the mid term elections are product is far superior than it was back then and we've really kind of built the products in a way to try to stick this audience better than we ever have.
Chris Pawlowski: We are seeing.
Chris Pawlowski: Obviously up until the election and even until now we're seeing a lot of these big channels retain a lot of engagement and retain a lot of their users and ways that we haven't seen in the past it's still early.
Chris Pawlowski: I'd like to see this kind of play out in Q4, and Q1 to really kind of get a sense of where everything kind of sticks and how it sticks, but generally speaking.
Chris Pawlowski: From our point of view the product is really going to engage a lot more stickiness, especially as we ramp up the premium offering we're seeing really high engagement for them from the premium cohort and real stickiness with that premium cohort and as we add more content to that I expect that to only.
Chris Pawlowski: Increase that engagement on the platform so up until now I would say, it's still too early to say, but the early signs and all the product improvements I'm very hopeful and optimistic that we're going to stick and audience and a much bigger way than we ever have in the past.
Chris Pawlowski: And I think we've kind of in that throughout the course of the year as well.
Chris Pawlowski: As we move quarter after quarter here in 2024.
Speaker Change: And then for my second question and maybe I'll ask III total is you've talked historically about.
Speaker Change: I guess the tools.
Speaker Change: Rumble at center.
Speaker Change: Or getting your user interface, where you wanted it to be on all the different platforms.
Speaker Change: You've talked about how.
Speaker Change: A large impediment to advertising revenue has been removed.
Speaker Change: Wanted to talk about your current feeling on.
Speaker Change: Do you have the tools, where you want them do you have any user interface, where you want it.
So that's my second question.
Speaker Change: Yes.
Speaker Change: I believe we do at this point in time I feel like the Rumble advertising center is in the best place it's ever been we introduced mid rolls in the middle of September.
Speaker Change: Which is only a couple of months ago, and what we noticed is that it.
Speaker Change: Kind of surprised us a little bit is that once we added the minerals it really kind of need everything clicked for us in terms of Russell premium we saw traction on premium kind of move quite nicely. Once we introduce drip minerals and obviously, we saw an uptick in revenue because we started introducing minerals. So not only did we see that.
Speaker Change: Boost on Iraq, but we started to see a boost on premium which really kind of created this flywheel in terms of the crater economics in a way that we didn't quite foresee until we introduce those.
Speaker Change: Those minerals, so the minerals had a much bigger impact than we initially thought it would.
Speaker Change: Both sides of the business for premium and rack. So we think at this point right now the mousetrap that we do have for the creator is in the best shape, we've ever had it obviously, where there is room for improvement and optimizations, but we are really really excited with how things are turning out.
Speaker Change: <unk>, Steven Crowder into the Rumble premium experience and this is something I really really want to lean into going forward because the numbers are proving to be very fruitful for us.
Speaker Change: Great and then my last question and thanks for taking my questions earlier.
Speaker Change: Earlier this year is a great win on the cloud front with the Miami Dolphins can you just talk about the sales cycle for cloud and so if you think it's your I guess staying the same or getting any shorter.
Speaker Change: How should we think about the sales cycle.
Speaker Change: Monetization going forward.
Speaker Change: Yeah, absolutely. So we did do the mine opens deal and more recently.
Speaker Change: We started selling some and video <unk> hundred's to sticker meal on the AI front and we see the opportunity for Rumble cloud Thats ahead of US right now and.
Speaker Change: And I think being network post election, now as well I think there is like a real opportunity here with some large enterprises potentially government clients that were in.
Speaker Change: No.
Speaker Change: We're in talks with that I've mentioned in the past and it's something that we're very excited excited about because any of these large clients or governments would move the needle pretty dramatically on the on the cloud front. So.
Speaker Change: These these sales cycles do take long, but they are all moving forward and we're cautiously optimistic here that.
Speaker Change: We will be able to start to see some traction on that front on the cloud front.
Speaker Change: So there is some material material traction.
Chris Pawlowski: Thanks, Chris Thanks for taking my questions.
Chris Pawlowski: Thank you Tom.
Ladies and gentlemen, just a reminder, if you ask the question queue will confront stall and then one to place itself into question queue.
Speaker Change: We've been vitro unifi, Jason <unk> of Oppenheimer <unk> co. Please go ahead.
Speaker Change: Not sure if this was answered already but.
Speaker Change: Just as you're thinking about fourth quarter given the.
Speaker Change: Guy can we expect similar or better.
Speaker Change: Revenue seasonality when you think about the seasonality last year and kind of how you expect this year to play out.
Speaker Change: Any kind of help with that Directionally. Thank you.
Speaker Change: Yes, yes, so we.
Speaker Change: I think as we said earlier in the year, we expected quarter after quarter revenue growth in 2024, and we've achieved that so far and we do expect that to continue into the balance of the year as well.
Speaker Change: Jason One thing I wanted to ask this is Craig.
Speaker Change: Is that.
Craig: We were really really positive on on rack rate now we introduced mid rolls back in the middle of September, which we don't really get to see in Q3.
Speaker Change: But.
Speaker Change: In Q4 that will be a full a full quarter with rack kind of really humming on the on the advertising side and as Brandon reiterated.
Speaker Change: We do expect sequential quarterly growth.
Speaker Change: Going into Q4.
Speaker Change: Jason does that conclude your questions.
Speaker Change: Thank you ladies and gentlemen, it appears we have reached the end of the question and answer session.
Speaker Change: Thank you for attending and you may now disconnect your lines.