Q4 2024 Rumble Inc Earnings Call
Okay.
Speaker Change: Good morning, ladies and gentlemen, and welcome to Rumble Incorporated's fourth quarter and full year 2024 earnings call. All participants are in a listen only mode. A 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.
Speaker Change: Keypad. Please note. This event is being recorded I will now turn the conference over to Shannon Devine Investor Relations for Rob Bell. Please go ahead.
Speaker Change: Thank you operator, I'm here today with Chris Carbos gave founder Chairman and CEO verbal and Brandon Alexandra CFO, a press release detailing our fourth quarter and full year 2024 results was released today and available on the Investor Relations section of our website before we begin the formal presentation I would like to remind everyone that state.
Speaker Change: <unk> made on this call 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 future company updates will be available via press release and the <unk>.
Speaker Change: He has identified social media channels I'll now turn the call over to Rumbles, Chairman founder and CEO, Chris Pawlowski.
Speaker Change: Thanks Shannon.
Speaker Change: Fourth quarter. It was everything we anticipated and much more while we closed a major chapter in our journey with the U S presidential election in November by late December we immediately entered an entirely new era, when we announced the 775 million strategic investment from China.
Speaker Change: Today I will address the significant implications of both these events first the U S presidential election Rumble cemented its place in the online media ecosystem. According to Scream charts, we were the top destination for live independent creator election coverage, both Dan Bond Gino and Steven Crowder.
Speaker Change: <unk> dominated election night in first and second place respectively, beating out all of their platforms and independent creators. Our success was rewarded over a month ago. When I was fortunate enough to be invited to the new independent media seat in the White House briefing room with press Secretary Carolyn limit. This is just one powerful and <unk>.
Speaker Change: Example of how the media landscape is changing and how well positioned we are for the future I see rumble as the dominant online media for us for future election coverage and as audiences transition from network TV to OTT Rumble will be positioned to capture this growth in.
Speaker Change: In previous calls we also discussed the potential impact of the election on our advertising business with the Trump administration is very strong stance on free speech, we expect to see the artificial headwinds on brand advertising that we faced in 2024 to turn into a tailwind in 2025 and 2026.
Speaker Change: Due to the environment change Rumble will be repositioning investing and expanding its sales focus to target brands more aggressively.
Speaker Change: Fourth quarter was something special to watch we broke internal livestream records without any hiccups from a rumble cloud infrastructure. Moreover, it was the first full quarter with our full revenue suite online, which includes rack sponsorships and premium the results are very promising and it is now clear to us that.
Speaker Change: We have one of the best monetization engines in the creator economy.
Speaker Change: The fourth quarter delivered another revenue record in another consecutive quarter of revenue growth registering over $30 million in revenue with $68 million Meus importantly.
Speaker Change: <unk>, our U S and Canada, Meus jumped 21% from $43 million in the third quarter to $52 million in the fourth quarter of 2024.
Speaker Change: As a note while we are working actively to prepare for brands. It is worth highlighting the success, we've had with our performance marketing solution for direct response advertisers one of our most successful advertising categories has been precious metals over the last three years rumbled audience has purchased over $750 million.
Speaker Change: Precious metals through rack and creator sponsorships a true testament to the audience, we have that the brand through advertising and rumbled can no longer be ignored.
Speaker Change: Let's talk about the tether investment and what this means for Rumble, we closed out 2024 with our most exciting announcements since going public in December we announced a 775 million strategic investment from tether the largest company in the digital asset industry and the most widely used.
Speaker Change: Stable stable coin across the world. This transaction was not just the move to fortify the company's balance sheet, while providing a liquidity opportunity for all of our stockholders. The investment was rooted in an extremely strong and not always obvious commonalities between crypto currency and free speech communities.
Speaker Change: <unk> built on our passion for freedom transparency and decentralization with more than 400 million International tether users imagine the possibilities between Rumble and tether going forward, we expect four core impacts on the business number one.
Speaker Change: <unk> International expansion, we expect to leverage tethers massive private presence outside of the U S and make inroads with Rumble video and Rumble cloud. The first example of this is our recently announced partnership between Rumble cloud and the government of El Salvador once we deliver the cloud we will be well positioned to build their presence in El <unk>.
Speaker Change: Salvador draw new audience to the video platform and ultimately sell this audience to local advertisers, while we still need to prove this strategy. This is the template that we will look to deploy around the world. A few other countries. We are speaking to in the same vein as El Salvador, Macedonia and Panama.
Speaker Change: <unk> to aggressively expand rumble clouds customer base by Onboarding as many tether portfolio companies onto the Rumble cloud.
Speaker Change: As a growing portfolio of nearly 100 companies of various sizes and various cloud needs number three we are now very well positioned to become the leading media platform in the crypto community. The first tangible project underway is the Rumble wallet, which we are building alongside tethered to deliver the first crypto wallet.
Speaker Change: To the creator community at scale, accepting and paying out and USD tether tether gold and Bitcoin. We expect we expect this to bring direct value to the crypto community on a platform enable international expansion on the video platform and facilitate meaningful high value partnerships with crypto.
Speaker Change: Exchanges.
Speaker Change: Number four while we continue to move towards adjusted EBITDA breakeven $250 million in gross proceeds will greatly strengthen our balance sheet and allow us to more fiercely compete with google's product suite I want to emphasize this having one of the most profitable companies in the world backing Rumble as only emboldened.
Speaker Change: Our vision to take on Google across their ecosystem and this is a shared vision from myself and our newest shareholders. We're already taking them on in video, but we plan to get very aggressive on cloud and expand into various other products suites, either by acquisition or internal development.
Speaker Change: Before I turn I'll turn the call over to Brandon I want to reiterate one thing is for certain we are entering a new era for Rumble one worth.
Speaker Change: Our artificial advertising headwinds have the potential to turn into a real tailwind and one with a powerful ally that is deeply passionate about.
Speaker Change: Helping take Rumble to the next level I've never been more excited for the future of this business now I will pass to Brendan Alexandra off to walk through the financials.
Brendan Alexandra: Thanks, Chris.
Brendan Alexandra: I'll now take you through our fourth quarter and full year 2020 for financials at a very high level before turning the call over to the operator for Q&A.
Brendan Alexandra: For the full year of 2024, we reported revenues of $95 5 million, an increase of 8% when compared to $81 million in 2023 for the fourth quarter of 2024, we reported revenues of $30 2 million compared to $20 4 million for Q4 2023, an increase of $9 eight.
Brendan Alexandra: Of which $7 9 million was attributable to an increase in audience monetization revenues and $1 9 million to other initiatives. The increase in audience monetization revenues was mainly due to higher revenue from advertising subscription tipping fees licensing and platform hosting the increase and other initiative revenues.
Brendan Alexandra: Was mostly due to more advertising inventory being monetized by our publisher network and an increase in cloud services offered.
Brendan Alexandra: <unk> was 39 for the fourth quarter compared to 30 <unk> in the third quarter of 2024, the increase from the third quarter is attributable to higher advertising revenue and subscription revenue.
Brendan Alexandra: Cost of services decreased to $34 5 million for the quarter compared to $39 5 million in the fourth quarter of 2023, primarily due to a reduction in programming and content costs of $5 3 million offset by an increase of zero point $3 million in other costs of services, including payment processing fees.
Brendan Alexandra: And cost paid to publishers.
Brendan Alexandra: For the full year cost of services decreased by $7 7 million to $138 $5 million, primarily due to a reduction in programming and content costs of $9 5 million offset by an increase of $1 8 million in other cost of services, including payment processing fees and cost paid to publishers.
Brendan Alexandra: You will see in our financial statements and net loss for the fourth quarter of $236 8 million, which compares to a net loss of $29 3 million in the fourth quarter of 2023 included in the net loss for this quarter was $184 7 million in the change in fair value of derivative expense.
Brendan Alexandra: Which is related to the tether strategic investment.
Brendan Alexandra: Adjusted EBITDA for the fourth quarter of 2024 was $13 4, million% to 55% improvement compared to a loss of $30 million in the fourth quarter of 2023.
Brendan Alexandra: For the full year of 2024, adjusted EBITDA loss was $92 1 million compared to a loss of $115 3 million in 2023.
Brendan Alexandra: As we ramp up monetization and maintain discipline around our cost structure, we continue to expect to move it materially towards adjusted EBITDA breakeven in 2025 ads.
Brendan Alexandra: As Chris stated this remains the goal today, however, with the recently closed capital infusion from Heather we have the increased flexibility to further invest in initiatives that could accelerate and expand our business sooner than originally anticipated.
Brendan Alexandra: Moving to our cash position, we ended the year with approximately $114 million in cash cash equivalents and marketable securities compared to $132 million as of September 32024. This does not include the $250 million in gross proceeds to the company upon closing of the tender transaction on February.
Brendan Alexandra: Seven 2025.
Brendan Alexandra: During the fourth quarter, you will once again see an improvement in cash cash equivalents and marketable securities usage, which has improved in each of the last five quarters for the fourth quarter, our cash usage was $18 million, representing 19% less usage compared to the third quarter.
Brendan Alexandra: As it relates to the first quarter of 2025, given the timing of our call today relative to the end of the first quarter I wanted to provide some color on our top line expectations.
Brendan Alexandra: For the first quarter, we expect revenue growth of at least 25% compared to the first quarter of 2024 <unk>.
Brendan Alexandra: Lastly in the earnings release, we have provided to capitalization tables for reference showing our fully diluted share count as of December 31, 2024 pre tether completion.
Brendan Alexandra: And as of March 12, 2025. After the tether completion was completed after the credit transaction was complete that concludes my prepared remarks, I will now turn the call over to the operator to open up the line for questions.
Brendan Alexandra: We will now be conducting a question and answer session. If he would like to ask a question. Please press Star then one on your telephone keypad, a confirmation tone will indicate your line is in the question queue.
Speaker Change: Press Star two to leave the question queue for participants, making use of speaker equipment may be necessary to pick up your handset before pressing the star keys, one moment, while we poll for questions.
Operator: Our first question is from Thomas Forte with Maxim Group. Please proceed.
Thomas Forte: Great. Thanks, So I'm going to ask one question, one follow up and I'll get back in the queue.
Speaker Change: They ask more so first off Chris congrats on a tremendous quarter and year.
Thomas Forte: First question I had was how should we think about the impact on your monthly active users and other engagement metrics.
Speaker Change: Standby in Juneau being named SBA Deputy director.
Thomas Forte: And then second part of this one are there other influencers on your platform that may take rules for the administration.
Speaker Change: Negatively impact our ability to provide thompson of Rumble.
Speaker Change: Yes.
Speaker Change: Hi, Tom Thanks for the question.
Speaker Change: With respect to the second part of that question I'm not aware of any other current content creators that may take on roles, obviously that could change at any moment notice, but I'm unaware of anything with respect to Dan Bond Gino, becoming the deputy director what we did in the last couple of weeks and we announced on March.
Speaker Change: <unk> last Monday that we launched something called the Rumble lineup and we introduced the technology, causing the rating right feature that allows one stream to follow another stream and we've seen an enormous success on this as of last week damp on genome. The last show I believe was.
Speaker Change: March 14th or around there and when we launched the lineup we had advanced come in and take over damp on Geno show on his channel and then we had Steven Crowder moved to 11, 11 o'clock slot and Tim Poole moved to the new slot.
Speaker Change: And what we've seen is starting from nine a M. We were dominating number one in the live streaming space in the United States at 10, a M as well with Vince and then 11 am Crowder really took on the the largest part of that audience and Tim Poole continued holding number one at noon slot and we're kind of seeing that throughout the.
Speaker Change: Entire week last week. So we think the transition there has been incredible to say, the least and potentially leading us to a bigger opportunity here with expanding that lineup throughout the entire day and into prime time to compete against network television. So we're really excited about that obviously, losing Dan is a huge loss.
Speaker Change: But we think we have filled the gap very well and Steven Crowder has definitely stepped up to take on a large part of that audience along with events and then obviously, adding Tim Poole to our lineup helped a lot as well so.
Speaker Change: Not seeing any kind of significant change if anything what we're seeing is this audience is sticking on a little longer and now watching other shows as well. So we're really happy with what we're seeing in the first week.
Speaker Change: Yes, that's very encouraging.
Speaker Change: Second question, then I'll get back in the queue. Some more so earlier this month, you announced a bitcoin treasury purchases for those investors, who may not be familiar what's the strategy.
Speaker Change: Yes, So we announced a while ago I think it was back in November or December.
Speaker Change: Going to be adopting big coin treasury strategy of up to $20 million in bitcoin purchases up until this point, we've invested around $17 1 million into bitcoin.
Speaker Change: And it's the strategy behind that is obviously I have been very very pro bitcoin my entire life that the jump in when the Trump administration came into office. This was an obvious thing for us to do we I felt very strongly that we needed to have a position and thats.
Speaker Change: Not just in holding cash, but also holding bitcoin and.
Speaker Change: From what I can see where we're one of the top 50 company hold holding bitcoin now with our $17 1 million top public companies I should say that I'm aware of that's holding so our strategy here is to make sure that we're aligned with the community that's <unk>.
Speaker Change: Very enthusiastic in using our products and showing that we really believe in what they believe in and we see this as a really good.
Speaker Change: Investment for this company for the long term.
Speaker Change: Great. Thank you I appreciate that ill get back in the queue.
Speaker Change: Okay.
Speaker Change: Our next question is from Jason <unk> with Oppenheimer <unk> Company. Please proceed.
Jason: So several questions. So first I'll start off.
Speaker Change: With the.
Speaker Change: Kind of the bitcoin Rumble wallet or I guess, who is going to be kind of doing the development of that is that they're gonna be bearing the cost of that.
Speaker Change: Are you going to be bearing the cost of that.
Speaker Change: Kind of factor in that's question one will just I will take them off one at a time.
Speaker Change: Thanks, Jason Yes. So tether is is helping with us on that and they are bearing their own cost on that side and helping us build that we also are bearing a cost on our side from the implementation of it but.
Speaker Change: The development is in unison with the <unk> teams and there is no additional costs or any material impact cost, but on building that youll youll see.
Speaker Change: So it's basically both teams kind of working on their ends of that of the Rumble wallet.
Speaker Change: And then just at a high level I mean.
Speaker Change: Obviously, heather has their own reasons for making this investment.
Speaker Change: I mean, I guess it sounds like some of this potentially will a demand for <unk> cloud.
Speaker Change: Obviously, you've got this kind of.
Speaker Change: Mobile wallet.
Speaker Change: I guess just.
Are there other strategic rationale.
Speaker Change: Hi, there has.
Speaker Change: I don't know, perhaps either publicly said it youre aware of kind of why they've made this.
Speaker Change: From a strategic standpoint.
Speaker Change: Yes, so strategically speaking one of the one of the big strategies around the Rumble wallet is to allow us to go to the international markets and.
Speaker Change: Right now in terms of having advertisers in international markets, it's very difficult for us, we're very focused in the United States and Canada, but let's just take El Salvador as an example, we will have the Rumble wallet available when it's done and we can now enter a market like El Salvador and then we can have whether it's a crypto exchange whether it.
Speaker Change: Tether they can all come in and help advertisers our product with influences that we have in the El Salvador and market. So the way, we see that as a real great growth opportunity to grow in and in international market and have big advertisers like tethered come in and help promote the rumba wallet product, which would carry usdt.
Speaker Change: And.
Speaker Change: Tether gold as long along with our bitcoin. So this is a real large strategic play with the Rumble wallet to go very international and tapping into those 400 million to other users that they have on the cloud side they have.
Speaker Change: A lot of portfolio companies that we can tap into and move over to the Rumble cloud those are longer term plays that take long to onboard, but thats something thats very strategic they have a lot of portfolio companies.
Speaker Change: Those revenue there for us to bring in on the cloud side and utilized.
Speaker Change: And that's something that we are aggressively approaching too so both on the international expansion and bringing.
Speaker Change: The ability for people to tap and pay and creators to get paid and tether around the world.
Speaker Change: It is a huge strategic point for them and obviously on the cloud is a huge strategic points for them.
Speaker Change: And then just lastly on the fundamental side so in the fourth quarter, we obviously feel better.
Speaker Change: <unk> as it relates to the U S.
Speaker Change: UK and Mou and a nice uptick sequentially in monetization.
Speaker Change: Maybe bridging how are you thinking about that with respect to the first quarter guide.
Speaker Change: Conversely, Brandon between the mix between engagement and monetization to get to that.
Speaker Change: First quarter guide and kind of are you assuming any natural falloff post the election.
Speaker Change: Yes, so with respect to the MAA use what we what I can say is in the first quarter being that were nearly closing out the first quarter here, we have stock the MA used in the first quarter better than we have after any other.
Speaker Change: <unk> election cycle, so as you've probably seen it historically in the midterm elections, we had a massive drop.
Speaker Change: Most of the midterm elections in the first quarter from the fourth quarter, we're not going to see that type of massive drop here and after.
Speaker Change: After the U S presidential election is going to be a much higher it's going to be a much tighter range than it was in the midterm elections, and that's attributable to the product being dramatically improved over the last year, we're sticking at users better than than we ever have and we're growing in different segments of the market not.
Speaker Change: Just politics, so that's something that.
Speaker Change: I think youre going to the market. We will see is that we're going to see it a tighter range compared to the ranges of drops that we saw from the previous midterm elections.
Speaker Change: Alright, thank you.
Jason: Thanks, Jason.
Speaker Change: Our next question is a follow up from Thomas Forte with Maxim Group. Please proceed.
Thomas Forte: Great. Thanks, Thanks for taking my follow ups. So haven't asked this type of question in a while I think it's important.
Thomas Forte: How are you able to get Dr disrespect and the White house to join the platform what is it about the platform today that makes them more attractive to content providers and in the past and then at a high level are you able to add content with more favorable gross margins trended in the past.
Thomas Forte: So all of that.
Thomas Forte: I'll tackle the last question there first with respect to the margins on the content, what's very different now than what was available a year ago or two years ago is that our entire product suite is now available from rumbled premium to rack to the sponsorships and both premium.
Thomas Forte: In Iraq really kind of dovetail into each other to help drive higher margins around the creators. We didn't have this a year ago or two years ago, and we didn't realize the impact that would actually have on the margins.
Thomas Forte: And we believe that going forward now that we have these three it puts us in a place where we're at in my opinion, one of the best places to monetize on the greater economy, and I think we're going to really like we're definitely going to be stepping on the gas pedal here and bringing on more creators to to push.
Thomas Forte: To push the envelope here, especially with this revenue engine that we do have now going with with respect to your other questions. The White House. One thing that is definitely true is that rumble as the lead in the independent greater space for streaming.
Thomas Forte: In the political sphere, the white house knows that.
Thomas Forte: We dominated the election cycle and we continue to dominate every almost every morning last week, we were number one at nine number one at 10 number in a 111 number one at noon.
Thomas Forte: In the United States, So the Whitehouse definitely sees that and they've definitely rewarded us with.
Thomas Forte: Bringing their channel onto the platform. So we couldnt be happier about that.
Thomas Forte: I, obviously believe that we should have been with the previous administration and had the Whitehouse channel then as well we were a dominant force then, but it's really nice to be recognized by the current administration how dominant we are.
Thomas Forte: In that political news space with respect to content creators. There's just nobody that has that type of influence that rumble does in the internet sphere.
Thomas Forte: With respect to Dr. Disrespect, we're really making a push into gaming. We've also launched a new creator program here in the first quarter that was showing us tremendous early results and we are very going to be very ambitious and growing this program and we think this program is here to stay.
Thomas Forte: For the long term and we're going to be investing very heavily into that going forward because what we're noticing is that it's driving results with respect to the.
Thomas Forte: The mouse trap of having both sponsorships premium and.
Thomas Forte: And rack, it's really driving our results a little better a lot better than what we were anticipating so.
Thomas Forte: We're going to step on the gas pedal in gaming and really push.
Thomas Forte: Lot harder through our greater program that would be open and available to all traders.
Thomas Forte: And this is kind of our pivot away from the whole contract.
Thomas Forte: <unk> contract us things that we do and kind of move to a very open program that everyone can join and generates both high revenues for the creators and high revenues for rumbles. So we're really going to lean into that in the future. Obviously, if there is a real big opportunity like we had with Tim Poole Wood will definite.
Thomas Forte: And look at that but we're going to we're a lot more conscious we really understand our numbers, we really understand the data now we know what works and we know it doesn't and we're really going to lean in on this crater program that we know is working currently.
Thomas Forte: Great So last one.
Thomas Forte: High level.
Thomas Forte: Chris as a longtime follower of the company and stock you sound more covenants.
Thomas Forte: But the business than you have in the past what gives you that confidence and then for example, I think you had high expectations heading into 'twenty four because of the U S presidential election.
Thomas Forte: Sound, even much better after the election.
Thomas Forte: Can you highlight why you feel that way.
Thomas Forte: Thanks, Tom.
Speaker Change: Having a partner like tethers obviously.
Speaker Change: A big confidence booster is there an enormous company the most profitable company per employee that I'm aware of.
Speaker Change: One of the most profitable companies out there.
Speaker Change: And having them back Rumble, obviously instills confidence in to this company in a way that.
Speaker Change: We haven't seen someone come in in the past so thats very helpful. We obviously had.
Speaker Change: We had a really great election cycle.
Speaker Change: The results were I think are going to be very positive to the Rumble business I think the advertisers are going to open up.
Speaker Change: And I think that.
Speaker Change: Now the line in the sand for this business is direct response, we already have that Mac. The macro economy is not going to really have an impact on direct response, but we have enormous headroom to grow with brands like it's we're basically zero right now at brand start coming in then that had that moves the headroom up a lot.
Speaker Change: <unk> and drives our revenue up pretty materially so I see like a lot of optimism around there are lot of optimized.
Speaker Change: Our optimism around the fact that <unk> is coming in and they are very ambitious about us growing internationally and utilizing their current user base to really grow rumble internationally and they obviously have the balance sheet too to advertise enough balance sheet to really lean in on Rumble. However, they want to lean on a lean in on it but most importantly.
Speaker Change: One of the things that we're very aligned on what the tether guys is that we want to take on Google head on and I've always wanted to do that we've taken a chip out of out of Youtube.
Speaker Change: Theres, a real opportunity for us to do something big on the cloud side, they think that as well and.
Speaker Change: In terms of even furthering that ecosystem work.
Speaker Change: Equally excited about adding even more products to the Rumble Rumble product line not just cloud not just rack not just video, but really looking into E mail really looking into these other products that were rethink that our audience, both rumbles and tapping into tethers audience is really it would be very.
Speaker Change: <unk>.
Speaker Change: They very much would want something like that so we're exploring that right now that's something we're thinking about all these different ideas.
Speaker Change: All of these different approaches its very consistent with the with the mission that we've had and how we wanted to take on Google in the past. The difference now is that we have someone like tethered behind us that really believes in that.
Speaker Change: Has stepped up to come and help us with that so.
Speaker Change: Like you've noticed I'm very optimistic and.
Speaker Change: Really looking forward to the coming year.
Speaker Change: Excellent very very encouraging and.
Speaker Change: Excellent. Thank you.
Speaker Change: Thank you ladies and gentlemen, it appears we have reached the end of our question and answer session. Thank you for attending you may now disconnect your lines.
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Speaker Change: Good morning, ladies and gentlemen, and welcome to Rumble Incorporated's fourth quarter and full year 2024 earnings call. All participants are in a listen only mode. A 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.
Shannon Devine: Keypad. Please note. This event is being recorded I will now turn the conference over to Shannon Devine Investor Relations for Rambo. Please go ahead.
Shannon Devine: Thank you operator, I am here today, with Chris tell Bosques, founder Chairman and CEO of Rumble, and Brandon Alexandra CFO, a press release detailing our fourth quarter and full year 2024 results was released today and available on the Investor Relations section of our website before we begin the formal presentation I would like to remind everyone that statement.
Shannon Devine: Made on this call 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 Theater company updates will be available via press release and the company.
Shannon Devine: <unk> identified social media channel I will now turn the call over to Rumbled, Chairman founder and CEO, Chris Pawlowski.
Chris Pawlowski: Thanks, Shannon for fourth quarter. It was everything we anticipated and much more while we closed a major chapter in our journey with the U S presidential election in November by late December we immediately entered an entirely new era, when we announced the $775 million strategic.
Shannon Devine: <unk> from tenants.
Shannon Devine: Today I will address the significant implications of both these events first the U S presidential election Rumble cemented its place in the online media ecosystem. According to Scream charts, we were the top destination for live independent crater election coverage, both Dan Bond Gino and Steven Crowder.
Shannon Devine: Dominated election night in first and second place respectively, beating out all of their platforms and independent creators. Our success was rewarded over a month ago. When I was fortunate enough to be invited to the new independent media seed in the White House briefing room with press Secretary Carolyn limit. This is just one powerful and immediate.
Shannon Devine: Example of how the media landscape is changing and.
Shannon Devine: How well positioned we are for the future.
Shannon Devine: C Rumble as the dominant online media for us for future election coverage and as audience has transitioned from network TV to OTT Rumble will be positioned to capture this growth in.
Shannon Devine: In previous calls we also discussed the potential impact of the election on our advertising business with the Trump administration is very strong stance on free speech, we expect to see the artificial headwinds on brand advertising that we faced in 2024 to turn into a tailwind in 2025 and 2026.
Shannon Devine: Due to the environment change Rumble will be repositioning investing and expanding its sales focus to target brands more aggressively.
Shannon Devine: Fourth quarter was something special to watch we broke internal livestream records without any hiccups from a rumble cloud infrastructure. Moreover, it was the first full quarter with our full revenue suite online, which includes rack sponsorships and premium the results are very promising and it is now clear to us that.
Shannon Devine: We have one of the best monetization engines in the creator economy.
Shannon Devine: The fourth quarter delivered another revenue record in another consecutive quarter of revenue growth registering over $30 million in revenue with $68 million Meus importantly.
Shannon Devine: <unk>, our U S and Canada, Meus jumped 21% from $43 million in the third quarter to $52 million in the fourth quarter of 2024.
Shannon Devine: As a note while we are working actively to prepare for brands. It is worth highlighting the success, we've had with our performance marketing solution for direct response advertisers one of our most successful advertising categories has been precious metals over the last three years rumbled audience has purchased over $750 million.
Shannon Devine: Precious metals through rack and creator sponsorships a true testament to the audience, we have that the brand through advertising and rumbled can no longer be ignored.
Shannon Devine: Let's talk about the tether investment and what this means for Rumble we.
Shannon Devine: We closed out 2024 with our most exciting announcements since going public in December we announced the 775 million strategic investment from tether the largest company in the digital asset industry and the most widely used dollar stable stable coin across the world. This transaction was not just the move to <unk>.
Shannon Devine: <unk> fortify the company's balance sheet, while providing a liquidity opportunity for all of our stockholders and the investment was rooted in extremely strong and not always obvious commonalities between crypto currency and free speech communities. Both built on our passion for freedom transparency and decentralization with more than 400 million Internet.
Speaker Change: National Tether users imagine the possibilities between Rumble and tether going forward, we expect four core impact on the business.
Shannon Devine: Number one.
Shannon Devine: Decelerated International expansion, we expect to leverage tethers massive private presence outside of the U S and make inroads with Rumble video and Rumble cloud. The first example of this is our recently announced partnership between Rumble cloud and the government of El Salvador once we deliver the cloud we will be well positioned to build their presence in El <unk>.
Shannon Devine: <unk> drawn new audience to the video platform and ultimately sell this audience to local advertisers, while we still need to prove this strategy. This is the template that we will look to deploy around the world. A few other countries. We are speaking to in the same vein as El Salvador, Macedonia and Panama.
Shannon Devine: We're too aggressively expand rumble clouds customer base by Onboarding as many tether portfolio companies onto the Rumble cloud.
As a growing portfolio of nearly 100 companies of various sizes and various cloud means number three we are now very well positioned to become the leading media platform in the crypto community. The first tangible project underway is the Rumble wallet, which we are building alongside tethered to deliver the first crypto wallet.
Shannon Devine: To the creator community add scale, excepting and paying out in USD tether tether gold and Bitcoin. We expect we expect this to bring direct value to the crypto community on a platform enable international expansion on the video platform and facilitate meaningful high value partnerships with crypto.
Shannon Devine: Changes.
Shannon Devine: Number four while we continue to move towards adjusted EBITDA breakeven $250 million in gross proceeds will greatly strengthen our balance sheet and allow us to more fiercely compete with google's product suite I want to emphasize this having one of the most profitable companies in the world backing Rumble as only emboldened are.
Shannon Devine: Our vision and take on Google across their ecosystem and this is a shared vision from myself and our newest shareholders. We're already taking them on video, but we plan to get very aggressive on cloud and expand into various other product suites, either by acquisition or internal development.
Shannon Devine: Before I turn I'll turn the call over to Brian I want to reiterate one thing is for certain we are entering a new era for Rumble one work.
Shannon Devine: Our artificial advertising headwinds have the potential to turn into a real tailwind and one with a powerful ally that is deeply passionate about helping.
Shannon Devine: Helping take Rumble to the next level I've never been more excited for the future of this business now I will pass to Brendan Alexandra to walk through the financials.
Brendan Alexandra: Thanks, Chris.
Speaker Change: I'll now take you through our fourth quarter and full year 2020 for financials at a very high level before turning the call over to the operator for Q&A.
Speaker Change: For the full year of 2024, we reported revenues of $95 $5 million, an increase of 18% when compared to $81 million in 2023 for the fourth quarter of 2024, we reported revenues of $30 2 million compared to $20 4 million for Q4 2023, an increase of nine eight.
Speaker Change: Of which $7 9 million was attributable to an increase in audience monetization revenues and $1 9 million for other initiatives.
Speaker Change: The increase in audience monetization revenues was mainly due to higher revenue from advertising subscription tipping fees licensing and platform hosting the increase and other initiative revenues was mostly due to more advertising inventory being monetized by our publisher network and an increase in cloud services offered.
Speaker Change: <unk> was 39 for the fourth quarter compared to 33.
Speaker Change: In the third quarter of 2024, the increase from the third quarter is attributable to higher advertising revenue and subscription revenue.
Speaker Change: Cost of services decreased to $34 5 million for the quarter compared to $39 5 million in the fourth quarter of 2023, primarily due to a reduction in programming and content costs of $5 3 million offset by an increase of zero point $3 million in other costs of services, including payment processing fees.
Speaker Change: And cost paid to publishers for.
Speaker Change: For the full year cost of services decreased by $7 7 million to $138 5 million, primarily due to a reduction in programming and content costs of $9 5 million offset by an increase of $1 8 million in other cost of services, including payment processing fees and costs paid to publishers.
Speaker Change: You will see in our financial statements and net loss for the fourth quarter of $236 8 million, which compares to a net loss of $29 3 million in the fourth quarter of 2023 included in the net loss for this quarter was $184 7 million in the change in fair value of derivative expense.
Speaker Change: Which is related to the tether strategic investment.
Speaker Change: Adjusted EBITDA for the fourth quarter of 2024 was $13 4, million% to 55% improvement compared to a loss of $30 million in the fourth quarter of 2023.
Speaker Change: For the full year of 2024, adjusted EBITDA loss was $92 1 million compared to a loss of $115 3 million in 2023.
Speaker Change: As we ramp up monetization and maintain discipline around our cost structure, we continue to expect to move it materially towards adjusted EBITDA breakeven in 2025.
Speaker Change: As Chris stated this remains the goal today, however, with the recently closed capital infusion from Heather we have the increased flexibility to further invest in initiatives that could accelerate and expand our business sooner than originally anticipated.
Speaker Change: Moving to our cash position, we ended the year with approximately $114 million in cash cash equivalents and marketable securities compared to $132 million as of September 32024. This does not include the $250 million in gross proceeds to the company upon closing of the tender transaction on <unk>.
Speaker Change: During <unk> two.
Speaker Change: <unk> 2025.
Speaker Change: During the fourth quarter, you will once again see an improvement in cash cash equivalents and marketable securities usage, which has improved in each of the last five quarters for the fourth quarter, our cash usage was $18 million, representing 19% less usage compared to the third quarter.
Speaker Change: As it relates to the first quarter of 2025, given the timing of our call today relative to the end of the first quarter I wanted to provide some color on our top line expectations for the first quarter, we expect revenue growth of at least 25% compared to the first quarter of 2024.
Speaker Change: Lastly in the earnings release, we have provided to capitalization tables for reference showing our fully diluted share count as of December 31, 2024 pre tether completion.
Speaker Change: And as of March 12, 2025. After the tether completion was completed after the credit transaction was complete that concludes my prepared remarks, I will now turn the call over to the operator to open up the line for questions.
Speaker Change: We will now be conducting a question and answer session. If he would like to ask a question. Please press Star then one on your telephone keypad, a confirmation tone will indicate your line is in the question queue.
Speaker Change: Press Star two to leave the question queue for participants, making use of speaker equipment may be necessary to pick up your handset before pressing the star keys, one moment, while we poll for questions.
Speaker Change: Our first question is from Thomas Forte with Maxim Group. Please proceed.
Thomas Forte: Great. Thanks, So I'm going to ask one question, one follow up and I'll get back in the queue.
Speaker Change: They ask more so first off Chris congrats on a tremendous quarter and year.
Speaker Change: First question I had was how should we think about the impact on your monthly active users and other engagement metrics.
Speaker Change: Standby in Juneau being named FBI Deputy Director and then second part of this one are there other influencers on your platform that may take rules for the administration.
Speaker Change: May negatively impact our ability to provide Thompson a rumble.
Speaker Change: Yes.
Tom: Hi, Tom Thanks for the question.
With respect to the second part of that question I'm not aware of any other current content creators that may take on roles, obviously that could change at a moment's notice, but I'm unaware of anything with respect to Dan Bond Gino, becoming the deputy director what we did in the last couple of weeks and we announced on <unk>.
Last Monday that we launched something called the Rumble lineup and we introduced the technology, causing the rating right feature that allows one stream to follow another stream and we've seen an enormous success on this as of last week damp on Gino's. The last show I believe was.
Tom: March 14th or around there and when we launched the lineup we had advanced come in and take over damp on Geno show on his channel and then we had Steven Crowder moved to 11, 11 o'clock slot and Tim Poole moved to the new <unk> slot.
Tom: And what we've seen is starting from nine a M. We were dominating number one in the live streaming space in the United States at 10, a M as well with Vince and then 11 am Crowder really took on the the largest part of that audience and Tim Poole continued holding number one at noon slot and we're kind of seeing that throughout that.
Tom: The entire week last week. So we think the transition there has been incredible to say, the least and potentially leading us to a bigger opportunity here with expanding that lineup throughout the entire day and into prime time to compete against network television. So we're really excited about that obviously, losing Dan is a huge loss.
Tom: But we think we have filled the gap very well and Steven Crowder has definitely stepped up to take on a large part of that audience, along with Vince and then obviously, adding Tim Poole to our lineup helped a lot as well. So we're not seeing any kind of significant change if anything what we're seeing is this audiences.
Tom: <unk> on a little longer and now watching other shows as well so we're really happy with what we're seeing in the first week.
Speaker Change: Got it that's very encouraging.
Speaker Change: Second question, then I'll get back in the queue. Some more so earlier this month, you announced a bitcoin treasury purchases for those investors, who may not be familiar what's the strategy.
Speaker Change: Yes, So we announced a while ago I think it was back in November December that we were.
Speaker Change: Going to be adopting big coin treasury strategy of up to $20 million in bitcoin purchases.
Speaker Change: Up until this point, we've invested around $17 1 million into bitcoin.
Speaker Change: And it's the strategy behind that is obviously I have been very very pro bitcoin my entire life that the Trump when the Trump administration came into office. This was an obvious thing for us to do we I felt very strongly that we needed to have a position in that.
Speaker Change: Not just in holding cash, but also holding bitcoin and from.
Speaker Change: From what I can see where one of the top 50 company hold holding bitcoin now with our $17 1 million top public companies I should say that I'm aware of that's holding so our strategy here is to make sure that we're aligned with the community that's <unk>.
Speaker Change: Very enthusiastic in using our products and showing that we really believe in what they believe in and we see this as a really good.
Speaker Change: Investment for this company for the long term.
Speaker Change: Great. Thank you I appreciate that ill get back in the queue.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Our next question is from Jason <unk> with Oppenheimer <unk> Company. Please proceed.
Speaker Change: Several questions. So first I'll start off.
Speaker Change: With the.
Speaker Change: Kind of the bitcoin or Rahmbo wallet, or I guess, who is going to be kind of doing the development of that is that how they're gonna be bearing the cost of that.
Speaker Change: Are you going to be bearing the cost of that just with the.
Speaker Change: Kind of factor in that's question one will just I will take them off one at a time.
Speaker Change: Thanks, Jason Yes. So tether is is helping with us on that and they are bearing their own cost on that side and helping us build that we also are bearing a cost on our side from the implementation of it but it's the development is in unison with the <unk> teams and.
Speaker Change: There is no additional costs or any material impact cost, but on building that youll youll see.
So it's basically both teams kind of working on their ends of that of the Rumble wallet.
Speaker Change: And then just at a high level I mean.
Speaker Change: Obviously, heather has their own reasons for making this investment.
Speaker Change: I mean, I guess it sounds like some of this potentially will a demand for rahmbo cloud.
Speaker Change: Obviously, you've got this kind of.
Speaker Change: Mobile wallet.
Speaker Change: I guess.
Speaker Change: Are there other strategic rationale.
Speaker Change: <unk> has.
Speaker Change: I don't know, perhaps either publicly or youre aware of kind of why.
Speaker Change: Why they've made this.
Speaker Change: From a strategic standpoint.
Speaker Change: Yes, so strategically speaking one of the one of the big strategies around the Rumble wallet is to allow us to go to the international markets and.
Speaker Change: Right now in terms of having advertisers in international markets, it's very difficult for us, we're very focused in the United States and Canada, but let's just take El Salvador as an example, we will have the Rumble wallet available when it's done and we can now enter a market like El Salvador and then we can have whether it's a crypto exchange whether it.
Speaker Change: Tether they can all come in and help advertisers our product with influences that we have in the El Salvador and market. So the way, we see that as a real great growth opportunity to grow in and in international market and have big advertisers like tethered come in and help promote the rumble wallet product, which would carry usdt.
Speaker Change: And.
Speaker Change: Tether gold as long along with the bitcoin. So this is a real large strategic play with the Rumble wallet to go very international and tapping into those 400 million to other users that they have on the cloud side they have.
Speaker Change: A lot of portfolio companies that we can tap into and move over to the Rumble cloud those are longer term plays that take long to onboard, but that's something that's very strategic they have a lot of portfolio companies.
Speaker Change: There is there is revenue there for us to bring in on the cloud side and utilized.
Speaker Change: And that's something that we're aggressively approaching too so both on the international expansion and bringing.
Speaker Change: The ability for people to tap and pay and creators to get paid and tether around the world.
Speaker Change: Huge strategic point for them and obviously on the cloud is a huge strategic points for them.
Speaker Change: And then just lastly on the fundamental side so in the fourth quarter, we obviously feel better.
Speaker Change: As it relates to the U S or UK.
Speaker Change: <unk>, you and a nice uptick sequentially in monetization.
Speaker Change: Maybe bridging how are you thinking about that with respect to the first quarter guide.
Speaker Change: Brandon between the mix between engagement and monetization to get to that.
Speaker Change: That first quarter guide and kind of are you assuming any natural falloff post the election.
Speaker Change: Yes, so with respect to the MAA use what we what I can say is in the first quarter being that were nearly closing out the first quarter here, we have stock the MAA used in the first quarter better than we have after any other like election cycle, so as you've probably seen it historically.
Speaker Change: <unk> in the midterm elections, we had a massive drop post the midterm elections in the first quarter from the fourth quarter, we're not going to see that type of massive drop here and after the U S. Presidential election is going to be a much tighter it's going to be a much tighter range than it was and then the midterm elections and.
Speaker Change: That's attributable to the product being dramatically improved over the last year, we're sticking at users better than than we ever have.
Speaker Change: We're growing in different segments of the market not just politics, so that's something that.
Speaker Change: I think youre going to the market. We will see is that we're going to see it a tighter range compared to the ranges of drops that we saw from the previous midterm elections.
Speaker Change: Alright, thank you.
Speaker Change: Thanks, Jason.
Speaker Change: Our next question is a follow up from Thomas Forte with Maxim Group. Please proceed.
Thomas Forte: Thanks for taking my follow ups. So haven't asked this type of question in a while I think it's important.
Speaker Change: How are you able to get Dr disrespect and the white house to join the platform.
Thomas Forte: Is it about the platform today that makes them more attractive to content providers and in the past.
Thomas Forte: And at a high level are you able to add content with more favorable gross margins and in the past.
Thomas Forte: So all of that.
Thomas Forte: I'll tackle the last question there first with respect to the margins on the content, what's very different now than what was available a year ago or two years ago is that our entire product suite is now available from rumbled premium to rack to the sponsorships and both premium.
Thomas Forte: In Iraq really kind of dovetail into each other to help drive higher margins around the creators. We didn't have this a year ago or two years ago, and we didn't realize the impact that would actually have on the margins and.
Thomas Forte: And we believe that going forward now that we have these three it puts us in a place where were in my opinion, one of the best places to monetize on the greater economy, and I think we're going to really like what we are definitely going to be stepping on the gas pedal here and bringing on more creators to to to push.
Thomas Forte: Just to push the envelope here, especially with this revenue engine that we do have now going with <unk> with respect to your other questions. The White House. One thing that is definitely true is that rumble as the lead in the independent greater space for streaming.
Thomas Forte: In the political sphere, the white house knows that.
Thomas Forte: We dominated the election cycle and we continue to dominate every almost every morning last week, we were number one at nine number one at 10 number in a 111 number one net noon.
Thomas Forte: In the United States, So the Whitehouse definitely sees that and they've definitely rewarded us with.
Thomas Forte: Bringing their channel onto the platform. So we couldnt be happier about that.
Thomas Forte: I, obviously believe that we should have been with the previous administration and had the Whitehouse channel then as well we were a dominant force then, but it's really nice to be recognized by the current administration how dominant we are.
Thomas Forte: In that political news space with respect to content creators. There's just nobody that has that type of influence that rumble does in the internet sphere.
Thomas Forte: With respect to Dr. Disrespect, we're really making a push into gaming. We've also launched a new creator program here in the first quarter that was showing us tremendous early results and we are very going to be very ambitious and growing this program and we think this program is here to stay.
Thomas Forte: For the long term and we're going to be investing very heavily into that going forward because what we're noticing is that it's driving results with respect to that.
Thomas Forte: The mouse trap of having both sponsorships premium and.
Thomas Forte: And rack is really driving our results a little better a lot better than what we were anticipating so.
Thomas Forte: We're going to step on the gas pedal and gaming and really push.
Thomas Forte: Lot harder through our greater program that would be open and available to all traders.
Thomas Forte: And this is kind of our pivot away from the whole contract.
Thomas Forte: <unk> contract us things that we do and kind of move to a very open program that everyone can join and generates both the high revenues for the creators and high revenues for Rumble. So we're really going to lean into that in the future. Obviously, if there is a real big opportunity like we had with Tim Poole, We'll we'll definitely.
Thomas Forte: And look at that but we're going to we're a lot more conscious we really understand our numbers, we really understand the data now we know what works and we know it doesn't and we're really going to lean in on on this crater program that we know is working currently.
Speaker Change: Great So last one.
Speaker Change: High level, so Chris as a longtime follower of the company and stock you sound more covenants.
Speaker Change: The business than you have in the past what gives you that confidence and then for example, I think you had high expectations heading into 'twenty four because of the U S presidential election.
Speaker Change: Sound, even much better after the election.
Speaker Change: Can you highlight why you feel that way.
Speaker Change: Thanks, Tom.
Speaker Change: Having a partner like tethers obviously.
Speaker Change: A big confidence booster there an enormous company the most profitable company per employee that I'm aware of.
Speaker Change: One of the most profitable companies out there and having them back Rumble, obviously instills confidence into this company in a way that we haven't seen in someone come in in the past. So thats very helpful. We obviously had.
Speaker Change: We had a really great election cycle.
Speaker Change: The results were I think are going to be very positive to the Rumble business I think the advertisers are going to open up and I think thats right.
Right now the line in the sand for this business is direct response, we already have that Mac. The macro economy is not going to really have an impact on direct response, but we have enormous headroom to grow with brands like it's we're basically zero right now a brand start coming in then that that moves the headroom up.
Speaker Change: Lotte and drives our revenue up pretty materially so I see like a lot of optimism around there are lot of optimize.
Speaker Change: Our optimism around the fact that <unk> is coming in and they are very ambitious about us growing internationally and utilizing their current user base to really grow rumble internationally and they obviously have the balance sheet too to advertise enough balance sheet to really lean in on Rumble. However, they want to lean on a lean in on it but most importantly.
Speaker Change: One of the things that we're very aligned on with a tether guys is that we want to take on Google head on and I've always wanted to do that we've taken a chip out of out of Youtube.
Speaker Change: I think theres, a real opportunity for us to real do something big on the cloud side, they think that as well and.
Speaker Change: In terms of even furthering that ecosystem.
Speaker Change: We're equally excited about adding even more products to the Rumble Rumble product line not just cloud not just rack not just video, but really looking into E mail really looking into these other products that were rethink that our audience, both rumbles and tapping into tethers audience is really it would be.
Speaker Change: Barry.
They very much would want something like that so we're exploring that right now that's something we're thinking about all these different ideas and all these different approaches its very consistent with the with the mission that we've had and how we wanted to take on Google in the past. The difference now is that we have someone like tethered behind us that really believes in that.
Speaker Change: And as that has stepped up to come and help us with that so.
Speaker Change: Like you've noticed I'm very optimistic.
Speaker Change: And <unk>.
Speaker Change: Really looking forward to the coming year.
Speaker Change: Excellent very very encouraging and.
Speaker Change: Excellent. Thank you.
Speaker Change: Thank you ladies and gentlemen, it appears we have reached the end of our question and answer session. Thank you for attending you may now disconnect your lines.