Q3 2025 Arena Group Holdings Inc Earnings Call

Speaker #1: Good afternoon, ladies and gentlemen, and thank you for joining us today. Welcome to the Arena Group's third quarter 2025 earnings conference call. I would now like to turn the conference over to Morgan Fitzgerald, Investor Relations and Social Media.

Speaker #1: Ms. conference.

Speaker #2: you. Hosting the call today are Paul Edmondson, Thank Chief Executive Officer, and Jeffrey Waite, begin, I'd like to note that some of the comments made statements.

Speaker #2: you. Hosting the call today are Paul Edmondson, Thank Chief Executive Officer, and Jeffrey Waite, begin, I'd like to note that some of the comments made Principal Financial Officer.

Speaker #2: All statements other than during this presentation may include forward-looking statements of historical fact are statements that could be deemed forward-looking statements. future performance and include without limitation statements concerning the company's business

Speaker #2: Growth, capital requirements, product introductions, and expansion plans, as well as the adequacy of the company's funding, are all important considerations. The company cautions investors that any forward-looking statements relate to future events or statements made in this presentation or that the company may make orally or in writing. Before we begin, please note that the actual outcomes will be affected by known and unknown risks, trends, uncertainties, and factors that are beyond the company's control or ability to predict.

Speaker #2: growth, capital requirements, product introductions, and expansion plans, and the adequacy of the company's funding. The company cautions investors that any forward-looking Forward-looking statements relate to future events or statements made in this presentation or that the Before we company may make orally or in writing from time Fitzgerald, you may begin your currently available to the actual outcomes will be affected by known and unknown risks, trends, uncertainties, and factors that are beyond the company's control or ability to of, assumptions made by, and information Accordingly, investors should use caution and rely on forward-looking statements, which are based only on known results and company.

Speaker #2: certain risks are discussed in the company's filings with to time are based on the beliefs disclaims any intention or obligation, the SEC. The company revise any financial projections or except as required by law, to update or forward-looking statements, whether because of new otherwise.

Speaker #2: the non-GAAP financial measure, information, future events, or Such statements are based on assumptions, and the In addition, reference will be made to adjusted EBITDA, information regarding reconciliation of this non-GAAP measure to trends at the time they are made.

Speaker #2: The closest GAAP measure can be found in the press release that was issued this afternoon on our Investor Relations website by CEO Paul Edmondson.

Speaker #2: Paul, the call is yours. investors.thearenagroup.net.

Speaker #3: Morgan, thank you everyone for joining us. With that, I'd like to turn the call over to... Thank you. Q3 was a group that we believe highlights the strength of our model, the ongoing industry-wide traffic, and another profitable quarter for the Arena, with margins that surpass industry averages.

Speaker #3: However, before we dive deeper, I want to acknowledge that this is of our business amid call in nearly two years. the Arena Group's first earnings discipline of our operations, and the resilience headwinds.

Speaker #3: communication and we've listened. Going they value this form of forward, we intend to continue these calls and combine them with additional channels. Including video, social, and other platforms.

Speaker #3: base. The Arena Group has undergone quite As a result, we delivered To share our short period of time, transforming our story, what's even a broader investor the transformation in a relatively operations, strengthening focus.

Speaker #3: We're confident and eager to engage directly with the investment leadership, stabilizing our balance sheet, and communicating our progress with transparency and consistency. With that, I'd like to turn the call over to our Principal Financial Officer, Jeff Waite, to discuss our financials.

Speaker #4: Thank you,

Speaker #4: Paul. Good afternoon, results. and sharpening our strategic everyone. In the third quarter, we delivered profitable results with strong margins. Our third quarter revenue was $29.8 million, compared to $33.6 million last year.

Speaker #4: The third quarter 2024 results include a $3 million one-time increase to net income from a licensing agreement. Our net income this quarter rose to $6.9 million, up from $4.0 million a year ago, and adjusted EBITDA increased to $11.9 million, compared to $11.2 we maintained a healthy efficiency, million last year.

Speaker #4: holding gross margins above Therefore, volatility. We believe this 50%, even with traffic reflects the scalability and resilience of our entrepreneurial publishing model and variable cost structure.

Speaker #4: Profitability expanded Net margin improved to $23.2%, and EBITDA margin improved to meaningfully again this quarter. $39.9%, compared to $11.9% and $33.3% in the same quarter last year.

Speaker #4: opportunities. Importantly, our profitability metrics, this quarter, outpaced sector norms This demonstrates with net margin and EBITDA averages. From a shareholder value the continued diversification of our perspective, our trailing margin both higher than industry 12-month income from continuing operations of $30.5 million divided by September 30th, equates to earnings per share of $64.

Speaker #4: This represents a price-to-earnings ratio of over 7.0 times, based on the share price of $4.87 as of NYSE American Market close on November $47.6 million shares outstanding as of 10th.

Speaker #4: Overall, these results highlight the flexibility of our cost base, and our ability to consistently deliver profit and cash media environment. These consistent profits have led to strong cash generation flow, even in a challenging digital sheet.

Speaker #4: We generated and continue to improvements to our balance $12.1 million of cash from operations during the third quarter. And after fully repaying our revolving credit facility, we have now reduced our leverage by more than $10 million in total debt year to date, and amassed a cash balance of $12.5 million strengthening our liquidity position.

Speaker #4: With trailing 12-month EBITDA above $50 million, net million, and leverage under two times, our balance sheet is solid and our flexible. We remained focused on further optimization and are capital structure is outstanding debt.

Speaker #4: Now, back to Paul for an update on our operations.

Speaker #3: Thanks,

Speaker #3: volatility from algorithmic changes in updates impacted organic traffic in many categories, most notably lifestyle and sports. However, we moved quickly to address the industry.

Speaker #3: them, executing a structured plan to optimize content signals, site experience, and technical SEO. I'm pleased to share that recent debt below $100 data shows stabilization of traffic across our verticals and significant recovery for our e-commerce-related content.

Speaker #3: or EP model, creates flexible cost basis that enables strong performance across a range of traffic scenarios. And we believe the steps we've taken will strengthen These our long-term audience quality Our entrepreneurial publisher, and reach, which is important for the success of our EPs.

Speaker #3: Parade, Athlon Sports, The Street, and Men's Journal continue to represent popular brands in our portfolio, that produce reach over 100 million sought-after content, and continue to users per month in the aggregate.

Speaker #3: In short, we believe our diversified model and variable cost structure allowed us strong financial to translate adaptability into performance. Maintaining solid profitability quarter. Regarding our portfolio expansion, we continue to execute on our disciplined M&A IP of two properties.

Speaker #3: ShopHQ and Lindy Sports. We spent a total of $2 million on these transactions, funded with cash. These expand our e-commerce and sports add new monetization strategy, acquiring the digital assets and opportunities.

Speaker #3: ShopHQ was recently relaunched, is generating revenue, and we expect to be a portfolios, deepen our brand ecosystem, and later this month. And we also expect it to generate profits in 2026.

Speaker #3: We remain focused on targeting at 2026. least one high-value, profit-driving acquisition per Lindy's will launch quarter. Deals that enhance our on strategy. Our thrive, drive IP, strengthen our brand, and align with our scalable reach, and allowing us to scale without the heavy fixed cost typical of traditional media.

Speaker #3: We will look to expand this model into video, and social commerce opportunities. We're also accelerating our EP model continues to AI and e-commerce. Leveraging our IP and portfolio brands, to build higher margin, scalable revenue streams.

Speaker #3: Today, we're registering more than 40,000 new users each day. And in Q4, we'll launch a proof of concept that connects user behavior and data across ads, newsletters, and articles to the most valuable user activity.

Speaker #3: This initiative powered by Encore which is our new centralized intelligence system that unifies our proprietary data with advanced LLM technology. Represents a significant opportunity to link audience intent directly to commerce outcomes.

Speaker #3: As well as curate our audience for advertisers, and establish deeper, more direct relationships with our users. Ultimately, it allows us to turn engagement into measurable, reoccurring value for both our partners and our business.

Speaker #3: We're excited about the path ahead, and look forward to sharing our progress. In summary, the third quarter reflected the continued execution of our transformational strategy.

Speaker #3: We delivered solid financial results with consistent profitability and a dynamic environment. Strengthened our balance sheet and continued our transformation into a data and brand-driven company.

Speaker #3: Most importantly, we believe that we've proven that our model is durable, adaptable, and built for a sustainable growth. We're proud of the progress we've made, and we're energized by the opportunity ahead.

Speaker #3: Now I'll turn the call back to the operator for Q&A.

Speaker #2: Thank you so much. And as a reminder, to ask a question, simply press star 11 on your telephone. And wait for your name to be announced.

Speaker #2: To remove yourself, press *11 again. One moment while we compile the Q&A roster. All right. And our first question comes from the line of Mark Argento with Lake Street Capital Markets.

Speaker #2: Please proceed.

Speaker #4: Jeff. Congrats Hey, Paul. Hey, on your first inaugural call. Exciting. A couple of quick questions from us. One in particular, I know and obviously Google is switching the algorithms, creating a lot of volatility.

Speaker #4: You guys seem to weather the storm nicely there. You talk about kind of more of a stable environment as you move into Q4. Are we working off of a lower base, or are we going to start to see some kind of trend back to kind of where it was kind of going into all the change?

Speaker #4: Maybe just walk us through kind of what the changes were and how you guys have successfully managed through.

Speaker #5: Hey, Mark. This is Paul. Thank you so much for the question, and thanks for joining today. We appreciate it. And this is obviously a pretty important question for our business going forward.

Speaker #5: In terms of what we see, it's common for any digital publisher that has been out there and experienced, as we've been over many, many years, to encounter algorithmic updates in our business.

Speaker #5: And it really comes to how you sort of tackle them. Whenever we see these kinds of challenges, we really do focus both on the content signals we're sending, the technical SEO, and getting back to your question, the second part of what we're seeing here for Q4 is we have an expect to see growth in one of the areas, which is our e-commerce content.

Speaker #5: That's the kind of stuff where we cover deals, and things like that. That's performing well. And I expect that to be stronger in Q4 than it was in Q4 of 2024.

Speaker #5: On our news-related content, we are off, I would say, a lower base than our peak in Q2. But we have seen that stabilize and we put a number of things, a number of tests, and a number of technological improvements out there to adapt to it.

Speaker #5: And we're seeing some positive results. So things have stabilized. I would say stabilized up from the bottom, and I'm optimistic that we're going to find some additional lift.

Speaker #4: Guys, I know everything's kind of been a little real-time, but do you think you've taken share, so to speak, in the various categories?

Speaker #4: Or when it's all said and done, what do you think this did to the overall industry? Are you guys have that beneficiary? Although it created a little top line volatility, but you're able to manage through.

Speaker #4: How are you thinking about where you guys are sitting relative to maybe some of your competitors?

Speaker #5: It's a really good question. It's hard to know exactly where every competitor is. And how they've reacted to it. I think when we go out and talk to and see what's happening in the industry, I think we've weathered it better than most.

Speaker #5: I think when we're still generating cash, which is really important, and key to our business, I like the improvements that we've made. I like the way the team has tackled it.

Speaker #5: I like how we've really engaged and unified in the company to whenever you see these kinds of headwinds. And made some really good results.

Speaker #5: So I feel good about our team and the progress we've made. In adapting to the environment, I think when you look at the industry as a whole, and the broader context, every company has a different dynamic in how they handle and tackle these things.

Speaker #5: So it's hard to say.

Speaker #4: But it's helpful. And then, just touching on the margin a little bit. Obviously impressive and speaks really to your variable cost model. But just so I can better appreciate it, we can better appreciate it.

Speaker #4: So effectively, you have to consider that your costs and your input costs are really pegged to the revenue line in terms of content generation costs. Overall, top-line revenues are down.

Speaker #4: Your cost of content are going to kind of be able to be real-time dynamic there versus having more of a traditional fixed overhead type component.

Speaker #4: Is that an accurate statement? And are you able to weather the storm, or is the content machine engine capable of weathering this?

Speaker #4: volatility? Mark, this is Jeff.

Speaker #5: Thank you for that question. I think that we do have a cost structure that allows us to perform at a variety of traffic levels.

Speaker #5: And you can actually see that if you look past into the past few quarters and how consistent we've generated gross margins above 50%. I think that this is an element that differentiates our business from a lot of others that are out there in the industry.

Speaker #5: And that we have tied our largest cost element, which is the cost of content, directly to revenues. That has enabled us to continue to drive profit and cash in a challenging environment.

Speaker #4: Well, that's one for me in terms of the balance sheet. Obviously, you guys have been generating some cash and paying down some debt. I know you had been talking about the refi where are you in the process there?

Speaker #4: Is that something that is that still a 2025 potential event? Are we looking out till next year at this point?

Speaker #5: So our plan is it relates to the refinance is we want to approach this from a position of strength. We view this as an opportunity for the business, not as a necessity.

Speaker #5: And therefore, we want to make sure we secure the most favorable terms possible as we execute a refinance process. It remains a priority and we're actively evaluating several options that will deliver the greatest value to our shareholders.

Speaker #5: Over the last few months, we've had quite a bit of interest. From the banking community, and have engaged in active discussions with traditional banks.

Speaker #5: These banks, by nature, are conservative. Some feedback we've received is that four consecutive quarters of profitability is good, and they want to see that.

Speaker #5: But they could use a few more quarters. And they have interest, but maybe need a few more quarters of results before they can close on a big deal like this.

Speaker #5: We continue to actively pursue this, and we have the flexibility to consider multiple structures and options. In addition to traditional banks, we believe there are other markets that would have offerings that would still be at more favorable terms than what we have currently that we can move forward with.

Speaker #5: But as I mentioned, our priority is really to identify the option that adds the most value for our shareholders. We intend to proceed deliberately focused on long-term value creation rather than short-term expediency.

Speaker #4: That's a thorough answer, Jeff. Appreciate that. I think that does it for me. I'll hop back in the queue and congrats, guys, on dealing with the volatility and welcome or it's exciting that you're starting to do these calls.

Speaker #4: Thanks.

Speaker #1: Thank

Speaker #1: you. Our next question comes from Kevin Randino with BC Partners. Please

Speaker #1: proceed. Hey, guys.

Speaker #6: Thanks for taking the call. First, I want to echo what Mark said. This conference call is refreshing and we missed hearing from Arena on a quarterly basis.

Speaker #6: So thanks for doing this, and making this part of your regular quarterly events that you're going to be doing after earnings. It's awesome. And the other thing is it's congratulations on all you've done in the last year.

Speaker #6: Have achieved the EBITDA and after-tax profitability in this environment shows how strong your model is. And how different you are than everybody else, many of whom have gotten crushed this quarter.

Speaker #6: So I actually learned more about how strong your business is this quarter than I did in the last two or three. Because I wasn't expecting this.

Speaker #6: So kudos to that. My real question is, those were statements. My question actually is on the shop HQ acquisition. I kind of want to talk more about that.

Speaker #6: That feels like a complete asset-like model where it feels like an enormous opportunity that's based upon traffic that you can drive without the cost of holding inventory.

Speaker #6: Like you're not getting the wholesale, but you're getting part of the sale. And it seems to me if you do that right, the upside is considerable.

Speaker #6: Could you just talk about specifically how you plan on running that business, what it is, and how it's going to flow through the model?

Speaker #6: Thanks.

Speaker #5: Kevin, this is Paul. Thank you so much for that. Thanks for joining today. And I really appreciate the kind words about the environment and how the team has weathered it.

Speaker #5: It means a lot to everybody here on the team. So thank you. Shop HQ, it's a really, really great question. First off, we bought the assets of Shop HQ.

Speaker #5: We thought it was a tremendous value. It came with millions of email addresses and data that is really, really valuable. The primary way we've relaunched the business, it's largely a drop-shipping business.

Speaker #5: We're not taking inventory, those types of things. We've fired it up. We are driving sales. Today, based off that newsletter list that we had, and we are continuing to fill out the products.

Speaker #5: Where we are talked a little bit about our encore project and the AI technology that we're using, and our data business is we're really combining those two things together.

Speaker #5: And we're going to be using our funnel. We mentioned earlier, we're getting about 40,000 email addresses a day. And we think there's an opportunity to grow that.

Speaker #5: We're creating first-party user data profiles. And now we have intent, not just intent; we actually have transactional data. This is where we're really focused right now in terms of a proof of concept, getting to market this quarter, that ties our audience into transactions.

Speaker #5: And allows us to actually move products through not only our affiliate model that we do so successfully today, but also directly through the Shop HQ platform.

Speaker #5: The other thing that is fascinating about Shop HQ is that is an audience while it's older, they are a they're an audience that is used to transacting off of video.

Speaker #5: And you'll see a number of experiments that we're going to be putting on where we will be using social media, YouTube, Facebook, those types of video experiences.

Speaker #5: And driving transactions, which is a really unique asset in and of itself, is to have a brand that people are used to transacting by being introduced to products through video.

Speaker #5: And I think everybody you can look at whether it's Instagram or TikTok or all the other places that people are continuing to shop. And I do view that as a really, really strong asset.

Speaker #5: And an ability to move our variable cost model into social selling as well. So I know that's a lot of things there, but we love the video aspect.

Speaker #5: We love the social selling opportunity. It's going to generate cash for us in 2026. And it's a really meaningful data

Speaker #5: asset for us. Are

Speaker #4: Are you essentially just the last one on this one. Are you essentially taking a commission off the overall sale? And what are the expenses that you're putting into this business?

Speaker #4: What are the expenses? Of running this business? Yeah, that people, is it? Yeah, go ahead.

Speaker #5: That's a great question. So one of the most important things whenever we do an acquisition is to make sure that it fits with our DNA of running a really asset-light, scalable model.

Speaker #5: And ShopHQ also fits that really beautifully. The arrangements we have with our drop-shipping partners offer us a share of the gross revenue.

Speaker #5: So we receive a share at protected margins. And we do have some personnel that came with it as a small number, less than 10.

Speaker #5: And they do things like procurement that we didn't have within the existing company capabilities. We didn't have. And then the rest of the costs are largely variable.

Speaker #5: We will be doing marketing activities to make sure we have the right audience flow into the platform. And make sure that we're selling the product that we want to sell.

Speaker #5: But we can grow this in a very real way without additional capital

Speaker #5: investment. And you

Speaker #4: start with what margin do I want to make on this business? Is that correct?

Speaker #5: Correct. So this will probably be a comparable margin to our news business or our media businesses, and a little bit lower margin than our publishing performance marketing and publishing revenues.

Speaker #4: It should be significantly higher revenues. Revenue growth, anyway, right?

Speaker #5: That's correct.

Speaker #4: Thanks, guys.

Speaker #1: Our next question comes from the line of John with Fickthorne and Dialectic Capital. Please proceed.

Speaker #4: Yeah, hi. Thanks for taking the question. And I echo the previous comments. Congratulations on the resilience in that very difficult environment. To start with, I guess, the balance sheet questions, you talked a little bit about the debt and the refi.

Speaker #4: How does that impact your share repurchase announcement? Are you able to? It doesn't look like you did in the last quarter. So, do you have to wait until the refi is done before you begin that?

Speaker #4: And then I'll throw in some follow-ups.

Speaker #5: John, this is Jeff. Thanks for joining the call and for your support here. As it relates to the stock repurchase program, we continue to focus on deploying capital where we think it can generate the best return for the company.

Speaker #5: In the last several months, we announced several acquisitions, which do create a little bit of non-public information that can make it challenging for us to trade in the stock.

Speaker #5: In addition, we also fully repaid our revolving credit facility and we thought that was the best use of capital for us during the third quarter.

Speaker #5: We do believe that our stock continues to be undervalued. And we continue to monitor our stock performance and our capital availability and intend to make repurchases when we have capacity and when we believe our equity is undervalued.

Speaker #5: So we haven't made any purchases yet, but I think that is something you may see in the

Speaker #5: future. So what's a hurdle rate look

Speaker #4: Like for you guys in M&A? You've said one and a quarter, but you must be looking for something specifically in terms of leverage to your existing business or a creative to earnings.

Speaker #4: Can you give us an idea of what you're looking at for?

Speaker #5: Absolutely. As I mentioned, we want things that really fit in with the operating model that we have. And we're focused on a few things.

Speaker #5: Number one, we believe that this is a great time to be a buyer of digital media assets, and we intend to be active in that market, as well as others.

Speaker #5: We look for extreme values that can offer profit accretion and payback within 12 months. And have great ROI. So you'll continue to see us active in the M&A space.

Speaker #5: And doing some different things going forward as we continue to expand and grow the business.

Speaker #4: Super. So you mentioned on the call that effectively the core business is stabilized, post kind of algorithmic earthquake. And you've added a couple of M&A deals and e-commerce seems to be stable and looking up.

Speaker #4: So it sounds like sequential growth on the top line and, obviously, therefore, on the bottom line would be something to expect. Am I doing my math right based on what you said?

Speaker #5: Yeah, so I think that's a fair expectation. I do want to touch a little bit. We won't be giving any specific financial guidance; we may provide, at times, directional guidance going forward.

Speaker #5: But I do think that aligns with our view of the business right now.

Speaker #4: To be clear, that is directional guidance. So up, next quarter is a fair assumption?

Speaker #5: Yes.

Speaker #4: Excellent. I'm proud that I was able to narrow you down to an answer on that one. So, I'm curious, as you look at your business, you have both the EP rollout across content verticals and now you have this commerce business that's growing, and you've got M&A and opportunities.

Speaker #4: If I were to break those apart, should I still think of the biggest growth driver as adding kind of entrepreneurial publishing to areas or the growth in those areas where you've just started that?

Speaker #4: Or is the primary growth driver, in your opinion, in the near and medium term, likely to be in converting the existing traffic that you've got into e-commerce buyers?

Speaker #5: Hey, John, this is Paul. Thank you so much for the, thanks for the question. So in terms of the opportunity and where the growth can come from, I think we've been a little bit of an outlier in terms of audience.

Speaker #5: And again, we talked a little bit about it already. I do think that there's opportunity there. I do like what I do like the changes that we've made and I do like it's hard to speak about algorithmic changes and what's happening out there.

Speaker #5: But I do think we're positioned well. There's other parts of our business on audience too. That are pretty interesting. I like what we're seeing in some of our businesses too on social.

Speaker #5: We're finding our footing there. In terms of our ability to produce content that users really love. We've got, there's a lot of things that are happening on the distribution front as well as you think about multi-platforms and where our business can go.

Speaker #5: But probably I think the most interesting opportunity that sits in front of us right now is what all the new users that we're registering every single day.

Speaker #5: That's a pretty significant new change to our business. So we mentioned 40,000 emails a day. That's quite a pipeline of users and data. And the ability to tie all those things together, make really good decisions about getting content in front opportunities, curating of them, e-commerce our audience, which is something we put out a little press release that we did with Index Exchange out there pretty recently.

Speaker #5: So I think we have a number of potential will continue to look at growth levers out there. We like. with audience because we're seeing values that we We really like the Lindy's acquisition that we did.

Speaker #5: That's very akin to what we have with Apple and Sports today. In terms of the preseason annual business that they do. We are just running the digital components of that.

Speaker #5: Again, very asset light. So I think we see a lot opportunities for growth.

Speaker #5: Again, very asset-light. So, I think we see a lot of opportunities for growth. Awesome.

Speaker #4: Last A lot of question. Is how do you, how would you this bridge from commerce buyers to content measure success as you build consumers?

Speaker #4: And you attempt to monetize them with AI. I'm just kind of curious how you guys internally think of success. What does success look like?

Speaker #4: Is it percent of people that you're able to convert from one to the other? How do you think about it?

Speaker #5: success on two things. The simplest thing out Thanks. It's a little bit of a, it's a little there is CAC. What can those opportunities to do it.

Speaker #5: side, I think that's a, I think that's a really interesting metric bit of a math problem. I look at the we acquire a customer for?

Speaker #5: for us because you're starting to use our reach and our media commerce opportunities. On the AI or on the LLM technology side, there's just been incredible advancements we have our own properties and then translating that to rapidly.

Speaker #5: partners. We are working on all kinds of marriages between the And We have a number of two. In order to identify segments of our audience.

Speaker #5: And split them up and being able to transact on direct products, affiliate offers. And like I said, curating our audience for programmatic buyers as first-party data.

Speaker #5: well. So I circled back on all those things. And I think when you really look able to take a consumer and move them through That's growing at that success, being the funnel and transact and there's three or four different tracking them all and establishing metrics for them.

Speaker #5: thing. Which I think is tremendously But I want to circle back to one important for our business. And for us and for the culture that we're developing here.

Speaker #5: Which is everything that we do has to generate cash and generate profits. And that's where when you look at our business and you think about how we are outcomes we like on that back end.

Speaker #5: acting as a company today, we are really focused on So we're taking and doing these things within our means and no additional discipline in us as a company.

Speaker #5: I debt. frame our opportunities. It helps think it helps our I think it's put a lot of us move to things that are both actionable and real deliver.

Speaker #5: And that near-term focus is something that we're really looking for opportunities to results sooner than later type things. Hope that's helpful.

Speaker #4: Awesome. Love it. Once again, great job weathering a difficult environment and thanks for the answers and the conference call. Keep it

Speaker #4: up. Thank

Speaker #1: you. And we have a question from the line of John Old with Long Meadow Investors. Please

Speaker #6: Thanks, guys. And I echo

Speaker #6: everyone else's comments. proceed. Just quickly, I wonder if you could give us an update on how travel hosts are doing. And then just thinking through M&A if we go obviously every deal is going to be different.

Speaker #6: But if we can do one of these a quarter for a million dollars, what is the average deal look like say in three years?

Speaker #6: I know you've talked about ROI, getting your capital back in a year. But what is the three-year or even five-year? What is the maximum at maturity?

Speaker #6: What is a deal like that do on average? Obviously, they're all going to be different.

Speaker #5: Hey, John, this is Paul. Thanks for joining today. Thanks for the question. I'd love to talk about Travel Host. Travel Host is a business that largely went to bunk again.

Speaker #5: We bought the assets of that business at a value that we really like as a company. We've relaunched it. We put it onto our platform, onto our technology.

Speaker #5: We piped all that content through to our syndication partners. Right now, it's just about breakeven in a really short period of time. And we're as we think about the health of our properties in the digital side, we think that there's continues to be really good upside in and around that brand and the opportunity.

Speaker #5: So it's pretty close to where we hoped it would be right now. And again, we'll look for that to move beyond breakeven to generating profits in 2026.

Speaker #5: On the acquisition front, I think there's a couple of things. When you look at our capital structure and what we can again, what are the opportunities?

Speaker #5: We're really focused on deals that don't require additional debt right now and that have tremendous upside. When we I'll give you an example of the types of things like Athlon was part of a purchase when we bought Parade.

Speaker #5: I don't know if it was really any meaningful value put to that business. But it generates millions of dollars a year in top line today.

Speaker #5: And profitable for us in a meaningful way. So we're going to continue to look for that kind of value and where we can get brand value then apply our special sauce and our technology and our expertise to getting multiples of what we pay for it.

Speaker #5: On the three to five on the three to five-year range, I think it does make sense that as a company grows, as we continue to have more cash, we're going to be looking at those opportunities in terms of Jeff talked a little bit already is it's the capital classic capital allocation.

Speaker #5: Do we pay down debt? Do we buy things? Or do we repurchase our stock? And we're just going to really, again, the culture and the type of thing that we're really trying to build inside the Arena Group is one that's just focused on really, really great value.

Speaker #5: For shareholders and for everybody that participates in the Arena Group. So we're going to continue to have that kind of discipline. Speaking about three to five years from now, that's quite a ways out there for us.

Speaker #5: But I'd say that we'd like to continue to hold these types of the type of culture and again, the type of being a buyer that has a lot of discipline

Speaker #6: Okay, thanks. And just a quick follow-up. At any given time, in terms of your M&A strategy, how many deals are you looking at at any what's the sort of the TAM, so to speak?

Speaker #6: What are the other just years of opportunity ahead of you? I mean, obviously, you turned some down, but I mean, you have a whole host of stuff that you're looking at all the

Speaker #6: What are the other just years of opportunity ahead of you? I mean, obviously, you turned some down, but I mean, you have a whole host of stuff that you're looking at all the time.

Speaker #5: Yeah, that's a great follow-up question. The amount of opportunity that's out in the marketplace right now is a lot. And we have a pretty quick process in which we can get through things.

Speaker #5: Jeff mentioned earlier, we look at things pretty quick and say, "Hey, can we get our capital back in 12 months as one of the things that we look at inside of it?" We try to make these decisions really, really quickly.

Speaker #5: There is to quantify that, I would put us in the handful of new opportunities a week. And some of those things come with a whole bunch of properties.

Speaker #5: Sometimes it comes with a company just wanting to offload one or two things or trying to find a home for something. We're seeing a range from digital media businesses that are traditional brands to other types of product companies that are out there that sort of straddle the digital world and the retail world at this time.

Speaker #5: But the pipeline of things to look at is, I would say it's robust.

Speaker #6: Great. Thank you very much. Appreciate

Speaker #6: it. And

Speaker #1: And that does conclude our Q&A session. I will turn it back to Paul Edmondson for final comments.

Speaker #5: Thank you, everybody, for joining our Q3 call. We really appreciate the time everybody invested here to learn a bit more about the Arena business.

Speaker #5: We'll be back for Q4. And thanks again, everybody, for joining today. We appreciate

Speaker #5: it. And thank you