Rumble (RUM +10.12%), a burgeoning video platform known for its commitment to free speech and minimal content restrictions, released its Q1 2024 earnings after the market closed on Tuesday. The company reported revenue of $17.7 million, a 1% increase from the prior year's quarter. It also reported a much higher net loss ($43.3 million in Q1) compared to the prior-year quarter.
The first quarter also saw noticeable declines in user engagement metrics compared to the fourth quarter of 2023, including sequential drops in monthly active users (MAUs) and minutes watched per month (MWPM). MWPM was also down 20% year over year. Overall, the quarter highlighted the challenges Rumble is having in sustaining growth momentum and managing increased costs.
| Metric | Q1 2024 | Q1 2023 | Change (YOY) |
|---|---|---|---|
| Revenue | $17.7 million | $17.6 million | 0.7% |
| Monthly active users | 50 million | 48 million | 4% |
| Average estimated MWPM | 8.6 billion | 10.8 billion | (20%) |
| Cost of services | $31.8 million | $26.0 million | 22% |
| Net income (loss) | ($43.3 million) | ($28.7 million) | N/A |
| EPS | ($0.21) | ($0.14) | N/A |
Data sources: Company results from Rumble Inc. MWPM = Minutes watched per month. YOY = Year over year.
About Rumble
Rumble is a social media site focused on video that is working to provide an alternative to mainstream platforms like Alphabet's (GOOG +2.92%)(GOOGL +2.53%) YouTube. The company monetizes through advertising, subscriptions, and cloud services. Recently, it has emphasized enhancing its product portfolio and expanding its infrastructure capabilities.
Its recent growth strategies include launching Rumble Cloud, Rumble Studio, and developing the Rumble Advertising Center (RAC). The focus has been on attracting top creators, increasing video content, and strengthening its revenue streams through various monetization methods.
Key developments in Q1
Financially, Rumble's revenue was almost flat compared to Q1 2023. Rumble noted that advertising revenue for the quarter decreased by $3.1 million, balanced by an increase in cloud and other services revenue of $3.2 million. The company's cost of services rose by 22% year over year, mainly due to programming and content costs increasing by $5.3 million.
NASDAQ: RUM
Key Data Points
Operationally, user engagement metrics showed significant declines on a sequential basis. MAUs fell sharply from 67 million in Q4 2023 down to 50 million in Q1. This was attributed to the lack of high-profile events related to sports and politics that had previously driven user spikes in Q4. MWPM also dropped to 8.6 billion from 10.5 billion in Q4 2023. This was attributed to bandwidth consumption transitioning from third-party content delivery networks (CDNs) to Rumble's proprietary CDN. On a positive note, video upload hours per day jumped 11% year over year.
R&D expenses surged 73% to $4.5 million, reflecting investments in the aforementioned growth strategies and added costs related to payroll, hardware, and software. General and administrative expenses increased to $9.3 million, driven primarily by share-based compensation. Sales and marketing expenses remained steady at $3.3 million.
Notable one-time events and partnerships
During Q1 2024, Rumble completed the launches of Rumble Cloud and Rumble Studio. These additions are expected to enhance the monetization pipeline and offer new revenue opportunities. The company also announced partnerships with Barstool Sports, Qinshift, and ACP CreativIT to leverage Rumble's infrastructure and expand its footprint.
One-time impacts within the quarter included YouTube terminating its auto-sync tool with Rumble, affecting the company's video upload metrics. However, the foundational completion of Rumble Studio sets the stage for new monetization features in the future.
Rumble also noted that it filed an antitrust lawsuit on May 13 against Alphabet's Google based on Google's alleged monopolization of the online advertising market. The lawsuit claims damages exceeding $1 billion. This new action is separate from a prior lawsuit Rumble filed against Google in January 2021, which remains in discovery with a trial scheduled for May 2025.
Looking ahead
Rumble's management reiterated its expectation for sequential revenue growth beginning in Q2 2024. It also forecast the company would move materially towards breakeven by 2025. This effort should be helped by company plans to reduce guaranteed creator commitments significantly by the end of 2024 into 2025, aiming to control operating costs better.
Rumble's management remains optimistic about further revenue growth driven by recent product launches and new partnerships. The company continues to invest in content, creators, and technology to enhance user engagement and monetize the platform more effectively.
Investors should keep an eye on user growth and engagement metrics as they directly impact revenue. The company's ability to control escalating costs while ramping up its new revenue streams will be crucial to achieving its breakeven goal by 2025.
