Rumble Inc. Q4 FY2023 earnings call

• Product transformations: Completely redesigned rumble.com's UI, acquired Callin for Rumble Studio beta, launched Rumble Advertising Center (RAC) with pre-roll ads in mobile apps and expanded inventory, and launched Rumble Cloud. - Audience: Held core audience of 40 million+ MAUs, with Q4 2023 MAUs reaching 67 million due to high-profile sporting events. - Transition to revenue: Anticipating sequential revenue growth starting Q2 2024 as monetization products ramp, with RAC showing strong results in March 2024. - Partnerships: Announced partnerships with Qinshift and ACP CreativIT to scale go-to-market strategy in mid-market and enterprise space.

For the full-year 2023, Rumble reported revenues of $81 million, an increase of 106% compared to $39.4 million in 2022. In the fourth quarter of 2023, revenues were $20.4 million, compared to $20 million in Q4 2022. The 2023 fourth quarter revenue reflected an increase in other services revenue ($3.5 million) offset by a decrease in advertising revenue ($3.1 million). Other services revenue was driven by subscriptions, content licensing, tipping features, and one-time content. Cost of services for the fourth quarter was $39.5 million, up from $23.5 million in Q4 2022 due to increases in programming/content costs ($14 million) and hosting/other service costs ($2 million). For the full-year, cost of services increased to $146.2 million due to increases in programming/content costs ($98.9 million), hosting expenses ($2.7 million), and other service costs ($0.8 million).

• Anticipate sequential quarterly revenue increase beginning in the second quarter of 2024 as monetization assets come online. - Moving materially towards breakeven in 2025 due to revenue engines coming online and guaranteed creator commitments decreasing during 2024 and 2025. - RAC's strong performance in March 2024 bolsters confidence in revenue ramp.

Q: Talked about drivers of lower engagement in Q4, specifically YouTube-related impact and content costs.

A: Impact from YouTube auto sync cut-off and CDN migration; cost of services components include creator revenue share, guaranteed contracts, and network hosting costs, with focus on reducing guaranteed contracts as monetization tools kick in.

Q: Update on reducing creator guarantees and breakeven in 2025.

A: Plan to move towards breakeven in 2025 as revenue starts kicking in from monetization engine and minimum guarantee costs decline.

Q: Similarities and differences between Rumble and Reddit.

A: Rumble's R&D spend and product building stands out compared to Reddit's R&D spend, with Rumble doing more with a smaller team.

Q: Potential election-related usage spikes.

A: 2024 presidential election could see growth, with Rumble having a solid product now compared to 2022 mid-terms.

Q: RFK Jr. on Rumble and left-wing influencers.

A: RFK Jr. is on Rumble, including as a cloud customer; partnership with Barstool Sports in sports category.

Q: Barstool distribution partnership impact.

A: Barstool grew on the platform in January-February, with Rumble aiming to broaden sports category but hard to predict single creator moving needle.

Q: Confidence in Q2 revenue ramp from RAC.

A: RAC adding publishers, inventory, and advertisers with stable CPMs, strengthening confidence in Q2 revenue ramp.

Q: Acquisition of North River.

A: It's the foundation for building RAC, including technology and human capital.

Q: Truth Social de-SPAC impact on Rumble Cloud.

A: Positive for Truth Social's growth as a large tenant on Rumble Cloud.

Q: Sports content update.

A: Street League Skateboarding, Nitro Rallycross, Power Slap showing positive trajectories, with Power Slap events attracting influencers.

Q: Antitrust regulation and TikTok ban.

A: Interested in being a technology partner for TikTok if divested, and lower App Store take rate would be helpful for Rants and tipping.