Revenue surges at Sarasota video platform Rumble — along with a big loss

The company’s high-cost model led to a quarterly loss of nearly $29 million.

By Mark Gordon
| 11:00 a.m. May 17, 2023
| 2 Free Articles Remaining!

Rumble Chairman and CEO Chris Pavlovski spoke with Russell Brand in the company's Longboat Key office in February.

File photo

Manatee-Sarasota

Longboat Key-based online video-sharing platform Rumble posted a large revenue gain in the 2023 first quarter — news partially overshadowed by an even larger net loss.

The company, which officially opened its Longboat Key office in late February and rose to national prominence by catering to a conservative-leaning audience, especially during the pandemic, posted $17.6 million in revenue in the first quarter, according to a May 15 statement. That’s up 336% year-over-year, from $4 million in the 2022 first quarter.

While the company touted the revenue gains, it also posted a net loss of $28.66 million in the first quarter, or 14 cents a share, according to its earnings report. That’s compared to a loss of $3.9 million, or $0.02 a share, in the same quarter last year. (Shares of Rumble are traded on the Nasdaq under the symbol RUM. Shares dropped -3.7% in May 15 overnight trading on the earnings news, according to MarketWatch. But by May 16 the stock was mostly back to where it was trading last week, hovering around $10 a share. Shares closed May 16 at $9.62.)

The revenue gain and net loss, in summary, stem from the high-cost model of providing video sharing services for advertising revenue. On the gain, the quarterly surge in revenue, officials say in a statement, is “due to an $11.8 million increase in advertising revenue and a $1.8 million increase in licensing and other revenue.”

On the flip side, Rumble’s “cost of services” in the most recent quarter was $26 million, compared to $3.7 million in the first quarter of 2022. That increase, officials say, “is due to an increase in programming and content costs of $21.1 million, hosting expenses of $0.5 million, and other service costs of $0.7 million.”

Rumble, according to an early March interview with Chairman and CEO Chris Pavlovski inside the company’s new Longboat Key office, intends to hire 25 people this spring, then hire more people in bunches of 25. While the earnings report doesn’t say how many employees the company brought on in the first quarter, it does say it incurred a “$1.3 million increase in staffing-related costs, as well as a $0.5 million increase in costs related to computer software, hardware and other administrative expenses.”

Other highlights from the earnings report include:

Average estimated minutes watched per month increased 3% to 10.8 billion, compared to 10.5 billion in the first quarter of 2022. (It’s down -2.7% from 11.1 billion in the fourth quarter of 2022.)
Hours of uploaded video per day increased 82% to 11,181, compared to 6,158 in the first quarter of 2022 and 10,373 in the fourth quarter of 2022.
Average global Monthly Active Users increased 17% to 48 million, compared to 41 million in the first quarter of 2022. (That’s down -40% from 80 million in the fourth quarter of 2022, which the company says is from “the overperformance of Q4, particularly around the U.S. midterm election cycle”
As of March 31, 2023, Rumble's balance of cash, cash equivalents and marketable securities was $326.3 million.

In other 2023 first quarter highlights the company:

Announced it will exclusively manage conservative commentator and comedian Steven Crowder’s content, including his “Mug Club” community, which includes Bryan Callen, Nick Di Paolo, MrGunsNGear and former SNL cast member Jim Breuer, in addition to the show “Louder with Crowder.”
Announced the company’s first-ever pay-per-view content with the exclusive release of Russell Brand's comedy special "Brandemic."
Reached agreement with Power Slap for exclusive global rights to Seasons 2 and 3 of the slap fighting league, following securing streaming exclusivity for Power Slap’s inaugural event.
Announced Dan Bongino’s relaunch of “The Dan Bongino Show” as a live production on Rumble.

The company, subsequent to the end of the quarter, also announced an online streaming partnership with the Republican National Committee for the first debate of the Republican presidential primaries, scheduled for August. Rumble plans to feature the debate on the platform’s home page and make it available for viewers across the country on the RNC’s Rumble channel, the release states.

Calling for deals

Longboat Key-based Rumble, in addition to its first quarter earnings report, also recently announced an acquisition: It bought San Francisco-based podcasting and livestreaming platform Callin. Financial terms of the acquisition weren’t disclosed, but Callin founder David Sacks will join Rumble’s board.

“CallIn was launched out of necessity after I personally experienced challenges in producing and curating a podcast,” says Sacks, the reformer COO of Paypal, in a statement. “As a result, we built CallIn as the first ‘social podcasting’ platform, where users can stream, take questions, record, edit, publish and share content with their audience. As the next step of CallIn’s progression, I am excited to take its capabilities to the next level by joining forces with Rumble, a platform with significant size, influence and reach. As a passionate proponent of the creator economy and the free flow of ideas, I strongly support Rumble’s unwavering commitment to free speech in the face of growing censorship and government overreach.”

author

Mark Gordon

Mark Gordon is the managing editor of the Business Observer. He has worked for the Business Observer since 2005. He previously worked for newspapers and magazines in upstate New York, suburban Philadelphia and Jacksonville.