NMAX

Newsmax Inc. 10-Q Summary: Quarter Ended June 30, 2026

Business Context and Reporting Period

This Quarterly Report on Form 10-Q covers the period ended June 30, 2026. Newsmax Inc. operates as a global media company delivering news, opinion, and entertainment content across linear television, streaming (OTT), and digital platforms. The company is classified as an emerging growth company and a non-accelerated filer, though it anticipates transitioning to accelerated filer status by the end of fiscal year 2026.

Key Financial Metrics

Material Changes vs. Prior Period

• Revenue Growth: Total revenues increased 16.5% year-over-year (YoY) for the quarter and 15.3% for the six-month period. This growth was driven primarily by a significant increase in Affiliate Fee revenue (up 81.9% for the quarter) and Licensing revenue (up 563.5% for the quarter) due to new contracts and rate increases.
• Profitability Turnaround: The company reported a net income of $2.9 million for the quarter, a stark contrast to the $75.2 million net loss in the same period in 2025. This improvement is largely attributable to the absence of "Other corporate matters" expenses (litigation-related) which totaled $68.4 million in the prior year's quarter.
• Expense Reduction: General and administrative expenses decreased by 76.6% YoY for the quarter, primarily due to the resolution of legal matters in 2025.
• Segment Performance: The Broadcasting segment generated $8.1 million in Adjusted EBITDA for the quarter, a 394% increase from the prior year. The Digital segment remained unprofitable with an Adjusted EBITDA loss of $2.4 million, though this represented a 56% improvement over the prior year.

Guidance, Outlook, and Risks

Management Commentary: Management highlights sustainable growth with revenues up 17% and 15% for the three and six months, respectively. The company is investing in production headcount and programming for its main channel and Newsmax 2 to monetize FAST channels. International expansion continues with licensing in over 100 countries.

Liquidity and Settlements: The company maintains a fully funded escrow account of $20.0 million to secure the final installment of the $67.0 million Dominion Voting Systems settlement, due on or before January 15, 2027. Another settlement liability of $27.0 million remains outstanding from a 2023 agreement.

Material Weaknesses in Internal Controls: Management concluded that disclosure controls and procedures were not effective as of June 30, 2026, due to material weaknesses. These include a lack of adequate policies for business processes, insufficient documentation of risk assessments, and ineffective IT general controls regarding user access and data validation. Remediation efforts are underway.

Risk Factors: The company anticipates transitioning to accelerated filer status, which will increase compliance costs and reporting deadlines. Additionally, the company faces standard market risks related to interest rates and equity prices affecting its investment portfolio.

Investor Verification Checklist

• Settlement Obligations: Verify the status of the $20.0 million Dominion settlement escrow and the $27.0 million remaining commercial counterparty settlement.
• Internal Control Remediation: Monitor progress on remediation of material weaknesses in financial reporting and IT controls, as these pose risks to future reporting accuracy.
• Revenue Sustainability: Assess the durability of the spike in Affiliate and Licensing revenues, which drove the majority of the growth, versus the decline in Advertising and Subscription revenues.
• Cash Flow vs. Net Income: Note the divergence between reported net income and negative operating cash flow ($2.8 million used), driven by working capital changes and capitalized contract costs.
• Regulatory Status: Confirm the timeline and impact of the transition from non-accelerated to accelerated filer status.