Rumble Inc. — Q3 2023 Form 10-Q
Reporting period: Three and nine months ended September 30, 2023. The company operates a video-sharing and cloud-services platform, generating revenue mainly from advertising, licensing, subscriptions, tipping, hosting and cloud services.
Financial results and liquidity
| Metric | Q3 2023 | Q3 2022 | Nine months 2023 | Nine months 2022 |
|---|---|---|---|---|
| Revenue | $18.0 million | $11.0 million | $60.6 million | $19.4 million |
| Operating loss | $40.2 million | $7.8 million | $98.3 million | $16.4 million |
| Net loss | $29.0 million | $1.9 million | $87.1 million | $10.5 million |
| Operating cash flow | Not separately presented | Not separately presented | $(59.8) million | $(17.4) million |
| Cash and cash equivalents at period-end | $265.9 million | — | $265.9 million | — |
Q3 advertising revenue was $11.5 million and licensing and other revenue was $6.5 million. Cost of services was $39.8 million in the quarter, exceeding revenue by $21.8 million; the filing reports no separate gross-margin percentage. Q3 loss per share was $0.14, versus $0.01 a year earlier.
At September 30, cash, cash equivalents and marketable securities totaled approximately $267.0 million. Current assets were $286.4 million and current liabilities $44.3 million. The filing reports no conventional borrowings; disclosed obligations include $1.9 million of lease liabilities, $1.8 million of contingent consideration and a $0.5 million other liability. Cash and cash equivalents declined $71.3 million from year-end 2022.
Changes versus prior comparable periods
- Q3 revenue rose 64%; nine-month revenue rose 212%. Management attributed growth to higher advertising consumption and newer ad offerings, and to licensing, subscriptions, tipping, cloud and hosting revenue.
- Costs grew faster than revenue. Q3 cost of services increased 224%, primarily from a $26.1 million increase in programming and content costs. For the nine months, programming and content costs increased $82.2 million.
- Nine-month net loss widened to $87.1 million from $10.5 million. Higher operating costs were partly offset by $10.5 million of interest income; the prior-year period included a larger warrant fair-value gain.
- Q3 operating cash use was not separately shown; nine-month operating cash use increased to $59.8 million from $17.4 million. Share-based compensation rose to $10.5 million for the nine months from $0.2 million.
Outlook, risks and unusual items
- Management says its priority remains growing users and usage rather than maximizing near-term profitability, and expects substantial investment and expense increases. The filing provides no specific revenue, earnings or cash-flow guidance.
- Q3 average monthly active users were reported at 58 million; estimated monthly minutes watched averaged 10.7 billion, up 19% year over year and down 9% sequentially. Uploaded video averaged 15,700 hours per day, up 78% year over year.
- Metric comparability is uncertain: Rumble switched from Google Universal Analytics to GA4 for Q3 MAUs, and management cannot quantify the effect. Estimated viewing minutes rely on bandwidth data; the move to Rumble’s own CDN may lower reported estimates for comparable activity.
- Content and programming commitments are material and include variable-cost arrangements that may be substantial. The filing gives differing minimum commitment figures: approximately $130 million in the notes, $123 million in the liquidity discussion and $128 million in a risk-factor disclosure. Management also warns creator incentives may be fixed regardless of actual performance.
- One customer represented 32% of Q3 revenue and 49% of nine-month revenue. That customer represented 36% of receivables at quarter-end; the filing says the balance was collected in October.
- Callin acquisition accounting remains provisional. Rumble recorded $12.0 million of goodwill and recognized a $1.3 million Q3 gain from remeasuring liability-classified contingent consideration. On October 3, 2023, it acquired North River for C$10 million upfront, with contingent payments of up to C$10 million.
- Legal matters include a shareholder lawsuit alleging damages of $419 million, a patent suit and a video-privacy class action. The company says payment in the notified claims is remote and intends to defend them; outcomes remain uncertain. Rumble’s own antitrust case against Google is in discovery, with trial scheduled for April 2025.
- Disclosure controls were deemed effective, with no material change in internal control over financial reporting reported for the quarter.
Important facts for investors to verify
- Reconcile the filing’s three stated minimum content-commitment amounts and assess expected variable content costs and payment timing.
- Track whether revenue growth, particularly licensing and other revenue, can improve service economics and reduce operating cash use.
- Assess customer concentration and confirm the disclosed October receivables collection.
- Evaluate the effect of GA4 and CDN measurement changes on user and engagement trends before comparing reported metrics across periods.
- Monitor Callin integration and final acquisition accounting, North River’s contingent payments, and developments in the disclosed litigation.