NMAX

Newsmax Inc. Q1 2026 Filing Summary

Business Context and Reporting Period

This Form 10-Q covers the quarterly period ended March 31, 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. As of May 8, 2026, the company had 39.2 million Class A shares and 89.9 million Class B shares outstanding.

Key Financial Metrics

Material Changes vs. Prior Period

• Revenue Growth: Total revenue increased 14.0% year-over-year, driven primarily by a 75.2% surge in affiliate fees ($13.0M vs $7.4M) and a 697.0% increase in licensing revenue ($3.5M vs $0.4M) due to new international contracts and rate increases.
• Advertising Decline: Advertising revenue decreased 5.8% to $27.2 million, attributed to lower digital ad revenue and a lack of election-related demand that benefited the prior year.
• Profitability Improvement: Net loss narrowed significantly by 87.3% to $2.19 million. This improvement was largely due to a $6.6 million reduction in General and Administrative (G&A) expenses, specifically lower legal costs compared to the prior year's settlement-related expenses.
• Segment Performance: The Broadcasting segment generated positive Adjusted EBITDA of $4.0 million (up 24.3%), while the Digital segment reported a loss of $4.3 million (worsening 57.5%) due to declines in digital advertising and subscription revenue.
• Cash Flow: Net cash used in operating activities improved to $2.6 million (from $15.7 million used in Q1 2025), aided by the release of $20.0 million from escrow funds related to the Dominion settlement.

Outlook, Risks, and Contingencies

• Legal Settlements: The company has a remaining settlement obligation of $20.0 million to Dominion Voting Systems, due on or before January 15, 2027. This amount is fully secured in an escrow account earning 4.02% interest. Additionally, a $28.3 million balance remains on a 2023 commercial counterparty settlement.
• Internal Control Weaknesses: Management concluded that disclosure controls and internal controls over financial reporting were not effective as of March 31, 2026. Material weaknesses include inadequate policies for business processes, lack of documentation for journal entry reviews, and insufficient IT general controls regarding user access and data validation.
• International Expansion Risks: The company faces regulatory and reputational risks as it expands licensing into over 100 countries, including recent launches in Ukraine and various European nations. Risks include censorship, IP protection issues, and compliance with local laws.
• Liquidity: The company maintains $17.2 million in cash and $111.9 million in investments. Management believes these resources are sufficient to meet operating requirements for the next 12 months.

Investor Verification Checklist

• Escrow Status: Verify the $20.0 million escrow balance designated for the Dominion settlement payment due in January 2027.
• Internal Control Remediation: Review the progress of the remediation plan for material weaknesses in financial reporting and IT controls.
• Segment Margins: Analyze the widening loss in the Digital segment versus the profitability of the Broadcasting segment to assess long-term sustainability.
• Advertising Trends: Monitor the recovery of advertising revenue, which declined due to the absence of election-year demand in the prior period.
• Settlement Obligations: Confirm the payment schedule for the remaining $28.3 million commercial settlement liability.