Video-sharing platform Rumble Inc. (NASDAQ: RUM) released its Q4 2023 earnings report with less-than-stellar results. The highlights included rising daily active users and an 8-cent EPS beat, with losses coming in at 14 cents versus 22 cents. However, the good news was offset by a shrinking number of average minutes watched per active user and a big revenue miss. Shares in the consumer discretionary sector company initially sold off on the news but managed to recover. The Rumble CEO stated that revenues are going to accelerate on a sequential basis due to the various monetization efforts triggered in the quarter.
A Free Speech Alternative to YouTube?
Rumble considers itself the alternative to Alphabet Inc. (NASDAQ: GOOG) owned YouTube, Vimeo Inc. (NASDAQ: VMEO) and other popular video-sharing platforms. The ideology of free speech with no censorship has drawn both right-leaning conservatives and criticism. Its stock price has also been coupled with former President Donald Trump's news events and his media company, Trump Media & Technology Group Co. (NASDAQ: DJT) price action. Rumble was the exclusive live stream platform for the fourth Republican presidential primary debate.
Q4 2023 Earnings Whimper
Rumble reported Q4 2023 EPS of a loss of 14 cents versus a loss of 22 cents, an 8-cent beat. Revenues rose 2.2% YoY to $20.39 million, falling short of the $28.13 million consensus estimates. Monthly active users (MAUs) rose 16% sequentially to 67 million, with 48 million in the United States and Canada. The average estimated minutes watched per month (MWPM) was 10.5 billion, down from 10.7 billion in the year-ago period. This figure was derived from bandwidth consumption metrics. Hours of uploaded video per day rose 21% to 12,520, up from 10,373 in the year-ago period. The company closed the quarter with $219.5 million in cash and cash equivalents.
Revenues Engines Are Positioned to Rev Up in Q2 2024
The company stated that beginning in Q2 2024, it expects revenues to increase sequentially from its revenue engines coming online. Its previous guaranteed creator commitments, where they contracted popular content creators for content generation, are set to shrink significantly by the end of 2024 and into 2025.
CEO Insights
Rumble CEO Chris Pavlovski reiterated that 2023 was the building year for the company. This includes successfully diversifying its content library and signing key content providers across comedy, entertainment and sports. The company launched a redesigned user interface across all platforms. Rumble integrated a premium subscription service, locals.com, providing content creators with more robust monetization opportunities.
2023 was a Year of Milestones
Rumble launched the beta version of Rumble Studio, which includes its patent-pending live streaming tool, which will lay the future foundation for monetization. The Rumble Advertising Center (RAC) was launched within the last 90 days. It's been deploying pre-roll video ads on its mobile apps. The company is onboarding new publishers and expanding its inventory. The company also launched Rumble Cloud just two weeks ago. The revamped user interface and integration of a video platform, an advertising network, a novel livestreaming tool and a cloud in a single year.
Rumble Studio enables content creators to live stream video to multiple platforms like YouTube, Amazon.com Inc. (NASDAQ: AMZN), owned Twitch, Kick, X and Meta Platforms Inc. (NASDAQ: META), and Facebook and invite guests to engage with viewers.
A Mini Google Created by Less than 250 People
Pavlovski compared 2023 milestones paralleling that of Google as the company built its 4 key products and monetization drivers. Pavlovski commented, "What we have built is essentially a mini Google."
He continued, "Google purchased DoubleClick for $3 billion, this compares to the Rumble Advertising Center. Google purchased YouTube for $1.65 billion back in 2006, which compares to the Rumble Video platform. Google has also invested billions into Google Cloud, which compares to our Rumble Cloud. And by the way, we did all of this with fewer than 250 people."
Rumble analyst ratings and price targets are at MarketBeat. Rumble peers and competitor stocks can be found with the MarketBeat stock screener. RUM has a 15% short interest.
Daily Ascending Triangle Pattern
The daily candlestick chart for RUM illustrates a daily ascending triangle pattern. The ascending trendline formed at $6.22 on February 28, 2024. The lower trendline formed as higher highs on pullbacks met the flat-top upper trendline resistance at $8.94. The daily relative strength index (RSI) pulled back to the 57 band but may be winding up for another bounce attempt to rechallenge the flat-top upper trendline as RUM moves closer to the apex point where the upper and lower trendline meet. Pullback support levels are at $7.40, $6.76, $6.22 and $5.82.
