To The Moon

$Rumble Inc.(RUM)$ is expected to release its quarterly earnings result for Q4 2024 on 25 March 2025 before the market open.

The consensus estimate for revenue is expected to come in at 29.74 million which is an increase of 45.82% compared to same period one year ago.

The earnings per share consensus estimate is anticipated to come in at a loss of 12 cents which is a improvement of 20.01% compared to same period a year ago.

Rumble (RUM) Last Positive Earnings Call Saw Share Price Increase By 13.32%

Rumble had a positive earnings call on 12 Nov 2024 which saw its share price increase by 13.32%

The earnings call reflects a positive sentiment, driven by strong revenue growth, successful monetization strategies, and significant engagement during the election period. Despite some challenges like decreased ARPU and a decline in cash reserves, the strategic initiatives and market positioning show promise for future growth.

Rumble (RUM) Guidance On Adjusted EBITDA Breakeven

During Rumble's Q3 2024 earnings call, the company provided optimistic guidance, highlighting significant growth and milestones achieved. Christopher Pavlovski, Rumble's CEO, noted that the company reached 67 million monthly active users and experienced a strong quarter with revenues increasing to $25.1 million, up from $18 million in Q3 2023. Rumble's platform saw a notable increase in engagement during the U.S. presidential election, capturing a 17.8% share of live streaming hours in the U.S. The company also reported a decrease in ARPU to $0.33, attributed to rapid user growth outpacing monetization efforts. Despite this, Rumble anticipates continued sequential revenue growth, fueled by the introduction of mid-roll ads and the expansion of Rumble Premium.

The company also reported reduced cost of services and a decrease in cash usage, with a cash position of $132 million. They aim to approach adjusted EBITDA breakeven in 2025, with early signs of brand advertising partnerships emerging following the disbandment of GARM.

Key Factors Influencing Q4 2024 Earnings Outlook:

User Growth

Positive Indicator: If Rumble sustains its historical user growth (e.g., 20% quarter-over-quarter), Q4 2024 could see a significantly expanded user base, driven by creators and viewers seeking alternatives to mainstream platforms.

Rumble reached a 17.8% share of live hours watched in the U.S. on election day, setting new records for concurrent viewers and surpassing previous benchmarks.

Risk: Saturation or competition from emerging platforms might slow growth.

Monetization Strategies

Advertising & Subscriptions: Success in rolling out targeted ads, premium subscriptions, or exclusive content partnerships could boost revenue. Enhanced ad-tech infrastructure would attract advertisers.

Rumble reported revenues of $25.1 million for Q3 2024, an increase of $7.1 million from Q3 2023, driven by $5.9 million in audience monetization revenues.

Challenge: Advertiser hesitancy due to content moderation policies might limit ad spend compared to larger platforms like YouTube.

Financial Health

Profitability Path: If Rumble narrows losses in prior quarters, Q4 2024 might approach breakeven or profitability, especially if operational efficiencies improve.

ARPU decreased from $0.37 in Q2 to $0.33 in Q3 2024, as revenue growth lagged behind the increase in monthly active users.

Investment Costs: Heavy spending on tech/marketing could delay profitability despite revenue growth.

Cost of services decreased by $3.3 million to $36.4 million in Q3 2024 compared to Q3 2023, due to a decrease in content costs.

Cash, cash equivalents, and marketable securities decreased to $132 million at the end of Q3 2024 from $219.5 million at the end of 2023.

Competitive and Regulatory Landscape

Differentiation: Rumble’s free-speech positioning may attract niche audiences but could face regulatory scrutiny or reputational risks if content controversies arise.

The introduction of mid-roll ads and exclusive content in Rumble Premium significantly increased subscriber growth, with notable contributions from Stephen Crowder's MugClub.

Regulatory Risks: Changes in content moderation laws or data privacy regulations could impact operations.

Strategic Moves

Partnerships/Exclusives: Deals with high-profile creators or political figures (e.g., similar to past partnerships with figures like Russell Brand) might drive traffic.

Infrastructure Investments: Scaling server capacity and improving video-streaming quality could enhance user retention.

Market Sentiment

Tech Sector Trends: Broader market conditions (e.g., interest rates, investor appetite for growth stocks) will influence stock performance post-earnings, regardless of fundamentals.

Rumble (RUM) Price Target

Based on 2 Wall Street analysts offering 12 month price targets for Rumble in the last 3 months. The average price target is $16.50 with a high forecast of $20.00 and a low forecast of $13.00. The average price target represents a 113.18% change from the last price of $7.74.

With the recent DDoS attack on Rumble platform, there might be some hesitation from investors on how RUM share price might move, but if we consider how platform like RUM have been gaining traction since the election, we might be seeing it gaining from famous creators endorsement.

Technical Analysis - Exponential Moving Average (EMA)

RUM have been trading close to the 12-EMA not able to make any break through because of investors sentiment hesitation, as we can see that RSI is trending down towards the oversold region.

This signal a weak momentum, but we need to understand that RUM is in the progress of making adjusted EBITDA breakeven in 2025, so if we were to see a steady progress which aligns to its expectations, this could result in minimal stock volatility.

What I would expect to see a bull or bear case are these factors that could trigger some volatility.

Bull Case: Accelerating user growth + successful monetization → revenue beats estimates, narrowing losses. Stock rallies on optimism about future profitability.

Bear Case: Slowing growth + elevated costs → wider-than-expected losses. Stock dips due to concerns about sustainability.

Summary

While Rumble’s focus on free speech and creator-friendly policies positions it uniquely, its Q4 2024 earnings will hinge on execution in monetization and user retention.

I think as investors, we might need to watch for its user metrics, partnerships, and cost management. There are some news of insider sales, which could also impact what investors might think of RUM.

I will be watching RUM as this might be a potential swing trade to make some profit.

Appreciate if you could share your thoughts in the comment section whether you think RUM could provide an earnings surprise and show progress nearer to its adjusted EBITDA breakeven.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.