RUM Group Inc.
For the period ended Dec 31, 2024. Filed Mar 25, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 25, 2025
RUM$4.92+4.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-03-27.
0001213900-24-026599
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-25.
0001013762-25-001863
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 113 previous paragraphs and 120 current paragraphs.
65 unchanged; 24 reworded; 29 added; 23 removed; 1 previous and 2 current paragraphs rearranged.
Tables are not compared: 8 previous and 9 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (29)
Current report
On December 20, 2024, the Company announced that it had entered into a definitive agreement for a strategic investment of $775 million from Tether, the largest company in the digital assets industry and the most widely used dollar stablecoin across the world with more than 400 million users. As part of the transaction, which closed on February 7, 2025, Tether purchased 103,333,333 shares of Class A Common Stock at a price per share of $7.50, totaling $775 million in gross proceeds to Rumble. As part of the closing of the transaction, the Company completed a tender offer to purchase 70,000,000 shares of its Class A Common Stock at a price of $7.50 per share (the “Tender Offer”), for a total of $525 million, excluding fees and expenses related to the Tender Offer. The Company will use $250 million of the proceeds, less transaction expenses, to support growth initiatives.
Current report
Refer to Note 11, Derivative Liability, to our consolidated financial statements included elsewhere in this Annual Report.
Current report
Other Initiatives includes digital advertisements that are placed on Rumble’s network of third-party publisher websites or mobile applications; and cloud. Cloud includes consumption-based fees, subscriptions for infrastructure and professional services.
Current report
Cost of Services (Exclusive of Amortization and Depreciation)
Current report
Other Expense
Current report
Change in Fair Value of Derivative
Current report
Income Tax Benefit (Expense)
Current report
MAUs (GA4) were 68 million on average in the fourth quarter of 2024, an increase of 1% from the third quarter of 2024. The increase in MAUs was primarily driven by increased interest in politics during the final stretch of the U.S. presidential election campaign, offset in part by reduced MAU activity during the December holiday season.
Current report
Average Revenue Per User (“ARPU”)
Current report
We use ARPU as a measure of our ability to monetize our user base. Quarterly ARPU is calculated as quarterly Audience Monetization revenue divided by MAUs for the relevant quarter (as reported by Google Analytics). ARPU does not include Other Initiatives revenue.
Current report
ARPU was $0.39 in the fourth quarter of 2024, an increase of 18% from the third quarter of 2024. The increase from the third quarter is attributable to higher advertising revenue and subscription revenue.
Current report
Revenues increased by $14.5 million to $95.5 million in the year ended December 31, 2024 compared to the year ended December 31, 2023, of which $10.3 million was attributable to an increase in Audience Monetization revenues and $4.2 million was attributable to higher Other Initiatives. The increase in Audience Monetization revenues was mainly due to higher revenue from subscriptions, tipping fees, licensing, platform hosting and advertising. The increase in Other Initiative revenue was mostly due to more advertising inventory being monetized by our publisher network and an increase in cloud services offered.
Current report
Cost of services decreased by $7.7 million to $138.5 million in the year ended December 31, 2024 compared to the year ended December 31, 2023. The decrease was primarily due to a reduction in programming and content costs of $9.5 million, offset by an increase of $1.8 million in other cost of services including payment processing fees and costs paid to publishers.
Current report
Research and development expenses increased by $3.2 million to $18.9 million in the year ended December 31, 2024 compared to the year ended December 31, 2023. The increase was due to an increase of $2.7 million in payroll and related expenses, and an increase of $0.5 million in other expenses .
Current report
Interest income decreased by $5.5 million to $8.1 million in the year ended December 31, 2024 compared to the year ended December 31, 2023. The decrease was due to our reduced investment in money market funds, treasury bills, and term deposits.
Current report
Other Expense
Current report
Other expense increased by an immaterial amount in the year ended December 31, 2024 compared to the year ended December 31, 2023. The increase was primarily due to lower foreign currency rate fluctuation as we maintained the majority of our cash balance in U.S. dollars, which is our functional currency, as of December 31, 2024.
Current report
Change in Fair Value of Derivative
Current report
Change in fair value of derivative decreased by $184.7 million resulting in a loss of $184.7 million in the year ended December 31, 2024. The derivative arose in connection with the forward purchase contracts related to the Tether transaction. As the forward purchase contracts meet the classification of a financial liability in accordance with ASC 815-40, the related derivative is measured at its fair value, determined in accordance with ASC 820, at each reporting period. The fair value of this forward purchase contracts were measured using a Monte Carlo simulation methodology that includes simulating the stock price using a risk-neutral Geometric Brownian Motion-based pricing model. The decrease relates to the revaluation of the forward purchase contracts in connection with the Tether transaction.
Current report
Income Tax Benefit
Current report
Income tax benefit decreased by $1.3 million to $2.0 million in the year ended December 31, 2024 compared to the year ended December 31, 2023.
Current report
Non-GAAP Financial Measures
Current report
To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use certain non-GAAP financial measures, as described below, to understand and evaluate our core operating performance. These non-GAAP financial measures, which may be different than similarly titled measures used by other companies, are presented to enhance investors’ overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. We use the non-GAAP financial measure of: Adjusted EBITDA, which is defined as net income (loss) excluding interest income (expense), net, other income (expense), net; provision for income taxes, depreciation and amortization, share-based compensation expense, acquisition-related expense, change in fair value of warrants, change in fair value of contingent consideration, and change in the fair value of derivative. The Company’s management believes that it is important to consider Adjusted EBITDA, in addition to net income (loss), as it helps identify trends in our business that could otherwise be masked by the effect of the gains and losses that are included in net income (loss) but excluded from Adjusted EBITDA.
Current report
Adjusted EBITDA should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. There are a number of limitations related to the use of Adjusted EBITDA rather than net income (loss), the nearest GAAP equivalent. As a result of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including net income (loss) and our other financial results presented in accordance with GAAP. The following table presents a reconciliation of net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP, to Adjusted EBITDA:
Current report
Reconciliation of Adjusted EBITDA
Current report
Trade and Barter Transactions
Current report
The Company engages in trade and barter transactions whereby the Company and its counterparty exchange media campaigns or other promotional services. The Company reviews each transaction to ensure the advertising it receives has economic substance and records revenue in an amount equal to the fair value of the products and services received unless this is not reasonable to estimate, in which case the consideration is measured based on the standalone selling price of the advertising inventory promised or delivered to the customer. Trade and barter revenue is recognized when the performance obligation is fulfilled and follows the same pattern of recognition as the Company’s normal advertising revenue. Trade and barter expense is recorded when goods or services are consumed. The trade and barter expense is recorded in sales and marketing expense in the consolidated statement of operations.
Current report
Arrangement to Sell Shares to Tether (Unit of Account)
Current report
The Company applied judgement in determining whether the support agreements and agreement to sell shares to Tether were a single unit or multiple units of account. Given that the agreements were entered into contemporaneously and in contemplation of one another, the closing of the support agreements was contingent on the close of the sale of shares to Tether, and the agreements relate to the same underlying risk (the price risk of the Company’s shares), the Company determined that the overall arrangement was one unit of account. As a result, the arrangement is accounted for as a derivative, initially and subsequently measured at fair value with changes through net loss. See Note 17 for information regarding the estimation of the fair value of the derivative.
Removed paragraphs (23)
Previous report
On December 1, 2021, CF Acquisition Corp. VI, a Delaware corporation (“CFVI”), and Rumble Inc., a corporation formed under the laws of the Province of Ontario, Canada (“Legacy Rumble”), entered into a business combination agreement (the “Business Combination”). On September 16, 2022, CFVI and Legacy Rumble consummated the business combination contemplated by the business combination agreement. In connection with the consummation of the Business Combination, CFVI changed its name from CF Acquisition Corp. VI to Rumble Inc. and Legacy Rumble changed its name from Rumble Inc. to Rumble Canada Inc. Refer to Note 12, Qualifying Transaction, to the Company’s annual consolidated financial statements for the year ended December 31, 2023.
Previous report
On May 15, 2023, the Company acquired 100% of the outstanding equity of Callin Corp. (“Callin”), a podcasting and live streaming platform. Refer to Note 3, Acquisitions, to our consolidated financial statements included elsewhere in this Annual Report.
Previous report
On October 3, 2023, the Company acquired 100% of the outstanding equity of North River Project Inc. (“North River”), an entity that holds intellectual property. Refer to Note 3, Acquisitions, to our consolidated financial statements included elsewhere in this Annual Report.
Previous report
Other Income (Expense)
Previous report
Income and Deferred Tax Recovery (Expense)
Previous report
MAUs (GA4) were 67 million on average in the fourth quarter of 2023, an increase of 16% from the third quarter of 2023. We believe the growth from the third quarter of 2023 is attributable to increased interest in geopolitical events, high profile seasonal sporting events and increased interest in certain Rumble content creators.
Previous report
Estimated Minutes Watched Per Month (“MWPM”)
Previous report
We use estimated MWPM as a measure of audience engagement to help us understand the volume of users engaged with our content on a monthly basis and the intensity of users’ engagement with the platform. Estimated MWPM represents the monthly average of minutes watched per user within a quarterly period, which helps us measure user engagement. Estimated MWPM is calculated by converting actual bandwidth consumption into minutes watched, using our management’s best estimate of video resolution quality mix and various encoding parameters. We continually seek to improve our best estimates based on our observations of creator and user behavior on the Rumble platform, which changes based on the introduction of new product features, including livestreaming. We are currently limited, however, in our ability to collect data from certain aspects of our systems. These limits may result in errors that are difficult to quantify, especially as the proportion of livestreaming on the Rumble platform increases over time, and as we improve the quality of various video formats by increasing bit rates.
Previous report
Bandwidth consumption includes video traffic across the entire Rumble platform (website, apps, embedded video, connected TV, RAC, etc.). In addition, our management believes bandwidth consumption includes a nominal amount of non-video traffic on the Rumble and Locals platforms and a potentially significant amount of consumption of Rumble videos outside of the Rumble video player and Rumble apps, due in part to intentional user circumvention of the Rumble platform that, despite our continuous efforts, we are unable to eliminate. Combined, the bandwidth consumption for this traffic may be material and difficult to quantify, resulting in an inability for us to monetize a potentially significant portion of our estimated MWPM.
Previous report
Estimated MWPM was 10.5 billion on average in the fourth quarter of 2023, a decrease of 5% from the fourth quarter of 2022 and a decrease of 2% from the third quarter of 2023. We believe the decline from the fourth quarter of 2022 and third quarter of 2023 is due to a portion of our bandwidth consumption moving from third-party service providers’ content delivery networks (“CDNs”) to our own proprietary CDN beginning in the second half of the third quarter of 2023. Based on preliminary testing, our own CDN indicates less bandwidth consumption than one of our service providers’ CDNs for comparable user activity. Because we calculate estimated MWPM by converting bandwidth consumption into minutes watched, consumption measured through our own CDN yields a lower estimated MWPM than when measured through that service provider’s CDN.
Previous report
Hours of Uploaded Video Per Day
Previous report
We use the amount of hours of uploaded video per day as a measure of content creation to help us understand the volume of content being created and uploaded to us on a daily basis. Hours of uploaded video per day were 12,520 on average in the fourth quarter of 2023, representing an increase of 21% from the fourth quarter of 2022 and a 20% decrease from the third quarter of 2023. We believe the growth from the fourth quarter of 2022 is due to our expanding pool of content creators and increased user watch time as a result of livestreaming and continued improvement of user experience. We believe that the decrease from the third quarter of 2023 is related to YouTube’s decision in the fourth quarter of 2023, to disable the ability of its users to utilize our tool that automatically imports videos from creators’ YouTube channels to their Rumble channels, commonly known as the “YouTube sync” tool. We provided additional information about this issue in a current report on Form 8-K, filed with the SEC on January 16, 2024.
Previous report
Revenues increased by $41.6 million to $81.0 million in the year ended December 31, 2023 compared to the year ended December 31, 2022, of which $28.9 million is attributable to higher advertising revenue and $12.7 million is attributable to higher revenue from other services and cloud. The increase in advertising revenue was driven by an increase in consumption as well as the introduction of new advertising solutions for creators, publishers and advertisers, including host read advertising and our online advertising management exchange (“Rumble Advertising Center” or “RAC”), both of which we started to build and test in the second half of 2022 and continued to scale testing throughout 2023. The increase in revenue from other services and cloud was driven mainly by subscriptions, content licensing, tipping features, and cloud services offered.
Previous report
Cost of Services
Previous report
Cost of services increased by $102.4 million to $146.2 million in the year ended December 31, 2023 compared to the year ended December 31, 2022. The increase was due to an increase in programming and content costs of $98.9 million, hosting expenses of $2.7 million, and other service costs of $0.8 million.
Previous report
Research and development expenses increased by $9.4 million to $15.7 million in the year ended December 31, 2023 compared to the year ended December 31, 2022. The increase was due to an increase in payroll and related expenses of $7.4 million, as well as a $2.0 million increase in costs related to computer hardware, software, and other expenses used in research and development related activity.
Previous report
Interest income increased by $10.6 million to $13.6 million in the year ended December 31, 2023 compared to the year ended December 31, 2022. The increase was due to carrying a higher balance of cash, cash equivalents, and marketable securities as a result of the Business Combination. The funds were invested in money market funds, treasury bills, and term deposits.
Previous report
Other Income (Expense)
Previous report
Other expense increased by $76.4 thousand to $0.1 million in the year ended December 31, 2023 compared to the year ended December 31, 2022.
Previous report
Income Tax Recovery
Previous report
Income tax recovery decreased by $0.2 million to $nil in the year ended December 31, 2023 compared to the year ended December 31, 2022.
Previous report
Deferred Tax Recovery
Previous report
Deferred tax recovery increased by $3.3 million to $3.3 million in the year ended December 31, 2023 compared to the year ended December 31, 2022. The increase was mainly driven by the recognition of deferred tax liabilities of Callin and North River as of the acquisition date, which were subsequently reversed resulting in a deferred tax benefit.
Reworded paragraphs (24)
Previous wording
We generate revenues primarily from advertising fees, other services and cloud.
Current wording
We generate revenues primarily from Audience Monetization and Other Initiatives.
Previous wording
Advertising fees are generated by delivering digital video and display advertisements as well as cost-per-message-read advertisements. Digital video and display advertisements are placed on Rumble and third-party publisher websites or mobile applications. Customers pay for advertisements either directly or through relationships with advertising agencies or resellers, based on the number of impressions delivered or the number of actions such as clicks, or purchases taken, by our users.
Current wording
Audience Monetization includes advertising fees on the Rumble platform; subscription fees earned primarily from consumer product offerings such as Rumble Premium; Locals and badges; revenues generated from content that is licensed by third-parties; pay-per-view; and fees from tipping and platform hosting fees. Advertising fees are generated by delivering digital video and display advertisements as well as cost-per-message-read advertisements. Digital video and display advertisements are placed on Rumble websites or mobile applications. Customers pay for advertisements either directly or through relationships with advertising agencies or resellers, based on the number of impressions delivered or the number of actions, such as clicks, or purchases taken, by our users.
Previous wording
Expenses primarily include cost of services, general and administrative, research and development, sales and marketing, acquisition-related transaction costs, amortization and depreciation, and changes in fair value of contingent consideration. The most significant component of our expenses on an ongoing basis are programming and content, service provider costs, and staffing-related costs.
Current wording
Expenses primarily include cost of services, general and administrative, research and development, sales and marketing, acquisition-related transaction costs, amortization and depreciation, and changes in fair value of contingent consideration. The most significant component of our expenses on an ongoing basis are programming and content.
Previous wording
Acquisition-related transaction costs consist of transaction expenses related to the Business Combination and other acquisitions.
Current wording
Acquisition-related transaction costs consist of transaction expenses related to acquisitions.
Previous wording
Other income (expense) consists of miscellaneous income earned outside of normal company revenue as well as foreign exchange gains and losses relates to gains and losses on transactions denominated in currencies other than the U.S. dollar.
Current wording
Other expense consists of miscellaneous income earned outside of normal company revenue as well as foreign exchange gains and losses related to gains and losses on transactions denominated in currencies other than the U.S. dollar.
Previous wording
Income and deferred tax recovery (expense) consists of the estimated federal, state, and foreign income taxes incurred in the U.S. and other jurisdictions in which we operate.
Current wording
Income tax benefit (expense) consists of the estimated federal, state, and foreign income taxes incurred in the U.S. and other jurisdictions in which we operate.
Previous wording
As with our earlier MAU reporting, there is a potential for minor overlap in the resulting data due to users who access Rumble’s content through the web, our mobile apps, and connected TVs in a given measurement period; however, given that we believe this minor overlap to be immaterial, we do not separately track or report “unique users” as distinct from MAUs. Our reported MAUs do not include users of Locals. We also do not separately report the number of users who register for accounts in any given period, which is different from MAUs.
Current wording
As with our earlier MAU reporting, there is a potential for minor overlap in the resulting data due to users who access Rumble’s content through the web, our mobile apps, and connected TVs in a given measurement period; however, given that we believe this minor overlap to be immaterial, we do not separately track or report “unique users” as distinct from MAUs. Our reported MAUs have not historically included users of Locals, however, starting in mid-May 2024, Locals users began using Rumble’s single sign-on technology to access their account, which we expect will reduce the number of Locals users not included in our Rumble MAU reporting. We also do not separately report the number of users who register for accounts in any given period, which is different from MAUs.
Previous wording
Like many other major social media companies, we rely on significant paid advertising in order to attract users to our platform; however, we cannot be certain that all or substantially all activity that results from such advertising is genuine. Spam activity, including inauthentic and fraudulent user activity, if undetected, may contribute to some amount of overstatement of our performance indicators, including reporting of MAUs by Google. We continually seek to improve our ability to estimate the total number of spam-generated users, and we eliminate material activity that is substantially likely to be spam from the calculation of our MAUs. We will not, however, succeed in identifying and removing all spam.
Current wording
Like many other major online platforms, we rely on significant paid advertising in order to attract users to our platform; however, we cannot be certain that all or substantially all activity that results from such advertising is genuine. Spam activity, including inauthentic and fraudulent user activity, if undetected, may contribute to some amount of overstatement of our performance indicators, including reporting of MAUs by Google. We continually seek to improve our ability to estimate the total number of spam-generated users, and we eliminate material activity that is substantially likely to be spam from the calculation of our MAUs. We will not, however, succeed in identifying and removing all spam.
Previous wording
General and administrative expenses increased by $21.0 million to $37.1 million in the year ended December 31, 2023 compared to the year ended December 31, 2022. The increase was due to an increase in payroll and related expenses of $9.0 million, share-based compensation of $2.5 million related to the recognition of contingent shares issued in connection with the Callin acquisition that were accounted for as post-combination expense, as well as a $9.5 million increase in other administrative expenses, most of which are public company-related, including accounting, legal, investor relations, insurance, and other administrative services.
Current wording
General and administrative expenses decreased by $0.5 million to $36.6 million in the year ended December 31, 2024 compared to the year ended December 31, 2023. The decrease was mainly driven by a reduction in administrative expenses of $2.8 million and share-based compensation of $1.1 million, offset by an increase in payroll and related expenses of $3.4 million. The decrease of $2.8 million in administrative expenses was primarily due to lower expenses related to public company-related costs, legal, insurance, and other administrative services. The decrease in share-based compensation was related to the recognition of contingent shares issued in connection with the Callin acquisition that was accounted for as a post-combination expense as well as the expense of previously and newly granted restricted stock units and stock options for certain employees and executives.
Previous wording
Sales and marketing expenses increased by $7.3 million to $13.4 million in the year ended December 31, 2023 compared to the year ended December 31, 2022. The increase was due to a $2.6 million increase in staffing-related and consulting service costs as well as a $4.7 million increase in other marketing and public relations activities.
Current wording
Sales and marketing expenses increased by $3.9 million to $17.3 million in the year ended December 31, 2024 compared to the year ended December 31, 2023. The increase was due to an increase of $2.7 million in payroll and related expenses, $0.4 million in consulting services, and $0.8 million in other marketing and public relations activities.
Previous wording
Acquisition-related transaction costs increased by $35.3 thousand to $1.2 million in the year ended December 31, 2023 compared to the year ended December 31, 2022. Acquisition-related transaction costs for the year ended December 31, 2023 consisted of $1.2 million related to the Callin and North River acquisitions in 2023. For the year ended December 31, 2022, acquisition-related transaction costs consisted of $1.1 million, which included legal and other professional fees related to the Business Combination.
Current wording
Acquisition-related transaction costs decreased by $1.2 million to $nil in the year ended December 31, 2024 compared to the year ended December 31, 2023. Acquisition-related transaction costs for the year ended December 31, 2023 consisted of transaction costs incurred related to acquisitions completed in 2023.
Previous wording
Amortization and depreciation increased by $3.3 million to $4.8 million in the year ended December 31, 2023 compared to the year ended December 31, 2022. The increase was due to an increase of $2.2 million from depreciation on our property and equipment as we continue to build out our infrastructure as well as an increase in amortization from intangible assets of $1.1 million.
Current wording
Amortization and depreciation increased by $8.8 million to $13.6 million in the year ended December 31, 2024 compared to the year ended December 31, 2023. The increase was due to an increase of $2.0 million from depreciation on our property and equipment as we continue to build out our infrastructure, as well as an increase in amortization from intangible assets of $6.8 million.
Previous wording
Change in fair value of contingent consideration increased by $1.9 million resulting in a gain of $1.9 million in the year ended December 31, 2023. The contingent consideration liability arose in connection with the Callin acquisition and the fair value of this contingent consideration was measured using the fair value of the expected number of shares to be issued and Company’s share price at closing. The gain from the change in fair value of contingent consideration can be directly attributable to changes in the Company’s share price since the closing.
Current wording
Change in fair value of contingent consideration increased by $3.3 million to $1.4 million in the year ended December 31, 2024 compared to the year ended December 31, 2023. The contingent consideration liability arose in connection with the Callin acquisition and the fair value of this contingent consideration was measured using the fair value of the expected number of shares to be issued and the Company’s share price at closing. The change in fair value of contingent consideration was directly attributable to changes in the Company’s share price since the closing and the probability of contingencies being met.
Previous wording
Change in fair value of warrant liability decreased by $18.6 million resulting in a gain of $2.4 million in the year ended December 31, 2023. The warrant liability arose in connection with the warrants offered as part of the Business Combination. As these warrants meet the classification of a financial liability in accordance with ASC 815-40, the related warrant liability is measured at its fair value, determined in accordance with ASC 820, at each reporting period. The fair value of this warrant liability was measured using the fair value of the Company’s warrants listed on the Nasdaq. The decrease in the change in fair value of warrant liability is directly attributable to changes in the trading price of Rumble’s warrants.
Current wording
Change in fair value of warrant liability decreased by $35.1 million resulting in a loss of $32.7 million in the year ended December 31, 2024. The warrant liability arose in connection with the warrants offered as part of the Business Combination. As these warrants meet the classification of a financial liability in accordance with ASC 815-40, the related warrant liability is measured at its fair value, determined in accordance with ASC 820, at each reporting period. The fair value of this warrant liability was measured using the fair value of the Company’s warrants listed on the Nasdaq. The decrease in the change in fair value of warrant liability was directly attributable to changes in the trading price of Rumble’s warrants.
Previous wording
Since the completion of our Business Combination in September 2022, we have financed operations primarily through cash generated from operating activities and the funds raised from our Business Combination. The primary short-term requirements for liquidity and capital are to fund general working capital and capital expenditures.
Current wording
Our principal sources of liquidity are cash generated from operating activities and funds previously raised. The primary short-term requirements for liquidity and capital are to fund general working capital and capital expenditures.
Previous wording
As of December 31, 2023, our cash, cash equivalents, and marketable securities balance was $219.5 million. Cash, cash equivalents, and marketable securities consist of cash on deposit with banks and amounts held in money market funds, treasury bills, and term deposits.
Current wording
As of December 31, 2024, our cash and cash equivalents balance was $114.0 million. Cash and cash equivalents consist of cash on deposit with banks and amounts held in money market funds, treasury bills, and term deposits.
Previous wording
As we have consistently stated, we intend to use a substantial portion of funds that we have raised to acquire content by providing economic incentives to a small number of content creators, including sports leagues. This content acquisition strategy will allow us to enter key content verticals and secure top content creators in those verticals before we have full monetization capabilities in place. Our focus in 2023 was to grow users and usage consumption and experiment with monetization levers, which may not maximize profitability in the immediate term, but which we believe positions our business for the long term. As a result, we expect this strategy will require us to consume a significant portion of our capital raised. As of December 31, 2023, we had entered into programming and content agreements with a minimum contractual cash commitment of $106 million. A significant amount of these minimum contractual cash commitments will be paid over 12 to 36 months, commencing in 2024. In addition to the minimum contractual cash commitments, we have programming and content agreements that have variable cost arrangements. These future costs are dependent upon many factors and are difficult to anticipate, however, these costs may be substantial.
Current wording
As we have consistently stated, we are using a substantial portion of funds to acquire content by providing economic incentives to a small number of content creators, including sports leagues. As of December 31, 2024, we had entered into programming and content agreements with a minimum contractual cash commitment of $30 million. A significant amount of these minimum contractual cash commitments will be paid over 12 to 24 months, commencing in 2025.
Previous wording
Net cash used in operating activities for the year ended December 31, 2023 primarily consisted of net loss adjusted for certain non-cash items, including a $4.3 million gain on the change in fair value of warrants and contingent consideration, offset by a $16.3 million change in share-based compensation, $5.6 million change in amortization and depreciation as well as changes in operating assets and liabilities. The increase in net cash used in operating activities during the year ended December 31, 2023 compared to the year ended December 31, 2022 was mostly due to an increase in expenses partially offset by changes in revenue and operating assets and liabilities.
Current wording
Net cash used in operating activities for the year ended December 31, 2024 primarily consisted of net loss adjusted for certain non-cash items, including a $218.7 million loss on the change in fair value of warrants, contingent consideration and derivative, $21.5 million change in share-based compensation, $13.6 million change in amortization and depreciation, $1.0 million changes in non-cash lease expenses, as well as changes in operating assets and liabilities. The decrease in net cash used in operating activities during the year ended December 31, 2024 compared to the year ended December 31, 2023 was mostly due to changes in net loss adjusted for certain non-cash items, offset by changes in operating assets and liabilities.
Previous wording
Net cash used in investing activities for the year ended December 31, 2023 consisted of $24.8 million in purchases of property, equipment, and intangible assets, offset by $1.0 million in cash acquired in connection with the Callin acquisition. The increase in net cash used in investing activities during the year ended December 31, 2023 compared to the year ended December 31, 2022, was mostly due to an increase in purchases of property, equipment, and intangible assets, which includes assets acquired from North River of $7.2 million, offset by cash acquired in connection with the Callin acquisition.
Current wording
Net cash used in investing activities for the year ended December 31, 2024 consisted of $7.2 million in purchases of property, equipment, and intangible assets, $9.6 million in cash paid in connection with the acquisitions of Callin and North River, and $1.1 million in the sale of marketable securities. The decrease in net cash used in investing activities during the year ended December 31, 2024 compared to the year ended December 31, 2023 was mainly driven by decreases in purchases of property and equipment and marketable securities, which were partially offset by a rise in spending on intangible assets. Additionally, the reduction in net cash used was due to cash payments made to non-accredited investors related to the Callin acquisition during the year ended December 31, 2024 as well as cash acquired in connection with the Callin acquisition during the year ended December 31, 2023.
Previous wording
Net cash used in financing activities for the year ended December 31, 2023 mainly consisted of $2.1 million in taxes paid from net share settlement of share-based compensation. The increase in net cash used in financing activities was mainly due to the taxes paid from the net share settlement of share-based compensation in the year ended December 31, 2023 compared to the receipt of cash proceeds, net of transactions costs, from the Business Combination in the year ended December 31, 2022.
Current wording
Net cash used in financing activities for the year ended December 31, 2024 consisted of $2.0 million in taxes paid from the net share settlement of share-based compensation and $0.4 million in share issuance costs, offset by $0.7 million from proceeds related to stock options exercised. The decrease in net cash used in financing activities was due to a decrease in taxes paid from the net share settlement of share-based compensation as well as an increase in proceeds from stock options exercised in the year ended December 31, 2024 compared to net cash used in the year ended December 31, 2023. The reduction in net cash used was offset by an increase in share issuance costs.
Previous wording
We believe the following key accounting policies require significant judgments and estimates used in the preparation of our consolidated financial statements. Critical accounting policies and estimates are those that we consider the most important to the portrayal of our financial condition and results of operations because they require our most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain. We believe the following key accounting policies require significant judgments and estimates used in the preparation of our consolidated financial. Accordingly, we believe that these are the most critical to aid in fully understanding and evaluating our financial condition and results of operations.
Current wording
We believe the following key accounting policies require significant judgments and estimates used in the preparation of our consolidated financial statements. Critical accounting policies and estimates are those that we consider the most important to the portrayal of our financial condition and results of operations because they require our most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain. Accordingly, we believe that these are the most critical to aid in fully understanding and evaluating our financial condition and results of operations.
Previous wording
The Company evaluates whether acquired net assets should be accounted for as a business combination or an asset acquisition by first applying a screen test to determine whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If so, the transaction is accounted for as an asset acquisition. If not, the Company applies its judgment to determine whether the acquired net assets meets the definition of a business by considering if the set includes an acquired input, process, and the ability to create outputs.
Current wording
The Company evaluates whether acquired net assets should be accounted for as a business combination or an asset acquisition by first applying a screen test to determine whether substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If so, the transaction is accounted for as an asset acquisition. If not, the Company applies its judgment to determine whether the acquired net assets meet the definition of a business by considering if the set includes an acquired input, process, and the ability to create outputs.
Previous wording
The Company acquired intangible assets in connection with acquisitions of Callin and North River. A valuation was performed to determine the estimated fair value of identifiable intangible assets related to the acquisition. Judgment is required to estimate the fair value of these identifiable intangible assets. We may use quoted market prices, prices for similar assets, present value techniques, and other valuation techniques such as the depreciated replacement cost and relief from royalty methods to prepare these estimates. We may need to make estimates of future cash flows and discount rates as well as other assumptions in order to implement these valuation techniques. Due to the degree of judgment involved in our estimation techniques, our estimate may result in significant difference in the estimation of fair value.
Current wording
The Company acquired intangible assets in connection with the acquisitions of Callin and North River. A valuation was performed to determine the estimated fair value of identifiable intangible assets related to the acquisition. Judgment is required to estimate the fair value of these identifiable intangible assets. We may use quoted market prices, prices for similar assets, present value techniques, and other valuation techniques such as the depreciated replacement cost and relief from royalty methods to prepare these estimates. We may need to make estimates of future cash flows and discount rates as well as other assumptions in order to implement these valuation techniques. Due to the degree of judgment involved in our estimation techniques, our estimate may result in a significant difference in the estimation of fair value.
Previous wording
For equity awards with a service condition, the fair value is estimated on the grant date using the Black-Scholes option pricing model which takes into account the following inputs: stock price, expected term, volatility, and risk-free interest rate. For equity awards with a market condition, the fair value is estimated on the grant date using a Monte Carlo simulation methodology that includes simulating the stock price using a risk-neutral Geometric Brownian Motion-based pricing model. Changes in the estimated inputs or using other option valuation methods may result in materially different option values and share-based compensation expense.
Current wording
For equity awards with a market condition, the fair value is estimated on the grant date using a Monte Carlo simulation methodology that includes simulating the stock price using a risk-neutral Geometric Brownian Motion-based pricing model. Changes in the estimated inputs or using other option valuation methods may result in materially different option values and share-based compensation expense.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
The forward purchase contracts in connection with the Tether transaction do not meet the criteria for equity classification, and must be recorded as a liability in accordance with guidance contained in ASC 815-40,Derivatives and Hedging Contracts in Entity’s Own Equity (“ASC 815-40”). Because the derivative meets the definition of a liability under ASC 815,Derivatives and Hedging(“ASC 815”), it is measured at fair value at inception and at each reporting date in accordance with the guidance in ASC 820,Fair Value Measurement(“ASC 820”), with any subsequent changes in fair value recognized in the consolidated statement of operations in the applicable period of change.
Current report — wording carried from elsewhere
For equity awards with a service condition, the fair value is estimated on the grant date using the Black-Scholes option pricing model which takes into account the following inputs: stock price, expected term, volatility, and risk-free interest rate.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Other services include: subscription fees earned primarily from consumer product offerings such as Locals and badges; revenues generated from content that is licensed by third-parties; pay-per-view; fees from tipping and platform hosting fees. Cloud includes consumption-based fees, subscriptions for infrastructure and professional services.