Rumble Inc
For the period ended Sep 30, 2024. Filed Nov 12, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 12, 2024
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-Q
Period ended 2024-06-30; filed 2024-08-12.
0001213900-24-067682
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-12.
0001213900-24-096789
Item 2. 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 122 previous paragraphs and 112 current paragraphs.
68 unchanged; 34 reworded; 10 added; 19 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 11 previous and 14 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 (10)
Current report
ARPU was $0.33 in the third quarter of 2024, a decrease of 11% from the second quarter of 2024. Given that we are currently in the early stages of monetizing our user base, we expect to see some lag in revenue relative to our users, particularly during periods of high user growth. As a result, in the third quarter we saw a decrease in ARPU as revenue growth slightly lagged our strong MAU growth from the lead-up to the United States presidential election.
Current report
Research and development expenses decreased by $0.5 million to $4.7 million in the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The decrease was mainly due to a decrease in payroll and related expenses of $0.5 million.
Current report
Other income (expense) decreased by $0.1 million to an immaterial amount for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The decrease 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 September 30, 2024.
Current report
Income Tax Benefit (Expense)
Current report
Comparisons for nine months ended September 30, 2024 and 2023:
Current report
Other income (expense) decreased by $0.2 million to $0.1 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The decrease 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 September 30, 2024.
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, and change in fair value of contingent consideration. 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
Removed paragraphs (19)
Previous report
Other Income (Expense)
Previous report
2 Id.
Previous report
3 Id.
Previous report
ARPU was $0.37 in the second quarter of 2024, an increase of 19% from the first quarter of 2024. The increase from the first quarter of 2024 is attributable to higher sponsorship revenue.
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 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 8.5 billion on average in the second quarter of 2024, a decrease of 1% from the first quarter of 2024. We believe that the decrease from the first quarter of 2024 was due to our bandwidth consumption moving from third-party service providers’ content delivery networks (“CDNs”) to our own proprietary CDN, offset by an increased interest in political news in the second quarter of 2024. 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
As described above, we introduced a new key business metric, ARPU, this quarter that we believe better reflects the focus of our management team given the current stage of our business. Accordingly, this is the last quarter we plan to report estimated MWPM.
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 13,342 on average in the second quarter of 2024, representing an increase of 7% from the first quarter of 2024. We believe that the increase from the first quarter of 2024 is attributable to an increased interest in political news in the second quarter of 2024.
Previous report
As previously disclosed, we believe hours of uploaded video per day have been depressed by 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
As described above, we introduced a new key business metric, ARPU, this quarter that we believe better reflects the focus of our management team given the current stage of our business. Accordingly, this is the last quarter we plan to report the number of hours of uploaded video per day.
Previous report
Other Expense
Previous report
Comparisons for six months ended June 30, 2024 and 2023:
Previous report
Other Expense
Previous report
Other expense increased by an immaterial amount for the six months ended June 30, 2024 compared to the six months ended June 30, 2023.
Previous report
Income Tax Expense
Previous report
Income tax expense increased by $0.1 million to $0.2 million in the six months ended June 30, 2024 compared to the six months ended June 30, 2023.
Reworded paragraphs (34)
Previous wording
We generate revenues primarily from two types of revenue: Audience Monetization and Other Initiatives.
Current wording
We generate revenues primarily from Audience Monetization and Other Initiatives.
Previous wording
Audience Monetization includes: advertising fees on the Rumble platform; 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; 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.
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
MAUs (GA4) were 53 million on average in the second quarter of 2024, an increase of 6% from the first quarter of 2024. We believe that the increase from the first quarter of 2024 is attributable to an increased interest in political news in the second quarter of 2024.
Current wording
MAUs (GA4) were 67 million on average in the third quarter of 2024, an increase of 26% from the second quarter of 2024. We believe that this increase is attributable to an increased interest in political news in the third quarter of 2024, including the lead-up to the United States presidential election.
Previous wording
Beginning with the second quarter of 2024, 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.
Current wording
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.
Previous wording
Revenues decreased by $2.5 million to $22.5 million in the three months ended June 30, 2024 compared to the three months ended June 30, 2023, of which $3.0 million was attributable to a decrease in Audience Monetization revenues, offset by higher Other Initiatives revenues of $0.5 million. The decrease in Audience Monetization was due to decreases in advertising fees offset by increases in subscription and tipping fees. The increase in revenue from Other Initiatives was mostly due to more advertising inventory being monetized by our publisher network.
Current wording
Revenues increased by $7.1 million to $25.1 million in the three months ended September 30, 2024 compared to the three months ended September 30, 2023, of which $5.9 million was attributable to an increase in Audience Monetization revenues and $1.2 million was attributable to higher Other Initiatives. The increase in Audience Monetization revenues was mainly due to higher advertising and subscription revenue. The increase in revenue from Other Initiatives was mostly due to more advertising inventory being monetized by our publisher network and an increase in cloud services offered.
Previous wording
Cost of services decreased by $5.2 million to $35.7 million in the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The decrease was due to a decrease in programming and content costs of $5.6 million, offset by an increase in other cost of services of $0.4 million.
Current wording
Cost of services decreased by $3.3 million to $36.4 million in the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The decrease was due to a decrease in programming and content costs of $5.4 million, offset by an increase of $1.7 million in share-based compensation and $0.4 million in other cost of services. The decrease in programming and content costs was primarily due to a reduction of $7.9 million in guaranteed creator commitment costs, which was partially offset by a $2.5 million increase in the creators’ share of revenue.
Previous wording
General and administrative expenses increased by $1.2 million to $10.4 million in the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The increase was due to an increase in payroll and related expenses of $1.1 million as well as an increase in other administrative expenses of $0.1 million which was mainly driven by public company-related costs, including accounting, investor relations, and other administrative services.
Current wording
General and administrative expenses increased by $23.0 thousand to $9.7 million in the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The increase was mainly due to payroll and related expenses offset by a decrease in other administrative expenses such as public company-related costs, including legal, insurance, and other administrative services.
Previous wording
Sales and marketing expenses increased by $2.6 million to $6.3 million in the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The increase was due to an increase in marketing and public relations activities of $1.8 million as well as payroll and related expenses of $0.8 million.
Current wording
Sales and marketing expenses increased by $0.8 million to $4.0 million in the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The increase was due to an increase in payroll and related expenses of $0.8 million.
Previous wording
Acquisition-related transaction costs decreased by $0.7 million to $nil in the three months ended June 30, 2024 compared to the three months ended June 30, 2023. Acquisition-related transaction costs for the three months ended June 30, 2023 consisted of transaction costs incurred that were related to acquisitions completed in 2023.
Current wording
Acquisition-related transaction costs decreased by $0.4 million to $nil in the three months ended September 30, 2024 compared to the three months ended September 30, 2023. Acquisition-related transaction costs for the three months ended September 30, 2023 consisted of transaction costs incurred related to acquisitions completed in 2023.
Previous wording
Amortization and depreciation increased by $2.5 million to $3.6 million in the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The increase was due to an increase of $1.0 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 $1.5 million.
Current wording
Amortization and depreciation increased by $1.8 million to $3.1 million in the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The increase was due to an increase of $0.6 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 $1.2 million.
Previous wording
Change in fair value of contingent consideration increased by $0.4 million resulting in a loss of $18 thousand for the three months ended June 30, 2024. 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/loss from the change in fair value of contingent consideration can be directly attributable to changes in the Company’s share price since the closing and the probability of contingencies being met.
Current wording
Change in fair value of contingent consideration increased by $1.3 million to $nil for the three months ended September 30, 2024. 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 gain from the change in fair value of contingent consideration in 2023 was directly attributable to changes in the Company’s share price since the closing and the probability of contingencies being met. On May 15, 2024, the contingent consideration was derecognized and reclassified to equity.
Previous wording
Interest income decreased by $1.4 million to $2.2 million in the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The decrease was due to the fact that the Company invested less in money market funds, treasury bills, and term deposits.
Current wording
Interest income decreased by $1.7 million to $1.9 million in the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The decrease was due to the fact that the Company invested less in money market funds, treasury bills, and term deposits.
Previous wording
Change in fair value of warrant liability decreased by $6.1 million resulting in a loss of $0.7 million in the six months ended June 30, 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 is directly attributable to changes in the trading price of Rumble’s warrants.
Current wording
Change in fair value of warrant liability decreased by $8.2 million resulting in a loss of $0.8 million in the three months ended September 30, 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 is directly attributable to changes in the trading price of Rumble’s warrants.
Previous wording
Income tax expense increased by $0.1 million to $0.2 million in the three months ended June 30, 2024 compared to the three months ended June 30, 2023.
Current wording
Income tax benefit (expense) increased by $0.1 million to $0.1 million in the three months ended September 30, 2024 compared to the three months ended September 30, 2023.
Previous wording
The following table sets forth our unaudited condensed consolidated interim statements of operations for the six months ended June 30, 2024 and 2023 and the dollar and percentage change between the two periods:
Current wording
The following table sets forth our unaudited condensed consolidated interim statements of operations for the nine months ended September 30, 2024 and 2023 and the dollar and percentage change between the two periods:
Previous wording
Revenues decreased by $2.4 million to $40.2 million in the six months ended June 30, 2024 compared to the six months ended June 30, 2023, of which $3.5 million was attributable to a decrease in Audience Monetization revenues, offset by higher Other Initiatives revenues of $1.1 million. The decrease in Audience Monetization was due to decreases in advertising fees offset by increases in subscription and tipping fees. The increase in revenue from Other Initiatives was mostly due to more advertising inventory being monetized by our publisher network.
Current wording
Revenues increased by $4.7 million to $65.3 million in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, of which $2.4 million was attributable to an increase in Audience Monetization revenues and higher Other Initiatives revenues of $2.3 million. The increase in Audience Monetization was mainly due to increases in subscription, platform hosting fees and tipping fees, offset by decreases in advertising fees. The increase in revenue from Other Initiatives was mostly due to more advertising inventory being monetized by our publisher network and cloud services offered.
Previous wording
Cost of services increased by $0.7 million to $67.5 million in the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The increase was due to an increase in other cost of services of $1.1 million offset by a decrease in programming and content costs of $0.4 million.
Current wording
Cost of services decreased by $2.7 million to $103.9 million in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The decrease was due to a decrease in programming and content costs of $7.6 million, offset by an increase of $1.5 million in other cost of services and $3.4 million in share-based compensation. The decrease in programming and content costs was primarily due to a reduction of $9.0 million in guaranteed creator commitment costs, which was partially offset by a $1.4 million increase in the creators’ share of revenue.
Previous wording
General and administrative expenses increased by $1.9 million to $19.7 million in the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The increase was due to an increase in payroll and related expenses of $0.9 million, share-based compensation of $2.6 million, offset by a decrease in other administrative expenses of $1.6 million. The $2.6 million increase in share-based compensation was related to the recognition of contingent shares issued in connection with the Callin acquisition that were 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. The remaining $1.6 million decrease in other administrative expenses was mainly driven by public company-related costs, including accounting, legal, investor relations, and other administrative services.
Current wording
General and administrative expenses increased by $2.0 million to $29.4 million in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The increase was due to increases in payroll and related expenses of $1.2 million and share-based compensation of $2.6 million, offset by a decrease in other administrative expenses of $1.8 million. The $2.6 million increase 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. The $1.8 million decrease in other administrative expenses was mainly driven by public company-related costs, including legal, insurance, and other administrative services.
Previous wording
Research and development expenses increased by $2.9 million to $9.8 million in the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The increase was due to an increase in payroll and related expenses of $2.8 million, as well as a $0.1 million increase in costs related to computer software and hardware, and other expenses used in research and development related activity.
Current wording
Research and development expenses increased by $2.4 million to $14.5 million in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The increase was due to an increase in payroll and related expenses of $2.1 million, as well as a $0.3 million increase in costs related to computer software and hardware, and other expenses used in research and development-related activity.
Previous wording
Sales and marketing expenses increased by $2.5 million to $9.6 million in the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The increase was due to an increase of $1.5 million in payroll and related expenses, $0.5 million in consulting services, and $0.5 million due to other marketing and public relations activities.
Current wording
Sales and marketing expenses increased by $3.3 million to $13.5 million in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The increase was due to an increase of $2.3 million in payroll and related expenses, $0.5 million in consulting services, and $0.5 million due to other marketing and public relations activities.
Previous wording
Acquisition-related transaction costs decreased by $0.7 million to $nil in the six months ended June 30, 2024 compared to the six months ended June 30, 2023. Acquisition-related transaction costs for the six months ended June 30, 2023 consisted of transaction costs incurred that were related to acquisitions completed in 2023.
Current wording
Acquisition-related transaction costs decreased by $1.2 million to $nil in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. Acquisition-related transaction costs for the nine months ended September 30, 2023 consisted of transaction costs incurred related to acquisitions completed in 2023.
Previous wording
Amortization and depreciation increased by $4.3 million to $6.0 million in the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The increase was due to an increase of $1.3 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 $3.0 million.
Current wording
Amortization and depreciation increased by $6.0 million to $9.1 million in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The increase was due to an increase of $1.9 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 $4.1 million.
Previous wording
Change in fair value of contingent consideration increased by $1.7 million resulting in a loss of $1.4 million for the six months ended June 30, 2024. 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 and the probability of contingencies being met.
Current wording
Change in fair value of contingent consideration increased by $3.1 million resulting in a loss of $1.4 million for the nine months ended September 30, 2024. 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 gain/loss from the change in fair value of contingent consideration can be directly attributable to changes in the Company’s share price since the closing and the probability of contingencies being met.
Previous wording
Interest income decreased by $2.2 million to $4.7 million in the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The decrease was due to the fact that the Company invested less in money market funds, treasury bills, and term deposits.
Current wording
Interest income decreased by $3.9 million to $6.6 million in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The decrease was due to the fact that the Company invested less in money market funds, treasury bills, and term deposits.
Previous wording
Change in fair value of warrant liability increased by $8.5 million resulting in a gain of $10.0 million in the three months ended June 30, 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 is directly attributable to changes in the trading price of Rumble’s warrants.
Current wording
Change in fair value of warrant liability decreased by $2.1 million resulting in a loss of $1.5 million in the nine months ended September 30, 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 is directly attributable to changes in the trading price of Rumble’s warrants.
Previous wording
Other expense increased by an immaterial amount for the three months ended June 30, 2024 compared to the three months ended June 30, 2023.
Current wording
Income tax expense decreased by an immaterial amount in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.
Previous wording
As of June 30, 2024, our cash, cash equivalents, and marketable securities balance was $154.2 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 September 30, 2024, our cash, cash equivalents, and marketable securities balance was $132.0 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.
Previous 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 June 30, 2024, we had entered into programming and content agreements with a minimum contractual cash commitment of $55 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 September 30, 2024, we had entered into programming and content agreements with a minimum contractual cash commitment of $38 million. A significant amount of these minimum contractual cash commitments will be paid over 12 to 24 months, commencing in 2024.
Previous wording
The following table presents a summary of the unaudited condensed consolidated interim statement of cash flows for the six months ended June 30, 2024 and 2023:
Current wording
The following table presents a summary of the unaudited condensed consolidated interim statement of cash flows for the nine months ended September 30, 2024 and 2023:
Previous wording
Net cash used in operating activities for the six months ended June 30, 2024 primarily consisted of net loss adjusted for certain non-cash items, including a $2.0 million loss on the change in fair value of warrants and contingent consideration, $8.6 million change in share-based compensation, $6.6 million changes in amortization and depreciation, $3.0 million changes in non-cash marketing expense, as well as changes in operating assets and liabilities. The increase in net cash used in operating activities during the six months ended June 30, 2024 compared to the six months ended June 30, 2023 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 nine months ended September 30, 2024 primarily consisted of net loss adjusted for certain non-cash items, including a $2.8 million loss on the change in fair value of warrants and contingent consideration, $14.7 million change in share-based compensation, $9.9 million changes in amortization and depreciation, $1.3 million changes in trade and barter revenue and expense, as well as changes in operating assets and liabilities. The increase in net cash used in operating activities during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 was mostly due to an increase in operating assets and liabilities offset by changes in net loss adjusted for certain non-cash items.
Previous wording
Net cash used in investing activities for the six months ended June 30, 2024 consisted of $5.3 million in purchases of property, equipment, and intangible assets as well as $3.8 million in cash paid in connection with the acquisitions of Callin and North River. The increase in net cash used in investing activities during the six months ended June 30, 2024 compared to the six months ended June 30, 2023 was due to an increase in purchases of intangible assets, offset by a decrease in purchases of property and equipment. Additionally, the increase in net cash used was related to cash paid to non-accredited investors related to the Callin acquisition and cash paid in connection with the North River acquisition in the six months ended June 30, 2024 as well as cash acquired in connection with the Callin acquisition in the six months ended June 30, 2023.
Current wording
Net cash used in investing activities for the nine months ended September 30, 2024 consisted of $7.3 million in purchases of property, equipment, and intangible assets, $3.9 million in cash paid in connection with the acquisitions of Callin and North River, and $0.1 million in purchase of marketable securities, net of sales and maturities of marketable securities. The increase in net cash used in investing activities during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 was due to an increase in purchases of intangible assets and marketable securities, which were partially offset by reduced spending on property and equipment. Additionally, the increase in net cash used was related to cash paid to non-accredited investors related to the Callin acquisition and cash paid in connection with the North River acquisition in the nine months ended September 30, 2024 as well as cash acquired in connection with the Callin acquisition in the nine months ended September 30, 2023.
Previous wording
Net cash used in financing activities for the six months ended June 30, 2024 consisted of $0.8 million in taxes paid from the net share settlement of share-based compensation, offset by $0.3 million from proceeds related to stock options exercised. The increase in net cash used in financing activities was due to the taxes paid from the net share settlement of share-based compensation, offset by proceeds from stock options exercised in the six months ended June 30, 2024 compared to net cash used related to share issuance costs incurred in the six months ended June 30, 2023.
Current wording
Net cash used in financing activities for the nine months ended September 30, 2024 consisted of $1.9 million in taxes paid from the net share settlement of share-based compensation, offset by $0.3 million from proceeds related to stock options exercised. The increase in net cash used in financing activities was due to the taxes paid from the net share settlement of share-based compensation, offset by proceeds from stock options exercised in the nine months ended September 30, 2024 compared to net cash used related to share issuance costs incurred in the nine months ended September 30, 2023.
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.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Research and development expenses increased by $1.0 million to $5.3 million in the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The increase was due to an increase in payroll and related expenses of $1.1 million, offset by a $0.1 million decrease in costs related to computer software and hardware, and other expenses used in research and development related activity.