Newsmax Inc.

Previous wording

The following “Management’s Discussion and Analysis of Financial Condition and Results of Operations” should be read in conjunction with the unaudited consolidated financial statements for the three months ended March 31, 2026 and the audited consolidated financial statements for the year ended December 31, 2025, and other information included elsewhere in this Quarterly Report. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from such forward-looking statements. Factors that could cause or contribute to those differences include, but are not limited to, those identified below and those discussed in the sections entitled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” included elsewhere in this Quarterly Report and our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 as may be amended supplemental or superseded from time to time by other reports we file with the SEC. Additionally, our historical results are not necessarily indicative of the results that may be expected in any future period.

Current wording

The following “Management’s Discussion and Analysis of Financial Condition and Results of Operations” should be read in conjunction with the unaudited consolidated financial statements for the three and six months ended June 30, 2026 and the audited consolidated financial statements for the year ended December 31, 2025, and other information included elsewhere in this Quarterly Report. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from such forward-looking statements. Factors that could cause or contribute to those differences include, but are not limited to, those identified below and those discussed in the sections entitled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” included elsewhere in this Quarterly Report and our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 as may be amended supplemental or superseded from time to time by other reports we file with the SEC. Additionally, our historical results are not necessarily indicative of the results that may be expected in any future period.

Previous wording

We have developed a significant audience, reaching over 50 million Americans each month through our television broadcasts and multi-platform content, and have demonstrated sustainable growth. Revenues are up 27% comparing the three months ended March 31, 2026 compared to the same period in 2024. Newsmax Broadcasting's TV content is now available to over 100 million homes in the U.S. In addition, international companies have licensed Newsmax Broadcasting’s channels and brand for regional, national and local television and digital media purposes. Certain licensing agreements now provide cable television and digital news under the Newsmax brand to viewers in more than 100 countries including several European countries like Republic of Serbia, Republic of Croatia, Bosnia and Herzegovina, Montenegro, North Macedonia, Slovenia, Albania, Hungary, Poland, Bulgaria, Slovakia, Romania, and the Czech Republic. Newsmax Ukraine launched in February 2026.

Current wording

We have developed a significant audience, reaching over 50 million Americans each month through our television broadcasts and multi-platform content, and have demonstrated sustainable growth. Revenues are up 17% and 15% comparing the three and six months ended June 30, 2026, respectively compared to the same period in 2025. Newsmax Broadcasting's TV content is now available to over 100 million homes in the U.S. In addition, international companies have licensed Newsmax Broadcasting’s channels and brand for regional, national and local television and digital media purposes. Certain licensing agreements now provide cable television and digital news under the Newsmax brand to viewers in more than 100 countries including several European countries like Republic of Serbia, Republic of Croatia, Bosnia and Herzegovina, Montenegro, North Macedonia, Slovenia, Albania, Hungary, Poland, Bulgaria, Slovakia, Romania, Ukraine, and the Czech Republic.

Previous wording

Revenues increased by $6.4 million, or 14.0%, for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. Affiliate fee revenues increased by $5.6 million due to new contractual relationships as well as rate increases which took effect in late 2025 and 2026. Licensing revenue increased by $3.0 million due to an amendment of one of our licensing agreements that increased the rate and duration of the partnership in February 2026. Advertising revenue decreased by $(1.7) million due to reductions in digital advertising revenue and a decline in linear cable and satellite advertising, as the same quarter last year benefited from election-related demand. Subscription revenue decreased by $(0.6) million due to lower new customer acquisition offset by gains from expanded affiliate agreements making Newsmax available on more linear cable providers.

Current wording

Revenues increased by $7.7 million, or 16.5%, for the three months ended June 30, 2026, compared to the three months ended June 30, 2025. Affiliate fee revenues increased by $6.0 million due to new contractual relationships as well as rate increases which took effect in late 2025 and 2026. Licensing revenue increased by $3.9 million due to an amendment of one of our licensing agreements that increased the rate and duration of the arrangement in February 2026. Advertising revenue decreased by $(1.1) million due to reductions in digital advertising revenue and a decline in linear cable and satellite advertising, as the same quarter last year benefited from election-related demand. Subscription revenue decreased by $(0.7) million due to lower new customer acquisition offset by gains from expanded affiliate agreements making Newsmax available on more linear cable providers.

Previous wording

Cost of revenues increased by $5.9 million, or 22.8%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was due to increased production headcount, programming and production costs on our main Newsmax TV channel as well as continued investment into Newsmax 2 for OTT to build out the programming to better monetize Newsmax 2 on FAST channels. Other drivers related to the increase include stock-based compensation expense, additional costs for remote shoots to cover global news events and increase in advertising service platform costs.

Current wording

Cost of revenues increased by $2.0 million, or 6.9%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The increase was due to increased production headcount, programming and production costs on our main Newsmax TV channel as well as continued investment into Newsmax 2 for OTT to build out the programming to better monetize Newsmax 2 on FAST channels.

Previous wording

Gross profit increased by $0.5 million, or 2.4%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. Gross profit as a percent of revenues decreased to 38.6% for the three months ended March 31, 2026 from 43.0% for the three months ended March 31, 2025. Gross profit percentage decreased mainly due to costs of revenues increasing at a faster rate than total revenues. The decline is also attributable to higher production and content costs, as well as changes in the product mix.

Current wording

Gross profit increased by $5.7 million, or 32.3%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. Gross profit as a percent of revenues increased to 43.1% for the three months ended June 30, 2026 from 38.0% for the three months ended June 30, 2025. Gross profit percentage increased mainly due to increases in rates for both affiliate fee and licensing revenues.

Previous wording

General and administrative expense decreased by $(6.6) million or (21.4)%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The decrease was primarily driven by the reduction of legal expenses related to the settlement of legal matters in 2025.

Current wording

General and administrative expense decreased by $(72.0) million or (76.6)%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The decrease was primarily driven by the reduction of legal expenses related to the settlement of legal matters in 2025.

Previous wording

Broadcasting Revenues increased by $7.5 million for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, due to an increase in affiliate fee revenue of $5.6 million, which is attributed to new contractual relationships starting later in 2025 as well as rate increases in late 2025 and 2026, an expansion of our international license agreement in February 2026, offset by a decrease in advertising revenue of $(0.9) million due to lower customer insertion order volume and lower subscription revenue of $(0.2) million from Newsmax+ due to change in subscriber mix.

Current wording

Broadcasting Revenues increased by $7.8 million for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025, due to an increase in affiliate fee revenue of $6.0 million, which is attributed to new contractual relationships starting later in 2025 as well as rate increases in late 2025 and 2026. Licensing revenue increased by $3.9 million due to an amendment of one of our licensing agreements that increased the rate and duration of the arrangement in February 2026, offset by a decrease in advertising revenue of $(1.8) million due to lower customer insertion order volume and lower subscription revenue of $(0.3) million due to change in subscriber mix.

Previous wording

The following table reconciles Net loss to Adjusted EBITDA for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025:

Current wording

The following table reconciles Net income (loss) to Adjusted EBITDA for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025:

Previous wording

Broadcasting Segment Adjusted EBITDA increased for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, primarily due costs of revenues increasing at a faster rate than total revenues.Increases in affiliate fee and licensing revenue were offset by increases in cost of revenues and SG&A expense related to increased headcount, programming and production costs on our Newsmax TV channel as well as continued investment into Newsmax 2 for OTT to build out the programming to better monetize Newsmax 2 on FAST channels.

Current wording

Cost of revenues increased by $7.9 million, or 14.4%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was due to increased production headcount, programming and production costs on our main Newsmax TV channel as well as continued investment into Newsmax 2 for OTT to build out the programming to better monetize Newsmax 2 on FAST channels.

Previous wording

Other income (expense), net increased by $7.9 million, or 140.3%, for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was primarily driven by interest and dividend income as well as a reduction of one-time expenses incurred in 2025 related to becoming a publicly traded company.

Current wording

Other income, net increased by $8.3 million, or 187.0%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was primarily driven by a reduction of one-time expenses incurred in 2025 related to becoming a publicly traded company in addition to an increase in unrealized gain on marketable securities.

Previous wording

Digital Revenues decreased by $1.2 million for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, due to decreases in advertising revenue as well as subscription revenue.

Current wording

Digital Revenues decreased by $(1.3) million for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, due to decreases in subscription revenue and product sales.

Previous wording

Digital Segment Adjusted EBITDA decreased for the three months ended March 31, 2026, as compared to three months ended March 31, 2025, due to a decrease in advertising and subscription revenues, partially offset by decreases in cost of revenues, further impacted by increases in personnel and marketing expense.

Current wording

Digital Segment Adjusted EBITDA increased for the six months ended June 30, 2026, as compared to six months ended June 30, 2025, due to decreases in cost of revenues and general and administrative expenses, partially offset by a decrease in subscription revenue and product sales.

Previous wording

We had $17.2 million of cash and cash equivalents and $111.9 million in investments as of March 31, 2026. Our primary sources of liquidity include cash on hand and available-for-sale investments. On August 15, 2025, Newsmax Media, Inc. and Newsmax Broadcasting, LLC entered into a settlement agreement with Dominion Voting Systems, Inc. and certain of its affiliates (“Dominion”), pursuant to which such parties agreed to resolve the lawsuit among them for a total amount of $67.0 million to be paid in the current and next fiscal year. As of March 31, 2026, there remains one final installment of $20.0 million due on or before January 15, 2027, for which the Company, maintains a fully funded escrow amount.

Current wording

We had $25.9 million of cash and cash equivalents and $102.4 million in investments as of June 30, 2026. Our primary sources of liquidity includes cash on hand and available-for-sale investments. On August 15, 2025, Newsmax Media, Inc. and Newsmax Broadcasting, LLC entered into a settlement agreement with Dominion Voting Systems, Inc. and certain of its affiliates (“Dominion”), pursuant to which such parties agreed to resolve the lawsuit among them for a total amount of $67.0 million. All payments due in the current fiscal year have been made. As of June 30, 2026, there remains one final installment of $20.0 million due on or before January 15, 2027, for which the Company, maintains a fully funded escrow amount.

Previous wording

As of March 31, 2026, cash and cash equivalents balance was $17.2 million. Cash and cash equivalents consist of interest-bearing deposit accounts and money market accounts managed by third-party financial institutions, and highly liquid investments with maturities of three months or less.

Current wording

As of June 30, 2026, cash and cash equivalents balance was $25.9 million. Cash and cash equivalents consist of interest-bearing deposit accounts and money market accounts managed by third-party financial institutions, and highly liquid investments with maturities of three months or less.

Previous wording

Net cash used in operating activities for the three months ended March 31, 2026 was $2.6 million and was primarily due to the Company's net loss, non-cash expenses, investment gains, and timing of working capital activity. Operating cash inflows were primarily a result of timing of customer collections. Operating cash outflows were primarily a result of timing of vendor payments. Further, the Company extended its international license contract during February 2026, resulting in increases to other assets and long-term liabilities for the related capitalized contract costs.

Current wording

Net cash used in operating activities for the six months ended June 30, 2026 was $2.8 million and was primarily due to the Company's net income, non-cash expenses, investment gains, and timing of working capital activity. Operating cash inflows were primarily a result of timing of customer collections. Operating cash outflows were primarily a result of timing of vendor payments. Further, the Company extended its international license contract during February 2026, resulting in increases to other assets and long-term liabilities for the related capitalized contract costs.

Previous wording

Net cash used in operating activities for the three months ended March 31, 2025 was $15.7 million and was primarily due to a net loss and offset by the change in fair value of warrant and derivative liability.

Current wording

Net cash used in operating activities for the six months ended June 30, 2025 was $38.9 million and was primarily due to a net income (loss) and offset by an increase in the settlement liability and the change in fair value of warrant and derivative liability.

Previous wording

Net cash used in investing activities for the three months ended March 31, 2026 was $0.6 million primarily due to the purchase of property and equipment and investments.

Current wording

Net cash provided by investing activities for the six months ended June 30, 2026 was $8.2 million primarily due to the proceeds from maturity of investments.

Previous wording

Net cash used in investing activities for the three months ended March 31, 2025 was $29.5 million primarily due to an increase in the purchase of investments offset by the maturity of certain investments.

Current wording

Net cash used in investing activities for the six months ended June 30, 2025 was $104.4 million primarily due to an increase in the purchase of investments offset by the maturity of certain investments.

Previous wording

Net cash provided by financing activities for the three months ended March 31, 2026 was $2.8 thousand due to proceeds received from the exercise of stock options offset by principal payments made under finance lease obligations.

Current wording

Net cash provided by financing activities for the six months June 30, 2026 was $0.1 million due to proceeds received from the exercise of stock options offset by principal payments made under finance lease obligations.

Previous wording

Net cash provided by financing activities for the three months ended March 31, 2025 was $147.9 million primarily from issuances of convertible stock and common stock in the initial public offering.

Current wording

Net cash provided by financing activities for the six months June 30, 2025 was $153.2 million primarily from issuances of convertible stock and common stock in the initial public offering.

Previous wording

Adjusted EBITDA is defined as revenues less cost of revenues and general and administrative expenses and does not include depreciation, amortization related to the incremental costs to obtain a contract, interest expense, net, impairment charges, unrealized gains (losses) on marketable securities, stock-based compensation, other corporate matters (consisting primarily of certain litigation expenses, and related fees, for specific legal proceedings and settlements that we have determined are not representative of the Company's core operating performance), other, net, and income tax expense.

Current wording

Adjusted EBITDA is defined as revenues less cost of revenues and general and administrative expenses and excludes depreciation, amortization related to the incremental costs to obtain a contract, interest expense, net, impairment charges, unrealized gains (losses) on marketable securities, stock-based compensation, other corporate matters (consisting primarily of certain litigation expenses, and related fees, for specific legal proceedings and settlements that we have determined are not representative of the Company's core operating performance), other, net, and income tax expense.