The Arena Group Generates $4.0 Million in Net Income for Third Quarter of 2024; First Ever Profitable Quarter
The Arena Group (NYSE American: AREN) achieved its first-ever profitable quarter, reporting $4.0 million in net income for Q3 2024. Revenue from continuing operations was $33.6 million, compared to $37.0 million in Q3 2023. The company significantly reduced operating expenses by 51% year-over-year and improved Adjusted EBITDA to $11.2 million from $3.1 million. Notable achievements include a 287% increase in affiliate commerce business and successful cost-cutting measures of $40 million annually. The company's transformation plan has led to improved profitability while maintaining editorial and technology capabilities.
The Arena Group (NYSE American: AREN) ha registrato il suo primo trimestre profittevole, riportando 4,0 milioni di dollari di utile netto per il Q3 2024. I ricavi dalle operazioni continuative sono stati di 33,6 milioni di dollari, rispetto ai 37,0 milioni di dollari del Q3 2023. L'azienda ha notevolmente ridotto le spese operative del 51% su base annua e ha migliorato l'Adjusted EBITDA a 11,2 milioni di dollari, rispetto ai 3,1 milioni di dollari. Tra i risultati degni di nota si registra un incremento del 287% nel settore del commercio affiliato e misure di riduzione dei costi di 40 milioni di dollari all'anno. Il piano di trasformazione dell'azienda ha portato a una maggiore redditività, mantenendo al contempo le capacità editoriali e tecnologiche.
The Arena Group (NYSE American: AREN) logró su primer trimestre rentable, reportando 4.0 millones de dólares en ingresos netos para el tercer trimestre de 2024. Los ingresos de operaciones continuas fueron de 33.6 millones de dólares, comparado con 37.0 millones de dólares en el tercer trimestre de 2023. La compañía redujo significativamente sus gastos operativos en un 51% interanual y mejoró el EBITDA Ajustado a 11.2 millones de dólares desde 3.1 millones de dólares. Los logros notables incluyen un incremento del 287% en el negocio de comercio de afiliados y medidas de recorte de costos de 40 millones de dólares anuales. El plan de transformación de la compañía ha llevado a una mejor rentabilidad, manteniendo al mismo tiempo las capacidades editoriales y tecnológicas.
The Arena Group (NYSE American: AREN)는 처음으로 수익성 있는 분기를 달성하여 2024년 3분기 순이익 400만 달러를 보고했습니다. 지속적인 운영 수익은 3,360만 달러였으며, 이는 2023년 3분기의 3,700만 달러와 비교됩니다. 회사는 연간 51%의 운영 비용을 크게 줄였고, 조정된 EBITDA를 310만 달러에서 1,120만 달러로 개선했습니다. 주목할 만한 성과로는 제휴 상업 비즈니스에서 287% 증가와 매년 4천만 달러의 비용 절감 조치가 있습니다. 회사의 변화 계획은 수익성을 개선하면서 편집 및 기술 역량을 유지하는 데 기여했습니다.
The Arena Group (NYSE American: AREN) a réalisé son premier trimestre bénéficiaire, annonçant 4,0 millions de dollars de revenu net pour le T3 2024. Les revenus des opérations continues s'élevaient à 33,6 millions de dollars, contre 37,0 millions de dollars au T3 2023. L'entreprise a considérablement réduit ses coûts d'exploitation de 51 % par rapport à l'année précédente et a amélioré l'EBITDA ajusté à 11,2 millions de dollars contre 3,1 millions de dollars. Parmi les réalisations notables, on note une augmentation de 287 % des revenus du commerce affilié et des mesures de réduction des coûts de 40 millions de dollars par an. Le plan de transformation de l'entreprise a conduit à une amélioration de la rentabilité tout en maintenant ses capacités éditoriales et technologiques.
The Arena Group (NYSE American: AREN) hat im dritten Quartal 2024 sein erstes profitables Quartal erreicht und einen Nettoeinkommen von 4,0 Millionen Dollar berichtet. Der Umsatz aus fortgeführten Betrieben betrug 33,6 Millionen Dollar, verglichen mit 37,0 Millionen Dollar im dritten Quartal 2023. Das Unternehmen hat die Betriebsausgaben im Jahresvergleich um 51% erheblich gesenkt und das Adjusted EBITDA auf 11,2 Millionen Dollar im Vergleich zu 3,1 Millionen Dollar verbessert. Zu den bemerkenswerten Leistungen zählt ein Anstieg des Affiliate-Commerce-Geschäfts um 287% sowie jährliche Kostensenkungen von 40 Millionen Dollar. Der Transformationsplan des Unternehmens hat dazu geführt, die Rentabilität zu verbessern, während die redaktionellen und technologischen Fähigkeiten beibehalten wurden.
- First-ever quarterly net income of $4.0 million ($0.11 EPS)
- 51% reduction in operating expenses from $18.4M to $8.9M
- Adjusted EBITDA increased to $11.2M from $3.1M YoY
- 287% growth in affiliate commerce business
- Conversion of $15M debt to common equity
- 57% improvement in revenue per post Q3 vs Q2 2024
- Revenue declined from $37.0M to $33.6M YoY
- $0.8M net loss from discontinued operations
Insights
A remarkable turnaround quarter marked by first-ever profitability with
- Adjusted EBITDA surged to
$11.2 million from$3.1 million - Operating expenses reduced to
$8.9 million from$18.4 million - E-commerce revenue grew
287% in Q2-Q3 2024
The debt-to-equity conversion of
The digital transformation strategy is showing strong execution across key brands. Athlon Sports achieved
Company reduces quarterly operating expenses by
Financial Highlights for Q3 2024:
-
Q3 2024 revenue from continuing operations was
$33.6 million $37.0 million -
Net income was
$4.0 million $0.11 $11.2 million $0.47 -
Total operating expenses from continuing operations for Q3 2024 were
$8.9 million $18.4 million -
Adjusted EBITDA for Q3 2024 was
$11.2 million $3.1 million - Arena closed a deal to license a copy of its proprietary content management system. This deal also included Arena acquiring multiple sites, including the top-tier automotive website, Autoblog.
-
Arena extended the maturity on its line of credit with Simplify Inventions, LLC and converted
$15 million
“The financial results for Q3 2024 reflect the strength of the new, leaner, more efficient Arena Group,” said The Arena Group CEO Sara Silverstein. “We’re achieving meaningful revenue diversification, including a significant increase in e-commerce and other revenue, enabling a substantial improvement in profitability. We generated higher gross margins, returned to positive operating income, and delivered our first-ever quarter of positive net income.”
“Our business transformation plan has focused on a restructuring and investments in tech and editorial,” added Silverstein. “We’re building a modern media company that not only creates great content, but also delivers strong results for our partners and drives diversified revenue and sustainable profits. We generated more than
After cutting an expected
This includes advancements in tech that help its partners better reach and leverage the company’s 100 million monthly users, not only for advertising but also for e-commerce. Arena’s investment in obtaining first-party data – via its proprietary platform – provides industry-leading addressability and monetization.
Arena’s affiliate commerce business increased
Brand highlights:
-
Athlon Sports: Audience traffic continues to grow substantially, increasing to 231M page views in Q3 (up
65% vs Q2). The site now garners an average of 77M page views a month, making it one of the world's largest sports websites. Revenue was up65% Q3 vs. Q2. - Parade: Digital traffic of Parade and Parade Pets also remains strong with more than 46M average monthly users and 62M average monthly page views. It has balanced, diversified revenue as its e-commerce business and social media audience continue to grow.
-
TheStreet: The financial brand continues to reach a large, dedicated, high-net-worth, finance-focused audience and excels at diversifying revenue streams through affiliate commerce which is up +
396% this quarter vs Q2.
Use of Non-GAAP Financial Measures
We report our financial results in accordance with generally accepted accounting principles in
Our non-GAAP Adjusted EBITDA may not be comparable to a similarly titled measure used by other companies, has limitations as an analytical tool, and should not be considered in isolation, or as a substitute for analysis of our operating results as reported under GAAP. Additionally, we do not consider our non-GAAP Adjusted EBITDA as superior to, or a substitute for, the equivalent measures calculated and presented in accordance with GAAP. Some of the limitations are that Adjusted EBITDA:
- does not reflect interest expense, or the cash required to service our debt, which reduces cash available to us;
- does not reflect income tax provision, which is a noncash expense;
- does not reflect depreciation and amortization expense and, although this is a noncash expense, the assets being depreciated may have to be replaced in the future, increasing our cash requirements;
- does not reflect stock-based compensation and, therefore, does not include all of our compensation costs;
- does not reflect the change in valuation of contingent consideration, and, although this is a noncash income or expense, the change in the valuations each reporting period are not impacted by our actual business operations but is instead strongly tied to the change in the market value of our common stock;
- does not reflect liquidated damages and, therefore, does not include future cash requirements if we repay the liquidated damages in cash instead of shares of our common stock (which the investor would need to agree to);
- does not reflect any losses from the impairment of assets, which is a noncash operating expense;
- does not reflect the employee retention credits recorded by us for payroll related tax credits under the CARES Act; and
- does not reflect payments related to employee severance and employee restructuring changes for our former executives.
The following table presents a reconciliation of Adjusted EBITDA to net loss, which is the most directly comparable GAAP measure, for the periods indicated:
| Three Months Ended September 30, | ||||||
2024 |
2023 |
|||||
| Net income (loss) | $ |
3,956 |
|
$ |
(11,166 |
) |
| Net loss from discontinued operations |
|
822 |
|
|
2,394 |
|
| Net income (loss) from continued operations |
|
4,778 |
|
|
(8,772 |
) |
| Add: | ||||||
| Interest expense (net) |
|
3,159 |
|
|
4,042 |
|
| Income taxes |
|
40 |
|
|
52 |
|
| Depreciation and amortization |
|
2,379 |
|
|
3,246 |
|
| Stock-based compensation |
|
732 |
|
|
3,762 |
|
| Change in valuation of contingent consideration |
|
- |
|
|
60 |
|
| Liquidated damages |
|
77 |
|
|
151 |
|
| Employee restructuring payments |
|
(8 |
) |
|
605 |
|
| Adjusted EBITDA | $ |
11,157 |
|
$ |
3,146 |
|
About The Arena Group
The Arena Group (NYSE American: AREN) is an innovative technology platform and media company with a proven cutting-edge playbook that transforms media brands. Our unified technology platform empowers creators and publishers with tools to publish and monetize their content, while also leveraging quality journalism of anchor brands like TheStreet, Parade, Men’s Journal and Athlon Sports to build their businesses. The company aggregates content across a diverse portfolio of brands, reaching over 100 million users monthly. Visit us at thearenagroup.net and discover how we are revolutionizing the world of digital media.
Forward-Looking Statements
This Press Release of The Arena Group Holdings, Inc. (the “Company,” “we,” “our,” and “us”) contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements relate to future events or future performance and include, without limitation, statements concerning our business strategy, future revenues, cost reductions, market growth, capital requirements, product introductions, expansion plans and the adequacy of our funding and our ability to alleviate the conditions that raise substantial doubt about our ability to continue as a going concern (as disclosed in our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2024 filed with the SEC on November 14, 2024). Other statements contained in this Press Release that are not historical facts are also forward-looking statements. We have tried, wherever possible, to identify forward-looking statements by terminology such as “may,” “will,” “could,” “should,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” and other stylistic variants denoting forward-looking statements.
We caution investors that any forward-looking statements presented in this Press Release, or that we may make orally or in writing from time to time, are based on information currently available, as well as our beliefs and assumptions. The actual outcome related to forward-looking statements will be affected by known and unknown risks, trends, uncertainties, and factors that are beyond our control or ability to predict. Although we believe that our assumptions are reasonable, they are not guarantees of future performance, and some will inevitably prove to be incorrect. As a result, our actual future results can be expected to differ from our expectations, and those differences may be material. Accordingly, investors should use caution in relying on forward-looking statements, which are based only on known results and trends at the time they are made, to anticipate future results or trends. We detail other risks in our public filings with the Securities and Exchange Commission (the “SEC”), including in Part I, Item 1A, Risk Factors, in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on April 1, 2024 and in Part II, Item 1A, Risk Factors, in Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2024 filed with the SEC on November 14, 2024. The discussion in this Press Release should be read in conjunction with the condensed consolidated financial statements and notes thereto included in Part I, Item 1 of our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2024 and our consolidated financial statements and notes thereto included in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2023.
This press release and all subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We do not undertake any obligation to release publicly any revisions to our forward-looking statements to reflect events or circumstances after the date of this Press Release except as may be required by law.
| THE ARENA GROUP HOLDINGS, INC. AND SUBSIDIARIES | |||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2024 |
2023 |
2024 |
2023 |
||||||||||||
| Revenue | $ |
33,555 |
|
$ |
36,996 |
|
$ |
89,679 |
|
$ |
99,486 |
|
|||
| Cost of revenue (includes amortization of platform development and developed technology for the three months ended September 30, 2024 and 2023 of |
|
16,562 |
|
|
23,046 |
|
|
53,035 |
|
|
61,991 |
|
|||
| Gross profit |
|
16,993 |
|
|
13,950 |
|
|
36,644 |
|
|
37,495 |
|
|||
| Operating expenses | |||||||||||||||
| Selling and marketing |
|
2,011 |
|
|
6,422 |
|
|
10,326 |
|
|
19,173 |
|
|||
| General and administrative |
|
6,023 |
|
|
10,940 |
|
|
24,790 |
|
|
35,516 |
|
|||
| Depreciation and amortization |
|
905 |
|
|
1,055 |
|
|
2,805 |
|
|
3,216 |
|
|||
| Loss on impairment of assets |
|
- |
|
|
- |
|
|
1,198 |
|
|
119 |
|
|||
| Total operating expenses |
|
8,939 |
|
|
18,417 |
|
|
39,119 |
|
|
58,024 |
|
|||
| Income (loss) from operations |
|
8,054 |
|
|
(4,467 |
) |
|
(2,475 |
) |
|
(20,529 |
) |
|||
| Other (expense) income | |||||||||||||||
| Change in valuation of contingent consideration |
|
- |
|
|
(60 |
) |
|
(313 |
) |
|
(469 |
) |
|||
| Interest expense, net |
|
(3,159 |
) |
|
(4,042 |
) |
|
(11,747 |
) |
|
(13,225 |
) |
|||
| Liquidated damages |
|
(77 |
) |
|
(151 |
) |
|
(229 |
) |
|
(455 |
) |
|||
| Total other expense | (3,236 |
) |
(4,253 |
) |
(12,289 |
) |
(14,149 |
) |
|||||||
| Income (loss) before income taxes |
|
4,818 |
|
|
(8,720 |
) |
|
(14,764 |
) |
|
(34,678 |
) |
|||
| Income tax provision |
|
(40 |
) |
|
(52 |
) |
|
(116 |
) |
|
(145 |
) |
|||
| Income (loss) from continuing operations |
|
4,778 |
|
|
(8,772 |
) |
|
(14,880 |
) |
|
(34,823 |
) |
|||
| Loss from discontinued operations, net of tax |
|
(822 |
) |
|
(2,394 |
) |
|
(92,709 |
) |
|
(15,204 |
) |
|||
| Net income (loss) | $ |
3,956 |
|
$ |
(11,166 |
) |
$ |
(107,589 |
) |
$ |
(50,027 |
) |
|||
| Basic and diluted net income (loss) per common share: | |||||||||||||||
| Continuing operations | $ |
0.13 |
|
$ |
(0.37 |
) |
$ |
(0.48 |
) |
$ |
(1.61 |
) |
|||
| Discontinued operations |
|
(0.02 |
) |
|
(0.10 |
) |
|
(2.96 |
) |
|
(0.70 |
) |
|||
| Basic and diluted net income (loss) per common share | $ |
0.11 |
|
$ |
(0.47 |
) |
$ |
(3.44 |
) |
$ |
(2.31 |
) |
|||
| Weighted average number of common shares outstanding – basic and diluted |
|
37,610,058 |
|
|
23,445,675 |
|
|
31,291,641 |
|
|
21,567,166 |
|
|||
| THE ARENA GROUP HOLDINGS, INC., AND SUBSIDIARIES | |||||||
| CONSOLIDATED BALANCE SHEETS | |||||||
| September 30, 2024 | December 31, 2023 | ||||||
| Assets | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ |
5,773 |
|
$ |
9,284 |
|
|
| Accounts receivables, net |
|
25,858 |
|
|
31,676 |
|
|
| Prepayments and other current assets |
|
5,675 |
|
|
5,791 |
|
|
| Current assets from discontinued operations |
|
528 |
|
|
43,648 |
|
|
| Total current assets |
|
37,834 |
|
|
90,399 |
|
|
| Property and equipment, net |
|
196 |
|
|
328 |
|
|
| Operating lease right-of-use assets |
|
2,421 |
|
|
176 |
|
|
| Platform development, net |
|
7,203 |
|
|
8,723 |
|
|
| Acquired and other intangible assets, net |
|
23,640 |
|
|
27,457 |
|
|
| Other long term assets |
|
356 |
|
|
1,003 |
|
|
| Goodwill |
|
42,575 |
|
|
42,575 |
|
|
| Noncurrent assets from discontinued operations |
|
- |
|
|
18,217 |
|
|
| Total assets | $ |
114,225 |
|
$ |
188,878 |
|
|
| Liabilities, mezzanine equity and stockholders’ deficiency | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ |
4,192 |
|
$ |
7,803 |
|
|
| Accrued expenses and other |
|
23,386 |
|
|
28,903 |
|
|
| Line of credit |
|
- |
|
|
19,609 |
|
|
| Unearned revenue |
|
7,574 |
|
|
16,938 |
|
|
| Subscription refund liability |
|
96 |
|
|
46 |
|
|
| Operating lease liability, current portion |
|
247 |
|
|
358 |
|
|
| Contingent consideration |
|
- |
|
|
1,571 |
|
|
| Liquidating damages payable |
|
3,153 |
|
|
2,924 |
|
|
| Bridge notes |
|
8,000 |
|
|
7,887 |
|
|
| Debt |
|
102,404 |
|
|
102,309 |
|
|
| Current liabilities from discontinued operations |
|
98,378 |
|
|
47,673 |
|
|
| Total current liabilities |
|
247,430 |
|
|
236,021 |
|
|
| Unearned revenue, net of current portion |
|
357 |
|
|
542 |
|
|
| Operating lease liability, net of current portion |
|
1,911 |
|
|
- |
|
|
| Other long-term liabilities |
|
46 |
|
|
406 |
|
|
| Deferred tax liabilities |
|
692 |
|
|
599 |
|
|
| Simplify loan |
|
1,100 |
|
|
- |
|
|
| Noncurrent liabilities from discontinued operations |
|
- |
|
|
10,137 |
|
|
| Total liabilities |
|
251,536 |
|
|
247,705 |
|
|
| Mezzanine equity: | |||||||
| Series G redeemable and convertible preferred stock, |
|
168 |
|
|
168 |
|
|
| Series H convertible preferred stock, |
|
- |
|
|
- |
|
|
| Total mezzanine equity |
|
168 |
|
|
168 |
|
|
| Stockholders' deficiency: | |||||||
| Common stock, |
|
474 |
|
|
237 |
|
|
| Additional paid-in capital |
|
348,289 |
|
|
319,421 |
|
|
| Accumulated deficit |
|
(486,242 |
) |
|
(378,653 |
) |
|
| Total stockholders’ deficiency |
|
(137,479 |
) |
|
(58,995 |
) |
|
| Total liabilities, mezzanine equity and stockholders’ deficiency | $ |
114,225 |
|
$ |
188,878 |
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20241114017258/en/
Steve Janisse
c-sjanisse@thearenagroup.net
404-574-9206
Source: The Arena Group Holdings, Inc.
FAQ
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