Rumble Inc

Rumble Inc. (NASDAQ: RUM) is a video sharing platform and cloud services provider. The Company comprises two segments: Rumble Services and Rumble Cloud. Rumble Services consists of three core businesses: Rumble Video, Rumble Studio, and Rumble Advertising Center (RAC).

Recent Business and Financial Updates

• Revenue Growth: Rumble reported substantial revenue growth in Q3 2024, achieving USD 25.1 million, representing a 12% sequential increase from Q2 2024 and a 39% year-over-year rise from USD 18.0 million in Q3 2023. The growth was driven by enhanced audience monetization, expanded advertising inventory monetization, and increased subscription revenues. This performance reflects the company’s effective strategies in diversifying and optimizing its revenue streams.
• Monthly Active Users (MAUs): The platform experienced significant user growth, with average global MAUs reaching 67 million in Q3 2024, a 26% increase from 53 million in Q2 2024. This quarter marked the eleventh consecutive period with MAUs exceeding 40 million, with 43 million users located in the U.S. and Canada. The surge in user engagement was primarily due to heightened interest in political content during the quarter, demonstrating Rumble’s ability to attract and sustain a growing audience base.
• ARPU and Financial Performance: Average revenue per user (ARPU) in Q3 2024 was USD 0.33, a slight decline from USD 0.37 in Q2 2024, reflecting the challenges of monetizing a rapidly expanding user base. The company reported a net loss of USD 31.5 million, compared to USD 29.0 million in Q3 2023, while adjusted EBITDA showed an USD 11.9 million year-over-year improvement with a loss of USD 23.5 million. Cash, cash equivalents, and marketable securities totaled USD 132.0 million as of September 30, 2024, highlighting ongoing efforts to optimize financial resources and manage growth.
• Operational Advancements: Q3 2024 saw significant operational milestones for Rumble. The company partnered with the Miami Dolphins and Hard Rock Stadium, marking a major achievement for Rumble Cloud by securing its first NFL franchise client. The launch of the Rumble app on Xbox expanded its distribution channels, enhancing video accessibility and supporting independent creators. Advertising capabilities were strengthened with the introduction of mid-roll ads across various platforms, while the full launch of Rumble Premium provided an ad-free subscription experience to complement advertising revenues. Additionally, the platform recorded unprecedented engagement during the September 10, 2024, U.S. presidential debate, achieving record concurrent live viewers, creator streams, and peak bandwidth consumption.
• Cost Management Initiatives: Rumble demonstrated disciplined cost management in Q3 2024. The cost of services declined by USD 3.3 million to USD 36.4 million, driven by a USD 5.4 million reduction in programming and content costs, partially offset by increased share-based compensation and creator revenue shares. General and administrative expenses rose marginally to USD 9.7 million, reflecting higher payroll expenses. Research and development costs declined by USD 0.5 million due to reduced payroll expenses, while sales and marketing expenses increased by USD 0.8 million due to higher payroll-related costs. These measures highlight the company’s focus on balancing cost control with strategic investments.
• Management Outlook and Future Prospects: Rumble’s leadership expressed optimism about the company’s growth trajectory, emphasizing record revenues, continued MAU expansion, and its role in supporting free speech and independent creators. Following Q3, the company achieved new records during U.S. presidential election coverage, with significant increases in advertising revenue, Rumble Premium subscribers, and live peak viewers. The addition of Steven Crowder’s MugClub to Rumble Premium diversified its subscription offerings, while onboarding Sticker Mule as a cloud client demonstrated the platform’s advanced capabilities in artificial intelligence processing. Rumble remains committed to driving revenue growth, managing costs, and achieving adjusted EBITDA breakeven by 2025.

Technical Observation (on the daily chart):

The Relative Strength Index (RSI) over a 14-day period stands at a value of 49.10, downward trending with the price retesting important support levels of USD 6.50-USD 7.00, with expectations of momentum in case this support holds. Additionally, the stock's current positioning is above both 50-Day SMA and 200-Day SMA, which can act as a short to medium term support levels.

As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Buy’ rating has been given to Rumble Inc. (NASDAQ: RUM) at the current market price of USD 7.21 as of December 20, 2024, at 10:10 am PST. 

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is December 20, 2024. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level that the stock is expected to reach as per the relative valuation method and or technical analysis taking into consideration both short-term and long-term scenarios.s

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the New York Stock Exchange (NYSE), NASDAQ Capital Markets (NASDAQ), and or REFINITIV. Typically, all sources (NYSE, NASDAQ, or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.