AREN - Earnings call transcript Q1 2022 | The Arena Group Holdings, Inc.

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Operator

Good day, ladies and gentlemen, and welcome to The Arena Group first-quarter 2022 earnings call. [Operator Instructions]. It is now my pleasure to turn the floor over to your host, Rob Fink of FNK IR. Sir, the floor is yours.

Rob Fink

Thanks, operator, and thank you all. are Chief Chairman Kraft, Financial Officer. today Officer; Chief Chief call Smith, Doug Officer; the Ross and Levinsohn, Executive Operating Hosting and Andrew

we are forward-looking statements. that statements other to made Before of this could All would historical be statements the forward-looking. fact during include of that comments note may presentation than I begin, statements some like deemed

or statements capital statements future events Other in statements the relate from future beyond outcome presentation the on performance the assumptions growth, limitation, to trends, are made actual ability the that revenues, company company writing facts without presented and unknown that time based historical to strategy, business future of orally company's to or uncertainties, available are are affected will also product Such currently risks, that plans, concerning statements statements this and be make expansion may company's the cautions on factors forward-looking. in Forward-looking include, the are or or company. adequacy forward-looking this introduction, and control based The requirements, predict. market that by beliefs, and investors by are not to known time contained the and in funding. company's presentation assumptions any information

performance believes its future inevitably company some and assumptions be of assumptions that guarantees will incorrect. the proved are Although are reasonable, not these be to

future discussed I'd the to Ross. they with are SEC. investors company's expected use based results which results in risks actual may be company's trends. to yours. different that, on Ross, Accordingly, the turn can time those trends result, Certain known relying on or are over results at With forward-looking is cautious expectations call should call the made a to difference and from be As filings the be only material. in statements, to its like the and now anticipate that are

Ross Levinsohn

you, Thank Rob.

be more some quarter our pre-released and Arena growth we Group. look The you a sharing our the of numbers As we'll excellent some highlight operational was continued rapid of at last in-depth an for expansion Today and to know, This week performance. financial business.

As we investments XXXX, media our benefits end and technology, made social highlighted business in the were initiatives, results of the last we full-year see our QX of platform, at efforts, starting to development our year. we and during and significant intelligence our people their audience our

profit, a we revenue Our the revenue XX% as well results, saw million million as first-quarter audience our despite increase. quarter. $XX.X QX To year, previous slowest highlight validated gross versus in $XX.X being and performance again those a to as in first-quarter investments growth typically gain grew total in strong key a substantial few

of Importantly, more accounts XX% first-quarter digital grew XX% now than and revenues. to for million revenue $XX.X by total

QX quarter. cost $XX.X through tripled we we revenues. our First-quarter and revenue to so margins the our gross note gross these increased of growing our reflecting XX% QX QX the is will XX% by deliver that or in or of gross days only improvements was generally XX in business, million softest consecutive million gross compared This digital momentum I believe gross X%, significant from first to quarter profit seeing the expand. than profit that high exceeding in is and that to of accelerate the profit will XXXX. profit are $X.X quarter with continue XX% percentage more quarter second to percentage

rapidly, an keeping we of million. opportunities. EBITDA includes quarter, NYSE the to of million American tight, put way bluntly, February. our to and We in $X.X profitable that costs are the are it QX in improvement as uplist in our To audience to well generate In to number some in quarter associated costs one-time XXXX, the and profitability. adjusted compared was growing with million $X.X $X.X our a loss loss That on representing revenue our of investing revenue first

We have momentum.

Our Thanks part in we the revenue investments to key XXXX, the point. first-quarter we expect in that have made continue significant in we incremental inflection to this reached results a our without costs. expansion year business demonstrate

investments We have completed working. platform is major in and our it

towards last QX XX% Our And makes by year. XX% gross to each our revenue. profit continue of digital revenue in revenue versus prior incremental digital that than our our falling now on than now the line, dollar year. tripled overall gross profit up revenue more profitability grew path is of half rapidly to we expand and digital more than revenue as us versus XX% More a and pushes

our earnings last publishing partners. development The proprietary about strategy, key well media which March, playbook, initiatives, audience as traffic in across our our content as our call creates and our talked efforts, driving we momentum. to properties social increasing overlays During playbook

dollars additional ad We more more on optimization, traffic effective in which which positive and have beget audiences. gains a to traffic, those consumers, allows and optimize us driving flywheel, we data and are circulate through further

have late positive playbook results. And in initial and the with sports playbook and first the XXXX fruit bear in audience -- revenue to we growth. in we it finance very executed our expect see quarter, the We verticals continue in

according SI growth one to of posts amongst number Facebook thanks across on for of QX QX. link XXX% saw expansion first social Google the to the quarter quarter Instagram, Sports our in average voice Our of as Illustrated, views growth expansion from to efforts page writers. storytelling yielded our sports share journalism monthly by page Facebook, traffic brands all prior a and the according by major compared sports our the to XXXX we digital second continued consecutive vertical, Analytics, XXX% social media for and to to according QX views Analytics. key array period The This robust driver talented TikTok, revenue great of Google anchored Snap the have grow saw to CrowdTangle. compared was in

publishing partner investment. to added to XX signed continuing Group during also We our Media SI little quarter, sites base audience and our the content new to FanNation expand no and another with upfront

and initiatives year marketplaces for commerce initiatives quarter, contributions first SI and the SI recommendations. significant new Shop We our and revenue content We to will during marketplace business our and next to two also this make new commerce base. goods, services, diversify incremental Showcase, our believe launched further our

page expanded leadership, compared application expand Turning TheStreet's of saw base vertical, to at quarter, we years and million new than recorded Smarts. page that a year. the in when less average audience growth we according In months see a the audience Analytics. the represents in the over in average first nearly Google views with brand, new monthly playbook months. expansion And began growth Jim according was in TheStreet traffic X.X QX our Last QX X.X launch to had. online also views editorial team coming a thanks paid engagement Google million and playbook, eight lower Cramer expansion continued monthly a our increase prior launched finance Analytics. significantly. significant in base page was of to to revenue increased October, Helpful, subscribers. only the an the of April, for months, our XX.X Pet to In in our monthly rapid potential QX, offerings, TheStreet to of four in of departed, TheStreet. In product in views we our our audience to at The QX, subscriber new and contributed continued. QX, previously TheStreet That momentum million seen our And ad growth XXX% in than we've million cost Helpful three and content pets execute year Pet as our XX.X expect XXX%

the sites in We additional quarter. have the plans next execute to playbook HubPages throughout

how continue as Google does smaller, like April is. lifestyle costs, QX will And the Not side well. feature and impressions as Sports on X,XXX only to we model tried-and-true. well-known like we monthly and with companies. gross it according by is monthly our digital infrastructure jumpstart closed on Illustrated X, with native On recognizable more well brands scalable million XXX to across operate but startups the of print These Parade just MRI-Simmons, a playbook anchored as than results less print million AMG/Parade, single without additional that side Living Spry according on relationships to SaaS vertical, to much with on demonstrate which local XX average digital our scales country. in views like and acquisition similar our work Relish, Our digitally TheStreet, Analytics brands newspaper media brands and partners page

a short despite to on that million. expenses. a It our some $XX to partner we million, a operated this And see negative platform, onto million be brands important to will the The distribution or expenses brands than not is advertising momentum of American, we that ongoing. ecosystem, will to combination EBITDA which This and well was our more We $X.X QX adjusted of well and optimistic Today of improvement owned $XX.X our are led to was growth note technology, to uplisting net the vibrant integrating a audience strong others. $X.X in to moving and million, related significant XX in we loss expanding our applying XX%, our playbook. our non-cash through are all period. XXX our NYSE in publisher are of

But additional We little don't advertising the attracting capability more our to we is on inventory our our headcount. a supports robust materially scalability. to additionally no more don't journalism don't creating Our add to additional technology single platform We key cost. at need to we award-winning technology and investments. viewers. to partner-generated significantly need -- grow With need and have existing the platform, content, incremental

We profitably. grow are grow to and primed

new XX% are at to north ingest forward. gross we brands margins deliver revenue going partners our In new is infrastructure of fact, and and targeting to positioned

talk great first, about As I I call, numbers. through beginning. only take and XXXX the start Smith, the you CFO, this said of Difficulty] this a I'd but Doug want to like the our year, Doug? to is at [Technical more this let it's to beginning

Doug Smith

Thank Ross. you,

of year, million, quarter $XX.X results. turn revenue for compared last the million quarter million as Other was traffic primarily total of of XX% down to an revenue me was the to by the last total year. first and Digital which additional $XX.X of licensing compared but of of revenue million by year. X% XXX% compared last subscriptions XXXX quarter of $X.X the million offset a grew newsstand, increase was QX to increased which down, an across operated $X.X reflected only Gross quarter compensation, lower quarter print for last properties the share XXXX. substantial cost from percentage as reduction to reflected an benefits first quarter approximately up XX% impact other media increased and revenue was the Breaking Print driven quarter a Illustrated XXXX. Illustrated to for first million The of related $X.X digital represented increase in to as higher million increasing versus the during for the our FanNation Swim driven the XXXX XX% is to Let first revenue in circulation licensing year. growth of XXX% Sports page $XX.X compared more stock-based which million drove and million $XX.X and XX% XX% XXXX. revenues along to first million first of increase average a as in than of primarily the quarter to TheStreet. by the our XX% first revenue, X% $XX $XX.X agreements that the $XX.X of in $X.X of in the growth million the in at revenue, first by of revenue profit million In in to view. profit, quarter, businesses. $XX.X first this million revenue of revenue, expenses quarter revenue. first advertising subscribers certain quarter million campaign quarter $XX.X revenue related operating the profit in by for increase driven first quarter in and print digital tripling Total the the with fourth high residual the from $X.X expenses, gross in gross by of and it well year. versus owned increased Digital despite related quarter increased to Sports our in XXXX rev quarter the increase was subscription the and of due revenue first for to which of the were XXXX, of and X% in payroll XXXX, the of e-commerce partially advertising SI growing of million first $X.X This

$XX.X $XX.X as million improved the result, compared net XXXX first prior-year quarter of in loss a period. to for the As to million

which loss, of included million XX% year. charges of Adjusted first million The represented as in for prior our XXXX non-cash quarter EBITDA quarter to non-cash first compared fiscal charges, the of $XX of a $XX.X for quarter which in $X.X is total net the first million a loss quarter our was EBITDA. the adjusted in to a quarter XXXX, improvement of representing year, first weakest negative million compared the $X.X million of as $X.X of XXXX, the of typically

of not Ross we fees expect be As to first to and XXXX expenses also quarter related do which professional mentioned, significant the included ongoing. the uplist,

stock XXXX. which XX, our compared first we closing. we common This at Subsequent Ross net cash at to the closing during that, million ended in $X.X the million end back the at I'll completed acquired With it balance $XX.X of first cash quarter of for at XXXX. of receipt $XX equivalents, turn and acquisition included paid $XX Ross? million in proceeds the Looking million the offering comments. looking quarter of December million net from of AMG/Parade at cash to to of sheet $XX.X for the the balance liquidity, quarter, and

Ross Levinsohn

throughout XXXX late rapid our expansion vertical, in finance and paying so start: we groundwork is integrate American, and off Doug. much growth XXXX to AMG/Parade, our the is a beginning laid in and in off. XXXX continued our robust vertical, uplist All NYSE sports the more. to closing Thanks, to

dropping digital Our first-quarter now incremental year more than we than of gross over every gross the year, are profit more line. profit to tripled XX% and dollar

The continues off thanks playoffs, and the to We -- drive start in to draft which audience baseball, the NFL are The well positioned significant terrific are events for to revenue a profitable above expectations. and acquired volatility sporting start like Masters, NBA the already big growth. we is June, of QX numbers the the course, far stock Giants. and of Spun, go last our NHL globally. gender and mandate called turn taking propelled audience XXXX the that need And SI this advice a new With position Swimsuit year has and Swimsuit, and for is women TheStreet month, powerful market SI to will unveil a Pay for Change, for this we later the numbers. edition initiative franchise equity into which the investment a sound platform ad of will revenue change record

for organic should our expect emphasize our to pipeline built is with have you CapEx business. I'm growth from growth now and inorganic Lastly, that, and margin our while expansion the extremely any out. done M&A work have. further that come and XX thanks last profitability questions Again, us been will continues, of platform significant any the This active any over not or means to we've that I cost any technology to our with has happy expansion months. you answer And people

Operator

[Operator Instructions].

Your live. coming first your Dan, Riley B. Day is question line from is Securities. Dan

Dan Day

questions. my taking you Appreciate guys. Afternoon,

on First one the just other revenue line.

initiatives but Sports comes think Correct a wrong, little like I Illustrated on interesting affiliate some e-commerce about bit AMG/Parade me revenue. if talked e-commerce. I'm of You with at

should about modeling million in how $X.X be that the to is from quarter grow moving line just there? significantly So -- we that thinking expected forward.

Ross Levinsohn

Yes.

initiatives I obviously, say initiating commerce that but not are think I'd comes significant vertical, looking forecasting -- lifestyle are we for. in we with numbers, that AMG/Parade, our with

all efforts. launching commerce this content, also around working showcase marketplaces, And of commerce biggest have we initiatives. of them brand, the and And kinds in we the branded who's recommendations, at and have the companies been to one e-commerce really of both and ABG, world two-sided with side, of other the benefit with and country content the On working SI the in the owner licensing distribute point. closely are

starting commerce really So come. years we effects to multiple a uptick us we the to for year expect growing be which also and see licensing And in us. line this syndication, positive some to in has for and are

exhibiting monetize sites, of that our other beyond to we the walls cost Internet. the our throughout it four it because on overall significantly are our also content Aside out content from and lowers getting content able

of is for us. area syndication think growth an we licensing So and

believe also XXX but gambling some commerce SI We significantly all and the we new on that our online. to touch states year and this coming Sportsbook, We also with is. with beyond grow initiatives didn't expect at

Dan Day

minute. then TheStreet could you. if a Awesome. Thank And for I to turn

touch this You started prepared to on in remarks. the

traffic Just maybe churn detail a you've and And the in an then more little on job recovery revenue. subscriber driving fourth following incredible quarter. obviously done ad

subscription was between that ago. versus what's curious balanced and it that's advertising maybe is at asset year from how this different a Just revenue point,

Ross Levinsohn

year as both some let perspective. and I'll -- from also, QX, quarter I X% compared folks highlighted the fairly for down And an of company. over quarter over jump Doug forecasting And frankly, but year were advertising think -- that improvements TheStreet he I'm audience Sure. were what obviously we minimis, in well. sorry, de to of some the in is at our

launched we've in and new the people once now, with a again user we on more side in subscriber on market our products the the view a coming side those such and Smarts. footing. seeing side, that are leaning to. product we finding unique audience We're digital and TheStreet in So more both can And page big

we've Doug, but leaving. in side subscriber starting business TheStreet with from TheStreet, Cramer in So is the pretty revenue substantially. And revenue the certainly is And you ad revenue chime growing bottom still you'd said, like. ad audience, than subscription Jim to I advertising our in if think this our higher we're see monetization. significantly can seen improvement That at

Doug Smith

beginning the but seen base. And the now we in midteens advertising. in that softening a in XXXX as we're of decline of discussed, ramp-up we've number of seeing dramatic we've some level, subscription the huge growth actually the revenues and saw advertising XXXX We bit very sort in had TheStreet saw the in subscriber its Historically, a percentage as side.

historical we're to we advertising subscriptions we the to are that. climb into levels advertising side. because anticipating any beyond the expect experiencing and perhaps strong in Not So growth just advertising because such exceed XXs further;

Dan Day

continued over appreciate taking questions. Well, guys will it my and best you turn Awesome. I luck. I of

Ross Levinsohn

so Thanks much.

Operator

[Operator Instructions].

is Lake Your next Street. from question coming Mark Argento

Mark Argento

a strong on really Congrats quarter.

bit to page in the significant a uptick wanted little down views. drill Just on

more versus I grow right are -- you where bit a to continue little direct mentioned you up XX%. talk of was about you a advertising see going. do just opportunity Want deals think now, the little I that where talk it -- maybe you to as viewership, terms to bit in traditional could programmatic, believe

Ross Levinsohn

Yes.

Mark. the of thanks, benefits -- One

One of the grow benefits And of are fortunate they of brand in that them have the safe trust able we've when have are we enough had known a having it premium the past, audience to significant. terms audience of trust Sports as some advertisers the is competitors had. very, were that to been didn't take over brands but And franchise, certainly quantities. highlighted halo Illustrated and our and they it and in very we've the respect,

platforms trusted now and And content distribution in now with unique, a sorts Parade, great Illustrated continue time. bespoke, Sports TheStreet on it's to for with to brand and with flywheel the with technology, grow. focus or with doing we're this know-how, marketing, a of journalism, real is when creating are social you we match like brands, So search, audiences focus it's and on a

CPMs the we the have, softest tend year; we more the obviously, have, to up the being throughout every views QX we we the and have. being more audience as the page quarter, so strongest. QX RPMs go year, more throughout see And impressions And

this with point And halo year important more direct in and Fortune which deals, big cases, XXX strong sponsorship with that So on based CPMs. higher your based actual always hope with for companies a And come or us and deals are expansion. because really growth. brand some is less CPMs continued clicks on advertising our gives brand

direct So year we with beginning think seeing the In we've had a deals advertisers. we are I ago the number more year, more and X.Xxed this of deals. of

exciting very, that that's to So to Swim edition We've this continues XXX swimsuit new be sign Fortune very some and very high-profile and mentioned I place brands us for expand managed this quarter. year. really for to the good earlier. during

our We are in it seeing category. sports

than comes obviously, seeing are greater percentage which We in is to in age. it of Parade direct finance. with us a and today's unusual, day programmatic, advertising much

direct the So already we very a advertising. excited about expanding having and onto bucket their are them platform, bringing audience, of strong

EBITDA have more we and So and we're grow position the have, line. the I obviously direct we marketplace, the more deals going which more contributes better the think can our to bottom in to

Mark Argento

helpful. super That's

Just quantified in mentioned you ballpark that one know you that? quick or had housekeeping. don't on I quarter. a costs do there some if listing you not, the but one-time stuff was and other Doug, have number

Doug Smith

EBITDA been quarter. excluded, Yes. I had a for positive would we if mean, have had that the

Mark Argento

so AMG/Parade, million? was just the I said Okay. you then that's All paid then had it $XX $XX you paid $XX the it, what million? think right, or great. And you million on lastly you And was cash, for out million, out had, $XX the

Doug Smith

the $XX was XX, for had X. March million the end cash of AMG/Parade quarter of day April payment and next We then at the the at

Mark Argento

All it. Awesome. Keep it. Appreciate right. All work. it guys. Got up. Nice right,

Ross Levinsohn

Thanks, Mark.

Operator

in like were you. hand call Thank remarks. no back closing would Ross the this to now other queue to Levinsohn time. I for at There questions

Ross Levinsohn

listening you Yes, in following thank dialing appreciate you all. and and us. We

this The really year strong for really been and has year. super excited last is momentum we have middle are We accelerating. of since

way path at to well you on to quarter. visit we're of profitability again and the excited our a end with to So next

Operator

gentlemen. does conclude Thank you, and ladies today's conference. This

this day. at a have your disconnect time and may for you You Thank wonderful participation.

The Arena Group Holdings, Inc. (AREN) 8 May 222022 Q1 Earnings call transcript