Earnings call transcript Q4 2022

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Operator

Greetings and welcome to the Arena Group Fourth Quarter and Full Year 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode, a questions-and-answer session will follow the formal presentation. [Operator Instructions]. Please note that, this conference is being recorder.

I will now turn the conference over to your host, Rob Fink, Investor Relations at Arena Group.

begin. may You

Rob Fink

Andrew and Hosting Operator, and everyone joining Officer; for Executive Officer. Thank call thank today today. and Financial Chief the Doug Chairman Chief are us Operating Officer; you, Smith, you Kraft, Ross Chief Levinsohn,

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

without or capital funding. Forward-looking concerning additive limitation, also and statements include, future presentation performance statement. future statements growth, the events Other company's market future expansion in are the relate forward-looking requirements, that strategy, business company's the contained suite of the and not to are facts statements introduction plans revenues, and product historical

Such on factors presented beliefs, investors presentation that the by currently control risks, by, and uncertainties to in writing will assumptions trends, The that this company take are predict. known beyond statements and time are assumptions the affected the to to forward-looking any outcomes actual company. or based orally in may cautions are company's on made be from or available the the where unknown information company and statements ability and time based

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

its expectations differences result, future expected those actual results differ company's and As from the be be a material. can may to

Certain in filings anticipate SEC. future known Accordingly, are to time and or the investors the which trends. trends they forward-looking statements, are based should cautious results with risks only the on on use in discussed relying made company's are results at

found measures, Information at Group's made afternoon the Relations of will in on this investors.arenagroup.net. to the In be Arena press GAAP to non-GAAP references reconciliation addition, measure that release issued adjusted can be was EBITDA. financial this non-GAAP Investor regarding there website

the Ross, turn the call like Ross. call With over to said, to I'd is all that yours.

Ross Levinsohn

the and was Rob, us for today. you, Arena Group. to thanks everyone joining here for XXXX Thank year milestone a

a line growth, successful core, company revenues expansion At become full top platform record business led have and to line significantly, model. expenses. highly has with operating our growing which We without year efficient rapid EBITDA support expenses acquisitions can partnerships, diversified a our profits our and and and adjusted first lower technology bottom with

you to share hand like I'd the Smith, you Doug numbers. the highlights I to Some take call before deeper with our CFO, over into to

our generated driven advertising. full $XXX over company, the year million year in all-time nearly increase XX% year, by in a high For we revenue, digital for an

For the from first $XX time, we for EBITDA generated XXXX. a in improvement $X.X the full of adjusted delivering XXXX. That's a profit year million million

more context, of this represents million $XX For swing than a XXXX. from positive

brands us year, helped improve has SI We year utilizing Fitness, nearly income new cut of Bike, Surfer, we also platform, in the additional our million a last $XX Golf, Skateboarder, XXX while and technology. to $XX adding by over Men's which million over Journal, significantly domains breadth operating operating read, XXXX, and which increasing become our Men's than XX Parade, by digital more year, sites Powder, acquired expenses depth morning

and nearly to We XX% billion. last by We X over pageviews built leader. dynamic tech a have grew media year

online year $XXX million $XXX grown $XXX this million to our revenue without generate than across revenue, we've more acquisitions, XXXX, expanding believe was revenue, growth from syndication and XX%. Our an our and organic launching expenses. licensing $XX all while and and advertising certain betting while our pageviews We Since brands efforts. sales direct further any will we reducing million business improved and operating yield, between e-commerce million,

We're XX XXX properties that's from in year XXX and combined sales now to number of technology apparatus largest with more the and who XX nearly than comScore. XXnd power in comScore brands up audience to the own United according a a States, users our another now January, ago. We and utilize publisher according monthly

Let to me speak the progress properties. specific at

Our pageviews was to XX% sports year. billion Illustrated number see the Sports of Media during XXXX. the Group growth sports vertical up in The robust X.X with four to comScore total continues in January rankings

compared delivered year full by to ‘XX, As growth in and grew spun XX%. Fan the pageviews, XX% Nation

to New Exchange, desk dynamic with real-time Street our pageviews particularly had video and ability enhancing its floor street to investor news to studio a million. the In The on strong XXX audience. opened York year Stock up the October, the bring content our XXX% of

continues vertical grow nicely. Our to lifestyle

delivered by over both and Parade and PetHelpful with growing pageviews year, by the XX%, During XXX%. strong growth in growing Parade PetHelpful

of have are in fourth proprietary -- we the Men's will into Journal optimistic the and months see through growth men's a playbook, expanded and acquisition our December, in very through as strong that vertical We we it our lifestyle apply coming technology.

cost Across XXX% content. across place in which party ecosystem, of focus XXXX. our our in our well have outlets, now we expanding growth platform, continue our to reducing as and as on third We in generate overall help revenue and distribution distribution licensing our XXX recirculation entire over to syndication

to poised accelerating and challenges. year deliver be transparent full XXXX adjusted to for continuing robust outstanding revenue I EBITDA while growth. all also about enter cash We generation, want our

manage print to shrinking ad foremost, print aggressively a and we business. and First subscription continue

Doug expect details Magazine But business in subscribers. contribution Illustrated in generated cash into minute. million profitable X.X the in Sports and we and strong once again will it will with get our a paying XXXX, again, XXXX

this managed product, and journalism, aggressively have beautiful We profits. a deliver premium business

we negative, and partnerships saw We also our and digital quickly the of managed transitioned successfully to only the rapid content. turn audience a shutdown operations and Parade print it minute

XX%, decreased to parade.com of has since ‘XX. our XXXX, Jim X.X XXX than at we million monthly reaching have Cramer strong subscribers. newspapers to to in from our At seen January the in December driven adoption million XXX% in XX.X magazine June, comScore. e-edition it grow XXXX, pages TheStreet, of up thestreet.com XXXX, of unique by October subscriptions in we've left digital users their XX offering of December digital ‘XX while added according with continues in then, users engagement more since presence doubling growth Parade's Parade nearly Since platform million to to of with digital

also Clearly, there capital inefficiencies in some our structure. are

investors of noted in this year. we debt have have Some a December significant expiration that

of several today, For and we've been we one the confident my months, a external the I'm created an priorities to the our the expect our result the working positive past This given in current business I top differentiated term. we and make the and shortly. are two results a we with replace past challenging our of over is that plan, extend of CEO, near as have foundation either we announcement secure time, or demonstrate board to sharing strength will have and especially backdrop facilities, will The years. economic advisors

our investments the strategic made while struggling industry we've in the are of I'm have accelerate worked, the proud that all continues achieved late clearly quarter. lines. both our business others this across our extremely The XXXX bottom that on top in growth we to XXXX and to growth of transform and verticals

first, Officer, let our numbers. like about I'd the to you our like Financial take to share outlook for Doug? I'd through Chief Doug Smith, XXXX, more but

Douglas Smith

Ross. you, Thank

quarter. $XX.X growth thirds fourth revenue versus $XX.X of reflecting $XX.X only Let in of a million, last me for our the business from operations last digital and the million turn reduction up million to great from quarter is Revenue and two total digital slightly print. grew results fourth the continuing quarter year. in Total fourth our approximately of over of planned the represented in revenue XX% year,

was advertising the revenue in driven digital XX% and largely increase of organic. a per to due quarter increase fourth a the to of The XX% revenue XX% was growth by in rise was year. in increase XX% a and This versus million $XX.X pageviews, pageviews last

licensing -- XXX% was to subscription to during $X.X and quarter. in revenue, XX% as which X.X fourth digital Digital the digital was prior was revenue syndication increased by revenue quarter. million down Other X.X year-over-year the million year million, compared principally

expect expand Ross We new existing robust ones to growth to area drove referred as continued as and this partners earlier. in we

reduction by in prior we acquisition reflecting the profitable reflects in to from This the $X.X rate-based our million implemented decrease in decrease reduction. decreased revenue accompanied the an in XXXX. December of base less subscription the rate in million was costs, subscribers Print in which the of elimination $XX.X quarter, million revenue plan $XX.X

Gross compared profit gross previously profit This reflects decrease reduction to $XX.X quarter. year to prior million a print $XX.X the the decreased subscription of in million mentioned and revenue.

However, in of the offsetting appears operating $X.X million expenses cost at cost reduction in not residence.

prior an $XX.X the $XX.X $XX.X down $XX.X in were reduction reflected $X.X and million. a in and as in costs expenses to general expenses selling in year million operating decrease Total million administrative $X.X million, quarter, compared XX% and marketing to to million, million

in decrease other The expense a G&A the expenses the by primarily acquisition acquired was marketing $X The related parade of mentioned decrease or to in in primarily in is related acquisition which selling $X.X decrease bit previously million XX% and to the April little payroll due XXXX. we the reduction million. costs properties, in expense one to offset and subscription

reductions, prior were million the $X.X XXX% As million reported the $XX.X of million to charges, loss compared $X.X was XXXX EBITDA charges. compensation, million non-cash of Over million fourth the non-cash $X.X quarter net and and of from XX%. in these year. cost or quarter in improvement other quarter, quarter XXXX’s significant loss fourth fourth stock-based the improvement including adjusted was of the a a amortization, year result $XX.X as prior $X.X an depreciation, million fourth of

of paid Again, substantial the Digital XX% the from than increase Turning growth reflecting revenues. last the to the revenue operations up year. in XX% a for total also $XXX from digital print continuing increase in million a revenue. as and in was growth for planned year was Total growth. was $XXX $XXX year, digital $XXX now XX% organic reduction approximately last in revenue advertising views, digital for year, was last that full full of revenue a And represented million the XX% advertising $XXX in year, million up compared and XX% a more to versus year. up offset results the million million, XX%

to want million phase. take to XX% moment subscription $XX Print XXX% as $XX last XX% related said, to print I to decreased the to I revenue discuss year. licensing revenue on print. Digital revenue $XX digital is a year. $XX Again, principally, million. just then as increased last And from $XX down or was plan focus rate how year-over-year by compared and But in subscriber reduction million our million, million other to syndication $XX million by we this

million, We a been focused well profitable our generally the positive shared compared editorial million reducing acquisition a do and as the contribution expenses thereby content difference business, as net its $XX $XX and fulfillment the distribution, $XX that main was cost Ross going while we've less of The on subscribers two And revenue which subscription is and was offset million. our forward. and of helps maximizing printing $XX cost, million print to to our that print referenced, of declining continue as portion contribution, we'll overhead. expenses,

million profit million profit $XX XX% compared Gross in increased to last of to $XX gross year. XXXX

this to had large significant savings profit reduction by revenues actually points expense However, where line. the narrowed X below cost XX%. line. our And print in margin of that largest acquisition Again, gross the reflects is subscription we the shown in course,

However, is gross revenue. is total of going revenue We anticipate forward. of margin now expansion profit going two-thirds our forward digital our

the million a to loss year, prior positive last $XX revenue $XX.X EBITDA $XX year. as of XXXX $X.X -- million as against swing Total in million improvement to decrease or adjusted year XX% XX% $XXX million $XX of we're growth. $XXX our compared a $XX.X expenses compared a and was million million the positive million, loss of million Net showed XX%, last or of an from operating of

liquidity, cash Looking balance $X.X million we XXXX. year at million sheet equivalent our $XX.X the December compared with at and cash and XX, ended to in

out today's of in point is essentially one all course, Of our cash tier should held that environment, at financial institutions. I

operating $XX net $X.X credit. In generated million by working borrowed we our and of was capital the line million million quarter, under cash activities $XX had

make million are showing the As notes come in Ross the mentioned, an and had a of hundred near announcement therefore refinancing year discussions to X.X as we the And as Ross senior this. and in the they at options and future current deck. extension discussed, ongoing due end about have our expect regarding

extension mention the XX-K filled the today for Before I we an XXXX. to wanted for XX I XX ended our year of up, wrap annual filing that

the the the XXX know, company, the to its As you may the is B for of Sarbanes this internal report include of required annual company's auditor over Oxley reporting. assessment first control attestation we're financial Section on

not has complete that substantially will the completed XX-K XX-K We yet XX-K released to expect accounting we B do independent the filed time that our Rule that statements by numbers We additional be earnings, XX-calendar also needed within ‘XX. in the period its firm financial audits expect and day we in XX be the the the provided in today's extension with consistent procedures. will

that, I'll comments. call to the turn With for closing back Ross

Ross Levinsohn

our a was success Parade playbook. proprietary verticals truly more Group with tremendous of translating and of this margins, Doug. This fourth the and year positive of Perhaps our importantly, is milestone expanded adjusted our the generation Thanks, and history. Journal, first growth EBITDA to for operating growth cash third acquisitions continued through the leading Men's major time in creation Arena and into for

inorganic and we'll strategy profitable only a growth this. add built have We for organic incremental and and to platform growth

we year a efficiencies. Upon critical reaching have on scale also and infrastructure focused our driving with mass ago,

announcement, and our reduced flow. earnings focus XXXX, including efficiencies and vendors, partnerships, to staff, have our maximize on cash continue to profits and we in throughout seen will you've operating tuning expenses overall XXXX free expenses in As

advertising partners do we fixed and is and traffic inventory one costs. Adding this, inventory no us added way with additional advertising giving incremental

to across inventory, yield industry drive our as our improvements our doubling and unprofitable down continue wide, revenue print operations on tech benchmarks eliminating the and digital tactic. to another Continued stack, ad outpacing

the In weeks, partnerships announced with innovative we AI few two firms. last

pilot decades Keep accelerate be have back content like to news using weeks efficiently to and records we content Jasper and our can makes from in sense. great dating but just and our these few are workflows immense seven AI of Magazine value using already solutions and nearly Illustrated and consuming, Searching to mind, editors tap reporters there to a for Sports We the time XXXX. quickly give and archives AI pull that ability our the productivity last is We've improvements now history from on Parade and search and into seen stories. rich in in basis. ChatGPT content

operating for writers more our intend productive. EBITDA even to proactively this make believe do investors are but to We to a structure for of their XXXX. editors, our the I do are in thank we not we and Arena Profitability who've supported cash moment we how few I was us adjusting asked and the this our the hit ensure of focus. want to adjusted and teams efforts of are take brand. drive will and employees target. lead flow work our examples talented cost to those our this to summarize our initiative that Group These business the a this in journey replace of great just tireless XXXX fall

years year our added of recently quarters later, line two from first generated acquired lost and that largest of we the have to derived and profit. business support refocused to which $XXX revenue, businesses, ago doubled of and three new We so day context, two EBITDA. with in call, million TheStreet spring For $XX XX $XX about the was million EBITDA year investors, the of adjusted adjusted revenue Sports million Illustrated reset we in a that our from ‘XX, nearly earnings to and show strategy, a this team, full armed we months

the a unlimited of publishing, iconic to have to model profitability. firmly $XX adjusted growth. progress comes managing the for our million projected for in while has some growing revenue achieved print efficient as that while EBITDA, digital print our with drive $XX we potential we most decreased significant This of will on year even a this million significantly transformation profitable business establishing refocused brands And as company lines,

over to Operator? with And I'd for it all to you questions. like turn that,

Operator

Argento coming Mark the Street. is Mark line from And Lake from Instructions] today is live. your first [Operator question

Mark Argento

year. Congrats on a strong

the in larger kind RPMs, ad like navigating of Just understand you CPMs, have of you're -- you're you're at helpful. specific macro be maybe would online of the one Looks release you how guys level Ross of little a help are and question numbers, you least Doug, kind some broader of kind kind kind market. yourself more the anything Andrew, seeing to could talked you trends, the a some like, bit of macro -- looks kind about and guys was the numbers. in at on that bucketing one Could to press script strength, of that differentiating of us market where talk some how

Ross Levinsohn

Hi, Mark.

So, some better better from things that of the the seen our our and the side partnerships in yield apparatus, expansion sales release, direct growth more technology, things call, and we mentioned sales on of certainly in also programmatic in in year-over-year. landscape comes the we've

obviously number advertising you So, direct of And advertisers, have the CPM. campaigns. and you direct generally we achieved in a upticks sell higher sponsors when to significant

the yield one. have. direct the in, layer deals is That's our on more So, that higher we can pages part the we

growing inventory. our is two Part overall

XXX As XXXX. That you in XXXX. sites know, added in new we trend continues

So those things new as mentioned, seeing the distributing we're also in growth hundreds increased have content of significant by advertising. combined outlets, revenue obviously that to lent And to we we a then, pretty there.

to there's entered But and sort the in markets we've stock markets the ad As year XXXX, past. of last QX years as than both question stress little more this whole, that bit started a year. that see are in we markets seeing no the a

better see then engagement from past we've And the content to we're about as growth we've the seen. enabled on in the that really of that inventory our think type talked has yield sites, overall of consumers, our combination, pie driving doing I growing and through more us

if you want he to chime has anything, in if follow-up? Doug have obviously you or follow-up

Douglas Smith

would to I just no, that. Yeah, add

products continued we've as to well and products growth considerably with to as CPM. side push programmatic the other advertising on of our have that addition as In direct higher marketplace guaranteed in programmatic like premium private side, our such the programmatic even business,

managed upscale more the we've to programmatic even inventory, premium to So within product.

Mark Argento

then higher think to, can us guys last you to gross And for are of single digits the of looking helpful. manifests that about drivers? in mostly a year this to. hopefully think just some from you up XX low into Its, adjusted was the pretty to but move ended Could to decent guiding We're the going guys positive, numbers, revenues, obviously, obviously, I terms higher itself we nice but key from how only walk of step whatever in kind revenues, margin it you EBITDA up it the loss, or see margins. through XX year

margins this additional in on but know I couple the content mentioned pretty much a go us some incremental obviously you profitable. you see obviously leverage as model you're high some hopefully level is to at just just where profitability kind of you see walk through decent, No, a going to maybe more the from of could modest

Ross Levinsohn

can Doug, ahead on need to you. in you Doug. whenever. Sure. chime Go Didn't step

Douglas Smith

active That's in all we can see business, growth to latter right. No, acquired of properties our network of addition generate but to impact I business, as lot in it's was both opportunity we a all, first men's which in of that the and will have a going well. our we December journal last positive year, that say, those on properties in

We has continue growth and no and margins our really are licensing advertising digital associated almost in of business. And and north advertising digital to in see syndication and the syndication it. cost strong with on licensing XX%

our in year-over-year. to expenses So keep we continued anticipating And that operating as to in growth generate focus help those rather expenses line, well our as reductions the the line. that'll cost our that significant in profit and significant We're us drops saw bottom operating EBITDA. gross on margin a

Operator

coming the B. from your Daniel next Securities. [Operator line Daniel live. Instructions] is question Day Riley And is from

Daniel Day

integrating an on those you acquiring Maybe this me, update Men's started first Journal, one assets. the for

Still then you've Doug, surprised you work first integrated point? either more mentioning? you worth bit are into Anything Just And anything negative there. whether fully at this second, or to curious so far, positive Thanks. they more do question a that post-acquisition. think as

Douglas Smith

Yes. Hey Daniel.

sites platform. last last week. on integration completed came successfully of the The our have we So, the onto

brands. We those have -- to started hire expand staff to staff new

in skiing. We years. are bike and real the they the audience, have somewhat for dormant titles reach we been of the the a incredibly part have they Those about -- from in excited terms that have surf social enthusiast engagement last of been some the and couple particularly the over of that surprise pleasant most acquired

in that picking a So us nice up find those brands. was for great

and it lifestyle new which it's because dug journal in, And of pretty audience, we us wellness the side, kinds opening title to fitness opens new us already have which On and of big the opening male kind up travel that's we've a run men's a journal, really to you the health some when category, have for focused all of you up for can categories like categories male men's sports on to footprint in. gamut as food.

So, there. there's some nice crossover

pretty platform and for this transition content. amount around surprises long, with who've this and real this for No our us was the brands of onto been seamless quick

last So, so as two too, on we year, you I sort week can said, every average. math sites plus the added XXX of do

and So, acquiring good management that leads revenue. obviously ad to pretty at brands system we're And new or our getting them and stack. content moving with partnering onto

mentioned as advertisers. to significant also lot of we're to going here see addition bottom both pretty Doug earlier, these titles. line our and interest a from planned from finding consumers with So And we're

Daniel Day

maybe a in on what's just just on licensing more syndication revenue Thank and this detail And little the you. then bucket.

anything Is You're the there the of to then that revenue margin, growth at in generally or kind of your Is there moving forward? in with be million and And typically modeling overall timey how one margins? of just seasonality in there little it that there in associated shy $X quarter. should revenue? EBITDA we accretive

Ross Levinsohn

Yeah.

much so us brands outlets content. companies very Journal large and News, are others very like digital that create and side, Parade MSN, with business and brand to partner Yahoo margin beauty redistribute side. from and sell with We're Sports once, to of On a Men's Illustrated the and the Street it's the many. to Apple now content ranging aggressive Similar in third safe and high-end on tech SaaS producing newspaper the that parties wanting

do there's to And to of no that. cost us real course,

We've had seeing So, is partners. revenue grown newspaper here. one-timers tremendous. There's the digital generating really in no pretty real of few mean, a coming year majority from outlets. we margin were I very the substantially. ago we the We were

In from television acquisition, to newspaper local done large that work exciting sign the really we've and the groups the part, thanks has local companies, biggest in our with also managed the to parade some team partnerships country.

starting are we're that or all more media our on see of across So, to taking premier And that brands. up I is earlier, portfolio. content one show XXX as mentioned outlets number sites north pieces of our

grow So, sort transition print we the we continue to as segment this expect from and more that to high more part about margin and business excited our very, of traditional very overall away company. of this very of we're

Daniel Day

some and me, too had lot for you were publishers you more of it have experiencing to imagine he's of turn I of apart pressure on the out kind over. spend Maybe I'll ad have that's far reinvigorating One the some probably in or valuation. Maybe is that the Great. in there. downturn conversations accelerating a just putting past. -- then on smaller

looks to, on You cash capital And maybe few acquisition just you done requirements get and, pipeline whether you comment today. see acquisition next then balance over can happening, have with, your the how the working comment that to an your on months. ability

Ross Levinsohn

sure. Yeah,

of us months big to the the it thought so, on another to couple December. focused assets well we of we out time be have last of two and acquisition really do in three None any prudent did we sort So, would a months or lot of try integrating ones go had. till platformed we months in spent the

beginning so And checked with up now off we're operations there a and that little freed bit.

partners. the of not titles Those this already. to a those are added are acquisitions, platform have We bunch year new platform

there. So, opportunities we're seeing additional revenue and

pretty acquisitions The I your proven lot think successful question, we've in surprise growing is robust. Probably no you, in -- platforming of companies acquiring said and there and out you that businesses. struggling there, are as pipeline we're for to a the

here. that we've more lot the than inbounds So, inbounds, been in I've so I've time a gotten this seen of far year

work do that overall have and That said, we on also the own on assets to balance we sheet. our

too said So, on starting and up we're want I focus remarks, ensure in not that my free we this to on bit But a do debt free our our as capital we said, doing anything cash although we're that really there, time. aggressively year. our little do, really generate structure real to we

Prices assets we consider So, brands. are we're approach. taking there that a cheaper really to strong sure out for be cautious for

Operator

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

Ross Levinsohn

so Thanks on once you again, much quarter. everybody. next you talk Appreciate we'll to Okay. being and

Operator

Thank conference. you. today's This conclude does

may at participation. for your disconnect lines you this time. Thank You your

The Arena Group Holdings, Inc. (AREN) 16 Mar 232022 Q4 Earnings call transcript