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AREN NYSE AM· The Arena Group Holdings Inc.
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AREN NYSE AM· The Arena Group Holdings Inc.
Earnings report Q3 2023

The Arena Group Holdings, Inc. Reports Strong Revenue Growth in Latest Quarter

Segments of revenue

The Arena Group Holdings, Inc. reported revenue of $63.42 million for the three months ended September 30, 2023, compared to $57.28 million for the same period in 2022. This represents a year-over-year increase of $6.14 million or 10.7%. For the nine months ended September 30, 2023, the company generated revenue of $173.60 million, up from $159.27 million in the prior year, reflecting a growth of $14.33 million or 9.0%.

Strengths

The company's revenue growth can be attributed to several factors. Firstly, there was a higher mix of premium digital advertising, as evidenced by the 23% increase in revenue per thousand impressions (RPM). Additionally, the company experienced more than doubling of other digital revenue, particularly from e-commerce. These factors contributed to a significant improvement in gross profit percentage, which increased from 38.0% in the nine months ended September 30, 2022, to 41.0% in the same period of 2023.

Challenges

Despite the overall revenue growth, the company faced challenges in managing its cost of revenue. For the three months ended September 30, 2023, the cost of revenue increased by $2.57 million or 7.9% compared to the same period in the previous year. This increase was primarily driven by higher publisher partner revenue share payments, technology and software licensing fees, and content and editorial expenses. These cost increases partially offset the revenue growth and impacted the company's gross profit margin.

Noteworthy

It is worth noting that the company's revenue growth outpaced the increase in cost of revenue, resulting in a 17.7% growth in gross profit for the nine months ended September 30, 2023, compared to the same period in 2022. This indicates that the company was able to effectively manage its costs and improve profitability despite the challenges faced.

Summary

The Arena Group Holdings, Inc. delivered a strong performance in the latest quarter, with a notable increase in revenue. The company's focus on premium digital advertising and the growth of other digital revenue streams contributed to the positive results. However, challenges in managing the cost of revenue impacted the gross profit margin. Overall, the company demonstrated its ability to generate revenue growth and improve profitability, highlighting its strengths in the digital advertising and e-commerce sectors.

Source documents

Form 10-Q  filed on Nov 14, 2023
87 pages scanned

Reference data

Company financials Q3 revenue 63.4M
Analyst estimates Q3 EPS missed by -70.09%
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