0002026478-25-000032
SEC filingRevenue grew 18.4% YoY but net loss surged to $75.2M due to Dominion lawsuit settlement and higher costs.
For the three months ended June 30, 2025, total revenue increased 18.4% to $46.4 million from $39.2 million in the prior year period. The growth was driven by a 26.2% increase in advertising revenue ($29.9M vs $23.7M) primarily due to higher linear cable and satellite advertising from improved Nielsen ratings, partially offset by a decline in digital advertising as 2024 was an election year. Affiliate fee revenue grew 7.3% to $7.3M from new contracts and rate increases. Subscription revenue rose 5.2% to $7.0M from Newsmax+ subscriber growth, offset by lower publication subscriptions. Product sales increased 5.1% to $1.6M.
Gross profit increased 5.5% to $17.6M, but gross margin contracted to 38.0% from 42.6% as cost of revenues grew 28.0% to $28.8M due to higher headcount, programming, production costs, and investment in Newsmax2. General and administrative expense surged 338.0% to $94.0M, primarily driven by $68.4M in litigation expenses related to the Dominion settlement, along with increased marketing, travel, stock-based compensation, and legal fees. Other income net of $1.2M (vs expense of $0.1M) was mainly from interest and dividends offset by unrealized losses on marketable securities. Net loss widened to $75.2M from $4.8M.
Broadcasting segment revenue grew 28.5% to $38.0M, with advertising up 36.4% ($26.2M), affiliate fees up 7.3% ($7.3M), and subscriptions up 29.2% ($3.8M). Despite revenue growth, Segment Adjusted EBITDA declined 58.7% to $1.6M as cost of revenues rose 29.7% and G&A increased 62.8% due to programming investments, headcount, and public company costs.
Digital segment revenue declined 12.6% to $8.4M, with advertising down 17.7% ($3.6M) and subscriptions down 13.6% ($3.2M) due to the election year effect and reduced marketing for customer acquisition. Product sales rose 5.1% to $1.6M. Segment Adjusted EBITDA worsened to -$5.4M from -$1.9M, as G&A increased 52.9% from headcount, consulting, and legal fees.
Management highlighted key growth strategies: maintaining leadership in news content, increasing revenue through premium content, and expanding distribution (including international and OTT). They noted the potential for additional distribution growth and affiliate fee expansion as a relatively new network. No specific quantitative guidance was provided. The company completed a private placement in February 2025, raising $206.7M, and an IPO in March 2025, providing liquidity. As of June 30, 2025, cash and investments totaled $197.9M. Management believes existing liquidity is sufficient for at least 12 months. However, the Dominion settlement of $67M (payable over three years) and ongoing legal costs remain headwinds.
As of June 30, 2025, Newsmax held $33.8 million in cash and cash equivalents and $164.1 million in marketable securities, totaling $197.9 million in liquid assets. The company has no outstanding debt on its lines of credit, which total $9 million in available capacity. Shareholders' equity improved significantly from a deficit of $137.6 million at December 31, 2024 to $106.9 million, driven by the IPO and conversion of preferred stock. The company's working capital position strengthened, with current assets of $237.3 million exceeding current liabilities of $94.9 million.
Total purchase commitments amount to $18.7 million, with $11.2 million due within one year. These include $6.9 million in distribution agreements and $11.8 million in other commitments, primarily talent costs and service agreements. The most significant liability is the settlement obligations totaling $99.6 million, comprising $67 million for the Dominion settlement (payable in three installments through January 2027) and $32.6 million for a commercial counterparty settlement (payable through 2029). The company also has operating lease obligations of $6.3 million and finance lease obligations of $0.2 million.
Newsmax paid $915,069 in dividends during the six months ended June 30, 2025. Capital expenditures were $689,460, representing 0.75% of total revenue. The company entered into a $1.2 billion Standby Equity Purchase Agreement (SEPA) with Yorkville on April 4, 2025, providing a potential source of future equity financing. No share repurchases were executed during the period. The company has no debt outstanding.
The company operates two reportable segments: Broadcasting and Digital. For the six months ended June 30, 2025, Broadcasting generated $74.2 million in revenue (80.9% of total) with Segment Adjusted EBITDA of $4.7 million (6.4% margin). Digital generated $17.5 million in revenue (19.1% of total) with a Segment Adjusted EBITDA loss of $8.1 million (-46.5% margin). Broadcasting revenue grew 24.3% year-over-year, driven by advertising and affiliate fee growth, while Digital revenue declined 12.9%, primarily due to lower advertising and subscription revenue. No geographic breakdown was provided.
Net loss of $92.4M exceeded operating cash outflow of $38.9M, indicating significant non-cash charges (depreciation $3.1M, stock-based compensation $5.0M, change in warrant/derivative liabilities $7.9M) and a $45.0M increase in settlement liability improved cash flow. Working capital changes consumed $6.9M (accounts receivable, prepaids, other assets). Capex of $0.7M was minimal relative to operations. The large investing outflow stems from $131.7M in investment purchases, partially offset by $28M maturities. Financing raised $153.2M, primarily from IPO net proceeds of $66.7M and convertible preferred stock net of $80.7M, with $0.9M in dividends. The company ended with $33.8M cash, up from $24.1M. Negative free cash flow (operating minus capex) was -$39.6M, covered by financing.