Q1 2024 Financial Results - The Arena Group Holdings, Inc. (AREN)

Introduction

The Arena Group Holdings, Inc. (Ticker: AREN), a company in the Communication Services sector and Internet Content & Information industry, has released its financial results for the first quarter of the calendar year 2024. This report covers the period ending March 31, 2024, and was filed on May 17, 2024. Financial figures are reported in USD.

Complete details can be accessed here.

Revenue and Expenses

During Q1 2024, The Arena Group Holdings, Inc. generated a revenue of $28.94M. The cost of revenue amounted to $20.01M, resulting in a gross profit of $8.93M, which translates to a gross profit ratio of 30.87%.

General and administrative expenses totaled $10.14M, while selling and marketing expenses stood at $4.56M, combining to total selling, general, and administrative expenses of $14.70M. Other expenses for the quarter were reported at $2.19M, bringing the total operating expenses to $16.88M.

The company’s total cost and expenses were $36.89M, leading to an operating loss of $7.95M and an EBITDA of -$16.03M. After accounting for other income and expenses, including interest expense (-$4.34M) and other net expenses (-$4.73M), the pre-tax loss amounted to $12.68M.

Despite the operating loss, the company reported an income tax expense of $90.68M, leading to a net loss of $103.36M for the quarter. Earnings per share (EPS) were recorded at -$3.91 (diluted).

Balance Sheet

As of the end of Q1 2024, The Arena Group Holdings, Inc. held total assets worth $120.29M, including $4.00M in cash and equivalents, $26.45M in net receivables, and $67.91M in goodwill and intangible assets.

On the liabilities side, the company reported total current liabilities of $268.18M and total non-current liabilities of $1.50M, leading to total liabilities of $269.68M. The company's total stockholder equity was $168,000.

Key Ratios and Performance

The Arena Group Holdings, Inc. reported several key financial ratios, comparing it with its peers:

• Gross Profit Margin: 30.87%, above the peer average of 21.87%.
• Operating Profit Margin: -27.48%, above the peer average of -17,984.05%.
• Net Profit Margin: -357.17%, below the peer average of -16,546.26%.
• Return on Equity (ROE): -61536.67%, significantly outperforming the peer average of -109.33%.
• Current Ratio: 0.45, below the peer average of 2.80.

Other notable metrics include a debt-to-equity ratio of 1605.24% and an asset turnover ratio of 0.64 times.

Conclusion

In summary, The Arena Group Holdings, Inc. faced significant financial challenges in Q1 2024, reporting a substantial net loss and negative EBITDA. Despite these difficulties, the company showed strong gross profit margins. The balance sheet reflects high current liabilities, underscoring the need for strategic financial management moving forward.