Trump Media and Technology Group Corp. (Nasdaq: DJT) (“TMTG” or the
“Company”), operator of the social media platform Truth Social, is
announcing financial results for the fiscal quarter ending on March
31, 2024, and will also file its 10-Q with the Securities and
Exchange Commission (the “SEC”) today. TMTG’s quarterly report and
financials were reviewed by Semple, Marchal & Cooper, LLP,
which the Company appointed as its independent registered public
accounting firm, effective May 4, 2024, after a detailed evaluation
process.
As of March 31, 2024, TMTG’s balance of cash and
cash equivalents was $273.7 million. This comprises $233.7 million
in unrestricted cash accounts and $40.0 million held in restricted
accounts pending the effectiveness of TMTG’s registration statement
on form S-1, which was filed with the SEC on April 15, 2024.
TMTG CEO Devin Nunes said, “After an
unprecedented, years-long process, we have consummated our merger
and dispensed with the vast bulk of merger-related expenses,
leaving the Company well-capitalized and supported by a legion of
retail shareholders who believe in our mission to provide a
free-speech beachhead against Big Tech censorship. Having started
from scratch not long ago, TMTG debuted Truth Social on the web,
iOS, and Android in 2022, and is now a publicly traded company
operating an international social media platform. TMTG is
well-positioned at this early stage to grow quickly and fulfill our
mission. Our positive working capital allows us to explore and
pursue a wide array of initiatives and innovations to build out the
Truth Social platform including potential mergers and acquisitions
activities. We are particularly excited to move forward with live
TV streaming by developing our own content delivery network, which
we believe will be a major enhancement of the platform.”
The Company had a first-quarter operating loss
of $12.1 million based on non-GAAP Adjusted EBITDA calculations.
Approximately half of that amount, $6.3 million, consisted of
one-time payments related to the closing of TMTG’s merger with
Digital World Acquisition Corp. (“DWAC”). TMTG believes it has
sufficient working capital to fund operations for the foreseeable
future.
In the first quarter, the Company recorded
$311.0 million in non-cash expenses arising from the conversion of
promissory notes, and the associated elimination of prior
liabilities, immediately before the closing of TMTG’s merger with
DWAC on March 25, 2024. These non-cash expenses resulted in a GAAP
loss of $327.6 million for the first quarter. A table further
illustrating these results is included in the section below titled
“Reconciliation of Non-GAAP Financial Measures.”
At this early stage in the Company’s
development, TMTG remains focused on long-term product development,
rather than quarterly revenue. By adding features to Truth Social,
launching live TV streaming, and building out its ecosystem, the
Company aims to first develop a slate of best-in-class products
that can then be leveraged to increase revenue and drive long-term
value. TMTG earned $770,500 in revenue in the first quarter,
largely from the Company’s nascent advertising initiative, which
will continue to evolve as TMTG implements its vision.
Streaming Update
- On April 16, 2024,
the Company announced that after six months of testing on its Web
and iOS platforms, it has finished the research and development
phase of its new live TV streaming platform and will begin scaling
up its own content delivery network ("CDN"). This roll out of
streaming content will occur in three phases:
- Phase 1: Introduce
Truth Social's CDN for streaming live TV to the Truth Social app
for Android, iOS, and Web.
- Phase 2: Release
stand-alone Truth Social over-the-top ("OTT") streaming apps for
phones, tablets, and other devices.
- Phase 3: Release
Truth Social streaming apps for home TV.
- In recent weeks, as part of its TV streaming initiative, TMTG
signed contracts with its first data center partner to host its own
TV content distribution network. The Company also signed contracts
with a core hardware vendor to obtain equipment for the
project.
Shareholders
Based on data provided to TMTG, as of April 29,
2024, the Company’s stock was held by over 621,000 shareholders,
the vast majority of whom are retail investors.
Reconciliation of Non-GAAP Financial
Measures
As noted above, the following table reconciles
each non-GAAP financial measure to its most directly comparable
GAAP financial measure:
|
|
Three Months Ended |
|
|
March 31, |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
(in thousands) |
Adjusted EBITDA: |
|
|
|
|
|
|
Net income |
|
$ |
(327,599.7) |
|
|
$ |
(210.3) |
|
Depreciation |
|
|
5.6 |
|
|
|
16.5 |
|
Stock based compensation expense1 |
|
|
84,588.0 |
|
|
|
- |
|
Interest expense, net |
|
|
2,788.8 |
|
|
|
2,024.3 |
|
Merger related expenses |
|
|
1,640.2 |
|
|
|
202.1 |
|
Change in fair value of derivative liabilities2 |
|
|
225,916.0 |
|
|
|
(5,659.9) |
|
Loss on extinguishment of debt |
|
|
542.3 |
|
|
|
- |
|
Adjusted EBITDA3 |
|
$ |
(12,118.8)4 |
|
$ |
(3,627.3 ) |
|
|
|
|
|
|
|
|
|
About TMTG
The mission of TMTG is to end Big Tech’s assault
on free speech by opening up the Internet and giving people their
voices back. TMTG operates Truth Social, a social media platform
established as a safe harbor for free expression amid increasingly
harsh censorship by Big Tech corporations.
Investor Relations
ContactShannon Devine (MZ Group | Managing Director - MZ
North America)Email: shannon.devine@mzgroup.us
Media Contactpress@tmtgcorp.com
Cautionary Statement About Forward-Looking
Statements
This press release includes forward-looking statements
regarding, among other things, the plans, strategies, and
prospects, both business and financial, of TMTG. We have based
these forward-looking statements on our current expectations and
projections about future events, including the future plans and
potential success of the streaming services under the CDN. Although
we believe that our plans, intentions, and expectations reflected
in or suggested by these forward-looking statements are reasonable,
we cannot assure you that we will achieve or realize these plans,
intentions, or expectations. Forward-looking statements are
inherently subject to risks, uncertainties, and assumptions.
Generally, statements that are not historical facts, including
statements concerning possible or assumed future actions, business
strategies, events, or results of operations, are forward-looking
statements. These statements may be preceded by, followed by, or
include the words “believes,” “estimates,” “expects,” “projects,”
“forecasts,” “may,” “will,” “should,” “seeks,” “plans,”
“scheduled,” “anticipates” or “intends” or similar expressions.
Forward-looking statements are not guarantees of future
performance, and involve risks, uncertainties and assumptions that
may cause our actual results to differ materially from the
expectations that we describe in our forward-looking statements.
There may be events in the future that we are not accurately able
to predict, or over which we have no control.
You should not place undue reliance on forward-looking
statements. Although we may elect to update forward-looking
statements in the future, we disclaim any obligation to do so, even
if our assumptions and projections change, except where applicable
law may otherwise require us to do so. Forward-looking statements
are not guarantees of performance. Readers should not put undue
reliance on these statements, which speak only as of the date
hereof. All forward-looking statements attributable to us or
persons acting on our behalf are expressly qualified in their
entirety by the cautionary statements herein. Important factors
that may affect these projections or expectations include, but are
not limited to: statements about the ability of TMTG to realize the
benefits from the business combination; the ability of TMTG to
maintain the listing of TMTG common stock on Nasdaq; ability to
realize the benefit of the streaming services, its cost
effectiveness, performance, stability, and future financial
performance following the business combination; the impact of the
outcome of any known or unknown litigation or other legal
proceedings; the ability of TMTG to forecast and maintain an
adequate rate of revenue growth and appropriately plan its
expenses; expectations regarding future expenditures of TMTG; the
future revenue and effect on gross margins of TMTG; the attraction
and retention of qualified directors, officers, employees, and key
personnel of TMTG; the ability of TMTG to compete effectively in a
competitive industry; the impact of the ongoing legal proceedings
in which President Donald J. Trump is involved on TMTG’s corporate
reputation and brand; expectations concerning the relationships and
actions of TMTG and its affiliates with third parties; the short-
and long-term effects of the consummation of the business
combination on TMTG’s business relationships, operating results,
and business generally; the impact of future regulatory, judicial,
and legislative changes in TMTG’s industry; the ability to locate
and acquire complementary products or product candidates and
integrate those into TMTG’s business; Truth Social, TMTG’s initial
product, and its ability to generate users and advertisers; future
arrangements with, or investments in, other entities or
associations; competition and competitive pressures from other
companies in the industries in which TMTG operates; and changes in
domestic and global general economic and macro-economic conditions.
For a discussion of these important factors and other risks, please
read the information set forth under the caption “Risk Factors” in
our Annual Report on Form 10-K for the fiscal year ended December
31, 2023 and other documents filed with the U.S. Securities and
Exchange Commission, which describe additional factors that could
adversely affect our business, financial condition, or results of
operations. The Company’s SEC filings are available publicly on the
SEC website at www.sec.gov. New risk factors emerge from time to
time and it is not possible to predict all such risk factors, nor
can we assess the impact of all such risk factors on our business,
or the extent to which any factor or combination of factors may
cause actual results to differ materially from those contained in
any forward-looking statements.
1 Non-cash expense related to pre-merger TMTG Executive
Promissory Notes and vendor convertible notes that were marked to
market upon consummation of the merger with
DWAC. 2 Non-cash
expense related to pre-merger TMTG Convertible Notes that were
marked to market upon consummation of the merger with
DWAC.
3 In addition to our financial results prepared
in accordance with U.S. GAAP, we believe the Adjusted EBITDA, a
non-GAAP financial measure, is useful in evaluating our operational
performance. We believe that this non-GAAP financial measure is
useful as a supplement in evaluating our ongoing operational
performance and enhancing an overall understanding of our financial
performance. The non-GAAP financial measure included in this press
release should not be considered in isolation from, or as a
substitute for, financial information prepared in accordance with
GAAP. In addition, similarly titled measures may be calculated
differently by other companies and may not be comparable. A
reconciliation between our non-GAAP financial measure and its
nearest GAAP equivalent is included in this press release. We use
both GAAP and non-GAAP measures to evaluate and manage our
operations.
Adjusted EBITDA is a supplemental measure of our
operating performance used by management and investors to evaluate
our business. We calculate Adjusted EBITDA as net income excluding
depreciation, interest expense (net), provision or benefit for
income taxes, stock based compensation expense, merger related
costs, recognized gain or loss on changes in fair value of our
derivative liabilities and certain other items. We believe that the
inclusion or exclusion of certain recurring and non-recurring items
provides a supplementary measure of our core operating results and
permits useful alternative period-over-period comparisons of our
operations but should not be viewed as a substitute for comparable
GAAP measures.
4 The first quarter 2024 adjusted EBITDA loss includes $6.3
million of one-time payments related to the consummation of the
Merger with Digital World Acquisition Corporation.
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