Rumble (RUM)

Video sharing platform Rumble (NASDAQGM:RUM) announced better-than-expected revenue in Q1 CY2025, with sales up 33.7% year on year to $23.71 million. Its GAAP loss of $0.01 per share was 90% above analysts’ consensus estimates.

Company Overview

Founded in 2013 as a champion for content creator rights and free expression, Rumble (NASDAQ:RUM) is a video sharing platform that positions itself as a free speech alternative to mainstream platforms, offering creators more favorable revenue-sharing opportunities.

AI-driven content creation, personalized media experiences, and digital advertising are evolving, which could benefit companies investing in these themes. For example, companies with a portfolio of licensed visual content or platforms facilitating direct monetization models could see increased demand for years. On the other hand, headwinds include growing regulatory scrutiny on AI-generated content, with many publishers balking at anything that gets no human oversight. Additional areas to navigate include the phasing out of third-party cookies, which could make traditional ways of tracking the online behavior of consumers (a secret sauce in digital marketing) much less effective.

Rumble's primary competitors include major video sharing platforms like YouTube (owned by Alphabet, NASDAQ:GOOGL), TikTok (owned by ByteDance), and Vimeo (NASDAQ:VMEO), as well as alternative platforms like Odysee and BitChute that also position themselves as free speech havens.

A company’s long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years.

With $101.5 million in revenue over the past 12 months, Rumble is a small player in the business services space, which sometimes brings disadvantages compared to larger competitors benefiting from economies of scale and numerous distribution channels. On the bright side, it can grow faster because it has more room to expand.

As you can see below, Rumble grew its sales at an incredible 95.2% compounded annual growth rate over the last four years. This shows it had high demand, a useful starting point for our analysis.

Long-term growth is the most important, but within business services, a stretched historical view may miss new innovations or demand cycles. Rumble’s annualized revenue growth of 38.4% over the last two years is below its four-year trend, but we still think the results suggest healthy demand.

This quarter, Rumble reported wonderful year-on-year revenue growth of 33.7%, and its $23.71 million of revenue exceeded Wall Street’s estimates by 4.1%.

We also like to judge companies based on their projected revenue growth, but not enough Wall Street analysts cover the company for it to have reliable consensus estimates.

Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.

Rumble’s high expenses have contributed to an average operating margin of negative 137% over the last five years. Unprofitable business services companies require extra attention because they could get caught swimming naked when the tide goes out. It’s hard to trust that the business can endure a full cycle.

Analyzing the trend in its profitability, Rumble’s operating margin decreased significantly over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. Rumble’s performance was poor no matter how you look at it - it shows that costs were rising and it couldn’t pass them onto its customers.

This quarter, Rumble generated a negative 153% operating margin. The company's consistent lack of profits raise a flag.

Revenue trends explain a company’s historical growth, but the change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Rumble’s earnings losses deepened over the last two years as its EPS dropped 41.4% annually. We’ll keep a close eye on the company as diminishing earnings could imply changing secular trends and preferences.

In Q1, Rumble reported EPS at negative $0.01, up from negative $0.21 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. We also like to analyze expected EPS growth based on Wall Street analysts’ consensus projections, but there is insufficient data. This signals Rumble could be a hidden gem because it doesn’t have much coverage among professional brokers.

Although earnings are undoubtedly valuable for assessing company performance, we believe cash is king because you can’t use accounting profits to pay the bills.

Rumble’s demanding reinvestments have drained its resources over the last five years, putting it in a pinch and limiting its ability to return capital to investors. Its free cash flow margin averaged negative 103%, meaning it lit $103.13 of cash on fire for every $100 in revenue.

Taking a step back, we can see that Rumble’s margin dropped by 59.3 percentage points during that time. It may have ticked higher more recently, but shareholders are likely hoping for its margin to at least revert to its historical level. Almost any movement in the wrong direction is undesirable because it’s already burning cash. If the longer-term trend returns, it could signal it’s in the middle of a big investment cycle.

Rumble burned through $14.63 million of cash in Q1, equivalent to a negative 61.7% margin. The company’s cash burn was similar to its $34.28 million of lost cash in the same quarter last year.

We were impressed by how significantly Rumble blew past analysts’ EPS expectations this quarter. We were also glad its revenue outperformed Wall Street’s estimates. Zooming out, we think this was a solid print. The stock traded up 3% to $8 immediately following the results.

Updated: May 22, 2025 at 11:57 PM EDT

The latest quarterly earnings matters, sure, but we actually think longer-term fundamentals and valuation matter more. Investors should consider all these pieces before deciding whether or not to invest in Rumble.

There are a lot of things to like about Rumble. First off, its revenue growth was exceptional over the last four years. And while its declining EPS over the last two years makes it a less attractive asset to the public markets, its projected EPS for the next year implies the company’s fundamentals will improve.

Rumble’s price-to-sales ratio based on the trailing 12 months is 21.6x. Looking at the business services landscape right now, Rumble trades at a pretty interesting price. If you’re a fan of the business and management team, now is a good time to scoop up some shares.

Wall Street analysts have a consensus one-year price target of $15 on the company (compared to the current share price of $9.29), implying they see 61.5% upside in buying Rumble in the short term.

Want to invest in a High Quality big tech company? We’d point you in the direction of Microsoft and Google, which have durable competitive moats and strong fundamentals, factors that are large determinants of long-term market outperformance.

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