Newsmax Inc. (NMAX) Earnings Call Transcript & Summary

Thanks for joining us this afternoon for Newsmax's conference call covering earnings for the third quarter of 2026. With me today are Chris Ruddy, our Chief Executive Officer, and Darryle Burnham, our Chief Financial Officer. During this call, Chris and Darryle will share prepared remarks about the quarter that just concluded. After that, we'll open things up for questions from the investment community. A recording of this call will be posted on our investor relations website not long after we finish. I'd like to note that forward-looking statements about Newsmax's financial performance and operating results may be made on this call. Management's current expectations form the basis for those statements. Certain factors identified on today's call and in the company's SEC filings could cause actual results to differ from what is stated. This call will also reference certain Non-GAAP financial measures. Reconciliations of those measures appear in the earnings release and our SEC filings, which you can find in the investor relations section of our website. I'll now hand the call to Chris Ruddy, Chief Executive Officer of Newsmax. Chris?

Thanks, Chris, and hello everyone, welcome to the third quarter 2026 earnings call. As a public company, this third quarter was the strongest we've ever had. If you set aside a one-time payment—Darryle will go through that in detail—revenue rose 21.6% to a record $55 million, and adjusted EBITDA came in at $5 million. That marks our highest quarterly revenue and our fastest growth rate since we listed, and it was the second quarter in a row with positive adjusted EBITDA. Measured against the broader cycle, the quality of our growth was fully evident; we're midway through the presidential election cycle, a point when cable news audiences and national advertising demand typically sit well below their peak. Despite those conditions, the two categories we had counted on to drive growth this year — affiliate fees and licensing — delivered just as expected. Renewals of affiliate agreements are coming in at elevated rates. Through licensing, the Newsmax brand is expanding worldwide and onto major AI platforms as people get their news from more varied sources; across all those markets, demand is genuine for independent journalism grounded in common sense, and we are well placed to supply it. Affiliate fees climbed 77% to $14.3 million. Newsmax entered the affiliate fee business fairly recently. When our contracts reach renewal, the pricing we obtain mirrors the audience reach and ratings we hold now. Because these deals span multiple years, every renewal establishes a higher baseline going forward. Beyond renewals, the quarter saw us keep building momentum. Six new Newsmax affiliates came on board, all of them independent cable operators. Those deals are on the smaller side, yet every one of them extends our reach. Even with viewership moving between platforms, linear news retains a solid role. We're positioned well to hold onto that presence, and it exposes viewers to the rest of what we provide. We also went live on AFN Now, the American Forces Network's streaming service, which delivers Newsmax to service members and their families posted abroad; in addition, we reached an agreement to buy two Miami radio stations, bringing a historic South Florida broadcast brand into the lineup of places where people can find Newsmax. The second area fueling our growth is brand and international licensing — the revenue stream expanding faster than any other. Compared with a year earlier, licensing revenue climbed 343%, reflecting the deals we widened at the start of this year as they showed up in our numbers. For this year, we expect roughly $16 million in international licensing fees, every dollar of it from contracts already inked, and we project that licensing revenues will annualize at about $25 million in the following year. Our reach is expanding as well. Newsmax Ukraine debuted on November 1, and this October we were honored to accept the Special Recognition Award from the Royal Television Society in the U.K., recognizing the part we played in assisting our partners as they constructed the Newsmax Ukraine studios amid the war. Our licensing partners are getting Newsmax ready for more European nations as well. Shareholders will hear more specifics from us down the road. We're happy to report as well that Newsmax is now available on all the major pay TV platforms in Israel, and three streaming distributors in the United States carry Newsmax en Español, with more to come; these are real partnerships, assembled in a capital-efficient way while reaching underserved audiences around the world. Advertising held up well. In a soft market, cable advertising revenue rose 3% versus the prior year. It has regularly outperformed what our ratings by themselves would suggest, because advertisers value a loyal, engaged audience that tunes in to news live. Our audience explains why the 2024 election brought millions of new viewers to Newsmax, and those viewers have remained with us. During the first nine months of this year, we reached nearly 49 million viewers, matching the same period of the 2024 election and rising 42% from 2023; we rank as the fourth highest-rated cable news channel, are number two in the category for engagement among adults 35 to 64, and continue to be the fastest-growing basic cable network since Nielsen started measuring us in 2020. Our viewers are deeply engaged, averaging 25 minutes per tune-in, compared with 14 minutes in 2020. They are loyal as well. 3.3 million people are watching Newsmax without ever turning to any of the top three cable news channels, and that count includes Fox News. Our viewers don't go anywhere even when the news cycle quiets down. With each election, new viewers come to Newsmax and they keep watching afterward, which means our audience keeps growing cycle after cycle. The way people get their news is constantly shifting, and we're shifting along with it. News consumption is spreading out across cable, OTT streaming, social, and now AI. Newsmax can be found on every platform, for everyone. At the close of the quarter, our total social followers had risen 13% year-over-year, reaching 26.8 million, and those followers are highly engaged. In Q3 we produced 44 million interactions, which was a 4% increase over Q2 despite having less content; on Facebook, among news publishers we came in first for interactions per follower. Newsmax2, the free streaming channel we offer, can be found on just about every major free streaming platform. As of now, N2 airs over the air via digital channels in 131 markets, covering approximately 87% of U.S. TV households. Our reach keeps growing, and with it our capacity to monetize, and in the quarters ahead we're assuming greater control over the advertising opportunity on N2, Newsmax2. Moving to Newsmax+, the paid streaming platform, engagement is strong. App users are devoting more of their time to it, and in the third quarter the average engagement time for each account rose 19% compared with a year earlier. More than 700 licensed and original documentaries and specials are now offered in the Newsmax+ catalog, and we keep adding originals along with further programming. Subscription revenue is still being built, and we are directing money toward programming, talent, and content so that our marketing efforts keep pace with customer demand for the app and its services; we have also brought in outside firms to widen that effort and grow subscribers. Rising engagement is what provides the foundation for turning that catalog into subscriber growth. The more we pull people toward the Newsmax brand on all our platforms, the more of them we anticipate will sign up for Newsmax+. Whether it's social, streaming, or AI, Newsmax will follow wherever the audience is. You'll see that Newsmax saw certain decreases in subscriptions to our print magazine, as well as in our legacy paid-subscription health and financial newsletter business. To lift profitability, the company has worked to trim overhead at these publications while we steer company resources toward online revenue streams — from news partners, our streaming app, international licensing, and additional income sources. As an example, this July we entered a multi-year AI content partnership with Meta, which puts Newsmax content across Meta's apps and devices. Our online news distribution has grown as well, through partnerships with Yahoo News, MSN, SmartNews, Apple, and Google. In terms of reach and revenues, we see particularly strong potential upside from AI, and I'm hopeful that some progress will show up over the next year. The cycle is turning. Keep in mind that advertising tied to midterm races for Congress as well as state and local elections flows mostly to local broadcast stations, local cable and pay TV operators, and local digital. Since Newsmax is a national cable news network, only a relatively small share of that spending reaches us.

What we gain from this is both engagement and new viewers. That midterm race was a hotly contested one, and much like what we saw after 2024, the audience it draws to Newsmax tends to remain with us. It also gives us a look at what lies ahead. AdImpact projected political ad spending for these midterms at $11.6 billion, which is more than the total spent during the 2024 presidential cycle. Looking ahead to 2028, we think the presidential contest, along with federal and state races, will only drive the money spent even higher. Newsmax anticipates gaining more on the advertising side during the 2028 cycle. The presidential race really gets going in 2027, and the first primary debates are anticipated that summer. There's no incumbent, so it's an open contest for the White House, and both parties are expected to have a crowded field. Our cable channel, Newsmax, hit 58 million total viewers in 2025—a year without a national election—and since then we've only expanded our presence across platforms. We plan to build on that over the coming year as the 2028 presidential election heats up, serving as a trusted outlet for the underserved, independent, and center-right market. Looking forward, we still expect our growth to be structural rather than cyclical, driven by affiliate fee expansion and international licensing. Darryle is going to cover the complete outlook for the year when he speaks. As is my habit, I'll finish with the broader view. There aren't many media firms that can connect with this audience at Newsmax's scale, credibility, and multi-platform reach. A two-year runway toward the 2028 cycle lies before us, and we head into it strong. With record revenue, a second straight profitable quarter, and a loyal audience spanning cable, streaming, and digital, we're eager for what's ahead, and we'll keep putting money behind growth. To our readers, viewers, advertisers, and shareholders, thank you; now I'll hand things over to Chief Financial Officer Darryle Burnham, who will take you through the financials. Darryle?

Thanks, Chris, and thanks to all of you for being with us today. As Chris pointed out, we posted record underlying revenues and achieved positive adjusted EBITDA on an adjusted basis for a second quarter in a row. Before we walk through the numbers, we want to address two items that shape how this quarter should be read. First, the one-time item that Chris referenced. In the third quarter, we recorded $14 million related to an amendment of an advertising purchase agreement with a customer, which changed that party's remaining rights and obligations. This amount does not recur. It appears as a new service revenue termination fee line in our broadcast segment. As a result, our advertising revenue excludes it. Where relevant, we will present our results on both a basis that includes it and one that does not. Second, our digital segment now carries a licensing line for the first time, reflecting $0.6 million of revenue from our media and AI content agreements. We expect content deals and other partnerships with AI companies to grow in the years ahead. Leaving the one-time item to one side, the quarter reflects the same shift we discussed last quarter. Our revenue mix kept moving toward higher margin, concentrated affiliate fee and licensing revenues, and higher rates across both expanded gross margin. Gross margin came in at 55.3% in the third quarter, or 44% once the one-time item is excluded, versus 35.3% in the prior year quarter. We will keep investing behind this growth. Our capital allocation priorities stay focused on supporting long-term growth, including investment in programming, talent, technology, distribution, digital initiatives, and other strategic opportunities. Now to our third quarter results. In the third quarter, we generated $69 million in total revenues, up 52.5% year-over-year. Excluding the $14 million one-time item, total revenues reached a record $55 million, up 21.6% year-over-year. Breaking that down by revenue stream for the quarter, beginning with our reportable segments, total broadcasting revenues rose 65.9% year-over-year to $60.7 million in the third quarter of 2026, which includes the $14 million one-time item. Without that item, broadcasting revenues increased 27.6% to $46.7 million. Growth in broadcasting came from higher affiliate fee revenue, driven by new contractual relationships and rate increases that took effect in late 2025 and 2026, along with expanded international licensing agreements. Total digital revenues fell 4.1% year-over-year to $8.3 million in the third quarter of 2026. The new media and AI licensing revenue was more than offset by declines in subscription revenue, product sales, and digital advertising. Now to our revenue by component. Advertising revenues were $28.1 million, up 1.9% year-over-year, as higher cable and satellite advertising from midterm election-related demand was partly offset by lower digital advertising. Affiliate revenues climbed 77.4% year-over-year to $14.3 million, driven by new contractual relationships and by rate increases that took effect in late 2025 and 2026. Subscription revenues of $6.1 million declined 12% year-over-year because of lower new customer acquisition, partly offset by gains from expanded affiliate agreements that make Newsmax available on more linear cable providers. Revenue from product sales fell 21.2% from a year earlier, landing at $1.2 million, which mainly mirrors weaker book and supplement sales. Licensing brought in $5.4 million, an increase of $1.2 million versus the prior year quarter, helped along by the amended international licensing agreement as well as revenue from our media and AI content agreements. Quarterly net income came in at $15.2 million, or $0.12 per share, against a net loss of $4.1 million, or $0.03 per share, in the same quarter a year ago. That improvement came largely from higher total revenue, gains in high-margin affiliate fee and licensing revenue, and reduced legal expenses, partly offset by ongoing investment in programming and production. Adjusted EBITDA for the quarter reached $19 million, a $20 million improvement over the negative $0.9 million posted in last year's same quarter. Once you exclude the one-time item, adjusted EBITDA stood at $5 million, marking a second straight quarter in positive territory. The underlying gain was mostly attributable to growth in high-margin affiliate fee and licensing revenue, partly offset by continued investment in programming, production, and OTT initiatives. We closed the quarter holding $26.7 million in cash and cash equivalents plus $110.8 million in short-term investments, which puts our total cash and investment position at $137.6 million, with no debt on the balance sheet. Moving to our outlook, we are keeping our underlying full-year 2026 revenue guidance at $212 million-$216 million. At the midpoint of that range, it reflects 13% growth year over year. When the one-time item is included, our full-year 2026 revenue guidance comes to $226 million-$230 million; we feel good about how we performed through the first nine months of the year and stay confident looking forward. Our higher-margin affiliate fee and licensing streams represent the largest levers for margin improvement in the near term. Meanwhile, we keep scaling the business, cutting our legacy spend, and pursuing opportunities to lift margins via revenue growth from content investment, technology, and monetization across multiple platforms. To wrap up, we stay focused on disciplined execution while continuing to invest in content, distribution, and OTT initiatives that underpin long-term growth. Given a strong balance sheet, no debt, and a diversified multi-platform revenue model, we believe we are well-positioned to deliver sustainable value for our shareholders. Thank you for your time today. At this point we would like to open the line for analyst questions. Operator?

Great. First off, Chris and Darryle, congratulations on a strong quarter. I've got one question and then a follow-up, and I'll ask them separately. Chris, in your prepared remarks you made some really thoughtful points, and I was hoping you could go through them again for us — specifically on engagement and monetization at Newsmax, usually when you compare the midterms with the presidential election.

Tom, thanks for that. Darryle, our CFO, has done studies and looked back at earlier presidential election cycles, and without fail, as far back as we can find, the two years leading up to a presidential election typically bring much higher engagement and revenues, and benefit the company overall in general. People sometimes refer to it as the Super Bowl of elections, and it has clearly gotten underway in earnest already. You only need to look at today's headlines around the web concerning Rubio and Vance. That kind of thing draws attention, plenty of drama, plenty of political interest, and in my view that will help us grow. At the same time, Congress is divided, and that is going to matter a great deal. There will be considerable heavy fundraising and political developments connected to that. We anticipate coming out ahead. As engagement rises, ratings rise, and all of our various platforms generally experience gains. That ought to be positive for revenues overall.

Great; as a follow-up, it sounds like you picked up two radio stations in Miami. Could you remind investors of your approach to M&A? Going forward, which kinds of assets would you look at buying rather than building yourselves?

Radio has always been of interest to Newsmax. We come from the radio world in the sense that many radio hosts have promoted Newsmax over the years, going back to when we began as a dot-com in the '90s. I believe we were probably the most closely aligned with radio talk show hosts across the country. That market is enormous. In any given month, 30 million to 50 million people are tuning in to talk radio, based on various industry estimates. In certain respects, it's thought to be larger than the cable news market, and those listeners are extremely engaged and passionate. Over the years, radio has been viewed as legacy media. The numbers on radio have declined, but podcasts, which are closely related to radio, have risen. If you look at some of the most successful podcasters, they are also people who are on radio or have radio affiliations. Newsmax entered radio with a syndicated radio show we launched several years ago, "The Rob Carson Show," which is a talk radio program that airs from 12:00 to 2:00 every day. It's in about 35 markets, I believe, at present. We had this opportunity for a Spanish-speaking station in Miami that's very famous, Radio Mambí, and a sister station that the company there owned. The company that owned it had not been investing in the programming. It had lost some of its audience, but the name is excellent. The reach of the signal on both stations is good. It reaches pretty much the Miami-Dade marketplace, which is a burgeoning market. Up to now, we've had almost no business involvement with the Latino community. We saw this as a useful entry point—not just to get into radio but also to establish a presence in the Spanish-speaking market, where we could begin by creating social media and other podcasting content with that station serving as our foundation. We viewed it as a solid move. I wouldn't necessarily call it a component of some broader M&A strategy on our part. We're definitely willing to consider suggestions, though our preference is to keep expanding the platforms in their current places—cable, streaming, the plus service we offer, and our app—and we're pursuing those along with supplementary efforts such as social media.

Great. Thanks, Chris. And thank you, Darryle.

Hello. I appreciate you taking my question; this is Jacob Mutchler filling in for Michael today. I was wondering whether you might share some detail on the Newsmax+ content library. You moved from more than 300 titles up to over 700, so I'm curious what you're seeing when it comes to subscriber additions and retention, and whether there are any early signs that the bigger content lineup is helping those trends improve. Thanks.

Well, in our view, what makes a streaming service succeed isn't just acquiring subscribers — it's that they stay with you. Our retention rates have been fairly high, I'd say, though we began with a core audience. As we expand, we recognize that satisfying that audience will require more content, so they feel the $50 a year is worth paying for a subscription. It seemed to us that the content of just the cable channel, which many people receive through cable systems, or just the streaming channel, Newsmax2, which is free on most streaming platforms and on the internet, wasn't sufficient to make subscribers commit for the long term, and that having more content would benefit us. We chose to put more emphasis on content. As the old saying goes, "Content is king." As you can see, the numbers show, we've been building that out. There does appear to be a significant increase — certainly, as we mentioned in one of our statements today, in engagement and viewing time, with people spending more on the app year-over-year. That's getting a boost. We're doing not only news, not only documentaries — we're also doing some scripted TV shows from the '60s and '70s, programs such as "Bonanza," "Dragnet." More of those are on the way. We're doing some movies as well. We have a very big genre and a third channel we added called "World at War," our military history channel. Recently we have been adding a lot of true crime or police bodycam, police live-to-tape series to Newsmax. One is called "Caught on Bodycam." We just bought "Bad Hombres," a program developed as a documentary series for the ICE during their recent operations. It just premiered on Newsmax and will be part of the app. In those genres, we think there'll be a lot of interest; but we see ourselves as a family-friendly news and entertainment app. Over the long run, we think there'll be a big market for that, because in our view the current app services — Netflix, Paramount, Disney — aren't focusing on that audience; that gives us a niche to move into while allowing for broad distribution of the channels, Newsmax 1 and Newsmax2.

Understood. That's great. Thanks for the detail. Could you also speak to how widely AI is used inside the company right now, both for content creation and for production, and how much more room do you see to boost efficiency and cut costs with AI internally? Thanks.