RUM Group Inc. Class A Common Stock 2026 Q2 Earnings Call

Please go ahead. Thank you, operator.

I am here today with Chris Pavlovski, Founder, Chairman, and CEO of RUM Group, and Mike Masci, CFO. A press release detailing our second quarter 2026 results was released today and available on our investor relations website. Before we begin the formal presentation, I would like to remind everyone that statements made on this call may include predictions, estimates, or other information that may be considered forward-looking. All forward-looking statements are made only as of the date of this call and should be considered in conjunction with the company's cautionary statements in our earnings release and the factors included in our filings with the SEC. Future company updates will be available via press release and the company's identified social media channels. I will now turn the call over to RUM Group's Founder, Chairman, and CEO, Chris Pavlovski.

Good afternoon, everyone, and thank you for joining us. Last quarter, I told you this would be the last call before Rumble meaningfully entered the cloud and agentic AI era. Today, I am glad to say that transformation is complete. On June 17th, we closed our acquisition of Northern Data, securing approximately 85.2% of its outstanding shares. With the deal closed, we renamed our parent company RUM Group Inc. We now operate two distinct synergistic business units, Rumble, our video platform, and Quake AI, our new cloud and AI infrastructure business, combining Rumble Cloud with Northern Data's estate of roughly 22,000 NVIDIA H100 and H200 GPUs. To kick off our first earnings call as a combined company, I am thrilled to announce that our revenue for the second quarter was $40.4 million, up 61% from $25.1 million in the second quarter of 2025.

I am proud to say it has been nearly five years since we announced going public, and we are still posting all-time records for our company, and we anticipate that we will post another all-time record in the next upcoming quarter. I want to spend a minute on the strategic logic here because I think it is important for everyone on this call to understand where we are headed. Rumble spent years building its own rails as a free speech platform, our own bare metal compute, our own CDN, and the network to deliver low latency streaming at scale. Combine that now with an AI compute as a service business like Northern Data, and you get a compelling end-to-end AI infrastructure company. That is Quake AI, and it is going to be the financial engine of RUM Group going forward.

On execution, Quake AI's existing GPU estate is running at more than 85% utilization today, up sharply from where it stood not long ago. That improvement reflects a deliberate focus on customer support, software, and infrastructure-as-a-service execution, and it's what gave us the credibility to win the next stage of growth. in June, we signed a multi-year agreement with Together AI to deploy NVIDIA HGX B300 GPU capacity, establishing RUM Group as a credible, independent provider of large-scale AI infrastructure outside the traditional hyperscaler ecosystem. It validates that our customers trust our execution enough to partner with us and that NVIDIA is willing to support us with the supply allocation to keep growing. The next stage for this team is monetizing our 250 megawatts of power targeted for 2027, the grid connections, and agreements that put us in position for real deployment next year.

That capacity spans our marquee 180-megawatt powered site near Atlanta, Georgia, one of the most important internet points of presence in the country. We continue to see strong customer momentum as well as meaningful progress on the site development, where the substation is already built and the transformers are on-site. In addition, we also have a smaller site in Pittsburgh and two European sites, roughly 50 megawatts in Sweden and roughly 20 megawatts in Norway. We continue to see encouraging and unprecedented growth in demand for AI compute as a service, and our customer and demand pipeline remains strong. Simply monetizing 250 megawatts of currently unmonetized capacity represents what we believe is a $3 billion-plus annual run rate opportunity for RUM Group. Turning to our video business.

Average global monthly active users were 57 million in the second quarter, and ARPU was $0.48, up 20% quarter-over-quarter. Our management team's focus is to continue to increase revenue by bringing in brand advertising. Additionally, with the recent formation of Quake AI, we are quickly learning from our AI clientele that Rumble may have a much more compelling monetization opportunity. As the AI industry moves into the robotic era in the coming years, Rumble's spatial temporal data, otherwise known as video data, becomes increasingly valuable and very important to robotic learning. For example, contextual data, like what Reddit has, is a prime example of the value in today's world of AI. But we believe in one to two years, this will shift heavily towards video data.

Only a week ago, it was reported in the news that Amazon was exploring ways to tap into Twitch's video data. In fact, Quake AI clientele have already expressed interest in our video data. Our team is looking at various ways to capitalize on this opportunity and add another bucket of potential revenue for the creator community. With significant spatial temporal data on Rumble, combined with the AI compute rails we are building and deploying at Quake, RUM Group sits in a very unique position compared to today's neoclouds. Like them, we can offer scaled AI compute, but unlike them, we have a trove of video data and a creator community that can help power the robotics era. In short, we have data, we have the rails, and we have the community to power the future of AI, which we believe is the robotic and agentic AI era.

With that, let me turn the call over to our CFO, Mike Masci, who will walk you through the quarter in more detail, along with some important updates on our guidance process and reporting on our businesses going forward.

Hey, thanks, Chris, and good afternoon, everyone. This was a landmark quarter, both operationally and financially. Let me start by walking you through the high-level financials. First, revenue for the second quarter was $40.4 million, an increase of $15.3 million or 61% compared to $25.1 million in the second quarter of 2025. Taking a turn to our expenses, we continue to make strategic investments to best position ourselves for high growth in AI. Cost of services were $30.6 million, up from $26.5 million a year ago, driven by higher programming and content costs, as well as the incremental data center expenses from the Northern Data acquisition. General and administrative expenses were $16.3 million, up from $11.7 million, again, primarily driven by Northern Data, which contributed $5 million of payroll and other administrative costs.

Excluding Northern Data, the remaining increase reflects higher payroll and other administrative costs, partially offset by lower professional fees. Research and development expenses were $6.8 million, up from $4.8 million. Sales and marketing expenses were $10.4 million, up from $7.9 million, attributable to higher marketing and public relations spend, increased payroll, and other sales and marketing-related expenditures. Adjusted EBITDA loss for the quarter was $16.6 million, an improvement from a loss of $20.5 million in the second quarter of 2025. Net loss for the quarter was $80.3 million, or $79.1 million attributable to RUM Group Inc, compared to a net loss of $30.2 million in the second quarter of 2025. The year-over-year increase in net loss was primarily driven by $28.3 million of acquisition-related transaction costs associated with Northern Data close, along with higher non-cash depreciation and amortization following the acquisition.

We ended the quarter with total liquidity of $220.5 million, consisting of $203.3 million in cash and cash equivalents and 293.14 Bitcoin, valued at roughly $17.2 million. Before I get into guidance, I want to talk you through an important change in how we will report going forward. This will be the last quarter we present MAU and ARPU as headline metrics for the company. Those numbers described a single video audience business, and following the Northern Data acquisition, that's no longer the full picture of what RUM Group is. Beginning with our third quarter report, we plan to move to segment reporting, Rumble Video and Quake AI, each with its own revenue and profitability metrics. I think that's a far more useful way for all of you to understand where we're allocating capital and how each part of our business is actually performing.

It is the reporting structure I will be building around as I get further into the seat. That brings me to guidance. For the first time, we are issuing formal revenue guidance. For the third quarter of 2026, our first full quarter reflecting Quake AI, we expect revenue between $87 million and $93 million. We have heard directly from many of you that formal guidance would help you better understand this business, and now that Northern Data is closed with strong contracted revenue, high utilization, we felt this was the right moment to give you that visibility. Over time, as our forecasting visibility continues to improve, we plan to build this out further, including longer-term views. Building a disciplined, credible guidance process is something I am personally focused on as we establish our track record with all of you. In summary, this was a transformational quarter.