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The Arena Group Holdings Inc. (AREN+1.38%) has submitted its 10-Q filing for the quarterly period ended September 30, 2024.
The filing includes financial statements for the quarter, showing a decrease in revenue to $33,555,000 from $36,996,000 in the same quarter the previous year. The decrease is attributed to a reduction in digital advertising and print revenue.
Cost of revenue for the quarter was $16,562,000, representing 49% of sales, compared to 62% in the same quarter of the previous year. This decrease in cost ratio is due to lower technology and platform fees.
The company reported a gross profit of $16,993,000 for the quarter, compared to $13,950,000 in the previous year, with the increase attributed to a higher mix of revenue from sports partners.
Selling and marketing expenses decreased to $2,011,000 from $6,422,000, primarily due to restructuring activities and a reduction in direct sales workforce.
General and administrative expenses decreased to $6,023,000 from $10,940,000, reflecting reductions in stock-based compensation and payroll expenses.
Net income from continuing operations for the quarter was $4,778,000, compared to a net loss of $8,772,000 in the previous year. The improvement is due to reduced operating expenses and increased gross profit.
The company disclosed a working capital deficit of $209,596,000 as of September 30, 2024, and expressed substantial doubt about its ability to continue as a going concern due to net losses and working capital deficit.
The filing also details various financial agreements, including the Simplify Loan and the Third Amended and Restated Note Purchase Agreement, which have been amended to extend maturity dates and defer interest payments.
The Arena Group does not anticipate cash dividend payments to common stockholders in the near future.
The company is involved in several legal proceedings, including a breach of contract action filed by ABG Group and a wrongful termination lawsuit filed by a former CEO.
The Arena Group continues to focus on leveraging its digital media platform and expanding its network of publisher partners to drive revenue growth.
This content was summarized by generative artificial intelligence using public filings retrieved from SEC.gov. The original data was derived from the The Arena Group Holdings Inc. quarterly 10-Q report dated November 14, 2024. To report an error, please email earnings@qz.com.