The Arena Group (AREN) on Feb. 3 released its preliminary financial results, reaffirming its 2023 outlook, and announced important new AI partnerships.
"Our financial results continue to validate our platform and our strategy, enabling us to drive significant revenue and audience growth. Key fourth quarter and full year 2022 results are expected to exceed published estimates and surpass our posted guidance," Chairman and CEO of The Arena Group Ross Levinsohn said. "We are benefiting from reaching the necessary scale to drive expansion in our operating margins, and we are increasingly utilizing advanced technology, including AI, to further streamline workflows, enabling further improvements in profitability."
The company also announced it has entered a partnership with two artificial intelligence firms -- Jasper and Nota -- to speed and broaden its AI-assisted efforts in content workflows, video creation, newsletters, sponsored content, and marketing campaigns. The partnerships will unlock new tools for the editorial teams at 250 brands operating on the Company’s platform, including Sports Illustrated, TheStreet, Parade, and Men’s Journal.
“While AI will never replace journalism, reporting, or crafting and editing a story, rapidly improving AI technologies can create enterprise value for our brands and partners,” said Levinsohn. “By leveraging these proprietary tools, we believe all those who create content on our platform will find opportunities to reach consumers in new ways.”
AI Will Expand the Arena Group’s Social, Video, and Marketing Efforts
Jasper is an AI platform that helps teams accelerate content workflows and unlock their best ideas. The Arena Group will integrate Jasper’s full suite of products, adding Jasper’s API to build generative AI processes.
“Our team feels privileged to partner with The Arena Group, a premier publisher with an established reputation for innovation. Leveraging Jasper's ability to customize the power of generative AI, The Arena Group will further elevate each property within its vast portfolio,” said Shane Orlick, President of Jasper.
The company’s strategic alignment with Nota initially focuses on AI-assisted video content creation and using AI-enabled tools to streamline workflows. Nota’s assistive AI tools provide advanced production infrastructure and increase video content revenue for digital publishers.
“We’re extremely excited to partner with The Arena Group,” said Josh Brandau, CEO of Nota. “We believe that we are at the beginning of a new way of working, one where AI-assisted tools will enhance nearly every area of publishing. Our beta tools offer a lot of opportunity for all journalism, and this partnership will help us improve the media landscape for all digital publishers.”
AI Helps Editors Spot Trending Topics
During the project’s pilot, editors used AI technology to rapidly identify trending topics and relevant proprietary archival content and photos to produce trending and evergreen articles. The article test demonstrated strong audience engagement (evaluating page view, search and social referral, and RPM metrics) and revenue performance while increasing workflow efficiencies by more than 10 times the normal rate.
Editors were able to query a chatbot trained on the proprietary content to produce text and curate relevant photos from the fitness brand, and review, edit, and publish articles in the Men’s Fitness section of MensJournal.com. For example, one such effort drew from 17 years of Men’s Fitness archives and produced new articles such as “Proven Tips to Help You Run Your Fastest Mile Yet,” “The Best Ways for Men Over 40 to Maintain Muscle,” and “A Primer on Intermittent Fasting for Weight Loss.”
Arena Group Announces Preliminary Financial Results
The Arena Group also announced preliminary and unaudited full year 2022 results, reaffirming its 2023 outlook.
- Management expects fiscal year 2022 revenue from continuing operations* of between $217 million and $220 million, an increase of between $28 million and $31 million or 15% to 16% compared to the 2021 fiscal year, driven by a more than 70% increase in digital advertising revenue.
- Management expects fiscal year 2022 net loss from continuing operations of between $68 million and $72 million, an improvement of between $18 million and $22 million compared to the 2021 fiscal year. Non-cash charges, such as stock-based compensation and depreciation and amortization, represented a majority of the net loss from continuing operations.
- Management expects fiscal year 2022 Adjusted EBITDA** from continuing operations to exceed $3 million as compared to a loss of $12 million in the 2021 fiscal year.
- Management also reiterated full year 2023 guidance of between $255 million and $270 million in total revenue and between $30 million and $35 million in Adjusted EBITDA**.
The Arena Group previously provided guidance for 2022 full year Pro Forma Revenue and Pro Forma Adjusted EBITDA of $220 million and $4 million, respectively.
The company will provide more detail and discuss full financial results on its fourth quarter 2022 earnings conference call on Thursday, March 16, 2023. See the Investor Relations section of The Arena Group’s website.
* The preliminary and unaudited results reflect the Parade Print business as a discontinued operation, consistent with the Company’s announcement in September of 2022 of its decision to cease Parade’s print operations.
** Adjusted EBITDA is a non-GAAP measure. For additional information regarding non-GAAP financial measures, see "Use of Non-GAAP Financial Measures" and "Reconciliation of GAAP to Non-GAAP Financial Measures" below.
