The Arena Group Holdings Inc. (AREN), a technology platform and media company home to more than 265 brands, including Sports Illustrated, TheStreet, Parade Media, Men’s Journal, and HubPages, grew top-line revenue by more than 7% year-over-year in the first quarter ended March 31.
Total operating expenses in the first-quarter held steady year-over-year, growing by only 2%. That helped The Arena Group dramatically decrease the cash it used in operations, to $1.7 million in Q1 2023 from $13.3 million in Q1 2022.
Revenue increased to $51.4 million from $48.2 million in the year-earlier period while digital advertising revenue grew 9% to $23.5 million from $21.6 million a year earlier.
Operating expenses increased by only $700,000, or 2% to $35.9 million from $35.2 million in the year-earlier period, even as the company added the operations of Men’s Journal, Men’s Fitness, Surfer, Powder, Bike Magazine and Fexy Studios to the company. See full release here.
“During the first quarter, The Arena Group continued its growth trajectory and outpaced peers in the competitive digital publishing space,” The Arena Group Chairman and Chief Executive Ross Levinsohn said in a statement.
“Overall, we focused our efforts in three core disciplines: first, driving revenue growth; second, focusing on operational efficiencies while expanding our brand portfolio; and third, investing in new growth areas, in particular commerce, creators, and AI.”
Levinsohn made clear that the company executed on those three core disciplines during the quarter.
“We grew total revenue, digital revenue, and narrowed our cash burn. This progress demonstrates the durability of our iconic brands and the stability of our business. The Arena Group offers a compelling platform for achieving this at scale with nearly 100 million monthly users as of March 2023, according to Comscore,” he said.
In Q1 The Arena Group purchased Fexy Studios, an award-winning creative agency that produces television shows, streaming and digital video programming, and branded content across a variety of mediums including desktop and mobile web, OTT, broadcast television, YouTube, Twitch, Instagram, Facebook, webinars, and more. The company also began integrating the assets it acquired from Men’s Journal, Men’s Fitness, Surfer, Powder, and Bike.
“During the quarter, we transitioned and re-platformed our recently acquired assets from Men’s Journal, Men’s Fitness, Surfer, Powder and Bike, and have begun to apply our playbook to these properties, as well as leaning into TV and video opportunities with our recent acquisition of Fexy Studios,” added Levinsohn.
“The acquisition of these assets has led to the creation of a fourth major vertical for The Arena Group, which we believe will serve as a catalyst for our 2023 growth. We continue to expect $30 million to $35 million in adjusted Ebitda and total revenue of $255 million to $270 million for 2023.”
The Arena Group Builds for Continued Growth
"The strength of our brands and our advertising partnerships allowed us to outperform our peers, as our Q1 2023 programmatic CPMs were consistently 30-40% higher than industry benchmarks, according to STAQ Benchmarking, a market-norm reporting service provided by Operative," Levinsohn said.
"As the industry finds a new footing, we expect that The Arena Group will grow more quickly than many competitors. And with an increasingly solid foundation for profitable growth in place, we believe this rising tide should translate to improving earnings and cash flow.”
Highlights across the company’s verticals include:
- The Lifestyle vertical, anchored by Parade, has continued to expand its audience since its acquisition by the company in April 2022. According to Google Analytics, Parade.com’s monthly average pageviews increased by 29% in Q1 2023 compared to the second quarter of 2022 when it was acquired, reaching 162 million quarterly pageviews in Q1 2023, according to Google Analytics. Parade’s social media presence has also expanded dramatically, with an 89% growth in quarterly engagement across all social platforms year-over-year, according to ListenFirst.
- Sports Illustrated Media Group remained the #4 ranked sports-media property according to Comscore in March 2023. Traffic to Sports Illustrated remained flat year-over-year, despite the fact that Q1 2023 did not benefit from a Winter Olympics and saw a March Madness tournament without many marquee teams. Still, the company generated more than 840 million Sports Illustrated Media Group pageviews during the quarter, according to Google Analytics.
- The Finance vertical, anchored by TheStreet, significantly expanded its distribution partnerships, with a 257% growth in quarterly Apple News pageviews year-over-year. TheStreet, which began producing video content at its news desk on the floor of the New York Stock Exchange late last year, has driven a 61% growth in quarterly social video views year-over-year. Monthly average pageviews decreased by 6% in Q1 2023 compared to Q1 2022, reaching an average of nearly 24 million pageviews online each month, according to Google Analytics.
- In the HubPages business, the company’s content playbook has now expanded across 11 sites, with plans to apply our playbook throughout 2023. While breaking and trending news traffic was impacted by audience volatility this quarter, the company’s total HubPages monthly average pageviews in Q1 2023 were nearly 53 million, up 3% from Q1 2022, according to Google Analytics.
