Former President Donald J. Trump's social media company on Monday reported $770,000 in ad revenue in the first three months of the year, mostly from its Truth Social platform, as it continued to rack up huge losses.
The company, called Trump Media and Technology Group, completed its long-awaited merger with Digital World Acquisition Corp., the cash-rich shell company that was the vehicle for Trump Media's initial public offering, in March. Trump Media said that after the merger, the company will have approximately $274 million in cash and cash equivalents on its balance sheet, which will enable the company to “fund its operations for the foreseeable future.”
Trump Media's public debut was a boon for Mr. Trump, who owns nearly 65% ​​of the company's stock, valued at about $6 billion. The company also boasts an equally high valuation of over $7 billion based on its stock price.
The company said in a regulatory filing that it had revenue of $770,000 in the past quarter, compared with revenue of $1.1 million in the year-ago period. The company said much of the revenue decline was “due to a change in revenue sharing with one of our advertising partners.”
It is difficult to compare the year-ago period with the first quarter, which was dominated by charges related to the completion of the company's merger. In his first three months of this year, Trump Media reported that he had a net loss of $327.6 million, of which his $311 million was due to “non-cash expenditures resulting from the exchange of promissory notes.” was.
When the deal closed on March 25, approximately $40 million that Trump Media raised from investors was converted into stock in the initial public company under the terms of the promissory note.
The company announced an operating loss of $12.1 million in the quarter, compared to $3.6 million in 2023. It said merger-related costs accounted for about half of its operating loss in the first quarter of this year.
The operating numbers reported by Trump Media do not follow Generally Accepted Accounting Principles, or GAAP, the standard method of reporting financial results. Some companies believe that operating numbers can more accurately reflect financial results because they often do not include one-time or other costs.
Last year, Trump Media reported losses of $58 million and revenues of about $4 million, most of which came from advertising on Truth Social.
First quarter advertising revenue of $770,000 translates into an annualized amount of just over $3 million. Trump Media cited its “initial advertising initiatives” in its earnings call.
Many of Trump Media's shares, including about 115 million owned by Mr. Trump, are subject to a six-month lockup that expires in September. The majority of traded stocks are held by individual investors, many of whom are fans of the former president.
In its earnings release, Trump Media said the company's stock is “owned by more than 621,000 shareholders, the majority of whom are individual investors.”
Trump Media released its financial results after the close of trading, and the stock price fell 5% to $48.38.
