Newsmax saw its third quarter (Q3) revenue rise more than 50 percent after a key advertiser canceled a contract with the political affairs news network, the company said this week.
That canceled contract brought an additional $14 million to Newsmax’s overall revenue, which increased 52.5 percent to $69 million during the three-month period that ended September 30. Excluding the windfall, Newsmax would have seen revenue of $55 million during the quarter, a year-over increase of 21.6 percent, the company noted.
Executives at Newsmax did not name the buyer who canceled their contract. Last month, a federal judge required the federal government to stop purchasing TV ad inventory for a political spot backed by President Donald Trump. The timing of the judge’s order fell outside the scope of Newsmax’s Q3 earnings report.
Still, the canceled contract helped juice Newsmax’s profitability during Q3, with net income logged at $15.2 million, fully reversing a loss of $4.1 million that was reported last year. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) reached $19 million, compared with a $933,000 loss last year; excluding the one-time payment, adjusted EBITDA was $5 million.
Revenue associated with broadcasting climbed to nearly $61 million during the quarter, up 66 percent, while affiliate fees increased 77 percent to $14.3 million, boosted by stronger cable, streaming and satellite distribution.
Broadcast advertising revenue increased 3.1 percent to $24.3 million, while licensing revenue nearly quadrupled to $4.7 million. That amount did not include the canceled ad contract payment, which was reported as service-related revenue.
Digital revenue from Newsmax’s website and apps declined 4.1 percent to $8.3 million, with lower advertising, subscription and product sales.
Newsmax CEO Christopher Ruddy said the company was investing in programming and distribution as existing carriage contracts approached renewal.
“We are using this period to invest in programming, talent and content, while our affiliate agreements come up for renewal,” Ruddy said in a statement.
During a conference call with analysts, Ruddy acknowledged that cable news outlets, like his, generally receive little in the way of political ad revenue that helps line the pockets of broadcast TV and radio outlets during a super-charged election cycle.
“Newsmax is a national cable news network, so a relatively small amount of that spending comes our way,” Ruddy said.
Without political ad revenue, Newsmax and other cable networks lean harder on increased interest in political news among Americans, trading on that higher audience during election cycles and pitching their increased viewership to national ad buyers, which happened during Q3.
Midterm elections are generally weaker compared to presidential elections, Ruddy noted. With that in mind, he said Newsmax should see stronger core and political ad buys over the next two years as Americans shift their focus on the 2028 race for the White House.
“Sometimes we call it the Super Bowl of elections,” Ruddy quipped.
Artificial intelligence is also helping Newsmax, in more ways than one: Ruddy noted off-the-shelf and business-specific AI tools are influencing the company’s long-term operational plans. One major source of revenue during Q3 was various content licensing arrangements, including those with AI companies that are using Newsmax’s editorial products to train their large language models (LLMs).
“We expect content deals and other partnerships with AI companies to grow over the coming years,” Darryle Burnham, the Chief Financial Officer at Newsmax, said during the conference call.
Ruddy said the company is leaning into various products to help smooth out editorial workflows, including using AI products to sift through legal documents and generate on-screen and website graphics. While AI isn’t being used to write articles for the website or scrips for TV, Ruddy said it is being used throughout the research and editing process, which has cut down the amount of time it takes to work on a story from two to three hours to around one hour.
“I do think that will impact the number of employees we need as we grow,” Ruddy said.
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