Trump Media and Technology Group, the company affiliated with former U.S. president Donald Trump that operates Truth Social, reported $770,500 in revenue for the first quarter of 2024 and a net loss of $327.6 million.
Shares in Sarasota, Fla.-based TMTG — which says it is a “safe harbor for free expression amid increasingly harsh censorship by Big Tech corporations”— began trading March 26, 2024, on Nasdaq under the ticker symbol “DJT” following its merger with special purpose acquisition company Digital World Acquisition Corp. (DWAC). At Monday’s closing price of $48.38/share, TMTG has a market capitalization of about $6.6 billion.
Trump owns about 64.9% of the outstanding shares in Trump Media & Technology Group, making his stake worth about $5.5 billion currently (though he is restricted from selling TMTG shares for the six-month period after the company’s stock started trading publicly). His holdings of 114.75 million shares include 36 million in “earnout shares” officially determined by TMTG on April 26 in accordance with the DWAC merger agreement.
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In Q1, the company recorded $311 million in non-cash expenses arising from the conversion of promissory notes, and the associated elimination of prior liabilities, immediately before the closing of TMTG’s merger with DWAC. Trump Media and Technology Group had a first-quarter operating loss of $12.1 million based on adjusted EBITDA calculations; approximately half of that amount — $6.3 million — consisted of one-time payments related to the closing of TMTG’s merger with DWAC. The company reported an operating loss of $98.35 million for Q1 on a generally accepted accounting principles (GAAP) basis.
“At this early stage in the Company’s development, TMTG remains focused on long-term product development, rather than quarterly revenue,” the company said in announcing Q1 2024 results. “By adding features to Truth Social, launching live TV streaming, and building out its ecosystem, the Company aims to first develop a slate of best-in-class products that can then be leveraged to increase revenue and drive long-term value.”
TMTG said its “nascent advertising initiative” will “continue to evolve as TMTG implements its vision.”
The company plans to launch a new “live TV streaming platform” for Truth Social’s app for Android, iOS, and web. In a subsequent phase, it said, TMTG will release “stand-alone Truth Social over-the-top (‘OTT’) streaming apps for phones, tablets and other devices,” followed by Truth Social streaming apps “for home TV.”
As of March 31, TMTG said, its balance of cash and cash equivalents was $273.7 million. The company “believes it has sufficient working capital to fund operations for the foreseeable future,” it said in announcing the Q1 results.
TMTG’s quarterly report and financials were reviewed by Semple, Marchal & Cooper, which the company appointed as its independent registered public accounting firm effective May 4, 2024. That came after the SEC accused TMTG’s previous auditor, BF Borgers, of “massive fraud” in preparing more than 1,500 regulatory filings for public companies.
Trump Media and Technology Group said that based on data provided to the company, as of April 29, 2024, the company’s stock was held by more than 621,000 shareholders, “the vast majority of whom are retail investors.”
TMTG launched Truth Social in early 2022; the company has not disclosed how many people use the service. “At this juncture in its development, TMTG believes that adhering to traditional key performance indicators, such as signups, average revenue per user, ad impressions and pricing, or active user accounts including monthly and daily active users, could potentially divert its focus from strategic evaluation with respect to the progress and growth of its business,” the company said in its 10-Q filing Monday.
Trump Media & Technology Group was formed in 2021 after the former president was kicked off Twitter(now called X), Facebook, Instagram, YouTube and other internet platforms, which said he had violated prohibitions against inciting violence in connection with the Jan. 6, 2021, attack on the U.S. Capitol, which aimed to overturn the results of the 2020 election. Trump’s accounts have been reinstated by X, Meta’s Facebook and Instagram, YouTube and others, but he continues to use Truth Social as his preferred social media platform.
“TMTG’s success depends in part on the popularity of our brand and the reputation and popularity of President Donald J. Trump. The value of TMTG’s brand may diminish if the popularity of President Donald J. Trump were to suffer,” the company said in a section of the 10-Q filing labeled “Key Factors Affecting Results of Operations.” The section continued, “Adverse reactions to publicity relating to President Donald J. Trump, or the loss of his services, could adversely affect TMTG’s revenues, results of operations and its ability to maintain or generate a consumer base. President Donald J. Trump is involved in numerous lawsuits and other matters that could damage his reputation. Additionally, TMTG’s business plan relies on President Donald J. Trump bringing his former social media followers to TMTG’s platform. In the event any of these, or other events, cause his followers to lose interest in his messages, the number of users of our platform could decline or not grow as we have assumed.”
