Executive Summary

First-ever profitable quarter: Q3 2024 revenue $33.555M, net income $3.956M ($0.11 diluted EPS), Adjusted EBITDA $11.157M; opex cut 51% YoY drove margin expansion and operating income turnaround to $8.054M .
Sequential inflection: revenue grew from $27.183M (Q2) to $33.555M (Q3) and gross margin expanded to 50.6% (computed) from 39.3% in Q2, reflecting mix shift and cost take-out .
Balance sheet actions: Simplify increased the LOC to $50M (maturity Dec 1, 2026) and exchanged $15M of debt for 17.8M shares (~$0.84/share), reducing leverage and extending liquidity runway .
Risks and near-term catalysts: NYSE American listing deficiency plan in place (notification Oct 2, 2024); execution on commerce ramp and the CMS-licensing/Autoblog acquisition should underpin traffic and monetization, but leverage and listing compliance remain key watch items .

What Went Well and What Went Wrong

What Went Well

Material profitability improvement on leaner cost base: opex down to $8.939M (−51% YoY), driving operating income to $8.054M and first-ever positive net income ($3.956M; $0.11 EPS) . CEO: “We generated higher gross margins, returned to positive operating income, and delivered our first-ever quarter of positive net income.”
Diversifying revenue and commerce acceleration: affiliate commerce up 287% in 2H-to-date (Q2–Q3) vs prior year; revenue per commerce post +57% q/q in Q3; TheStreet affiliate commerce +396% vs Q2 .
Audience momentum in core brands: Athlon reached 231M Q3 page views (+65% vs Q2) with revenue up 65% q/q; Parade averaged 46M monthly users and 62M monthly page views .

What Went Wrong

YoY revenue decline as company shed lower-margin businesses: Q3 revenue fell to $33.555M from $36.996M (−9.3% YoY) even as profitability improved .
Leverage and interest burden remain elevated: Q3 interest expense $3.159M; current debt $102.404M plus bridge notes $8.0M, despite the $15M debt-for-equity exchange .
Listing compliance overhang: received NYSE American continued listing deficiency notice; company submitted a plan with an 18‑month cure period; no immediate trading impact but adds headline risk .

Financial Results

Headline P&L metrics (GAAP; computed margins). Periods ordered oldest → newest.

Metric	Q3 2023	Q1 2024	Q2 2024	Q3 2024
Revenue ($M)	36.996	28.941	27.183	33.555
Gross Profit ($M)	13.950	8.933	10.718	16.993
Gross Margin (%)	37.7% (computed from )	30.9%	39.3%	50.6% (computed from )
Operating Income ($M)	(4.467)	(7.951)	(2.578)	8.054
Net Income ($M)	(11.166)	(103.358)	(8.187)	3.956
Diluted EPS ($)	(0.47)	(3.91)	(0.28)	0.11

Q3 2024 vs estimates

Metric	Q3 2024 Actual	Q3 2024 S&P Global Consensus	Beat/Miss
Revenue ($M)	33.555	n/a – consensus unavailable	n/a
Diluted EPS ($)	0.11	n/a – consensus unavailable	n/a

Adjusted profitability

Metric	Q3 2023	Q3 2024
Adjusted EBITDA ($M, Non-GAAP)	3.146	11.157
Adjusted EBITDA Margin (%)	8.5% (computed from )	33.3% (computed from )

Balance sheet and liquidity (quarter-end)

Metric	Q2 2024	Q3 2024
Cash & Cash Equivalents ($M)	6.085	5.773
Current Debt ($M)	102.372	102.404
Bridge Notes ($M)	8.000	8.000
LOC Outstanding/Line	Simplify loan $12.748M current balance pre-amendment; LOC expanded to $50M (Aug 19)	Simplify loan $1.100M long-term; LOC maturity extended to 12/1/26
Stockholders’ Equity (Deficit) ($M)	(157.201)	(137.479)

KPIs and operating highlights

KPI	Q3 2024
Affiliate commerce growth (Q2–Q3 vs prior year)	+287%
Revenue per commerce post	+57% q/q (Q3 vs Q2)
Athlon Sports page views	231M in Q3; +65% vs Q2; revenue +65% q/q
Parade digital scale	46M avg monthly users; 62M avg monthly page views
TheStreet affiliate commerce	+396% vs Q2
CMS license + site acquisitions	Licensed CMS copy; acquired multiple sites incl. Autoblog

Notes on Non-GAAP: Adjusted EBITDA excludes interest, taxes, D&A, stock-based comp, change in contingent consideration, liquidated damages, impairment, employee retention credits and restructuring payments; see company’s Non‑GAAP discussion for limitations .

Guidance Changes

No formal quantitative guidance (revenue, EPS, margins, OpEx, OI&E, tax, or segments) was issued in Q3 materials.

Metric	Period	Previous Guidance	Current Guidance	Change
Company guidance	FY/Q4	None disclosed	None disclosed	n/a

Management reiterated a focus on sustaining profitability via cost reductions, tech/editorial investments, audience growth, and diversified revenue; no specific numeric ranges provided .

Earnings Call Themes & Trends

No Q3 2024 earnings call transcript was available in our document set; themes below reflect management commentary across filings/press releases.

Topic	Q1 2024 (10-Q)	Q2 2024 (PR/8-K)	Q3 2024 (PR/8-K)	Trend
Cost structure / opex	Gross margin 30.9%; opex down YoY; mix shift to higher rev-share sports partners	“Nearly all” cost reductions complete; >$40M annualized cuts targeted	Opex −51% YoY; operating income positive	Improving
Liquidity / capital	Cash $4.003M; leverage elevated	LOC increased to $50M; $15M debt-for-equity; maturity to 12/1/26	LOC maturity extended; debt still high; cash $5.773M	Liquidity improved; leverage high
Commerce / e‑comm	Other digital revenue +133% YoY; e‑commerce expansion noted	Commerce growth accelerating; finance vertical record quarter	Affiliate +287% (Q2–Q3 vs LY); revenue/post +57% q/q	Accelerating
Platform/tech & content	—	KPMG appointed auditor; operational overhaul	Licensed CMS; acquired Autoblog and other sites	Building
Listing compliance	—	—	NYSE American deficiency letter; plan submission	Risk under remediation

Management Commentary

“The financial results for Q3 2024 reflect the strength of the new, leaner, more efficient Arena Group… We generated higher gross margins, returned to positive operating income, and delivered our first-ever quarter of positive net income.” — CEO Sara Silverstein
“We’re building a modern media company… We generated more than $13.6 million higher income from continuing operations on $3.4 million in lower revenue as we shed unprofitable operations.” — Sara Silverstein
“I am as committed to The Arena Group today as I have ever been… In light of the shift towards profitability and the success of new leadership.” — Manoj Bhargava (Simplify Inventions), on expanded support (LOC to $50M; $15M debt-to-equity)

Q&A Highlights

No Q3 2024 earnings call transcript was available; the company did not publish a Q&A in our document set. Key clarifications on profitability drivers, commerce momentum, and capital structure were provided via press releases and the 8-K .

Estimates Context

S&P Global/Capital IQ consensus for Q3 2024 revenue and EPS was unavailable for AREN at the time of this analysis; as a result, we cannot assess formal beats/misses versus Wall Street. Given the magnitude of upside in operating income and net income versus historical run-rate, we expect upward revisions to forward EPS frameworks if profitability proves sustainable; however, coverage breadth and formal estimate visibility appear limited for this name .

Key Takeaways for Investors

Structural cost reset is flowing through: YoY opex −51% and gross margin expansion to ~50.6% drove operating income positive; sustaining this mix/discipline is the core bull case .
Revenue mix is improving even at lower absolute scale: commerce growth (+287% over Q2–Q3 vs LY) and brand momentum (Athlon, Parade, TheStreet) support higher margins and monetization per post .
Capital structure de-risking underway but not done: LOC expanded/extended and $15M debt-for-equity reduced pressure, yet current debt (~$102M) and interest expense remain significant headwinds to equity value accretion .
Listing compliance plan is a swing factor: acceptance and execution against the NYSE American cure plan mitigates delisting risk; continued profits and equity improvement would help address stockholders’ deficit .
M&A/platform leverage optionality: CMS licensing and Autoblog acquisition should add scale and monetization surface area heading into 2025 .
Watch discontinued operations noise: Q1 and Q2 results were heavily impacted by discontinued operations; Q3 showed clearer profitability from continuing ops and total net income positive .
Near-term trading setup: Continued profitable execution (Q4/FY trajectory), cash generation, and tangible progress on listing compliance and leverage could be catalysts; setbacks on traffic/commerce or renewed opex creep would pressure the thesis .

Sources: Company Q3 2024 press release and 8‑K (including financial statements), Q2 2024 press release and 8‑K, Q1 2024 10‑Q excerpts, NYSE American listing notice press release. Citations embedded above.

Arena Group Holdings, Inc. (AREN)·Q3 2024 Earnings Summary