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AE

Asset Entities Inc. (ASST)·Q3 2024 Earnings Summary

Executive Summary

  • Q3 revenue grew 237% year over year to $0.203M, up sequentially from $0.093M in Q2, driven by higher paying subscribers (OptionsSwing and June Pure Profits acquisition contribution), but losses remained large as operating expenses rose; net loss was $1.315M vs $1.190M a year ago .
  • Paying subscribers were 1,184 in Q3 (vs 298 YoY), down modestly from 1,238 in Q2, suggesting sequential churn/normalization even as YoY subscriber growth supports revenue gains .
  • Liquidity improved via 2024 financings: two closings of Series A Convertible Preferred ($3.0M gross) and a new ATM facility (up to $1.79M initially) with waivers; cash was $2.10M at quarter-end, and management expects sufficient funds through at least Sept 30, 2025, though equity raises imply dilution risk .
  • No formal Q3 guidance or consensus estimates available; no earnings call transcript was published in the filings we reviewed, so beat/miss analysis vs Street is not possible this quarter -.

What Went Well and What Went Wrong

What Went Well

  • Strong top-line acceleration: revenue up 237% YoY to $202,921, attributed to strategic acquisitions and partnerships; CEO highlighted optimism as growth initiatives continue .
  • Subscriber base expansion YoY: paying subscribers increased to 1,184 from 298 in the prior-year quarter, supporting the revenue ramp .
  • Improved funding runway: closed $3.0M gross Series A preferred (two closings) and established an ATM program with related waivers; cash of $2.10M at 9/30/24 and expectation to fund operations through at least 9/30/25 - - .

What Went Wrong

  • Persistent losses and cost growth: operating expenses rose to $1.52M (+21% YoY), with higher advertising/marketing, payroll and public company costs; operating loss widened to $1.315M .
  • Sequential subscriber softness: paying subscribers fell to 1,184 from 1,238 in Q2 despite YoY gains, indicating near-term churn/normalization risk .
  • No formal guidance and no call transcript: limits visibility and external framing for investors this quarter; Street consensus/beat-miss analysis not available in our S&P Global pull attempt -.

Financial Results

MetricQ3 2023Q2 2024Q3 2024
Revenue ($)$60,135 $92,966 $202,921
Net Income (Loss) ($)$(1,190,491) $(1,726,537) $(1,315,369)
Diluted EPS ($)$(0.43) $(0.58) $(0.41)
Operating Income (EBIT) ($)$(1,190,491) $(1,726,537) $(1,315,369)
EBIT Margin (%)(1,980%) (1,857%) (648%)

Notes: EBIT Margin computed from reported revenues and loss from operations.

Segment breakdown: Not applicable—company reports consolidated results (subscription, marketing, AE.360.DDM are services categories, not GAAP segments) .

KPIs

KPIQ1 2024Q2 2024Q3 2024
Paying Subscribers (#)438 1,238 1,184
Total Server Membership (approx.)209,417 ~212,000 ~200,000
Cash and Equivalents ($)$1,869,786 $1,926,888 $2,098,406

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Formal guidance (revenue, margins, opex, tax, segments)Q4 2024/Q1 2025 and FYN/AN/ANo formal guidance provided in Q3 8‑K/10‑Q -

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2024, Q2 2024)Current Period (Q3 2024)Trend
Paying subscribers growthQ1: 438; Q2: 1,238, reflecting OptionsSwing contribution 1,184 subscribers; up YoY but down QoQ Mixed (YoY up, QoQ down)
Liquidity & capital marketsQ1: Filed shelf; plan financings . Q2: Completed second $1.5M preferred closing -ATM program launched with Ionic/Boustead waivers; cash $2.10M; runway through at least 9/30/25 - Improving runway; dilution risk
Product/Platform (Ternary v2)Emphasized across Q1 and Q2 as Stripe-verified payment/CRM for Discord Continued positioning of Ternary and AE.360.DDM Stable
M&A/PartnershipsQ2: Acquired TommyBoyTV assets (6/21/24) Execution on acquisitions/partnerships cited in PR; OptionsSwing (Nov’23), Pure Profits (June’24) underpin YoY growth Active
Operating expensesQ1/Q2: Higher advertising/marketing, payroll, public company costs -OpEx up 21% YoY to $1.52M Rising cost base

Management Commentary

  • Strategic focus: “We are thrilled to see the strong year-over-year growth in revenue, with our recent strategic acquisitions and partnerships… We are optimistic for what’s ahead, as we continue executing strategic acquisitions, growth initiatives, and further collaborations and partnerships.” — CEO Arshia Sarkhani .
  • Revenue drivers: Management attributes revenue increases primarily to higher paying subscribers, including from OptionsSwing (Nov 2023) and Pure Profits (June 2024) communities; pricing was unchanged YoY .
  • Cost dynamics: Higher OpEx reflects increased advertising/marketing, payroll, and public company costs .
  • Funding: Two Series A Preferred closings and an ATM facility with waivers to support operations; expectation of adequate funding through Sept 30, 2025 - - .

Q&A Highlights

  • No earnings call transcript was published in the Q3 2024 filing set; key messages are drawn from the 8‑K press release and 10‑Q MD&A -.

Estimates Context

  • Wall Street consensus (S&P Global) for Q3 2024 EPS/revenue was not available in our pull at time of analysis; as a result, we cannot assess beats/misses this quarter. Any future estimate comparisons will default to S&P Global consensus when accessible.

Key Takeaways for Investors

  • Revenue inflected positively (237% YoY; +$110K QoQ) on subscriber expansion from acquired communities, but scale remains small ($0.203M) and operating losses are still large; focus near-term is on converting subscriber growth into sustainable unit economics .
  • Sequential subscriber softness (1,184 vs 1,238) is a watch item; monitor retention/engagement and contribution from acquired servers next quarter .
  • Funding runway improved (cash $2.10M; preferred + ATM), but raises bring dilution risk; execution on growth with cost discipline is critical to narrow losses - - .
  • No formal guidance or call this quarter reduces external visibility; investors should track monthly subscriber trends and ATM utilization disclosures for signals on growth and capital needs -.
  • Strategic narrative centers on Discord infrastructure (AE.360.DDM) and Ternary v2 payments; success hinges on scaling paying subs and cross-selling services while managing CAC and churn - .
  • Cost structure (advertising/marketing, payroll, public company costs) remains elevated; margin improvement depends on higher revenue scale and tighter spend controls .

Sources: Q3 2024 Form 10‑Q (filed Nov 14, 2024) and Q3 2024 8‑K/press release (Nov 15, 2024) - - -.