Mega Matrix Corp. (MPU)·Q1 2024 Earnings Summary

Executive Summary

• Q1 2024 marked MPU’s first quarter focused on FlexTV (short-drama streaming) after ceasing crypto-related operations, delivering unaudited revenue of $8.69M, gross profit of $5.19M (~59.7% gross margin), and a net loss of $1.94M, or $(0.05) diluted EPS .
• Monetization traction was concentrated in subscription and “top-up” services ($8.05M), with the U.S. contributing $4.39M (54.6% of streaming revenue) as English self-produced short dramas resonated; advertising contributed $0.64M .
• Strong user engagement accompanied revenue: QAU 2.62M, QPU 0.323M, ARPU $3.07, ARPPU $24.94; user recharges totaled $9.35M, with 66% from the U.S. .
• No formal guidance or earnings call transcript were provided; a $3.7M private placement closed on May 9, 2024 adds liquidity for content and growth initiatives .
• Consensus estimates from S&P Global were unavailable at the time of request; therefore, estimate comparisons are omitted (S&P Global consensus unavailable).

What Went Well and What Went Wrong

• What Went Well

  • Rapid revenue ramp with high gross margin: $8.69M revenue, $5.19M gross profit, ~59.7% implied gross margin (calc. from $5.19M/$8.69M) as content amortization and payment processor fees remained manageable relative to monetization .
  • U.S. market-led monetization: $4.39M of streaming revenue from the U.S. (54.6% of streaming), reflecting traction of English self-produced content; “Mr. Williams! Madame is Dying” surpassed $6.3M user top-ups and 4.8M views (as of Apr 30) .
  • Management confidence and scaled content plan: CEO emphasized strengthening the script team “by about 10 times” with intent to produce 5–10 short dramas per month starting June 2024, positioning for sustained content velocity .

• What Went Wrong

  • Heavy customer acquisition costs: Selling expense was $7.72M in Q1 (primarily $7.67M advertising), driving a $4.77M operating loss despite strong gross profit .
  • GAAP net loss persisted: $(1.94)M net loss and $(0.05) diluted EPS despite $2.54M positive fair value change in ETH during the quarter; management has since sold all ETH per MD&A .
  • Controls and personnel gaps: Management reported material weaknesses in internal controls (tax review for complex transactions, US GAAP staffing), with remediation in progress .

Financial Results

Revenue breakdown – stream

Revenue breakdown – geography (streaming)

Key platform KPIs

Notes: Cost of revenues comprised payment processor fees ($2.70M), content amortization ($0.55M), and other production-related costs ($0.25M) in Q1 2024 .

Guidance Changes

Earnings Call Themes & Trends

Note: We did not find an earnings call transcript for Q1 2024. Narrative below is based on the Q1 press release, 8‑K, and 10‑Q .

Management Commentary

• “Our efforts to bolster FlexTV’s development were validated as we witnessed significant traction and engagement on the platform.”
• “We… enlarged [the script] team by about 10 times… poised to produce 5 to 10 short dramas per month starting from June 2024.”
• “Membership and top-up streaming services revenue from the U.S. market amounted to $4.4 million… attributed to our focus on English self-produced short dramas and the U.S. market.”

Q&A Highlights

No Q1 2024 earnings call transcript was found in the document set; therefore, no Q&A highlights or clarifications to report for this period. The company’s filings and press releases serve as the primary sources for qualitative commentary this quarter .

Estimates Context

• S&P Global consensus estimates for Q1 2024 (revenue and EPS) were unavailable at the time of request; therefore, we cannot provide “vs. estimates” comparisons for this quarter (S&P Global consensus unavailable).

Key Takeaways for Investors

• FlexTV monetization is real: $8.69M in total revenue and ~60% gross margin, driven by paid memberships/top-ups; unit economics at the gross level are attractive .
• Growth currently “paid”: $7.67M ad spend in Q1 implies high CAC; path to operating leverage hinges on hit cadence, organic retention, and improving ad efficiency .
• U.S. focus is working: U.S. contributed 55% of streaming revenue with higher ARPU; English self-produced hits are key to monetization .
• Content flywheel is the main lever: Expanded script capacity and 5–10 new monthly short dramas aim to reduce reliance on paid traffic over time via hits and library depth .
• Liquidity added post-quarter: $3.7M private placement and a $10M strategic content fund (TopReels) support content pipeline and market expansion .
• Risk checks: Material weaknesses in controls and a heavy ad spend model warrant scrutiny; near-term cash discipline and progress on control remediation are important monitoring items .
• Without Street estimates or a call transcript, the trading narrative will center on user/revenue momentum, hit releases (e.g., ongoing originals), and any updates on marketing efficiency and margin trajectory .

Additional context and prior quarters:

• Q3 2023 focused on ETH holdings/solo-staking and liquidity; the company has now exited crypto-related operations and repositioned around streaming .
• Q1 2024 10‑Q confirms one operating segment (short drama streaming) and details content amortization and payment processor fees as primary cost drivers in COGS .

Press releases relevant to Q1/Q2 timing:

• Q1 2024 financial results press release (May 8, 2024) .
• Private placement closed (May 21, 2024) .
• Strategic partnership and $10M content fund with TopReels in Korea (May 24, 2024) .
• Upcoming original launches (e.g., “Apocalypse Rising: A Zombie Saga” announced May 31, 2024) .

All figures cited above are sourced directly from the company’s 8‑K/press release and 10‑Q filings or press releases as referenced.