Sign in

You're signed outSign in or to get full access.

MM

Mega Matrix Corp. (MPU)·Q3 2023 Earnings Summary

Executive Summary

  • Q3 2023 revenue was $4,400 and net loss narrowed to $1.61M (-28% YoY), while EPS held at $(0.05); operating expenses fell 29% YoY as the company pivoted fully to ETH solo-staking .
  • ETH treasury expanded meaningfully: 2,978.8 ETH at quarter-end and 3,113.5 ETH “as of the date hereof,” with ~$6.3M fair value; validators scaled from 10 at quarter-end (320 ETH staked) to 50 (1,600 ETH) shortly thereafter .
  • Liquidity remained adequate: cash $2.0M, total liquidity ~$7.0M, and working capital $7.1M despite negative operating cash flow; total assets $9.0M and stockholders’ equity $10.3M at 9/30/23 .
  • No formal guidance or earnings call transcript was provided; catalysts focus on solo-staking scale-up and corporate redomicile plans to Cayman Islands (Mega Matrix Inc.), plus winding down of legacy JetFleet .

What Went Well and What Went Wrong

What Went Well

  • ETH staking strategy scaled post-quarter: staked 1,600 ETH to run 50 validators, aiming to earn ETH rewards and yield; “strengthens our investment and support for [the] Ethereum ecosystem” (CEO) .
  • Operating discipline: total operating expenses fell to $1.58M in Q3 vs $2.23M in Q3 2022 (-29% YoY), with lower consulting and office costs .
  • Liquidity cushion: cash $2.0M and total liquidity ~$7.0M, working capital $7.1M, and highly liquid digital assets supporting near-term obligations .

What Went Wrong

  • Revenue base remains nascent: Q3 revenue was $4,400, producing a gross loss of $14,600; minimal topline from solo-staking only .
  • Digital asset impairment of $490,100 in Q3 drove part of the loss; cumulative nine-month ETH impairment reached $713,100 .
  • Going-concern and controls: substantial doubt language persists; material weakness in internal controls (tax review/segregation of duties) remained unresolved in Q3 .

Financial Results

Income Statement – Quarterly Comparison (oldest → newest)

MetricQ3 2022Q1 2023Q2 2023Q3 2023
Revenues and other income ($USD)$0 $8,500 $13,000 $4,400
Cost of revenues ($USD)$0 $(229,800) $(15,100) $(19,000)
Gross (loss)/profit ($USD)$0 $(221,300) $(2,100) $(14,600)
Net loss ($USD)$(2,223,100) $(1,661,300) $(1,701,600) $(1,610,600)
Basic EPS ($USD)$(0.10) $(0.05) $(0.05) $(0.05)
Diluted EPS ($USD)$(0.10) $(0.05) $(0.05) $(0.05)

Balance Sheet Highlights

MetricQ1 2023Q2 2023Q3 2023
Cash and cash equivalents ($USD)$8,647,300 $6,847,700 $1,967,000
Total assets ($USD)$12,141,700 $10,806,700 $9,033,800
Total equity ($USD)$11,839,600 $10,435,700 $8,736,200
Stockholders’ equity (MPU) ($USD)$13,003,300 $11,754,100 $10,281,300

Segment Breakdown – Q3 2023

SegmentRevenue ($USD)Gross (Loss) ($USD)Operating Expenses ($USD)Loss Before Tax ($USD)Net Loss ($USD)
Staking Business$4,400 $(14,600) $(1,404,600) $(1,447,300) $(1,447,700)
Leasing Business$0 $0 $(176,400) $(176,400) $(162,900)
Total$4,400 $(14,600) $(1,581,000) $(1,623,700) $(1,610,600)

KPIs and Operational Metrics

KPIQ1 2023Q2 2023Q3 2023Post-Q3 Update
ETH holdings (units)471.2 1,392.5 2,978.8 3,113.5 (~$6.3M FMV)
ETH staking rewards (ETH)3.4 (quarter) 5.7 (six months) 8.2 (nine months) —
Validators (ETH staked)9 validators (288 ETH) 8 validators (256 ETH) 10 validators (320 ETH) 50 validators (1,600 ETH)
Cash and total liquidityCash $8.6M Cash $6.8M Cash $2.0M; liquidity ~$7.0M —
Working capital—$9.3M $7.1M —

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueQ4 2023 / FY 2023None provided None provided Maintained
Margins/OpEx/TaxQ4 2023 / FY 2023None provided None provided Maintained
Segment-specificQ4 2023 / FY 2023None provided None provided Maintained
Capital returnsQ4 2023 / FY 2023None provided None provided Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2023)Previous Mentions (Q2 2023)Current Period (Q3 2023)Trend
ETH solo-staking strategyInitiated validators; 3.4 ETH rewards; 471.2 ETH holdings Expanded to 1,392.5 ETH; 5.7 ETH rewards; consulting ramp 2,978.8 ETH; 10 validators at Q3-end; scaling to 50 validators Scaling up
Non-custodial staking tools (MarsProtocol)Launched with Bit Digital (60/40) Terminated third-party platform; ceased non-custodial tools from 7/1 No third-party tools; focus on solo-staking and MarsLand StaaS Pivot to own staking/partners
Redomicile Merger (Cayman)Merger agreement signed Continuing process Reaffirmed redomicile plan to Mega Matrix Inc. (Cayman) Ongoing corporate action
Legacy JetFleet/LeasingMinimal activity; legacy focus Operating segments include leasing with losses Wind-down approved; cease aircraft advisory/management Exit legacy
Regulatory/legal and controlsRisk factors; material weakness noted Material weakness persists Material weakness persists; going-concern risks Unresolved risk
Investments (MarsLand/Quleduo/DaoMax)Private placement proceeds; early plans $1.135M LT investments; MarsLand equity method LT investments $1.609M; added DaoMax stake to 7.6% post-Q3 Building portfolio

Management Commentary

  • “In the third quarter of 2023, our company has continued to explore Ethereum-related business through continuous purchase and solo-staking of Ethereum, which strengthens our investment and support for [the] Ethereum ecosystem.” — CEO, Yucheng Hu .
  • Similar confidence expressed in Q2: continued purchases and solo-staking, supporting Ethereum ecosystem and exploring expansion and innovation of related businesses .
  • Q1 commentary emphasized initial solo-staking and MarsProtocol build-out alongside support for the Ethereum ecosystem .

Q&A Highlights

  • No earnings call transcript was available in the period; no Q&A details provided [ListDocuments returned none].

Estimates Context

  • S&P Global (Capital IQ) consensus revenue/EPS estimates for Q3 2023 were unavailable due to system limits; no third-party consensus discovered in filings. As a result, we cannot assess beat/miss versus Wall Street at this time (S&P Global data unavailable).

Key Takeaways for Investors

  • The pivot to ETH solo-staking is the core revenue engine; near-term topline is de minimis, but validator scale and ETH accumulation are the primary drivers of future staking rewards .
  • Expense management improved YoY; operating expenses down ~29%, helping narrow net loss despite digital asset impairment charges .
  • Liquidity/working capital adequate for 12 months; management continues to prepare financials on a going-concern basis while acknowledging substantial doubt language .
  • Strategic actions include redomicile to Cayman (Mega Matrix Inc.), winding down legacy JetFleet, and targeted private investments (MarsLand/Quleduo/DaoMax) that complement staking capabilities .
  • Risk profile remains elevated: digital asset price volatility (impairments), regulatory uncertainty around crypto assets, and material internal control weaknesses .
  • Near-term catalysts: continued validator scale-up (to 50), ETH treasury growth, and progress on redomicile; monitoring future disclosures for formal guidance and revenue trajectory from staking .