Trump Media & Technology Group Reports Significant Balance Sheet Changes, Decline in Revenue, and Increased Operating Expenses in Latest Quarter

Trump Media & Technology Group Corp. (TMTG) reported significant financial changes in its Form 10-Q for the quarter ending September 30, 2024, compared to the same period in 2023. The company, which operates the Truth Social platform, experienced a notable increase in cash and cash equivalents, rising to $372.1 million from $2.6 million at the end of 2023. Total current assets also surged to $682.1 million, up from $3.0 million, while total assets increased to $837.8 million from $3.4 million. Current liabilities decreased significantly to $14.4 million from $65.3 million, leading to a substantial improvement in stockholders’ equity, which rose to $816.5 million from a deficit of $66.8 million.

Despite these positive balance sheet changes, TMTG reported a decline in revenue. For the three months ended September 30, 2024, net sales were $1.0 million, a decrease of 6% from $1.1 million in the same quarter of 2023. For the nine-month period, revenue fell 23% to $2.6 million from $3.4 million, attributed to changes in revenue-sharing agreements and selective testing of new advertising initiatives. Operating expenses, however, surged dramatically, with total costs for the three months rising to $24.7 million from $4.1 million, marking a 501% increase. This included a 1,073% rise in general and administrative expenses, largely due to merger-related costs and stock-based compensation.

The company reported a loss from operations of $23.7 million for the third quarter, compared to a loss of $3.0 million in the prior year, and a net loss of $19.2 million, down from $26.0 million. For the nine-month period, the net loss ballooned to $363.2 million from $49.0 million in 2023, reflecting a 641% increase.

Strategically, TMTG completed a merger with Digital World Acquisition Corp. on March 25, 2024, which was accounted for as a reverse recapitalization. The merger provided gross proceeds of $233.0 million, which TMTG plans to use for growth initiatives, including marketing and technology development. Additionally, TMTG acquired WorldConnect Technologies, LLC, for $132.2 million, enhancing its streaming capabilities.

The company has also faced challenges, including increased operating costs due to inflation and macroeconomic conditions affecting advertising revenue. TMTG's reliance on advertising for revenue generation remains a critical risk, particularly as it competes with larger platforms. The company continues to focus on expanding its user base and enhancing its service offerings, including the recent launch of its Truth+ streaming service.