NMAX

Core Financial Performance

• Newsmax achieved its first profitable quarter as a public company, with Q2 2026 net income of $2.9 million ($0.02 per share) and adjusted EBITDA of $5.7 million, compared to a net loss of $75.2 million and adjusted EBITDA of -$3.8 million in the year-ago quarter. The improvement stemmed from top-line growth, improved operating efficiency, and the absence of prior-year legal settlement expenses.
• Gross margin expanded to 43.1% from 38% YoY, driven by a shift toward higher-margin affiliate and licensing revenue. The company ended the quarter with $128.3 million in total cash and short-term investments, and holds a completely debt-free balance sheet.

Audience and Brand Metrics

• Total Q2 viewership reached 26.9 million, up 4% YoY, marking the highest Q2 reach in four years. Newsmax remains the 4th highest-rated cable news channel, and ranks 2nd in audience engagement among adults 35-64.
• Since 2020, Newsmax has grown total viewership across key day parts by more than 280%, making it the fastest growing basic cable network measured by Nielsen.

Strategic and Operational Initiatives

• Closed a multi-year AI content partnership with Meta, where Newsmax journalism will power AI answers across Meta's social, streaming, and AI ecosystem. Management confirms ongoing discussions with other major AI platforms for additional partnerships.
• Expanded the Newsmax Plus content catalog to over 300 titles, adding more family-friendly original premium specials and documentaries. Free streaming channel Newsmax 2 continues to grow news hours and audience on major platforms, with management taking deliberate steps to grow subscription revenue through improved engagement and retention.
• International licensing is growing rapidly: the company operates with a capital-light model, where local operators run regional channels under a Newsmax brand license, and Newsmax provides content and editorial framework. All international deals are multi-year, and management sees large untapped demand for center-right independent news globally. The company reported $3.6 million in international licensing revenue in 2025.

Capital Allocation

• Despite achieving profitability, management will maintain its strategic investment mode, with capital allocation focused on long-term growth priorities including programming, talent, technology, distribution, digital initiatives, and other strategic opportunities.

• Management reaffirmed its full-year 2026 revenue guidance of $212 million to $216 million, which represents 13% year-over-year revenue growth at the midpoint of the range, an acceleration from 2025 growth. • The full-year 2026 international licensing guidance of $16 million is fully backed by already executed contracts, with no portion contingent on future agreements. Management has previously disclosed an expected 2027 annualized run rate of $25 million for international licensing, and sees significant additional growth opportunities in this segment beyond that figure. • No specific quantitative guidance is provided for AI licensing revenue at this stage, though management expects it to become an incremental meaningful supplemental revenue stream over time.

For Q2 2026, Newsmax reported total revenues of $54.1 million, a 16.5% year-over-year increase. 1. Broadcasting segment: Total revenue grew 20.5% YoY to $45.8 million, accounting for 84.7% of total Q2 2026 revenue. Growth was driven by higher affiliate fees (up 81.9% YoY to $13.4 million) from new contracts and rate increases, plus expanded international licensing revenue (up from $0.7 million YoY to $4.6 million). 2. Digital segment: Total revenue declined 1.3% YoY to $8.3 million, accounting for 15.3% of total Q2 2026 revenue. Digital advertising grew 21.3% YoY, but this growth was offset by lower Newsmax Plus subscription revenue (down 9.9% YoY to $6.3 million) and reduced product sales (down 31.7% YoY to $1.1 million). By revenue component: Advertising revenue overall decreased 3.5% YoY to $28.8 million, due to tough comps from 2025 election-related demand and lower customer order volume, partially offset by digital ad growth.

The Q2 2026 earnings call did not include explicit discussion of material operational failures or new material company-specific risks beyond general forward-looking statement disclosures that actual results may differ from management expectations due to unstated factors. Forward-looking statements for growth in affiliate fees, international licensing, and AI partnerships are contingent on continued execution of strategic initiatives and successful contract negotiations, which carry inherent uncertainty.

Q: Analyst asks what share of affiliate contracts are up for renewal in the next 12-24 months, and how quickly the 7x current gap between Newsmax's affiliate rates and peer rates can be closed without hurting distribution. / A: Management does not publicly disclose the percentage of contracts up for renewal. They note affiliate fees grew 81% YoY in Q2, showing their renewal strategy is already working. The ability to close the rate gap depends on continued growth in ratings, programming quality, and distribution, which build negotiating leverage; management notes Newsmax has historically overcome industry skepticism to gain full cable distribution and affiliate fees from all major players, and expects this momentum to continue.

Q: Analyst asks how much of 2026's $16 million guided licensing revenue is already contracted, and what growth can be expected for international licensing in 2027. / A: The full $16 million 2026 licensing guidance is backed by existing contracts, with no contingent portions. Management has already guided to a $25 million annualized run rate for 2027, and sees strong global demand for center-right news that will support additional growth beyond this figure, with all deals being multi-year to support long-term recurring revenue.

Q: Analyst asks for non-contractual color on the economics of the Meta AI partnership, if Newsmax is talking to other AI platforms, and if this can become a meaningful standalone revenue stream. / A: Management does not disclose specific financial details, but confirms it is a multi-year agreement with terms consistent with market rates. Newsmax is in discussions with other major AI platforms for additional partnerships. They note AI companies need large volumes of licensed content, so AI licensing could become a significant standalone revenue stream for Newsmax long-term, though no specific guidance is provided.

Q: Analyst asks what non-affiliate operating improvements drove margin expansion, and how future content and technology investments will drive further margin gains. / A: Beyond the mix shift to high-margin affiliate and licensing revenue, margins improved because one-time public company and legal costs are now largely in the past. AI is reducing content production costs by speeding up editing, graphics creation, and background research, while cross-platform content investments deliver economies of scale: content investments boost ratings, which drive higher ad demand, improve affiliate negotiating power, and increase subscriber appeal for Newsmax Plus, raising ROI as the business grows.

Q: Analyst asks how the 2026 midterm elections will impact audience engagement, sales, and profits in the second half of 2026. / A: Elections boost audience engagement, even though midterm advertising is mostly local, so national ad revenue gains are limited. Post-midterm, management expects engagement to rise further due to expected divided government, which generates more political news, and the upcoming 2028 presidential campaign which will start in earnest after the midterms, creating a multi-year window of strong growth opportunity.