The Arena Group Holdings, Inc.

Good day, ladies and gentlemen, and welcome to the Arena Group first quarter 2022 earnings call. At this time, all participants have been placed on listen-only mode, and the floor will be open for questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Rob Fink of FNK IR. Sir, the floor is yours.

Thanks, Operator, and thank you all. Hosting the call today are Ross Levinson, Chairman and Chief Executive Officer of Doug Smith, Chief Financial Officer, and Andrew Kraft, Chief Operating Officer. Before we begin, I'd like to note that some of the comments made during this presentation may include forward-looking statements. All statements other than statements of historical fact are statements that could be deemed forward-looking. Forward-looking statements relate to future events or future performance and include, without limitation, statements concerning the company's business strategy, future revenues, market growth, capital requirements, product introduction, expansion plans, and the adequacy of the company's funding. Other statements contained in this presentation that are not historical facts are also forward-looking. The company cautions investors that any forward-looking statements presented in this presentation or that the company may make orally or in writing from time to time are based on beliefs, assumptions made by information currently available to the company. Such statements are based on assumptions, and the actual outcome will be affected by known and unknown risks, trends, uncertainties, and factors that are beyond the company's control or ability to predict. Although the company believes that its assumptions are reasonable, these assumptions are not guarantees of future performance, and some will inevitably be proved to be incorrect. As a result, the company's actual results can be expected to be different from its expectations, and those differences may be material. Accordingly, investors should use cautious and relying on forward-looking statements, which are based only on known results and trends at the time they are made, to anticipate future results or trends. Certain risks are discussed in the company's filings with the SEC. With that, I'd now like to turn the call over to Ross. Ross, the call is yours.

Thank you, Rob. As some of you know, we pre-released some numbers last week to highlight the continued rapid growth and expansion of our business. Today, we'll be sharing a more in-depth look at our financial and operational performance. This was an excellent quarter for the Arena Group. As we highlighted during our Q4 and full-year results at the end of 2021, we were starting to see the benefits of significant investments we made in our technology, our platform, our social media and audience development initiatives, our business intelligence efforts, and our people last year. Our first quarter performance again validated those investments as we saw strong growth in revenue and audience as well as a substantial gain in gross profit despite Q1 typically being our slowest quarter. To highlight a few key results, first quarter total revenue grew to 48.2 million versus 33.6 million in the previous year, a 44% increase. Importantly, First quarter digital revenue grew by 82% to 31.6 million and now accounts for more than 65% of total revenues. First quarter gross profit more than tripled to 19.7 million or 41% gross profit percentage compared to 5.4 million or 16% gross profit percentage in the first quarter of 2021. This was our second consecutive quarter with gross margins exceeding 40%, and we continue to believe that will expand. Q1 cost of revenue increased by only 1%, reflecting the high gross profit from our growing digital revenues. I will note that Q1 is generally the softest quarter in our business, so to deliver these improvements is significant, and we are seeing that momentum accelerate in Q2 through 34 days of the quarter. We are well on our way to profitability. In the quarter, our adjusted EBITDA loss was 1.1 million as compared to a loss of 8.7 million in the first quarter of 2021, representing an improvement of 7.6 million. That number includes some one-time costs associated with our up list in Q1 to the NYSE American in February. To put it bluntly, we are growing revenue and audience rapidly, keeping our costs to generate that revenue tight, and investing in profitable opportunities. We have momentum. Our first quarter results demonstrate that we have reached a key inflection point. Thanks in part to the investments we made in the business in 2021, we expect our revenue expansion this year to continue without significant incremental costs. We have completed major investments in our platform and it is working. Our Q1 gross profit more than tripled and digital revenue grew by more than 82% versus the prior year. And digital revenue now makes up 65% of our overall revenue versus 52% last year. More than half of each incremental dollar in digital revenue is now falling to our gross profit line. And that pushes us on a path towards profitability as we continue to rapidly expand our revenue. During our last earnings call in March, we talked about our proprietary playbook, which overlays our content strategy, audience development efforts, and social media initiatives, driving traffic across our key properties, as well as to our publishing partners. The playbook creates increasing momentum. We have a flywheel, and through effective optimization, we are driving additional positive gains in traffic which beget more ad dollars and more data on consumers, which allows us to circulate traffic further and optimize those audiences. We have executed the playbook in our sports and finance verticals in late 2021 with very positive initial results. And in the first quarter, we continue to see it bear fruit in audience and revenue growth. Our sports vertical anchored by Sports Illustrated saw Q1 monthly average page views grow by 248% as compared to the first quarter of 2021, according to Google Analytics, thanks to our great journalism and storytelling from our talented array of writers. The expansion of our social media efforts across TikTok, Facebook, Instagram, and Snap yielded 265% growth in Q1 social page views compared to the prior period according to Google Analytics. SI continued to have the number one share of voice on Facebook link posts amongst all major sports brands for the second consecutive quarter according to CrowdTangle. This robust traffic growth was a key driver for the digital revenue expansion we saw in Q1. We also signed 14 new FanNation sites and added another publishing partner to our SI media group during the quarter, continuing to expand our content and audience base with little to no upfront investment. We also launched our new commerce initiatives during the first quarter, SI Shop and SI Showcase, two new marketplaces for goods, services, and content recommendations. We believe our commerce and marketplace initiatives will make significant incremental contributions to our business this year and next to further diversify our revenue base. Turning to our finance vertical, Q1 saw a rapid expansion of our audience at the street. Last October when Jim Cramer departed, the street's online audience was 9.1 million monthly page views according to Google Analytics. In Q1, thanks to a new team of editorial leadership, the application of our playbook, and an expansion of our content offerings, the street recorded 24.3 million monthly average page views according to Google Analytics. And in April, that momentum continued. That represents 166% growth in only eight months and at a lower cost base than the street previously had. The increased traffic contributed significant ad revenue growth and expanded the potential for new subscribers. In Q1, we launched our first new paid product in nearly four years with the launch of the Street Smarts, and we expect to see continued growth in our subscriber base in the coming months. In Q1, we also began to execute the playbook in our Pets brand, Pet Helpful. And in less than three months, we've seen our audience engagement expand significantly. Pet helpful monthly average page views in Q1 was 13.6 million as compared to 6.7 million in the prior quarter, a 101% increase year over year. We have plans to execute the playbook in additional HubPages sites throughout the next quarter. Our playbook is tried and true. Not only does it work with well-known media brands like Sports Illustrated and digitally native startups like The Street, but on much smaller, less recognizable brands as well. These results continue to demonstrate just how scalable our model is. And we operate on a single digital infrastructure that scales without additional costs, similar to SaaS companies. On April 1, we closed our acquisition of AMG Parade. which will jumpstart our lifestyle vertical anchored by Parade and feature popular brands like Spry Living and Relish with 46 million monthly average page views in Q1 on the digital side according to Google Analytics and 233 million monthly print gross impressions on the print side according to MRI Simons, as well as relationships with more than 1,200 local newspaper partners across the country. We are well on our way to moving the brands onto our platform, integrating our advertising technology, expanding distribution through our ecosystem, and applying our playbook. And we are optimistic that we will see strong audience growth in a short period. The combination of all this momentum in Q1 led to a $7.6 million improvement in adjusted EBITDA to negative 1.1 million. This was despite some significant expenses related to our uplisting to the NYSC American, which will not be ongoing. It is important to note that of our net loss of $18.4 million, $15 million, or 81%, was non-cash expenses. Today we are a vibrant publisher of 40 owned and operated brands and a partner to more than 200 others. Our award-winning journalism supports partner-generated content, creating additional advertising and inventory, and attracting more and more viewers. But the key is our scalability. With a single robust technology platform, we have the capability to grow significantly on our existing platform at little to no incremental cost. We don't need to materially add to our headcount. We don't need additional technology investments. We are primed to grow and grow profitably. In fact, our infrastructure is positioned to ingest new partners and new brands, and we are targeting to deliver revenue at gross margins north of 50% going forward. As I said at the beginning of this call, this is a great start to 2022, and it's only the beginning. I want to talk more about what we share, but first I'd like to let Doug Smith, our CFO, take you through the numbers. Doug?