NEW YORK – Trump Media & Technology Group, the company behind Truth Social, reported a $238 million second-quarter loss as newly appointed CEO Kevin McGurn moves to scale back several businesses launched during the company’s expansion beyond social media.
The loss for the three months through June was more than 10 times the loss recorded a year earlier. The company’s per-share loss widened to 86 cents from 8 cents, while its stock fell 8% during regular trading Monday and edged lower in after-hours trading following the earnings release.
The results mark a strategic shift for Trump Media as McGurn seeks to concentrate resources on Truth Social and related data services while reducing its focus on cryptocurrency and online betting ventures.
Trump Media narrows expansion strategy
McGurn said during a conference call following the earnings release that the company would devote more resources to its core social media operation and abandon most of its newer business initiatives.
“We made the disciplined choice to pivot in order to invest more time and resources in our most important initiatives,” McGurn said. “We will say no to things or change course as warranted.”
The company’s planned nuclear-fusion venture is an exception. Trump Media intends to continue pursuing its previously announced merger with energy company TAE Technologies, which McGurn said the company hopes to complete by the end of the year.
“We continue to believe it’s the single most important driver of long-term value for this company,” McGurn said.
The strategy leaves Trump Media with Truth Social at the center of its operating business while maintaining significant financial exposure to cryptocurrency and a potential expansion into nuclear fusion.
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Cryptocurrency holdings widen quarterly loss
A significant portion of the second-quarter loss came from unrealized declines in the value of Trump Media’s bitcoin holdings and its holdings of the Cronos cryptocurrency token.
Excluding those paper losses, as well as taxes, interest and other items, the company’s operating loss was $164 million, compared with $44 million a year earlier.
Revenue remained relatively small compared with the company’s losses. Trump Media reported $1.7 million in second-quarter revenue, more than double the amount reported a year earlier.
At the end of June, the company held more than $400 million in cash and short-term investments, along with $1.2 billion in bitcoin and bitcoin-related assets.
The company also had $1 billion in debt from special convertible notes due in 2028. Lenders have an option to require repayment in November, creating a potential financial obligation despite Trump Media’s reported cash and investment holdings.
Truth API becomes key part of turnaround
McGurn is placing a new data business, Truth API, at the center of the company’s effort to generate additional revenue from Truth Social.
The service provides Wall Street trading firms with early access to posts from prominent Truth Social users. President Donald Trump, who has the platform’s largest following, frequently uses Truth Social to announce policy positions that can influence financial markets.
McGurn said Truth API charges customers between $60,000 and $100,000 a month and has signed 10 customers, most of them high-frequency trading firms that execute transactions in milliseconds.
At those rates, 10 customers could generate approximately $7 million to $12 million in annual revenue, potentially making the service significantly larger than Trump Media’s existing revenue base.
McGurn said the potential customer base could also include data-center companies, news organizations and developers of large language models.
“We’re in the early innings,” he said.
Truth API draws political scrutiny
The data service has also raised questions about Trump Media’s business model because of Trump’s position as president and his relationship with the company.
Good-government groups have criticized Trump Media as a potential vehicle for profiting from Trump’s presidency, while Democrats have said they would investigate Truth API if they gain control of Congress in the midterm elections.
McGurn rejected those concerns, arguing that the commercial licensing of real-time public data through application programming interfaces is common across technology, financial information and media businesses.
“Providing licensed real-time public data through commercial APIs is a well-established business practice across the technology, financial information and media industries,” he said. “This is no different.”
Company faces pressure to improve operating performance
Trump Media’s immediate challenge is to reduce losses from ventures that have generated limited operating revenue while developing a sustainable business around Truth Social and its emerging data services.
Its substantial cash and cryptocurrency holdings provide financial resources, but the second-quarter results show a significant gap between the value of those assets and the revenue generated by the company’s core operations.
The strategic retreat from several newer ventures therefore places greater importance on Truth Social, Truth API and the planned TAE Technologies transaction as McGurn seeks to reshape the company’s business following a year of expansion.
This report is based on reporting by The Associated Press.
