Operating losses at the media company owned by the US President ballooned to $238 million in the second quarter, alongside a plan to abandon several new business lines and refocus on building a social forum for user opinions.

Trump Media & Technology Group, the operator of the Truth Social platform, released its quarterly report on Monday, revealing a $238 million loss for the three months ending June 30. This followed a period of aggressive expansion into areas like cryptocurrency, which was largely outside the company's core media business.

The size of this loss was more than ten times the figure from the same period last year, with the per-share loss widening from $0.08 to $0.86. During an investor conference call following the release, new CEO Kevin McGaan stated that the company's recent forays into online gambling and cryptocurrency were being essentially abandoned. The focus is now returning to social media.

"We are making rational adjustments, dedicating more time and resources to our most important core projects," McGaan said. "For businesses that aren't a fit, we will decisively decline or pivot away."

Following the earnings report, shares of Trump Media dipped slightly in after-hours trading, after already falling 8% during the regular trading session.

Where to focus next

The central element of McGaan's transformation plan is a product called "Truth API." This service would give Wall Street trading firms priority access to content from top influencers on the Truth Social platform, including the highest-profile account belonging to the US President, Donald Trump. Trump frequently uses the platform to announce major policy changes, which often trigger market volatility.

Since the President began his second term, public governance watchdogs have criticized Trump Media as a tool for the President to profit from his official position. The new paid data service has intensified these concerns. The Democratic Party stated that if they gain control of Congress in the midterm elections, they will launch an investigation into the paid service.

McGaan pushed back against such criticism, arguing that other companies also sell proprietary, fast-access data feeds to traders. "Offering authorized real-time public data through a commercial application programming interface is a mature and standard business model in the technology, financial news, and media sectors. This operation is no different in its essence."

A previously announced new venture, a nuclear fusion project, will be retained. McGaan revealed that Trump Media aims to close the previously announced acquisition of energy company TAE Technologies by the end of the year. Discussing the fusion business, he said, "We have always believed this is the single most important engine for driving our company's long-term value."

Understanding the quarterly loss

A large portion of last quarter's losses came from unrealized paper losses, as the value of the company's holdings in Bitcoin and the Cronos token fell. Even excluding this paper loss, and after adjusting for taxes, interest, and other items, the operating loss widened from $44 million in the same period last year to $164 million.

How Truth API monetizes Trump's posts

McGaan explained that Truth API's monthly subscription fee ranges from $60,000 to $100,000. The company has already signed 10 clients, mostly high-frequency trading firms that execute trades in milliseconds. These 10 clients are expected to generate between $7 million and $12 million in new annual revenue for the company, which is roughly two to three times the company's total revenue for last year.

"We are still in the early stages of this business," McGaan said, adding that the potential customer base extends beyond traders to include data center operators, news organizations, and large language model developers.

The company is carrying a $1 billion special convertible note debt, which is not due until 2028. However, creditors have the option to demand cash repayment in November. While the company's cash reserves are relatively healthy, such a demand could still impact its financial position. At the end of the quarter, Trump Media held over $400 million in cash and short-term investments, alongside $1.2 billion in Bitcoin and Bitcoin-related assets.