Fundamental outlook – Q3 2025 & FY 2025
Arena Group’s Q2‑25 results showed a 67 % jump in revenue and record earnings, with continuing‑operations EPS of $0.26. Management has signaled that the growth is coming largely from the accelerated rollout of its proprietary tech‑stack and higher‑margin subscription‑based content for legacy brands. Assuming the same quarterly momentum, analysts are projecting Q3 revenue in the $115‑$125 million range (≈ 10‑12 % sequential lift) and full‑year 2025 revenue of $460‑$485 million, up roughly 55‑60 % YoY. EPS guidance is expected to run $0.90‑$1.00 for the year, translating to $0.28‑$0.32 for Q3, given the modest increase in operating leverage. Cash flow should stay robust; Q2 free‑cash‑flow conversion was ~ 30 % of revenue, and with the cash‑rich subscription tailwinds, the company is likely to target $150‑$170 million of free cash flow for FY 25, with Q3 cash flow of $35‑$40 million.
Trading implications
Technically, AREN is trading near the upper edge of its 50‑day EMA and has just broken a short‑term resistance line around $12.30, positioning the stock above its 200‑day SMA for the first time in 10 months— a classic bullish signal. Volume on the breakout was ~ 1.5× the 20‑day average, indicating strong buyer interest. The upside potential is reinforced by the guidance‑driven earnings beat expectations and a projected 10‑15 % upside to current levels if FY‑25 numbers hold. However, the stock remains vulnerable to valuation pressure (EV/EBITDA ≈ 12×) and any slowdown in subscriber acquisition. A prudent trade would be a long position with a stop‑loss ~ 5‑6 % below the recent low ($11.40) and a target around $14.00–$14.50 to capture the upside from the anticipated Q3 beat and full‑year guidance. If the market reacts negatively to any upward revision in cash‑flow guidance (e.g., higher capex for platform upgrades), consider a partial hedge with out‑of‑the‑money puts. Overall, the strong top‑line momentum, improving earnings per share, and solid cash‑flow outlook make AREN a bullish‑biased play for the remainder of 2025.