Financial Performance - For the three months ended September 30, 2025, total revenue decreased by 3% to $12.4 million, with streaming and digital revenue declining by 5% to $9.6 million [146]. - The company experienced a 39% increase in base distribution revenue for the three months ended September 30, 2025, totaling $1.8 million, primarily due to theatrical releases [146]. - For the six months ended September 30, 2025, total revenue increased by 7% to $23.5 million, with streaming and digital revenue rising by 5% to $18.7 million [154]. - The company reported a net loss attributable to common stockholders of $9.3 million for the three months ended September 30, 2025 [139]. - Adjusted EBITDA for the six months ended September 30, 2025, was a loss of $5.8 million, compared to a loss of $0.9 million in the same period of 2024 [165]. Expenses - Direct operating expenses decreased by 17% to $5.2 million for the three months ended September 30, 2025, driven by lower variable costs [150]. - Selling, general and administrative expenses increased by 79% to $11.4 million for the three months ended September 30, 2025, largely due to higher compensation and marketing expenses [151]. - For the six months ended September 30, 2025, Selling, General and Administrative expenses increased by $7.4 million, or 57%, compared to the same period in 2024, totaling $20.4 million [157]. - Compensation expenses rose by $2.6 million, or 31%, primarily due to an increase in employee headcount [157]. - Marketing expenses surged by 7427%, increasing by $3.3 million, largely attributed to the Toxic Avenger campaign [157]. - Interest expense decreased by $0.2 million to $0.1 million for the three months ended September 30, 2025, due to a lower average balance on the Line of Credit Facility [153]. - Interest expense decreased by $0.9 million for the six months ended September 30, 2025, primarily due to higher outstanding debt balances and increased interest rates in 2024 [160]. - Amortization of intangible assets increased by $0.5 million, or 31%, totaling $2.0 million for the six months ended September 30, 2025 [159]. Cash Flow - Net cash used in operating activities for the six months ended September 30, 2025, was $21.7 million, compared to $2.4 million in 2024 [166]. - Net cash provided by financing activities was $11.0 million for the six months ended September 30, 2025, compared to $0.5 million in 2024 [166]. - Cash used in investing activities was $0.9 million for the six months ended September 30, 2025, compared to $0.8 million in 2024, mainly for long-lived intangible and fixed assets [167]. Debt and Financing - The company has a Line of Credit Facility with East West Bank, allowing borrowings of up to $12.5 million, with $6.6 million outstanding as of September 30, 2025 [140]. - The company plans to continue investing in content development and acquisitions, with short-term content advances of $5.4 million as of September 30, 2025 [141]. Equity Interest - The company holds a 100% equity interest in CDF2 Holdings, an unconsolidated variable interest entity, but is not the primary beneficiary [169]. Accumulated Deficit - As of September 30, 2025, the company reported an accumulated deficit of $510.2 million and negative working capital of $1.3 million [139].

Financial Performance - Total revenue for Q2 FY 2026 was $12.4 million, a 3% decrease from $12.7 million in the prior-year quarter[4] - Net loss attributable to common stockholders was $(5.7) million, or $(0.31) per share, compared to a net loss of $(1.4) million, or $(0.09) per share, in the prior-year quarter[7] - Total revenues for the three months ended September 30, 2025, were $12,357,000, a decrease of 3% compared to $12,739,000 for the same period in 2024[31] - Operating loss for the three months ended September 30, 2025, was $(5,410,000), compared to $(861,000) for the same period in 2024, reflecting a significant increase in operating expenses[31] - Net loss attributable to common stockholders for the three months ended September 30, 2025, was $(5,678,000), compared to $(1,376,000) for the same period in 2024, indicating a worsening financial performance[31] - Adjusted EBITDA for the three months ended September 30, 2025, was $(3,685,000), a decline from $532,000 in the same period of 2024[36] - The company reported a net loss before income taxes of $(5,525,000) for the three months ended September 30, 2025, compared to $(1,197,000) for the same period in 2024[31] Expenses - SG&A expenses rose by $5.0 million, or 79%, to $11.4 million, driven by increased marketing costs of approximately $2.3 million for The Toxic Avenger Unrated[5] - Selling, general and administrative expenses increased to $11,407,000 for the three months ended September 30, 2025, compared to $6,364,000 for the same period in 2024[31] Revenue Streams - Streaming and digital revenues decreased by 5% to $9.6 million from $10.1 million in the prior year[6] - Base distribution revenue increased by 39% to $1.8 million, up from $1.3 million in the prior-year quarter, primarily due to the theatrical release of The Toxic Avenger Unrated[6] Assets and Liabilities - Total current assets decreased to $23,258,000 as of September 30, 2025, from $38,081,000 as of March 31, 2025[29] - Total liabilities decreased to $24,784,000 as of September 30, 2025, from $34,724,000 as of March 31, 2025[29] - Cash and cash equivalents were $2,336,000 as of September 30, 2025, down from $13,941,000 as of March 31, 2025[29] Strategic Initiatives - Cineverse announced a new venture, MicroCo, projected to tap into a market expected to reach $10 billion by 2027[10] - Cineverse plans to reissue the 20th anniversary edition of Pan's Labyrinth in Fall 2026, with a marketing campaign kicking off at the Cannes Film Festival[3] Content Performance - The Toxic Avenger Unrated is projected to generate an internal rate of return (IRR) of over 40% despite underperforming at the box office[2] - The company's content library, valued at $45 million, significantly exceeds the $3.2 million book value recorded at quarter end[16] Share Information - The weighted average shares of common stock outstanding for the three months ended September 30, 2025, were 18,447,000, compared to 15,721,000 for the same period in 2024[31]

Revenue Performance - For the three months ended June 30, 2025, total revenue increased by $2.0 million, or 22%, to $11.1 million compared to the same period in 2024[142]. - Streaming and digital revenue rose by $1.4 million, primarily due to a $0.5 million increase in subscriber revenue and $0.5 million in transaction revenue related to Terrifier 3[142]. Financial Losses - The Company reported a net loss of $3.6 million for the three months ended June 30, 2025, compared to a net loss of $3.1 million in the prior year[135]. - Adjusted EBITDA for the three months ended June 30, 2025, was a loss of $2.1 million, compared to a loss of $1.4 million in the same period in 2024[155]. Expenses - Direct operating expenses increased by $0.3 million to $4.5 million, primarily due to increased variable costs associated with revenue growth[146]. - Selling, general and administrative expenses rose by $2.4 million to $9.0 million, driven by a $1.1 million increase in compensation expense and a $1.2 million rise in other operating expenses[147]. Cash Flow and Working Capital - As of June 30, 2025, the Company had an accumulated deficit of $504.6 million and a working capital deficit of $(0.3) million[135]. - For the three months ended June 30, 2025, net cash used in operating activities was $(14,524) thousand, compared to $(2,344) thousand in the same period of 2024[156]. - Cash used in investing activities was $(16) thousand for the three months ended June 30, 2025, primarily related to expenditures towards long-lived intangible and fixed assets[157]. - Cash provided by financing activities was $2,568 thousand for the three months ended June 30, 2025, driven by proceeds from the Line of Credit Facility[158]. - The net change in cash and cash equivalents for the three months ended June 30, 2025, was $(11,972) thousand, compared to $(1,267) thousand in 2024[156]. - Operating cash flows are typically seasonally lower during the first two fiscal quarters and higher during the fiscal third and fourth quarters due to revenues earned during the holiday season[160]. Credit Facilities and Investments - The Company has a Line of Credit Facility with East West Bank providing for borrowings of up to $12.5 million, which can be expanded to $15.0 million[136]. - The Line of Credit Facility bears interest at a rate of 1.25% above the prime rate, which was 8.75% as of June 30, 2025[137]. - The Company plans to continue investing in content development and acquisitions, with short-term content advances totaling $5.2 million as of June 30, 2025[138]. Equity Interests - The company holds a 100% equity interest in CDF2 Holdings, which is an unconsolidated variable interest entity (VIE)[161].

[Q1 FY2026 Financial and Operational Highlights](index=1&type=section&id=Q1%20FY2026%20Financial%20and%20Operational%20Highlights) Cineverse achieved significant revenue growth and improved direct operating margin in Q1 FY2026, driven by streaming and theatrical successes, despite increased SG&A impacting net loss and Adjusted EBITDA [1.1 Overall Performance Summary](index=1&type=section&id=1.1%20Overall%20Performance%20Summary) Cineverse reported significant improvements in Total Revenue and Direct Operating Margin for Q1 FY2026, with revenue increasing by 22% to $11.1 million and margin improving by 6% to 57% - Total Revenue increased by $2.0 million or **22%** over the prior year quarter to **$11.1 million**[1](index=1&type=chunk) - Direct Operating Margin improved by **6%** over the prior year quarter to **57%**[1](index=1&type=chunk) - Net Loss and Adjusted EBITDA decreased slightly due to increased SG&A costs, attributable to investments in theatrical slate and an enhanced business development, product, and sales team for the Technology group[1](index=1&type=chunk) [1.2 Key Financial Highlights](index=1&type=section&id=1.2%20Key%20Financial%20Highlights) Total quarterly revenue grew 22% to $11.1 million, driven by gains in streaming, digital distribution, theatrical, and physical sales, leading to a net loss of $3.6 million and Adjusted EBITDA of $(2.1) million Q1 FY2026 Key Financial Highlights | Metric | Q1 FY2026 | Q1 FY2025 | Change (YoY) | | :-------------------------------- | :---------- | :---------- | :----------- | | Total Revenue | $11.1 million | $9.1 million | +22% | | Streaming and Digital Revenues | $9.1 million | $7.7 million | +18% | | Base Distribution Revenue | $1.0 million | $0.4 million | +192% | | SG&A Expenses | $9.0 million | $6.6 million | +36% | | Net Loss attributable to common stockholders | $(3.6) million | $(3.2) million | -12.5% | | Basic and Diluted EPS | $(0.21) | $(0.20) | -5% | | Adjusted EBITDA | $(2.1) million | $(1.4) million | -50% | [1.3 Key Operational Highlights](index=1&type=section&id=1.3%20Key%20Operational%20Highlights) The company expanded its theatrical slate and streaming viewership, with total minutes streamed up to 4.0 billion and SVOD subscribers growing 6% to 1.38 million, alongside strategic initiatives like the MicroCo joint venture - Expanded theatrical slate with upcoming wide release films including The Toxic Avenger Unrated (August 29, 2025), Silent Night, Deadly Night (December 12, 2025), Return to Silent Hill (January 23, 2026), Air Bud Returns (Summer 2026), and Wolf Creek: Legacy (2027)[2](index=2&type=chunk) - Total monthly viewership across the channel portfolio increased **38%** year-over-year, driven by strong growth from Screambox, Dog Whisperer with Cesar Millan, Barney, and Yu-Gi-Oh[5](index=5&type=chunk) - Total streaming viewers increased approximately **20%** year-over-year to **209 million**, with total minutes streamed up **38%** to more than **4.0 billion** and FAST channel minutes up **20%** to **3.8 billion**[10](index=10&type=chunk) - SVOD subscribers grew approximately **6%** year-over-year to **1.38 million**[10](index=10&type=chunk) - Announced a 50/50 joint venture with Lloyd Braun's Banyan Media Ventures to launch MicroCo, a new studio and platform for microseries, a market projected to reach **$10 billion by 2027**[9](index=9&type=chunk) - Commercial release of cineSearch on Google Cloud Marketplace and launched Matchpoint Dispatch pilots with a major studio[10](index=10&type=chunk) [Management Commentary](index=3&type=section&id=Management%20Commentary) Management emphasized strong revenue and operating margin growth, strategic investments in theatrical and technology, and the potential of the MicroCo joint venture to capitalize on the microseries market [2.1 Chairman and CEO's Statement](index=3&type=section&id=2.1%20Chairman%20and%20CEO's%20Statement) CEO Chris McGurk highlighted strong revenue and operating margin growth, acknowledging that increased SG&A investments impacted Adjusted EBITDA and Net Income, with returns expected from Q2, while emphasizing the strategic importance of the MicroCo joint venture - Strong revenue and total Operating Margin growth, with investments in SG&A and marketing impacting Adjusted EBITDA and Net Income, but returns are expected to begin in fiscal second quarter[11](index=11&type=chunk) - The Toxic Avenger Unrated has a favorable risk/reward profile for Cineverse due to the acquisition of all domestic rights in all media in perpetuity under a unique deal structure, with a total investment of less than **$5 million**[11](index=11&type=chunk) - Acquired Air Bud Returns, the latest theatrical installment of the beloved family franchise, for release next summer[11](index=11&type=chunk) - The MicroCo joint venture, with Banyan Ventures and led by elite executives, is positioned to build an industry-leading business in the high-growth microseries market, projected to reach **$10 billion by 2027**[11](index=11&type=chunk) [2.2 President and Chief Strategy Officer's Statement](index=3&type=section&id=2.2%20President%20and%20Chief%20Strategy%20Officer's%20Statement) President Erick Opeka detailed Cineverse's strategy of combining owned ad tech, proprietary media networks, and a disciplined theatrical acquisition approach to achieve studio-level awareness with minimal spend, noting significant streaming growth and the strategic vision for MicroCo - Cineverse's strategy combines owned ad tech, proprietary media networks, and a disciplined theatrical acquisition approach to achieve studio-level awareness with a fraction of comparable studio campaign spend[11](index=11&type=chunk)[13](index=13&type=chunk) - The same marketing machine driving theatrical awareness is fueling growth across the streaming business, with total minutes streamed up **38%** year-over-year to over **4.0 billion** and FAST viewing up **20%**[13](index=13&type=chunk) - Screambox viewership climbed **26%** since the release of Terrifier 3, demonstrating the approach's ability to both launch films and deepen engagement across platforms[13](index=13&type=chunk) - The MicroCo joint venture aims to build the infrastructure layer for the entire microdrama space, unifying content, creators, fandom, and monetization under one platform, powered by Cineverse's proprietary technology and AI capabilities[13](index=13&type=chunk) [Financial Statements](index=6&type=section&id=Financial%20Statements) The financial statements reflect a decrease in total assets and cash, an increase in revenue offset by higher operating expenses, leading to an increased net loss and decreased Adjusted EBITDA [3.1 Condensed Consolidated Balance Sheets](index=6&type=section&id=3.1%20Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, Cineverse reported total assets of $61.5 million, a decrease from $72.5 million on March 31, 2025, primarily due to a drop in cash and cash equivalents, while total liabilities and equity also declined Condensed Consolidated Balance Sheets (in thousands) | ASSETS | June 30, 2025 (Unaudited) | March 31, 2025 | | :-------------------------------- | :------------------------ | :------------- | | Cash and cash equivalents | $1,985 | $13,941 | | Total Current Assets | $24,863 | $38,081 | | Total Assets | $61,534 | $72,516 | | LIABILITIES AND STOCKHOLDERS' EQUITY | | | | Total Current Liabilities | $25,139 | $34,435 | | Total Liabilities | $25,380 | $34,724 | | Total equity | $36,154 | $37,792 | [3.2 Condensed Consolidated Statements of Operations](index=7&type=section&id=3.2%20Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended June 30, 2025, Cineverse's revenues increased to $11.1 million, but total operating expenses rose to $14.8 million, resulting in an operating loss of $(3.7) million and a net loss of $(3.6) million Condensed Consolidated Statements of Operations (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | | Revenues | $11,119 | $9,127 | | Direct operating expenses | $4,807 | $4,479 | | Selling, general and administrative | $8,952 | $6,563 | | Total operating expenses | $14,821 | $11,905 | | Operating loss | $(3,702) | $(2,778) | | Net loss attributable to common stockholders | $(3,649) | $(3,162) | | Basic and Diluted EPS | $(0.21) | $(0.20) | [3.3 Adjusted EBITDA Reconciliation](index=8&type=section&id=3.3%20Adjusted%20EBITDA%20Reconciliation) Cineverse defines Adjusted EBITDA as a non-GAAP metric to assess fundamental business performance, reporting $(2.1) million for Q1 FY2026, a decrease from $(1.4) million in the prior year due to increased operating expenses - Adjusted EBITDA is a non-GAAP financial metric defined as earnings before interest, taxes, depreciation and amortization, stock-based compensation expense, merger and acquisition costs, restructuring, transition and acquisitions expense, net, goodwill impairment and certain other items[21](index=21&type=chunk)[22](index=22&type=chunk)[23](index=23&type=chunk) Adjusted EBITDA Reconciliation (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | | Net Loss | $(3,516) | $(3,050) | | Add Backs: | | | | Income tax expense | 14 | 7 | | Depreciation and amortization | 1,147 | 948 | | Interest (income) expense | (278) | 431 | | Stock-based compensation | 418 | 470 | | Other expense (income), net | 78 | (166) | | Net income attributable to noncontrolling interest | (44) | (23) | | Transition-related costs | 47 | 27 | | **Adjusted EBITDA** | **$(2,134)** | **$(1,357)** | [Operational Developments](index=2&type=section&id=Operational%20Developments) Post-quarter, Cineverse established the MicroCo joint venture, acquired US rights for "Air Bud Returns," expanded its streaming audience and SVOD subscribers, and commercially released cineSearch [4.1 Developments Subsequent to Quarter-End](index=2&type=section&id=4.1%20Developments%20Subsequent%20to%20Quarter-End) Subsequent to quarter-end, Cineverse announced a 50/50 joint venture with Banyan Media Ventures to launch MicroCo, acquired US rights for 'Air Bud Returns,' and expanded its streaming audience and SVOD subscribers - Announced 50/50 joint venture with Lloyd Braun's Banyan Media Ventures to launch MicroCo, a new studio and platform for microseries, with former Showtime President Jana Winograde named Co-founder and CEO[9](index=9&type=chunk) - Acquired US rights for Air Bud Returns, the latest installment in the iconic family franchise, in partnership with Air Bud Entertainment, with a wide theatrical release slated for summer 2026[12](index=12&type=chunk) - Total streaming viewers increased approximately **20%** year-over-year to **209 million**, with total minutes streamed up **38%** to more than **4.0 billion** and FAST channel minutes up **20%** to **3.8 billion**[10](index=10&type=chunk) - SVOD subscribers grew approximately **6%** year-over-year to **1.38 million**[10](index=10&type=chunk) - Commercial release of cineSearch on Google Cloud Marketplace and launched Matchpoint Dispatch pilots with a major studio[10](index=10&type=chunk) - Expanded international FAST footprint with Dog Whisperer with Cesar Millan and Bob Ross channels on Samsung TV Plus Australia, contributing to projected **35%** growth in international viewing hours[10](index=10&type=chunk) - Formed an internal Motion Pictures Group, expanded ad sales leadership, and rebranded the Cineverse Podcast Network, now with **74+ series** and over **230 million lifetime downloads**[10](index=10&type=chunk) - Cineverse common stock was added to multiple Russell indexes including 3000E, Microcap, Growth, and Value Segments[12](index=12&type=chunk) [Additional Information](index=5&type=section&id=Additional%20Information) This section provides an overview of Cineverse as a technology-driven entertainment studio, details of the Q1 FY2026 conference call, and a standard safe harbor statement regarding forward-looking information [5.1 About Cineverse](index=5&type=section&id=5.1%20About%20Cineverse) Cineverse is a next-generation entertainment studio leveraging technology to empower creators and entertain fans, distributing over 71,000 films, series, and podcasts, and utilizing proprietary streaming tools and AI technology - Cineverse is a global streaming technology and entertainment company that empowers creators and entertains fans with a wide breadth of content through technology[1](index=1&type=chunk)[14](index=14&type=chunk) - Distributes more than **71,000** premium films, series, and podcasts, connecting fans with bold, authentic, independent stories[14](index=14&type=chunk) - Utilizes proprietary streaming tools and AI technology to drive revenue and reach, redefining the next era of entertainment[14](index=14&type=chunk) [5.2 Conference Call Information](index=5&type=section&id=5.2%20Conference%20Call%20Information) Cineverse hosted a conference call on August 14, 2025, to discuss Q1 FY2026 results, with online access and replay details provided via the Cineverse Investor Relations website - A conference call was hosted on Thursday, August 14, 2025, at 4:30 p.m. EST/1:30 p.m. PST to discuss the fiscal first quarter results[14](index=14&type=chunk) - The conference call was accessible online via the Cineverse Investor Relations website (https://investor.cineverse.com), with an audio recording available for replay[16](index=16&type=chunk) [5.3 Safe Harbor Statement](index=5&type=section&id=5.3%20Safe%20Harbor%20Statement) The document includes a Safe Harbor Statement, cautioning investors that certain statements are 'forward-looking' and subject to various risks, uncertainties, and assumptions, with Cineverse undertaking no obligation to update these statements after the release date - The document contains 'forward-looking statements' as defined by the Private Securities Litigation Reform Act of 1995, which are predictive in nature and depend upon or refer to future events or conditions[15](index=15&type=chunk) - Forward-looking statements are based on current expectations and projections and are subject to various risks, uncertainties, and assumptions about Cineverse, its technology, economic and market factors, and the industries in which it operates[15](index=15&type=chunk) - Cineverse undertakes no specific obligation or intention to update these statements after the date of the release[15](index=15&type=chunk)

Company Overview - Cineverse has over 71,000 film and TV assets and has reached over 82 million streaming viewers, with more than 1.4 million SVOD subscribers[18]. - The company aims to grow its audience significantly beyond the current base of 82 million monthly viewers to potentially hundreds of millions across billions of connected devices[20]. - Cineverse's proprietary technology platform, Matchpoint™, enables the company to automate content distribution and features a robust data analytics platform[16]. - The company has a strategy focused on acquiring premium content and streaming channels, exploring new technology and revenue channels, and leveraging its Matchpoint™ platform for concurrent acquisitions[20]. - The company has experienced significant growth in viewership and subscription metrics, positioning itself as a leading independent distributor in the streaming market[18]. - Cineverse's focus on enthusiast content provides a significant and underserved market opportunity on a global basis[18]. - The company transformed from a digital cinema equipment distributor to a leading independent streaming company[210]. - The company has played a pioneering role in transitioning movie screens from analog film prints to digital distribution[210]. - The company was incorporated in Delaware on March 31, 2000[209]. Financial Performance - For the fiscal year ended March 31, 2025, total revenue increased by $29.1 million to $78.2 million, with streaming and digital revenue growing by 19% to $44.4 million[145]. - Revenues for the fiscal year ended March 31, 2025, increased to $78,181,000, up 59.3% from $49,131,000 in 2024[197]. - Operating income for the same period was $7,924,000, compared to a loss of $15,700,000 in the previous year, marking a significant turnaround[197]. - For the fiscal year ended March 31, 2025, the company reported a net income attributable to common stockholders of $3.2 million, while maintaining an accumulated deficit of $500.9 million[115]. - The company reported a significant reduction in goodwill impairment, with no impairment recorded in 2025 compared to $14,025,000 in 2024[197]. - The total stockholders' equity increased to $38,752,000 from $33,273,000, indicating improved financial health[195]. - The company generated net cash from operations amounting to $17.4 million for the year ended March 31, 2025[211]. - The company has positive working capital of $3.6 million as of March 31, 2025[211]. - The company reported a net income of $3.8 million, a significant recovery from a net loss of $21.3 million in the previous year[168]. - Adjusted EBITDA for the fiscal year ended March 31, 2025 was $13.9 million, compared to $4.4 million for the fiscal year ended March 31, 2024, reflecting improved operational performance[168]. Cash Flow and Liquidity - The company generated $17.4 million of net positive cash flows from operations for the year ended March 31, 2025, with cash and cash equivalents of $13.9 million and total equity of $37.8 million[47]. - The company had cash and cash equivalents of $13.9 million as of March 31, 2025, up from $5.2 million as of March 31, 2024, indicating a strong liquidity position[171]. - The Company anticipates sufficient cash and cash equivalents to support operations for at least twelve months from the report filing date[125]. - Cash used in financing activities for the year ended March 31, 2025 was $8.0 million, primarily due to repayments of the Line of Credit Facility and the T3 Loan[174]. Debt and Financing - As of March 31, 2025, CDF2 Holdings had a total stockholder's deficit of $59.2 million, with the company's financial exposure limited to an initial investment of $2.0 million[40]. - CDF2 Holdings has incurred long-term losses and financed operations primarily through equity investments and borrowings, indicating a reliance on external funding sources[47]. - The company is party to a Line of Credit Facility with East West Bank providing for $12.5 million, expandable to $15.0 million[212]. - The Line of Credit Facility bears interest at a rate of 8.75% as of March 31, 2025[212]. - The company may need to adopt alternative strategies, such as reducing capital expenditures or seeking additional funding, if unable to service its indebtedness[50]. - The company may face challenges in raising capital in the future, which could hinder its ability to fund operations and expansion[82]. Risks and Liabilities - Cineverse recorded $14 million in goodwill impairment in the prior fiscal year, indicating potential future risks related to asset valuation[33]. - Risks related to market downturns could lead to significant fluctuations in revenues and earnings, affecting overall financial stability[54]. - The company faces potential liability claims for media content, which could adversely affect its financial condition and operating results[53]. - Changes in economic conditions, such as increased energy costs and consumer confidence, could materially impact demand for the company's products and services[56]. - The ability to utilize net operating loss carryforwards is subject to substantial limitations due to ownership changes, potentially resulting in increased future tax payments[58]. - The company's reliance on Amazon Web Services (AWS) for computing infrastructure poses a risk, as any disruption could adversely affect operations[64]. - The company has experienced periodic service interruptions and lacks live fail-over capability to switch to another cloud provider, which could impair service delivery[65]. - The liquidity of the company's Common Stock is uncertain, with limited trading volume potentially leading to significant price fluctuations[67]. - The company has 2.7 million shares of Common Stock potentially subject to dilution due to outstanding warrants[69]. - The company is subject to significant costs associated with being a public company, which may disrupt operations and increase compliance expenses[84]. Stock and Shareholder Information - The company has no current intention of paying dividends on its Common Stock, which may limit returns for investors[81]. - The company approved a share repurchase program in March 2023, renewed in February 2024 and 2025, contingent on favorable market conditions[83]. - The company's stock repurchase program allows for the purchase of up to 500,000 shares, with the program renewed to expire on March 31, 2026[107]. - The reported closing price per share of the company's Common Stock on June 20, 2025, was $3.89[104]. - The company issued 2,150,000 shares of Common Stock and raised approximately $7.4 million in gross proceeds from a public offering in June 2023[122]. - The company has never paid cash dividends on its Common Stock and does not anticipate doing so in the foreseeable future[105].

[Financial & Business Highlights](index=1&type=section&id=Financial%20%26%20Business%20Highlights) [Fiscal Year 2025 Financial Highlights](index=2&type=section&id=Fiscal%20Year%202025%20Financial%20Highlights) Cineverse achieved 59% revenue growth to $78.2 million in FY2025, turning a net loss into $3.2 million net income Metric (in millions) | Metric | FY 2025 (in millions) | FY 2024 (in millions) | Change | | :--- | :--- | :--- | :--- | | **Consolidated Revenue** | $78.2M | $49.1M | +59% | | **Net Income (to common stockholders)** | $3.2M | $(21.8)M | +$25.0M | | **Diluted EPS** | $0.16 | $(1.78) | +$1.94 | | **Adjusted EBITDA** | $13.9M | $4.4M | +216% | | **Direct Operating Margin** | 50% | N/A | - | - SG&A expenses remained flat year-over-year but decreased as a percentage of revenue from **57%** in FY 2024 to **35%** in FY 2025, reflecting successful cost-saving initiatives like the off-shoring program to Cineverse Services India[7](index=7&type=chunk) [Fourth Quarter (Q4) FY 2025 Financial Highlights](index=1&type=section&id=Fourth%20Quarter%20(Q4)%20FY%202025%20Financial%20Highlights) Cineverse's Q4 FY2025 revenue grew 58% to $15.6 million, achieving $0.9 million net income and $4.0 million Adjusted EBITDA Metric (in millions) | Metric | Q4 FY 2025 (in millions) | Q4 FY 2024 (in millions) | Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | $15.6M | $9.9M | +58% | | **Net Income (to common stockholders)** | $0.8M | $(14.8)M | +$15.6M | | **Diluted EPS** | $0.04 | $(1.10) | +$1.14 | | **Adjusted EBITDA** | $4.0M | $1.6M | +158% | | **Direct Operating Margin** | 55% | N/A | - | - SG&A expenses decreased by **$1.4 million** (**21%**) compared to the prior year quarter, improving as a percentage of revenue from **69%** in Q4 FY 2024 to **35%** in Q4 FY 2025[9](index=9&type=chunk) [Financial Condition & Strategic Initiatives](index=1&type=section&id=Financial%20Condition%20%26%20Strategic%20Initiatives) Strong financial position with $13.9 million cash and no debt, driven by 'Terrifier 3' success and streaming/podcast growth - As of quarter-end, the company had nearly **$14 million** in cash-on-hand and **no outstanding debt**, with a zero draw on its **$12.5 million** line of credit[4](index=4&type=chunk)[13](index=13&type=chunk) - The horror film 'Terrifier 3' grossed over **$54.0 million** at the domestic box office and more than **$8.5 million** in ancillaries on a minimal paid media budget, demonstrating the effectiveness of the company's digital viral campaign and internal marketing assets[2](index=2&type=chunk)[12](index=12&type=chunk) - The company is building a slate of wide-release films following the 'Terrifier 3' model, including 'The Toxic Avenger', 'Silent Night, Deadly Night', 'Return to Silent Hill', and 'Wolf Creek: Legacy'[3](index=3&type=chunk) Business Line | Business Line | Revenue/Metric (in millions) | YoY Growth | Key Drivers | | :--- | :--- | :--- | :--- | | **Streaming & Digital** | $44.4M | +19% | 45% increase in monthly viewership; successful channel launches (Dog Whisperer, Barney). | | **Podcast & Other** | N/A | +86% | Expansion to 62 podcasts, ranking in the top eight nationally. | [Operational Developments](index=3&type=section&id=Operational%20Developments) Cineverse actively pursued content acquisition, technology partnerships, and international expansion, enhancing AI and advertising [During Q4 FY2025](index=3&type=section&id=During%20Q4%20FY2025) - SVOD subscriber base grew by approximately **17%** (**+62,000 subscribers**) after launching the Cineverse-branded channel on Amazon Channels[16](index=16&type=chunk) - Formed a partnership with SymphonyAI to accelerate the AI capabilities of the Matchpoint Insights platform[16](index=16&type=chunk) - FAST and AVOD viewership across key channels (RetroCrush, Docurama, Midnight Pulp) rose by **50%** in total minutes streamed compared to the prior quarter[16](index=16&type=chunk) [Subsequent to Quarter-End](index=3&type=section&id=Subsequent%20to%20Quarter-End) - Expanded the line of credit facility with East West Bank from **$7.5 million to $12.5 million** (expandable to **$15.0 million**) and extended the term to April 2028[13](index=13&type=chunk)[15](index=15&type=chunk) - Acquired U.S. rights for 'Return to Silent Hill' and announced the start of production for a reboot of 'Silent Night, Deadly Night'[18](index=18&type=chunk) - Commercially released cineSearch on Google Cloud Marketplace and initiated active pilot programs for Matchpoint Dispatch with major studio and OEM clients[18](index=18&type=chunk) [Management Commentary](index=4&type=section&id=Management%20Commentary) Management highlighted strong performance, focusing on replicating 'Terrifier 3' success and reorganizing to become an AI-native studio - **CEO Chris McGurk:** Highlighted strong financial gains, a robust balance sheet, and the strategy to replicate the 'Terrifier 3' blueprint with a slate of new franchise films like 'The Toxic Avenger' and 'Return to Silent Hill'[17](index=17&type=chunk) - **Company Reorganization:** Tony Huidor was appointed President of Technology and Chief Product Officer to focus on Matchpoint licensing and AI product development (e.g., cineSearch). Yolanda Macias was named Chief Motion Pictures Officer to build out the wide-release film slate[17](index=17&type=chunk)[19](index=19&type=chunk) - **President & CSO Erick Opeka:** Stated the company is evolving into a platform-first entity with strong performance in SVOD and FAST. The forward-looking strategy is to become an 'AI-native entertainment studio,' using AI in distribution, marketing, development, and production[19](index=19&type=chunk) [Financial Statements](index=7&type=section&id=Financial%20Statements) [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Cineverse's balance sheet shows a stronger financial position with total assets at $72.5 million, cash at $13.9 million (in thousands) | (in thousands) | As of March 31, 2025 | As of March 31, 2024 | | :--- | :--- | :--- | | **Cash and cash equivalents** | $13,941 | $5,167 | | **Total Current Assets** | $38,081 | $32,721 | | **Total Assets** | $72,516 | $64,378 | | **Line of credit, net** | $0 | $6,301 | | **Total Current Liabilities** | $34,435 | $31,249 | | **Total Liabilities** | $34,724 | $32,228 | | **Total Equity** | $37,792 | $32,151 | [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) FY2025 operations show a significant turnaround with 59% revenue growth to $78.2 million, achieving $7.9 million operating income For the Fiscal Year Ended March 31 (in thousands, except per share data) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | **Revenues** | $78,181 | $49,131 | | **Operating income (loss)** | $7,924 | $(15,700) | | **Net income (loss) attributable to common stockholders** | $3,246 | $(21,757) | | **Diluted net income (loss) per share** | $0.16 | $(1.78) | For the Three Months Ended March 31 (in thousands, except per share data) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | **Revenues** | $15,575 | $9,863 | | **Operating income (loss)** | $2,127 | $(13,995) | | **Net income (loss) attributable to common stockholders** | $761 | $(14,811) | | **Diluted net income (loss) per share** | $0.04 | $(1.10) | [Non-GAAP Measures: Adjusted EBITDA Reconciliation](index=9&type=section&id=Non-GAAP%20Measures%3A%20Adjusted%20EBITDA%20Reconciliation) Adjusted EBITDA, a key non-GAAP metric, significantly increased to $13.9 million for FY2025 and $4.0 million for Q4 - Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization, stock-based compensation, M&A costs, restructuring, goodwill impairment, and other certain items. Management believes it is a useful metric for evaluating core operating performance[28](index=28&type=chunk)[29](index=29&type=chunk) Reconciliation of Net Income (Loss) to Adjusted EBITDA (in thousands) | | For the Three Months Ended March 31, | For the Fiscal Year Ended March 31, | | | :--- | :--- | :--- | :--- | | | **2025** | **2024** | **2025** | **2024** | | **Net Income (Loss)** | $858 | $(14,676) | $3,764 | $(21,265) | | **Goodwill impairment** | $0 | $14,025 | $0 | $14,025 | | **Other Adjustments** | $3,144 | $(2,796) | $10,153 | $11,638 | | **Adjusted EBITDA** | **$4,002** | **$1,553** | **$13,917** | **$4,398** | [Corporate Information](index=6&type=section&id=Corporate%20Information) [About Cineverse](index=6&type=section&id=About%20Cineverse) Cineverse is a next-gen entertainment studio distributing over 71,000 films, series, and podcasts, leveraging AI and streaming tech - Cineverse is an entertainment studio distributing over **71,000** premium films, series, and podcasts[21](index=21&type=chunk) - Company properties include the highest-grossing unrated film in U.S. history, numerous streaming fandom channels, the Cineverse Podcast Network, and the horror brand Bloody Disgusting[21](index=21&type=chunk) [Conference Call Information](index=6&type=section&id=Conference%20Call%20Information) Cineverse will host a conference call on June 27, 2025, at 9:00 a.m. ET to discuss Q4 and FY2025 financial results - A conference call to discuss Q4 and FY 2025 results is scheduled for **9:00 a.m. ET** on Friday, June 27, 2025[20](index=20&type=chunk) - Access is available via toll-free number **+1 833 470 1428** (Access Code: **414024**) or through a webcast on the company's investor relations website[20](index=20&type=chunk)