LOS ANGELES, March 20, 2026 /PRNewswire/ -- Cineverse  (Nasdaq: CNVS), an entertainment technology company and studio, today announced a strategic partnership with VA Media, a recognized leader in strategy, channel management, and monetization for YouTube and other social networks including Facebook, Snapchat and TikTok. Under the agreement, VA Media will work closely with Cineverse to deliver a comprehensive, YouTube-first growth strategy spanning both longform and shortform content, channel optim ...

Core Insights - Cineverse has announced the start of production for "Wolf Creek Legacy," the third installment of the popular horror franchise, with John Jarratt reprising his role as Mick Taylor [1] - The first two films in the franchise have grossed over $35 million globally, indicating strong audience interest and potential for the new film [1] - Cineverse holds exclusive North American distribution rights and plans a wide theatrical release for the film [1] Production Details - The film is being produced in South Australia, with a cast that includes notable actors such as Ditch Davey and Laura Gordon, alongside John Jarratt [1] - The production team includes Greg McLean as producer and Sean Lahiff as director, with a script written by Duncan Samarasinghe [1] - The film aims to deliver a "bigger, darker, and more relentless" experience for fans of the franchise [1] Company Strategy - Cineverse is focused on acquiring proven, IP-based franchise films and releasing them cost-effectively through its technology and media infrastructure [1] - The company has a growing tech ecosystem powered by AI, designed to enhance content distribution and monetization across various platforms [2] - Cineverse's recent successes include the box office performance of "Terrifier 3" and upcoming releases like "Pan's Labyrinth" and "Air Bud Returns" [2]

Core Insights - Cineverse Corp. reported third-quarter fiscal year 2026 earnings with revenue of $16.3 million, below the estimated $20 million, and an EPS of -$0.05, missing the estimated EPS of -$0.03 [1][6] Financial Performance - The company achieved a direct operating margin of 69%, a significant increase from 48% in the same quarter of the previous year, indicating improved operational efficiency [2][6] - Adjusted EBITDA for the quarter was $2.4 million, reflecting ongoing operational challenges despite the margin improvement [2] - The company has a negative price-to-earnings (P/E) ratio of approximately -42.19, indicating ongoing losses [2] Future Guidance - Cineverse projects revenue for fiscal year 2027 to be between $115 million and $120 million, with adjusted EBITDA expected to range from $10 million to $20 million [3][6] - The company completed two acquisitions anticipated to contribute approximately $53 million in annual revenue and around $10 million in adjusted EBITDA for fiscal year 2027 [3] Valuation Metrics - Cineverse has a price-to-sales ratio of about 0.66, suggesting the stock is valued at less than its sales revenue [4] - The enterprise value to sales ratio is approximately 0.73, reflecting the company's total valuation including debt and excluding cash [4] - The enterprise value to operating cash flow ratio is around -27.41, indicating challenges in generating positive cash flow from operations [4] Debt and Liquidity - The company's debt-to-equity ratio is about 0.19, indicating a relatively low level of debt compared to its equity [5] - The current ratio is approximately 0.95, suggesting potential challenges in covering short-term liabilities with short-term assets [5]

Financial Data and Key Metrics Changes - Revenues for Q3 2026 were $16.3 million, up from $12.4 million in the previous quarter but down from $40.7 million in the same quarter last year, primarily due to the absence of theatrical results from "Terrifier 3" which contributed over $20 million in the prior year [14] - The net loss for the quarter was $875,000, a $4.7 million improvement over the prior quarter [14] - Adjusted EBITDA for the quarter was $2.4 million, reflecting a $6 million improvement from the previous quarter [14] - Direct operating margin improved to 69%, up from 48% in the prior year quarter [8][20] Business Line Data and Key Metrics Changes - The company focused on improving its cost structure and operating margins in its base businesses, achieving a direct operating margin of 69% [8][20] - The acquisitions of Giant Worldwide and IndiCue are expected to significantly enhance revenue streams and profitability, with projected contributions of over $50 million in revenue and $10 million in Adjusted EBITDA for fiscal year 2027 [17][18] Market Data and Key Metrics Changes - The streaming ecosystem saw a monthly unique viewer count of 35.5 million, with SVOD subscribers growing 15% year-over-year to 1.55 million [19] - The content library expanded to over 66,000 assets, including nearly 58,000 films and episodes, plus over 8,500 podcasts [19] Company Strategy and Development Direction - The company aims to transform into a comprehensive, AI-powered technology services provider for the entertainment industry, leveraging the acquisitions to fill market gaps and enhance operational efficiency [6][21][28] - The strategic focus is on building a unified, automated architecture for the entire media supply chain, addressing fragmentation in content distribution and monetization [28][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the financial guidance for fiscal year 2027, projecting revenues of $115 million to $120 million and Adjusted EBITDA of $10 million to $20 million [12][18] - The acquisitions are seen as a response to the industry's shift towards AI integration and automation, with expectations of significant growth in content volume and demand for efficient distribution solutions [12][80] Other Important Information - The company successfully closed two acquisitions, Giant for $2 million and IndiCue for a base consideration of $22 million, with potential earn-out considerations based on future performance [15][16] - The company sold 1.725 million shares of common stock at $2 per share, raising net proceeds of $3.2 million for working capital and corporate purposes [18] Q&A Session Summary Question: Can you discuss the evolution of IndiCue's business and its revenue concentration? - Management noted that IndiCue's revenue concentration has improved year-over-year, with a focus on building durable relationships with a diverse customer base [33][36] Question: Can you provide an update on Matchpoint and its new customers? - Management indicated that new customers are coming through various service needs, and there is potential for significant revenue growth through existing relationships [39][44] Question: What are the anticipated synergies from the acquisitions? - Management highlighted that there are significant revenue synergies expected from both acquisitions, with a conservative estimate of $8 million to $9 million in potential synergies from IndiCue alone [52][56] Question: How will free cash flow be managed moving forward? - Management stated that free cash flow will be directed towards growth initiatives rather than dilution, with a focus on leveraging existing software investments [64][66] Question: What is the company's future M&A strategy? - Management emphasized the importance of integrating the current acquisitions before pursuing further opportunities, but indicated that they remain open to acquiring additional companies that align with their strategic goals [81][83]

Financial Data and Key Metrics Changes - Revenues for Q3 2026 were $16.3 million, an increase from $12.4 million in the previous quarter but a decrease from $40.7 million in the same quarter last year, which included theatrical results from "Terrifier 3" exceeding $20 million [14] - The net loss for the quarter was $875,000, improving by $4.7 million compared to the prior quarter [14] - Adjusted EBITDA for the quarter was $2.4 million, a $6 million improvement from the previous quarter [14] - Direct operating margin improved to 69%, up from 48% in the prior year quarter [8][20] Business Line Data and Key Metrics Changes - The company focused on improving its cost structure and operating margins in its base businesses, achieving a direct operating margin of 69% [8][20] - The acquisitions of Giant Worldwide and IndiCue are expected to significantly enhance revenue and EBITDA, with projected contributions of over $50 million in revenue and $10 million in Adjusted EBITDA for fiscal year 2027 [17][18] Market Data and Key Metrics Changes - The streaming ecosystem saw a monthly unique viewer count of 35.5 million, with SVOD subscribers growing 15% year-over-year to 1.55 million [19] - The content library now exceeds 66,000 total assets, including nearly 58,000 films and episodes, plus over 8,500 podcasts [19] Company Strategy and Development Direction - The company aims to transform into a comprehensive, AI-powered technology services provider for the entertainment industry, leveraging the acquisitions to fill gaps in the market and enhance operational efficiency [6][21] - The focus remains on building a unified, automated architecture for the entire media supply chain, addressing fragmentation in content distribution and monetization [28][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the financial guidance for fiscal year 2027, projecting revenues of $115 million to $120 million and Adjusted EBITDA of $10 million to $20 million [12][17] - The acquisitions are seen as a strategic move to capitalize on the industry's shift towards AI integration and automation, with expectations of significant growth in the post- and media services market [24][25] Other Important Information - The company sold 1.725 million shares of common stock at $2 per share, generating net proceeds of $3.2 million for working capital and general corporate purposes [18] - The integration of Giant has been smooth, with a significant increase in business following the acquisition [11][25] Q&A Session Summary Question: Can you discuss the evolution of IndiCue's business and its revenue concentration? - Management noted that IndiCue's revenue concentration has improved year-over-year, with a focus on building durable relationships with a diverse customer base [33][35] Question: Can you provide an update on Matchpoint and its new customers? - Management indicated that new customers are coming through various needs, and the strategy is to expand services once initial contracts are secured [39][41] Question: What are the anticipated synergies from the acquisitions? - Management expects significant revenue and EBITDA synergies from both acquisitions, with potential for $8 million to $9 million in synergies from IndiCue alone [52][54] Question: How will free cash flow be managed moving forward? - Management highlighted that minimal CapEx is required, allowing free cash flow to be reinvested into growth initiatives rather than dilution [64][66] Question: What is the future of acquisitions for the company? - Management stated that while the focus is on integrating the current acquisitions, they remain open to pursuing additional opportunities that align with their strategic goals [81][83]

Financial Data and Key Metrics Changes - Revenues for Q3 2026 were $16.3 million, up from $12.4 million in the previous quarter but down from $40.7 million in the same quarter last year, primarily due to the absence of theatrical results from "Terrifier 3" which generated over $20 million in the prior year [13] - The net loss for the quarter was $875,000, a $4.7 million improvement over the prior quarter [13] - Adjusted EBITDA for the quarter was $2.4 million, reflecting a $6 million improvement from the previous quarter [13] - Direct operating margin improved to 69%, up from 48% in the prior year quarter [6][20] Business Line Data and Key Metrics Changes - The company focused on improving its cost structure and operating margins in its base businesses, achieving a direct operating margin of 69% [6][20] - The acquisitions of Giant Worldwide and IndiCue are expected to significantly enhance revenue streams and profitability, with projected contributions of over $50 million in revenue and $10 million in Adjusted EBITDA for fiscal year 2027 [17][18] Market Data and Key Metrics Changes - The streaming ecosystem saw a monthly unique viewer count of 35.5 million, with SVOD subscribers growing 15% year-over-year to 1.55 million [19] - The content library now exceeds 66,000 total assets, including nearly 58,000 films and over 8,500 podcasts [19] Company Strategy and Development Direction - The company aims to transform into a comprehensive, AI-powered technology services provider for the entertainment industry through the acquisitions of Giant and IndiCue [5][8] - The strategy focuses on addressing the fragmented nature of content distribution and monetization, leveraging AI to enhance operational efficiency and scalability [21][28] - The market opportunity in post- and media services is projected to grow from $25 billion to $74 billion by 2034, with a shift towards AI-powered workflows [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the financial guidance for fiscal year 2027, projecting revenues of $115 million to $120 million and Adjusted EBITDA of $10 million to $20 million [11][17] - The integration of Giant and IndiCue is expected to create significant shareholder value and improve operational efficiencies [18][28] - Management highlighted the importance of building a unified, automated architecture for the entire media supply chain to meet future market demands [29] Other Important Information - The company sold 1.725 million shares of common stock at $2 per share, generating net proceeds of $3.2 million for working capital and content acquisition [18] - The acquisitions were financed with convertible notes from long-term shareholders, reflecting strong investor confidence in the company's strategy [17] Q&A Session Summary Question: Can you discuss the evolution of IndiCue's business and its revenue concentration? - Management noted that IndiCue's revenue concentration has improved year-over-year, with a focus on building durable relationships with major clients [33][36] Question: What is the significance of the new customers announced for Matchpoint? - Management indicated that the acquisition of Giant has allowed for expedited access to major studios, enhancing the ability to sell additional Matchpoint services [39][44] Question: What are the anticipated synergies from the acquisitions? - Management expects significant revenue synergies from both acquisitions, with potential for $8 million to $9 million in synergies from IndiCue alone [51][56] Question: How will free cash flow be managed moving forward? - Management emphasized that free cash flow will be reinvested into growth initiatives rather than through dilution, positioning the company for future acquisitions [66] Question: What is the company's future M&A strategy? - Management stated that while the focus is currently on integrating the recent acquisitions, they remain open to pursuing additional opportunities that align with their strategic goals [84][85]

Financial Performance - For the three months ended December 31, 2025, total revenue decreased by 60% to $16.3 million, down from $40.7 million in the same period of 2024[156] - For the nine months ended December 31, 2025, total revenue decreased by 36% to $39.8 million, down from $62.6 million in the same period of 2024[165] - The company reported a net loss of $(9.9) million for the nine months ended December 31, 2025, compared to a net income of $2.9 million in 2024[177] - Adjusted EBITDA for the nine months ended December 31, 2025, was $(3.5) million, compared to $10.2 million for the same period in 2024[177] Revenue Breakdown - Streaming and digital revenue for the three months ended December 31, 2025 decreased by $2.6 million, primarily due to strong digital release revenue of $2.8 million from Terrifier 3 in the prior period[156] - Base distribution revenue decreased by $21.0 million for the three months ended December 31, 2025, primarily due to strong theatrical release revenue of $22.8 million from Terrifier 3 in the prior period[157] - Streaming and digital revenue for the nine months ended December 31, 2025 decreased by $1.8 million, primarily due to strong digital release revenue of $2.8 million for Terrifier 3 in the prior period[165] Operating Expenses - Direct operating expenses for the three months ended December 31, 2025 decreased by 76% to $5.0 million, compared to $21.0 million in the same period of 2024[160] - Direct operating expenses for the nine months ended December 31, 2025 decreased by 53% to $15.1 million, compared to $31.7 million in the same period of 2024[167] - Selling, General and Administrative expenses increased by $8.8 million, or 39%, compared to the same period in 2024, reaching a total of $31.0 million[168] - Compensation expenses rose by $0.8 million, or 5%, primarily due to an increase in employee headcount, while corporate expenses increased by $1.7 million, or 66%, reflecting higher professional services and legal expenses[168] - Marketing expenses surged by 4,516% to $5.4 million, largely due to costs associated with the Toxic Avenger project[168] Cash Flow and Financing - The Company had net cash used in operating activities of $23.3 million for the nine months ended December 31, 2025, which included $7.9 million of incremental investment in the content portfolio[149] - Net cash used in operating activities for the nine months ended December 31, 2025, was $(23.3) million, a significant decrease from $4.9 million provided in 2024[178] - Net cash used in investing activities increased to $(1.4) million in 2025 from $(0.7) million in 2024, primarily related to expenditures on long-lived intangible and fixed assets[179] - As of December 31, 2025, $8.3 million was outstanding on the Line of Credit Facility, which allows for borrowings of up to $12.5 million[150] Asset and Liability Management - As of December 31, 2025, Cineverse Corp. reported an accumulated deficit of $(511.2) million and negative working capital of $(1.4) million[149] - Interest expense decreased by $3.0 million for the nine months ended December 31, 2025, due to lower borrowings and interest rates compared to the previous year[171] - Amortization of intangible assets increased by $0.8 million, or 34%, to $3.1 million for the nine months ended December 31, 2025, driven by higher capitalized content costs[170] Cash Position - The net change in cash and cash equivalents for the nine months ended December 31, 2025, was $(11.5) million, compared to an increase of $0.9 million in 2024[178]

Acquisition Details - Cineverse Corp. agreed to acquire 100% of IndiCue, Inc. for an aggregate consideration of $22.0 million, consisting of $12.8 million in cash and $9.2 million in deferred consideration[2]. - The total consideration could increase by $18.0 million based on revenue and gross profit earnout targets achieved in the first three fiscal years post-acquisition[2]. - Cineverse has secured commitments for a $13.0 million convertible note to finance the acquisition[3]. - The acquisition of IndiCue involves a total purchase price of $32,417 million, which includes $12,800 million in cash and $9,200 million in deferred consideration[26]. - Cineverse estimates that IndiCue shareholders could receive up to $18,000 million in Earnout Payments based on achieving specific revenue and gross profit targets over the next three fiscal years[23]. Financial Projections - The pro forma combined balance sheet as of September 30, 2025, shows total assets of $100.4 million, with Cineverse's assets at $61.9 million and IndiCue's at $20.4 million[14]. - Total liabilities for the combined entity are projected at $64.4 million, with current liabilities amounting to $64.1 million[14]. - For the fiscal year ended March 31, 2025, total revenue for the combined entity is projected to be $88.4 million, with Cineverse contributing $78.2 million and IndiCue $10.2 million[16]. - The combined operating income is estimated at $8.5 million, with total operating expenses of $79.9 million[16]. - Net income attributable to common stockholders for the combined entity is projected at $674,000, with a basic net income per share of $0.04[16]. Historical Financial Performance - Total revenue for Cineverse was $23,476 million, while IndiCue contributed $15,245 million, resulting in a combined total revenue of $38,594 million[18]. - Operating income for Cineverse was a loss of $9,112 million, whereas IndiCue reported an operating income of $2,437 million, leading to a combined operating loss of $7,640 million[18]. - Net loss attributable to common stockholders was $9,327 million for Cineverse and $1,633 million for IndiCue, resulting in a combined net loss of $8,993 million[18]. Pro Forma Adjustments - The pro forma adjustments and purchase price allocation are preliminary and subject to final adjustments within one year after the acquisition[10]. - The financial information provided is for illustrative purposes only and does not represent the actual future financial position of the combined company[11]. - The preliminary pro forma goodwill from the acquisition is estimated at $19,419 million, reflecting the excess of the purchase price over the fair value of net assets acquired[26]. - Pro forma adjustments include a net decrease in cash of $1,300 million due to financing transactions related to the acquisition[27]. - The pro forma financial statements do not account for potential restructuring or integration activities that may arise from the acquisition[21]. - The fair values of IndiCue's assets and liabilities are subject to refinement for up to one year after the closing date of the acquisition[20]. Tax Implications - The acquisition is expected to provide IndiCue with the opportunity to utilize Cineverse's accumulated tax Net Operating Losses, potentially reducing historical taxable income[27].

Core Insights - Cineverse Corp reported a total revenue of $16.3 million for Q3 FY 2026, a 60% decrease compared to $40.7 million in the prior year quarter, primarily due to a significant theatrical revenue from "Terrifier 3" in the previous year [1][2] - The company achieved a direct operating margin of 69%, up from 48% in the prior year, indicating improved cost management [1][2] - Adjusted EBITDA for the quarter was $2.4 million, a decrease from $10.9 million year-over-year, but an improvement of $6.0 million from the previous sequential quarter [1][2] Financial Performance - Revenue for Q3 FY 2026 was $16.3 million, down from $40.7 million in Q3 FY 2025, reflecting a 60% decline [1][2] - Direct operating margin increased to 69% from 48% year-over-year, showcasing effective cost management strategies [1][2] - SG&A expenses rose by 14% to $10.7 million, attributed to increased marketing and professional service costs [1][2] - Net loss attributable to common stockholders was $(1.0) million, or $(0.05) per share, compared to a net profit of $7.0 million, or $0.34 per share, in the prior year [1][2] - Adjusted EBITDA was $2.4 million, down from $10.9 million year-over-year, but improved by $6.0 million sequentially [1][2] Acquisitions and Future Guidance - Cineverse completed two acquisitions expected to add approximately $53 million in annual revenue and $10 million in Adjusted EBITDA for FY 2027 [1][2] - The acquisition of Giant Worldwide is anticipated to contribute $15 to $17 million in revenue and $3.5 to $4 million in Adjusted EBITDA for FY 2027 [1][2] - The acquisition of IndiCue, Inc. for $22 million is expected to generate approximately $38 million in revenue and $7 million in Adjusted EBITDA for FY 2027 [1][2] - The company provided guidance for FY 2027, projecting revenue between $115 to $120 million and Adjusted EBITDA between $10 to $20 million [1][2] Operational Developments - Cineverse launched a new streaming network, JoySauce, and expanded its international streaming channels [2] - Total streaming viewers increased by approximately 10% year-over-year to 149 million, with total minutes streamed up 33% to over 3.4 billion [2] - SVOD subscribers grew approximately 15% year-over-year to 1.55 million, driven by the flagship Cineverse channel [2] - The company announced the launch of Matchpoint™ 3.0, an AI-driven media supply chain platform with advanced features [2] Management Commentary - Management emphasized the focus on improving operating results and the positive impact of the Giant and IndiCue acquisitions on revenue and EBITDA [2] - The CEO highlighted the favorable valuations and accretive nature of the acquisitions, strengthening Cineverse's market position [2] - The company aims to maintain cost discipline while enhancing its subscription business and achieving targeted cost reductions [2]

Core Insights - Cineverse Corp. has acquired IndiCue, a profitable connected TV monetization platform, marking a significant step in its transformation into a streaming infrastructure company [1][2] - The acquisition is expected to generate $115-$120 million in revenue and $10-$20 million in adjusted EBITDA for fiscal year 2027, starting April 1, 2026 [1][2] - This deal enhances Cineverse's technology revenue, moving towards a majority technology revenue model through scalable, recurring infrastructure economics [1] Financial Impact - IndiCue is projected to generate approximately $38 million in revenue and $9.6 million in EBITDA in calendar year 2026, reflecting a 25% EBITDA margin [1][2] - The acquisition is expected to contribute to Cineverse's adjusted EBITDA of $10-$20 million in fiscal year 2027, indicating the accretive nature of the transaction [1][2] - Revenue for fiscal year 2027 is anticipated to exceed $115 million, with technology platforms accounting for over 50% of total revenue [1][2] Strategic Rationale - The integration of IndiCue into Cineverse's Matchpoint ecosystem completes a critical component of its platform strategy, allowing for a unified solution that connects distribution, data, and monetization [1][2] - The combined platform enables real-time analytics and automated workflows, essential for competitiveness in the rapidly evolving ad-supported streaming market [2] - This acquisition positions Cineverse as the only independent, full-stack white-label solution for content delivery and ad monetization, simplifying operations for studios and streaming operators [2] Transaction Financing - The acquisition was financed through a mix of cash, deferred consideration, and performance-based earnouts, with total potential consideration reaching up to $40 million [2] - Cineverse raised $13 million in convertible notes to support the transaction and working capital needs, reflecting strong shareholder confidence in the company's strategy [2] Integration and Team - IndiCue's leadership team has joined Cineverse in newly appointed roles, enhancing the combined organization's expertise in CTV advertising technology and content operations [2] - The integration aims to leverage advanced monetization capabilities within a scalable platform, allowing for improved content distribution and advertising efficiency [2]