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]

Core Viewpoint - Cineverse Corp. has announced a public offering of 1,500,000 shares of its Class A common stock at a price of $2.00 per share, aiming to raise approximately $3.0 million in gross proceeds before expenses [1]. Group 1: Offering Details - The public offering price is set at $2.00 per share, with a total of 1,500,000 shares being offered [1]. - Cineverse has granted the underwriter a 30-day option to purchase an additional 225,000 shares at the same public offering price [1]. - The offering is expected to close on February 17, 2026, pending customary closing conditions [1]. Group 2: Company Background - Cineverse is described as an innovative and independent entertainment technology company and studio, focusing on developing and investing in technology and content for the industry [1]. - The company operates Matchpoint®, a tech ecosystem powered by AI, designed to enhance content preparation, distribution, monetization, and performance across various platforms [1]. - Cineverse distributes over 71,000 premium films, series, and podcasts, and collaborates with leading brands to connect with valued audiences [1].

Core Viewpoint - Cineverse Corp. has announced a proposed underwritten public offering of its Class A common stock, with the intention to grant the underwriter a 30-day option to purchase an additional 15% of the shares offered, subject to market conditions [1] Company Overview - Cineverse is described as an innovative and independent entertainment technology company and studio, focusing on developing and investing in technology and content that shapes the future of the industry [1] - The company operates Matchpoint®, a tech ecosystem powered by AI, designed to prepare, distribute, monetize, and continuously improve content across various platforms [1] - Cineverse distributes over 71,000 premium films, series, and podcasts across theatrical, home entertainment, and streaming platforms, and operates numerous digital properties catering to passionate fandoms globally [1] Offering Details - The offering is being underwritten by The Benchmark Company, LLC, and a shelf registration statement relating to the shares was previously filed with the SEC, becoming effective on January 25, 2024 [1] - The offering will be conducted through a written prospectus and prospectus supplement, which will be filed with the SEC and made available on their website [1]