Cineverse (CNVS)

Search documents
Cineverse's 'Terrifier 3' Scares Up No. 1 at Box Office Over Holiday Weekend, With $21.4 Million in a Win for Independent Filmmaking
Prnewswire· 2024-10-15 15:47
Horror Sequel Certified Fresh on Rotten Tomatoes and Earns Strong Rotten Tomatoes and CinemaScore Audience Approval LOS ANGELES, Oct. 15, 2024 /PRNewswire/ -- Cineverse Corp. (NASDAQ: CNVS), an innovative streaming technology and entertainment company, is proud to announce that Terrifier 3 has delivered a standout opening performance, far surpassing early expectations and proving the power of independent filmmaking. Terrifier 3Terrifier 3 With over 2,500 theaters in North America, Terrifier 3 opened to $21. ...
Cineverse Launches cineSearch For Public Preview, Revolutionizing Content Discovery
Prnewswire· 2024-10-08 13:30
AI-Powered cineSearch Unlocks Personalized Content Recommendations Across Leading Streaming Platforms LOS ANGELES, Oct. 8, 2024 /PRNewswire/ -- Cineverse Corp. (NASDAQ: CNVS), an innovative streaming technology and entertainment company, today announced that cineSearch, its highly anticipated AI-driven content discovery tool, is now available for public preview. cineSearch is set to transform the way users interact with their favorite streaming platforms by offering an intuitive, highly personalized search ...
Cineverse's Bloody Disgusting Scares up New Revenue Opportunities with Growing Merchandise Business - From Collectible TERRIFIER 2 VHS Box Set to New BEETLEJUICE T-Shirts
Prnewswire· 2024-10-07 16:30
Coming off Successful Product Run, Bloody Disgusting Continues to Prove its Value as Top Horror Brand by Tapping into Fan Nostalgia and Retail Partnerships LOS ANGELES, Oct. 7, 2024 /PRNewswire/ -- Cineverse (NASDAQ: CNVS), an innovative streaming entertainment and technology company, is riding the momentum of its growing consumer products business into Halloween. Specifically, its fan-first horror brand Bloody Disgusting continues to tap into nostalgia and the love for iconic films, from Beetlejuice to the ...
TERRIFIER 3 Premieres at Fantastic Fest with Unprecedented Positive Early Reactions Ahead of October 11 Wide Theatrical Release
Prnewswire· 2024-09-23 16:30
Fans and Critics Praise Damien Leone's Masterpiece: "A Blood-soaked Triumph!" AUSTIN, Texas, Sept. 23, 2024 /PRNewswire/ -- The highly anticipated Terrifier 3 premiered last week at Fantastic Fest 2024 in Austin, TX, to rapturous early acclaim from critics and fans. Following the shocking reactions to Terrifier 2, which caused some audience members to faint and vomit in theaters, initial buzz suggests Terrifier 3 could push audiences even further. With its unapologetic violence and graphic kills, this third ...
Cineverse and Its Proprietary Matchpoint Technology Earn Industry Honors for Innovation
Prnewswire· 2024-09-19 13:30
LOS ANGELES, Sept. 19, 2024 /PRNewswire/ -- Cineverse Corp. (NASDAQ: CNVS), an innovative streaming technology and entertainment company, is wrapping the summer by earning industry recognition by Next TV and the Digital Entertainment Group (DEG). The 4th Annual EnTech Awards Taking place on October 1 in Los Angeles, DEG's EnTech Awards are chosen by a distinguished judging panel comprised of a cross-section of leaders representing entertainment technology. Among other factors, the judging panel based its de ...
Christmas Comes Early This Year as TERRIFIER 3 Drops Official Trailer and Key Art
Prnewswire· 2024-08-29 17:28
Ahead of the World Premiere at Fantastic Fest 2024, the highly anticipated Official Trailer and Key Art for TERRIFIER 3 Unveiled; Tickets on Sale Now for October 11 Theatrical Release Trailer Scared up Over 7 Million Views on YouTube in first 24 Hours LOS ANGELES, Aug. 29, 2024 /PRNewswire/ -- Cineverse Corp. (NASDAQ: CNVS), an innovative streaming technology and entertainment company, and Bloody Disgusting, its horror division, have released the official trailer and key art for Terrifier 3 ahead of its wor ...
Cineverse Switches on Frequency to Distribute its Top FAST Channels Worldwide
Prnewswire· 2024-08-22 13:30
LOS ANGELES, Aug. 22, 2024 /PRNewswire/ -- Frequency, the engine behind many of the world's bestknown streaming television channels, is proud to announce that Cineverse (NASDAQ:CNVS), a recognized pioneer in the FAST industry, has chosen Frequency to deliver leading channels from its streaming portfolio to more than 25 platforms. This strategic partnership underscores Cineverse's significant growth and evolution in the streaming market by enhancing content delivery methods and viewer engagement across its c ...
Cineverse (CNVS) - 2025 Q1 - Earnings Call Transcript
2024-08-14 23:02
Financial Data and Key Metrics Changes - Cineverse reported total revenues of $9.1 million for Q1 2025, down from $13.0 million in the prior year period, primarily due to a decline in digital distribution revenue and the absence of non-recurring revenues from the legacy digital cinema business [9][10][11] - The direct operating margin for the quarter was 51%, exceeding the target of 45% to 50%, attributed to cost optimization initiatives [10][11] - SG&A expenses decreased by $1.3 million or 17% compared to the prior year quarter, reflecting successful cost-saving measures [11][12] Business Line Data and Key Metrics Changes - Digital licensing revenue declined by approximately $2 million due to timing issues with content releases and a comparison to non-recurring revenues from the previous year [5][9] - Advertising revenues also saw a decline of about $500,000 due to channel optimization efforts [9] - The streaming business achieved significant viewer growth, with 2.26 billion minutes watched in Q2 2024, up 73% year-over-year [14][15] Market Data and Key Metrics Changes - The subscriber count for Cineverse stands at approximately 1.39 million, down 3.5% sequentially but up 10% year-over-year, with expectations for growth following the release of Terrifier 3 [15][16] - The podcast network experienced a 49% revenue surge over the last 60 days, indicating strong listener growth [20] Company Strategy and Development Direction - The company is focusing on expanding its distribution of SVOD, AVOD, and fast streaming channels, as well as growing direct ad sales and new revenue drivers like Matchpoint and podcasts [22] - Cineverse is optimistic about the upcoming release of Terrifier 3, which is expected to generate substantial revenue across various business lines [7][16] - The company is also in the final stages of developing cineSearch, an AI-powered content search tool, which is anticipated to enhance user experience and drive growth [21] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for double-digit revenue growth in fiscal year 2025, driven by an improving economy and the expected rebound in advertising [10][11] - The company believes it is bouncing off the bottom of revenue and entering a robust growth period, supported by a strong sales pipeline and new initiatives [27] Other Important Information - Cineverse extended its $7.5 million line of credit with East West Bank for another 12 months, enhancing financial flexibility [7][12] - The valuation of the company's digital library increased to approximately $39.8 million, significantly higher than its book value of $2.6 million [8] Q&A Session Summary Question: What caused the drop in digital distribution revenue? - Management indicated that the decline was due to timing issues with content releases and the absence of large licensing deals that occurred in the prior year [24][25][26] Question: What is the outlook for revenue growth excluding digital distribution? - Management noted that new sales teams are ramping up, and there is a robust pipeline of potential revenue, suggesting a positive outlook for future growth [27][28] Question: How much revenue can be expected from top-earning channels? - A successful channel could generate low to mid-seven figures, with unique properties like Dog Whisperer potentially earning on the higher end due to additional rights [28] Question: How does the company plan to navigate the competitive advertising landscape? - Management emphasized a focus on bespoke campaigns and comprehensive packages that include various media types, which differentiates Cineverse from larger competitors [30] Question: What is the expected growth for the podcast segment? - The podcast segment is approaching significant revenue milestones, with substantial upside potential as monetization efforts ramp up [31] Question: Will the guidance include monetization from cineSearch? - The guidance does not currently include monetization from cineSearch, but there are expectations for operational cost savings and revenue growth from various initiatives [33]
Cineverse (CNVS) - 2025 Q1 - Quarterly Report
2024-08-14 20:50
PART I - FINANCIAL INFORMATION This section presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=9&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, comprehensive income, cash flows, and equity, along with detailed notes explaining the company's accounting policies, financial condition, and specific transactions for the period ended June 30, 2024 [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20at%20June%2030%2C%202024%20and%20March%2031%2C%202024) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific dates Condensed Consolidated Balance Sheets (in thousands) | Metric (in thousands) | June 30, 2024 | March 31, 2024 | | :-------------------- | :------------ | :------------- | | Cash and cash equivalents | $3,955 | $5,167 | | Accounts receivable, net | $9,262 | $8,667 | | Total current assets | $31,531 | $32,721 | | Total Assets | $62,342 | $64,378 | | Total current liabilities | $32,429 | $31,249 | | Total Liabilities | $32,905 | $32,227 | | Total equity | $29,437 | $32,151 | - The company's total assets decreased from **$64.38 million** to **$62.34 million**, while total liabilities increased from **$32.23 million** to **$32.91 million**, leading to a decrease in total equity from **$32.15 million** to **$29.44 million** as of June 30, 2024, compared to March 31, 2024[4](index=4&type=chunk) [Unaudited Condensed Consolidated Statements of Operations](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations%20for%20the%20Three%20Months%20ended%20June%2030%2C%202024%20and%202023) This section details the company's revenues, expenses, and net loss over specific periods, reflecting operational performance Unaudited Condensed Consolidated Statements of Operations (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | | :-------------------- | :------------------------------- | :------------------------------- | | Revenues | $9,127 | $12,980 | | Total operating expenses | $11,905 | $15,697 | | Operating loss | $(2,778) | $(2,717) | | Net loss | $(3,050) | $(3,536) | | Net loss attributable to common stockholders | $(3,162) | $(3,638) | | Basic Net loss per share | $(0.20) | $(0.37) | | Diluted Net loss per share | $(0.20) | $(0.37) | - Revenues decreased by **29.7%** from **$12.98 million** in Q1 2023 to **$9.13 million** in Q1 2024. Despite the revenue decline, the net loss attributable to common stockholders improved from **$(3.64) million** to **$(3.16) million**, and basic/diluted net loss per share improved from **$(0.37)** to **$(0.20)** year-over-year[5](index=5&type=chunk) [Unaudited Condensed Consolidated Statements of Comprehensive (Loss) Income](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Comprehensive%20(Loss)%20Income%20for%20the%20Three%20Months%20ended%20June%2030%2C%202024%20and%202023) This section presents the company's net loss and other comprehensive income items, showing total comprehensive loss Unaudited Condensed Consolidated Statements of Comprehensive (Loss) Income (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | | :-------------------- | :------------------------------- | :------------------------------- | | Net loss | $(3,050) | $(3,536) | | Foreign exchange translation | $55 | $(78) | | Net income attributable to noncontrolling interest | $(23) | $(14) | | Comprehensive loss | $(3,018) | $(3,628) | - The comprehensive loss for the three months ended June 30, 2024, was **$(3.02) million**, an improvement from **$(3.63) million** in the prior year, primarily due to a lower net loss and positive foreign exchange translation[6](index=6&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20Three%20Months%20ended%20June%2030%2C%202024%20and%202023) This section outlines the company's cash inflows and outflows from operating, investing, and financing activities Cash Flow Summary (in thousands) | Cash Flow Activity (in thousands) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | | :-------------------------------- | :------------------------------- | :------------------------------- | | Net cash used in operating activities | $(1,714) | $(3,260) | | Net cash used in investing activities | $(423) | $(272) | | Net cash provided by financing activities | $925 | $8,509 | | Net change in cash and cash equivalents | $(1,212) | $4,977 | | Cash and cash equivalents at end of period | $3,955 | $12,129 | - Net cash used in operating activities improved to **$(1.71) million** in Q1 2024 from **$(3.26) million** in Q1 2023. However, net cash provided by financing activities significantly decreased from **$8.51 million** to **$0.93 million**, leading to a net decrease in cash and cash equivalents of **$(1.21) million** in Q1 2024, compared to a **$4.98 million** increase in Q1 2023[7](index=7&type=chunk) [Unaudited Condensed Consolidated Statements of Equity](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Equity%20for%20the%20Three%20Months%20ended%20June%2030%2C%202024%20and%202023) This section tracks changes in the company's equity components, including stock, capital, and accumulated deficit Equity Component (in thousands) | Equity Component (in thousands) | March 31, 2024 | June 30, 2024 | | :------------------------------ | :------------- | :------------ | | Preferred Stock Amount | $3,559 | $3,559 | | Common Stock Amount | $194 | $194 | | Treasury Amount | $(11,978) | $(12,166) | | Additional Paid-In Capital | $545,996 | $546,554 | | Accumulated Deficit | $(504,153) | $(507,315) |\ | Total Stockholders' Equity | $33,273 | $30,536 | | Total Equity | $32,151 | $29,437 | - Total stockholders' equity decreased from **$33.27 million** to **$30.54 million** from March 31, 2024, to June 30, 2024, primarily due to the net loss of **$(3.07) million** and treasury stock acquisitions of **$(188) thousand**, partially offset by stock-based compensation and common stock issuances[9](index=9&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section provides detailed explanations of the company's accounting policies, financial condition, and specific transactions [1. Nature of Operations and Liquidity](index=10&type=section&id=1.%20NATURE%20OF%20OPERATIONS%20AND%20LIQUIDITY) This section describes the company's business, operational context, and current liquidity position - Cineverse Corp. is a streaming technology and entertainment company operating a portfolio of owned/operated streaming channels, a global content distributor, and a proprietary SaaS platform (Matchpoint™) for OTT app development and content distribution[11](index=11&type=chunk)[57](index=57&type=chunk) - The company received a Nasdaq Listing Qualifications staff letter on July 10, 2024, indicating non-compliance with the minimum bid price requirement (**$1** per share) and has **180 days** (until January 6, 2025) to regain compliance[11](index=11&type=chunk) - As of June 30, 2024, the company had an accumulated deficit of **$507.3 million** and a negative working capital of **$0.9 million**, with a net loss of **$3.2 million** attributable to common stockholders for the three months ended June 30, 2024[12](index=12&type=chunk)[58](index=58&type=chunk) - The company has a **$7.5 million** revolving Line of Credit Facility with East West Bank, with **$4.8 million** outstanding as of June 30, 2024, and a term loan of up to **$3.67 million** for the 'Terrifier 3' film, with **$3.1 million** outstanding as of June 30, 2024[12](index=12&type=chunk)[46](index=46&type=chunk)[48](index=48&type=chunk) - The company believes its cash and cash equivalent balances as of June 30, 2024, will be sufficient to support operations for at least **twelve months**[13](index=13&type=chunk)[60](index=60&type=chunk) [2. Basis of Presentation and Summary of Significant Accounting Policies](index=12&type=section&id=2.%20BASIS%20OF%20PRESENTATION%20AND%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This section outlines the accounting principles, estimates, and policies used in preparing the financial statements - The financial statements are prepared in conformity with GAAP, are unaudited, and include all normal recurring adjustments. Management makes estimates and judgments affecting reported amounts, with actual results potentially differing[14](index=14&type=chunk)[61](index=61&type=chunk) - The company manages its operations as **one reporting segment**[18](index=18&type=chunk) - The Employee Retention Tax Credit (ERTC) receivable was **$0.1 million** as of June 30, 2024, down from **$1.7 million** as of March 31, 2024, following a **$1.7 million** cash receipt in June 2024[18](index=18&type=chunk) Intangible Assets, Net (in thousands) | Intangible Asset | June 30, 2024 Net | March 31, 2024 Net | | :------------------------------- | :---------------- | :----------------- | | Content Library | $2,607 | $2,641 | | Advertiser Relationships and Channel | $9,653 | $10,062 | | Customer Relationships | $750 | $818 | | Software | $2,240 | $2,320 | | Tradenames, Trademarks and Patents | $834 | $855 | | Capitalized Content | $2,154 | $1,632 | | **Total Intangible Assets** | **$18,238** | **$18,328** | - No goodwill impairment charges were recorded for the three months ended June 30, 2024 and 2023, following a **$14.0 million** charge in the fiscal year ended March 31, 2024[23](index=23&type=chunk) Fair Value Measurements (in thousands) | Item | June 30, 2024 Total | March 31, 2024 Total | | :--------------------------------- | :------------------ | :------------------- | | Equity investment in Metaverse, at fair value | $162 | $362 | | Current portion of earnout consideration | $180 | $180 | Disaggregated Revenue by Source (in thousands) | Revenue Source | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | | :-------------------- | :------------------------------- | :------------------------------- | | Streaming and digital | $7,703 | $10,114 | | Podcast and other | $1,043 | $429 | | Base distribution | $351 | $1,158 | | Other non-recurring | $30 | $1,279 | | **Total Revenue** | **$9,127** | **$12,980** | - One customer represented **39%** and **26%** of consolidated revenues for the three months ended June 30, 2024 and 2023, respectively[33](index=33&type=chunk) Basic and Diluted Net Loss Per Share (in thousands, except per share data) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | | :----------------------------------- | :------------------------------- | :------------------------------- | | Net loss attributable to Common Stockholders | $(3,162) | $(3,638) | | Weighted-average shares of Common Stock outstanding | 15,702 | 9,879 | | Basic Net Loss Per Share | $(0.20) | $(0.37) | | Diluted Net Loss Per Share | $(0.20) | $(0.37) | [3. Other Interests](index=21&type=section&id=3.%20OTHER%20INTERESTS) This section details the company's investments in other entities and related financial interests - The company indirectly owns **100%** of CDF2 Holdings, a Variable Interest Entity (VIE), but is not the primary beneficiary. Its maximum exposure to loss from CDF2 Holdings is **$0** as of June 30, 2024[40](index=40&type=chunk) - Cineverse holds an investment in Roundtable Holdings, Inc. (Roundtable Securities) valued at **$0.2 million**, accounted for using the cost method as the company owns less than **20%** and does not exert significant influence[43](index=43&type=chunk) [4. Stockholders' Equity](index=22&type=section&id=4.%20STOCKHOLDERS'%20EQUITY) This section provides an overview of changes in the company's equity, including stock issuances and repurchases - During Q1 2024, the company issued **93 thousand shares** of Common Stock, including **64 thousand** for preferred stock dividends and **29 thousand** for acquisition compensation. In Q1 2023, **2,337 thousand shares** were issued, primarily from a direct offering and ATM sales[42](index=42&type=chunk) - Cumulative dividends in arrears on Series A Preferred Stock were **$89 thousand** as of June 30, 2024, paid in Common Stock[42](index=42&type=chunk) - Treasury stock increased to **473 thousand shares** (cost **$12.17 million**) as of June 30, 2024, from **289 thousand shares** (cost **$11.98 million**) as of March 31, 2024, due to the acquisition of **184 thousand shares** through a Rule 10b5-1 trading plan[42](index=42&type=chunk)[9](index=9&type=chunk) - Stock-based compensation expense was **$0.5 million** for both the three months ended June 30, 2024 and 2023[45](index=45&type=chunk) [5. Debt](index=23&type=section&id=5.%20DEBT) This section details the company's outstanding debt obligations, including credit facilities and term loans - The company has a **$7.5 million** revolving Line of Credit Facility with East West Bank, bearing interest at **1.5%** above the prime rate (**10.00%** as of June 30, 2024), extended to September 15, 2025. **$4.8 million** was outstanding as of June 30, 2024[46](index=46&type=chunk) - A Term Loan for up to **$3.67 million** was entered into on April 5, 2024, for the 'Terrifier 3' film, with a maturity date of April 1, 2025. It bears no interest until maturity, except for a **$576 thousand** interest advance paid at closing. **$3.1 million** was outstanding as of June 30, 2024[48](index=48&type=chunk) - The company provided a guarantee for the T3 Loan, capped at **$1.5 million**, which is subordinated to the Line of Credit Facility[48](index=48&type=chunk) [6. Commitments and Contingencies](index=24&type=section&id=6.%20COMMITMENTS%20AND%20CONTINGENCIES) This section outlines the company's contractual obligations, lease commitments, and potential liabilities - Cineverse operates as a virtual company with **one domestic operating lease** (subleased to a third party, expiring January 2025) and **two operating leases** for its India operations (expiring July 2027)[49](index=49&type=chunk) Operating Lease Liabilities and Commitments (in thousands) | Metric | June 30, 2024 | March 31, 2024 | | :-------------------------- | :------------ | :------------- | | Noncurrent Lease Assets | $725 | $834 | | Current Operating Lease Liabilities | $338 | $401 | | Noncurrent Operating Lease Liabilities | $418 | $462 | | Total Operating Lease Liabilities | $756 | $863 | | Fiscal Year Ending March 31 | Operating Lease Commitments | | :-------------------------- | :-------------------------- | | 2025 | $308 | | 2026 | $200 | | 2027 | $210 | | 2028 | $72 | | Total Lease Payments | $790 | - The company recognized **$45 thousand** and **$44 thousand** of income from its subleasing arrangement for the three months ended June 30, 2024 and 2023, respectively[49](index=49&type=chunk) [7. Income Taxes](index=25&type=section&id=7.%20INCOME%20TAXES) This section discusses the company's income tax expense, deferred taxes, and effective tax rate - Income tax expense was **$7 thousand** for the three months ended June 30, 2024, down from **$20 thousand** in the prior year, primarily attributable to taxable income in India related to transfer pricing[54](index=54&type=chunk) - The company has a **full valuation allowance** offsetting potential deferred tax assets due to net operating loss carryforwards, reflecting an inability to use such losses[54](index=54&type=chunk) - The effective tax rate was **(0.2)%** for the three months ended June 30, 2024, compared to **(0.6)%** for the same period in 2023[54](index=54&type=chunk) [Recently Issued Accounting Pronouncements](index=21&type=section&id=Recently%20Issued%20Accounting%20Pronouncements) This section discusses new accounting standards issued by FASB and their potential impact on the company's financial reporting - FASB issued ASU 2023-07 (Segment Reporting) effective for fiscal years beginning after December 15, 2023, requiring incremental segment expense disclosures. The company is assessing its impact[41](index=41&type=chunk) - FASB issued ASU 2023-09 (Income Taxes Disclosures) effective for annual periods beginning after December 15, 2024, requiring specific tax categories in rate reconciliation. The company is evaluating its adoption method and impact[41](index=41&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition, liquidity, and results of operations for the three months ended June 30, 2024, compared to the prior year, including a detailed breakdown of revenue and expense changes, and a reconciliation of Adjusted EBITDA [Business Overview](index=26&type=section&id=Business%20Overview) This section describes the company's strategic transformation and its core business operations in streaming technology and content distribution - Cineverse has transformed from a digital cinema equipment and physical content distributor to a leading independent streaming company, focusing on owned/operated streaming channels, global content distribution, and its proprietary Matchpoint™ SaaS platform[57](index=57&type=chunk) - The Matchpoint™ platform offers AVOD, SVOD, TVOD, and linear capabilities, automates content distribution, and provides robust data analytics[57](index=57&type=chunk) - The company distributes content for major brands like Hallmark, ITV, NFL, and Highlander across various digital platforms (e.g., Apple iTunes, Amazon Prime, Netflix, Hulu, Xbox, Pluto, Tubi) and physical goods (DVD/Blu-ray)[57](index=57&type=chunk) [Financial Condition and Liquidity](index=26&type=section&id=Financial%20Condition%20and%20Liquidity) This section assesses the company's current financial health, working capital, and ability to meet short-term and long-term obligations - As of June 30, 2024, the company reported an accumulated deficit of **$507.3 million** and a working capital deficit of **$0.9 million**, with a net loss attributable to common stockholders of **$3.2 million** for the three months ended June 30, 2024[58](index=58&type=chunk) - Net cash used in operating activities for the three months ended June 30, 2024, was **$1.7 million**, including a **$2.0 million** incremental investment in content[58](index=58&type=chunk) - The company maintains a **$7.5 million** revolving Line of Credit Facility with East West Bank, with **$4.8 million** outstanding as of June 30, 2024, and a term loan of up to **$3.67 million** for the 'Terrifier 3' film, with **$3.1 million** outstanding[58](index=58&type=chunk)[60](index=60&type=chunk) - The company believes its cash and cash equivalent balances as of June 30, 2024, are sufficient to support operations for at least **twelve months**, but may pursue equity or debt offerings opportunistically for further capital needs[60](index=60&type=chunk) [Critical Accounting Estimates](index=27&type=section&id=Critical%20Accounting%20Estimates) This section highlights key accounting policies and management judgments that significantly impact the financial statements - The company's financial statements rely on significant accounting policies and management's assumptions and estimates, particularly for revenue recognition, allowance for credit losses, goodwill and intangible asset impairments, and share-based compensation expense[61](index=61&type=chunk)[63](index=63&type=chunk) [Results of Operations](index=28&type=section&id=Results%20of%20Operations%20for%20the%20Three%20Months%20Ended%20June%2030%2C%202024%2C%20and%202023) This section analyzes the company's revenue and expense performance for the three months ended June 30, 2024, compared to the prior year Revenue Performance (in thousands) | Revenue Source | Q1 2024 ($) | Q1 2023 ($) | Change ($) | % Change | | :-------------------- | :---------- | :---------- | :--------- | :------- | | Streaming and digital | 7,703 | 10,114 | (2,411) | (24)% | | Podcast and other | 1,043 | 429 | 614 | 143% | | Base distribution | 351 | 1,158 | (807) | (70)% | | Other non-recurring | 30 | 1,279 | (1,249) | (98)% | | **Total Revenue** | **9,127** | **12,980** | **(3,853)**| **(30)%**| - Total revenue declined by **$3.9 million** (**30%**) year-over-year, primarily due to a **$2.4 million** decrease in Streaming and digital revenue (driven by content release timing and changes in direct advertising sales) and a **$1.2 million** decrease in other non-recurring revenue from legacy cinema equipment sales[63](index=63&type=chunk) - Podcast and other revenue significantly increased by **$0.6 million** (**143%**) due to the success of the Bloody Disgusting podcast content[63](index=63&type=chunk) - Direct operating expenses decreased by **$2.5 million** (**36%**), driven by reduced licensing, royalty, and participation expenses (**$1.7 million**) and lower manufacturing/fulfillment charges due to declining physical sales[63](index=63&type=chunk)[64](index=64&type=chunk) - Selling, general and administrative expenses decreased by **$1.3 million** (**17%**), mainly due to a **$0.4 million** reduction in compensation expenses (change in employment mix) and a **$0.7 million** decrease in corporate expenses (consulting, legal, PR fees)[66](index=66&type=chunk) - Interest expense increased by **$0.1 million** to **$0.4 million**, primarily due to the Terrifier 3 term loan interest[66](index=66&type=chunk) [Adjusted EBITDA](index=30&type=section&id=Adjusted%20EBITDA) This section presents a non-GAAP measure of the company's operating performance, excluding specific non-cash and non-recurring items - Adjusted EBITDA is a non-GAAP financial metric used to measure the financial performance of the business, excluding interest, taxes, depreciation and amortization, stock-based compensation, and other non-recurring items[69](index=69&type=chunk) Adjusted EBITDA Reconciliation (in thousands) | Metric | Q1 2024 ($) | Q1 2023 ($) | | :----------------------------------- | :---------- | :---------- | | Net loss | (3,050) | (3,536) | | Add Back: | | | | Income tax expense | 7 | 20 | | Depreciation and amortization | 863 | 822 | | Interest expense | 431 | 295 | | Loss from equity investment in Metaverse | 3 | — | | Stock-based compensation | 470 | 409 | | Other (income) expense, net | (163) | 36 | | Net income attributable to noncontrolling interest | (23) | (14) | | Transition-related costs | 27 | 468 | | **Adjusted EBITDA** | **(1,435)** | **(1,500)** | - Adjusted EBITDA improved slightly to **$(1.44) million** in Q1 2024 from **$(1.50) million** in Q1 2023[70](index=70&type=chunk) [Cash Flow](index=31&type=section&id=Cash%20Flow) This section summarizes the company's cash generation and usage across operating, investing, and financing activities Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2024 ($) | Q1 2023 ($) | | :---------------------------------- | :---------- | :---------- | | Net cash used in operating activities | (1,714) | (3,260) | | Net cash used in investing activities | (423) | (272) | | Net cash provided by financing activities | 925 | 8,509 | | **Net Change In Cash and Cash Equivalents** | **(1,212)** | **4,977** | - Net cash used in operating activities decreased due to lower loss from operations (excluding non-cash expenses), decreased unbilled revenue, collection of ERTC claim, and increased accounts payable, partially offset by content advances[72](index=72&type=chunk) - Net cash used in investing activities increased due to higher expenditures for long-lived intangible and fixed assets, partially offset by proceeds from the sale of equity investment securities[72](index=72&type=chunk) - Net cash provided by financing activities significantly decreased due to lower proceeds from the line of credit and the absence of large common stock issuances seen in the prior year, despite proceeds from the Terrifier 3 term loan[72](index=72&type=chunk) [Off-balance sheet arrangements](index=31&type=section&id=Off-balance%20sheet%20arrangements) This section describes the company's involvement with unconsolidated entities and potential off-balance sheet obligations - The company holds a **100%** equity interest in CDF2 Holdings, an unconsolidated Variable Interest Entity (VIE), but is not the primary beneficiary[72](index=72&type=chunk) [Item 4. Controls and Procedures](index=32&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the company's disclosure controls and procedures, including their definition, management's evaluation of their effectiveness, and any changes in internal control over financial reporting [Definition and Limitations of Disclosure Controls and Procedures](index=32&type=section&id=Definition%20and%20Limitations%20of%20Disclosure%20Controls%20and%20Procedures) This section defines the scope and inherent limitations of the company's disclosure controls and procedures - Disclosure controls and procedures are designed to reasonably ensure that information required for SEC reports is recorded, processed, summarized, and reported timely, and communicated to management for disclosure decisions[74](index=74&type=chunk) [Evaluation of Disclosure Controls and Procedures](index=32&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section presents management's assessment of the effectiveness of the company's disclosure controls and procedures - As of June 30, 2024, management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective in providing reasonable assurance for timely and accurate information disclosure[75](index=75&type=chunk) [Changes in Internal Control Over Financial Reporting](index=32&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) This section reports any material changes in the company's internal control over financial reporting during the period - There have been **no material changes** in the company's internal control over financial reporting during the three months ended June 30, 2024[76](index=76&type=chunk) PART II - OTHER INFORMATION This section covers legal proceedings, risk factors, equity sales, debt defaults, and other miscellaneous disclosures [Item 1. Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) This section confirms the absence of any material legal proceedings involving the company - No legal proceedings were reported[76](index=76&type=chunk) [Item 1A. Risk Factors](index=33&type=section&id=Item%201A.%20Risk%20Factors) This section indicates that there have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K - No material changes to the Risk Factors disclosed in the Annual Report on Form 10-K for the fiscal year ended March 31, 2024[77](index=77&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=33&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details unregistered sales of equity securities, specifically shares issued for an acquisition, and outlines the company's share repurchase activities under its approved Rule 10b-18 plan - On April 1, 2024, the company issued **29,741 shares** of Common Stock as a deferred payment for the acquisition of Christian Channel, pursuant to Section 4(a)(2) of the Securities Act[78](index=78&type=chunk) Open Market Repurchases of Class A Common Shares (May 2024) | Period | Total Number of Shares Purchased | Average Price Per Share | Total Number of Shares Purchased as Part of Publicly announced Plans | Maximum Shares that May yet be purchased under the Plan or Programs | | :---------- | :------------------------------- | :---------------------- | :----------------------------------------------------------------- | :------------------------------------------------------------------ | | May 2024 | 184,495 | $1.02 | 184,495 | 315,505 | | **Total** | **184,495** | **$1.02** | **184,495** | **315,505** | - The Board approved the renewal of a stock repurchase program on February 29, 2024, to purchase up to **500,000 shares** of Common Stock, expiring March 1, 2025[78](index=78&type=chunk) [Item 3. Defaults Upon Senior Securities](index=33&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section confirms no defaults on senior securities have occurred - No defaults upon senior securities were reported[78](index=78&type=chunk) [Item 4. Mine Safety Disclosures](index=33&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to the company's operations - Mine Safety Disclosures are not applicable[78](index=78&type=chunk) [Item 5. Other Information](index=33&type=section&id=Item%205.%20Other%20Information) This section confirms there is no additional material information to report - No other information was reported[78](index=78&type=chunk) [Item 6. Exhibits](index=33&type=section&id=Item%206.%20Exhibits) This section provides an index of exhibits filed as part of the Form 10-Q, including various agreements and certifications - Key exhibits include the Guaranty Agreement, Loan and Security Agreement, Amendment No. 3 to Amended and Restated Loan, Guaranty and Security Agreement, and Officer's Certificates (Sections 302 and 906 of Sarbanes-Oxley Act)[80](index=80&type=chunk) [Signatures](index=35&type=section&id=Signatures) This section contains the official certifications and signatures of the company's principal executive and financial officers - The report was signed by Christopher J. McGurk, Chief Executive Officer and Chairman of the Board of Directors, and Mark Lindsey, Chief Financial Officer, on August 14, 2024[82](index=82&type=chunk)
Cineverse (CNVS) - 2025 Q1 - Quarterly Results
2024-08-14 20:30
Revenue Performance - Total revenue for Q1 FY 2025 was $9.1 million, a decrease from $13.0 million in the prior year, primarily due to a $2.4 million reduction in Streaming and Digital revenue[3] - Revenues for Q2 2024 were $9,127,000, a decrease of 29% from $12,980,000 in Q2 2023[19] Operating Expenses - Selling, General, and Administrative (SG&A) expenses decreased by $1.3 million, or 17%, driven by reduced legal, consulting, and compensation costs[4] - Total operating expenses for Q2 2024 were $11,905,000, down 24% from $15,697,000 in Q2 2023[19] - Direct operating expenses decreased by 36% to $4,479,000 in Q2 2024 from $6,987,000 in Q2 2023[19] - Selling, general and administrative expenses decreased by 17% to $6,563,000 in Q2 2024 from $7,888,000 in Q2 2023[19] Profitability and Loss - Net loss attributable to common stockholders was $3.2 million, or $(0.20) earnings per share, an improvement from a net loss of $3.6 million, or $(0.37) earnings per share in the prior year[4] - Net loss for Q2 2024 was $3,050,000, compared to a net loss of $3,536,000 in Q2 2023, representing a 14% improvement[19] - Basic and diluted net loss per share attributable to common stockholders was $(0.20) for Q2 2024, compared to $(0.37) in Q2 2023[19] - Adjusted EBITDA for Q2 2024 was $(1,435,000), slightly improved from $(1,500,000) in Q2 2023[25] Viewership and Content Growth - Total monthly viewership across the channel portfolio increased by 73% year-over-year, supported by successful new channel launches and podcast growth[5][9] - The company experienced a 143% increase in podcast revenue, attributed to the popularity of its Bloody Disgusting podcast content[4] Cash and Financial Position - Cash and cash equivalents stood at $4.0 million as of June 30, 2024, with a line of credit facility extended to September 15, 2025[4][10] Strategic Initiatives - The company has signed its first long-term Matchpoint SaaS deals worth over $250,000 in annual revenue and has a pipeline of more than 20 potential deals[7][11] - The anticipated release of "Terrifier 3" on October 11, 2024, is expected to maximize profits across various distribution channels[9][12] Shareholder Information - Weighted average shares of common stock outstanding increased to 15,702,000 in Q2 2024 from 9,879,000 in Q2 2023[19] Interest and Investment - Interest expense increased to $431,000 in Q2 2024 from $295,000 in Q2 2023[19] - The company reported a loss from investment in Metaverse of $3,000 in Q2 2024, with no prior year comparison available[19] Direct Operating Margin - Direct operating margin improved to 51%, up from 46% in the previous year, exceeding the target range of 45% to 50%[1]