Company Overview - CuriosityStream Inc. (CURI) currently holds a Momentum Style Score of B and a Zacks Rank of 2 (Buy) [3][4] - The company has shown significant price performance, with shares increasing 175.21% over the past quarter and 522.43% over the last year [7] Price Performance - CURI shares are up 2.02% over the past week, while the Zacks Film and Television Production and Distribution industry is down 0.48% during the same period [6] - The monthly price change for CURI is 103.05%, compared to the industry's performance of 4.6% [6] Trading Volume - The average 20-day trading volume for CURI is 1,102,597 shares, indicating a bullish sign as the stock is rising with above-average volume [8] Earnings Outlook - Over the past two months, one earnings estimate for CURI moved higher, while none moved lower, resulting in an increase in the consensus estimate from -$0.09 to -$0.01 [10] - For the next fiscal year, one estimate has moved upwards with no downward revisions during the same period [10] Conclusion - Considering the positive momentum indicators and earnings outlook, CURI is positioned as a promising investment opportunity with a Momentum Score of B [12]

Industry Overview - The Zacks Film and Television Production and Distribution industry is experiencing increased demand for digital entertainment due to operational constraints in traditional venues like movie theaters and theme parks, driven by the work-from-home trend [1] - Companies such as Live Nation Entertainment, TKO Group Holdings, and CuriosityStream are benefiting from this trend, although rising content costs are pressuring profitability [1] Industry Trends - Over-the-top (OTT) services are gaining prominence as content creators distribute through these platforms to leverage franchise popularity, while streaming companies are producing original programming to reduce reliance on third-party content [3] - Binge-watching and advancements in technology are leading to increased consumption of content on smaller screens, prompting industry players to pivot towards digital distribution [4] - Technological advancements, including laser projection systems and immersive experiences, are enhancing the viewing experience, but alternative distribution channels are challenging traditional exhibitors [5] Financial Performance - The Zacks Film and Television Production and Distribution industry ranks 155, placing it in the bottom 37% of over 246 Zacks industries, indicating a negative earnings outlook [6][8] - Despite a gloomy outlook, the industry has outperformed the broader Zacks Consumer Discretionary sector and the S&P 500, returning 46.8% over the past year compared to 17.3% and 10.9% respectively [10] Valuation Metrics - The industry is currently trading at a trailing 12-month price-to-sales (P/S) ratio of 2.79X, lower than the S&P 500's 5.33X and the sector's 2.31X [12] Company Highlights - **CuriosityStream**: Achieved its first positive net income and adjusted EBITDA, with a 26% year-over-year revenue growth to $15.1 million, driven by a $4 million increase in licensing revenues [15][16] - **Live Nation Entertainment**: Reported record-breaking deferred revenue levels of $5.4 billion for concerts, up 24% year-over-year, with 95 million concert tickets sold for 2025 events [21][22] - **TKO Group Holdings**: Reported revenues of $1.27 billion and adjusted EBITDA of $417.4 million, reflecting a 23% year-over-year growth, bolstered by acquisitions and strong performance from UFC and WWE [26][27]

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] Company Overview: CuriosityStream Inc. (CURI) - CURI currently holds a Momentum Style Score of A, indicating strong momentum characteristics [2] - The company has a Zacks Rank of 2 (Buy), suggesting it is positioned for potential outperformance in the market [3] Performance Metrics - CURI shares have increased by 46.33% over the past week, significantly outperforming the Zacks Film and Television Production and Distribution industry, which rose by 1.74% [5] - Over the past month, CURI's price change is 97.67%, compared to the industry's 8.28% [5] - In the last quarter, CURI shares have surged by 94.64%, and over the past year, they have gained 357.66%, while the S&P 500 has moved -3.09% and 13.39%, respectively [6] Trading Volume - CURI's average 20-day trading volume is 945,447 shares, which serves as a bullish indicator when combined with rising stock prices [7] Earnings Outlook - In the past two months, one earnings estimate for CURI has increased, while none have decreased, leading to a consensus estimate improvement from -$0.09 to -$0.01 [9] - For the next fiscal year, one estimate has moved upwards with no downward revisions during the same period [9] Conclusion - Given the strong performance metrics and positive earnings outlook, CURI is identified as a promising momentum pick and is recommended for consideration in the near term [11]

Core Insights - CuriosityStream (NASDAQ: CURI) has experienced a tenfold increase in its stock price since a bullish article was published in March of the previous year [1] - At the time of the initial article, the company was trading below its cash value and was burning cash, although at a decreasing rate [1] - Starting in Q1 2024, the company has shown signs of improvement in its financial performance [1] Company Overview - CuriosityStream is a streaming service focused on documentary and educational content [1] - The company has been under scrutiny due to its cash burn rate, which has been decreasing over time [1] Management Background - Edward Schneider, a managing director of Quan Management LLC, has over 30 years of investment experience, including 25 years managing technology funds [1] - Schneider holds a CFA designation, an MBA from Thunderbird, and a BA from Emory University [1] - Quan Management has generated a 17% annual return since 1995, outperforming the Nasdaq's 11% return [1]

Core Viewpoint - CuriosityStream Inc. reported quarterly earnings of $0.01 per share, surpassing the Zacks Consensus Estimate of a loss of $0.01 per share, marking a significant improvement from a loss of $0.09 per share a year ago, indicating a 200% earnings surprise [1] Financial Performance - The company achieved revenues of $15.09 million for the quarter ended March 2025, exceeding the Zacks Consensus Estimate by 3.36%, compared to $12 million in revenues from the same quarter last year [2] - Over the last four quarters, CuriosityStream has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Stock Performance - CuriosityStream shares have increased approximately 115% since the beginning of the year, contrasting with the S&P 500's decline of 3.9% [3] Future Outlook - The company's earnings outlook will be crucial for determining the sustainability of its stock price movement, with current consensus EPS estimates for the upcoming quarter at -$0.02 on revenues of $14.2 million, and -$0.05 on revenues of $61.9 million for the current fiscal year [4][7] - The estimate revisions trend for CuriosityStream is currently mixed, resulting in a Zacks Rank 3 (Hold), suggesting the stock is expected to perform in line with the market in the near future [6] Industry Context - The Film and Television Production and Distribution industry, to which CuriosityStream belongs, is currently ranked in the top 28% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8]

Financial Data and Key Metrics Changes - Q1 revenue reached $15.1 million, representing a 26% year-over-year increase and a 7% sequential increase [6] - Net income was positive for the first time, improving by $5.4 million year-over-year [6][13] - Adjusted EBITDA was positive at $1.1 million, an improvement of $3.9 million from the previous year [13][16] - Gross margin improved to 53%, up from 44% a year ago, driven by reductions in content amortization [14] - Adjusted free cash flow was $2 million, the high end of guidance, and an increase of $800,000 compared to last year [13][16] Business Line Data and Key Metrics Changes - Direct subscription revenue was approximately $9 million, showing a slight decline year-over-year, offset by a $4 million increase in licensing revenue [14][26] - Operating expenses declined by $1 million or 11% compared to last year, due to ongoing cost rationalization efforts [15][16] Market Data and Key Metrics Changes - The company reported a strong balance sheet with $39.1 million in liquidity and no debt, providing significant operating flexibility [11][16] - The company anticipates revenue for Q2 to be in the range of $16 million to $17 million [17] Company Strategy and Development Direction - The company is focused on five growth pillars: increased licensing, rationalization of annual expenses, leveraging translation cost reductions, launching new currencies, and enhancing talent density [10] - The company has entered into several new third-party agreements and expanded its library of content significantly [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving double-digit growth in both top-line revenue and cash flow for 2025 [9][10] - The company plans to double its quarterly dividend to $0.08, reflecting confidence in future performance [9][34] Other Important Information - The company has implemented a dividend program, returning $6.3 million to shareholders since its inception [16] - Management highlighted the potential of AI licensing opportunities, with expected gross margins of 40% to 50% [46] Q&A Session Summary Question: How has Gen AI contributed to cost reductions? - Management noted that costs were reduced largely without leveraging AI tools, but they see potential for further cost reductions through AI in the future [19][20] Question: What were the key drivers for revenue growth? - Management indicated that while direct subscription revenue was slightly down, licensing revenue saw significant growth due to a broad corpus of content appealing to various companies [25][28] Question: Is the reduction in costs sustainable? - Management confirmed that while some costs may increase seasonally, they expect a continued decline in G&A expenses throughout the year [30][31] Question: How confident is the company in covering the increased dividend? - Management expressed strong confidence in generating sufficient cash flow to cover the dividend, supported by a robust cash reserve [34][35] Question: What consumer trends are observed in the direct business? - Management indicated that direct subscription revenue is largely influenced by marketing spend efficiency, with expectations for opportunistic growth in the future [40][42] Question: What is the pipeline for AI licensing? - Management highlighted a broad set of potential licensees, including tech companies and government agencies, with significant deals expected to impact profitability [46][47] Question: Are the relationships in AI content sustainable? - Management believes that strong relationships and high-quality content will lead to recurring business opportunities, despite the nature of licensing agreements [51][56]

Investment and Ownership - The carrying value of the Company's equity method investment in Nebula decreased from $3,848,000 as of December 31, 2024, to $3,697,000 as of March 31, 2025, reflecting an equity method investment loss of $151,000[37]. - The Company acquired a 32% ownership in the Spiegel Venture for an initial investment of $3.3 million in July 2021, which operates two documentary channels and an SVOD service[38]. - The Company holds a 16.875% ownership interest in Nebula as of March 31, 2025, after making incremental purchases totaling $6.0 million since August 2021[44]. - The Company has a Call Option to acquire the remaining ownership interests in the Spiegel Venture, exercisable after the adoption of the Spiegel Venture's audited financial statements for the fiscal year 2025[40]. - The Company has not received any dividends from either the Spiegel Venture or Nebula as of March 31, 2025[38][44]. Financial Performance - Total revenues for the three months ended March 31, 2025, were $15,090,000, a 25.6% increase compared to $12,001,000 for the same period in 2024[54]. - Direct-to-Consumer revenue decreased to $6,530,000, accounting for 43% of total revenue, down from 68% in the prior year[54]. - The net income for the three months ended March 31, 2025, was $319,000, a significant improvement from a net loss of $5,035,000 in the same period of 2024[72]. - For the three months ended March 31, 2025, the company reported revenues of $15,090,000, an increase of 25.9% compared to $12,001,000 for the same period in 2024[85]. - The company’s international revenue accounted for 29% of total revenue in Q1 2025, with Switzerland contributing 10% of total revenue[86]. Expenses and Liabilities - Total operating expenses for the three months ended March 31, 2025, were $15,011,000, a decrease of 4.1% from $15,655,000 in the same period of 2024[85]. - Content amortization for the three months ended March 31, 2025, was $3,513,000, down from $5,215,000 in the same period of 2024[51]. - Content amortization expenses decreased to $3,513,000 in Q1 2025 from $5,215,000 in Q1 2024, reflecting a reduction of 32.6%[85]. - Total deferred revenues decreased to $10.9 million as of March 31, 2025, from $11.4 million as of December 31, 2024[56]. - The total operating lease cost for the three months ended March 31, 2025, was $133,000, slightly up from $131,000 in 2024[92]. Cash and Investments - As of March 31, 2025, the company's cash and cash equivalents increased to $9,183,000 from $7,826,000 as of December 31, 2024, representing a growth of approximately 17.4%[46]. - The Company’s investments in debt securities are classified as held-to-maturity and reported at amortized cost, with interest income recognized as non-operating income[27][28]. - The fair value of Private Placement Warrants increased to $96,000 as of March 31, 2025, compared to $88,000 as of December 31, 2024[53]. - The fair value of the warrant liability for the Private Placement Warrants was estimated at $0.03 per warrant as of March 31, 2025, compared to $0.02 per warrant as of December 31, 2024[70]. Shareholder Actions - The Company paid a Holdback Payment of $900,000 to Spiegel TV and Autentic in July 2023 due to the Spiegel Venture achieving certain financial targets during its 2022 fiscal period[39]. - The Company declared a quarterly cash dividend of $0.08 per share, totaling approximately $4.6 million, to be paid on June 20, 2025[100]. - The company had repurchased 216,000 shares of its common stock at an average price of $1.16 per share, totaling $0.3 million as of December 31, 2024[64]. - The company had a weighted-average of 57,132,000 shares outstanding for the three months ended March 31, 2025, compared to 53,301,000 shares for the same period in 2024[72]. Future Expectations - The company expects to recognize future revenues of $1,955,000 in 2025 related to remaining performance obligations[55]. - The Company has not yet adopted new accounting pronouncements under the JOBS Act and expects to no longer qualify as an emerging growth company after December 31, 2025[34]. - The company anticipates amortizing $5.3 million, $2.5 million, and $0.7 million of licensed content costs over the next three years[49]. - Future advertising commitments totaled $1.7 million, expected to be paid during the year ending December 31, 2025[98]. Tax and Valuation - Income tax expense for the three months ended March 31, 2025, was immaterial due to a full valuation allowance position[99]. - The weighted average discount rate used for measuring operating lease liabilities was 4.4% as of March 31, 2025[91]. - Total lease payments due are $4.96 million, with a present value of total lease liabilities at $4.187 million[93].

Financial Data and Key Metrics Changes - Q1 revenue reached $15.1 million, representing a 26% year-over-year increase and a 7% sequential increase [5][12] - The company reported positive net income for the first time, improving by $5.4 million year-over-year [11] - Adjusted EBITDA was positive at $1.1 million, an improvement of $3.9 million from the previous year [11][12] - Gross margin improved to 53%, up from 44% a year ago, driven by reductions in content amortization [12] - Adjusted free cash flow was $2 million, the high end of guidance, and an increase of $800,000 compared to last year [11][12] Business Line Data and Key Metrics Changes - Direct subscription revenue was approximately $9 million, showing a slight decline year-over-year, offset by a $4 million increase in licensing revenue [12][26] - Operating expenses decreased by $1 million or 11% compared to last year, due to ongoing cost rationalization efforts [12] Market Data and Key Metrics Changes - The company has entered into several new third-party agreements in the US and internationally, expanding its content library significantly [8] - The company launched 10 new currencies to reduce subscription friction internationally [8] Company Strategy and Development Direction - The company focuses on five growth pillars: increased licensing, rationalization of annual expenses, leveraging translation cost reductions, launching new currencies, and enhancing talent density [8] - The company aims for continued double-digit growth in both top-line revenue and cash flow [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving positive cash flow and revenue growth, with expectations for Q2 revenue between $16 million and $17 million [14] - The company highlighted its strong balance sheet with $39.1 million in liquidity and no debt, providing significant operational flexibility [12][14] Other Important Information - The quarterly dividend was doubled to $0.08 per share, reflecting confidence in future performance [7][32] - The company has returned $6.3 million to shareholders since the dividend program was announced [12] Q&A Session Summary Question: How has Gen AI contributed to cost reductions? - Management noted that costs were reduced largely without leveraging AI tools, but they see potential for AI in translation and content editing in the future [17][18] Question: What were the key drivers for revenue growth? - Management indicated that while direct subscription revenue was slightly down, licensing revenue saw significant growth due to a broad corpus of content appealing to various companies [22][26] Question: Is the reduction in costs sustainable? - Management acknowledged that while content amortization costs have declined, marketing costs may increase in Q4, but they expect a continued decline in G&A expenses [28][29] Question: Can the company sustain the increased dividend? - Management expressed confidence in generating sufficient cash flow to cover the dividend, supported by a strong cash reserve [30][32] Question: What consumer trends are observed in the direct business? - Management indicated that direct subscription revenue is largely influenced by marketing spend, with plans to be opportunistic in spending to optimize CPA [37][39] Question: What is the pipeline for AI licensing? - Management highlighted a broad set of licensees, including tech companies and public sector agencies, with significant potential for large deals impacting profitability [42][44] Question: Are the relationships with AI content partners sustainable? - Management believes that controlling a large library of content will allow for ongoing monetization and that existing partners have shown interest in further agreements [49][52]

First Quarter 2025 Financial Results ▪ Revenue of $15.1 Million, Increased 26% YoY ▪ $5.4 million Improvement in Net Income YoY ▪ Dividend Program Increased 100% to $0.32 Annually ▪ Guiding Q2 Revenue to 30-37% Growth YoY • Revenue of $15.1 million, compared to $12.0 million in the first quarter of 2024; • Gross profit of $8.0 million or 53.1%, compared to $5.3 million or 43.8% in the first quarter of 2024; • Net income of $0.3 million, compared to net loss of $5.0 million in the first quarter of 2024; • Ad ...

Muslim Farooque is a leading financial journalist and market analyst with over five years of expertise in covering the stock and cryptocurrency markets. His work has been widely featured on platforms such as Seeking Alpha, InvestorPlace, GuruFocus, BarCharts, TipRanks, and Equities, reaching over 200,000 readers monthly. He delivers data-driven insights that empower investors to make well-informed financial decisions. Muslim is a Chartered Certified Accountant (ACCA), a Fellow Member of ACCA Global, and hol ...