Cineverse (CNVS) - 2026 Q1 - Quarterly Results

Executive Summary and Q1 FY2026 Highlights Overall Financial Performance Cineverse saw strong Q1 FY2026 revenue growth and improved operating margin, but increased SG&A impacted net loss and adjusted EBITDA Key Financial Metrics | Metric | Q1 FY2026 (million USD) | Q1 FY2025 (million USD) | Change (%) | | :---------------------- | :-------------------- | :-------------------- | :------- | | Total Revenue | 11.1 | 9.1 | +22% | | Direct Operating Margin | 57% | 51% | +6% | | SG&A Expenses | 9.0 | 6.6 | +36% | | Net Loss | (3.6) | (3.2) | -12.5% | | Adjusted EBITDA | (2.1) | (1.4) | -50% | - Increased SG&A expenses primarily resulted from investments supporting expanded theatrical release schedules and the development of technology, product, and sales teams[1][5] Key Business Drivers Revenue growth was driven by strong streaming, digital distribution, and theatrical/physical sales, significantly boosted by Terrifier 3 Revenue by Category | Revenue Category | Q1 FY2026 (million USD) | Q1 FY2025 (million USD) | Change (%) | | :----------------- | :-------------------- | :-------------------- | :------- | | Streaming and Digital Revenue | 9.1 | 7.7 | +18% | | Underlying Distribution Revenue | 1.0 | 0.4 | +192% | - Total monthly viewership increased by 38% year-over-year, driven by strong growth in channels like Screambox, Dog Whisperer with Cesar Millan, Barney, and Yu-Gi-Oh[5] - The success of Terrifier 3 boosted theatrical and DVD sales, significantly increasing underlying distribution revenue[5] Strategic Initiatives and Operational Progress The company expands theatrical distribution and leverages its media ecosystem for studio marketing, maintaining a solid financial position - The company is building a new theatrical release slate, including The Toxic Avenger Unrated, Silent Night, Deadly Night, Return to Silent Hill, Air Bud Returns, and Wolf Creek: Legacy[2] - Other major studios continue to utilize Cineverse's new media ecosystem for marketing, highlighting the impact of its unique approach[2] - As of June 30, 2025, the company held nearly $10.9 million in cash and had $12.5 million available under its credit facility[3] Financial Condition Overview Liquidity and Capital Resources Cineverse held $2.0 million cash and $8.9 million available credit, with warrant redemptions providing $5.8 million despite negative working capital Liquidity and Capital Resources Summary | Metric | June 30, 2025 (million USD) | March 31, 2025 (million USD) | | :----------------------- | :----------------------- | :----------------------- | | Cash and Cash Equivalents | 2.0 | 13.9 | | Credit Facility Availability | 8.9 (Total 12.5) | - | | Working Capital | (0.3) | 3.6 | - As of the release date, the company had $12.0 million available under its credit facility[10] - Subsequent to quarter-end, the company received $5.8 million from the redemption of 1,947,500 common stock warrants[10] Digital Content Library Valuation The company's digital content library, with over 71,000 titles, was valued at $40 million, significantly exceeding its $2.9 million book value Digital Content Library Valuation Summary | Metric | Amount (million USD) | | :--------------------- | :-------------- | | Digital Content Library Valuation (March 31, 2024) | 40.0 | | Digital Content Library Book Value (June 30, 2025) | 2.9 | - The digital content library comprises over 71,000 titles, with its valuation showing significant growth since 2023[10] Operational Developments Developments During the Quarter Cineverse made significant Q1 progress in streaming audience growth, platform engagement, SVOD subscriptions, content expansion, and technology - Total streaming audience grew approximately 20% year-over-year to 209 million, with total watch time increasing 38% to over 4 billion minutes, and FAST channel watch time up 20% to 3.8 billion minutes[10] - Screambox viewership increased 27% since the release of Terrifier 3, and Cineverse channel audience grew over 4,300% since January 2025[10] - SVOD subscribers increased approximately 6% year-over-year to 1.38 million[10] - Content expansion included Fandor acquiring rights to Return to Silent Hill and Silent Night, Deadly Night, and launching cineSearch Commercial and the Matchpoint Dispatch pilot program[10] - An internal film group was established, the ad sales leadership team expanded, and the Cineverse Podcast Network was relaunched, featuring 74+ series and over 230 million lifetime downloads[10] Developments Subsequent to Quarter-End Post-quarter, Cineverse formed MicroCo for micro-series, acquired Air Bud Returns rights, launched WITZ Podcast Network, and strengthened tech leadership - Formed MicroCo, a 50/50 joint venture with Lloyd Braun's Banyan Media Ventures, targeting the micro-series market, projected to reach $10 billion by 2027[9][11] - Announced the acquisition of US rights for Air Bud Returns, with a wide theatrical release planned for Summer 2026[12] - Launched the WITZ Podcast Network in partnership with The Stand Group and strengthened the technology leadership team with Michele Edelman as EVP of Technology and GM of Matchpoint[12] - Cineverse common stock was included in multiple Russell indices, including the Russell 3000E, Microcap, Growth, and Value indices[12] - Successfully promoted upcoming films The Toxic Avenger Unrated and Silent Night, Deadly Night at San Diego Comic-Con[12] Management Commentary CEO's Remarks CEO Chris McGurk noted strong revenue growth and improved operating margins, with SG&A investments expected to yield returns, highlighting strategic film and MicroCo potential - The company achieved significant growth across all business lines, with a substantial increase in overall operating margins[11] - Investments in SG&A and marketing impacted Adjusted EBITDA and net income, but returns on these investments are anticipated to begin in Q2 FY2026[11] - Investment in The Toxic Avenger Unrated, including distribution and marketing, was less than $5 million, with a favorable risk/reward profile due to securing permanent domestic rights across all media[11] - The MicroCo joint venture will leverage Cineverse's unique streaming, content, technology, and AI capabilities to establish a leading position in the micro-series market, projected to reach $10 billion by 2027[11] President and CSO's Remarks President and CSO Erick Opeka explained Cineverse's low-cost studio-level visibility through integrated ad tech and theatrical strategy, driving streaming growth, and envisioned MicroCo setting the micro-series standard - Cineverse achieves high market visibility at significantly lower costs than traditional studios by integrating proprietary ad tech, exclusive media networks, and disciplined theatrical acquisition strategies[11][13] - The same system driving theatrical visibility also fueled streaming business growth, with total watch time increasing 38% year-over-year to over 4 billion minutes, and FAST viewership up 20%[13] - The MicroCo joint venture aims to build the infrastructure layer for the entire micro-series sector, leveraging Cineverse's proprietary technology and AI capabilities to support various content generation forms and define the future of short-form storytelling[13] Company Information About Cineverse Cineverse is a next-gen entertainment studio leveraging proprietary streaming and AI to distribute over 71,000 titles, connecting fans with authentic stories - Cineverse is a global streaming technology and entertainment company with over 71,000 premium films, series, and podcasts[14] - The company utilizes its proprietary streaming tools and AI technology to drive revenue and reach, redefining the next era of entertainment[14] - Its assets include the highest-grossing unrated film in US box office history, dozens of streaming fan channels, a top podcast network, and the horror content destination Bloody Disgusting[14] Safe Harbor Statement This report contains forward-looking statements, subject to risks and uncertainties, based on current expectations, with no obligation for the company to update them - Forward-looking statements include predictive statements that depend on future events or conditions and contain words such as 'anticipate,' 'expect,' 'intend,' and 'plan'[15] - These statements are not guarantees of future performance, and the company undertakes no specific obligation or intention to update them after the date of this release[15] Investor Relations and Conference Call Cineverse held a conference call on August 14, 2025, to discuss Q1 FY2026 results, accessible online via its investor relations website with a replay available - Cineverse held a conference call on Thursday, August 14, 2025, at 4:30 PM ET / 1:30 PM PT to discuss its Q1 FY2026 results[14] - The conference call is accessible online via the Cineverse investor relations website at https://investor.cineverse.com, with a replay also available post-call[16] Condensed Consolidated Financial Statements Condensed Consolidated Balance Sheets As of June 30, 2025, Cineverse's total assets decreased to $61.534 million, primarily due to reduced cash, with total liabilities also declining Condensed Consolidated Balance Sheets Summary | Item | June 30, 2025 (thousand USD) | March 31, 2025 (thousand USD) | | :----------------------- | :----------------------- | :----------------------- | | Total Assets | 61,534 | 72,516 | | Current Assets | 24,863 | 38,081 | | Cash and Cash Equivalents | 1,985 | 13,941 | | Total Liabilities | 25,380 | 34,724 | | Current Liabilities | 25,139 | 34,435 | | Total Cineverse Corp. Stockholders' Equity | 37,070 | 38,752 | Condensed Consolidated Statements of Operations For Q1 FY2026, Cineverse reported $11.119 million revenue, up 22%, but increased operating expenses led to an operating loss and net loss Condensed Consolidated Statements of Operations Summary | Item | Three Months Ended June 30, 2025 (thousand USD) | Three Months Ended June 30, 2024 (thousand USD) | | :----------------------- | :-------------------------- | :-------------------------- | | Revenue | 11,119 | 9,127 | | Direct Operating Expenses | 4,807 | 4,479 | | Selling, General and Administrative Expenses | 8,952 | 6,563 | | Total Operating Expenses | 14,821 | 11,905 | | Operating Loss | (3,702) | (2,778) | | Net Loss Attributable to Common Stockholders | (3,649) | (3,162) | | Net Loss Per Share - Basic and Diluted | (0.21) | (0.20) | Non-GAAP Financial Measures Adjusted EBITDA Reconciliation Cineverse defines Adjusted EBITDA as earnings before specific non-cash and non-recurring items, using it as a non-GAAP metric to assess financial performance and facilitate comparisons - Adjusted EBITDA is a non-GAAP financial measure used to assess business financial performance and should not be considered a substitute for GAAP net income (loss) or cash flow from operating activities[21][22][24] Adjusted EBITDA Reconciliation Table | Item | Three Months Ended December 31, 2025 (thousand USD) | Three Months Ended December 31, 2024 (thousand USD) | | :----------------------- | :-------------------------- | :-------------------------- | | Net Loss | (3,516) | (3,050) | | Add-back Items: | | | | Income tax expense | 14 | 7 | | Depreciation and amortization | 1,147 | 948 | | Interest (income) expense | (278) | 431 | | Stock-based compensation | 418 | 470 | | Other (expense) income, net | 78 | (166) | | Net income attributable to non-controlling interests | (44) | (23) | | Transition-related costs | 47 | 27 | | Adjusted EBITDA | (2,134) | (1,357) |