CINEDIGM DIGIT-A(CIDM) - 2026 Q1 - Quarterly Results

Q1 FY2026 Financial and Operational Highlights Cineverse achieved significant revenue growth and improved direct operating margin in Q1 FY2026, driven by streaming and theatrical successes, despite increased SG&A impacting net loss and Adjusted EBITDA 1.1 Overall Performance Summary Cineverse reported significant improvements in Total Revenue and Direct Operating Margin for Q1 FY2026, with revenue increasing by 22% to $11.1 million and margin improving by 6% to 57% - Total Revenue increased by $2.0 million or 22% over the prior year quarter to $11.1 million[1] - Direct Operating Margin improved by 6% over the prior year quarter to 57%[1] - Net Loss and Adjusted EBITDA decreased slightly due to increased SG&A costs, attributable to investments in theatrical slate and an enhanced business development, product, and sales team for the Technology group[1] 1.2 Key Financial Highlights Total quarterly revenue grew 22% to $11.1 million, driven by gains in streaming, digital distribution, theatrical, and physical sales, leading to a net loss of $3.6 million and Adjusted EBITDA of $(2.1) million Q1 FY2026 Key Financial Highlights | Metric | Q1 FY2026 | Q1 FY2025 | Change (YoY) | | :-------------------------------- | :---------- | :---------- | :----------- | | Total Revenue | $11.1 million | $9.1 million | +22% | | Streaming and Digital Revenues | $9.1 million | $7.7 million | +18% | | Base Distribution Revenue | $1.0 million | $0.4 million | +192% | | SG&A Expenses | $9.0 million | $6.6 million | +36% | | Net Loss attributable to common stockholders | $(3.6) million | $(3.2) million | -12.5% | | Basic and Diluted EPS | $(0.21) | $(0.20) | -5% | | Adjusted EBITDA | $(2.1) million | $(1.4) million | -50% | 1.3 Key Operational Highlights The company expanded its theatrical slate and streaming viewership, with total minutes streamed up to 4.0 billion and SVOD subscribers growing 6% to 1.38 million, alongside strategic initiatives like the MicroCo joint venture - Expanded theatrical slate with upcoming wide release films including The Toxic Avenger Unrated (August 29, 2025), Silent Night, Deadly Night (December 12, 2025), Return to Silent Hill (January 23, 2026), Air Bud Returns (Summer 2026), and Wolf Creek: Legacy (2027)[2] - Total monthly viewership across the channel portfolio increased 38% year-over-year, driven by strong growth from Screambox, Dog Whisperer with Cesar Millan, Barney, and Yu-Gi-Oh[5] - Total streaming viewers increased approximately 20% year-over-year to 209 million, with total minutes streamed up 38% to more than 4.0 billion and FAST channel minutes up 20% to 3.8 billion[10] - SVOD subscribers grew approximately 6% year-over-year to 1.38 million[10] - Announced a 50/50 joint venture with Lloyd Braun's Banyan Media Ventures to launch MicroCo, a new studio and platform for microseries, a market projected to reach $10 billion by 2027[9] - Commercial release of cineSearch on Google Cloud Marketplace and launched Matchpoint Dispatch pilots with a major studio[10] Management Commentary Management emphasized strong revenue and operating margin growth, strategic investments in theatrical and technology, and the potential of the MicroCo joint venture to capitalize on the microseries market 2.1 Chairman and CEO's Statement CEO Chris McGurk highlighted strong revenue and operating margin growth, acknowledging that increased SG&A investments impacted Adjusted EBITDA and Net Income, with returns expected from Q2, while emphasizing the strategic importance of the MicroCo joint venture - Strong revenue and total Operating Margin growth, with investments in SG&A and marketing impacting Adjusted EBITDA and Net Income, but returns are expected to begin in fiscal second quarter[11] - The Toxic Avenger Unrated has a favorable risk/reward profile for Cineverse due to the acquisition of all domestic rights in all media in perpetuity under a unique deal structure, with a total investment of less than $5 million[11] - Acquired Air Bud Returns, the latest theatrical installment of the beloved family franchise, for release next summer[11] - The MicroCo joint venture, with Banyan Ventures and led by elite executives, is positioned to build an industry-leading business in the high-growth microseries market, projected to reach $10 billion by 2027[11] 2.2 President and Chief Strategy Officer's Statement President Erick Opeka detailed Cineverse's strategy of combining owned ad tech, proprietary media networks, and a disciplined theatrical acquisition approach to achieve studio-level awareness with minimal spend, noting significant streaming growth and the strategic vision for MicroCo - Cineverse's strategy combines owned ad tech, proprietary media networks, and a disciplined theatrical acquisition approach to achieve studio-level awareness with a fraction of comparable studio campaign spend[11][13] - The same marketing machine driving theatrical awareness is fueling growth across the streaming business, with total minutes streamed up 38% year-over-year to over 4.0 billion and FAST viewing up 20%[13] - Screambox viewership climbed 26% since the release of Terrifier 3, demonstrating the approach's ability to both launch films and deepen engagement across platforms[13] - The MicroCo joint venture aims to build the infrastructure layer for the entire microdrama space, unifying content, creators, fandom, and monetization under one platform, powered by Cineverse's proprietary technology and AI capabilities[13] Financial Statements The financial statements reflect a decrease in total assets and cash, an increase in revenue offset by higher operating expenses, leading to an increased net loss and decreased Adjusted EBITDA 3.1 Condensed Consolidated Balance Sheets As of June 30, 2025, Cineverse reported total assets of $61.5 million, a decrease from $72.5 million on March 31, 2025, primarily due to a drop in cash and cash equivalents, while total liabilities and equity also declined Condensed Consolidated Balance Sheets (in thousands) | ASSETS | June 30, 2025 (Unaudited) | March 31, 2025 | | :-------------------------------- | :------------------------ | :------------- | | Cash and cash equivalents | $1,985 | $13,941 | | Total Current Assets | $24,863 | $38,081 | | Total Assets | $61,534 | $72,516 | | LIABILITIES AND STOCKHOLDERS' EQUITY | | | | Total Current Liabilities | $25,139 | $34,435 | | Total Liabilities | $25,380 | $34,724 | | Total equity | $36,154 | $37,792 | 3.2 Condensed Consolidated Statements of Operations For the three months ended June 30, 2025, Cineverse's revenues increased to $11.1 million, but total operating expenses rose to $14.8 million, resulting in an operating loss of $(3.7) million and a net loss of $(3.6) million Condensed Consolidated Statements of Operations (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | | Revenues | $11,119 | $9,127 | | Direct operating expenses | $4,807 | $4,479 | | Selling, general and administrative | $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) | | Basic and Diluted EPS | $(0.21) | $(0.20) | 3.3 Adjusted EBITDA Reconciliation Cineverse defines Adjusted EBITDA as a non-GAAP metric to assess fundamental business performance, reporting $(2.1) million for Q1 FY2026, a decrease from $(1.4) million in the prior year due to increased operating expenses - Adjusted EBITDA is a non-GAAP financial metric defined as earnings before interest, taxes, depreciation and amortization, stock-based compensation expense, merger and acquisition costs, restructuring, transition and acquisitions expense, net, goodwill impairment and certain other items[21][22][23] Adjusted EBITDA Reconciliation (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | | Net Loss | $(3,516) | $(3,050) | | Add Backs: | | | | 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 noncontrolling interest | (44) | (23) | | Transition-related costs | 47 | 27 | | Adjusted EBITDA | $(2,134) | $(1,357) | Operational Developments Post-quarter, Cineverse established the MicroCo joint venture, acquired US rights for "Air Bud Returns," expanded its streaming audience and SVOD subscribers, and commercially released cineSearch 4.1 Developments Subsequent to Quarter-End Subsequent to quarter-end, Cineverse announced a 50/50 joint venture with Banyan Media Ventures to launch MicroCo, acquired US rights for 'Air Bud Returns,' and expanded its streaming audience and SVOD subscribers - Announced 50/50 joint venture with Lloyd Braun's Banyan Media Ventures to launch MicroCo, a new studio and platform for microseries, with former Showtime President Jana Winograde named Co-founder and CEO[9] - Acquired US rights for Air Bud Returns, the latest installment in the iconic family franchise, in partnership with Air Bud Entertainment, with a wide theatrical release slated for summer 2026[12] - Total streaming viewers increased approximately 20% year-over-year to 209 million, with total minutes streamed up 38% to more than 4.0 billion and FAST channel minutes up 20% to 3.8 billion[10] - SVOD subscribers grew approximately 6% year-over-year to 1.38 million[10] - Commercial release of cineSearch on Google Cloud Marketplace and launched Matchpoint Dispatch pilots with a major studio[10] - Expanded international FAST footprint with Dog Whisperer with Cesar Millan and Bob Ross channels on Samsung TV Plus Australia, contributing to projected 35% growth in international viewing hours[10] - Formed an internal Motion Pictures Group, expanded ad sales leadership, and rebranded the Cineverse Podcast Network, now with 74+ series and over 230 million lifetime downloads[10] - Cineverse common stock was added to multiple Russell indexes including 3000E, Microcap, Growth, and Value Segments[12] Additional Information This section provides an overview of Cineverse as a technology-driven entertainment studio, details of the Q1 FY2026 conference call, and a standard safe harbor statement regarding forward-looking information 5.1 About Cineverse Cineverse is a next-generation entertainment studio leveraging technology to empower creators and entertain fans, distributing over 71,000 films, series, and podcasts, and utilizing proprietary streaming tools and AI technology - Cineverse is a global streaming technology and entertainment company that empowers creators and entertains fans with a wide breadth of content through technology[1][14] - Distributes more than 71,000 premium films, series, and podcasts, connecting fans with bold, authentic, independent stories[14] - Utilizes proprietary streaming tools and AI technology to drive revenue and reach, redefining the next era of entertainment[14] 5.2 Conference Call Information Cineverse hosted a conference call on August 14, 2025, to discuss Q1 FY2026 results, with online access and replay details provided via the Cineverse Investor Relations website - A conference call was hosted on Thursday, August 14, 2025, at 4:30 p.m. EST/1:30 p.m. PST to discuss the fiscal first quarter results[14] - The conference call was accessible online via the Cineverse Investor Relations website (https://investor.cineverse.com), with an audio recording available for replay[16] 5.3 Safe Harbor Statement The document includes a Safe Harbor Statement, cautioning investors that certain statements are 'forward-looking' and subject to various risks, uncertainties, and assumptions, with Cineverse undertaking no obligation to update these statements after the release date - The document contains 'forward-looking statements' as defined by the Private Securities Litigation Reform Act of 1995, which are predictive in nature and depend upon or refer to future events or conditions[15] - Forward-looking statements are based on current expectations and projections and are subject to various risks, uncertainties, and assumptions about Cineverse, its technology, economic and market factors, and the industries in which it operates[15] - Cineverse undertakes no specific obligation or intention to update these statements after the date of the release[15]