Revenue Performance - Production Services revenue for Q3 2025 was $7,105,000, a 45% increase from $4,898,000 in Q3 2024, driven by projects advancing in production stages [159]. - Total revenue for Q3 2025 reached $9,877,000, reflecting a 13% increase from $8,708,000 in Q3 2024 [159]. - Licensing and Royalties revenue surged by 97% in Q3 2025 to $73,000, up from $37,000 in Q3 2024, due to higher earnings from existing licensing agreements [161]. - Media Advisory and Advertising Services revenue decreased by 36% in Q3 2025 to $912,000, down from $1,425,000 in Q3 2024, attributed to lower client media spending [162]. - For the nine months ended September 30, 2025, Production Services revenue was $12,756,000, a 65% increase from $21,036,000 in the same period of 2024 [168]. - Total revenue for the nine months ended September 30, 2025 was $23,170,000, a 28% decrease from $29,660,000 in the same period of 2024 [168]. - Revenue from Content Distribution on AVOD and SVOD decreased by 18% to $5.5 million for the nine months ended September 30, 2025, compared to the same period in 2024 [169]. - Licensing and Royalties revenue increased by 3% to $3.4 million for the nine months ended September 30, 2025, driven by higher earnings from existing license deals [170]. - Media Advisory and Advertising services revenue decreased by 18% to $2.5 million for the nine months ended September 30, 2025, primarily due to lower client media purchases [171]. Expense Overview - Total expenses for Q3 2025 were $12,773,000, a 13% increase from $11,255,000 in Q3 2024 [163]. - Direct Operating Costs rose by 20% in Q3 2025 to $6,922,000, primarily due to increased salary costs and headcount in Production Services [165]. - Total expenses increased by 6% to $38.9 million for the nine months ended September 30, 2025, with a significant decrease in Marketing and Sales expenses by 45% to $0.6 million [172]. - Direct Operating Costs rose by 30% to $20.7 million for the nine months ended September 30, 2025, mainly due to increased salary costs related to new projects [173]. - General and Administrative expenses decreased by 11% to $17.6 million for the nine months ended September 30, 2025, attributed to lower professional fees and reduced salaries [174]. Financial Position - The company reported a net loss of $19.4 million for the nine months ended September 30, 2025, impacting cash used in operating activities of $11.8 million [179]. - As of September 30, 2025, the company had negative working capital of $5.4 million, a decrease of $6.6 million compared to December 31, 2024 [181]. - Cash and restricted cash decreased by $7.0 million to $1.4 million as of September 30, 2025, primarily due to cash used in operating activities [179]. - The company did not hold any available-for-sale marketable securities as of September 30, 2025, reflecting a decrease of $2.0 million since December 31, 2024 [180]. - As of September 30, 2025, total cash decreased to $0.9 million from $7.9 million as of September 30, 2024, representing a decline of approximately 88.6% [185]. - Net cash used in operating activities for the nine months ended September 30, 2025, was $(11,787) thousand, compared to $(1,127) thousand for the same period in 2024, indicating an increase in cash outflow of $10,660 thousand [186]. - Net non-cash expenses increased to $13.6 million for the nine months ended September 30, 2025, from $5.9 million in the prior year, primarily due to a $7.3 million loss on equity investment revaluation [187]. - Cash provided by investing activities decreased by $5.5 million, primarily due to a $4.2 million decrease in proceeds from sales and maturities of marketable securities [189]. - Cash provided by financing activities increased by $9.3 million, mainly due to a decrease in repayments of production facilities and margin loans totaling $10.1 million [190]. - The company has material cash requirements totaling approximately $32.8 million over the next five years, with $16.4 million due within one year [191]. - As of September 30, 2025, the company had $0.4 million in commitments for capital expenditures related to equipment leases [193]. Management Outlook - Management expresses substantial doubt about the company's ability to continue as a going concern for at least twelve months following the issuance of the financial statements [184]. - The company raised net proceeds of $6.6 million from the October Offerings, which closed on October 22, 2025, improving its cash position [184]. - The company plans to consider multiple alternatives to address capital needs, including the sale of equity or debt securities and strategic transactions [184]. - The company plans to expand its licensing programs utilizing its broader IP catalog starting in 2026 [152].
GENIUS BRANDS(GNUS) - 2025 Q3 - Quarterly Report