Curiosity(CURI) - 2023 Q4 - Annual Results

Financial Highlights and Dividend Announcement CuriosityStream announced Q4 and full-year 2023 results, with Q4 revenue meeting guidance and adjusted free cash flow exceeding it, initiating a $0.025 per share quarterly cash dividend - The Board of Directors has initiated a quarterly cash dividend program, declaring a dividend of $0.025 per share, payable on April 30, 2024[3] - Management reported that Q4 2023 revenue met guidance, while adjusted free cash flow exceeded expectations, marking the fifth consecutive quarter of sequential improvement in adjusted free cash flow[4] Fourth Quarter 2023 Financial Results Q4 2023 revenue slightly increased to $14.8 million, with gross profit rising to $6.7 million and net loss narrowing to $4.7 million, driven by a 32% reduction in operating expenses Q4 2023 Key Financial Metrics (vs. Q4 2022) | Metric | Q4 2023 (in millions) | Q4 2022 (in millions) | Change | | :--- | :--- | :--- | :--- | | Revenue | $14.8 | $14.5 | +2.1% | | Gross Profit | $6.7 | $1.4 | +378.6% | | Net Loss | $(4.7) | $(14.5) | Improved by 67.4% | | Adjusted Free Cash Flow | $(2.4) | $(8.8) | Improved by 72.7% | | Adjusted EBITDA | $(3.4) | $(13.6) | Improved by 75.0% | - Total advertising, marketing, general, and administrative expenses were reduced by 32% year-over-year to $11.4 million[5] - The company ended the quarter with a cash and restricted cash balance of $38.2 million and no debt[5] Full Year 2023 Financial Results Full year 2023 revenue decreased to $56.9 million, but net loss reduced to $48.9 million (including a $19.0 million content impairment), with Adjusted Free Cash Flow significantly improving Full Year 2023 Key Financial Metrics (vs. 2022) | Metric | FY 2023 (in millions) | FY 2022 (in millions) | Change | | :--- | :--- | :--- | :--- | | Revenue | $56.9 | $78.0 | -27.1% | | Gross Profit | $21.3 | $26.5 | -19.6% | | Net Loss | $(48.9) | $(50.9) | Improved by 3.9% | | Adjusted Free Cash Flow | $(16.2) | $(39.7) | Improved by 59.2% | | Adjusted EBITDA | $(20.2) | $(44.3) | Improved by 54.4% | - Total advertising, marketing, general, and administrative expenses were reduced by 40% year-over-year to $46.8 million[6] - The full-year net loss included a significant non-cash charge of $19.0 million related to the impairment of content assets[6] Full Year 2023 Business Highlights Throughout 2023, CuriosityStream focused on content enrichment and distribution, premiering original series, expanding its content library, and securing new licensing agreements - Premiered multiple original series and specials, including 'The Real Wild West', 'Connections with James Burke', and 'AI Tipping Point'[7] - Signed new licensing, Pay TV, and AVOD agreements with various partners[7] - Expanded content library by adding hundreds of titles in underserved and core genres like crime, aviation, history, and science[7] Q1 2024 Financial Outlook CuriosityStream provided guidance for the first quarter of 2024, projecting positive Adjusted Free Cash Flow and revenue between $11.5 million and $12.5 million Q1 2024 Guidance | Metric | Guidance Range (in millions) | | :--- | :--- | | Revenue | $11.5 - $12.5 | | Adjusted Free Cash Flow | $0.25 - $1.00 | Financial Statements The consolidated financial statements detail the company's financial position and performance, reflecting decreased total assets and liabilities, lower revenue but a smaller net loss, and significantly reduced cash burn from operations Consolidated Balance Sheets Selected Balance Sheet Data (as of Dec 31) | Account (in thousands) | 2023 | 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $37,715 | $40,007 | | Content assets, net | $44,943 | $68,502 | | Total assets | $101,022 | $154,113 | | Total current liabilities | $23,398 | $30,960 | | Total liabilities | $28,376 | $36,487 | | Total stockholders' equity | $72,646 | $117,626 | Consolidated Statements of Operations Full Year Statement of Operations Highlights (Year ended Dec 31) | Account (in thousands) | 2023 | 2022 | | :--- | :--- | :--- | | Revenues | $56,889 | $78,043 | | Cost of revenues | $35,553 | $51,536 | | Impairment of content assets | $18,970 | $0 | | Operating loss | $(44,471) | $(55,284) | | Net loss | $(48,896) | $(50,917) | | Net loss per share (Basic) | $(0.92) | $(0.96) | Consolidated Statements of Cash Flows Full Year Cash Flow Summary (Year ended Dec 31) | Activity (in thousands) | 2023 | 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | $(16,172) | $(39,523) | | Net cash provided by investing activities | $14,003 | $62,701 | | Net cash used in financing activities | $(123) | $(218) | | Net (decrease) increase in cash | $(2,292) | $22,960 | Non-GAAP Financial Measures Reconciliation The company provides reconciliations for Adjusted EBITDA and Adjusted Free Cash Flow, showing a reduced Adjusted EBITDA loss of $(20.2) million and improved Adjusted Free Cash Flow of $(16.2) million for full year 2023 Reconciliation to Adjusted EBITDA Reconciliation from Net Loss to Adjusted EBITDA (Year ended Dec 31) | Account (in thousands) | 2023 | 2022 | | :--- | :--- | :--- | | Net loss | $(48,896) | $(50,917) | | Adjustments (incl. impairments, stock comp, etc.) | $28,709 | $6,579 | | Adjusted EBITDA | $(20,187) | $(44,338) | Reconciliation to Adjusted Free Cash Flow Reconciliation to Adjusted Free Cash Flow (Year ended Dec 31) | Account (in thousands) | 2023 | 2022 | | :--- | :--- | :--- | | Net cash flow used in operating activities | $(16,172) | $(39,523) | | Purchases of property and equipment | $(5) | $(130) | | Adjusted Free Cash Flow | $(16,177) | $(39,653) |