Cineverse Corp. Q4 FY2025 earnings call

• Reorganized technology business into Cineverse Technology Group with Tony Huidor in charge, focusing on Matchpoint and AI products like cineSearch.
• Created dedicated Theatrical Motion Pictures division with Yolanda Macias as Chief Motion Pictures Officer, planning wide releases of films like The Toxic Avenger, Silent Night, Deadly Night, and Return to Silent Hill, each with investment <$5M.
• Streaming: Screambox subscribers grew 31% post Terrifier 3 Home Premier, with concurrent windowing maximizing revenue. FAST channels faced CPM pressure but direct advertising and C360 ad platform saw growth.
• Podcasting: Podcast revenues up 57% y/y, with 62 current shows and 4 new originals in development, and partnerships with WITZ for comedy content.
• Technology: Matchpoint reached maturity, targeting major studios, cineSearch licensed as a product, and AI initiatives to transform the company into a next-gen studio.

In the fourth quarter, Cineverse generated total revenue of $15.6 million, a $5.7 million (58%) increase over the prior year. Net income was $858,000, a $15.5 million increase y/y. Adjusted EBITDA was $4 million, a $2.4 million (158%) increase y/y. Total direct operating margin was 55%, well above the target of 45%-50%. For the full year, total revenues increased by 59% to $78.2 million. Total full year net income was $3.8 million, and total full year adjusted EBITDA was $13.9 million, a $9.5 million (216%) increase y/y. Growth was driven by streaming, digital, and podcast revenue, with Terrifier 3 being a key driver.

• Expect direct operating margin to remain in 45%-50% range.
• Stock price undervalued with significant upside based on $4.18 closing share price.
• Plan to continue growth with new film releases, licensing deals, and expansion into new content genres like family, fantasy, Black Cinema, and comedy.

• Macro environment causing companies to pull back on discretionary advertising spend.
• Oversupply in FAST channels putting pressure on CPMs and fill rates.
• Major studios relying on legacy workflows and third-party vendors, posing challenges for technology adoption like Matchpoint.

Q: Dan Kurnos asked about leaning in on wide releases and pay windows/licensing opportunities.

A: Chris McGurk said they'll announce more films similar to the current slate, expand into family, fantasy, Black Cinema, and comedy, and aim for a pay output deal once the slate is filled.

Q: Brian Kinstlinger asked about cineSearch, Matchpoint, and podcast monetization.

A: Erick Opeka and Tony Huidor discussed Matchpoint targeting major studios with mid-7 figure potential, cineSearch's competitive edge, and podcast monetization with direct sponsorships, higher CPMs than CTV, and deals in the low 6 figures per deal.