CuriosityStream Inc. Q2 FY2025 earnings call

• Quarterly revenue grew 53% year-over-year to $19 million, exceeding guidance; net income was positive and improved by nearly $3 million year-over-year; adjusted EBITDA grew from negative $1 million to positive $3.1 million year-over-year.
• Entered new and expanded multiyear wholesale distribution agreements in Asia, Latin America, and the U.S. for subscription revenue.
• Licensing revenue, particularly for AI training data, grew considerably; launched a major series on Netflix; licensed approximately 9 million tokens of code for the first time.
• Highlighted unique advantages in AI licensing: deep and curated global premium video and audio library, long-standing relationships with content producers, programming services, and superior data structuring capability.

Quarterly revenue grew by 53% year-over-year from $12.4 million to $19 million. Subscription revenue was $9.3 million in the second quarter, a $1.7 million decline from the prior year but a sequential increase. Content licensing revenue was also $9.3 million in the second quarter, an increase of over $8 million year-over-year, driven by significant new business from AI licensing. Subscription revenue contributed approximately 48.9% to total revenue, while content licensing contributed approximately 48.9%.

• Third quarter revenue is expected to be in the range of $15 million to $18 million.
• For 2025, adjusted free cash flow is expected to be in the range of $11 million to $13 million for the full year.

• Uncertainties around legal and regulatory issues in AI data licensing.
• Impact of synthetic training data on the demand for authentic data.
• Competition from large studios entering the AI licensing space.

Q: Why are you in the core media business?

A: We have three solid revenue pillars - subscription, licensing, and advertising. The subscription business is strong and global, licensing is a high-growth area, and advertising has significant growth potential. All these pillars work hand in glove as content acquisition for subscriptions supports licensing efforts.

Q: What should we expect to see cost increases happen as you pivot more towards this high-growth licensing for business?

A: Primarily, there may be slight increases in storage and delivery costs, but they are relatively de minimis. The company remains lean with 42 full-time employees and is focused on maintaining efficiency.

Q: What about the code licensing mentioned?

A: Code licensing is a result of owning good IP, showing additional monetization opportunities beyond video. As partner needs evolve, there are potential new licensing possibilities, highlighting the value of controlling good IP.