CuriosityStream Inc. Q3 FY2025 earnings call

Revenue Growth

• Revenue grew 46% YOY to $18.4 million, exceeding guidance. Adjusted free cash flow up 88% to $4.8 million, adjusted EBITDA improved by $3.4 million YOY.

Pillars of Growth

• Licensing revenue up over 40% YOY, with 9 key partners engaged and over 1.5 million distinct assets delivered. AI training library near 2 million hours.
• Subscriptions: Sequential growth in subscription revenue in 2025, with launches in key markets (US, Australia, New Zealand, Germany) with partners like Amazon and TMTG.
• Advertising: U.S. Hispanic and FAST channels launched on major platforms; 2-hour branded block in Australia; plan to replicate with additional partners. Plan to hire a sales leader for advertising in early 2026.

Cost Discipline

• Adjusted free cash flow up due to cost rationalization, offsetting higher storage/delivery expenses.

Revenue grew 46% year-over-year to $18.4 million. Subscription revenue was $9.3 million in Q3, with sequential growth. Content licensing revenue was $8.7 million in Q3, up over 40% YOY, driven by AI training fulfillments. Year-to-date licensing revenue through September was $23.4 million, over half of 2024's subscription revenue. Adjusted free cash flow increased 88% to $4.8 million. Adjusted EBITDA improved by $3.4 million YOY. Gross margin was 59% in Q3, up from 54% YOY. Net loss was $3.7 million in Q3, driven by noncash stock-based compensation and one-time charges.

2025 Q4

• Expected revenue $18M-$20M, full-year 2025 revenue $70M-$72M (38%-42% YOY growth). Adjusted free cash flow Q4 $2.5M-$3.5M, full-year 2025 $12M-$13M (27%-37% YOY growth).

2026

• No specific guidance, but expect top-line and bottom-line growth to continue. Intend to cover 2026 dividends from operating cash. Anticipate licensing to exceed subscription revenue in 2027, possibly earlier.

• Dilution from Warrants: Warrants expired unexercised in October 2025, reducing potential dilution but still a factor.
• Stock-Based Compensation Impact: Noncash stock-based compensation charges affected Q3 results and will impact future quarters.
• Market and Execution Risks: Uncertainties in market adoption of AI licensing, execution of advertising initiatives, and subscription growth.

Q: Concern about focusing on AI vs. media expansion A: Need sales leaders for revenue generation, bringing in seasoned professionals to accelerate growth, with focus on AI but needing sales support Q: AI licensing evolution and library growth A: AI licensing has evolved from basic training to bespoke data structuring; library near 2 million hours, mostly for AI licensing, with expansion into new genres Q: Stock-based comp impact on diluted shares A: Market-based stock awards led to higher SBC, affecting diluted share count, with expensing over aggressive periods Q: Free cash flow guidance and content library margins A: Free cash flow guidance timing issue; content library has diverse genres with different margins and use cases for licensing