CuriosityStream (CURI) 20 Mar 242023 Q4 Earnings call transcript

Good afternoon. My name is Jeanne, and I will be your conference operator today. I would like to welcome you to the CuriosityStream Inc., Q4 2023 Earnings Call. [Operator Instructions] Thank you. I would now like to turn the conference over to Andrew Lata, Investor Relations.

conference. your begin may You

Westley, Welcome to year are quarter full and its Stinchcomb, Officer. discussion financial results. of Peter Officer; XXXX Executive today fourth Chief Leading Financial CuriosityStream's and Chief CuriosityStream's CuriosityStream's the Clint discussion

will remarks, safe questions. the happy to statement. Following But we take I'll first, management's be prepared review harbor your

securities our forward-looking statements are this we call, that may During the make laws. federal business statements related to under

a variety These rather to statements are are assumptions. future guarantees risks, but performance, of not of and uncertainties subject

actual any additional results revise to management's company aware statements forward-looking forward-looking could reflected Our the differ materially future. make obligation reflect forward-looking that or in expectations the from update statements current in and no be views these only, statements. statements Please undertakes to any or

the that and risks For refer please in release. the as discussed as Investor our other risks material today's our press well affect a actual SEC and discussion our on could factors available results, other important important of website website SEC filings to Relations on and factors the

our also December XXXX, in the set filed. forth fiscal on XX, Report information will XX-K Additional year Form be ended Annual when for

made these financial our GAAP to will A reconciliation investors.curiositystream.com. measures. of at website In reference can be addition, non-GAAP be comparable to on measures non-GAAP measures found

I'll turn Now the call over Clint. to

Cudahy; General of Tia joining Also Head on today. Burke. Counsel, us CFO, the and Hello, all our Thank you Andrew. are COO appreciate Rob you, and I everyone. Peter Content, call our our Westley

this the QX reducing on our delighted marketing Curiosity with detail, accomplish and a had team we we call will with begin congratulating QX adjusted end spend. paid will importantly, critical more to the positive this XXXX than hand will cash that significant in we end flow. And free to achieving want share discuss QX While without of milestone. I'm I we and cash for by at

the excess paid to first and positive a flow in be adjusted be quarter initiating program we'll free for dividend from XXXX, we'll cash. cash will be Looking guiding forward, of which April,

quarter. free keeping our cash flat. as adjusted back, was marketing $X.X flow sequentially while spend we good a a Looking straight QX relatively for We quarter million, cut our our burn fifth improved to cash

we direct and sequentially to plans Many subscribers. our of new and our to higher adopting just and a both subscribers increase store our revenue extraordinary even believe in coming offerings our existing value Our the out our most to subscription annual grew our continued represent services announcing at price direct began continue cohort or roll point, partners now market. year-over-year, channel for are new to service. the renewal, to And to flagship of pricing other up only a compared an customers of

in in EU with distribution TV out entered partners light licensing new, agreements content QX. We end most long-term CuriosityStream and more and countries, into of XX EU recently, a companies in for And U.S.-based simple February, at rolled not in achievement Apple the increasingly requirements. the stringent Asia of

in launched last X had platforms we've Just our services XX and the over world. in the months, third-party products around

monthly progress our key with expand October, impressions AVOD our and we Roku dramatically. partners out grow early like funnel and Xumo, our the to our in marketing we as pleased of millions rolled monetize continue In are order to further top product our with and Tubi, content, promotional and of

will renegotiated now we to vendor appealing had the and that and the and where advantages. both organization, streamlined are in XXXX large, bartered predictability we content, revenues a have We and we of QX going significantly our G&A agreements forward. we believe enhance across work evergreen, continued titles of over library new in We as reduced reliability, increase have that durability to globally putting platforms XX,XXX

technologies and often thoughtfully new available the into of us, seen impact AI the metaverse, thoughtfully are we as opportunities As treading to innovations measuredly. overhyped we've XG, the with crypto, like is

cheaper to areas. ways started efficiently leverage faster, conduct just in more to AI practical We and generative explore catalysts in several work to order and

Some areas third-party like as e-mail a broader so range in utilizing functional doing, more sequencing content examples to and work. initiatives; around us the process, marketing more today requirements the of are personalized we include put to in targeted editing enables specific which accelerated CRM as and world broad well different meet platform

software and and practices data testing reviews, as enhance analysis such Our code AI using engineering suggestions, query automated development team is database to assistance.

analysis. analysis of and feedback experiences factual We've Additionally, categorization to content, summarizing also analysis with AI we're of enhance understanding and using improve relevance. insights content AI started scripts, for customer experimenting to sentiment through user

synthetic believe is content our program the primetime, quite of number across While impact speed a sights of dubbing languages. in growing ready the we create globe to for within volume it's publish we not meaningful on premium a can and

out programming the small one year strongest QX the our through with In brand-defining with to seemingly factual our closed by of premium date, slates unrelated we fuel events Burke, that reboot in of innovation. regard journey X-part to headlined and Connections content, James human

science Mystery annual fan Birds Point, We X of Top stunt, year and Amazing anchored our of launch the Giant by Stories the perennial Dino tech favorite, A.I. the XXXX. of and of specials also Dinoworld release this the Tipping Week Science more and premier like had of a cutting-edge

Evil excited of Art Seduction. of The we're Notre Dame, our premier series Invention and strong For Science ahead, The original start to XXXX, of Surgery about Geniuses, the like Rebuilding Looking including

I'm long-term that projected XX,XXX sustainable, strength our with competitive believe that major and debt. platforms, our equivalents happy reinforce favorable rationalized flexibility. global sheet our cash provide uniquely direct our and appeal, our we And believe company over deep currency exceptional closing, multiyear and third-party to content and our cost to and agreements, structure continue direct ended balance that strong titles, positive base subscriber current over our cash environment. public library of flow and the attributes in X are are us XXXX the broad we in advantages year We with In $XX and million

Over to you, Peter.

Clint. Thanks,

Clint the range. free we was million in flow. our improving on quarter, flow. progress remain cash $XX.X compared efficiency. the by range and Fourth and while QX free during adjusted improved quarter believe we've our year As progress the fifth focused million guidance the prior Fourth quarter excellent expense demonstrate towards further operating line guidance of above made improve free straight quarter, made to quarter revenue we and free profitability high with the discipline our past EBITDA We cash cash and year-over-year. by intensely This cash our flow over results flow cash mentioned, for objective positive year adjusted adjusted was adjusted our was sequentially $X.X the flow improved adjusted quarter with of end

quarter revenue our exception of results. in Enterprise to which revenue. categories million fourth the the our our compared to business, We million Revenue $XX.X represents with in all $XX.X prior major portion year was of Turning year-over-year gains saw now quarter. our of smallest the

increases our revenue at million, Our price in by business, and largest again our up driven impact in came QX X%, in $X.X which Direct the of earlier category was sequentially XXXX. implemented year-over-year, both primarily

compared was quarter, with we Content an which licensing, this inherently our revenue $X.X category business. largest of licensing quarter. million generated content year the second lumpy is prior $X.X to million in Turning

content with We deals these continue -- million the number licensing barter our revenue. content accounting close a of for total to of during quarter $X.X transactions

earlier $X.X The which from partnerships Bundled in $X.X recognition revenue was revenue the to quarter. the of driven prior to collections. category largest quarter Distribution, million new next of growth was compared Our successful saw and periods primarily million in the year year-over-year by due

approximately of this For other $XX,XXX an the million revenue year to QX, of had in revenue our last $X.X category increase quarter we $X.X less than million, fourth when category. compared was of

includes videos, revenue. sponsorships, transactions and promotional media branded Revenue advertising, of other social Other Our category sources

revenue our licensing business, related with $XXX,XXX the As transactions. of quarter, in transactions. our we engage to advertising-related barter fourth approximately content barter In other

small increased revenue paywall quarter of grow other TV in Pay front our business and we sponsorship the believe channels now, While right and margin our gross revenues of we have our in XX% to opportunities coming Fourth part quarters. a advertising future of in significant our is was which the amortization year we million in cost driven the a by in year million, significant efforts of in decline quarter, was X.X% quarter $X.X about half from in recorded our content quarter. and Content prior expense. the the fourth $X.X prior control amortization

cost of level G&A We during largest our component year-over-year, expect forward of expense continue content that we've that in quarter down fourth to was to of lower new now require of the and of or services our costs. XX% $X.X achieved $X.X lower decline professional going revenues investment XXXX the compensation we and million driven million expense, content amortization by the critical converge with library. content mass ultimately

an initiated earnings during a XXXX. charge December, will mostly this in planned million on our the part standpoint, force these charge, spending reduction a more we which paid XXXX, recorded restructuring in in majority costs consists QX in severance $X.X be although and As $XX we discussed in of in costs resulted million the our that QX of From quarter. than of reductions cash we call, of accounting which

workforce As we will to align our in reduce and compensation enable business optimization needs, operate beyond. efficiently our us believe that more costs efforts we significantly current XXXX and staff our levels with

deploying exercise quarter rigor our million continue discipline acquisition marketing and was to advertising $X fourth and XX% analytical year-over-year, of down expense Our we dollars. customer in and

was $X.X loss the million of million the loss restructuring million, adjusted earlier $XX.X year prior of which to $X.X EBITDA quarter. compared Adjusted calculation Moving EBITDA the an charge to profitability. excludes discussed in

quarter cash million free $X.X improved flow for Adjusted use year-over-year. the $X.X million of

of adjusted cash and our fifth As cash continued we flow. consecutive underscores our sequentially represents quarter positive free toward momentum mentioned this improving earlier, adjusted free flow

of overall cash approximately liabilities shape equivalents assets, no and $XX.X remained total $XXX and the per million, or balance outstanding share. $X.XX cash, debt. million We of great value cash with restricted book sheet ended $XX.X in Our and quarter of $XX.X million with of million

Moving quarter XXXX to first guidance. our

revenue excited time flow the $XX.X free to the company's is expect to be range million first $XX.X to million for in a million $X adjusted the We're guiding $X.X million. milestone This flow of CuriosityStream. adjusted in to in history. We cash and range free the of cash for major positive

our cash Clint mentioned, of Board given balance as the has of flow to to dividends. in Additionally, for cash capital return the quarter the regarding form our and in of year, the Directors our decided shareholders expectations first

$X.XXX to Specifically, of they a quarterly dividend have our that per be share shareholders. will declared paid

XXXX of the The April on XXXX. paid on first as be holders business of XX, April dividend will XX, close to

wanted I from that give notice update on Finally, to NASDAQ. the an we received

Just share the NASDAQ, XXXX, XX, September Department per price consecutive for of to the Listing compliance XXX-day minimum regain a granting of our price regain during rule. To must minimum of to that, to yesterday, questions. have the days meet the received open our meet with Qualifications request or until XX extension a $X With this notification call bid for we XXX-day closing now period. operator, compliance, written from stock We bid let's common the exceed requirement. business

[Operator Instructions] Needham. with question from Your line first the of Laura comes Martin

So the first one, to Asia. I back to go wanted

tell doing you terms those? worse, the terms of staying those You your can EU and What those same? us And Asia about are said [indiscernible]? are the better, you're renewals. getting of the Are renewals

Yes.

I referencing that with a agreement Asia Laura. deal, was the new and telecom was is that in provider a So

the new third-party way territory we as this can to deals we we for platform later, into this quarter but don't in did in a -- presence massive, few about but nice the then get well. there a So is of Asia, XXXX talk do have and first a us

So yes. opportunity for equal us,

Sorry?

in you renew the EU? anything Did

Yes.

there we But So new year. this in actually -- agreements one do we which we've announced leading not were what new the I up renewal we had significant quarter third will the rollouts, was EU, in today, to but have referring of shortly. will which -- to coming

of the that you exit wondering is Or you becoming can this smaller M&A Paramount market on you think question the saw bid traction for think [ market? the and anybody Apollo talk Okay. my second Great. [indiscernible] difficult? I'm streaming on in what like more whether going about is is ] studio. Could companies We -- in M&A market. the

Yes.

have more streamers. without Seeso, unique been the look, subscale difficult, mean know, last X some or you for there've think of or really on Laura, depends gone years that it's I mean et draw especially that we company are cetera, just a you it subscale But there. doubt, real away, for Rooster where a part line. were these of services completely larger over services I advantages have FilmStruck, say a I a DramaFever, I Teeth, either that a while. lot X like would

things that about the real think cash. we one unique we're And that that is that excited about so really I of have us and is

and over cash. turn hard into We've the the to taken positive months XX us really steps increasing territory. ship have the last We put

lot think is right people. so And of M&A I for a tough now

while companies that I obviously, the I our that the towards think think, going to dividend cash though, are allocating certainly many there we're that focused towards have on real challenges. be business,

that conversations these companies say to will of even with which Smart services X have in I through ones. Now referenced, other streaming Bundle, addition larger we smaller some CuriosityStream, that like, lot includes you've a our

cost fact so base. for think be have over the these we a That's the it months. lot that unique -- will a the guys, that And next And be certainly XX tough. challenging and do it is why of will next growth sustainable like over I we really year,

tens The our Thank a Hobbit hours millions dollars to say, single where of content subscriber just to spending of because are consumers Dexter more consumer shaky, are with for you per over reactivations evergreen watch this or disciplined, environment hour. series. Rather, appeal. value this, have testament where competing that of that that's or jumping or confidence kind month close or question, We're Island global not in Laura. is sports for we're and track to seasonal like in not programming I Love X it's And individual Game of on years. premium or with will of to macro of Thrones costly best a is quality, to in

for is And then question last my you. Peter, Sure.

remind the to cash free You're lower million to like of QX? it flow how Can of will to lot severance You $X.XX a was first the flow paid you $X said in million out QX. cash going us adjusted much guiding free in be in quarter?

Yes.

added actually flow. in of is back free calculation the cash severance So adjusted

excluded effectively that be calculation would number. that the So of in

is severance? that's I'm why Yes. number the asking for what

Yes.

higher about that severance the on that, magnitude. than total somewhere So will slightly order but $XXX,XXX of in the of be or so, order

[Operator the Instructions] comes from line Barrington. of next Goss Your question with Jim

Xumo, all relationships wondering they Roku, Tubi, are pretty the was channel-driven? I -- there are FAST or with largely differences? are relationships domestic similar? And they

Jim. question, Thank you Great Yes. asking. for

them, of a the model I the to XX% larger anywhere the mean where XX%. rev same. typically the it's share from from business platform most partner to distributors the rev is For be the with share model might

that FAST today flagship and with to channels, U.S. have distributors more As with do in our launched few the it relates -- CuriosityStream recently then the channel we a FAST EU. we've recently in

conversations then And obviously, there. we're in a lot of

have, light so we the in of do we're FAST. to right And it content all as trying the deals to of that relates

And platform either is of or even the space. mentioned like sort that partnerships so sometimes, deeper includes, in the leaders you Jim, leaders with what category

on much but And encouraged so work those platforms excited in conversations, not opportunity process been to the heretofore really and work. put we're being in about all of that those the put to to so our are has content of

conduits primary that correct? your the subscription are also those for is So services,

subscription in a But case are and a are Roku, they I holistic of Pluto case. promote then nice people Roku series we're thing or package the that Xumo subscription our there's have the if us but to to Wall our good offer job channel guys of the about Roku the subscription third, or mean the to X AVOD monthly where in offer yes, their like offering Street a Roku, a want example. they is to in place a watch And relationship or nice we first you to certain amount upselling or CuriosityStream services. CuriosityStream a watch a you for they those of our offer store our of Tubi package. they great with apps, AVOD that and -- History where like with does Well, episodes, showing

the case described, you in exactly yes, So Jim. as Roku of

on you wondering have making You it you of before, more. And also that with season now? gotten may X/X that nature? that of mass using could of think to or your in with And something you working asked library, like I take some process this but carving for describe talked the of mass that year but sure are I about past I'm keeping and like critical it of terms critical which the library How over are that? you've exactly out library, advantage fresh, you right or --

Yes, it's a great question.

you that If of you and years. today a take few we that through probably came and to CuriosityStream to just X,XXX to there, try titles go all X,XXX our watch have

So it's like premiere new like sort on night CuriosityStream. of every customers, night especially, for almost it's

the content trying now, we to published to our time, the XXX best So Jim, same and shelf the At we yet. great over personalized of have even job the subscribers. up serving titles haven't on do resurfacing we right genres that right have we're a right

to my I enough So that have we base. content. approach cost it unique But I think in, And we and I think, really I alluded to last answer. extensive have amassing can't a unique a emphasize

XXX build thing actually push our that have content hopefully not multiple AI, less opportunity mentioned in services XXX become content to we nice to we're is, different but catalyzed we're in translation And continue put in that I -- language throughout products -- and countries the to we out And in through. today, have expensive XX. as build in to script, as Whereas world. my the by all languages, not an we're So in library. we today

with we will we deploy around -- generating growing. content our different high on more on don't But and I reliability content when volume today what different have platforms. say we're it we're and third-party a content, yield predictability So of platforms XXX and that

excited in really of opportunity the us. front So we're about

grow And relationships with pretty with domestic into you're lastly, the content the to And additional way those to the you AI-dictated embellishment relationships? able similar global relationships same Okay. are languages? the are global describing

like not any we've content. to just be commercial put So used not -- broadcast we've clear, AI-translated into

that not rights our think have it's do we basis. that with yes, different of obviously, content. partners it -- that's that on in But those it's like something it's or on U.S. that adventure, on global crime, and we're you living and dramas hampered close, animals, appealing broadly with translate lot genres. the it's procedural by you're just working daily motors, we know, not is It's colloquialisms a lot science, that. There's it's However, -- because a it's a the it's experience it's -- working to we're kids, well. just it's in categories as And you -- might of factual

yes, platform the can the our So I as grow we And content we're going sort great into well. partnerships we've you and to business travels opportunities just us help and money make partners think to And look, available do to enter underestimated of whatever -- well. our forward. looking obviously

time. this There you no participation. questions today's at are Thank your call. for and further This interest concludes

now You may disconnect.