CuriosityStream (CURI) 7 May 242024 Q1 Earnings call transcript

Thank you for standing by. My name is Krista, and I will be your conference operator today. At this time, I would like to welcome everyone to the CuriosityStream's First Quarter 2024 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Andrew Lata, Director of FP&A and Director of Investor Relations, you may begin your conference.

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

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

statements we are forward-looking and not are future but the During guarantees that this to subject business laws. rather variety uncertainties make of assumptions. may call, federal of to related securities statements our are under statements risks, a These performance,

actual expectations statements. Our differ in reflected from results materially could any forward-looking

current Please only, obligation any be these additional aware forward-looking that or in revise the statements statements no reflect undertakes statements management's to make future. forward-looking views company or update and the to

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

Additional when on XXXX, Form information the our quarterly XX, for March set report be quarter ended will XX-Q in filed. forth also

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

Now to I'll Clint. the over turn call

Thank report. Andrew. today you us I milestone very much, for this appreciate joining everyone

improvement $X year-over-year first the a adjusted in million free over over positive quarter first cash generated quarter, For in in We company a history, $X achieved quarter. flow the million. we of

benefit our direct QX, under subscribers to June, United will of our in new subscription all critical fact well to be both we In positioned roughly that the increased top we these year. sequentially from and Our are line finally last will QX. in pricing improve the States begin new introduced was QX the to year-over-year. of revenue XXXX. We we equivalent believe revenue metrics upon we

margins added global and in regard QX, subscription XX services some to multinational our we revised we toward X we licensing agreements. greater PayTV an overall partners. our in out With new flow, with revenue, partners eye In and higher partnerships, of content countries, rolled cash

revenue long-term outweighs While result category, and these these revisions in adjustments upside midterm we're a the minor distribution from that confident decrease near-term decrease. the far in bundled the will near-term

Moreover, to where legacy we meaningful chaotic believe and current their fee groups, we are entitlement entire disruption help demands dropping along leverage. and the network opportunities services believe solve MVPDs uniquely that license suited some are creates we even with

and well have category space As demand. areas operating distributor around deep equipped world library, we a meet our create the we are additional to And to natural history reminder, like vast channels factual and science, from today. in channels

with our content commercial PayTV, will Animales, As Motores. we an channels in advertising, last example partners AVOD. roster have Curiosity X in of of announced now this Curiosity relationships roughly anticipate Hispanic that and launch XX just XXXX. over June. week, FAST platform partners to Samsung of Español, ad-supported this, key Curiosity they regard In advertising in and doubling And our platforms in for we and

our publish of to predictable our publish of begin ad revenue in and as revenue content, our content. in has generate licensing our the content to from been advertising-oriented ad-supported light more as existing partners promote will we increasing bulk the guarantees date new While our as minimum we revenues Curiosity partners negotiated, advances categorized and and

cost simultaneously which in helpful we will our we of marketing objectives, from generate front base. the these moderating our We've accomplished funnel, top be Additionally, rationalizing will expansion as more we paid benefit the believe at the impressions in we'll marketing of our paywall, allocations.

we predictable G&A cut revenues are and reliable. in half QX from believe XX%. To increasingly and in QX now 'XX we we sustainable content inherent our reduced reiterate, are noncash situated flow the that 'XX, cash to cost generate positive and to increasing by revenue Excluding amortization, sturdy expense we of solidly about expense

In believe from greater XXXX cash, positive addition and dividend to guiding is beyond. to we our and second positive our paid surplus being which further program, underscores the cash trajectory revenue flow in for quarter,

At most pioneers successful recapture science; a expose the the who Surgery, look distribution across of and of powers genres challenges the Paul an premium The history's transformed that core released another world's look the The of influential of of a at secret biggest unflinching In inspires State factual the and is, of range Curiosity beautiful course, of art programming original creation a of religions festivals some of from series both we origins, informs. Seduction, and specials of and QX, a the characters; of they Kaye; formats, villain today. and traditions Geniuses, Believe, Art Invention Evil of Thrones test Science X Eagles' Game medicine of the at irreverent and real-world And face primitive to into Texas quest starring Forever; title; and and sophisticated Desoto an Xth super following fourth including an For season Science actor the

ancient Jaws the creatures Animals that Egyptian eat preceded can us that as And Claws we on are interesting & interesting to us. people compelling world everywhere, Week. our of dinosaurs X, with and nearly week. We celebrated the us to May Ancient and kick all off

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

at good my will baton the friend of to pass about conclusion and I'd his remarks. say the colleague, more now whom I to Peter, like to have

Clint. Thanks,

As came guidance our was Clint came performance high true range, for first adjusted above strong the guidance and a of our company. our flow within by milestone event range. in in Driven QX free quarter end the cash execution, our said, our revenue

free this quarter flow adjusted experienced sequential of flow million, losses was companies the other represented company's in the first straight This the in metric, so cash is in positive cash sector. improvement $X.X quarterly of free the streaming sixth which many cash video accomplishment given our Our by positive flow history. particularly noteworthy adjusted

bundled for $X.X of million XXXX year-over-year free million details. licensing prior-year $X.X bottom our distribution. The $XX.X quarter. compared adjusted negative by prior-year million first was $X.X quarter million adjusted million First in in $X.X intense compared decline positive by to flow million Despite EBITDA result year-over-year. the improved to to quarter quarter content the in as the revenue, free focus was $XX primarily were cash driven in able this this we line. improve our by into first decreases year's and quarter, the on Revenue while quarter from improved the prior-year in change with flow cash the of adjusted Getting a

breakout the revenues. Turning to of

XX% revenue put compared this revenue year-over-year came quarter. see in million of Our quarter, with quarter Direct the was up at of price year. business. in direct million, category the prior-year to generated this $X.X in largest last the continue as our benefits revenue which we second Content and increases category X% we million sequentially $X largest place $X.X our licensing, was revenue

I'd of like to couple a make this comparison. about comments

million with million it's $X.X presales included figure First, of presales quarter. last first year's $X.X year's that transactions of noting worth compared content in this licensing

margin for not are As I've mentioned us, profitability. reduce transactions revenue in gross decline calls, prior in this so X% presales our does

content transactions. $XXX,XXX QX increase XXXX, of is our of these transactions, had compared the approximately quarter on we Second, gross of our main margin focus in library-related X% with of licensing XXXX. first In positive an

bundled worldwide. of distribution, for television from revenue revenue, right first category of million the generated quarter. stream which is million next revenue distribution which the of felt QX the a business $X.X now, Our is being down in challenging in year's pay us linear $X.X reflective largest prior was pressures in Bundled XXXX

continue revised to up for While our distribution financial partners the that contracts response we we have to renew where where agreements new or occasionally partners, also as do not face. renewal in pressures our come are fees add do we situations affiliate

in $XXX,XXX. Our approximately each XXXX quarter first revenue of the XXXX total barter quarter was of of and first the

expenses. million our Content an million, first amortization to in recorded we quarter. quarter Turning $X.X prior-year was $X.X the the decline the from in XX%

continue content mass investment and to content in cost that component of level achieved revenues, going with forward we've our that the new we ultimately the of to lower require of amortization We now decline critical library. expect expense, largest content our converge

One of cost profitability excluding at our XXXX. find XX.X% in margin amortization. compares by quarter, which our quarter really the our favorably our reduction This figure XX.X% all cost in result streams. our content ongoing XX.X% metric is of driven the assessing most gross cash-based gross a revenues, in the in in metric of quarter of XX.X% delivering QX of revenue significant XXXX, cash across that XX.X% prior-year the other prior-year was which we from cost efforts. very our services in First QX gets That recent of reductions margin, quarter, with and are increased useful

during deploying exercise XXXX reductions benefits Our $X.X was we're our essentially, first the quarter optimization of million continue rigor acquisition flat or analytical year-over-year, and million G&A million seeing discipline was expense and of our was, $X.X XX% the planned down of and workforce first $X.X to advertising marketing of year-over-year expense $X.X efforts. -- as in million spending we dollars. customer quarter and

positive of of was million and prior-year debt. with overall back EBITDA compared $XX approximately million an $X.X was of loss and Adjusted cash the total $X.XX quarter in prior-year We We quarter quarter. profitability. share. cash, cash of $XX free quarter. to the Moving the of outstanding million to million ended $X.X assets, balance million great sheet million value in believe $XX in million $X.X and restricted adjusted per the no book compared loss equivalents flow Adjusted or with remained cash EBITDA $XX.X shape million negative our in with $X.X liabilities

Moving second to quarter guidance. our

We to million in million of expect and to $XX million. revenue cash the million range of $X.X $X.X $XX range the free flow in adjusted

Board is seen I'm you with been up last would us have press as release, of last role named that CFO XX. Brady Controller, CFO. effective his call in note as and The may step is has our CFO June Brady this confident Hayden, in the my since Finally, to position. the May abilities earnings I in into

smooth role We ensure CuriosityStream as I'll and a work to beginning team to adviser management a to senior return transition, of together the my June. will prior in

friends, good that proud and look a my been over all back, for some of the tremendously Clint, last to team real the Rob the at we've of call With Tia, work over I'm the pleasure comments. the turn closing rest As that, to It's years. achieved X company. Clint I with I'll

an called maturity here first have adviser to everyone in met an we were alongside that member, in XXXX Peter at of friends Mater. freshman in I and adviser when and and late requisite Peter. our in else Most undergraduate upon XXXX as that met observer appreciated same that, capacity Appreciate he UGA, Dick became invested Westley, a the qualities Dick. here Bloom, my CuriosityStream. and dorm Board Peter to former he great, Board closest are his when for at Alma the our was a leadership one The the Peter

engage our consultant business to Peter's to X as deep innate for CFO enlist led naturally well as about curiosity our affection then more him a us as ago. years his and him as formally

our XX look the years, X It's for years by of and spend, our status we've And the both quarters of with while expenses has to more day-to-day X a of as to these our improved a moderating access for marketing from sequentially just and cut and continued the adjusted his Peter Peter our finance thank to comparable want with offering forward comparing with company, we entire period and team, offered operations Board him the flow, paying in our by Peter flow more function us. revenue March to grown our and cash our months dedication privilege the dividend. During overall cogency shoulder to maturity, direct consulting XX%, work XX%, annual the of say, collegial improving steadiness XX%, demeanor. Since to positive. thank working getting enjoyed the his that shoulder service X of in cash by the always Peter's in leadership on returns enjoyed and I've we he to capacity. same mighty to we've ago, us completed the And behalf arrival than loaned our begun brain than G&A leadership him the free on team. I May XXXX, flow to more cash been straight

you'll know the in I other collaborative professional have we, a on. to already closing, named work CFO roll-up-the-sleeves, the to that a and right, operational getting and bringing for such feel respect, Brady's with Brady In the XX. style forget not has past currently for the let departure, know been experience appreciate Peter public done serves colleagues, come He's hard-working, us Board company of year, with same. and a function. May requirements over get finance pleasure rely day-to-day thank and to it It's also Controller as Hayden, and upon his Brady me who me whom Peter's

Peter, chapter and thank you, I'm Brady. for you, really ahead. excited the So thank

let's the that, operator, questions. to With call open

comes [Operator with Research. of line Barrington first Goss Jim the Instructions] And question from your

you I sales on if your you services, was an programmatic to the option do be where subscription staff to have to the be gives own? able to core wondering ad-lite on might an able ad it consider opportunity not

under think really calculation to without at looked massive and always larger that unlocking our larger FAST content platforms, Jim, certainly it's appreciate content work, We've the advertising the business consideration. It's into that, approach the I content our on that, same think with something a margin believe, aggregate, our a PayTV to partners. and having growth. But putting we putting in that subscription and by great about we staff. revenue that without to the advertising it. on great it with putting way a work good platforms that, programmatic. our work working the AVOD made you question, it's today But to better higher I and without into another and disrupting the we've through get a will is is our time, higher get way At to continued be point channels, make

working media partnership earlier so one MediaCo in [ on a of we Hispanic the with advertising, largest companies. to regard began (sic) Estrella And this year, Estrella Media ], commercial U.S.

launch FAST channels, networks, Hispanic syndicated Curiosity that stations, largest the broadcast of X our Samsung, Estrella and they're stations, going owns TV operates last channels radio Samsung and shows. of and SaaS the week, Curiosity one TV world, FAST radio and Animales, announced in local Español, to X Motores. platforms U.S. Curiosity

They've than agency world. CPMs platforms tightly this of AVOD And relationship Estrella, X have, sales programmatic the that channel of Xx at a the that Jim, they'll an in Hispanic robust greater sales. manage We've the expert organization, and in got as ecosystem, that is beauty the Hispanic they the a are generate inventory track got enmeshed brand U.S. ad ad selling the and generally to CPMs from FAST record sales.

the good aren't makes So sense parties. absolute monetization example just type and no-brainer, the Thank really you, an it's always of our another content and promotion extension, is relationships opportunities content for brand think appeal I broad that for obvious. Jim. And the this of all of

other Bros. Discovery, into about increasingly one up Max, further open you does opportunity Discovery the And competitively? for with that Okay. blending Warner any networks

Another Jim. for you great asking question, Thank that.

so. think I

and Turner You the dropped Bally Comcast Networks. probably launched dropped of Fubo, all all some all RSN, saw, Discovery announcements. just big the Sports, last of of week, -- the

library, because, in us. our So channels we distributor titles opportunities to pretty today. are to channels yes, have around opportunities we're quickly factual able needs. that our through for for the And these put that XX,XXX-plus do one, They us meet create create we world operating together have

Animales, Samsung, same then from we with X U.S. you year, automotive you'll boats, in obviously, cars, content History the largely, like the Curiosity us this out a channel, Hispanic on channels channels like week, planes. see And emerge Science last rest of that, channel. bikes History as announced, side, Curiosity the again, have we over language Motores, So and English which, Natural look and

basis, you And to base, be in now that position to aggressively prices with a less time that that upward might well subscription and go you revenue maybe higher you pricing enough made give that first increase set allowed the the one seemed Okay. over edge you service maybe gradual than to change was pattern that the one, do think a bias? a final and more on one might over the

I'll at defer take shot friend, to like the my an initial that, then and second I'd part good Peter.

CuriosityStream, we're the includes, we which features think a heck incredible we best wine. it subscribe we It which includes have additional a year. And and in we're time, to -- includes of to kids same year. value well-known I some the believe, an One At because educational channel, what Bundle, It we that's continue at ,which Smart we most for some Day or factual learning call also Kidstream, have SOMM own, a Jim, type a or a a exchange, that which $X.XX a of $X.XX That's value. month -- month flagship $XX.XX priced is more heroes. University, includes is networks incredible kids $XX.XX that course. of that channel

So we we're raise exchange that need think through time, indeed, lot, learning think incredible if we -- that, to do our we're today, do definitely that that and value rates. while over an a we

I this, and a lot chance as value a talk Peter in get to time well. We give of spent if love of have could, to exchange a lot it I'd to that. for about Peter But on

we we'll it Bundle continue pricing service. Smart ceiling, time the us of competitors the not did that look think think open raised opportunities No, to up at as at the pricing the point, we it. I I the does to for Yes. something the core To kind it's raise think on on that to Clint's about raise continue

price likely think the on was Smart kind extent to the package, that going included next increase, of one, most be So I on that on would and what's probably depending that what's there think Bundle there. marketplace, you're core in we the Bundle currently for what paying. the package But both price remain the you get Smart in mix that the given the service just tremendous and values low would

So we is do there. there think long-term opportunity

it. you Thank very much. right. All Appreciate

Stinchcomb That concludes remarks. to over session. call And turn back I now closing Clint the will our question-and-answer for

you, everybody, attending. for Thank

conference your now And this for concludes you Thank disconnect. may you call. participation, today's and