CuriosityStream (CURI) 6 Nov 242024 Q3 Earnings call transcript

Good afternoon. My name is JL, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the CuriosityStream Third Quarter 2024 Earnings Conference Call. Please note that today's call is being recorded. [indiscernible] I will now turn the call over to Vanessa Gillan, Curiosity Stream's Head of Investor Relations.

conference. your begin may You

CuriosityStream's Thank you, quarter are of third phillip CuriosityStream's Stinchcomb, welcome financial results. to Hayden, and XXXX Officer; today Chief discussion Financial Leading Officer. CuriosityStream's its Executive and Chief the Clint discussion

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

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

from Our update reflected reflect actual results these make additional statements company undertakes in could differ aware the forward-looking and any materially be statements. nor future. statements to that no only, any statements expectations Please forward-looking obligation or forward-looking revise the views current management's in to

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

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

all period. made comparable be will addition, the reference stated, measures. GAAP of A be reconciliation non-GAAP for non-GAAP In will against results XXXX measures can found comparisons to investors.curiositystream.com. on otherwise at Unless financial be these our measures comparable to our website

Now Clint. I'll turn call the over to

our of cash free our cash consecutive delighted positive Thank ever adjusted our share This quarter generated you, and this marks that highest cash. today for QX quarterly Vanessa. appreciate to flow eighth report. increased I'm us free I third everyone quarter joining quarterly of free consecutive flow. we

in million. our adjusted improvement nearly represents of cash $X year-over-year free $X.X flow a million Specifically,

continue and our continue from are significant QX to paid We to from And believe our well top increased. We we as to our meaningful EBITDA sequentially. dividend, growth, adjusted line surplus top and to to line revenue pay a cash even positioned increased generate revenue flow deliver cash. liquidity sequential also we QX free dividend

subscription while our our year-over-year. We sequential grew margin XX% growth flat, was here up. our direct was And revenue

sponsorship last expenses exceed a annualized revenues cash with now I launched basis. University, on milestones curated channels and direct channels to mentioned Curiosity launched revenue. America. that many domestically in made one regard reliable in Latin operating group Video TV+ We available the our Amazon agreements advertising small new initiatives, pay-TV services in annualized We our and our Europe and quarter, Prime In achieved Samsung the executed X we durable and As some internationally. offer of long-term channel MVPD partners recurring with store. FAST QX major we of as partnership

largest East America. the with in content among Latin AVOD X the new Europe, in out partners, Tubi Middle U.S., agreements Canada with the U.K. and Pluto U.S., the America, licensing packages partners others. executed the in and rolled We in third-party global and Latin Roku We

original to and Insect, increase and the front, our engagement Connections Giants some James content West, programming biggest viewer expand our the continue marketing campaign Planet with On blockbusters Rush, series, we Wild across summer Astroid best-performing to Burke. of and Real including

around Killers, And acclaimed We Mystery vendor base. rationalize Nature productivity We're history costs China Egypt, of variable. original of the the we Engineering, science the wheel groundbreaking in have increasing Cute throughout significantly incentives premiered keep Little light also new tools, and fixed Spider to Penguin Tomb from believe and including Coding the the expenses, availability Vision, Science specials X reduce cost to our overall and to we of humanity's critical AI-infused some achievements achieving and both our Love our cost with and Celtic new organizational the our additional that heights containment, milestones Specials, released In reduced to thoughtfully East. continuing of greatest Little series, and highlighting Movement, while room we multiple strong shoulders Island. color, Ancient Middle

I'm our that proud the In flow well-directed liquidity adjusted really quarter in $X.X to talent closing, generate no us team $XX free million dense of in work and cash end the and million debt. approximately enabled with

of of grants licensing These we content and rights rights to quarters meaningful for hours XX images, XXX,XXX of growing of believe current of have hundreds own the and over the under with data sheet new we both significant and license. new through our positive and anticipate out cash We code. assets over thousands and us scripts, monetizable XX forward, make include balance partners text today executing the video environment. in and several traditional and unique next stand flow Looking premium agreements audio sets books, audio grants strong and

direct platforms, currency strength I'd our company to structure friend public we now our baton that rationalized agreements, and subscriber third-party the exceptional direct like us believe Moreover, long-term our continue favorable and my sustainable flexibility. to multiyear and with global Phillip that and cost are base uniquely Hayden. our colleague, pass attributes appeal, our provide to

everyone. Clint, you, Thank good and afternoon,

the year, improvement million free near improved million third $XX.X $XX.X quarter highest adjusted flow was from we represented $X.X range. guidance continued quarterly As our at Clint quarter this the end achieved bottom cash in $X.X sequential million EBITDA by metric. another million, the the years history flow intense in Adjusted a for our million second Revenue the in adjusted $XX.X free came said, million we line. adjusted milestone as the last cash our high by year and ago. on of third and X in focus quarter of also company's cash flow to quarterly and compared the free This as improved $X.X in

from rolling year. continue price Our business, from which last generated was the benefit direct XX% we as year the category to began in $X.X quarter ago largest up revenue our million, increases a we out

of generated a content compared categories, quarter barter transactions remains other while the year mostly content licensing content licensing, business. of ago. and of part deals $X.X noncash inherently Our lumpy ago, number This distribution closed driven an the licensing in was $X million we a and additional timing the change to that a year million by bundled revenue

of quarter XX% XX% cost increased gross from Third cash-based amortization year by a revenues. margin ago, driven content in reductions and continued of

to which was year our Our quarter gross focuses the a the amortization, ago. delivering XX% third XX% content margin, excluding cost cash of services compared on in

continue expect we ahead, gross margin improve. Looking to to

our or And G&A excluding expenses. Turning year QX from declined we benefits a spending stock-based of to operating from year as last the ongoing planned G&A XX% reductions. was compensation, third million, quarter million $X of down X% from $X.X ago. realized

year and ago to we a $X.X loss partner expense marketing of advertising have million quarter obligations. year $X.X the a $X.X million, Finally, marketing from ago. third to Adjusted XX% reduce in loss million compared of as a was EBITDA was million decline continued $X.X a

as ago. While with adjusted flow adjusted continues is we improve, compared guidance quarter with reach. EBITDA within million don't as $X.X breakeven expect regard And we our provide gross the in to a negative year cash free $X margin million we earlier, metric, was to that this mentioned

return of capital. to Turning

our repurchase of XXX,XXX back third XXX,XXX June. shares the that shares the the we During bought program we stock, in total common under repurchased quarter, bringing announced to

believe $XX.X and and We ended balance securities paid September we with provides remains and us total We million our operating cash $X.X of of and significant outstanding shape million, great July sheet debt. our flexibility. that no dividend this with in

Moving to quarter fourth guidance.

it the million in adjusted range of to We to to million free to cash back million open in the questions. flow can With and $XX revenue hand expect the and range $X JL million. of we $XX $X call that,

Your first Scholl Patrick of instructions] Barrington question line Research. the [Operator comes from of

how I just versus couple wondering monetization channels and how balancing AVOD those X the of the kind view efforts? you the of aspects. versus subscription of growing I was of monetization you had on service a streaming awareness FAST FAST questions view and

Excellent and of see FAST revenue leaning toward see to end significant I I that. appreciate pretty opportunities, hard And we promotional AVOD and in we the year. question, significant say last also and we would started opportunities. Pat, is really do

I in our our paywall and to services a assets of very use assets, subscription for paid do company the we that's more on we that without think front to smaller but more, can to us. begin the good presence marketing, a promote as extensive rely build

the the proposition and So it Pluto U.S. AVOD with U.K. launched We -- and we launched September TV+ and with of the And FAST Latin FAST toward in quarter, Roku X Europe. our just biggest in when biggest of channels in those in with and AVOD. the Samsung comes as are fubo. We end America. the an expanded and example, with U.S. to Tubi the FAST the with Canada

really like category. that And so we

there. deploy content We have to lot a of still

the say would is evolving. I so And immature that whereas not category and

some in we're promotion. growth about of it think larger and the revenue that fact for the with I going-forward we're partners, excited opportunity now for the

Okay. library And refresh you as I kind content to balancing how you versus on kind But know talk spending, it's been the in to can see to content of maybe investments you maybe new costs. control look lineup? about opportunity lower barter the of content

question. Yes. Great

week So we X X programs a try CuriosityStream. on to premier to

service, the never depth we've CuriosityStream. but our to there content. of to stay of They a come like think reliant people and been I like breadth to because

the you back and content way. that company spending people of much think so evaluate sit easy And how it's for I to then kind are okay, on and say,

have spending view. as lot are we a quality There point especially a assets more of of without like We to ways really slightly develop different money, content amass you do.

of video under my as hours of I Pat, remarks, over have so in and referenced, some audio today, And XXX,XXX kind we license.

any a A it's of we're measurement is lot media That's world footage. that tall monetizable business, the the in That's nonetheless, today. raw objective that But a lot by finish. standard in all of that's in content.

from Laura Your the line of next of question Needham. Martin comes

Sure.

one, of under AI. my So generative the category first is Clint,

you could that what... to bring you talk specifically costs. You about mentioned down thought more Could use you it

Question, Really it. Laura. appreciate

side, in there. material, service not your think the reduction. new would say, things next stages side, speed edit there's containment with an like that is incredibly That's So cost of on the year, in Obviously, and but there's cost to area -- editing AI and customer X the seems sequencing it And development. aided they're a sort to areas, I is reduce certainly, day. over every the of on the be varying I of to are opportunity kind That's of fantastic. that, then regard you that that tool a -- by and can

for us the grails of languaging. holy One is big in

-- And certain using that been that content so in translated actually -- AI. we've that we've languages certain

overnight, But there. certain it's lots are there little come, instead come can, costs to of for it's into that of XX and I difference. God, documentaries or a voice where as XX hard the we don't content And meaningful a voices, XX for And bit down, not exactly to into bad, tell for have those but different when where and date other people In that's of we will languages way our put know it's us. is development date of coming. go a certain still countries, that certainly, content XXX

a with On side, licensing in the largest spent lot the conversation of LLMs. time we've

are, Google I to Amazon you on who And they list. to the knows them think Laura, mentioned everybody down and exactly right from OpenAI

And so review research period partner into their extensive the typically depending of those conversations, enter when a scientists. review you pretty by there's on

training publishing back video of not At bit is gross of done, to of time, thoughtful the it, there economics. thoughtful unit be have a And a around deals you deals little associated same done, but area, because enter and lot a new a not kind into with just number around the licensing of want been but the there. lot so forth it you

say that like several shared what would partner, deals so not week, in emerging many that's Clint earlier you we is and to to anticipate And with an I what this licensing dissimilar doing area.

our new President. is Trump Fantastic. Okay.

open. As I think and -- are markets every of the the think people M&A today, market think that I up, is

I think feel smaller competitive strategically, streamers a disadvantage. like at they're

company? holding do thanks like you market and business, it's bigger time the So again, feel to opens if new to administration merger a exit warm the

the large, got compete years. stand-alone to same Well, we've like those it's -- cash, you're an when conversations John think -- next increasingly, strength everyone in in of it's at said business. large ago, which what's going the good to the need have and a position it always when I large, few think do amount Malone of weeks We business this we we're to the you're increasing And mean, in always feel a I to for few are. certainly a great be best of generating free interest time, But shareholders. I you

if would we that's then without transaction So a of some appropriately. a type, doubt, engage

is, assets more have which quarter, a then year lot one typically advertising. ad-driven quarter is the And strong you fourth for this a for Great. Okay. last my

quarter Pluto, So maybe revenue. Is isn't next happening Roku, Samsung, of ad not material until guidance ad little I'm to what's be of because the fourth here? seasonality a revenue year's Tubi, that surprised going higher really quarter? fourth Is just the just

Yes.

I puts you're the anything think just in will it of about, the we that talking past. be meaningful content to deals licensors unlikely an and not have side, guidance acceptance, I going nontraditional if there's challenge when the of then projecting it accept they're think our licensing And relates those media the and to licensing tens the some of I thousands in a you are, any that the on of have that, revenue, and year. period it's companies do about hours, increase next you're when And especially companies advertising acceptance it's Laura, not more. were as talking but done these most on content, yes, material takes agreement, period. delivering unlike our and mean the to of in is that sort

is control as guidance of period a relates And to XX kind from our bit. certainly, days. it XX we to upside. advertising licensing, relates But as directly don't chose meaningful anywhere to is that and And little to it there as we temper that,

of comes of Your from Singular line question Robert next the Research. Maltby

and here on I'm luxury doing I'm is hard out Dave. a -- Dave the all cruise, focus to here labor. wanted I for

So. Are you stuff. Good good is stuff. hiring? This

balance So the I and the sheet wanted initially. to in dividend on focus stream

objective? Your with What the plans? uses value what's sources you leverage that What are cash, types and increase can of your do and cash? to

Great go good good to through. question to and always a a exercise problem have,

uses stock. the people dividend-paying best and feel to customers long-term And year of dividend, of lot going look how you to this take the go best initiating cash, a year-to-year follow I a a sense, at I made from new around lot we to of like pay that. So look we're a think we'll continue got a if and think practices of the at sort dividend our of they

to continue that. So do we'll

we as licensing. As deliver advertising be it relates we them that would cash, relates to for and able to be to make, almost what for immediately, to be any is for accretive acquisitions particularly it looking would and to

in if roster in few we've of something a are there So last a of been before. December, wider available really expanded right. And we've we'll had able have people. priced XX the the really of who's work market. always of libraries I fact that at with months look we since just licensing content take that in light a And is are Ludo that licensing the we've a talented think light over that the our fact variety head to

and little of we're technology the wider bit these that variety a much of easier better. acquisitions a with partners, some little around a math makes Now working it bit

to as buy think look would that's our pretty we're ideally quickly. just directs, we'll again, doing at price. the back can Board -- able money So we to anything something be And make the and accretive, we we look right at,

the there? And or Or policy, outlook maintained a it growth will to levels? it type regarding some assume safe for at at is of prospect current least is dividend there be

every would think option. at I we look

minimum, to think And really would think capacity, increase we look absolute I an at I a think some best we at then practices that take too. is I that, maintain in hard it. it

and and on the the to gross budget on are I margins prospectively great very job focus ad those in margins good. wanted

sustainable? or in that XX% the forward looking the ad bit XX% year-over-year little margins. a at on gross cut the what's that is bigger XX% And to due versus a Is look? cut Or So you're budget? the

it's these would current based sustainable I on economics. say

lot we licensing we we obligation acquired in noncash I rev that deals content As light a fact through that share a meaning it of think, the have with more associated move we today volume in do light and the of of, of that. means, have in and

XXX% not XX% Does overall that that we be that at those -- they'll be because licensing So a stuff But margin. do of it's not -- but we're make wholly to deals, But that's fantastic. margin, is which at large we I will cut Robert? closer own. a margin still think can sense, that into number a probably not the

potential you the looking finally, you main And and your are feel if you growth? at opportunity strong your landscape partners for terms a top set, be that growth, then look -- at at could the what at top we be look that you line the competition, catalyst your would in avenues at you the looking If catalysts? of do could understand line look what of

catalysts Again, mean, and now license. have video Yes. licensing. hours under we're The are -- I audio XXX,XXX big of over we

that hard-pressed think find company to our I you'd be controls sort a volume. size that of

mentioned, there a And the bit real the little At course accepted space. catalyst. and when agreements the standpoint, same because it's in are, from compared doing That's over space. -- revenue in little a doubt, TV AVOD enhancing of are content to FAST I outside U.S. a the more -- agreement. is lumpier and we as the time, the without a pay a big so licensing our that's And delivered the the are position opportunities as we is longer-term recognized

with those lot so heights as X same And not fast larger But growth. continue can licensing categories of the as deliver will content Again, a and that to not agreements. grow.

amount part it to spend marketing. you're as in paid on the money you the revenue, On relates there that -- subscription tied to of the

to top it revenue. significantly. continue the to want we're right meaningful think continue we our to generate at -- way grow so cash. we help, the time, And We Does to is to that grow And same Robert? line that -- we're can focus now going

Yes. in But came that. started on some XX came you a And talking call, tight you great. to partners pretty little and in and were security partners Congrats bit That's the terrific. about I after growth, new to I XX there. new your

potential trajectory trend about increasing more thinking is growth that less of new to Just partners? sales the is line, what existing it Or partners? or

Yes.

the a existing licensing gone can case, have on global proposition, I we've back companies. because But a lot side. in our think we partners a is we're because have that work and good of of with the to news So broad we we large variety even

just one with and did mean global an called really a company licensing a past agreements, of Corp. a we which company really proposition heard XX strong As multimedia this a We're quarter, probably have with licensing Hispanic lot they I people backing. agreement have example, of, but HITN, strong is not that News

is with. scale. did audience-first of we everybody an YouTube company think with And probably I agreement licensing familiar a

And to we're mentioned, then video I a lot as companies technology talking training. of around

been. it's a and got we've than it's than it's So nice deeper been. It's roster, wider

so to be new the the traditional when same And those doing XX will be in time, at traditional bringing continue the XX companies. will anticipate they'll mentioned area media in on well. I partners, -- XX -- space, that And as we XX those to be technology

further With concludes thank We no you call. for participation. conference questions, today's that your

now You disconnect. may