Summary and Analysis of Cineverse Corp. Financial Report

Overview

Cineverse Corp. is a streaming technology and entertainment company that operates a portfolio of owned and operated streaming channels, a global aggregator and distributor of feature films and TV programs, and a proprietary streaming technology platform. The company has a long history of using technology to transform the entertainment industry.

Financial Performance

• Cineverse has a history of net losses but has generated net income in the most recent quarter and nine-month period.
• As of December 31, 2024, the company has an accumulated deficit of $501.7 million and a working capital surplus of $6.8 million.
• For the three and nine months ended December 31, 2024, the company had net income attributable to common stockholders of $7.0 million and $2.5 million, respectively.
• Net cash provided by operating activities for the nine months ended December 31, 2024 was $5.0 million, after $4.8 million in investments in the company’s content portfolio.

Revenue and Profit Trends

• Total revenue grew significantly in the three and nine months ended December 31, 2024 compared to the prior year, driven by strong performance in streaming/digital, podcasts/other, and base distribution revenue.
• Streaming and digital revenue increased 48% in Q3 2024 and 10% in the first nine months, due to the timing of content releases.
• Podcast and other revenue grew 138% in Q3 2024 and 124% in the first nine months, driven by growth in direct advertising and the company’s Bloody Disgusting podcast.
• Base distribution revenue increased 771% in Q3 2024 and 477% in the first nine months, primarily due to the theatrical release of Terrifier 3.
• Direct operating expenses increased significantly in line with the revenue growth, particularly due to higher royalty, marketing, and distribution costs related to Terrifier 3.
• Selling, general and administrative expenses increased 47% in Q3 2024 and 6% in the first nine months, mainly due to higher compensation and share-based compensation.

Strengths and Weaknesses

Strengths:

• Diversified revenue streams across streaming, digital, podcasts, and base distribution
• Successful release of high-profile content like Terrifier 3
• Proprietary streaming technology platform (Matchpoint) providing capabilities for clients
• Partnerships with major brands and content creators

Weaknesses:

• History of net losses, though recent profitability
• High direct operating costs as a percentage of revenue
• Reliance on a few high-profile content releases to drive results

Outlook

• The company will continue to invest in content development and acquisition, which it believes will provide an appropriate return.
• The company’s cash, cash equivalents, and availability under its line of credit are expected to be sufficient to support operations for at least the next 12 months.
• The company plans to renew its $7.5 million line of credit facility when it matures in September 2025.
• Overall, the company appears to be making progress in its transformation to a leading independent streaming company, though it will need to manage costs and continue delivering successful content releases to sustain profitability.