Release Date: July 01, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Cineverse Corp (CNVS, Financial) achieved a substantial increase in operating margins, reaching 61% for the year and 79% in the fourth quarter.
- The company reported a significant reduction in net loss by $4.8 million, or 58%, to $3.4 million for the full year.
- Full-year adjusted EBITDA increased to $4.4 million, a $4.3 million improvement over the prior year.
- Subscription-based revenues grew by 25% to $13.5 million for the fiscal year.
- Cineverse Corp (CNVS) successfully implemented cost optimization initiatives, reducing SG&A expenses by $8.9 million for the year.
Negative Points
- Total revenues for the fiscal year decreased to $49.1 million from $68 million in the prior year.
- Advertising-based revenues declined by 34% to $12.5 million for the full year.
- The company recorded a $14 million non-cash, non-recurring impairment to goodwill due to market capitalization being significantly below book value.
- Cash flow used in operations was $10.6 million for the year, with $7.8 million related to investments in the content portfolio.
- Ad-based revenues experienced a 10% decline in the fourth quarter, reflecting the impact of channel portfolio optimization and the current economic environment.
Q & A Highlights
Q: Chris, can you provide more details on the expected performance and marketing strategy for Terrifier 3?
A: Christopher McGurk, Chairman, CEO, Executive Director: We have a comprehensive marketing and distribution plan for Terrifier 3, leveraging our previous success with Terrifier 2. We expect to generate at least as much box-office revenue as the last one, with significant upside potential. The cash generated will be reinvested in key initiatives such as podcasting, technology, AI tools, and new content and channel investments.
Q: Can you elaborate on the growth and monetization strategy for your podcast business?
A: Erick Opeka, President, Chief Strategy Officer: Our podcast business is growing rapidly, with a focus on high-quality, producer-driven weekly shows. We are leveraging our direct sales team and bundling podcasts with CTV and display ads, which is appealing to advertisers. We believe there is significant revenue upside as we scale monetization efforts.
Q: How is the adoption and viewership for your new channels like Dog Whisperer and GoPro?
A: Erick Opeka, President, Chief Strategy Officer: The Dog Whisperer channel is performing exceptionally well, potentially becoming our top channel. GoPro and MeatEater are also seeing strong demand and performance. We expect significant distribution expansion for these channels by year-end.
Q: What is the potential revenue impact of your new channels?
A: Erick Opeka, President, Chief Strategy Officer: While we are not providing specific guidance, the strength of channels like Dog Whisperer and GoPro gives us confidence in their potential to drive top-line growth and improve gross margins. The $10 million annualized revenue target may be achievable in the near term when considering all new business initiatives.
Q: Can you provide an update on the progress and market demand for Matchpoint?
A: Erick Opeka, President, Chief Strategy Officer: Matchpoint is seeing strong demand, particularly for our Dispatch orchestration platform. The need for automated content processing is driving business forward, and we expect to close key sales soon. This demand is accelerated by the growing need for high-quality training material in the AI landscape.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
