Yahoo Finance CuriosityStream Inc (CURI) (Q1 2024) Earnings Call Transcript Highlights: Strategic Adjustments ...
Adjusted Free Cash Flow: $1.2 million in Q1 2024, a year-over-year improvement of $7.5 million.
Revenue: $12 million in Q1 2024, slightly down from $12.4 million in Q1 2023.
Direct Subscription Revenue: $9.5 million, up 11% year-over-year.
Content Licensing Revenue: $1.2 million, down from $2 million in the previous year.
Bundled Distribution Revenue: $1.1 million, decreased from $1.5 million year-over-year.
Gross Margin: Increased to 43.8% in Q1 2024 from 27.3% in Q1 2023.
Net Cash Position: Ended the quarter with $39 million in cash and equivalents, with zero debt.
Adjusted EBITDA: Loss reduced to $2.8 million in Q1 2024 from a loss of $6.4 million in Q1 2023.
Cost Reduction: G&A expenses reduced by about 30% year-over-year.
Future Guidance: Q2 revenue expected to be between $12 million and $13 million; adjusted free cash flow projected between $1.5 million and $2.5 million.
Release Date: May 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
CuriosityStream Inc (NASDAQ:CURI) achieved a positive quarter with over $1 million in adjusted free cash flow, marking a year-over-year improvement of over $7 million.
Direct subscription revenue increased both sequentially and year-over-year, with new pricing strategies set to boost future revenues.
The company expanded its global reach by rolling out subscription services with multinational partners in 25 countries and adding seven new content licensing partners.
Significant cost reductions were achieved, including a 50% reduction in cost of revenue and a 30% reduction in G&A expenses from Q1 2023 to Q1 2024.
CuriosityStream Inc (NASDAQ:CURI) has a strong balance sheet with $39 million in cash and equivalents, $1.2 million in adjusted free cash flow, and zero debt.
Negative Points
Top line revenue for Q1 2024 was roughly equivalent to Q1 2023, indicating stagnation in overall revenue growth.
Revisions in Pay TV agreements are expected to cause a near-term revenue decrease in the bundle distribution category.
Revenue from content licensing decreased from $2 million in the prior year quarter to $1.2 million in Q1 2024.
Bundled distribution revenue decreased from $1.5 million in the prior year's first quarter to $1.1 million in Q1 2024, reflecting challenges in the linear pay television business.
Despite improvements, the company reported an adjusted EBITDA loss of $2.8 million, although this was an improvement from a $6.4 million loss in the prior year quarter.
Q & A Highlights
Q: Thanks. I was wondering if programmatic gives you the opportunity to consider an ad light option and core subscription services where you might not be able to have an ad sales there, be able to do it on your own? A: Clinton Stinchcomb, CuriosityStream Inc - President, Chief Executive Officer, Director: I think it's a great question, Jim, and I really appreciate it. And we've certainly looked at that and it's something that it is always under consideration, but we've made that. We made the calculation today that, but we believe without that by you putting our content to work on the larger AVA platforms, putting our content to work on the larger SaaS platforms and putting our content to work, but unlocking advertising with our pay TV channels. We think that in the aggregate, that will be a better and higher revenue and higher margin approach and without without disrupting our continued subscription growth. But you make a great point about about product about programmatic. It is it's a way to get into the advertising business without having a massive staff same time.
Q: Okay. And then one other about with Warner Brothers discovery blending the Discovery Networks increasingly IndyMac's, does that open up any further opportunity for you competitively? A: Clinton Stinchcomb, CuriosityStream Inc - President, Chief Executive Officer, Director: I had another great question, Jim, thank you for asking that. And I think so you probably saw just last week some of that big announcements of Comcast launched, all the buttons dropped all of the valley sports from RS. and fubo dropped all of the discovery and Turner Networks. So yes, these do create opportunities for us that create opportunities for us because one, we have factual channels that are operating directly in and around the world today and through our 17,000-plus titles that we have in our library, we're able to put channels together pretty quickly to meet to meet distributor needs. So as you look out over the rest of the rest of this year, you'll see channels emerge from us like a curiosity Science Channel. It's like curiosity, History Channel. And again, we we announced the last week with Samsung three U.S. Hispanic channels that obviously we have the same content in on the English language side, Panama's natural history, and then motor, which largely automotive cars, boats, bikes and planes.
Q: Okay. And one final one with the and with the pricing change that you made, that seemed to go over well enough until August, you increased the revenue base. Do you think you might now be in a position to add prices higher overtime and the subscription service on a more gradual basis, maybe less aggressively than the first one was, but maybe set a pattern that might give you that upward bias? A: Clinton Stinchcomb, CuriosityStream Inc - President, Chief Executive Officer, Director: I'll take an initial shot at that and then I'm I'd like to defer the second part to my good friend, Peter. I think we continue to believe, Jim, that we have that we're in a incredible value exchange curiosity stream flagship channel to subscribe to it for $4.99 a month or $39.99 a year. That's a heck of a value. At the same time, we're learning more because we also have a what we call smart bundle, which includes some additional factual, tight networks includes One Day University, which we own, of course, includes some TV, which our line includes a kid's stream, which is incredible kids channel that feature some of the best and most well-known kids, educational heroes and that that's that's priced at $999 a month or $6,999 a year. So through that, we're we're definitely learning a lot, and we do think that we have we do that while we're at incredible value exchange today that overtime, if indeed we need to raise our rates, we have a lot of value to give in exchange for that. But if I could -- Peter spent a lot of time on this, and I'd love to give Peter a chance to talk about it as well.
Q: Yes, I think it's something that we'll continue to look at is as the competitors continue to kind of raise the pricing ceiling. I think that does open up opportunities for us to think about it Clint's point, we did not raise the pricing on the smart bundle at the time we raised it on the core service. So I would think that the most likely next price increase to the extent that there was one would probably be on that smart bundle package kind of depending on on what's going on what's included in the mix there. But we think both the core service and smart bundle package remain can just tremendous values in the marketplace, given what you get for the low price that you're currently buying so we do think there is long-term opportunity there. A: Peter Westley, CuriosityStream Inc - Chief Financial Officer
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
