Q3 2022 Cinedigm Corp Earnings Call

Good day, ladies and gentlemen did that you'd be hosting a conference call to discuss <unk> third quarter fiscal 2020 results. My name is watching and that will be your conference. Operator at this time all participants are in a listen only mode. We will have a question and answer session at the end of the cool at which time all participants wishing to ask a question will be instructed to presto frequent the number one on your telephone.

If anyone needs operator assistance, Please press star zero.

Thanks to one or two questions. So that others may have a chance to ask questions. You may reenter the queue. Please note that this call is being recorded.

Ms Laura Kiernan head of Investor Relations.

Please go ahead when you're ready.

Thank you Adam.

Good afternoon, everyone and welcome to Cinedigm fiscal 2022 third quarter results conference call before we begin I would like to point out that certain statements made on today's call contain forward looking statements.

These statements are based on management's current expectations and are subject to risks uncertainties and assumptions.

Potential risks and uncertainties that could cause the company's business and financial results to differ materially from these forward looking statements are described in the company's periodic reports filed with SEC.

All the information discussed on this call is as of today February 15th.

<unk> undertakes no duty to update it.

In addition, certain information presented on this call represents non-GAAP financial measures.

Today, we have Chris Mcgurk, Chairman and CEO , John Canning CFO .

Linda moths here Chief content Officer, Gary Loffredo, Chief operating Officer General Counsel and President.

Eric <unk>, Chief strategy Officer, and President of <unk> networks, and Tony <unk>, Our Chief Technology, and product officer, all of whom will be available for questions. Following the prepared remarks, I will now turn the call over to Chris Mcgurk to begin.

Thank you Laura welcome.

Welcome everyone and thanks for joining us on the call today.

Clearly we had great results this quarter on all fronts.

And thats because unlike many of the growth micro cap REIT technology, New media stocks, we often get compared to we are successfully executing on our strategic roadmap for sustained growth.

We just posted record streaming revenues with our fourth quarter in a row of triple digit screening revenue growth.

And we saw a huge acceleration in all of our key performance metrics, including monthly viewers.

Drivers and total minutes viewed.

We also have solid fundamentals, including a strong balance sheet with $20 million in cash.

Yes.

And we have posted a net profit of $4 $3 million year to date.

And we are already seeing this strong streaming growth momentum carry forward into this January and February as well.

We are achieving these outstanding results because we have a unique strategy.

Capture all the upsides of the rapidly growing screening immediate technology business.

Unlike almost all of the other players in this space.

Not dependent on a single revenue stream or a single screen.

Instead, we have a portfolio of multiple revenue streams from advertising subscription technology and digital cockpit.

And we also have a robust portfolio of enthusiast screening too.

More than two dozen with extremely broad distribution across every major streaming platform.

And our portfolio of streaming channels does not compete with the Big General Entertainment subscription services like Disney plus and Netflix.

Instead perfectly complementary to them on every distribution platform.

This unique revenue and channel portfolio strategy in the streaming space is what is driving our rapid growth and why we are such a different and high potential business and investment proposition than anyone else everyone else in the streaming technology arena.

Let me further underscore that point by going through some of the quarter's highlights.

Our total consolidated revenues were $14 $1 million this quarter were up 42% over the prior year.

Up almost 40% over the prior sequential quarter.

Streaming revenues were a new record and up a 104% with AD supported streaming revenues up 100% and subscription streaming revenues up 109%.

And I know, it's important to many of you that this quarter's revenues more than handily beat all of the revenue estimates on all of the analysts who follow our company.

Our year to date consolidated revenues were $39 2 million.

This was up 69% from last year led by our streaming revenues, which increased by 133%.

This was driven by a search AD supported streaming revenue business, which was up 171% and also a subscription streaming revenue, which was up 90% year to date versus the prior year.

And it's very important to note that we achieved this huge overall screening revenue growth against increasingly tougher comparisons as we grew strongly each quarter last year as well notwithstanding that we have now grown screening revenues in triple digits for four quarters in a row with record numbers we need.

Quarter.

Eric will expand further on the details and performance metrics of what's driving this massive growth in streaming percentage.

And why our unique strategy is working so well.

Year to date year to date, we've also generated positive adjusted EBITDA of $7 5 million and net income of $4 3 million or <unk> <unk> per share.

Again, our EPS this quarter of yield per share also very handily beat the estimates of all the analysts who follow our company.

However, as I've said before on these calls we are now in a rapid growth mode and continue to invest in accretive acquisitions more premium content and technology enhancements to drive our screening growth.

So while we have been and will continue to invest behind smart accretive growth opportunities I also want to emphasize that our positive year to date net income combined with our zero balance sheet is another key attribute is centered on that clearly separates us from most of the other players in our space.

Let me expand a little bit more on our investment activities for the roll up acquisition film and TV content and technology initiatives that are fueling our triple digit streaming growth.

The screaming and technology acquisition asset roll up strategy, we have successfully executed over the last 14 months has resulted in significant accretive additions to our streaming channel and digital content portfolios.

Last month, we announced an agreement to acquire digital media rights or DMR, a New York based streaming company with 10 streaming channels and 7500 film and TV titles DMR has a particular focus on Asia and anime titles and channels two of the hottest content categories in the world right.

Yes.

After.

Of the BMR deal, which is dependent on the final stages of diligence and a little over a year. We will have accretively added 15 streaming channels more than 20000 film and TV titles and full ownership of our industry, leading <unk> screening technology to our asset portfolio.

Clearly <unk> is just the latest example of how key players in the media and technology space continue to be attracted by a standardized technology distribution muscle.

Sure.

Kale and public currency and seek to be part of our rapid growth there.

As far as film and television content acquisitions are concerned we continue to rapidly build our library of premium distribution rights.

Through our acquisition roll up strategy the distribution deals we have in place with key suppliers like all mark in the NFL and new content licensing deals.

Now have a film and TV library of approximately 40000 titles with about 35000 or 90% of those titles screening assets.

Of those titles.

Concentration in genres, like family and detail action and or they're clearly support our streaming channel portfolio and growth plans.

This is one of the largest modern streaming content libraries in the world.

And it's very important to note that we are not following the path of many of our competitors, we're developing films and television properties from scratch and taking on significant production.

Instead, the vast majority of the content we acquire is finished product.

Very predictable market potential and in the vast majority of cases with acquisition deals that either require small advances are revenue sharing deals with no upfront investment.

Finally at our core we have always been innovative industry, leading technology company and we continue to invest in our technology future.

Our recent augmented reality or AR announcement within real our full acquisition of and enhancements to our state of the art proprietary maximally streaming technology and the ramp up of our engineering team at Cinedigm, India, all underscore our commitment to be at the forefront of where media business innovation is heading.

The at the met averse.

Our NFC for streaming technology enhancements.

Another extremely important factor and one that I feel I do not emphasized enough.

The supplier from other players in our space as our experienced executive team.

All have deep industry knowledge and relationships with the capability to manage a much larger company.

Finally, we believe with all the recent market volatility and impact on our sector.

<unk> presents a much more appealing investment opportunity than ever before.

Let me Bill Ackman, Pershing square, who recently plowed, a massive investment into Netflix to take advantage of an incredibly compelling bargain investment opportunity.

Ackman stated many of our best investments have emerged when other investors, whose time horizons are short term discard great companies at prices that look extraordinarily attractive when one has a long term horizon.

Any further pointed out we are all in on screening.

We believe this thinking clearly could apply to standardize.

Only with even more upside as evidenced by our record results this quarter and year to date.

And with that I'll hand, it over to John Kennedy <unk> will speak more about our streaming strategy and results.

Knowing that we will take your questions and finally I'll provide some closing remarks John .

Thank you, Chris and good afternoon, everyone as Chris mentioned, our fundamentals are very strong, including no debt at $20 million of cash balance and both positive net income and positive adjusted EBITDA year to date, we are poised to continue considering accretive acquisition opportunities, while we reinvest in the <unk>.

Growth of our business, improving and expanding upon our proprietary <unk> technology and supplementing our already strong management team our balance sheet remains strong as we continue to take a measured approach to fundraising activities to support our acquisition and overall growth strategy from this position of strength, while we remain debt free.

We continuously evaluate our optimal capital structure and would consider less dilutive financing alternatives when appropriate.

We handily beat both our revenue and EPS estimates of all the analysts that follow us this quarter and we are hopeful that we will be picking up additional coverage in the near future.

I'd also like to reiterate as Chris said that we operate a portfolio of business model and media technology content and streaming provides multiple revenue streams to fuel this rapid growth.

Maximize those growth opportunities and minimize risk, while our streaming and digital content business continues to rapidly grow and become an ever larger percentage of our total business. We are also considering breaking out and demo equipment and our non digital based distribution business into our legacy business line next fiscal year to highlight more clearly.

Our key growth drivers, it's worth mentioning that since having joined Cinedigm five months ago, we have significantly enhanced the accounting and finance organizations systems processes and the depth of experience necessary to support our goal of becoming a much larger enterprise on the accounting side, we've improved the functionality.

Our existing tools and streamlined integrations with our match point technology, bolstering controls and improving efficiency on the finance side. We've expanded the team to include top notch talent, managing our planning and analysis budgeting forecasting and business intelligence driving more timely and accurate reporting to inform decision.

Making across the enterprise.

Finally, I want to reiterate that our successful portfolio revenue in screening channel strategy remains firmly on track and we are prepared for and committed to achieving our long term goals over the next two to four years. These include targeting at least 50% annual revenue growth in streaming and digital.

Growing revenue to $150 million through organic and acquired revenue.

Increasing monthly viewers to over $40 million growing engagement to 1 billion connected TV minutes from half 1 billion per month and growing the content library to 75000 titles you can find our latest investor presentation Hot off the presses at Investor day at <unk> Dot com.

Slash events <unk> presentations now I'd like to hand, it over to Eric.

Eric.

Thank you John and thanks to everyone for joining the call today.

Before I review, our results and streaming I wanted to expand on our strategic imperative and where we fit into this rapidly changing media ecosystem.

The promise of streaming has always been about two things the freedom of choice and a better value for consumers over the last few years consumers have grown increasingly wary of the cable bundle, which has lost more than 20 million households over the last 24 months.

This is being driven by one key factor consumers have always wanted the ability to pick and choose the channels and content they want.

And just not pay for those that they don't watch.

Initially the promise of streaming was exactly that you've got to choose the channels you wanted and we're free from the expensive long term contracts and commitments and poor customer service of the legacy bundle How's.

However, the trends in recent weeks and months point to a future where major media companies are going to claw back all of that choice and value in an attempt to recreate the path.

What have we seen rapid price increases across the board at major streaming services and virtual cable providers, some upwards of 35% to 40%.

Forest bundling of services consumers didn't ask for Mega mergers and of course, even more bundling and even a return to contractual pricing.

Our philosophy and value proposition.

And I couldnt be more different than that.

Our values are about providing consumers the diversity of choice that they desire and price points. They can afford even if that means free with that.

Allowing consumers the ability to stream their passion to build their own bundles of content is a winning strategy.

Frankly, that's what consumers have been clamoring for for decades.

Based on our results. It is clear our strategy is fully resonating with consumers streaming.

Streaming channel revenues increased 104% over the prior year quarter set a new company record.

AD supported streaming channels revenues increased 100% over the prior year quarter and subscription streaming channel revenues increased 109% over the prior year quarter to 954000 subs.

We're closing in quickly on that 1 million subscriber milestone.

And we've seen new milestones across almost every facet of our business that reinforce consumers are enjoying centered on product.

Straining minutes in the quarter Rose to 100, 133 billion up 47% prior year quarter, and accumulative minutes streamed and the first nine months of the year.

<unk> nine 2 billion up more than 112% over the $1 84 billion streamed in the prior year first nine months.

Total monthly AD supported streaming channel viewers in the quarter were approximately $33 million up 44% versus $22 6 million.

From the prior year quarter.

And as we noted total subscribers to our subscription offerings increased to approximately 954466% from the prior year quarter.

Additionally, our current streaming content library or sorry, our content library overall of approximately 40000 titles of which 90% are available for streaming makes sending him one of the largest streaming libraries in the world compared to other key streaming service providers like Amazon Prime Netflix and <unk>.

This is according.

According to data from Empire analytics from this last December 2021, I'm going to take a look at that.

It also is in the presentation.

That John described.

Our ability to scale and achieve these viewership and subscriber milestones at this rate is a reflection of our successful multi pronged portfolio strategy that Chris described earlier.

First we continue to launch new channels into the market with the goal of at least one new channel in the market per quarter.

For example in the last quarter, we launched cable and broadcast network the country network into the fast linear space, we've done it with other players.

Such as array and others second.

We continue to focus on content programming.

We added more than 5000 films and series to our portfolio in the last quarter and built a top notch team of programmers with considerable experience growing audience in the cable and streaming environment that companies like Sinclair, earning networks and WGN.

Third we continue to focus on expanding the distribution of our services, adding 19, new distribution outlets for our portfolio in the last quarter alone, including new distribution of channels with Comcast dish network, Directv Viacom CBS exclude OTV Imdb TV, Samsung TV plus LG <unk>.

<unk> and more.

Our blue Chip distribution partners reflect the high quality of our brands and content and we expect that trend to continue.

Finally, our focus on technology enables us to accomplish with no other company in this space can do.

Due to our tax we can operate more channels at lower operating cost anyone in the business. The same technology is also enabling us to optimize advertising yield.

AI and machine learning to price and value content and create new experience to prepare us for the next generation of distribution, whether it's in Ftes, the meta versus VR AR or whatever new developments are in front of us we will be ready.

Acknowledged is at the heart of our competitive moat.

We're planning to add more than 100 employees over time concentrated in our India technology hub as we develop new game changing products and software experiences to further our already broad market advantages.

Beauty of our strategy is that with scale, we can generate more distribution better content better partners and ultimately more revenue while.

While we are growing at an incredible clip today, our acquisition roll up strategies. Most recently exemplified by DMR enables us to do this faster in a way that no other company can match.

Given our relentless focus on providing consumers the choice and value they want and combined with our portfolio strategy and technological moat.

We have ample layers to continue the rapid organic growth trajectory, we're on and with our accretive M&A strategy will afford us the ability to grow far faster and at better operating metrics than our competitors in the market.

With that let me turn things over to the operator to take your questions.

Thank you just a reminder, if you'd like to ask a question today. Please press star followed by one on your telephone keypad down from the parent to ask a question. Please ensure your headsets fully plugged in on mutual likely a star one on your telephone keypad.

Our first question today is from Dan comes from the Benchmark Company. Please go ahead. Your line is open.

Thank goodness from the benchmark company. Your line is open please ask your question.

Yes, hi, good.

Good afternoon. Good morning, you guys Keith.

Obviously stock reacting wealthier off a really strong print.

I guess first question.

Chris or Eric.

We've talked a lot about kind of the.

The growth of the portfolio here you guys have added a ton of channel.

<unk> added a boatload of content now you've got EMR, which builds a nice little niche with.

It gives you a really strong presence.

I think there's kind of a cornerstone for an umbrella channel. So maybe if you want to just update us on your thoughts on how close you are getting to that and then any color you can kind of providers.

Valuation or contribution from <unk>, how we should think about the incremental benefit from the acquisition or synergies that would be helpful. Thanks.

Yes. This is Chris Dan Thank you.

Just in terms of the DMR question, we're getting close to closing that deal I don't want to get into details until it's closed, but we think DMR is going to be incredibly additive.

What we're doing.

7500 titles concentration on anime in Asia titles 10 channels.

All of that content is going to be incredibly useful.

Across our portfolio for channels like com, TV or channels that kind of thing.

So theyre going to help us in a number of ways content channels, and obviously getting that scale is going to help set us up.

For the.

Umbrella channel ideas.

We've been considering we've talked about.

Before this call so.

So thats the DMR piece I'll, let I'll, let Eric answer the.

A question about our portfolio and growth.

A little more specifics.

I'm thinking the umbrella.

Yeah, sure Hi, Dan.

So I think one of the one of the big things about portfolio strategy like any strategy as you are constantly adding new.

Properties to the portfolio and Youre, calling things that don't.

Don't work.

So I think that's really we're still in growth mode of adding new things that portfolio. The market is still <unk>.

Very nascent.

If you kind of look at if you look at sort of the long term horizon.

There's only around $3 billion to $4 billion.

Fast advertising happening Tibet today, depending on you talk who you talk to which analysts that market you talk too, but on the broader scope theres $70 billion.

From the rapidly eroding legacy system that needs to flow somewhere. So we think you are just going to see the sustained long term growth. So what does that mean that means there is.

The demand for.

Inventory is being outstripped.

Outstripped by availability.

So we think this is a really good time for us to continue to add new channel the portfolio, but with a real focus on learning what are.

A lot of great partners really learning what is going to drive their business because ultimately in addition to serving consumers. We're also trying to build great talent for those partners. So I think thats, a little bit more on where we're going in the portfolio in terms of how DMR enhances this portfolio.

You did hit the nail on the head when you talked about anime.

As you look at every <unk>.

Every major streaming service has a big anime component.

Also has.

No.

A big batch of foreign dramas, which are white hot right now driving a lot of attention in the market.

But beyond that we also are bringing in components.

In terms of their AD network, which adds more scale. This is the year, we're going to be adding direct sales to our repertoire and really expanding.

CPM. So we're not only just getting channels and content, we're also getting capabilities as well.

Pit.

That's really good color on that last point Eric.

Question does can talk about just looking at your results. It seems pretty clear to me and I know you mentioned the somewhat in your prepared remarks that you guys had a very healthy uptick.

And both fill rates and seeking out within a quarter.

And I'm just curious.

<unk>.

Just talk about how much low hanging fruit there is two.

To still pick there and then b.

As we look into Q1, Thats, obviously been some noise in the marketplace around the.

Potential worried about the consumer right.

And et cetera, and I know you guys aren't impacted by any supply obviously in your Q3 results, but just curious what kind of trends youre seeing as we head into the March quarter.

Sure well look ill.

And I think we.

Gone through many quarters over the last year, just talking about this one of the things that I'm always impressed by us.

Just one I think the team's ability to ring, even more revenue growth out of out of the inventory they go and they do even more.

I just got feedback from my team that we're already four for February pacing to where we were in November and I'm sure. You know February is not exactly a very robust advertising month as the Super Bowl lines off and the holidays are in the rearview mirror.

So the fact that we're pacing in February to where we were in November .

Yes.

To me that's just a.

Sliver example of just how good our team has been at optimizing.

Our ad yields.

<unk> are up our render rates are among the highest they've ever been and our fill rates are incredible just given the seasonality. We are seeing so the caveat obviously is.

We're still halfway through the quarter here, but I think that that example, sort of it exemplifies just how focused we are on being the best in the business at maximizing yield out of the inventory base.

They clamor for me everyday to deliver them more inventory through M&A and better content because they know they can fill it.

That's one of the great strategic.

Strategic advantages we have as a company have is we're just very very good at extracting revenue out of inventory, even when the rest of the market may be experiencing things, we're not seeing that so far.

Got it Super helpful I will.

Couple of multi partner, so I guess I'll get back into queue pronounce. So thanks for all the color guys I appreciate it and the excellent initial to the calendar year.

Thanks, Dan Thank you.

The next question is from Brian Kingston, Linda from Alliance Global comments, Brian . Your line is open. Please go ahead.

Hey, guys great quarter.

First can you update us on the expected timing for the launch of the <unk> channel I think it was supposed to launch in his birthday.

I didn't know if I side, maybe you can tell US also what distribution partners will be screaming this channel.

Yes, Hi, Eric here.

So yes, we did when we initially announced it I think we were.

Originally aiming for Elvis's birthday.

One thing I want to make clear about when we announced forthcoming channels. It's almost I think you can kind of.

They are akin to development deals around.

Around movies right, where.

Sometimes they take sometimes we're able to go faster than we than we anticipate which was actually the case with El Rey I think we were live in a few weeks after launch announcement.

Others take longer.

Especially if there is a lot of original programming. If there is a lot of parties, if theres a lot of approvals and things.

So I think Elvis clearly just given the high profile given our.

Our focus on really getting the content right.

Given the brand care and feeding that has to happen.

Taking a longer and also that there.

There is a a big movie coming out in the middle of the year I think it is slated for July starring Tom Hanks as.

Colonel Parker.

Story of Elvis huge priority for Warner Media. So obviously, we want to if we can get this out in the market in tandem with that it is going to be just a much more successful launch and far more culturally relevant.

So.

Long story short.

Timing and windowing as we've seen with movies this last year.

You have to be flexible and change enroll with.

The optimal timing.

And so this is really the same thing here so.

We're still working on it working heavily and we'll have more details.

On the distribution partners and so on.

We would expect it to look very similar to other offerings, we brought into the market.

Yes, Brian we think.

Warner move we think the Warner movies, a little bit more important and obviously his first day.

Some of it up.

Yes.

And then as it relates to the real Madrid channel can you talk about when Youll have the picture in picture technology or any other updates you need to make.

So that you can better monetize the solar viewership and then maybe you can provide an update on any kpis for that channel.

Yes sure so.

Here's the.

Here's the great news about that channel is.

It's doing very well right we've seen.

In excess of about $3 2 million viewers on that channel pretty consistent pretty consistently.

Even when there is not even when theres matches or not matches, we're finding an actual increase in uptake in the in the non matched programming.

I think we've mentioned on previous calls the biggest challenge with with soccer is unlike football Thats kind of had.

50, 60 years to kind of shape its cadence to work in the North American TV advertising market.

<unk> does not have the same sort of pauses in brakes.

Every sometimes even madden and Madden Lee.

That happens when youre watching it in FL game.

That said we are in.

In deep negotiations with.

Some technology providers to allow us to do some of the things like picture in picture side by sides screen and other things.

We're also now.

We already do have deployed the technology to do overlays and sponsorships.

We will be able to leverage some of that as we ramp up our direct sales efforts this year.

On the the overlays sponsorship side.

Thing about.

The side by side picture in picture type technology, sometimes those things require.

Unlike a broadcast stream they require participation and approval of the third party technology partners, we work with.

Simply because we have AD sharing deals and other things.

And so if they can't leverage that technology for their share then it becomes a problem. So it is a little more complicated than if we were just a broadcast network. We can just deploy it.

But it's going to take a little more time and effort to get it right.

I think the <unk>.

Upside to that is we will have.

Basically come to market is something that nobody else can do so I think theres a lot of there's a lot of goodwill to get it right because it may lead to more business from other European teams, if were able to successfully deploy it.

Great and then on rental rates and prices you made some comments.

First of all with the New technology, you have is there any way to quantify how much stronger rental rates from a year ago percentage basis, and then from a pricing standpoint.

You've made a couple of comments it sounded interesting it sounds like Cpm's are up it sounds like demand exceeds supply of inventory units, how do you see pricing over the next.

12 to 18 months at 10%, 20% more.

Sure.

So.

I'll give you sort of.

I'll give you sort of the the philosophy we have.

So first off on the vendor side.

I'll have to get back to you on specific numbers, but I do think we are.

Yes.

Approaching.

Mid 90% effectiveness, there, which.

Which is a pretty substantial improvement over where we were last year.

That's one big piece of it is there.

We'll have a few platforms of partners, where we got work to do.

On that front.

But it's more of a mop up exercise so we've really across the board.

Dramatically improve that in terms of pricing I think.

Pricing is really a function of.

Two things, one having having the content that advertisers want and the audience that advertisers want.

<unk> ability to increase pricing.

Third is actually just time in market and getting market trust that.

You deliver.

On the ads and <unk>.

<unk> that the advertiser wants while the good news is we've been in market long enough, where many of the advertisers are now familiar with us our brands.

Keep in mind, what our portfolio is very heavy with.

Emerging brands, New brands brands that may transition from broadcast to fast and so on so it takes time, but I think we're starting to see some real goodwill emerge there.

As I as you know as you saw from our earlier notes, we've dramatically expanded the content portfolio and I think this year, our focus on bringing in.

Top tier recognizable series.

Exclusives, even some original programming that we license.

It's really going to be a big part of being able to increase our ask and then lastly of course, having the team.

In place to do those direct sales to get that ask I mean, I will give you a great example, right now.

We're running a.

Private marketplace deal.

Nearly a $45 CPM.

That's a lot higher than what we are normally doing.

More than twofold.

So if we can there's a lot more headroom on that front as we improve the value of our content and programming those or Hulu.

And greater type numbers. So we have a lot of headroom on that as we add better programming deploy more technology and really.

And really increase.

Our direct sales efforts.

Great and one last question.

With the acquisition of DMR I'm wondering are there any.

Limits to where they were distributing meaning now that they were working with you are there any did you on demand services or other platforms that werent necessary working with them, but now they can leverage your reach and maybe you can get more out of that.

Absolutely so.

A couple of things so I think.

First off.

Their business has been predominantly in average even though they offer some of their services and brands.

Subscription they are predominantly in an advertising based company.

<unk>, we know and you guys know.

We are hybrid model, we do advertising and subscription.

First off being able to take.

10, new brands into market.

And either.

Launched them as new subscription services or combine their content into our existing services. Great example, as they have one of the greatest.

Our libraries of foreign core and we have one of the fastest growing or streaming service in the market.

So we can immediately not only improved the content on our on our horror service.

But we can also they have a fantastic anime.

Service called retro crush, which is kind of like a retro animated version of crunchy role.

It's not very likely distributed on the subscription side, we can bring that to our 25 plus subscription platforms partners cable.

International So we really can dramatically scale up the distributions the subscription is where they bring we bring a lot of benefits on the advertising side, they've had a lot of experience.

Building their AD network and driving social AD revenue that has not been a big piece of our business. So those two sort of it's a very symbiotic situation there where they have things that they're great at that helped our overall business and we can hand off to them and we have great.

Distribution and models and partners that they're not working with today to enhance their offerings and then you add in signing the content elements from their services into our services are starting to scale. It just makes for a really rich base of opportunities between us.

Great. Thanks, so much guys.

Okay.

Our final question today is from Scott Buck H C. Wainwright. Your line is open. Please go ahead.

Hey, good morning, guys. Thank you for taking my question first I was hoping you could just kind of talk about what the environment is like for content acquisition in terms of.

Competitiveness and pricing these days and how that could impact the cadence of future acquisitions.

Yes. This is Chris sure Scott Thanks for thanks for joining the call today, Scott, but I think.

We're in a great position is as I mentioned in my remarks in order to acquire premium independent content right now.

There were fewer distributors in the marketplace and were.

We're one of the biggest independent buyers of distribution rights in the market with us as we both mentioned the size of our library of 40000 film and TV titles.

35000 of which have a streaming component. So we're one of the largest modern streaming library. So that gives us very very strong leverage.

To build and we knew distribution deals with key players as I've said like hallmark in the unit fell but to also.

Acquire finished content in the market.

That increasingly I think.

Reasonable deal terms.

Many of the deals that we're doing now to acquire.

PV content.

Either require a very minimal advance upfront or there are revenue sharing deal. So there is no investment upfront.

And.

So we've got leverage in the market, we've got the large library, we've got the.

We've got the ability to acquire finished product, where we've got a track record of distributing content.

20 years right now we know what's working in the marketplace now and what isn't and acquiring finished content gives you a much better opportunity to pick up.

Films and TV episodes in other pieces of content as you know has great an immediate market potential without taking on the risk.

Like many of our competitors are obviously.

Actually developing and producing content from scratch.

Very very small part of what we're doing it's not really in our DNA.

<unk>.

Will all those factors combined have put us really in the driver seat.

In a buyer's market for independent content and that's why our library is expanding and Thats why we have been fueling.

All of our channels with this content.

Leading to that enormous growth that youre seeing.

That's great that's really good color I appreciate that and second one for me.

What about revenue growth, how should we be thinking about the growth in SG&A.

What do you guys need in terms of.

Additional head count I think I heard the number 100 thrown out over the next few years.

But.

The investment in Opex, and how should we think about that over the next 12 to 24 months I'll, let the others answer that but the 100 figure remember we're talking about the expansion of our engineering and technology team and Cinedigm India.

And obviously the cost of doing business over there.

Sure.

Very favorable.

And that's where that exchange and that's going to come I'll, let John or Eric.

Respond to the rest of your question.

Yes, I can touch on that.

We're currently.

Yes, and then I'll hand, it off to Eric We're currently poised to support the growth we have in mind from an SG&A perspective, we certainly arent expecting SG&A to grow any faster.

And then our overall company growth, but certainly to be growing much much more slowly.

We've done a great deal of investing in our teams our processes our systems to get to this point to support growing to $150 million revenue company. So.

We're comfortable that we're in good shape to get there and with this management team.

We're going to do it quite smartly Eric.

Eric.

Yes, yes, and just a second John's comments I think as you look at and compare <unk> to other to our peers other other.

Micro caps.

Streaming players and so on I think one of the things you will see us.

We're already relatively disciplined on.

On cost, we're not we're not running huge.

Huge deficits like some of the peers in the market are.

But we're looking at it not only.

Not only that we're looking at leveraging technology to tighten that up even more right.

We're operating with a comparable investment in people.

Nearly a 30 channel portfolio.

Some people have the same amount of people that they are doing one or maybe two channels.

We already have.

A lot of.

Operational efficiencies that we drive the technology. So one of the things that we're looking at is how can we.

How can we deploy even more technology.

To allow the people that we already have in place do more and so that's really at the heart of what we're doing right is how do we get more efficient there. So I think in the future youre going to see.

Our SG&A growth, we had to invest.

Just to get the staff and base up to a level that we could support the growth. We were at we were undermanned I think now.

Going forward, it's going to be less about.

Absolute head count and more about how to get more productivity through the deployment of technology tools to get there. So I would say more modest SG&A growth.

Forward than <unk> seen over the last 18 to 24 months.

Great. That's perfect I appreciate the time guys. Thanks, again and congrats on the quarter.

Okay. Thanks, Scott Thanks for joining.

This now concludes today's Q&A session. So I'll hand back to Chris Mcgurk for any closing remarks.

Thanks, So thank you everyone for joining us today and for your interest and send it up.

To reiterate.

We had our strongest result ever constrained this quarter registering record triple digit revenue growth for the fourth quarter in a row.

We have a unique strategy and portfolio of business model and technology entertainment content and streaming that provides multiple revenue streams and a broad portfolio of enthusiast screen channels to fuel this rapid growth.

Like most players in our space, we are not dependent on a single channel or a single revenue stream.

And our enthusiasm channel business is not competitive with a big General entertainment subscription streamers, like Disney plus and Netflix instead, it is perfectly complementary to them.

Also have a strong balance sheet with zero debt and our net profitable year to date.

Clearly, we continue to fire on all cylinders and believe we present, a very compelling investment opportunity, particularly at this moment in time.

Please follow up with Mark here and the team at high touch Investor Relations with any other questions you may have.

She can be reached at Cinedigm.

HP IR dot net.

We look forward to speaking with you again, when we report our fourth quarter and full year results. Thank you all.

This concludes today's call. Thank you very much for your attendance you may now disconnect your lines.

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