Q4 2025 Cineverse Corp Earnings Call

Okay.

Operator: Good day everyone.

Emily: Good day, everyone welcome to serve as its fourth quarter and fiscal year 'twenty 25 financial results Conference call. My name is Emily and I'll be your operator today.

Operator: Welcome to Cineverse's fourth quarter and fiscal year 2025 financial results conference call. My name is Emily and I will be your operator today. Currently, all participants are in a listen-only mode. We will have a question and answer session following management's prepared remarks, at which time participants can press start, followed by the number 1 to ask a question. If anyone needs operator assistance, please press star followed by zero. Please note that this call is being recorded.

Emily: Currently all participants are in a listen only mode. We will have a question and answer session. Following managements prepared remarks at which time participants compressed all led by the number one to ask a question.

Emily: If anyone needs appraise your assistance. Please press star followed by day right.

Of course I'm. Please note that this call is being recorded.

Gary Loffredo: I would now like to turn the call over to your host, Gary Loffredo, Chief Legal Officer, Secretary and Senior Advisor for Cineverse. Please go ahead.

Emily: I would now like to turn the call over to you all hi, Gary I'm afraid I, Chief Legal Officer Secretary and senior advisor assistant of US. Please go ahead.

Gary Loffredo: Good morning, everyone. Thank you for joining us for Cineverse's fourth quarter and fiscal year 2025 financial results conference call. The press release announcing Cineverse's results for the fiscal fourth quarter and year-ended March 31st, 2025 is available at the investor's section of the company's website at www.cineverse.com.

Speaker Change: Good morning, everyone. Thank you for joining us for Sina versus fourth quarter and fiscal year 2025 financial results Conference call.

Emily: The press release announcing its anniversary results for the fiscal fourth quarter and year ended March 31, 2025 is available at the investors section of the company's website at <unk>.

Emily: Www Dot <unk> dot com.

Gary Loffredo: A replay of this broadcast will also be made available at Cineverse's website after the conclusion of this call. Before we begin, I would like to point out that certain statements made on today's call may contain forward-looking statements. These statements are based on management's current expectations and are subject to risks, uncertainties, and assumptions. The company's periodic reports that are filed with the SEC describe potential risks and uncertainties that could cause the company's business and financial results to differ materially from these forward-looking statements. All the information presented on this call is, as of today, June 27, 2025, and Cineverse does not assume any obligation to update any of these forward-looking statements except as required by law.

Emily: A replay of this broadcast will also be made available at sooner versus website. After the conclusion of this call.

Emily: Before we begin I would like to point out that certain statements.

Emily: Made on today's call may contain forward looking statements.

Emily: These statements are based on management's current expectations and are subject to risks uncertainties and assumptions. The companys periodic reports that are filed with the SEC described potential risks and uncertainties that could cause the company's business and financial results to differ materially from these forward looking statements all the information were prevented.

Emily: Presented on this call.

Emily: Is as of today June 27, 2025, and <unk> does not assume any obligation to up any of these forward looking statements except as required by law.

Gary Loffredo: In addition, certain financial information presented in this call represent non-GAAP financial measures, and we encourage you to read our disclosures and the reconciliation tables to applicable GAAP measures in our earnings release carefully as you consider these metrics.

Emily: In addition, certain financial information presented in this call represents non-GAAP financial measures and we encourage you to read our disclosures and the reconciliation tables to applicable GAAP measures in our earnings release carefully as you consider these metrics.

Gary Loffredo: I'm Gary Loffredo, Chief Legal Officer, Secretary, and Senior Advisor at Cineverse. With me today are Chris McGurk, Chairman and CEO, Erick Opeka, President and Chief Strategy Officer. Tony Huidor, President of Technology and Chief Product Officer, Mark Lindsey, Chief Financial Officer, and Mark Torres, Chief People Officer, all of whom will be available for questions following the prepared remarks.

Gary Loffredo: I'm, Gary Loffredo, Chief Legal Officer, Secretary and senior adviser at <unk> with.

Speaker Change: With me today are Chris Mcgurk, Chairman and CEO, Eric <unk>, President and Chief Strategy Officer, Tony We Dor, President of Technology, and Chief product Officer, Mark Lindsey Chief Financial Officer, and Mark Torres Chief people officer, all of whom will be available for questions fall.

Gary Loffredo: Knowing the prepared remarks.

Christopher McGurk: On today's call, Chris will briefly discuss our fourth quarter and fiscal year 2025 financial highlights, the latest operational developments, outlook, and long-term growth strategy. Mark will follow with a review of our financial results for the fourth quarter and fiscal year. Erick will provide some details on our streaming business results and operating initiatives.

Gary Loffredo: On today's call, Chris will briefly discuss our fourth quarter and fiscal year 2025 financial highlights the latest operational developments outlook and long term growth strategy.

Mark: Mark will follow with a review of our financial results for the fourth quarter and fiscal year.

Mark: Eric will provide some details on our business results and operating initiatives and Tony will provide updates on our technology initiatives before opening the floor for questions.

Christopher McGurk: and Tony will provide updates on our technology initiatives before opening the floor for questions. As the market opens at 930 a.m.

Mark: As the market opens at 930 a M. This morning, we would like to conclude our comments and Q&A by that time.

Christopher McGurk: this morning, we would like to conclude our comments and Q&A by that time.

Christopher McGurk: I will now turn the call over to Chris McGurk to begin. Thanks, Gary, and thanks, everyone, for joining us today. As you recall, in February, we reported our third quarter results. That quarter was the best in the company's history, with over $41 million in total revenues, an increase of $27.5 million from the prior year quarter. And we also recorded net income of $7.2 million, a $9.9 million increase from the prior year. And we've continued that very strong financial and business momentum in our fourth fiscal quarter. generating impressive growth in all our financial performance measures and beating consensus analyst guidance on all key metrics.

Mark: I'll now turn the call over to Chris Mcgurk to begin.

Chris McGurk: Thanks, Gary and thanks, everyone for joining us today.

Chris McGurk: You'll recall in February we reported our third quarter results that quarter was the best in the company's history with over $41 million in total revenues, an increase of $27 5 million from.

Chris McGurk: From the prior year quarter.

Chris McGurk: We also recorded net income of $7 2 million.

Chris McGurk: A $9 $9 million increase from the prior year.

Chris McGurk: And we've continued that very strong financial and business momentum in our fourth fiscal quarter.

Generating impressive growth in all our financial performance measures and beating consensus analyst guidance on all key metrics.

Christopher McGurk: In the quarter, we generated total revenue of $15.6 million, a $5.7 million or 58% increase over the prior year. Net income was $858,000. a $15.5 million increase over the prior year. adjusted EBITDA was $4 million, a $2.4 million or 158% increase over the prior year quarter. Total direct operating margin was 58%, 55%, well above our stated margin target of 45 to 50%. Our full year of fiscal 2025 results were equally impressive. total full year revenues increased by 59% to $78.2 million. Total full-year net income was $3.8 million, and total full-year adjusted EBITDA was $13.9 million, a $9.5 million, or 216% increase, over the last year.

In the quarter, we generated total revenue of $15 6 million, a $5 7 million or 58% increase over the prior year.

Net income was $858000, a $15 $5 million increase over the prior year.

Adjusted EBITDA was 4 million.

A $2 4 million or <unk>.

158% increase over the prior year quarter.

Total direct operating margin was 58%, 55% well above our stated margin targets target of 45% to 50%.

Our full year fiscal 2025 results were equally impressive.

Total full year revenues increased by 59%.

$8 2 million.

Total full year net income was $3 8 billion.

Total full year, adjusted EBITDA was $13 9 million, a $9 $5 million or 261% increase over last year.

Christopher McGurk: These strong results were driven by growth across all the company's key lines of business. particularly streaming, digital and podcast revenues, but most importantly, by the unprecedented success of Terrapire 3, the most successful unrated film release of all time. Our goal now is to build a high-growth, high-profit, low-risk, year-round, wide theatrical releasing business by following the same acquisition, releasing, and marketing blueprint that works so well in the Terrifying Movies and astonished the entertainment industry. I will speak more about that in just a minute, and Erick will go into much more detail about all the operating successes and new initiatives we've been pursuing across our other lines of business.

These strong results were driven by growth across all of the Companys key lines of business, particularly streaming digital and podcast revenue, but most.

Most importantly by the unprecedented success of clarifier three the most successful unrated film release of all time.

Chris McGurk: Our goal now is to build a high growth high profit no risk year round wide theatrical releasing business by following the same acquisition lethal and marketing blueprint that work so well on the tariff by our movies and astonish the entertainment industry.

Speaker Change: I will speak more about that in just a minute and Eric will go into much more detail about all of the operating successes and new initiatives, we've been pursuing across our other lines of business, but first let me speak about an important reorganization with Justin.

Christopher McGurk: But first, let me speak about an important reorganization we just implemented. First, to rapidly capture the growth and financial upside of our most important underlying asset, a proprietary streaming content management and AI technology, we have set up our technology business as a separate business group and put Tony Huidor in charge as President and Chief Product Officer. This move was designed to focus all of Tony's considerable talent and experience in technology and business development on immediately turbocharging this business, with a focus on matchpoint licensing and the development of new AI-based products, such as Cinesearch, our industry-leading AI search tool that we developed with Google.

Chris McGurk: First to rapidly capture the growth and financial upside of our most important underlying asset our proprietary streaming content management and AI technology, we have set up our technology business as a separate business group and put Tony <unk> charge, as president and Chief product Officer.

Chris McGurk: This move is designed to focus all of Tony has considerable experience in technology and business development and immediately turbocharging. This business with a focus on match point licensing and the development of new AI based products, such as <unk>, our industry, leading search tool that we developed with Google.

Christopher McGurk: Tony is not only tasked with keeping the company at the forefront of industry AI innovation, but also ensuring that Cineverse becomes the first truly AI-forward entertainment company in every operating process across every function of the company. In a few minutes, Tony will speak about all these key technology initiatives and the strong progress we're making in the marketplace with our MatchPoint and AI products.

Chris McGurk: Tony is not only test with keeping the company at the forefront of industry innovation, but also ensuring that <unk> becomes the first truly AI forward Entertainment company in every operating process across every function of the company.

Chris McGurk: Few minutes, Tony will speak about all of these key technology initiatives and the strong progress, we're making in the marketplace with our match point in AI products.

Christopher McGurk: Second, we also reorganized our entertainment content business to create a dedicated theatrical motion pictures division.

Chris McGurk: Second we also reorganized our entertainment content business to create a dedicated theatrical motion Pictures Division.

Christopher McGurk: Yolanda Macias is now the company's chief motion pictures author. In this role, Yolanda will focus 100% of her considerable experience and expertise to leverage the success of Terrifier 2 and 3 by building and releasing a wide release slate of theatrical movies that are well poised to successfully follow the Terrifier blueprint. We believe this business, given our unique new media assets and releasing formula, can be a major potential source of ongoing value creation for the company.

Chris McGurk: <unk> is now the company's Chief Motion Pictures Officer.

Chris McGurk: This rule Yolanda will focus 100% of her considerable experience and expertise to leverage the success of clarify our two and three by building and releasing a wide release slate of theatrical movies that are well poised to successfully follow the terrify our blueprint.

Chris McGurk: We believe this business given our unique new media assets and releasing formula can be a major potential source of ongoing value creation for the company.

Christopher McGurk: We've already made great progress in this area based on the high potential slate of franchise IP properties we have secured for our release lineup over the remainder of this fiscal year, which I will describe in more detail now. Our next franchise release is The Toxic Avenger, a contemporary rendering of the classic trauma horror comedy. The film was produced by Major Studio Legendary Films, which counts the tremendously successful Doom movies and Godzilla vs. Kong among its recent mega hits. The film was directed by Macon Blair and stars Peter Dinklage, Kevin Bacon, and Elijah Wood. We have domestic rights for the film in perpetuity and we'll be releasing it on August 29th.

Chris McGurk: And we've already made great progress in this area based on the high potential slate.

Chris McGurk: Franchise IP properties, we have secured for our release running up over the remainder of this fiscal year.

Chris McGurk: I will describe in more detail now.

Chris McGurk: Our next franchise releases the toxic Avenger the kantar.

Speaker Change: Temporary rendering of the classic Troma horror comedy.

Speaker Change: The film was produced by major studio legendary films, which counts the tremendously successful doing movies and Godzilla vs curve among its recent Mega hits.

Speaker Change: Directed by making Blair and stars Peter to include Kevin Bacon, and Elijah Wood, we have domestic rights for the film in perpetuity.

Speaker Change: And we will be releasing it on August 29.

Christopher McGurk: Like Terrifier 3, our all-in cash investment in this film for acquisition and release marketing will be less than $5 million. However, it's important to note that this film will generate approximately the same level of financial return to Cineverse as Terrifier 3 if it performs at only half of Terrifier's box office level, given the parameters of the economic deal we made on the film. Additionally, our lifetime box office break, even on the film, is well below $10 million. I'm just going again, the favorable risk reward profile of this property. And the film is very well-made, directed, and acted, and currently has a 92% positive score on Review Aggregator Rotten Tomato.

Speaker Change: Terrify are three are all in cash investments and this film for acquisition and release marketing will be less than $5 million. However, it's important to note that this film will generate approximately the same level of financial return to Senators is terrified III if it performs at only half a tariff hires.

Speaker Change: Box office level, given the parameters of the economic deal we made on that Phil.

Speaker Change: Additionally, our lifetime box office breakeven on the film is well below $10 billion.

Speaker Change: Underscoring again, the favorable risk reward profile at this property.

Speaker Change: And the film is very well.

Speaker Change: And active and currently has a 92% positive score a review aggregator Rotten Tomatoes Victor.

Christopher McGurk: Like Terrafire 2 and 3, it will be an unrated release.

Speaker Change: <unk> <unk>, two and three it will be an unrated release.

Christopher McGurk: After that, on December 12th, we will be releasing Silent Night, Deadly Night, a reinterpretation of the classic controversial Christmas horror film that was banned from theaters years ago. We are releasing the film domestically and have partnered with international entertainment powerhouse Studio Canal, which is releasing it overseas. The film is finished principal photography and is currently in post-production. Total acquisition and leasing investment with this film will also be below $5 million.

Speaker Change: After that on December 12, we will be releasing silent night deadly night, a reinterpretation of the classic controversial Christmas horror film that was banned from theatres years ago.

Speaker Change: We are releasing the film domestically and have partnered with International Entertainment powerhouse studio Canal, which is releasing it overseas.

Speaker Change: The film has finished principal photography and is currently in postproduction.

Speaker Change: Total acquisition and the leasing investment with this film will also be below $5 million.

Christopher McGurk: Next up will be Return to Silent Hill, the latest film installment of the enormously successful and popular video game horror franchise, which will be released on January 23rd, 2026. This film will also carry a total investment of less than $5 million.

Emily: Next step will be returned to silent Hill. The latest film installment of the enormously successful and popular videogame core franchise, which will be released on January 23, two.

2026.

Emily: This film will also carry a total investment of less than $5 million.

Christopher McGurk: So we will have at least three wide-release films in this current fiscal year, all with investments of less than $5 million, all based on very well-known franchise IP, all with very specific and reachable fan bases, and all perfectly poised to leverage the unique set of assets we have built at Cineverse, our streaming channel, our podcast network, our social media platforms, our AI-based research tools, our targeted ad sales technology. And to use them all to follow the blueprint that was so successful in powering the performance of the Purifier. Expect more wide-release film announcements in the next few months as we gold our slate for fiscal year 2026.

Emily: So we will have at least three wide release films in this current fiscal year.

Emily: All with investments of less than $5 million, all based on very well known franchise, how IP all with very specific and reachable fan bases in all perfectly poised to leverage the unique set of assets we have built at <unk>.

Emily: Our streaming channel podcast network, our social media platforms. Our AI based research tools are targeted AD sales technology and to use them all to follow the blueprint that was so successful empowering the performance of the purifier moves.

Emily: Expect more wide release film announcements in the next few months as we build our slate for fiscal year 2026.

Christopher McGurk: In addition, we continue to generate significant new advertising businesses via other studios using our ecosystem to market their theatrical releases as well.

Emily: In addition, we continue to generate significant new advertising businesses.

Emily: Other studios using our ecosystem to market their theatrical releases as well.

Christopher McGurk: Yolanda will give a detailed update on all this on our next earnings call in August.

Emily: Yolanda, we will give a detailed update on all of this on our next earnings call in August.

Mark Lindsey: And with that, I'll turn things over to Mark for a financial update. Mark?

Emily: And with that I'll turn things over to Mark for a financial update Mark.

Emily: Okay.

Emily: Yes.

Mark Lindsey: All right.

Emily: Hi.

Operator: Operator, I don't think we can hear Mark. Apologies Mark, we are unable to hear you. If I could please ask you to check that you are not on mute.

Emily: Operator, I don't think we could hear mark.

Speaker Change: Apologies Marc we are unable to hear you if I could please ask you to check that you Amit.

Emily: Yes.

Emily: Okay.

Mark Lindsey: Hello, can you hear me? Yeah.

Emily: Hello can you hear me.

Emily: Yes.

Emily: Yes.

Mark Lindsey: Sorry, guys. So, sorry. Thank you, Chris. As Chris noted, last quarter was a record quarter for us, and we have been able to follow that up with a very strong quarter, which is seasonally our toughest quarter in our fiscal year.

Emily: Yes.

Emily: Yes.

Emily: So sorry.

Emily: Chris as.

Emily: As Chris noted last quarter was a record quarter for us and we have been able to follow that up with a very strong quarter, which is seasonally our toughest quarter and our fiscal year.

Mark Lindsey: be analyst consensus estimates for revenue, net income, diluted EPS, and adjusted EBITDA for both the fourth quarter and the full year. For the quarter, we reported revenues of $15.6 million compared to $9.9 million for the same quarter last year, or a 58% increase. and Adjusted EBITDA were $0.9 million and $4 million respectively for the quarter, reflecting significant improvements over the prior year quarter. Again, very strong results for a seasonally low quarter, especially considering the depressed direct and programmatic advertising environment in the first quarter. which is a direct result of companies pulling back on their discretionary advertising spend due to the ever-changing tariff environment.

Emily: Able to beat analysts' consensus estimates for revenue net income diluted EPS and adjusted EBITDA for both the fourth quarter and the full year for.

Emily: For the quarter, we reported revenues of $15 6 million compared to $9 9 million for the same quarter last year were a 58% increase.

Emily: Net income and adjusted EBITDA were <unk> 9 million and $4 million, respectively for the quarter, reflecting significant improvements over the prior year quarter again, very strong results for a seasonally low quarter, especially considering the depressed direct and programmatic advertising environment in the first quarter.

Emily: Which is a direct result of companies pulling back on their discretionary advertising spend due to the ever changing tariff environment.

Mark Lindsey: Our direct operating margin for the quarter was 55%, which is above our previously issued guidance of 45 to 50%. Our improved operating margin is a direct result of our cost optimization initiatives implemented over the last 12 to 18 months, as well as our ability to grow revenues while controlling variable costs. We expect our direct operating margin in future quarters to remain in the 45 to 50% range. SG&A expenses for the quarter were $5.4 million, a decrease of $1.4 million compared to the prior year quarter in 35% of revenues, a material improvement from 69% in the prior year.

Emily: Our direct operating margin for the quarter was 55%, which is above our previously issued guidance of 45% to 50% on improved operating margin is a direct result of our cost optimization initiatives implemented over the last 12 to 18 months as well as our ability to grow revenues, while controlling variable costs.

Emily: We expect our direct operating margin in future quarters to remain in the 45% to 50% range.

Emily: G&A expenses for the quarter were $5 4 million, a decrease of $1 4 million compared to the prior year quarter and 35% of revenues in material improvement from 69% in the prior year as I stated last quarter, we expect to continue to see our SG&A expenses declined as a percentage of revenues as we.

Mark Lindsey: As I stated last quarter, we expect to continue to see our SG&A expenses decline as a percentage of revenues as we continue to focus on top-line revenue growth while maintaining an efficient cost structure bolstered by our ability to offshore operations to our Cineverse India location.

Emily: To focus on top line revenue growth, while maintaining an efficient cost structure.

Emily: Stirred by our ability to offshore operations to our centers India location.

Mark Lindsey: We had $13.9 million in cash and cash equivalents on our. of March 31, 2025, with $0 outstanding on our $12.5 million working capital facility. In addition, as of March 31, 2025, we have a working capital surplus of $3.6 million, continuing to reflect our improving financial position over the last 12 to 18 months. For the year, our net cash provided by operations was $18.5 million, a $29.1 million improvement over the prior year. Finally, with a strong fourth quarter and record revenue for the full year and a $40 million valuation for our content library portfolio, which is almost entirely off balance sheet, we continue to believe that our stock price is undervalued with significant upside based on yesterday's closing stock price of $4.18 per share.

Emily: We had $13 $9 million in cash and cash equivalents honor.

Emily: As of March 31, 2025, with $0 outstanding on our $12 5 million working capital facility.

Emily: In addition, as at March 31, 2025, we have a working capital surplus of $3 $6 million continuing to reflect our improving financial position over the last 812 months to 18 months.

Emily: For the year, our net cash provided by operations was $18 5 million to $29 1 million improvement over the prior year.

Emily: Finally, with a strong fourth quarter and record revenue for the full year and a $40 million valuation for our content library portfolio, which is almost entirely off balance sheet. We continue to believe that our stock price is undervalued with significant upside.

Emily: Based on Yesterdays close to closing closing stock price of $4 18 per share.

Erick Opeka: With that, I'll turn the floor over to Erick to discuss our operating and strategic growth initiative.

Emily: With that I'll turn the floor over to Eric to discuss our operating and strategic growth initiatives.

Erick Opeka: Thanks, Mark.

Eric: Thanks Mark.

Erick Opeka: I'd like to spend a few minutes reviewing our platform businesses and growth initiatives across distribution, streaming, advertising, and podcasting. So let's start with our distribution and content licensing business. This past quarter continued to be a solid one for Terrafire 3 on the ancillary side. Transactional and home entertainment revenues continued to exceed expectations, and during the quarter, we closed several windows of licensing deals with both Amazon and Peacock for the film. Compellingly, we were able to preserve a window on our own services while maintaining market value licenses on third parties. This concurrent windowing approach not only maximizes revenue but enables us to continue to grow our streaming services as well.

Speaker Change: I'd like to spend a few minutes reviewing our platform businesses and growth initiatives across distribution streaming advertising and podcasting. So.

Speaker Change: So, let's start with our distribution and content licensing businesses.

Speaker Change: This past quarter continued to be a solid one for tariff fire three on the ancillary side transactional and home entertainment revenues continued to exceed expectations and during the quarter. We closed several windows of licensing deals with both Amazon and Peacock for the film Compellingly, we were able to preserve a window on our own services, while maintaining market value licenses.

Speaker Change: On third parties.

Speaker Change: This concurrent windowing approach not only maximizes revenue enables us to continue to grow our streaming services as well since.

Erick Opeka: Since the home premiere of T3, ScreenBox subscribers have grown 31% while preserving valuable third-party license revenues in the mid-seven-figure range over the next 18 months. We also expanded our footprint with major fast channel launches on Google TV FreePlay, international rollout of our flagship brands, including Dog Whisperer, and broader domestic distribution as well. As noted in the earnings release, we closed several traditional content licensing deals across genres and saw a meaningful uptick in our catalog revenues as well. Our team also announced new podcast licensing agreements and content expansions, with the Cineverse podcast network continuing to grow rapidly thanks to a more diverse content slate and increased advertiser demand.

Speaker Change: Since the home Premier of T. Three screen box subscribers have grown 31%, while preserving valuable third party license revenues in the mid seven figure range over the next 18 months.

Speaker Change: We also expanded our footprint with major fast channel launches on Google TV free play international rollout of our flagship brands, including Douglas fir and broader domestic distribution as well as noted in the earnings release, we closed several traditional content licensing deals across genres and saw a meaningful uptick in our catalog revenues is.

Speaker Change: Well.

Speaker Change: Our team also announced new podcast licensing agreements and content expansions with the <unk> podcast network continuing to grow rapidly. Thanks to a more diverse content slate and increased advertiser demand.

Erick Opeka: We now have 62 current shows and four new original series in development slated for release in the current fiscal year. Podcast revenues were up 57% over the prior year due to the rapid expansion of our slate and the impact of our ad sales strategy. We think we can maintain this robust rate of growth as we scale up the current series in ad effort.

Speaker Change: We now have 62 current shows and four new original series and development slated for release in the current fiscal year.

Speaker Change: Broadcast revenues were up 57% over the prior year due to the rapid expansion of our slate and the impact of our AD sales strategy. We think we can maintain this robot robust rate of growth as we scale up the current series and add efforts.

Erick Opeka: On the comedy front, we're making major progress with our partner WITS, as recently announced, the team behind the Stand Comedy Club in New York City, and other major ventures in comedy. We're seeing strong early interest from brands and agencies, and we'll be announcing our inaugural content lineup this midsummer. We currently have a dozen new shows in the works, and we'll be announcing the slate later this summer. Comedy remains the largest and most monetizable podcast category in the U.S.

Speaker Change: On the comedy Frank we're making major progress with our partner, which has recently announced the team behind the stand comedy Club in New York City and other major ventures in comedy.

Speaker Change: We're seeing strong early interest from brands and agencies and we will be announcing our inaugural content lineup. This mid summer.

Speaker Change: We currently have a dozen new shows in the works and we'll be announcing the slate later this summer.

Speaker Change: Comedy remains the largest and most monetize podcast category in the U S and it represents over 23% of all podcast listening according to Edison.

Erick Opeka: And it represents over 23 percent of all podcasts listening, according to We're also exploring other emerging segments like health, wellness, and family where brand demand is accelerating, but there's a real lack of scale in the market.

Speaker Change: We're also exploring other emerging segments like health wellness and family where brand demand is accelerating but theres a real lack of scale in the market.

Erick Opeka: Let's discuss our streaming channels business. Our platforms delivered strong engagement in Q4, with over 3.2 billion minutes streamed across our owned and operated services, up 45% over the prior year. Subscription revenues grew meaningfully, and we saw a 4% year-over-year increase in subscribers, bringing our total across the portfolio to approximately 1.42 million. This was fueled by continued momentum from ScreenBox, which now ranks among the top four services in North America and from our new Cineverse channel on Amazon, which has shown significant subscriber growth and has been growing at 30% per month since launch. We plan on expanding this platform beyond Amazon in the coming quarters, and believe it will become one of our top streaming services over time, especially with access to the high caliber of wide and specialty theatrical programming that we're now releasing.

Speaker Change: Now, let's discuss our streaming channels business.

Speaker Change: Our platforms delivered strong engagement in Q4 with over $3 2 billion minutes streamed across our owned and operated services up 45% over the prior year.

Speaker Change: Ascription revenues grew meaningfully and we saw 4% year over year increase in subscribers, bringing our total across the portfolio to approximately $1 $42 million.

Speaker Change: This was fueled by continued momentum from screen box, which now ranks among the top four services in North America and from our New <unk> channel on Amazon, which has shown significant subscriber growth and it's been growing at 30% per month since launch.

Speaker Change: We plan on expanding this platform beyond Amazon in the coming quarters and believe it will become one of our top streaming services over time, especially with access to the high caliber of wide and specialty theatrical programming that we're now releasing.

Erick Opeka: In addition to Cineverse, we now have four flagship services that have scale potential. Screambox, Dove, Fandor, and Midnight Pulp. These platforms make up the bulk of our subscriber base, and we're going to focus our investments and growth on these four properties in the short to midterm. Our genre-specific and movie-centric model not only supports subscription growth, but it acts as a flywheel that supports our theatrical and ancillary businesses as well.

Speaker Change: In addition to the universe, we now have four flagship services have scale potential screen box Dove, <unk> and midnight pulp.

Speaker Change: These platforms make up the bulk of our subscriber base and we're going to focus our investments in growth on these four properties in the short to midterm.

Speaker Change: Genre specific and movie centric model not only support subscription growth, but it acts as a flywheel that supports our theatrical and answer ancillary businesses as well.

Erick Opeka: on the fast front. While we continue to grow viewership, as noted, we've seen a glut of supply with huge growth in available competitive channels from studios, outstripping the audience growth in the market. This factor has put some pressure on CPNs and fill rates for open market programmatic in the short to midterm, combined with the macro environment as Mark had described. We think over the long term, the market will absorb this oversupply. But as we support and maintain this channel based during this period, we're focusing our efforts in the ad space more on direct sales, our platform, C360, and on private marketplace deals.

Speaker Change: On the SaaS front.

Speaker Change: While we continue to grow viewership as noted we've seen a glut of supply with huge growth and available competitive channels from studios outstripping the audience growth in the market.

Speaker Change: These factors put some pressure on CPM and fill rates for open market programmatic in the short to mid term combined with the macro on Biomarin as market described.

Speaker Change: We think over the long term the market will absorb this oversupply.

Speaker Change: But as we support and maintain this channel base. During this period, we're focusing our efforts in the AD space more on direct sales our platform <unk> hundred 60 and on private marketplace deals.

Erick Opeka: And that's been a good turn for us. On the direct advertising front, Cineverse continues to become a must-buy destination for entertainment marketers. We now work with four of the top five movie studios and all major indies on wide-release campaigns and have added several new key brand partners in Q4, including Sony Pictures, Expedia, Hulu, Display, Warner Bros., and Rocket Money. We've expanded this list to include Progressive, ZipRecruiter, Universal Pictures, Mint Mobile, and more in the current quarter. Unlike competitors that are focused exclusively on CTV, given our brands and platforms, we offer a full 360-degree strategy that includes CTV, mobile, display, podcasts, and live events.

Speaker Change: And thats been a good turn for us on the direct advertising front <unk> continues to become a must buy destination for entertainment marketers.

Speaker Change: We now work with four of the top five movie Studios and all major Indies on wide release campaigns and have added several new key brand partners in Q4, including Sony Pictures, Expedia, Hulu display Warner brothers and rocket money.

Speaker Change: We've expanded this list to include Progressive ZIP recruiter Universal Pictures meant mobile and more in the current quarter.

Speaker Change: Unlike competitors that are focused exclusively on CTV give.

Speaker Change: Given our brands and platforms, we offer a full 360 degree strategy that includes CTV mobile display podcast and live events with.

Erick Opeka: This holistic offering provides superior outcomes for advertisers and allows us to command more strategic partnerships. While programmatic remains under pressure, our performance in direct and PMP channels continues to outperform budgetary benchmarks. T360, our proprietary ad platform, remains a major focus as well. Q4 marked our strongest quarter to date for the service. with year-over-year revenue growth of 290%. Importantly, C360, now directly connected to the Trade Desk, will integrate with CineCore, our proprietary film dataset comprising of millions of titles and billions of metadata points. We believe it's the most extensive domain-specific dataset for film in existence. Originally developed to support CineSearch, it's now central to how we will revolutionize targeting in film advertising.

Speaker Change: This holistic offering provides superior outcomes for advertisers and allows us to command more strategic partnerships.

Speaker Change: While program at programmatic remains under pressure our performance indirect in PMT channels continues to outperform budgetary benchmarks.

Speaker Change: 360, our proprietary AD platform remains a major focus as well Q4 marked our strongest quarter to date for the service.

Speaker Change: Year over year revenue growth of 290% importantly, see 360 now directly connected to the trade desk will integrate with Sinacore, our proprietary film dataset comprising of millions of titles and billions of metadata points.

Speaker Change: We believe it's the most extensive domain specific dataset for film in existence. Originally developed to support center search is now central to how we will revolutionize targeting and film advertising.

Erick Opeka: So we'll be more on that to come in future quarters.

Speaker Change: So it will be more on that to come in future quarters.

Erick Opeka: Lastly, I want to talk about where we're headed in the near term. Podcasting continues to be one of our highest margin, fastest growing businesses. In addition to horror and comedy, we're going to continue to invest in the new verticals as we discussed. We've already hired a dedicated podcast sales team and are considering further expansion given the early momentum we're already seeing in the space. We're also seeing strong growth in YouTube and social video. Across our brands, we now manage nearly 24 million social followers. According to Nielsen, YouTube is the number one platform by watch time in all of media, commanding 13% of total TV viewing, and over the last nine months, With minimal to no CapEx investment, we've built a low seven-figure business, placing our premium content into this space, and believe that with our vast content library, there's significant growth and upside leveraging this number one streaming platform.

Speaker Change: Lastly, I want to talk about where we're headed in the near term.

Speaker Change: <unk> continues to be one of our highest margin fastest growing businesses. In addition to horror comedy we're going to continue to invest in the new verticals as we discussed we've already hired a dedicated podcast sales team and are considering further expansion given the early momentum we're already seeing in the space.

Speaker Change: We're also seeing strong growth in Youtube and social video across our brands, we now manage nearly 24 million social followers.

Speaker Change: According to Nielsen Youtube is the number one platform by watch time in all of media commanding 13% of the total TV viewing and over the last nine months.

Speaker Change: Minimal to no Capex investment, we built a low seven figure business, placing our premium content into this space and believe that with our vast content library, where significant growth and upside leveraging this number one streaming platform in the world.

Erick Opeka: Additionally, we're exploring other high-growth, high-revenue formats like scripted microdramas and short-form content. According to Business Research Insights, the short-term video market is currently at $34 billion globally and growing at 32% annually. With our scalable content pipeline, tech platforms, and existing reach, we are well positioned to capture a meaningful share of this emerging category in the near to mid-term.

Speaker Change: Additionally, we are exploring other high growth high revenue formats, like scripted micro dramas and short form content.

Speaker Change: According to business research insights the short form video market is currently at 34 billion globally and growing at 32% annually.

Speaker Change: With our scalable content pipeline tech platforms and existing reach I believe we're well positioned to capture meaningful share of this emerging category in the near to midterm.

Erick Opeka: And finally, on content licensing, both traditional and AI-based, remains a key focus. Our theatrical slate will be the main driver of this, with titles like Toxic Avenger, Silent Night, Deadly Night, and Silent Hill. We'll have a robust slate that will also drive value, licensing value, of our vast catalog. And given our focus on IP-driven popular content that appeals to wide swaths of people and demos, we're in a strong position to secure an output deal On the AI front, we're in numerous dialogues to license our content for AI training and expect to see traction on that front later this year.

Speaker Change: And finally on content licensing both traditional and AI based remains a key focus.

Speaker Change: Our theatrical slate will be the main driver of this with titles like toxic Avenger silent deadly night silent Hill will have a robust slate that will also drive value licensing value of our vast catalog.

Speaker Change: And given our focus on IP driven popular content that appeals to a wide swaths of people and demos.

Speaker Change: Not just postal audiences, we're in a strong position to secure an output deal with a major streaming company against our future releases.

Speaker Change: On the AI front, we're in numerous dialogues to license our content for AI training and expect to see traction on that front later this year.

Erick Opeka: At every level, we're focused on high-quality, high-margin growth and maintaining the existing margins that we've painstakingly built. We're excited about where Cineverse is headed in fiscal year 26 and beyond.

Speaker Change: Every level, we're focused on high quality high margin growth and maintaining the existing margins that we've painstakingly built we're excited about where <unk> is headed in fiscal year 'twenty six and beyond.

Tony Huidor: With that, I'll turn the floor over to Tony to discuss our technology. Thank you, Erick. I'm excited to share an update on our technology business.

Speaker Change: With that I'll turn the floor over to Tony to discuss our technology initiatives.

Tony: Thank you Eric.

Speaker Change: I'm excited to share an update on our technology business as you know the company recently announced a new organizational structure and with the company's technology assets were placed under New Division named Universe Technology Group.

Tony Huidor: As you know, the company recently announced a new organizational structure in which the company's technology assets were placed under a new division named Cineverse Technology Group. The underlying reason for this was to accelerate our sales effort by investing more resources to an area of the company where we hold tremendous value. As many of you know, over the past several years, we have announced various deals with several small channel operators and video distributors. These deals were intended to allow the company to walk before we run by putting MatchPoint through real-world tasks before fully taking it to market as a SaaS product.

Speaker Change: Your line reason for this was to accelerate our sales effort by investing more resources to an area of the company, where we hold tremendous value.

Speaker Change: As many of you know over the past several years, we have announced various deals with several small channel operators and video of these distributors. These deals were intended to allow the company to walk before we run by putting math point through real World test before fully taken it to market as a SaaS product.

Tony Huidor: We use these deals as a way to put MatchPoint through a hardening process where we can onboard real-world clients to help us identify the areas that we needed to further improve. We have learned a lot from these deals and are grateful to our partners for helping us improve MatchPoint. With this work complete, MatchPoint has reached an advanced level of maturity with robust capabilities that finally allow us to target who we feel are the ideal customers, the major Hollywood studios and major media companies. With that, we now have a seasoned sales team that has extensive expertise in the media supply chain of the business, as well as deep contacts into the Hollywood community.

Speaker Change: We use these deals as a way to put math point through a hardening process, where we can onboard real world clients to help us identify the areas that we needed to further improve we have learned a lot from these deals and are grateful to our partners for helping us improve match point.

Speaker Change: This work complete match point has reached an advanced level of maturity with robust capabilities that finally allows us to target who we feel are the ideal customers. The major Hollywood Studios and major media companies.

Speaker Change: With that we now have a seasoned sales team that has extensive expertise in the media supply chain of the business as well as deep contacts into the Hollywood community. These factors have allowed us to effectively reach the right decision makers and major Hollywood Studios as well as key media companies and broadcast networks, we plan to present Matt's point to every major steel.

Tony Huidor: These factors have allowed us to effectively reach the right decision makers and major Hollywood studios, as well as key media companies and broadcast networks. We plan to present MatchPoint to every major studio before summer's end. In the last 45 days alone, we have presented MatchPoint to three major studios, two broadcast networks, and a leading e-commerce giant. The reception we have received has been glowing and, frankly, quite humbling. For so long, we have overestimated the pace of innovation on the way across the entertainment industry. We now see how these large media conglomerates still struggle with the very basics of operating a major streaming business at scale.

Speaker Change: Leo before some reason in the last 45 days alone. We have presented mass point to three major studios to broadcast networks and a leading e-commerce giant the reception. We have received has been growing and frankly quite humbling.

Speaker Change: So long we have overestimated the pace of innovation in the way across the entertainment industry. We now see how these large media conglomerates still struggle with the very basics of operating a major streaming business at scale. We have found that major studios and film distributors still rely on manual workflows workflows fragmented systems, a patchwork of external <unk>.

Tony Huidor: We have found that major studios and film distributors still rely on manual workflows, fragmented systems, a patchwork of external vendors, and massive internal teams to deliver content, often taking weeks to release a single title. This is a result of these large media companies preferring to hire third-party vendors to solve their operational problems, rather than developing proprietary technology. This legacy way of doing business is no longer sustainable and requires a new approach. As a result, this places MatchPoint in a very unique position about offering a complete end-to-end media supply chain specifically developed for the video streaming era.

Speaker Change: <unk> and massive internal teams to deliver content, often taking weeks to release a single title.

Speaker Change: This is a result of these large media companies, preferring a higher third party vendors to solve their operational problems rather than developing proprietary technology.

Speaker Change: This legacy way of doing business is no longer sustained sustainable and requires a new approach as.

Speaker Change: As a result, this places match point in a very unique position about offering a complete end to end media supply chain, specifically developed for the video streaming era media.

Tony Huidor: Media companies are accustomed to using various vendors, and when cobbled together, offer an ad hoc solution that at best meets some of their needs, but not all. MatchPoint, on the other hand, has been specifically developed to meet all the needs of a modern streaming company, including many nuanced edge cases that most technology vendors don't understand or can effectively solve. There is no comparable system in the market that can match our ability to deliver tens of thousands of titles per month with no human intervention. Knowing this is why MatchPoint has been so well received by large media companies.

Speaker Change: Companies are accustomed to using various vendors and when cobbled together offer an AD hoc solutions that best meet some of their needs, but not all.

Speaker Change: <unk> point on the other hand has been specifically developed to meet all the needs of a modern streaming company, including many nuanced edge cases that most technology vendors don't understand nor can effectively. So there is no comparable system in the market that can match, our ability to deliver tens of thousands of titles per month with no human intervention.

Speaker Change: Knowing this is why <unk> has been so well received by large media companies. In addition, the company's new organizational structure of having a separate entertainment and technology Division has eased any concerns of being a competitive threat as a result, the Seo gates have opened wide match point is currently being evaluated as part of two rfps that are underway.

Tony Huidor: In addition, the company's new organizational structure of having a separate entertainment and technology division has eased any concerns of being a competitive threat. As a result, the studio gates have opened wide. MatchPoint is currently being evaluated as part of two RFPs that are underway. In addition, of the three major Hollywood studios that we have already presented MatchPoint to, one studio has fast-tracked their evaluation processes moving forward with a pilot that should lead to a commercial trial. During this process, we will be required to integrate into their internal supply chain so that MatchPoint can serve as a content fulfillment solution for distributing their movie catalog worldwide.

Speaker Change: In addition of the three major Hollywood Studios that we have already presented mask point to one studio has fast track. The evaluation process is moving forward with a pilot that should lead to a commercial trial.

Speaker Change: During this process, we will be required to integrate into their internal supply chain. So that math point conserve as a constant fulfillment solution for distributed their movie catalog worldwide.

Tony Huidor: We anticipate that this implementation alone can result in upwards of mid-seven-figure revenue for the company on an annual basis. Discussion with other studios and media companies have centered along similar lines. These media companies are under tremendous pressure to scale their streaming business, cut costs, reduce headcount, and leverage AI for workflow efficiencies. As many of you know, these are all the areas in which Masspoint excels. Moving forward, our strategy is to focus on selling Masspoint Dispatch as a way to get into the door and establish a relationship where we can prove ourselves. These media companies are the ideal customers for our Masspoint products, such as Insights and CineSearch.

Speaker Change: We anticipate that this implemented implementation alone can result in upwards of mid seven figure revenue for the company on an annual basis discussion with other studios and media companies has sent centered along similar lines. These media companies under tremendous pressure to the streaming business cut costs reduced head count and <unk>.

Speaker Change: Average AI for workflow efficiencies as many of you know these are all the areas in which match point of sales moving forward. Our strategy is to focus on selling mass point dispatch is the way to get into the door and establish a relationship where we can prove ourselves. These media companies are the ideal customers for match point products, such as insights into the search.

Tony Huidor: Having Dispatch as our flagship product gives us a strategic advantage when pitching our suite of Masspoint products.

Speaker Change: Having dispatches are flagship product gives us a strategic advantage when pitching our suite of <unk> products.

Tony Huidor: Moving on to CineSearch. As you all know, we recently announced that we completed development of CineSearch. We are proud of the progress we have made and are extremely proud of this achievement.

Speaker Change: Moving on to sensors as you all know, we recently announced that we completed development of <unk>. We are proud of the progress. We have made and are extremely proud of this achievement. We have achieved with no. Other company media technology company has been able to do the accuracy and breadth of the content recommendations at when receives gifts in the search are far superior to.

Tony Huidor: We have achieved what no other company, media or technology company, has been able to do. The accuracy and breadth of the content recommendations that one receives via CineSearch are far superior to anything else in the market. Although Google and OpenAI can generate suitable results on their own, their understanding of cinema is broad but shallow. Google and OpenAI lack a true understanding of the intrinsic nature of a film. This is where CineSearch excels and provides us with the depth of understanding that large AI models lack.

Speaker Change: Anything else in the market.

Speaker Change: Although Google and open AI can generate suitable results on their own they're understanding of cinema is broad, but shallow Google and open eye and lack of understanding of the intrinsic nature of the film. This is where <unk> excels and provides us with the depth of understanding that large AI model black moving forward.

Tony Huidor: Moving forward, CineSearch will be licensed as a full product offering.

Speaker Change: Search will be license is a full product offering. In addition, we will license sinacore as a standalone dataset. We are excited to bring <unk> to market at a time when the streaming industry continues to suffer from poor user experience type two week search capabilities and inadequate content recommendations, we feel we have a competitive advantage and maintain a hit.

Tony Huidor: In addition, we will license CineCore as a standalone data set. We are excited to bring CineSearch to market at a time when the streaming industry continues to suffer from poor user experience tied to weak search capabilities and inadequate content recommendations. We feel we have a competitive advantage and maintain a head start of several years above any of our competitors.

Speaker Change: Started several years above any of our competitors lastly, I want to talk about the role that AI will play in the future <unk> for some time, we have been strong proponents of AI and have leveraged AI for years as a means to make math point more efficient and to help streamline our internal operations given the success, we have seen with leveraging AI, we have kicked off.

Tony Huidor: Lastly, I want to talk about the role that AI will play in the future of Cineverse. For some time, we have been strong proponents of AI and have leveraged AI for years as a means to make MatchPoint more efficient and to help streamline our internal operations. Given the success we have seen with leveraging AI, we have kicked off an internal initiative to fully transform the entire company and fulfill our vision of becoming a next generation studio. We envision a future where each department is utilizing agentic AI for automation and to better scale the department's output.

Speaker Change: An internal initiative to fully transform the entire company and fulfill our vision of becoming a next generation studio.

Speaker Change: We envision a future where each department is utilizing agentic AI for automation and to better scale the departments out but our goal is to create an internal network of AI agents that communicate directly across every department. So that we can maximize efficiencies across departments and further streamline how the company operates.

Tony Huidor: Our goal is to create an internal network of AI agents that communicate directly across every department so that we can maximize efficiencies across departments and further streamline how the company operates.

Tony Huidor: Lastly, we have additional products under development and excited to share more on that soon.

Speaker Change: Lastly, we have additional products under development and excited to share more on that soon.

Operator: With that, operator, let's open it up for Q&A. Thank you.

Speaker Change: With that operator, let's open it up for Q&A.

Speaker Change: Thank you we will now begin the question and answer session.

Operator: We will now begin the question and answer session. If you would like to ask a question today, please do so now by pressing star followed by the number 1 on your telephone keypad. If you change your mind, please press star followed by 2 to withdraw yourself from this call.

Speaker Change: If you would like to ask a question today. Please do so now by pressing star followed by the number one on your telephone keypad.

Speaker Change: If you change your mind. Please press star followed by Q2 with Julia So from Macquarie.

Daniel Kurnos: Our first question today comes from Dan Kurnos with Venture. Please go ahead. Yeah, thanks. Good morning. I'll try to keep it tight for your request to finish up here. Look, just fantastic end to the year. We've got wide releases the next three quarters coming out.

Dan Cutoffs: Our first question today comes from Dan Cutoffs with benchmark. Please.

Speaker Change: Go ahead.

Speaker Change: Yes. Thanks, good morning, I'll try to keep it tight for your request to finish up here.

Speaker Change: Look just fantastic enter the year, we've got <unk>.

Speaker Change: Wide releases in the next three quarters coming out I guess, Chris high level just if.

Christopher McGurk: I guess, Chris, high level, just if you guys are successful or see early signs of success, how much more are you willing to lean in? And I know Erick kind of intimated that you're talking with some of the streamers, but how do we think about pay windows and licensing opportunities, especially for the licenses? Yeah, I think, you know, as we continue to fill out our slate, as Erick said, you know, we really have an overriding objective to set up a pay output deal. And we've started some discussions in that regard. I think what you'll see over the next few months is we'll be announcing more films, you know, that are similar to the three, the four, actually, if you include Wolf Creek that we have in our release slate right now.

Speaker Change: You guys are successful or see early signs of success.

Speaker Change: How much more are you willing to lean in and I know, Eric kind of intimated that youre talking with some of the streamers, but how do we think about pay windows.

Speaker Change: In licensing opportunities, especially for the.

Speaker Change: Licenses that you own.

Speaker Change: Yes, I think.

Speaker Change: We continue to fill out our slate as Eric said.

Speaker Change: Are we really have an overriding objective.

Speaker Change: Set up.

Speaker Change: Output deal and we've started some discussions in that regard I think what youll see over the next few months, we'll be announcing.

Speaker Change: <unk>.

Speaker Change: <unk>.

Speaker Change: Similar to.

Speaker Change: Before actually if you include Wolf Creek.

Speaker Change: We have in our release slate right now and it will also be expanding from our focus on horror.

Christopher McGurk: And it'll also be expanding, you know, our focus on horror into family films, another area that we had great strength in the past. And also, we're looking at more of a fantasy film as well. And actually some black cinema content and comedy, as Erick mentioned. And I think once we put those pieces into our release slate, I think, you know, that's when we'll get really serious about negotiating a pay deal.

Speaker Change: It's a family films another area that we have great strength in the past and also.

Speaker Change: So we're looking at more of a fantasy film as well.

Speaker Change: Actually some black cinema.

Speaker Change: And comedy as Eric mentioned, and I think once we put those pieces into our release slate I think.

Speaker Change: That's when we'll get really serious about negotiating.

Speaker Change: Dr.

Christopher McGurk: And just on the profitability, because it really matters. Like it was great in the quarter. You know, I don't want to lose sight of the offshoring. I know that Mark, in his comments, said sort of 45, 50 percent op margin. You crushed it this quarter with north of that. How do we think about it in quarters where you have a successful, you know, owned license film for wide release? And is there any chance that that margin could creep up? Yeah, I forget what the margin was, you know, in our last quarter, maybe Mark Mark can mention that, but I think we, you know, with Terrifier in the market, we put up a really, really solid operating margin.

Speaker Change: And just on the profitability because it really matters. It was great in the quarter I don't want to lose sight of the offshoring I know that mark in his comments said sort of $45, 50% op margin you crushed it this quarter with north of that how do we think about it and in quarters, where you have a successful.

Speaker Change: Owned license film for wide release and is there any chance that that margin could creep up over time.

Speaker Change: Yes, I forget what the margin was.

Speaker Change: And our last quarter, maybe mark.

Speaker Change: Our convention that but I think we with clarifier encumber market, we put up a really really solid operating margins.

Christopher McGurk: So, you know, we feel good about the 55% number that we put up and we feel really good that we'll meet or exceed our operating margin target of 45 to 50% going forward.

Speaker Change: We feel good about 55% number that we put up and we feel really good that we'll meet or exceed our operating margin target of 45% to 50% going forward.

Speaker Change: Okay.

Daniel Kurnos: Hey Chris, margin in the last quarter was 49%. Thanks. Congrats, guys. Well done. Thanks, dude. Thank you.

Chris: Hey, Chris.

Chris: Lastly groups are doing last quarter was 49%.

Chris: Yes.

Speaker Change: Yes.

Speaker Change: Thanks, Congrats guys well done.

Speaker Change: Thanks, Dan.

Speaker Change: Okay.

Speaker Change: Thank you. Our next question comes from Brian <unk> with Alliance Global partners.

Brian Kinstlinger: Our next question comes from Brian Kinstlinger with Alliance Global Partners. Brian, please go ahead. Great. Thanks so much. Great to hear about all the great details on the slate of movies, so I want to focus on some other growth areas.

Speaker Change: Brian. Please go ahead.

Brian: Great. Thanks, so much.

Speaker Change: Great to hear about all the great details on the slate of movies, so I'm going to focus on some other growth areas.

Erick Opeka: I'm hoping you can frame for investors how to think about, in a search and match point with Tony's comments, how should we think about maybe the pipeline of opportunities, what do deal sizes look like, and maybe when should we expect this will have a significant impact on your overall results. Thanks, Brian. I'll let Erick and Tony respond to that.

Speaker Change: You can frame for investors, how they think about.

Speaker Change: Search and match point with Tony's comments, how should we think about maybe the pipeline of opportunities. What you deal sizes look like and maybe when should we expect this will have a significant impact on your overall results.

Speaker Change: Thanks, Brian.

Speaker Change: Eric and Tony to respond to that.

Erick Opeka: That's all for I'll frame the top line. So I think, as Tony, as Tony mentioned, and I'll let Tony go into into more detail here. I think As it relates to the overall sales pipeline, the opportunity set of the companies we have, we're now focused more on the enterprise side in the future. In the past, we had been focused on smaller entities as more of a proof of concept. Those kinds of entities are pretty small. It takes a lot of them to generate meaningful revenue. So, they're good for investing, but they're not really efficient for scaling the business.

Speaker Change: That's all for our claim that the top line. So I think as Tony as Tony mentioned and I'll, let Tony go into more detail here I think.

Speaker Change: <unk>.

Speaker Change: As it relates to the overall sales pipeline.

Speaker Change: <unk>.

Speaker Change: The opportunity set of the companies we have.

Speaker Change: We're now focused more on the enterprise side.

Speaker Change: Right.

Speaker Change: In the future in the past we had been focused on smaller entities as more of a proof of concept.

Speaker Change: Those are those those kinds of entities are are pretty.

Speaker Change: Small it takes a lot of them to generate meaningful revenue.

Speaker Change: So they are good for testing, but theyre not really efficient for scaling the business.

Tony Huidor: Tony, why don't you detail sort of the opportunities that generally, in terms of the number of properties in the pipeline, what do you think the average deal size could end up being? Sure, thanks, Erick. Yeah, you know, I would say, as Erick pointed out, we were really focused on small operators. We, you know, we had one shot to come to market. We didn't want to risk it, so we aimed for smaller operators so that we could learn what needed to be fixed and get everything right before we took it to the big media companies. You know, of the five major studios, I would say on average, each of those studios is probably 5 million and up.

Speaker Change: Why don't you detail sort of the opportunity set.

Speaker Change: Generally in terms of the number of.

Speaker Change: Our properties in the pipeline what do you think the average deal size could end up being.

Speaker Change: Sure. Thanks, Eric.

Speaker Change: Yes, I would say.

Speaker Change: Rick pointed out we were really focused on lease on small operators.

Speaker Change: We have one shot to come to market, we didn't want to risk. So we aimed for smaller operators. So that we can learn.

Speaker Change: What needed to be fixed.

Speaker Change: And get everything right before we took it to the big media companies.

Speaker Change: Of the five major studios I would say on average each of those studios is probably $5 million and up.

Tony Huidor: You know, it really depends on whether they use the platform for domestic distribution or worldwide.

Speaker Change: It really depends on whether they use the platform for domestic distribution worldwide.

Tony Huidor: the partner that we're currently working towards a pilot. Their initial expectation is we start with the back catalog launching worldwide. And then if this goes well, it can expand into other parts of the company, including their streaming servers, and then as well as their international operations. So that 5 million can easily scale much higher. But so far what our expectation is mid, mid-7 figures. And there's five of them. And as I said, we've presented to a good share of them so far. The reception has been very, very robust.

Speaker Change: The partner that we're currently working towards a pilot.

Speaker Change: Their initial expectation as we start.

Speaker Change: With the back catalog launching worldwide and then if this goes well it can expand into other parts of the company.

Speaker Change: Including their streaming service and then as well as their international operations. So that's $5 million can easily scaled much higher but so so far with what our expectation is mid mid seven figures and if there's five of them and as I said, we've we've presented to <unk>.

Speaker Change: Share of them. So far the reception has been very very robust after the Big Studios, we have obviously, the big networks and the big media companies.

Tony Huidor: After the big studios, we have obviously the big networks and the big media companies. And so there's plenty of other potential clients on that list. So we expect that, you know, over time within the next few years we should have a very strong foothold within the business. And I think from there, that is where, you know, as we say, land and expand. We sell them Dispatch. We sell them Cinesearch. We sell them any of the other services, our analytics. And these are all areas where all the big media companies are struggling. So we find ourselves in a very unique position in that we have technology that really sets us apart from everyone else.

Speaker Change: So there is plenty of other.

Speaker Change: Potential clients on that list. So we expect that over time within the next few years, we should have a very strong foothold within the business.

Speaker Change: And I think from there that is where as we say in land and expand we sell them dispatch we sell them sensors, we sell them any of the other services or analytics and these are all areas, where all the big media companies are struggling so we find ourselves in a very unique position and that we have technology that really sets us up.

Speaker Change: Part from everyone else.

Brian Kinstlinger: Great, that's wonderful.

Speaker Change: Great that's wonderful and just.

Brian Kinstlinger: And just, I wanted to follow up just on podcast.

Speaker Change: I wanted to follow up just on.

Brian Kinstlinger: I don't know what revenue was, the segments haven't been out yet, but with your push into direct hire, and I know one of the initiatives was to better monetize podcasting, maybe you can provide some more details on, again, direct sponsorship and sizes of those deals and how you maybe frame also monetization of podcasting over the next 12 to 18 months versus where it is today. Sure, sure. So first of all, so just thinking about the monetization strategy here, it's really twofold. One is, you know, if you think about our efforts in the podcast business, the big advantage that we have there is, you know, podcasts are new, fresh content and new releases.

Speaker Change: Podcast.

Speaker Change: No.

Speaker Change: But revenue wise.

Speaker Change: Headwinds, having been out yet but.

Speaker Change: Youre pushing to direct hire and I know when the initiatives and ways to better monetize podcast and maybe you can provide some more details.

Speaker Change: And again correct.

Speaker Change: Correct sponsorship and sizes of those deals and how you.

Speaker Change: Maybe frame also monetization of broadcasting over the next.

Speaker Change: 12 months to 18 months versus where it is today.

Speaker Change: Sure sure.

Speaker Change: So first of all so just thinking about the monetization strategy here, it's really two fold one.

Speaker Change: As is.

Speaker Change: If you think about our efforts in the podcast business the big advantage that we have there.

Speaker Change: Yes.

Speaker Change: Podcasts are new fresh content and new releases. So that provides I think a premium need for advertisers over fast channels that are predominant of library and.

Erick Opeka: So that provides, I think, a premium need for advertisers over fast channels that are predominantly library. And we're actually seeing podcast CPMs higher than CTV CPMs, sometimes by, you know, even $10 or more higher on a direct basis. And that just reflects, you know, the quality and the value of the portfolio we're starting to put together. So number one, we think the portfolio we're building towards a more premium, higher quality. So our show, you know, our focus is on assembling shows that have, you know, half a million to a million monthly listeners at a minimum per podcast.

Speaker Change: We're actually seeing.

Speaker Change: Podcast CPM.

Speaker Change: Higher.

Speaker Change: CTV cpm's, sometimes by even $10 or more higher on a direct basis.

Speaker Change: And that just reflects.

Speaker Change: The quality and the value of the portfolio, we're starting to put together. So number one we think the portfolio. We are building towards a more premium higher quality. So are our focus is on on assembling shows that have.

Speaker Change: Half a million dollars to 1 million monthly listeners at a minimum.

Speaker Change: Per podcast I think that's very different for some of the other networks out there that are kind of vacuuming up every every show.

Erick Opeka: I think that's very different for some of the other networks out there that are kind of vacuuming up every show, no matter how small or big it is. So that's number one, and that plays well with advertisers. Number two, you know, we're doing this on a direct basis with, in addition to bundling it, as I described during our commentary, we've hired up a direct team. We hired some sellers out of the SiriusXM universe who have hit the ground running and doing quite well. So the average deal size we're getting as we're getting larger brands like Progressive and others can go into the low six figures per deal.

Speaker Change: Matter, how small or big it is.

Speaker Change: So that's number one and that plays well to advertisers number two.

Speaker Change: <unk>.

Speaker Change: We're doing this on a direct basis.

Speaker Change: With.

Speaker Change: In addition to bundling it as I described during our commentary.

Speaker Change: We have we've hired up a direct team.

Speaker Change: Hired.

Speaker Change: Some sellers out of out of the Sirius XM universe, who are have hit the ground running and doing quite well. So the average deal size were getting is were getting larger brands like progressive and others.

Speaker Change: Ken can go into the low six figures per deal.

Erick Opeka: That's not every deal. You know, you're doing mid-five deals quite consistently for brands. But interestingly, we're starting to see bigger, more brand and less performance oriented, which I think is a really good space for us when you think about it from that perspective. Because, you know, branded tend to buy just in bigger packages than performance who are testing. So as we kind of think about the trajectory with our focus on more brand oriented, larger advertisers. Given we were at 100% programmatic last year, we think the CPMs on the direct are more than double. And given the velocity, I think we could probably accelerate into the back half of the year to two X or more of what we did last year.

Speaker Change: That's not every deal.

Speaker Change: Doing mid fives.

Speaker Change: Deals quite consistently for brands, but interestingly, we're starting to see bigger more brand.

Speaker Change: Less performance oriented.

Speaker Change: Which I think is a really good space for us when you when you think about it from that perspective.

Speaker Change: Because brand branded tend to buy.

Speaker Change: Just in bigger packages that performance testing.

Speaker Change: So as we kind of think about the trajectory with our focus on more.

Speaker Change: More brand oriented larger advertisers.

Speaker Change: Given we were at 100% programmatic last year.

Speaker Change: We think.

Speaker Change: The CPM is on a direct or more than double and given the velocity I think we could probably we could probably accelerate into the back half.

Speaker Change: Half of the year.

Speaker Change: To two acts or more what we did last year.

Erick Opeka: But a lot of that is highly dependent, obviously, on macro conditions and other elements, how the ad market continues to play out. But so far, it's looking very solid. And we think just adding more salespeople, we could expand it even further. Thank you.

Speaker Change: But that a lot of that is highly dependent obviously on macro conditions and other elements.

Speaker Change: How would the AD market continues to play out, but so far it's looking very solid and we think just adding more salespeople, we could expand that even further.

Christopher McGurk: There are no further questions remaining, so I'll pass the conference back over to the management team for closing remarks. Yes, this is Chris. Thank you all for joining us today. And please feel free to reach out to Julie Milstead with any additional questions you might have. We look forward to speaking to you all again on our next quarterly call. Thank you very much.

Speaker Change: Thank you there are no further questions remaining so I'll pass the conference back over to the management team for closing remarks.

Speaker Change: Yes. This is Chris so thank you all for joining us today and please feel free to reach out to Julian notes that with any additional questions you might have.

Speaker Change: And we look forward to speaking to you all again on our next quarterly call. Thank you very much.

Operator: That concludes today's conference call. Thank you for your participation. You may now disconnect your lines.

Speaker Change: That concludes today's conference call. Thank you for your participation you may now disconnect your lines.

Speaker Change: Yeah.