- Positive Net Cash from Operating Activities
and Adjusted Free Cash Flow for First Time
- Dividend of $0.025 Per Share
Declared
CuriosityStream Inc. (NASDAQ: CURI), a global factual
entertainment company, today announced its financial results for
the first quarter ended March 31, 2024. In addition, the Company’s
Board of Directors declared a quarterly cash dividend of $0.025 per
share, payable on July 31, 2024, to stockholders of record on July
12, 2024.
"We generated over $1 million in adjusted free cash flow in the
first quarter, a major milestone for the Company and for the team
that achieved it," said Clint Stinchcomb, President & CEO. "We
increased our direct subscription revenue sequentially and year
over year. We rolled out our subscription services with
multinational global partners in 25 countries. We added seven new
content licensing partners. And we now have commercial
relationships with over 20 key partners and platforms for our
ad-supported content. We have accomplished these objectives while
simultaneously rationalizing our cost base and we believe we are
now well positioned to generate increasing cash flow and sturdy,
sustainable revenues that are increasingly predictable and
reliable. Looking forward, in addition to guiding to greater
positive cash flow in the second quarter, we believe our dividend
program, which is being paid from surplus cash, underscores our
positive trajectory for 2024 and beyond."
First Quarter 2024 Financial Results
- Revenue of $12.0 million, compared to $12.4 million in the
first quarter of 2023;
- Gross profit of $5.3 million, compared to $3.4 million in the
first quarter of 2023;
- Total advertising and marketing and general and administrative
expenses of $8.9 million, compared to $11.2 million in the first
quarter of 2023;
- Net loss of $5.0 million, compared to net loss of $7.7 million
in the first quarter of 2023;
- Net cash provided by operating activities of $0.7 million,
compared to net cash used in operating activities of $6.3 million
in the first quarter of 2023;
- Adjusted Free Cash Flow of $1.2 million, compared to Adjusted
Free Cash Flow use of $6.3 million in the first quarter of
2023;
- Adjusted EBITDA loss of $2.8 million, compared to Adjusted
EBITDA loss of $6.4 million in the first quarter of 2023;
- Cash and restricted cash balance of $38.9 million and no debt
as of March 31, 2024.
First Quarter 2024 Business Highlights
- Apple TV+ launch of Curiosity Stream into 23 European
countries.
- 11 Content Licensing Agreements across several territories and
platforms.
- Curiosity University (newly relaunched and rebranded from One
Day University) surpasses 100,000 paying subscribers and now
features courses, videos, and podcasts from the world's best
subject matter experts in addition to the premium talks from the
best professors at the most renowned universities.
- Kidstream, with its unique and carefully curated selection of
high-profile children’s shows, is the newest service to join
Curiosity’s Smart Bundle, with a commitment to programming that’s
safe, educational, and ad-free.
- Released original series and specials across a range of genres
and formats, including Science for Evil Geniuses, an irreverent
real-world test of super-villain science, starring Game of Thrones
actor Paul Kaye; the fourth season of high-school football series
4th & Forever, following the DeSoto Eagles' quest to re-capture
another Texas state title; The Invention of Surgery, an unflinching
look at the pioneers who transformed medicine from a primitive art
into a sophisticated and successful science; The Art of Seduction,
an exposé of the secret powers of some of history’s most
influential characters; and Believe, a beautiful look at the
origins, traditions and festivals of the world’s five biggest
religions, and the challenges they face today.
- Launched additional annual programming stunts including Ancient
Egypt Week and the upcoming Jaws & Claws Week to enhance
content discoverability and promotion.
Financial Outlook
CuriosityStream expects the following for the second quarter of
2024:
- Revenue within the range of $12.0 - $13.0 million
- Adjusted Free Cash Flow1 within the range of $1.5 - $2.5
million
1 See Non-GAAP Financial Measures below.
CFO Transition
CuriosityStream is also announcing a transition among its
executive leadership. Peter Westley will resign his role as Chief
Financial Officer and return to consulting status with the Company
effective May 31, 2024. Westley helped shepherd CuriosityStream to
positive cash flow, oversaw distribution of the Company's first
dividend and built a capable Finance team, including Controller
Brady Hayden. The Board of Directors has named Hayden, who held
previous positions with Cyren Ltd, US Postal Service and Spok
Holdings Inc., CFO effective May 31, 2024.
Conference Call Information
CuriosityStream will host a Q&A conference call today to
discuss the Company’s first quarter 2024 results at 5:00 p.m.
Eastern Time (2:00 p.m. Pacific Time). A live audio webcast of the
call will be available on the CuriosityStream Investor Relations
website at https://investors.curiositystream.com. Participants may
also dial-in toll free at (888) 510-2008 or International at (646)
960-0306 and reference conference ID# 3957505. An audio replay of
the conference call will be available for two weeks following the
call on the CuriosityStream Investor Relations website at
https://investors.curiositystream.com.
Forward-Looking Statements
Certain statements in this press release may be considered
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995 including, but not limited
to, CuriosityStream’s expectations or predictions of future
financial or business performance or conditions, consumers’
valuation of factual content, and the Company’s continued success.
Forward-looking statements are inherently subject to risks,
uncertainties and assumptions. Generally, statements that are not
historical facts, including statements concerning possible or
assumed future actions, business strategies, events or results of
operations, are forward-looking statements. These statements may be
preceded by, followed by or include the words “believes,”
“estimates,” “expects,” “projects,” “forecasts,” “may,” “will,”
“should,” “seeks,” “plans,” “scheduled,” “anticipates,” “predicts”
or “intends” or similar expressions. Such forward-looking
statements involve risks and uncertainties that may cause actual
events, results or performance to differ materially from those
indicated by such statements. Certain of these risks are identified
and discussed under “Risk Factors” in CuriosityStream’s Annual
Report on Form 10-K for the year ended December 31, 2023, that
CuriosityStream filed with the Securities and Exchange Commission
(the “SEC”) on March 25, 2024, and in CuriosityStream’s other SEC
filings. These risk factors are important to consider in
determining future results and should be reviewed in their
entirety.
Forward-looking statements are based on the current belief of
the management of CuriosityStream, based on currently available
information, as to the outcome and timing of future events, and
involve factors, risks, and uncertainties that may cause actual
results in future periods to differ materially from such
statements. However, there can be no assurance that the events,
results or trends identified in these forward-looking statements
will occur or be achieved. Forward-looking statements speak only as
of the date they are made, and CuriosityStream is not under any
obligation, and expressly disclaims any obligation to update, alter
or otherwise revise any forward-looking statement, whether as a
result of new information, future events or otherwise, except as
required by law. Readers should carefully review the statements set
forth in the reports that CuriosityStream has filed or will file
from time to time with the SEC.
In addition to factors previously disclosed in CuriosityStream’s
reports filed with the SEC and those identified elsewhere in this
communication, the following factors, among others, could cause
actual results to differ materially from forward-looking statements
or historical performance: (i) risks related to CuriosityStream’s
ability to maintain and develop new and existing revenue-generating
relationships and partnerships or to significantly increase
CuriosityStream's subscriber base and retain customers; (ii) the
effects of pending and future legislation; (iii) risks of the
internet, online commerce and media industry; (iv) the highly
competitive nature of the internet, online commerce and media
industry and CuriosityStream’s ability to compete therein; (v)
litigation, complaints, and/or adverse publicity; and (vi) privacy
and data protection laws, privacy or data breaches, or the loss of
data.
Non-GAAP Financial
Measures
To supplement our unaudited consolidated statement of
operations, which is prepared in accordance with GAAP, we present
Adjusted EBITDA and Adjusted Free Cash Flow in this press release.
Our use of non-GAAP financial measures, such as Adjusted EBITDA and
Adjusted Free Cash Flow, has limitations as an analytical tool, and
these measures should not be considered in isolation or as a
substitute for analysis of financial results as reported under
GAAP.
The Company is not able to provide expectations of net cash
generated from operating activities, the closest comparable GAAP
measure to Adjusted Free Cash Flow (a non-GAAP measure), on a
forward-looking basis. The Company is unable to predict without
unreasonable costs and efforts the ultimate amounts of certain cash
receipts and outlays because, in part, such items may have not yet
occurred, are out of the Company’s control and/or cannot be
reasonably predicted. These items are further described in the
reconciliation tables and related descriptions below. Further,
these items are uncertain, depend on various factors and could be
material to the Company’s results computed in accordance with U.S.
GAAP.
We use these non-GAAP financial measures in conjunction with
financial measures prepared in accordance with GAAP for planning
purposes, including in the preparation of our annual operating
budget, as a measure of our core operating results and the
effectiveness of our business strategy, and in evaluating our
financial performance. These measures provide consistency and
comparability with past financial performance, facilitate
period-to-period comparisons of core operating results, and also
facilitate comparisons with other peer companies, many of which use
similar non-GAAP financial measures to supplement their GAAP
results. In addition, Adjusted EBITDA and Adjusted Free Cash Flow
are widely used by investors and securities analysts to measure a
company’s operating performance. We exclude the following items
from net income to calculate Adjusted EBITDA: interest and other
income (expense), provision for income taxes, depreciation and
non-content amortization, loss/(gain) on the change in fair value
of our warrants, equity interests loss (gain), impairment of
goodwill, intangible assets and content assets, restructuring
charges and stock-based compensation. Adjusted Free Cash Flow is
calculated as net cash flow used in operating activities less
purchases of property and equipment, restructuring charges and
nonrecurring license fees.
Investors are cautioned that there are material limitations
associated with the use of non-GAAP financial measures as an
analytical tool. In particular, (1) although depreciation and
amortization expense are non-cash charges, the assets subject to
depreciation and amortization may have to be replaced in the
future, and Adjusted EBITDA does not reflect cash capital
expenditure requirements for such replacements or for new capital
expenditure requirements; (2) Adjusted EBITDA does not reflect: (a)
changes in, or cash requirements for, our working capital needs; or
(b) tax payments that may represent a reduction in cash available
to us; and (3) Adjusted Free Cash Flow does not reflect: (a) our
cash flow available for discretionary payments; (b) our future
contractual commitments (such as any debt service requirements or
dividend payments); (c) funds available for investment or other
discretionary uses; (d) certain capital expenditure requirements;
or (e) the total increase or decrease in our cash balances for the
stated period. The non-GAAP financial measures we use may be
different from non-GAAP financial measures used by other companies,
limiting their usefulness for comparison purposes. We compensate
for these limitations by providing specific information regarding
the GAAP items excluded from these non-GAAP financial measures. A
reconciliation of these non-GAAP financial measures has been
provided in the financial statements tables included in this press
release and investors are encouraged to review the
reconciliation.
About Curiosity Inc.
Curiosity Inc. is the entertainment brand for people who want to
know more. The global media company is home to award-winning
original and curated factual films, shows, and series covering
science, nature, history, technology, society, and lifestyle. With
millions of subscribers worldwide and thousands of titles, the
company operates the flagship Curiosity Stream SVOD service,
available in more than 175 countries worldwide; Curiosity Channel,
the linear television channel available via global distribution
partners; Curiosity University, featuring talks from the best
professors at the world's most renowned universities as well as
courses, short and long-form videos, and podcasts; Curiosity Now, a
free, ad-supported channel; Curiosity Audio Network, with original
content and podcasts; and Curiosity Studios, which oversees
original programming. Curiosity Inc. is a wholly owned subsidiary
of CuriosityStream Inc. (Nasdaq: CURI). For more information, visit
CuriosityStream.com.
CuriosityStream Inc.
Consolidated Balance
Sheets
March 31, 2024
December 31,
2023
(In thousands, except par value)
(Unaudited)
Assets
Current assets
Cash and cash equivalents
$
38,750
$
37,715
Restricted cash
125
500
Accounts receivable, net
4,876
4,760
Other current assets
1,831
2,315
Total current assets
45,582
45,290
Investments in equity method investees
4,598
6,354
Property and equipment, net
639
727
Content assets, net
40,154
44,943
Operating lease right-of-use assets
3,279
3,350
Other assets
311
358
Total assets
$
94,563
$
101,022
Liabilities and stockholders’
equity
Current liabilities
Content liabilities
$
74
$
407
Accounts payable
3,288
4,765
Accrued expenses and other liabilities
4,766
3,705
Deferred revenue
14,651
14,521
Total current liabilities
22,779
23,398
Warrant liability
74
44
Non-current operating lease
liabilities
4,187
4,283
Other liabilities
562
651
Total liabilities
27,602
28,376
Stockholders’ equity
Common stock, $0.0001 par value – 125,000
shares authorized as of December 31, 2023, and December 31, 2022;
53,071 shares issued and outstanding as of December 31, 2023;
52,853 issued and outstanding as of December 31, 2022
5
5
Additional paid-in capital
363,319
362,636
Accumulated other comprehensive loss
—
—
Accumulated deficit
(296,363
)
(289,995
)
Total stockholders’ equity
66,961
72,646
Total liabilities and stockholders’
equity
$
94,563
$
101,022
CuriosityStream Inc.
Consolidated Statements of
Operations
Three Months Ended
March 31, 2024
(Unaudited and in thousands except per
share amounts)
2024
2023
Revenues
$
12,001
$
12,387
Operating expenses
Cost of revenues
6,748
9,001
Advertising and marketing
3,105
3,115
General and administrative
5,802
8,059
15,655
20,175
Operating loss
(3,654
)
(7,788
)
Change in fair value of warrant
liability
(30
)
(74
)
Interest and other income
439
388
Equity method investment loss
(1,756
)
(219
)
Loss before income taxes
(5,001
)
(7,693
)
Provision for income taxes
34
58
Net loss
$
(5,035
)
$
(7,751
)
Net loss per share
Basic
$
(0.09
)
$
(0.15
)
Diluted
$
(0.09
)
$
(0.15
)
Weighted average number of common
shares outstanding
Basic
53,301
52,950
Diluted
53,301
52,950
CuriosityStream Inc.
Consolidated Statements of
Cash Flows
Three Months Ended March
31,
(Unaudited and in thousands)
2024
2023
Cash flows from operating
activities
Net loss
$
(5,035
)
$
(7,751
)
Adjustments to reconcile net loss to net
cash used in operating activities
Change in fair value of warrant
liability
30
74
Additions to content assets
(426
)
(3,723
)
Change in content liabilities
(333
)
(1,206
)
Amortization of content assets
5,215
5,852
Depreciation and amortization expenses
117
127
Amortization of premiums and accretion of
discounts associated with investments in debt securities, net
—
26
Stock-based compensation
689
1,267
Equity method investment loss
1,756
219
Other non-cash items
122
121
Changes in operating assets and
liabilities
Accounts receivable
(116
)
1,200
Other assets
502
944
Accounts payable
(1,477
)
1,440
Accrued expenses and other liabilities
(419
)
(4,514
)
Deferred revenue
41
(384
)
Net cash used in operating activities
666
(6,308
)
Cash flows from investing
activities
Purchases of property and equipment
—
(5
)
Maturities of investments in debt
securities
—
15,000
Net cash provided by investing
activities
—
14,995
Cash flows from financing
activities
Payments related to tax withholding
(6
)
(26
)
Net cash used in financing activities
(6
)
(26
)
Net increase in cash, cash equivalents
and restricted cash
660
8,661
Cash, cash equivalents and restricted
cash, beginning of period
38,215
40,507
Cash, cash equivalents and restricted
cash, end of period
$
38,875
$
49,168
Supplemental disclosure:
Cash paid for taxes
$
(2
)
$
—
Cash paid for operating leases
$
138
$
134
CuriosityStream Inc.
Reconciliation from Net Loss
to Adjusted EBITDA
Three Months Ended
March 31,
(Unaudited and in thousands)
2024
2023
Net loss
$
(5,035
)
$
(7,751
)
Change in fair value of warrant
liability
30
74
Interest and other (income) expense
(439
)
(388
)
Provision for Income taxes
34
58
Equity method investment loss
1,756
219
Depreciation and amortization1
117
127
Stock-based compensation
689
1,267
Adjusted EBITDA
$
(2,848
)
$
(6,394
)
1 These amounts do not include
amortization of content assets.
CuriosityStream Inc.
Reconciliation from Net Cash
Flow used in Operating Activities to Adjusted Free Cash
Flow
Three Months Ended
March 31,
(Unaudited and in thousands)
2024
2023
Net cash flow used in operating
activities
$
666
$
(6,308
)
Purchases of property and equipment
—
(5
)
Restructuring payments1
435
—
Nonrecurring license fees
85
—
Adjusted Free Cash Flow
$
1,186
$
(6,313
)
1 Consists primarily of severance and
workforce optimization payments resulting from a December 2023
reduction in force.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240507924164/en/
CuriosityStream Investor Relations Andrew Lata
IR@CuriosityStream.com
CuriosityStream (NASDAQ:CURI)
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