CNVS

Image source: The Motley Fool. Thursday, Aug. 13, 2026 at 4:30 p.m. ET Chief Legal Officer, Secretary, and Senior Adviser - Gary S. Loffredo Chairman and CEO - Christopher J. McGurk President and Chief Strategy Officer - Erick Opeka Chief Financial Officer - Sean McCabe Chief Motion Pictures Officer - Yolanda Macias Chief People Officer - Mark Torres Operator: Hello, everyone. Thank you for joining us. And welcome to the Cineverse First Quarter Fiscal Year 27 Earnings Call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press *1 to raise your hand. To withdraw your question, press *1 again. I will now hand the conference over to Gary Lofredo, chief legal officer, secretary, and senior adviser. Gary, please go ahead. Gary S. Loffredo: Good afternoon, everyone. Thank you for joining us for the Cineverse first quarter fiscal year 27 financial results conference call. The press release announcing Cineverse's results for the fiscal first quarter ended 06/30/2026 is available at the Investors section of the company's website at www.cineverse.com. A replay of this broadcast will also be made available on 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 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 of the information discussed on this call is as of today, 08/13/2026. And Cineverse does not assume any obligation to update any of these forward looking statements except as required by law. 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. I am Gary Lofredo, chief legal officer, secretary, and senior adviser at Cineverse. With me today are Christopher McGurk, chairman and CEO. Erick Opeka, president and chief strategy officer Sean McCabe, chief financial officer, Yolanda Macias, chief motion pictures officer, and Mark Torres, chief people officer. All of whom will be available for questions following the prepared remarks. On today's call, Christopher will briefly discuss our first quarter fiscal year 27 business highlights. Then Sean will follow with a review of our financial results and Erick will provide further details on our 2 recent acquisitions. I will now turn the call over to Christopher McGurk to begin. Christopher J. McGurk: Thank you, Gary, and thanks everyone for joining us on the call today. We registered yet another very strong quarter. Driven by the acquisitions of Giant Worldwide and IndiCue, which both closed during the fourth quarter of fiscal 26, increased total revenues by 175% over last year's first quarter. And increased adjusted EBITDA by $2.6 million, our 2nd positive adjusted EBITDA quarter in a row. We feel this is impressive as we had no new wide release theatrical films during this quarter. Which also happens to be 1 of our 2 most seasonally slow quarters across all our businesses. Importantly, technology revenues represented more than 60% of the consolidated total during the quarter. Clearly, technology is now the largest source of revenue for the company. And much of that revenue is recurring and durable. With many A-list industry customers now using our products and services. We are also very optimistic about the business and financial prospects for Vadio, a new proprietary ad tech offering that extends brands audio campaigns onto connected TVs. This new product, which was developed and built by the IndiCue executive team, was just announced yesterday. Following our 2 key acquisitions, we have embarked on several initiatives to reduce costs, improve efficiencies, and generate synergies. We have identified and are now targeting over $13 million in annual upsides from that process which is well underway. Including a $1.8 million reduction in force that occurred after the close of this quarter. And we are not just cutting costs, we are also rationalizing our greatly expanded business footprint to focus on our highest potential and most profitable core products and services to better concentrate management focus improve margins and profitability. By our third and fourth fiscal quarters, we should see the great majority of those savings and synergies realized. Those quarters also happen to be our 2 strongest seasonal quarters, and we have 3 high potential wide release films that exactly follow the Terrifier 2 and 3 model in the lineup for those quarters as well. it is also important to note that we improved operating cash flow by over $13 million this quarter. And based on our acquisitions and business rationalization efforts, we should have a much lower CapEx to generate cash going forward. Let me now speak to our theatrical releasing business for a moment before I turn things over to Sean. We are in the theatrical releasing business in what we believe is a smarter, less risky way than our competitors for 1 primary reason. To generate a strong return on investment while at the same time creating recurring revenues by driving viewers and subscribers to our streaming channels and by adding valuable properties to our film library. Following the same low investment strategy that fully leverages our streaming, podcast, social media, advertising ecosystem as we did on Terrifier 2 and 3, we have now released 3 more films to date. Using that same strategy. Those films had a high return on investment and now join the ultra-profitable Terrifiers in our library. Which should only help increase the value of that asset which was already assessed at approximately $45 million by an independent firm last year. We have 3 releases coming up this fiscal year that also exactly follow the Terrifier formula. First up on October 9th is Guillermo del Toro's masterpiece. Pan's Labyrinth. Presented for its 20th anniversary 4K and 3D. In addition to opening the Cannes Film Festival Classics presentation at the Palais, in May, we recently conducted a panel featuring Guillermo del Toro and talent from the film in the main hall at Comic-Con, where 6.5 thousand fans gave them a rousing reception. Guillermo also showed 3D footage of the film for the first time to 900 fans. And the footage got another incredibly positive response. We also took talent from our next film, Air Bud Returns, which will be released on January 22nd, to Comic-Con. In this case, the talent involved was principally Air Bud himself. The golden retriever did his own panel and spent hours taking photos with the fans. We are very encouraged by the reaction we saw at Comic-Con and prior to that at CinemaCon, to this iconic and nostalgia inducing golden retriever named Buddy. Finally, we will be releasing the latest installment of the Wolf Creek horror franchise next March. We have seen the rough cut of the film, and are very excited about the film's theatrical potential. And with that, I will now turn things over to Sean for a financial review. Sean? Sean McCabe: Thank you, Christopher. A few highlights from our first fiscal quarter. Revenues were $30.6 million, up 175% from $11.1 million in the same quarter last year. This was primarily driven by our $19.4 million increase from our new advertising technology and media services revenue streams. Our direct operating margin for the quarter was 35%, down from the prior year quarter of 57%. This direct operating margin performance, however, was in line with our expectations. Reflecting the impact of our fourth quarter acquisitions including our new advertising technology revenue stream that carried an average 79% revenue share expense paid to supply partners in Q1. And our media services revenue stream, a business that we are focused on optimizing throughout the course of fiscal year 27. We expect margins to improve as we complete our cost reduction and synergy initiatives. Particularly by our third and fourth quarters where the majority of our impact will be reflected in our financial statements. Net loss attributable to common stockholders for the quarter was $5.8 million, a $2.1 million greater net loss than the $3.6 million net loss in the same quarter last year. The decline was driven by a $2.7 million increase in SG&A from increased compensation costs following our fourth quarter acquisitions, $1.8 million from depreciation and amortization, primarily driven by purchase price accounting, from our fourth quarter acquisitions. A $1.3 million noncash accounting adjustment from the fair value from the change in the fair value of our IndiCue earn out and deferred consideration liabilities, and an $800 thousand increase in interest costs from higher utilization of our line of credit from paying down nonrecurring acquisition related liabilities and convertible note interest. This compared to the prior year nonrecurring interest income recognized from a reduction in accrued interest following the accelerated payback of our Terrifier 3 loan. These cost increases, however, were partially offset by $4.3 million in increased direct operating profit. Adjusted EBITDA for the quarter was $500 thousand an increase of $2.6 million over the prior year quarter and an increase of $400 thousand from just last quarter. This represents integration progress. This is now the second consecutive quarter positive and improving EBITDA, following the acquisition of IndiCue and Giant. This also occurred with only 1 new theatrical release during those 2 quarters. This momentum affirms our new operating model, and when combined with the full impact of integration and cost saving initiatives, we are looking forward to the opportunity ahead. While we do anticipate seasonal, typical seasonal softness in our advertising business in the second quarter, the upcoming US midterm elections and holiday season, in addition to the release of Pan's Labyrinth in October, Air Bud Returns in January, and Wolf Creek in March are anticipated to contribute to a strong second half of the fiscal year. As such, as a combined entity, we are reaffirming our previously announced guidance for fiscal year 27 of $115 million to $120 million of revenue and $10 million to $20 million of adjusted EBITDA. From a liquidity standpoint, we ended the quarter with $4.3 million of cash, and our $12.5 million revolver still effective. While our net working capital as of June 30 was negative $18.9 million, this does include $18 million of deferred consideration in the current portion of the IndiCue earnout. Both of which the company has the right to pay in equity. Finally, Finally, our cash flow from operations has improved by more than $13 million from the first quarter in fiscal 26. As we move beyond our nonrecurring acquisition related payments, and current theatrical commitments, we see liquidity improvement continuing throughout fiscal year 27. With that, I will turn it over to Erick to discuss our operating highlights in greater detail. Erick Opeka: Thanks, Sean. Last quarter, I walked through strategy, but this quarter, I am gonna focus on execution. How we are how we are integrating the acquired businesses, reducing our cost structure, and making the combined company work the way we designed it to. So let me start with the most important takeaway. The core work of post merger integration is substantially complete. Systems, teams, and workflows are now unified, and the organizational heavy lifting is behind us. From here, our energy goes towards reducing costs capturing synergies that we have identified, and then growing the combined businesses. That shift from integrating to capturing value is what the rest of my remarks are gonna be about. So everything we are doing right now falls under a few priorities. The first is simplifying our product portfolio. Over the last several years, we have built a number of stand alone products some may not meet however, some may not meet our contribution margin targets. And some of them are excellent technologies, but do not justify the sales and marketing commitments a full fledged product offering. So during the quarter, we have decided to integrate several of our key products directly into Matchpoint as platform features rather than selling them as stand alone offerings. This does 3 things at once. It makes Matchpoint more valuable to every customer, It makes our story much easier to understand, and it takes out approximately $2.7 million in annualized vendor sales and marketing costs. Second priority, transforming how Giant operates. Giant was built on 2 decades of studio trust doing packaging and delivery work largely through skilled manual operation. Our goal is for Giant to run predominantly on the Matchpoint platform with automation doing the heavy lifting and our people managing exceptions and quality. The margin implications of this move are significant. Work running through the platform can carry gross margins in the mid seventies or higher, versus mid forties for traditional manual workflows depending on the character of the work. We will also be leveraging our operations in India and Yolanda to bring more of the non-automated work in at structurally higher margins. The commercial results are already showing up. Air and Giant's studio relationship with Matchpoint's automation is winning work orders that neither company could have won alone. Our Revry partnership this quarter, for example, automating the delivery of thousands of content assets through Matchpoint dispatch is a good example of the model. The client results are validating the transition. Existing giant clients, including Neon, PBS, and Pluto, a division of Paramount, increased their delivery output individually with us between 45 and as high as 75%. We have also begun moving giant customer workflows directly into Matchpoint with the first conversions delivering roughly 40% time savings versus manual processing. So that is the margin story actually showing up in real workflows. And we have barely begun. And it should be reflected in our financial results more and more as the year rolls on. The third priority is cost reduction. Part of the integration process was rightsizing our cost structure to match the current focus in the company. We made $3.8 million of headcount reductions just prior to the start of this fiscal year, plus additional RIFs and vendor eliminations During and subsequent to the end of Q1. That totaled more than $8.3 million, of which $7.5 million will be realized within the current fiscal year. Additionally, we have identified and are in the process of eliminating $5.5 million of additional costs, which include the product streamlining I mentioned earlier. Altogether, we estimate total operating and SG&A reductions of $13 million within this fiscal year and we expect our cutting efforts to be materially complete by the end of the current quarter. or Q2. On IndyQ, integration is ahead of plan on the metric that matters most. Durability. We have cut SaaS customer concentration by nearly half since the acquisition, and churn has remained consistently low, and net revenue retention sits at approximately 98%. We added We added new SaaS customers during the quarter as well as new ad network partners. And strengthen the commercial team with a new head of business development recruited from 1 of the leading cloud broadcast platforms. The business continues to scale with increasing monetizable supply and better yields. Total ad opportunities in the quarter reached 3.4 trillion, with 3.39 trillion ad impressions served for our customers in Q1. We expect this growth to scale even faster with the launch of Vadio, the new ad tech offering, that extends brands' audio campaigns into connected TV. We believe that 5% to 7% of the $3 billion annual podcast ad spend could eventually migrate into CTV opportunities in the near to midterm and we are poised with our product to materially help OEMs and channels participate in this innovative new approach. Our goal is to make IndiCue and Vadio 2 high performing growth streams over the course of this fiscal year. Now onto our streaming business. This was the most watched quarter in company history. With 4.5 billion minutes streamed up 33% year over year. Streaming viewers grew 12% to 122.8 million in the quarter, and we ended the quarter with 1.52 million SVOD subscribers, up 12%. Note what these numbers mean together. Minutes are growing nearly 3 times as fast as our audience. Viewers are not just more numerous. They are also watching substantially more. That engagement is what ultimately feeds discovery, first party data, and monetization across the platform. The fandom model keeps compounding channel by channel. Docurama, our documentary network, crossed 100 thousand subscribers during the quarter, up 66% year over year, with its Roku subscribers nearly quadrupling over the past year. Our flagship January 2025, hit another all time high, driven first by Amazon and now its May launch on Roku, where we also introduced our new premium channel, So Real, in partnership with All3Media. And we also launched Gorilla Comedy Plus, a premium ad free comedy service entirely on Matchpoint. On the ad supported side of our streaming business, Dove The Dog Whisperer, Screambox, and Yu Gi Oh channels all delivered their most watched quarters ever. The Dog Whisperer channel grew 54% year over year, Screambox grew 48%, with 5 straight quarters of growth. And Yu-Gi-Oh! grew 80%, with record per viewer engagement. Our Midnight Pulp cult channel grew more than 10x year over year. Put simply, the acquisitions gave us the assets and with integration substantially behind us, this is now 1 company built to capture value. Costs will come down rapidly every quarter across the entire organization from here, and margins will expand as work moves onto the platform just as our strongest seasonal quarters in our film slate arrive in the back half of the year. We believe we are exactly where we want to be. With that operator, we can open up the line for questions. Operator: We will now begin the question and answer session. Please limit yourself to 1 question and 1 follow-up. If you would like to ask a question, please press *1. To raise your hand. To withdraw your question, press 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Dan Kurnos with StoneX. Your line is open. Please go ahead. Dan Kurnos: Great. Thanks. Good afternoon. Another solid quarter from you guys in terms of progress. So let me let me take it just from the top line first. IndiCue is about a million better than we anticipated in the quarter. I know Erick, you gave some color on some of the things you are doing. Super excited by Vadio as well. How do we think about the incrementality of Vadio in the near term? what is driving kind of the short term upside and as we get into the back half of the year here with political driving up CPMs, just how do we think about sort of IndiCue's ability to benefit from that environment? Erick Opeka: I will dive in and take that. So first up on Vadio, I think, our goal, you know, we gave some steady state guidance for that business at around a $12 million run rate. This is based off of, you know, the IndiCue team's projections on that business given what they are already seeing in early and pretty extensive trials. The directionality we gave is to hit that rate by the end of the fiscal year. But we think that given the high demand that we are seeing from customers and the strong willingness of large OEMs to participate in what looks to be a unique and robust new opportunity at frankly, higher CPMs than they are seeing in the CTV market. That we think adoption could be quite rapid. So that is the outside guidance, but we are pushing very hard, to do it as quickly as possible. So our hope is to start to see real meaningful contribution out of that business towards the end of this quarter and into the very busy season that we are starting to see that starts in our next quarter. In terms of the political upside, you know, I think once we are, you know, we are we are getting into the full ramp of that season, the spending is slowly starting to increase. Increase now. We think the full intensity comes post summer lull. You know, a lot of people are not really at home or paying attention to politics yet, and in turn, the advertising has not really ramped to the full that we are gonna expect in the next quarter, but we think that is gonna that is gonna be commencing quite rapidly after the Labor Day holiday. So we are poised to take as much of that business as we can. Dan Kurnos: Got it. And then on the cost side, you know, we went from sort of modest cost reductions, $8 million, now $13 million in savings in synergies. I do not think there is any real revenue synergy baked into that number. So if you can clarify that. But you know, you guys have always done a great job, sort of pruning and readjusting the portfolio. Do you feel like after this round, you guys have sort of core where you want it to be? Is there more work to be done? Is there more upside to that? Just any additional color you can give there. Christopher J. McGurk: Yeah. This is Christopher. I will I will let Erick answer that in detail, but I want to step back a second and say, you know, with these 2 acquisitions, we basically doubled the size of the company. We added about 150 employees. We are now spread across 3 continents. And we have 5 offices. So, you know, the process of winnowing that down and streamlining it and realizing all the synergies is job number 1 for us right now. And it is a real fertile area we are very comfortable with the $13 million target. And as we said, we are gonna see most of that really hit our P&L in the third and fourth quarter. I will let Erick talk a little bit more about the specifics. Erick Opeka: Yeah. Sure. So you know, that number is predominantly focused on cost reductions. So you are right. it is not inclusive of the broader synergies that will come as the businesses continue to evolve together. But that cost reduction, you know, as I noted, in the in the comments, we have already made about $8.3 million worth of cuts of which $7.5 million will fully realize this fiscal year. And then the balance of these cuts will as I mentioned, come from the streamlining of the product portfolio. there is not a lot of fluff or you know, hypotheticals in that number that is actually all realizable reductions that are identified and in the process of being made with the goal of being complete by 9/30. So you know, that those numbers are you know, very actualizable. Christopher J. McGurk: Just to your other point, Dan, about revenue synergies, Vadio is a perfect example of revenue synergies coming out of an acquisition. The IndiCue people were very interested in us because of our strength in connected TV. And they were very interested in our podcast business. They had this audio idea previously. And obviously we love their brand relationships in their ad technology. You put the 3 things together, there you have a potential $12 million annual business. And I think that is the first in many synergistic revenue upsides that are gonna come from the acquisitions that we did. Dan Kurnos: Alright. It seems like we are just getting started Christopher, for sure, and I appreciate that additional color. So I just wanna tie it all together with 1 thing Sean said just around CapEx. Spend, feels like if you add all of these things together, potential revenue synergies, the EBITDA upside from the cost saves now and then the lower CapEx, it feels like free cash flow is gonna turn meaningfully positive and accelerate from here. Is that a fair statement? Christopher J. McGurk: Correct. And there is no need to add any more color to that. Kind of what I figured, Christopher. Alright. Thank you guys for all the thank you for all the answers to my question. Operator: Thank you. Your next question comes from the line of Brian Kinstlinger with Alliance Global Partners. Your line is open. Please go ahead. Brian Kinstlinger: Great. Thanks so much for taking my question. I saw in your prepared remarks and your press release you highlighted there has been some conversion in Giant's manual process to match point. But I assume it is modest given it is early. So I am curious how long you see the process taking what are studios indicating, And are they interested in fully transitioning to Matchpoint, and over what time frame might you think? Erick Opeka: Yeah. Sure. So I can take that. So first up, you are right. It is early days. You know, the first goal was just to have the business operating as 1 unified company And so, you know, we are getting that we are getting to that place now. The second piece is really getting the teams up and trained on it. You know, to our customers, the really critical thing is all of them actually have pressure to move fast and to drive more work. So the natural business demand is driving towards automation anyways. So we are finding our customers actually demanding more automation, more reporting, more visibility. So we are playing right to the sweet spot of where the market is. Part of that is really driven by the shift of the industry towards you know, from individual distribution of 1 title to thousands of locations to mass catalog pushes, reworks of catalogs, redeliveries, and so on. Today, when we get orders, there are thousands and thousands of title orders, not just, you know, 10 pieces here to lots and places. So that number 1, the market is doing it. 2, what is compelling is Matchpoint is transparent to our They do not have to do anything for them to take advantage of benefit when they are working with Giant They just get the benefit of it. So there is no real resistance to or there is no work to drive adoption. it is more of internal pushing Matchpoint into workflows, and that is a process of training. it is a process of some development work to make it work with existing systems and so on. But we the goal is to have materially all of the packaging and delivery work, which accounts for 80% of that revenue, done in an automated or semi automated fashion by the closeout of this fiscal year. And then second goal by the end of the quarter is obviously to take advantage of the of the offshore resources we have to help further improve margins for parts that cannot be fully automated. Brian Kinstlinger: Great. That was helpful. 1 question on theatrical releases. Can you share how many theaters is Pan's Labyrinth expected to be showing on? And while I know monetization does not stop at box office sales, Remind us what your all in cost to Cineverse is and what would success be from a box office sales perspective? Christopher J. McGurk: Yeah. Good question. Again, I will reiterate, it is coming out on October 9th, we expect it to be in between 1.5 thousand and 2,000 screens. And our releasing partner on this film is Fathom Entertainment. Which is a releasing arm of AMC, Regal, and Cinemark. And we are very confident that they are gonna be able to secure really great placement on this movie. Particularly since it is being presented in 4K and 3D. They had a release a couple years ago of the, 75% of its business on 3D and ended up doing really, really well. It did over $30 million at the box office. Again, the beauty of our model we do not have to do $30 million at the box office in order to breakeven and make a very, very nice return. Our all in investment on this movie marketing and acquisition cost for 20 year distribution term. Is less than $5 million. So our breakeven at the box office is well below $10 million at the box office. And we feel pretty good where we are at right now as I mentioned in my remarks, the response to Guillermo in this movie wherever we have taken it, whether it is Cannes or Comic-Con or screening it, is remarkably positive because he is become 1 of the most respected and beloved filmmakers in the world. And the movie trailer in front of The Odyssey, we got great trailer placement on it, and reaction in theater was very, very positive as well. So we are we are very bullish on this movie. both from the fact that the risk reward profile is great, and the response so far among the fans out there has been fantastic. Brian Kinstlinger: Right. Thank you so much. Christopher J. McGurk: Thanks. Operator: We have reached the end of the question and answer session. I will now turn the call back to Christopher McGurk for closing remarks. Christopher J. McGurk: Thank you, you know, and thanks to all of you for joining us on this call today. You know, as always, Julie Milstead will be available if you have any follow-up questions. At all. And we look forward to speaking with you again on our next quarterly call. Thank you all. Operator: This concludes today's call. Thank you for attending. You may now disconnect. Before you buy stock in Cineverse, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Cineverse wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $432,621!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,335,314!* That performance is why people listen. 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Cineverse (CNVS) Q1 2027 Earnings Call Transcript was originally published by The Motley Fool

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Technology revenues now represent over 60% of the consolidated total, signaling a fundamental shift toward recurring and durable software-driven revenue streams. The acquisitions of Giant Worldwide and IndiCue drove a 175% year-over-year revenue increase, providing the scale necessary for a second consecutive quarter of positive adjusted EBITDA. Management is rationalizing the expanded business footprint to focus on high-potential core services, aiming to improve margins by concentrating resources on the most profitable products. The theatrical strategy remains focused on a low-risk, high-ROI model designed to drive viewers to streaming channels and build long-term library value rather than relying solely on box office. Operational efficiency is being driven by migrating Giant's manual studio workflows onto the automated Matchpoint platform, which carries significantly higher gross margins in the mid-70s. Streaming engagement is outpacing audience growth, with minutes streamed increasing 33% year-over-year, nearly three times the rate of viewer growth, indicating deeper platform monetization potential. Reaffirmed fiscal year 2027 guidance of $115 million to $120 million in revenue and $10 million to $20 million in adjusted EBITDA, supported by second-half seasonality and film releases. Targeting $13 million in annual cost synergies and upsides, with the vast majority expected to be realized in the third and fourth fiscal quarters. The launch of Vadio, a new ad tech product extending audio campaigns to connected TVs, is projected to reach a $12 million annual run rate by the end of the fiscal year. Anticipates significant liquidity improvement throughout fiscal 2027 as non-recurring acquisition payments and current theatrical commitments are cleared. Expects the upcoming US midterm elections and holiday season to drive increased advertising yields and CPMs starting after the Labor Day holiday. Implemented a $1.8 million reduction in force post-quarter as part of a broader $8.3 million headcount and vendor cost-cutting initiative. Net loss expansion was primarily attributed to $2.7 million in increased compensation costs and $1.8 million in depreciation and amortization following recent acquisitions. Negative working capital of $18.9 million includes $18 million in deferred consideration and earnouts that the company retains the right to settle in equity. Identified $5.5 million in additional cost eliminations through the streamlining of the product portfolio and integrating standalone products into the Matchpoint platform. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management expects Vadio to hit a $12 million run rate by year-end, driven by high demand from OEMs seeking higher CPMs in the connected TV market. The product leverages existing brand relationships and podcast business strengths to capture a portion of the $3 billion annual podcast ad spend. The $13 million target is almost entirely focused on hard cost reductions rather than hypothetical revenue synergies, with $7.5 million expected to be realized within the current fiscal year. Management confirmed that the integration process is materially complete, with remaining cuts focused on product streamlining and vendor eliminations. The goal is to have nearly all packaging and delivery work automated or semi-automated by the end of the fiscal year to capture higher margins. Early results show existing clients increasing delivery output by 45% to 75% due to the increased capacity provided by automation. The all-in investment for the 20-year distribution term is less than $5 million, with a box office breakeven point below $10 million. The release will target 1,500 to 2,000 screens through Fathom Entertainment, leveraging strong fan reception from recent Comic-Con and Cannes presentations.

This article first appeared on GuruFocus. Revenue: $30.6 million, up 175% from $11.1 million in the same quarter last year. Direct Operating Margin: 35%, down from 57% in the prior year quarter. Net Loss: $5.8 million attributable to common stockholders, compared to a $3.6 million net loss in the same quarter last year. Adjusted EBITDA: $0.5 million, an increase of $2.6 million over the prior year quarter. Cash Flow from Operations: Improved by more than $13 million from the first quarter in fiscal 2026. Cash Position: Ended the quarter with $4.3 million of cash. Net Working Capital: Negative $18.9 million as of June 30. Streaming Minutes: 4.5 billion minutes streamed, up 33% year-over-year. Streaming Viewers: 122.8 million, up 12% in the quarter. SVOD Subscribers: 1.52 million, up 12%. Ad Impressions: $3.39 trillion ad impressions served in Q1. Cost Reductions: Identified and targeting over $13 million in annual upsides, including a $1.8 million reduction in force after the close of the quarter. Warning! GuruFocus has detected 7 Warning Signs with CNVS. Is CNVS fairly valued? Test your thesis with our free DCF calculator. Release Date: August 13, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Cineverse Corp (NASDAQ:CNVS) reported a 175% increase in total revenues year-over-year, driven by the acquisitions of Giant Worldwide and Inc. The company achieved its second consecutive positive adjusted EBITDA quarter, with a $2.6 million improvement over the prior year. Technology revenues now represent over 60% of total revenue, with a focus on recurring and durable income from A-list industry customers. Management has identified and is targeting over $13 million in annual cost savings and synergies, including a $1.8 million reduction in force. The company's streaming business saw record engagement, with 4.5 billion minutes streamed (up 33% year-over-year) and a 12% increase in SVOD subscribers to 1.52 million. Net loss attributable to common stockholders widened to $5.8 million, a $2.1 million increase from the prior year, due to higher SG&A, depreciation, and interest costs. Direct operating margin declined to 35% from 57% in the prior year, reflecting the impact of acquisitions and a high revenue share expense for ad tech. The company faces seasonal softness in advertising in the second quarter, which could impact near-term revenue. Net working capital is negative at $18.9 million, though it includes $18 million in deferred consideration and earn-out liabilities payable in equity. The company's cost reduction and synergy initiatives are not expected to be fully realized until the third and fourth fiscal quarters, delaying margin improvements. Q: How should we think about the incrementality of the new "audio" ad tech offering in the near term, and how is Indieq positioned to benefit from the political advertising environment in the back half of the year? A: Erick Opeka (President and Chief Strategy Officer) stated that the steady-state guidance for the audio business is a $12 million run rate, with a goal to hit that by the end of the fiscal year. He noted that high demand from customers and strong willingness from large OEMs to participate in this new opportunity, which commands higher CPMs than the traditional CTV market, could lead to rapid adoption. He expects meaningful contribution to begin towards the end of the current quarter and into the busy season. Regarding political advertising, he noted that spending is just starting to increase and expects the full intensity to ramp up after the Labor Day holiday, positioning the company to capture as much of that business as possible. Q: With cost reductions now totaling $13 million in savings and synergies, do you feel you have the core where you want it to be, or is there more work to be done? A: Chris McGurk (Chairman and CEO) explained that the company has essentially doubled in size with the recent acquisitions, adding about 150 employees across three continents and five offices. He stated that streamlining and realizing synergies is job number one, and they are comfortable with the $13 million target. Erick Opeka added that this number is predominantly focused on cost reductions, not revenue synergies. He confirmed that $8.3 million in cuts have already been made, with $7.5 million fully realized in the quarter, and the balance coming from product portfolio streamlining. He emphasized that these are realizable reductions with a goal to be complete by September 30. Q: Given the potential revenue synergies, EBITDA upside from cost savings, and lower CapEx, is it fair to say free cash flow will turn meaningfully positive and accelerate from here? A: Chris McGurk (Chairman and CEO) affirmed this statement, highlighting the "audio" product as a prime example of revenue synergies from the acquisitions. He explained that the combination of Indieq's ad technology and brand relationships with Cineverse's strength in connected TV and podcast business created the potential for a $12 million annual business, which he believes is the first of many synergistic revenue upsides to come from the acquisitions. Q: How long will the process take to convert Giant's manual processes to MatchPoint, and are studios interested in fully transitioning? A: Erick Opeka (President and Chief Strategy Officer) stated that it is early days, with the first goal being to operate as one unified company. He noted that customers are actually demanding more automation, reporting, and visibility, driven by the industry shift from individual title distribution to mass catalog pushes. Since MatchPoint is transparent to customers, there is no resistance to adoption. The goal is to have materially all of the packaging and delivery work, which accounts for 80% of that revenue, done in an automated or semi-automated fashion by the closeout of the fiscal year, with offshore resources further improving margins. Q: How many theaters will "Pan's Labyrinth" be showing in, and what is the all-in cost and breakeven point for the film? A: Chris McGurk (Chairman and CEO) stated the film will be released on October 9 in between 1,500 and 2,000 screens, with Fathom Entertainment as the releasing partner. He noted the all-in investment for marketing and acquisition costs for a 20-year distribution term is less than $5 million, making the breakeven at the box office well below $10 million. He expressed confidence in the film's potential, citing the positive response from fans at various events and the strong trailer placement, and highlighted the favorable risk/reward profile of the release. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

First Quarter Revenue of $30.6 Million, a $19.5 Million or 175% Increase Over the Prior Year Quarter More Than 60% of Total Revenues Were Technology Related Adjusted EBITDA of $0.5 Million, a $2.6 Million Increase Over the Prior Year Quarter Cash Flow From Operations Increased $13 Million Over the Prior Year Quarter Building on $2.0 Million of Savings Achieved in Fiscal 2026, Company Reaffirms Its Fiscal 2027 Cost Savings Target of $8.0 Million, with More Than $3 Million Achieved to Date in Q2. Including the Company's Synergy Program, Annual Target Upside is $13 million in Cost Reductions and Synergies. Most-Watched Streaming Quarter in Company History: 4.5 Billion Minutes Streamed, Up 33% Year-Over-Year. Company Reaffirms Full Year Fiscal 2027 Guidance of $115 to $120 Million in Revenues and $10 to $20 Million in Adjusted EBITDA LOS ANGELES, Aug. 13, 2026 /PRNewswire/ -- Cineverse Corp. ("Cineverse" or the "Company") (NASDAQ: CNVS), a global streaming technology and entertainment company, today announced its financial results for its fiscal first quarter ("Q1 FY 2027"): Q1 FY 2027 Highlights (all comparisons are to the prior year fiscal quarter ended June 30, 2025 ("Q1 FY 2026"): Total quarterly revenue was $30.6 million versus $11.1 million in the prior-year period, a 175% increase, driven mainly by the addition of new revenue streams from our strategic technology acquisitions in the fourth quarter of the prior fiscal year. In their first full quarter: The Company's traditional revenue streams otherwise were largely consistent with the prior year. Notably, this quarter had no wide film releases, in comparison to last year which had Terrifier 3, the best performing unrated film release of all time, still in its strong ancillary distribution market run. As anticipated, direct operating margin declined from 57% in the prior year quarter to 35% this quarter, due to the evolution of the Company's business, including: Revenue share expenses within our Advertising Technology business, which are amounts owed to supplier partners for advertising inventory and related services. In the first quarter of fiscal 2027, revenue-share expense represented 79% of gross Advertising Technology revenue. The Media Services revenue stream, for which the Company has an ongoing transformation effort focused on streamlining workflows, increasing automation, and optimizing resource allocation. SG&A expenses rose $2.7 million, or 30%, to $11.6 million, primarily due to higher compensation costs of $1.1 million, including $0.3 million of severance and $0.6 million of unpaid bonus accruals that the Company may settle in equity; $0.5 million of higher marketing costs tied to the committed theatrical release slate, and $0.4 million of increased professional consulting fees related to integration and year-end audit, tax and Sarbanes-Oxley compliance costs following the fourth quarter fiscal 2026 acquisitions. Adjusted EBITDA was $0.5 million, an increase of $2.6 million over the prior year. Net loss attributable to common stockholders was $(5.8) million, or $(0.28) per basic and diluted share, compared with $(3.6) million, or $(0.21) per share, in the prior-year. Financial Condition Overview: Cash and cash equivalents totaled $4.3 million as of June 30, 2026 with $1.1 million available under the $12.5 million line of credit facility. As of June 30, 2026, working capital was $(18.9) million, compared with $(0.3) million at the prior year quarter end. This notably includes $18.0 Million of Deferred and Earnout Consideration from the IndiCue Inc. acquisition that the Company has the option to settle in stock. The Company's digital content library, which includes more than 66,000 titles, has been valued at approximately $45 million, significantly above its $4.8 million book value as of June 30, 2026. Operational Developments During the Quarter: Substantially completed the core post-merger integration of Giant Worldwide and IndiCue, unifying systems, teams and workflows on the Cineverse platform as the Company shifts from integration to synergy capture and growth. Strengthened IndiCue's commercial durability by nearly halving customer concentration since acquisition, while maintaining approximately 98% net revenue retention, with more than 40 live clients and 75 additional publishers onboarding. Began migrating Giant Worldwide's media packaging and delivery operations to the Matchpoint platform, a transition expected to substantially expand Media Services gross margins as automation replaces manual workflows. The combined offering is already winning studio work orders that neither company could have secured independently. Began streamlining the Company's product portfolio by integrating key standalone products into the Matchpoint platform. This simplifies the customer offering and is expected to substantially reduce engineering, sales and marketing costs, contributing approximately $2.7 million in annualized run-rate savings. Delivered the most-watched streaming quarter in Company history, with 4.5 billion minutes streamed, up 33% year over year; 122.8 million streaming viewers, up 12%; and 1.52 million SVOD subscribers, up 12%. Docurama surpassed 100,000 subscribers for the first time, while the flagship Cineverse channel and RetroCrush ended the quarter at all-time subscriber highs. Launched Gorilla Comedy+, a premium ad-free streaming service on Matchpoint, on May 5, featuring more than 250 comedy specials and backed by 800 Pound Gorilla's network of more than 20 million monthly comedy fans. The Company also launched two Roku SVOD channels—the flagship Cineverse channel and So ... Real—through Roku Premium Subscriptions. Set the fiscal-year theatrical and streaming slate, including the October 9 wide theatrical re-release of Guillermo del Toro's Oscar-winning Pan's Labyrinth in 4K and 3D with Fathom Entertainment following its Cannes Classics screening; production of the next Wolf Creek installment; the Hulu premiere of Return to Silent Hill, which debuted in the platform's weekend Top 15; and the exclusive Screambox release of Silent Night, Deadly Night as part of the "Halfway to Halloween" slate. Announced Sean McCabe's appointment as Chief Financial Officer, returning to the Company from ad-tech leader Freestar to strengthen the finance organization for the scale of the post-acquisition business. Operational Developments Subsequent to Quarter-End: Completed a reduction in force representing approximately $1.8 million in annualized savings and identified an additional $4.8 million in cost reductions and synergies, bringing the Company's total identified program to $13 million in annualized cost reductions and synergies, with substantially all actions expected to be completed by the end of the fiscal second quarter. Launched VAUDIO, a proprietary ad-tech offering extending brands' audio campaigns onto CTV, developed by the executive team that joined with the IndiCue acquisition on our expanded technology platform. Announced a partnership with PEDIGREE® and Air Bud Entertainment for a multi-city summer movie series across Los Angeles, Chicago, and Kansas City, featuring an exclusive first look at Air Bud Returns ahead of its January 2027 theatrical release. Management Commentary Chris McGurk, Cineverse Chairman and CEO, stated: "We registered another very strong quarter: Fueled by the acquisitions of Giant Worldwide and IndiCue, our total revenues increased by 175% and we increased Adjusted EBITDA by $2.6 million. This is impressive given that we had no new theatrical film releases during the quarter, and this is also one of our seasonally slowest quarters across all of our business lines. Importantly, technology now continues to be the most important source of revenue for the Company, representing over 60% of our combined revenues, with much of that revenue durable and recurring with long term customers." "Going forward, we expect to see more and more of the impact of our cost reduction and synergy program initiatives reflected in our financials as we fully complete the integration of our two key acquisitions, further rationalize the business to focus on our highest potential core products and services, and increase operating margins. We are well on our way to generating our target of $13 million in annual cost reductions and synergies, and much of that is expected to be fully recognized during our Fiscal 3rd and 4th quarters, which are also our strongest seasonal quarters across our business lines. In addition, we have three high potential wide release films in the lineup for those quarters as well. Our last five wide film releases starting with Terrifier 2 have generated high ROI and are strong additions to our library, which has been valued at approximately $45 million. It is also worth emphasizing that we improved operating cash flows by over $13 million and should require a far lower CAPEX to generate that cash going forward than in the past." "Given that, we reaffirm our full year Fiscal 2027 guidance of $115 to $120 million in total revenues and $10 to $20 million in Adjusted EBITDA." Erick Opeka, Cineverse President and Chief Strategy Officer, stated: "With the acquisitions of Giant Worldwide and IndiCue complete, this quarter was about one thing: integration and execution. The core integration of both companies is now substantially complete, and our focus has shifted to capturing synergies and driving growth. Q1 absorbed the full cost weight of both acquisitions, including integration, audit, and transition expenses, while we still improved Adjusted EBITDA by $2.6 million year over year, and delivered the most-watched streaming quarter in our history. That is the pattern we anticipate providing to investors from here: costs coming down while the revenue engines scale up." "We are executing against three value-capture priorities. First, we are streamlining our product portfolio by integrating key standalone products as features within Matchpoint, which simplifies our offering and substantially reduces engineering, sales, and marketing costs. Second, we are moving Giant's packaging and delivery operations onto the Matchpoint platform, which we expect to meaningfully expand Media Services gross margins as automation replaces manual workflows. Third, we have expanded our identified cost reduction and synergy program to $13 million on an annualized basis, of which more than $8 million has been actioned to date, with substantially all remaining actions expected to be completed by the end of the second quarter. As these actions take hold, we believe our studio and streaming operations, inclusive of corporate overhead, are approaching run-rate profitability, and the full earnings power of the new Cineverse will become visible in our results through the balance of the fiscal year." Conference Call Cineverse will host a conference call at 4:30 p.m. EST/1:30 p.m. PST (Thursday, August 13, 2026), during which management will discuss the results of its fiscal first quarter ended June 30, 2026. The conference call can be accessed by webcast at the Investors section of the Company's website at https://events.q4inc.com/attendee/516480513. Those who are unable to attend the live conference call may access the recording at the above webcast link, which will be made available shortly after the conclusion of the call. About Cineverse Cineverse (Nasdaq: CNVS) is an entertainment technology company and studio. Fiercely innovative and independent, Cineverse develops and invests in technology and content that drives the future of the industry. Core to its business is Matchpoint® – a growing tech ecosystem designed to prepare, distribute, monetize, and continuously improve content across any platform. Matchpoint helps studios large and small operate at scale and improve performance and efficiency in an increasingly fragmented distribution environment. Additionally, Cineverse distributes a vast library of premium films, series, and podcasts, across theatrical, home entertainment, and streaming; operates dozens of digital properties that super serve passionate fandoms around the world; and works with leading brands to connect them with audiences they value. From award-winning technology to the highest-grossing unrated film in U.S. history, Cineverse has created a playbook that marries tech and content to redefine the next era of entertainment. For more information, visit cineverse.com. Safe Harbor Statement Investors and readers are cautioned that certain statements contained in this document, as well as some statements in periodic press releases and some oral statements of Cineverse officials during presentations about Cineverse, along with Cineverse's filings with the Securities and Exchange Commission, including Cineverse's registration statements, quarterly reports on Form 10-Q and annual report on Form 10-K, are "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"). Forward-looking statements include statements that are predictive in nature, which depend upon or refer to future events or conditions, which include words such as "expects," "anticipates," "intends," "plans," "could," "might," "believes," "seeks," "estimates" or similar expressions. In addition, any statements concerning future financial performance (including future revenues, earnings, or growth rates), ongoing business strategies or prospects, and possible future actions, which may be provided by Cineverse's management, are also forward-looking statements as defined by the Act. Forward-looking statements are based on current expectations and projections about future events and are subject to various risks, uncertainties, and assumptions about Cineverse, its technology, economic and market factors, and the industries in which Cineverse does business, among other things. These statements are not guarantees of future performance, and Cineverse undertakes no specific obligation or intention to update these statements after the date of this release. For additional information, please contact:Julie [email protected] Adjusted EBITDA We define Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, stock-based compensation expense, merger and acquisition costs, restructuring, transition and acquisitions expense, net, goodwill impairment and certain other items. Adjusted EBITDA is not a measurement of financial performance under GAAP and may not be comparable to other similarly titled measures of other companies. We use Adjusted EBITDA as a financial metric to measure the financial performance of the business, because management believes it provides additional information with respect to the performance of its fundamental business activities. For this reason, we believe Adjusted EBITDA will also be useful to others, including our stockholders, as a valuable financial metric. We present Adjusted EBITDA because we believe that Adjusted EBITDA is a useful supplement to net income (loss) from continuing operations as an indicator of operating performance. We also believe that Adjusted EBITDA is a financial measure that is useful both to management and investors when evaluating our performance and comparing our performance with that of our competitors. We also use Adjusted EBITDA for planning purposes, and to evaluate our financial performance because Adjusted EBITDA excludes certain incremental expenses or non-cash items, such as stock-based compensation charges, that we believe are not indicative of our ongoing operating performance. We believe that Adjusted EBITDA is a performance measure and not a liquidity measure, and therefore a reconciliation between net income (loss) from operations and Adjusted EBITDA has been provided in the financial results. Adjusted EBITDA should not be considered as an alternative to net income (loss) from operations as an indicator of performance, or as an alternative to cash flows from operating activities as an indicator of cash flows, in each case as determined in accordance with GAAP, or as a measure of liquidity. In addition, Adjusted EBITDA does not take into account changes in certain assets and liabilities as well as interest and income taxes that can affect cash flows. We do not intend the presentation of these non-GAAP measures to be considered in isolation or as a substitute for results prepared in accordance with GAAP. These non-GAAP measures should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP. Following is the reconciliation of our consolidated net income (loss) to Adjusted EBITDA (in thousands): View original content to download multimedia:https://www.prnewswire.com/news-releases/cineverse-reports-first-quarter-fiscal-year-2027-results-302851365.html

Interested in Cineverse Corp.? Here are five stocks we like better. Revenue surged 175% to $30.6 million in fiscal Q1 2027 following the Giant Worldwide and IndiCue acquisitions, while adjusted EBITDA reached $0.5 million for a second consecutive profitable quarter. Cineverse reaffirmed full-year guidance of $115 million-$120 million in revenue and $10 million-$20 million in adjusted EBITDA. Management expects more than $13 million in cost reductions during fiscal 2027, with integration largely complete and additional savings from consolidating products into the Matchpoint platform. Automation could lift gross margins from the mid-40% range to the mid-70% range or higher for eligible workflows. Streaming engagement strengthened, with minutes viewed up 33% to 4.5 billion, viewers up 12% to 122.8 million and subscribers up 12% to 1.52 million. Cineverse also launched VAUDIO, targeting a roughly $12 million run rate by year-end, and expects seasonal advertising softness in Q2 before stronger election, holiday and theatrical demand in the second half. Cineverse (NASDAQ:CNVS) reported first-quarter fiscal 2027 revenue growth of 175% as the company integrated its Giant Worldwide and IndiCue acquisitions, while management reaffirmed full-year guidance and outlined plans for cost reductions, platform automation and new advertising products. Revenue for the quarter ended June 30, 2026, rose to $30.6 million from $11.1 million a year earlier. Chief Financial Officer Sean McCabe said the increase was primarily driven by a $19.4 million contribution from new advertising, technology and media-services revenue streams associated with the acquisitions, which closed during the fourth quarter of fiscal 2026. → AST SpaceMobile Earnings Just Reminded Investors How Risky Space Can Be Chairman and Chief Executive Officer Chris McGurk said technology revenue represented more than 60% of consolidated revenue in the quarter, making it the company’s largest revenue source. He said much of this revenue is recurring and supported by industry customers using Cineverse’s products and services. Cineverse posted adjusted EBITDA of $0.5 million, improving by $2.6 million from the year-earlier quarter and by $0.4 million sequentially. McCabe said it was the company’s second consecutive quarter of positive adjusted EBITDA following the Giant and IndiCue acquisitions. → Nebius’ Q2 Beat Shows the AI Bottleneck Is Capacity, Not Demand The company’s direct operating margin was 35%, compared with 57% in the prior quarter. McCabe attributed the decline to the acquired advertising-technology business, which carried an average 79% revenue-share expense to supply partners during the first quarter, as well as media-services operations that Cineverse is working to optimize during fiscal 2027. Net loss attributable to common stockholders widened to $5.8 million from $3.6 million a year earlier. McCabe cited higher selling, general and administrative expense, depreciation and amortization related to purchase accounting, a non-cash adjustment to the fair value of IndiCue earn-out and deferred-consideration liabilities, and increased interest expense. Those items were partly offset by a $4.3 million increase in direct operating profit. → On Holding's Price Stumble May Be an Opening for a Company Built to Run Operating cash flow improved by more than $13 million from the first quarter of fiscal 2026, according to management. Cineverse ended the quarter with $4.3 million in cash and a $12.5 million revolver available. McCabe said negative working capital of $18.9 million included $18 million in deferred consideration and the current portion of the IndiCue earn-out, which the company has the right to pay in equity. The company reaffirmed fiscal 2027 guidance for revenue of $115 million to $120 million and adjusted EBITDA of $10 million to $20 million. McCabe said Cineverse expects seasonal softness in advertising during the second quarter but anticipates that U.S. midterm-election advertising, holiday demand and theatrical releases will support the second half. President and Chief Strategy Officer Erick Opeka said the core post-merger integration work is substantially complete, with systems, teams and workflows unified. The company is now focused on reducing costs, capturing synergies and growing the combined businesses. Cineverse identified more than $13 million in operating and SG&A reductions expected within the current fiscal year. Opeka said the company made $3.8 million of headcount reductions before the fiscal year began, followed by additional reductions in force and vendor eliminations totaling more than $8.3 million. Of that total, he said $7.5 million is expected to be realized during fiscal 2027. Additional planned reductions of $5.5 million include efforts to streamline the product portfolio. Cineverse plans to fold certain standalone offerings into its Matchpoint platform rather than market them separately, a move Opeka said should eliminate about $2.7 million in annualized vendor, sales and marketing costs. Management expects the bulk of savings and synergies to appear in third- and fourth-quarter results. In response to an analyst question, McGurk said the $13 million target is focused predominantly on cost reductions and does not include broader revenue synergies. He described the company’s acquisitions as having doubled its size, added about 150 employees and expanded its operations across three continents and five offices. Management said it is shifting Giant’s packaging and delivery work toward Matchpoint automation. Opeka said platform-based work can generate gross margins in the mid-70% range or higher, compared with the mid-40% range for traditional manual workflows, depending on the work. Existing Giant clients including Neon, PBS and Paramount’s Pluto increased their delivery output individually by between 45% and 75%, according to Opeka. The first customer workflow conversions to Matchpoint Dispatch produced about 40% time savings versus manual processing. Cineverse aims to have materially all packaging and delivery work, which Opeka said accounts for 80% of Giant revenue, performed in an automated or semi-automated manner by the end of the fiscal year. IndiCue’s customer concentration has been reduced by nearly half since the acquisition, while churn remained low and net revenue retention was about 98%, Opeka said. The business served 3.39 trillion ad impressions during the quarter from 3.4 trillion ad opportunities. Cineverse also introduced VAUDIO, an ad-tech product developed by the IndiCue team that extends audio campaigns into connected television. Opeka said management is targeting a roughly $12 million run rate for VAUDIO by the end of the fiscal year, based on early trials and customer demand. He said the company believes 5% to 7% of the estimated $3 billion annual podcast advertising market could eventually migrate to connected-TV opportunities. Streaming engagement reached record levels during the quarter, with 4.5 billion minutes streamed, up 33% year over year. Viewers rose 12% to 122.8 million, while SVOD subscribers increased 12% to 1.52 million. Opeka said Docurama surpassed 100,000 subscribers, and several ad-supported channels, including Dove Channel, Dog Whisperer, Screambox and Yu-Gi-Oh!, posted their most-watched quarters. McGurk said Cineverse’s upcoming releases include a 20th-anniversary 4K and 3D presentation of Guillermo del Toro’s Pan’s Labyrinth on Oct. 9, Air Bud Returns on Jan. 22, and a new Wolf Creek installment in March. In the question-and-answer session, McGurk said Pan’s Labyrinth is expected to open on between 1,500 and 2,000 screens through distribution partner Fathom Entertainment. He said Cineverse’s all-in investment, including marketing and a 20-year distribution term, is less than $5 million, with box-office break-even below $10 million. Cineverse (NASDAQ: CNVS), formerly known as Cinedigm, is a digital entertainment company that acquires, produces and distributes film and television content across a range of platforms. Through its streaming division, the company offers a portfolio of direct-to-consumer channels and apps—spanning genres such as horror, faith and family, documentaries and classic cinema—on both AVOD (ad-supported) and FAST (free ad-supported television) services. Cineverse also licenses its curated libraries to third-party streaming platforms, pay-TV operators and retail video-on-demand providers. In addition to its consumer-facing streaming business, Cineverse operates a digital cinema network that supplies hardware, software and content delivery solutions to cinema exhibitors throughout North America. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Cineverse Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management characterizes fiscal year 2026 as a pivotal turning point, transitioning from a traditional content distributor to a technology-first, AI-driven integrated entertainment company. The acquisitions of Giant Worldwide and IndiCue are described as the foundation of a new 'flywheel' where Matchpoint's automated supply chain feeds IndiCue's monetization engine. Performance in the fourth quarter was driven by the partial-quarter inclusion of these acquisitions, contributing $11.6 million in new technology-based revenue streams. The company is leveraging a 'proven low-risk, high-potential-return' film strategy, using known IP like Pan's Labyrinth and Air Bud to drive recurring streaming engagement. Management attributes the 66% growth in streaming viewers to a successful 'free-to-paid' funnel, where engagement is growing four to five times faster than the subscriber base. The strategic pivot includes a shift toward durable, recurring revenue, with over 50% of future revenue expected to be technology-based rather than hit-driven content sales. Operational focus has shifted toward 'single pane of glass' solutions, addressing industry fatigue with fragmented systems for delivery, encoding, and ad serving. Reaffirmed fiscal 2027 guidance of $115 million to $120 million in revenue and $10 million to $20 million in adjusted EBITDA based on full-year acquisition contributions. Management expects progressive margin and EBITDA improvement from Q1 through Q4 of fiscal 2027 as integration and cost-saving initiatives are finalized. The company anticipates realizing the vast majority of a remaining $5.5 million cost reduction program by the end of the second quarter of fiscal 2027. Guidance assumes a rebound in CPMs and fill rates as the ad market absorbs the recent influx of streaming inventory from major platforms. Future growth is contingent on the successful cross-selling of integrated products across the newly expanded sales team and the capture of $2.5 million in annualized Giant-Matchpoint synergies. Recorded a $4.3 million bargain purchase gain on the Giant Worldwide acquisition, which management cites as evidence of high-quality deal execution. Restructured the MicroCo investment into a passive minority stake (rebranded as A Twist) to avoid the 'arms race' of heavy marketing spend in the micro-drama space. Reported a negative $12.2 million net working capital position, though management notes this includes $12.2 million in deferred consideration that can be settled in equity. Identified a temporary depression in CPMs due to a massive increase in FAST channel competition and new inventory from major streamers like Netflix and Amazon. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management stated the 'flywheel' is performing better than anticipated on paper, with significant opportunities for optimizing Giant's manual processes through automation. International operations and combined integrated cross-selling are identified as the next major phases of synergy realization. The acquisition of Giant provided a 20-year 'operating trust' with major studios, which has already led to Cineverse being included in major RFPs. Management believes they are winning RFPs because competitors rely on manual or partial solutions rather than owning the full integrated stack. Management decided to sell 'picks and shovels' (technology and content) to the 400+ new micro-drama services rather than competing in a high-burn marketing environment. The shift to a passive stake allows the company to retain upside while focusing capital on the core technology and media services business. Management expects to benefit from political advertising in the back half of the year, noting it could provide upside to current guidance. IndiCue is expected to follow typical entertainment cycles but has shown a better ability to manage volume during traditional Q1 dips.

Image source: The Motley Fool. Friday, June 26, 2026 at 8:30 a.m. ET Chairman and Chief Executive Officer - Chris McGurk President and Chief Strategy Officer - Eric Opeka President of Technology and Chief Product Officer - Tony Huidor Chief Financial Officer - Sean McCabe Chief Motion Pictures Officer - Yolanda Macias Chief People Officer - Mark Torres Chief Legal Officer, Secretary, and Senior Advisor - Gary Loffredo Operator: Everyone. Thank you for joining us. Welcome to Cineverse fourth quarter and fiscal year 2026 earnings conference call. I will now hand the conference over to Gary Loffredo, Chief Legal Officer, Secretary, and Senior Advisor. Gary Loffredo: Good morning, everyone. Thank you for joining us for the Cineverse fourth quarter and fiscal year 2026 financial results conference call. The press release is available at the investors section of the company's website at www.cineverse.com. Before we begin, I would like to point out that certain statements made on today's call contain forward-looking statements based on management's current expectations and subject to risks, uncertainties, and assumptions. All the information discussed on this call is as of today, June 26th, 2026. With me today are Chris McGurk, Chairman and CEO; Eric Opeka, President and Chief Strategy Officer; Tony Huidor, President of Technology and Chief Product Officer; Sean McCabe, Chief Financial Officer; Yolanda Macias, Chief Motion Pictures Officer; and Mark Torres, Chief People Officer, all of whom will be available for questions following the prepared remarks. On today's call, Chris will briefly discuss our fourth quarter and fiscal year 2026 business highlights, Sean will follow with a review of our financial results, and Eric will provide further details on our two recent acquisitions. I will now turn the call over to Chris McGurk. Chris McGurk: Thank you, Gary, and thanks everyone for joining us on the call today. First, I want to note that we're very happy to have our new CFO, Sean McCabe, here with us. Sean was our controller previously and returns to the company as CFO, having acquired valuable experience in the ad tech business, which as you'll hear today is going to be a big part of our future following our acquisition of IndiCue and all the related synergies that will create with the rest of our business. We had a very strong fiscal fourth quarter. We generated $26 million in consolidated revenues, up 67% over the prior year period. This reflected solid performance in our base business, plus a partial quarter contribution from our two new acquisitions, Giant Worldwide and IndiCue, of $11.6 million. We acquired Giant Worldwide in January and IndiCue in the middle of February, and we fully expect an even bigger revenue contribution from those acquisitions when we record their full impact in our next reported quarter. Importantly, a significant portion of those revenues come from durable, recurring, fast-growing technology-based revenue streams from a large array of major studio and streaming customers, which was a major rationale for the acquisitions themselves. We also recorded net income attributable to stockholders of $1.1 million, a 51% increase over the prior year period. This was driven by a $4.3 million bargain purchase gain on the Giant Worldwide acquisition and a $2.9 million income tax benefit primarily coming from the IndiCue acquisition — both additional strong indicators of the quality of the deals we cut and their upside value creation potential. Overall, we believe that fiscal year 2026 was one of the most consequential years in our history. We followed up the unprecedented success of Terrifier 3, the highest performing unrated film in history, by quickly and decisively completing the acquisitions of Giant Worldwide and IndiCue in the span of six weeks during this reported quarter. These deals fundamentally strengthen and change what Cineverse is as a company. We are now a technology-first, AI-driven, fully integrated entertainment company with three powerful and mutually reinforcing growth engines: a proven low-risk, high-potential-return wide release film slate strategy; a scaled streaming and podcast portfolio with vertically integrated advertising technology; and a media services business built around our Matchpoint technology platform. The strategic logic of these transactions is clear. IndiCue brings a connected TV monetization platform serving more than 40 live clients, plus an additional 75 publishers onboarding. Giant Worldwide, now a Matchpoint company, brings deep and longstanding studio relationships directly into our automated media services ecosystem. Combined, this creates a powerful flywheel — Matchpoint's automated content supply chain feeds IndiCue's monetization engine, while IndiCue's advertiser demand increases the value of every channel, film, TV title, and partner we serve. This expanded Cineverse flywheel is the key growth and performance engine behind our fiscal 2027 guidance of $115 million to $120 million in consolidated revenue and $10 million to $20 million in adjusted EBITDA, which we are reaffirming today. A significant portion of those revenues will be durable and recurring, and over 50% will be technology-based. Our franchise IP-based wide release film strategy continues to perform exactly as designed. Our upcoming slate includes the 20th anniversary theatrical re-release of Guillermo del Toro's Oscar-winning "Pan's Labyrinth" this October, presented in 3D and 4K formats. When first released in 2006, the film received the longest standing ovation in the history of the Cannes Film Festival — a record that still stands. We just took the film back to Cannes six weeks ago, where it was selected as the opening film of the festival and received a tremendous ovation and great critical reaction once again. Next up after "Pan's Labyrinth" will be "Air Bud Returns" in January 2027, then "Wolf Creek: Legacy" in March 2027. All three closely follow the Terrifier blueprint of acquiring known IP properties with large built-in fan bases, high upside potential, and low financial risk. These titles will generate recurring revenues by driving viewers and subscribers to our streaming channels and becoming valuable long-term additions to our library. With that, I'll now turn things over to Sean. Sean McCabe: Thank you, Chris. A few highlights from our fiscal fourth quarter. Revenues were $26 million, up 60% from $16.3 million last quarter, and up 67% from $15.6 million in the same fiscal quarter last year. The increase was primarily driven by $11.6 million of revenue from our new advertising technology and media services revenue streams from our fourth quarter acquisitions of IndiCue and Giant during their first partial quarter. Net income attributable to stockholders for the quarter was $1.1 million, a $2.1 million improvement over the net loss of $1.1 million last quarter, aided by $2.9 million of income tax benefits primarily from the IndiCue acquisition and a $4.3 million bargain purchase gain on the Giant Worldwide acquisition. Adjusted EBITDA for the quarter was $0.1 million, a decrease of $2.3 million from $2.4 million of adjusted EBITDA last quarter. Our direct operating margin for the quarter was 40%, down from last quarter's 69%. This quarter, we had a focus on acquisition integration and ensuring we get this right in order to put us on an optimized path into fiscal year 2027. We anticipate both margin and adjusted EBITDA improvement from quarter one to quarter four of fiscal 2027 as integration and cost savings initiatives are completed. As a combined entity, we are reaffirming our previously announced guidance for fiscal year 2027 of $115 million to $120 million of revenue and $10 million to $20 million of adjusted EBITDA. From a liquidity standpoint, we ended the quarter with $3.4 million of cash, our $12.5 million revolver still effective, and an ATM facility recently increased to $30 million. While our net working capital as of March 31st is negative $12.2 million, this does include $12.2 million of deferred consideration relating to the IndiCue acquisition, which the company has the right to pay in equity. With that, I'll turn it over to Eric. Eric Opeka: Thanks, Sean. Let me start with a review of where the industry is at, then turn to our operating results. Three shifts are happening at once. First is consolidation — companies are tired of bolting together separate systems for delivery, encoding, ad serving, and data that were never built to talk to each other. They all want a single pane of glass, one system that runs the entire supply chain and works tightly together. That is, at its core, what our Matchpoint technology and operating platform now is. We built the operating layer for the media supply chain from ingestion through delivery through monetization. There is no commercially available version of this at scale anywhere else in the market. A company that wants a fully unified technology stack today has two options: spend years building it or come to us, and that's our moat. The second shift is that this same consolidation is opening lanes for smaller focused companies to scale quickly, and we serve both ends of that — large platforms consolidating onto our stack and new challengers using it to evolve from a single app or content library into a full platform. For example, Gorilla Comedy+ launched a subscription service on Matchpoint this quarter. The third shift and the largest is the move to ad-supported streaming. According to Nielsen, ad-supported viewing reached 74% of all U.S. time in the fourth quarter — the highest level of the year. According to eMarketer, ad-supported streaming now reaches more than 200 million people in the U.S., on its way to roughly two-thirds of the country by next year. Fox's purchase of Roku is the clearest signal yet — a deal built around owning the ad-supported on-demand machine at scale. Scaling an ad-supported business means preparing, delivering, and monetizing far more content than ever before. This is exactly what Matchpoint and Giant do on the supply side and what IndiCue does on monetization, letting a customer run all of it inside one integrated stack rather than stitching together a dozen vendors and giving up margin and data at every step. Now to our results. We ended the quarter with 1.52 million SVOD subscribers, up 13% year-over-year. More importantly, the engagement underneath that grew far faster. Streaming viewers were up 66% to nearly 130 million, and total minutes streamed rose 58% to 4.4 billion for the quarter. Our engagement growing four to five times faster than our subscriber base is exactly what we want to see, because it's that reach and first-party data that feed discovery, monetization, and the rest of the business. Our fandom model is compounding channel by channel. Docurama was up 47% year-over-year and has since crossed 100,000 subscribers in its eighth straight month of growth. Midnight Pulp was up 18%, with its Roku subscriber base more than doubling. Our flagship Cineverse channel has grown every single month since we launched, driven first by its debut on Amazon and now by its recent launch on The Roku Channel in May. That free-to-paid funnel is working in real time. The Dog Whisperer was up 84% year-over-year in its eighth consecutive quarter of growth, and Screambox was up 40%. Midnight Pulp, boosted by its launch on YouTube and Twitch, grew more than tenfold year-over-year on the ad-supported side. On the micro drama investment — during the quarter, we restructured our investment in MicroCo, now rebranded as A Twist, moving from a joint venture into a passive minority stake. This approach lets us keep our attention and capital focused on our core business and recent acquisitions while retaining meaningful upside and avoiding dilution and heavy investment in an early-stage joint venture. We still retain the ability to invest pari passu with other institutional investors as that business scales, if we choose to do so. We completed approximately $2 million in SG&A cost reductions through the end of the fiscal year and remain on track to realize the vast majority of the remaining $5.5 million of our $7.5 million cost reduction program by the end of the second quarter of fiscal 2027, while also capturing approximately $2.5 million in annualized synergies from integrating Giant into Matchpoint. As these cuts take hold, we believe our studio and streaming operations, inclusive of corporate overhead, are near run rate profitability. Operator, we can open up the line for questions. Operator: Your first question comes from Dan Kurnos with StoneX. Dan Kurnos: Since you've completed and closed the acquisitions, any initial learnings or incremental business opportunities? And on the synergy side, can you give us a cadence on how that's going to play out and where you're finding the incremental synergies coming from? Chris McGurk: Both acquisitions combined are performing better than we thought already, especially now that we're seeing the integration being completed and we're seeing the full monthly results. The flywheel we put down on paper is actually working better than we anticipated. Eric, do you want to add something on additional synergies? Eric Opeka: What we've assembled here with the various assets combined into a platform is exactly what the market is really looking for right now. Scale is important — you need hundreds of thousands of titles to reap the benefits of AI, not just a few hundred. Partners are looking to scale up and can't do that with manual processes. Our timing was prescient, based on our own experiences as operators in the market. In terms of incremental synergies, we're seeing significant opportunities for optimizing these businesses. Giant has good processes but could benefit greatly from the automated processes we work with. We haven't yet begun to exploit Cineverse's strong international operations at a very good cost basis. Combined integrated selling is also just starting — we have a very large diverse team now selling a lot of different products, and getting those teams to cross-sell is a pretty substantial synergy that will be scaling up over the course of the year. Dan Kurnos: How are the conversations with networks and studios going, especially with Giant? And on the IndiCue side, do you benefit from seasonality and political advertising in the back half of the year? Eric Opeka: On the large enterprise studio side, all of those partners are in scale-up mode or optimization mode. Studios that we know are in scale-up mode want automated, highly visible solutions to scale their business and make more revenue. We're seeing either existing customers scaling up or new studios coming to us because most of the competitors they're dealing with have manual, semi-manual, or partial solutions, or system integrators who don't actually control or own the full stack. That environment has changed pretty dramatically and it's going to be a big part of our growth this year. Chris McGurk: On seasonality and political — clearly we're going to benefit this year. That could be an upside to our guidance. Operator: Your next question comes from Brian Kinstlinger with Alliance Global Partners. Brian Kinstlinger: How are studios reacting to this combination? I know you've had some trouble with Matchpoint penetrating them. What are conversations like regarding converting to Matchpoint now that the combination is complete? Eric Opeka: When we first started launching enterprise sales on Matchpoint, you need proof points that your product can be trusted at scale. With the addition of Giant, we have a very strong over 20-year studio operating trust with those partners. That's led to us being in major RFPs on a variety of different products and opportunities. Beyond that, we're finding that we're either winning RFPs or looking to win RFPs simply because most of the competition has manual, semi-manual, or partial solutions. They don't actually control or own the full stack. That environment has changed pretty dramatically and is going to be a big part of our growth this year. Brian Kinstlinger: Streaming viewer numbers and KPIs are all up huge year-over-year, yet revenue without M&A is flat year-over-year. Can you speak to the market dynamics for the legacy business? Chris McGurk: Last year we had the spillover effect of Terrifier 3 — we were still generating huge revenues in the ancillary markets after the theatrical release in October, which made the comparison tougher. Eric Opeka: In the ad market, we saw probably the fastest growth in the FAST space in terms of channel and competition. Studios have launched 80-plus channels into the market, on top of adding Netflix and Amazon Prime inventory, and every major streamer. The market is just starting to absorb that volume of impressions. That has caused, I think temporarily, a depression in CPMs and fill rates. We're starting to see that rebound, and we think last year was kind of the low. The migration of ad dollars from television is still accelerating, CTV is still double-digit growth, and us owning an ad tech platform and having experts at monetization positions us well to take advantage of that audience as it changes. Brian Kinstlinger: Can you speak to the overall seasonality of this new business combination? And what does the EBITDA guidance equate to in terms of free cash flow? Eric Opeka: On seasonality — even though we've expanded our lines of business, Giant and IndiCue still follow some of the seasonality we had overall as a company. Q3, which is calendar Q4 and fiscal Q3, is still going to be our heaviest quarter in terms of volume and revenue, and IndiCue will mirror that. IndiCue has been able to maintain and manage scale and volume in Q1 better than we would normally see, so it won't be quite the same dip. Giant seasonality also matches the entertainment cycle, with big demand going into calendar Q4, typically pulling about a quarter forward as companies prep to deliver lots of content for that period. Sean McCabe: Generally, with the EBITDA improvement, I think you would see relief from the cash and liquidity perspective naturally as we work in our cost savings and increase revenue. We also have our recently increased ATM facility as a lifeline if needed. Generally, you would expect from the guidance that we'd have an improving cash flow and liquidity situation. Operator: Your next question comes from Laura Martin with Needham. Laura Martin: Three questions — first, your acquisition roadmap, what's missing that would make this value chain more valuable? Second, what KPIs will you track internally and disclose externally that will indicate whether the strategic pivot of doubling your size has been successful? Third, Eric, I'd love your learnings from the microdrama business and why you're stepping back from it. Chris McGurk: On micro dramas — as we got into it, there's just a huge level of investment happening in that space, with big Asian media companies spending like $1 million a day to market their platforms and channels. Our gut feeling was we should be selling picks and shovels to that business versus getting involved in an arms race and spending at the levels competitors are spending. We can leverage our technology, content library, and ecosystem in a smarter, lower-investment way to drive revenues and participate in the business. Eric Opeka: On acquisitions — any business that we think could benefit from leveraging our technology to increase margins, increase scale, and provide us greater market share. The encoding and packaging space is pretty ripe — most competitors fit the same profile as Giant, where using technology and combined scale, we could add 20-plus points of margin to those businesses. Also, other technology providers that provide critical automated services but are maybe subscale on their own — things like metadata enrichment, AI enhancement of content. Either things that bring scale or support this flywheel are going to be on track. On KPIs — for our software business, especially the SaaS advertising business, we're looking at net revenue retention, increase in customer annual spends, and particularly on the media network side, looking at TAC in that business. For our services and media services business, similar SaaS metrics will apply, along with software-like margins out of those services businesses. IndiCue's net revenue retention sits at nearly 98% today, which bodes very well for the continued growth of our recurring SaaS revenue. On micro dramas specifically, since you and I last spoke, there have been about 400 microdrama service launches globally, many of them losing hundreds of millions of dollars a year. We've been down that road in 2014 and 2015 in the early days of streaming. I'd rather be selling content to 400 microdrama services and providing technology than competing with 400 services. Operator: This concludes the Q&A session. We will now turn the call back to Chris McGurk for closing remarks. Chris McGurk: Thank you all for joining us today. Please feel free to reach out to Julie Milstead with any additional questions. We look forward to speaking to you all again on our next quarterly call, where we'll see the full impact of the two acquisitions that we just made. Thank you all very much. Operator: This concludes today's call. Thank you for attending. You may now disconnect. Before you buy stock in Cineverse, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Cineverse wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Cineverse (CNVS) Q4 2026 Earnings Call Transcript was originally published by The Motley Fool

This article first appeared on GuruFocus. Revenue: $26 million, up 67% year-over-year. Net Income: $1.1 million, a 51% increase over the prior year period. Adjusted EBITDA: $0.1 million, a decrease from $2.4 million last quarter. Direct Operating Margin: 40%, down from 69% last quarter. Cash Position: $3.4 million at the end of the quarter. Fiscal 2027 Revenue Guidance: $115 million to $120 million. Fiscal 2027 Adjusted EBITDA Guidance: $10 million to $20 million. SVOD Subscribers: 1.52 million, up 13% year-over-year. Streaming Viewers: Nearly 130 million, up 66% year-over-year. Total Minutes Streamed: 4.4 billion, up 58% year-over-year. SG&A Cost Reductions: $2 million completed, with a target of $7.5 million by fiscal 2027 Q2. Warning! GuruFocus has detected 5 Warning Signs with CNVS. Is CNVS fairly valued? Test your thesis with our free DCF calculator. Release Date: June 26, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Cineverse Corp (NASDAQ:CNVS) reported a strong fiscal fourth quarter with consolidated revenues of $26 million, up 67% over the prior year period. The company successfully completed the acquisitions of Giant Worldwide and IndiCue, contributing $11.6 million to the quarter's revenue. Net income attributable to stockholders increased by 51% to $1.1 million, driven by a $4.3 million bargain purchase gain and a $2.9 million income tax benefit. Cineverse Corp (NASDAQ:CNVS) reaffirmed its fiscal 2027 guidance of $115 million to $120 million in consolidated revenue and $10 million to $20 million in adjusted EBITDA. The company's strategic shift to a technology-first, AI-driven entertainment company is expected to create significant shareholder value through durable, recurring revenue streams. Adjusted EBITDA for the quarter decreased to $0.1 million, down from $2.4 million in the previous quarter. Direct operating margin for the quarter was 40%, a decline from 69% in the previous quarter. The company ended the quarter with negative net working capital of $12.2 million, including deferred consideration from the IndiCue acquisition. There is a significant level of investment required in the microdrama space, leading Cineverse Corp (NASDAQ:CNVS) to step back from direct involvement. The ad market faced challenges with temporary depression in CPMs and fill rates due to increased competition and inventory. Q: Since completing the acquisitions, have there been any initial learnings or new business opportunities? Also, can you provide a cadence on synergy realization? A: Christopher McGurk, CEO: Both acquisitions are performing better than expected, with integration showing positive results. Erick Opeka, President and Chief Strategy Officer, added that the market is looking for scale, which our acquisitions provide. Incremental synergies are being realized through process optimization and cross-selling opportunities. Q: How are conversations with networks and studios progressing, especially with Giant? Does IndiCue benefit from political seasonality? A: Erick Opeka, President and Chief Strategy Officer: Studios are in scale-up mode, seeking automated solutions, which aligns with our offerings. We anticipate more business with studios this year. Regarding seasonality, political advertising could provide an upside to our guidance. Q: How are studios reacting to the Matchpoint combination, and what are the challenges in penetrating them? A: Erick Opeka, President and Chief Strategy Officer: The addition of Giant has strengthened our studio relationships, leading to participation in major RFPs. Our integrated solutions are more competitive compared to manual or semi-manual offerings from others. Q: Despite strong streaming KPIs, revenue without M&A is flat year-over-year. Can you explain the dynamics affecting legacy business revenue? A: Christopher McGurk, CEO: Last year's revenue was boosted by the success of Terrifier 3, making comparisons tougher. Erick Opeka added that the market is absorbing a large volume of impressions, temporarily affecting CPMs and fill rates, but expects a rebound as CTV growth continues. Q: What is your acquisition roadmap, and what KPIs will indicate success over the next 12 months? A: Erick Opeka, President and Chief Strategy Officer: We are looking at businesses that can leverage our technology for increased margins and scale. KPIs will include net revenue retention, customer annual spend increases, and software-like margins in media services. On microdramas, we prefer selling content and services rather than competing in a crowded market. For the complete transcript of the earnings call, please refer to the full earnings call transcript.