CuriosityStream Inc. (NASDAQ: CURI), a global factual
entertainment company, today announced its financial results for
the second quarter ended June 30, 2023.
“Our second quarter results exceeded the midpoints of our
guidance ranges as we returned the business to sequential revenue
growth and delivered a third straight quarter of sequential
Adjusted Free Cash Flow improvement,” said Clint Stinchcomb,
President & CEO. “Looking ahead, we expect to continue our path
toward positive Adjusted Free Cash Flow as we expand our content
partnerships globally and as we continue to roll out our pricing
increase to new direct subscribers and existing subscribers as they
come up for renewal over the next year. Specifically, we entered
into several new licensing relationships in the UK, Europe and the
Middle East in the second quarter, demonstrating the global
interest in Curiosity’s premium factual content. Further, we
believe that our direct subscriber base, content library,
multi-year partner agreements, strong cash position, public equity
currency and lack of debt are uniquely favorable attributes that
provide us with a firm foundation and exceptional flexibility.”
Second Quarter 2023 Financial Results
- Revenue of $14.1 million, compared to $22.3 million in the
second quarter of 2022;
- Gross profit of $4.2 million, compared to $9.4 million in the
second quarter of 2022;
- Total advertising and marketing and general and administrative
expenses of $12.2 million, a 44% year-over-year reduction;
- Net loss of $(9.9) million, compared to net loss of $(16.0)
million in the second quarter of 2022;
- Net cash used in operating activities of $(4.3) million,
compared to net cash used in operating activities of $(5.9) million
in the second quarter of 2022;
- Adjusted Free Cash Flow of $(4.3) million, compared to Adjusted
Free Cash Flow of $(6.0) million in the second quarter of
2022;
- Adjusted EBITDA of $(6.5) million, compared to Adjusted EBITDA
of $(10.6) million in the second quarter of 2022; and
- Cash and restricted cash balance of $44.8 million and no debt
as of June 30, 2023.
Second Quarter 2023 Business Highlights
- Signed new content licensing agreements with several partners
during the quarter;
- Entered into new advertising and sponsorship agreements with
several companies, including one of the world’s largest
pharmaceutical companies; and
- Continued to ramp-up release of groundbreaking original series
and specials slated for 2023 with premieres of: “Lift the
Ice,” a 6-part series exploring the surprising secrets emerging
from our planet’s melting cryosphere; “GIANTS,” a 5-part
search for the largest creatures alive today and the biggest that
have roamed our planet; “Attack of the Zombie Fungus,” an
in-depth look at the real science behind the HBO hit series “The
Last of Us;” “War Gamers,” a 6-part docudrama about a group
of British women who helped defeat the Nazis in the Battle of the
Atlantic; “Unearthed: Ancient Murder Mysteries,” a 6-part
journey back in time to solve some of history’s most notorious
cold-cases; and “The Real Wild West,” a 4-part exploration
of the unheralded Black and Hispanic cowboys, female homesteaders,
immigrants and Native Americans who settled and continue to shape
the American West.
Financial Outlook
CuriosityStream expects the following for the third quarter of
2023:
- Revenue within the range of $13.5 - $15.5 million
- Adjusted Free Cash Flow within the range of $(5.5) - $(3.5)
million
Conference Call Information
CuriosityStream will host a Q&A conference call today to
discuss the Company's Q2 2023 results at 5:00 p.m. Eastern Time
(2:00 p.m. Pacific Time). A live audio webcast of the call will be
available on the CuriosityStream Investor Relations website at
https://investors.curiositystream.com. Participants may also
dial-in toll free at (888) 510-2008 or International at (646)
960-0306 and reference conference ID# 3957505. An audio replay of
the conference call will be available for two weeks following the
call on the CuriosityStream Investor Relations website at
https://investors.curiositystream.com.
Forward-Looking Statements
Certain statements in this press release may be considered
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995 including, but not limited
to, CuriosityStream’s expectations or predictions of future
financial or business performance or conditions, consumers’
valuation of factual content, and the Company’s continued success.
Forward-looking statements are inherently subject to risks,
uncertainties and assumptions. Generally, statements that are not
historical facts, including statements concerning possible or
assumed future actions, business strategies, events or results of
operations, are forward-looking statements. These statements may be
preceded by, followed by or include the words “believes,”
“estimates,” “expects,” “projects,” “forecasts,” “may,” “will,”
“should,” “seeks,” “plans,” “scheduled,” “anticipates,” “predicts”
or “intends” or similar expressions. Such forward-looking
statements involve risks and uncertainties that may cause actual
events, results or performance to differ materially from those
indicated by such statements. Certain of these risks are identified
and discussed under “Risk Factors” in CuriosityStream’s Annual
Report on Form 10-K for the year ended December 31, 2022, that we
filed with the Securities and Exchange Commission (the “SEC”) on
March 31, 2023, and in CuriosityStream’s other SEC filings. These
risk factors are important to consider in determining future
results and should be reviewed in their entirety. Forward-looking
statements are based on the current belief of the management of
CuriosityStream, based on currently available information, as to
the outcome and timing of future events, and involve factors,
risks, and uncertainties that may cause actual results in future
periods to differ materially from such statements. However, there
can be no assurance that the events, results or trends identified
in these forward-looking statements will occur or be achieved.
Forward-looking statements speak only as of the date they are made,
and CuriosityStream is not under any obligation, and expressly
disclaims any obligation to update, alter or otherwise revise any
forward-looking statement, whether as a result of new information,
future events or otherwise, except as required by law. Readers
should carefully review the statements set forth in the reports
that CuriosityStream has filed or will file from time to time with
the SEC.
In addition to factors previously disclosed in CuriosityStream’s
reports filed with the SEC and those identified elsewhere in this
communication, the following factors, among others, could cause
actual results to differ materially from forward-looking statements
or historical performance: (i) risks related to CuriosityStream’s
limited operating history; (ii) the effects of pending and future
legislation; (iii) risks of the internet, online commerce and media
industry; (iv) the highly competitive nature of the internet,
online commerce and media industry and CuriosityStream’s ability to
compete therein; (v) litigation, complaints, and/or adverse
publicity; (vi) the ability to meet Nasdaq’s listing standards; and
(vii) privacy and data protection laws, privacy or data breaches,
or the loss of data.
Non-GAAP Financial
Measures
To supplement our unaudited consolidated statement of
operations, which is prepared in accordance with GAAP, we present
Adjusted EBITDA and Adjusted Free Cash Flow in this press release.
Our use of non-GAAP financial measures, such as Adjusted EBITDA and
Adjusted Free Cash Flow, has limitations as an analytical tool, and
these measures should not be considered in isolation or as a
substitute for analysis of financial results as reported under
GAAP.
We use these non-GAAP financial measures in conjunction with
financial measures prepared in accordance with GAAP for planning
purposes, including in the preparation of our annual operating
budget, as a measure of our core operating results and the
effectiveness of our business strategy, and in evaluating our
financial performance. These measures provide consistency and
comparability with past financial performance, facilitate
period-to-period comparisons of core operating results, and also
facilitate comparisons with other peer companies, many of which use
similar non-GAAP financial measures to supplement their GAAP
results. In addition, Adjusted EBITDA and Adjusted Free Cash Flow
are widely used by investors and securities analysts to measure a
company’s operating performance. We exclude the following items
from net income to calculate Adjusted EBITDA: interest and other
income (expense), provision for income taxes, depreciation and
non-content amortization, loss/(gain) on the change in fair value
of our warrants, equity interests loss (gain), impairment of
goodwill and intangible assets, and stock-based compensation.
Adjusted Free Cash Flow is calculated as net cash flow used in
operating activities less purchases of property and equipment.
Investors are cautioned that there are material limitations
associated with the use of non-GAAP financial measures as an
analytical tool. In particular, (1) although depreciation and
amortization expense are non-cash charges, the assets subject to
depreciation and amortization may have to be replaced in the
future, and Adjusted EBITDA does not reflect cash capital
expenditure requirements for such replacements or for new capital
expenditure requirements; (2) Adjusted EBITDA does not reflect: (a)
changes in, or cash requirements for, our working capital needs; or
(b) tax payments that may represent a reduction in cash available
to us; and (3) Adjusted Free Cash Flow does not reflect: (a) our
cash flow available for discretionary payments; (b) our future
contractual commitments (such as any debt service requirements or
dividend payments); (c) funds available for investment or other
discretionary uses; (d) certain capital expenditure requirements;
or (e) the total increase or decrease in our cash balances for the
stated period. The non-GAAP financial measures we use may be
different from non-GAAP financial measures used by other companies,
limiting their usefulness for comparison purposes. We compensate
for these limitations by providing specific information regarding
the GAAP items excluded from these non-GAAP financial measures. A
reconciliation of these non-GAAP financial measures has been
provided in the financial statements tables included in this press
release and investors are encouraged to review the
reconciliation.
About Curiosity Inc.
Curiosity Inc. is the entertainment brand for people who want to
know more. The global media company is home to award-winning
original and curated factual films, shows, and series covering
science, nature, history, technology, society, and lifestyle. With
over 25 million total paying subscribers worldwide and thousands of
titles, the company operates the flagship Curiosity Stream SVOD
service, available in more than 175 countries worldwide; Curiosity
Channel, the linear television channel available via global
distribution partners; Curiosity Now, a free, ad-supported channel;
Curiosity Audio Network, featuring original content and podcasts;
and Curiosity Studios, which oversees original programming.
Curiosity Inc. also owns and operates One Day University, which
provides access to engaging talks and lectures from leading
university and college professors in the United States. Curiosity
Inc. is a wholly owned subsidiary of CuriosityStream Inc. (Nasdaq:
CURI). For more information, visit CuriosityStream.com.
CuriosityStream Inc. Consolidated Balance Sheets
(in thousands, except par value) June
30, December 31,
2023
2022
(unaudited) Assets Current assets Cash and
cash equivalents
$
44,337
$
40,007
Restricted cash
500
500
Short-term investments in debt securities
-
14,986
Accounts receivable, net
9,087
10,899
Other current assets
1,679
3,118
Total current assets
55,603
69,510
Investments in equity method investees
9,303
10,766
Property and equipment, net
911
1,094
Content assets, net
63,288
68,502
Operating lease right-of-use assets
3,564
3,702
Other assets
448
539
Total assets
$
133,117
$
154,113
Liabilities and stockholders' equity (deficit)
Current liabilities Content liabilities
$
1,750
$
2,862
Accounts payable
6,407
6,065
Accrued expenses and other liabilities
4,173
7,752
Deferred revenue
12,876
14,281
Total current liabilities
25,206
30,960
Warrant liability
147
257
Non-current operating lease liabilities
4,470
4,648
Other liabilities
668
622
Total liabilities
30,491
36,487
Stockholders' equity (deficit) Common stock, $0.0001
par value – 125,000 shares authorized as of June 30, 2023 and
December 31, 2022; 53,026 shares issued and outstanding as of June
30, 2023; 52,853 shares issued and outstanding as of December 31,
2022
5
5
Additional paid-in capital
361,392
358,760
Accumulated other comprehensive loss
-
(40
)
Accumulated deficit
(258,771
)
(241,099
)
Total stockholders' equity (deficit)
102,626
117,626
Total liabilities and stockholders' equity (deficit)
$
133,117
$
154,113
CuriosityStream Inc. Consolidated Statements of
Operations (in thousands, except for per share data)
(unaudited) For the three months ended June
30, For the six months ended June 30,
2023
2022
2023
2022
Revenues
$
14,097
$
22,348
$
26,484
$
39,975
Operating expenses Cost of revenues
9,933
12,988
18,934
24,838
Advertising and marketing
4,203
11,208
7,318
25,976
General and administrative
7,980
10,603
16,039
21,106
Impairment of goodwill and intangible assets
-
3,603
-
3,603
22,116
38,402
42,291
75,523
Operating loss
(8,019
)
(16,054
)
(15,807
)
(35,548
)
Change in fair value of warrant liability
184
478
110
4,338
Interest and other income (expense)
437
(29
)
825
(86
)
Equity method investment loss
(2,235
)
(316
)
(2,454
)
(472
)
Loss before income taxes
(9,633
)
(15,921
)
(17,326
)
(31,768
)
Provision for income taxes
288
56
346
101
Net loss
$
(9,921
)
$
(15,977
)
$
(17,672
)
$
(31,869
)
Net loss per share Basic
$
(0.19
)
$
(0.30
)
$
(0.33
)
$
(0.60
)
Diluted
$
(0.19
)
$
(0.30
)
$
(0.33
)
$
(0.60
)
Weighted average number of common shares outstanding Basic
53,006
52,775
52,978
52,762
Diluted
53,006
52,775
52,978
52,762
CuriosityStream Inc. Consolidated Statements of Cash
Flows (in thousands) (unaudited)
For the six months ended June 30,
2023
2022
Cash flows from operating activities Net loss
$
(17,672
)
$
(31,869
)
Adjustments to reconcile net loss to net cash used in operating
activities Change in fair value of warrant liability
(110
)
(4,338
)
Additions to content assets
(7,103
)
(25,303
)
Change in content liabilities
(1,112
)
(3,708
)
Amortization of content assets
12,317
19,130
Depreciation and amortization expenses
249
441
Impairment of goodwill and intangible assets
-
3,603
Amortization of premiums and accretion of discounts associated with
investments in debt securities, net
26
758
Stock-based compensation
2,689
3,382
Equity method investment loss
2,454
472
Other non-cash items
243
211
Changes in operating assets and liabilities Accounts receivable
1,812
11,893
Other assets
1,464
4,040
Accounts payable
(645
)
6,146
Accrued expenses and other liabilities
(3,862
)
(2,850
)
Deferred revenue
(1,358
)
(157
)
Net cash used in operating activities
(10,608
)
(18,149
)
Cash flows from investing activities Purchases of
property and equipment
(5
)
(120
)
Investment in equity method investees
-
(1,625
)
Sales of investments in debt securities
-
2,893
Maturities of investments in debt securities
15,000
24,373
Purchases of investments in debt securities
-
(1,497
)
Net cash provided by investing activities
14,995
24,024
Cash flows from financing activities Payments related
to tax withholding
(57
)
(161
)
Net cash used in financing activities
(57
)
(161
)
Net increase in cash, cash equivalents and restricted
cash
4,330
5,714
Cash, cash equivalents and restricted cash, beginning of period
40,507
17,547
Cash, cash equivalents and restricted cash, end of period
$
44,837
$
23,261
Supplemental disclosure: Cash paid for taxes
$
25
$
398
Cash paid for operating leases
$
269
$
219
Right-of-use assets obtained in exchange for new operating lease
liabilities
$
-
$
3,965
CuriosityStream Inc. Reconciliation from Net Loss to
Adjusted EBITDA (in thousands) (unaudited)
For the three months ended June 30, For the
six months ended June 30,
2023
2022
2023
2022
Net loss
$
(9,921
)
$
(15,977
)
$
(17,672
)
$
(31,869
)
Change in fair value of warrant liability
(184
)
(478
)
(110
)
(4,338
)
Interest and other (income) expense
(437
)
29
(825
)
86
Provision for Income taxes
288
56
346
101
Equity method investment loss
2,235
316
2,454
472
Depreciation and amortization
122
231
249
440
Impairment of goodwill and intangible assets
-
3,603
-
3,603
Stock-based compensation
1,422
1,594
2,689
3,382
Adjusted EBITDA
$
(6,475
)
$
(10,626
)
$
(12,869
)
$
(28,123
)
CuriosityStream Inc. Reconciliation from Net Cash Flow
used in Operating Activities to Adjusted Free Cash Flow (in
thousands) (unaudited) For the
three months ended June 30, For the six months ended June
30,
2023
2022
2023
2022
Net cash flow used in operating activities
$
(4,300
)
$
(5,862
)
$
(10,608
)
$
(18,149
)
Purchases of property and equipment
-
(98
)
(5
)
(120
)
Adjusted Free Cash Flow
$
(4,300
)
$
(5,960
)
$
(10,613
)
$
(18,269
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230814942464/en/
CuriosityStream Investor Relations Denise Garcia
IR@CuriosityStream.com
CuriosityStream (NASDAQ:CURI)
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