CuriosityStream Announces Second Quarter 2023 Financial Results
“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
Second Quarter 2023 Financial Results
-
Revenue of
$14.1 million $22.3 million -
Gross profit of
$4.2 million $9.4 million -
Total advertising and marketing and general and administrative expenses of
$12.2 million 44% year-over-year reduction; -
Net loss of
$(9.9) million $(16.0) million -
Net cash used in operating activities of
$(4.3) million $(5.9) million -
Adjusted Free Cash Flow of
$(4.3) million $(6.0) million -
Adjusted EBITDA of
$(6.5) million $(10.6) million -
Cash and restricted cash balance of
$44.8 million
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
| 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, |
|
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
Source: CuriosityStream Inc.
