Cineverse Reports Third Quarter Fiscal Year 2025 Results

PR Newswire

LOS ANGELES, Feb. 13, 2025

Total Revenue of $40.7 Million, a 207%, or $27.5 Million, Increase over Prior Year Quarter

Net Income of $7.2 Million, a $9.9 Million Increase over Prior Year Quarter

Adjusted EBITDA of $10.8 Million, a $9.0 Million Increase over Prior Year Quarter

Total Direct Operating Margin of 48%

LOS ANGELES, Feb. 13, 2025 /PRNewswire/ -- Cineverse Corp. ("Cineverse" or the "Company") $(CNVS)$, a global streaming technology and entertainment company, today announced its financial results for its fiscal third quarter ended December 31, 2024 ("Q3 FY 2025").

The Company's financial results for Q3 FY 2025 reflected significant increases in revenue, direct operating margin, SG&A expenses and net income when compared to the prior quarter and the prior year quarter primarily driven by the results of Terrifier 3, but also reflected solid growth across all of the Company's key lines of business.

After debuting at number one in North American theaters on October 11, 2024, displacing Joker: Folie a Deux at the top of the box office charts, Cineverse's low budget horror phenomenon Terrifier 3 charged on to become the highest-grossing non-rated film ever (topping previous record-holder Renaissance: A Film by Beyoncé), amassing more than $54 million at the box office domestically. Subsequently, Terrifier 3 has also performed very strongly in the Digital Sales and BluRay/DVD distribution channels. The film debuts tomorrow, February 14, on our Screambox horror streaming channel and we are also considering multiple other pay/streaming distribution channel options. Terrifier 3 will also continue to have a major positive financial impact on our fiscal 4(th) quarter and beyond.

Based on our ability to achieve outstanding box office results with Terrifier 3 by utilizing our unique ecosystem of new media assets to spend a fraction of what other studios would have spent to promote and market the movie, we are now rounding out a slate of films that we believe can provide a strong and ongoing source of profits for the Company. We have already announced that we are releasing Silent Night Deadly Night, a re-interpretation of the classic controversial horror film, in the next fiscal year's third quarter and The Toxic Avenger, produced by major studio Legendary Films (Dune, Godzilla x Kong, etc.), which we are releasing on August 29, 2025. We also just announced that we will be releasing Wolf Creek: Legacy, the third installment of the classic Australian Outback horror/thriller film in 2026. In addition, based on the results of Terrifier 2 and Terrifier 3, other major studios are now utilizing our new media ecosystem to market their releases, emphasizing the impact our unique and innovative marketing approach has had on the industry.

The Company is now in an extremely strong financial position with more than $13 million in cash-on-hand as of today and no debt, having a zero draw on our current $7.5 million line of credit with East West Bank. We have multiple alternatives to further expand our credit if necessary and have no plans at this time to issue equity to fund our current operations.

All of the Company's lines of business performed strongly this quarter as well, setting the stage for continued strong growth going forward.

Q3 FY 2025 Highlights (all comparisons are to the prior year fiscal quarter ended December 31, 2023, or Q3 FY 2024):

Total revenue was $40.7 million versus $13.3 million in the prior year quarter, a 207% increase primarily driven by the box office performance of our low budget horror phenomenon Terrifier 3.

   -- After opening to No. 1 at the box office at $18.9 million on a $500,000 
      P&A budget, Terrifier 3 has grossed more than $54.0 million at the 
      domestic box office and more than $7.2 million in ancillaries. This 
      unprecedented return on investment was achieved by executing a highly 
      digital viral campaign, and leveraging internal assets, owned channels 
      and our subsidiary editorial platform, Bloody Disgusting, to dramatically 
      reduce marketing costs and efficiently target a highly engaged fanbase. 
 
   -- Total monthly viewership across our channel portfolio increased 47% 
      versus the same period last year, driven in large part by successful 
      recent channel launches such as Dog Whisperer with Cesar Millan, Barney, 
      and Garfield and Friends. In addition, Dove Channel viewership increased 
      23% for the same comparable periods. 
 
   -- Podcast and related revenues were up 39% versus last year following our 
      expansion to 57 podcasts, continuing to rank the Cineverse Podcast 
      Network in the top eight nationally. 

The Company's direct operating expenses increased by $15.5 million over the prior year quarter, for a direct operating margin of 48%, which is in line with our previously stated margin target of 45% to 50%. The increase in direct operating expenses is primarily driven by increased royalty expenses associated with the $27.5 million increase in revenues over the prior year quarter.

SG&A expenses increased $3.0 million, or 47%, primarily due to expenses driven by Terrifier 3 performance, partially offset by the Company's continued focus on cost savings initiatives in addition to savings realized from our off-shoring program to Cineverse Services India.

Net income attributable to common stockholders was $7.2 million, or $0.38 per share, compared to a net loss of $2.9 million, or $(0.22) per share, in the prior year quarter primarily due to the contribution of the Terrifier 3 performance to our net bottom line. Consequently, our Adjusted EBITDA increased by $9.0 million from $1.8 million in the prior year quarter to $10.8 million this quarter.

Financial condition overview:

   -- Cash and cash equivalents of $6.1 million and $3.7 million in unused 
      capacity under our line of credit facility as of December 31, 2024. As of 
      today, the balance on our line of credit facility with East West Bank is 
      $0 with available capacity of $7.5 million, and cash-on-hand of more than 
      $13 million. 
 
   -- Paid down the $3.1 million new-film related term loan and associated 
      interest during the quarter. 
 
   -- A working capital surplus of $6.8 million as of December 31, 2024, 
      compared to $1.5 million as of March 31, 2024. 
 
   -- The Company's Digital content library, comprised of approximately 66,000 
      titles was valued as of March 31, 2024 at approximately $40 million, a 
      significant increase over the 2023 valuation and well above the $2.6 
      million book value of the library as of December 31, 2024. 
 
   -- The Company continues to have available, its previously approved share 
      repurchase program as of December 31, 2024 which will continue to be 
      utilized as appropriate. 

Operational Developments During the Quarter:

   -- Announced participation in Google Cloud Live: New York -- executives 
      presented and showcased our GenAI Content Search & Discovery tool, 
      cineSearch as part of the tech giant's annual conference in New York. 
 
   -- Announced Terrifier 3 winning No. 1 at the box office in its opening 
      weekend -- opening to almost $19 million over the four-day holiday 
      weekend. The horror franchise follow-up garnered a Certified Fresh on 
      Rotten Tomatoes. The movie has grossed more than $54 million in the 
      United States and Canada to-date. 
 
   -- Announced expansion of Cineverse Podcast Network with Midnight Pulp and 
      RetroCrush audio series, and new true crime show Creepy Places -- joined 
      ranks as Top-10 Podcast Network as it celebrated record growth driven by 
      popular horror lineup under the BloodyFM sub-brand. 
 
   -- Announced ad platform, Cineverse 360, seeing strong revenue growth driven 
      by direct and programmatic sales - with October being its Biggest month 
      to date. 
 
   -- Announced partnership with Focus Features and Thirteenth Floor 
      Entertainment to produce immersive event in anticipation of 
      Robert Eggers' Academy Award Nominated Nosferatu -- expanding revenue 
      streams and establishing the playbook for future brand partnerships. 
 
   -- Announced the acquisition of worldwide distribution rights to Silent 
      Night Deadly Night, a remake of the controversial horror classic planned 
      for a late 2025 release. 
 
   -- Unveiled MatchpointTM Reel Visuals AI, a new product that empowers 
      content owners to tap into revenue opportunities from artificial 
      intelligence -- monetizing AI content rights. 
 
   -- Expanded revenue opportunities through Horror vertical Bloody 
      Disgusting's growing merchandise and collectibles business -- following 
      the success of merchandise at retailers like Spencer's and Walmart. 
 
   -- Released Terrifier 3 on EST/VOD and Physical Media, reached #1 on the 
      home entertainment charts. 
 
   -- Launched Bob Ross, Comedy Dynamics, Dog Whisperer and Dove FAST channels 
      on Google TV$(TM)$ Freeplay. 
 
   -- Featured Art the Clown ringing Nasdaq closing bell to celebrate Halloween 
      -- and the killer box office success of Terrifier 3. 

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February 13, 2025 16:00 ET (21:00 GMT)