CuriosityStream Inc. Q1 FY2025 earnings call

• Q1 revenue was $15.1 million, up 26% YOY and 7% sequentially. Net income was positive for the first time, improving $5.4 million YOY. Adjusted EBITDA was positive for the first time at $1.1 million. - Implemented a dividend program, increased dividend to $0.08 per quarter ($0.32 annualized). - Focus on five growth pillars: increased licensing to media and tech companies, cost rationalization, leveraging falling translation costs for global growth, launching new currencies, and enhancing talent density. - Entered new third-party agreements, expanded content library, and had original premieres and special content. - Balance sheet strong with $39 million in liquidity and no debt.

In Q1 2025, CuriosityStream had revenue of $15.1 million, up 26% year-over-year. Direct subscription revenue was approximately $9 million, while licensing revenue grew by about $4 million. First quarter gross margin was 53%, an improvement from 44% the previous year. Adjusted EBITDA was positive at $1.1 million, and adjusted free cash flow was $2 million, the fifth sequential quarter of positive adjusted free cash flow.

• Second quarter revenue expected in the range of $16 million to $17 million. - Adjusted free cash flow expected in the range of $2 million to $3 million. - Confident in hitting double-digit top-line and bottom-line growth in 2025, though specific year-end guidance not provided.

• Forward-looking statements subject to various risks, uncertainties, and assumptions. Actual results could differ materially from forward-looking statements. Refer to SEC filings and press release for material risks.

Q: Good afternoon and congratulations on the great numbers. I have a question on the cost side, how GenAI may have contributed to come in and well below what we estimated for costs?

A: Great question... we’ve been able to reduce costs largely without leveraging GenAI, but GenAI tools are available to accelerate cost reduction efforts.

Q: Hey guys, thanks for taking the questions and congrats on a great quarter. So I just wanted to start on the top line. I mean could you give us a little bit more granularity in terms of what the key drivers were for the revenue growth, relative to licensing versus subscriptions?

A: Yes... direct subscription revenue down slightly but offset by licensing revenue growth due to many new licensing partners and broad content corpus.

Q: Hi, I was wondering if you could talk a little bit on the direct business and any sort of consumer trends that you’re seeing there.

A: Sure... direct subscription revenue largely a function of marketing spend, managed to be flat to slightly up with new partner launches impacting it.

Q: Yes. I have a question on the – basically on the size and the sources of the pipeline for your AI licensing beyond Q2 and just give more color on that, that degree.

A: Appreciate that question... broad set of licensees including tech hypers, AI companies, and public sector, with 40%-50% gross margin for these agreements.

Q: Thanks very much for taking my question. Thanks for all your hard work. It’s obviously evident in the results. The one question I get most often from folks that we talked to you about this name is the relationship you have on the AI content side. They wonder about the duration and sustainability like how to think about it as you add content...

A: Yes... control of large content library ensures monetization, partners ask for more data, building robust recurring business likely with new rights grants in future.