Executive Summary

Q2 FY2025 delivered revenue of $12.7M, up 20% year-over-year excluding legacy Digital Cinema, and up 40% sequentially, with direct operating margin at 51% and positive Adjusted EBITDA of $0.5M; EPS was $(0.09) and net loss $1.4M, reflecting the absence of non-recurring Digital Cinema revenue recognized in the prior year .
Management emphasized that results did not include any contribution from Terrifier 3 (released October 11); they expect at least $20M in theatrical rental revenue in Q3 FY2025 with significant high-margin ancillary revenues to follow, and stated they beat analyst consensus “on every key financial metric” in Q2 .
Operating discipline continued: SG&A decreased 7% YoY, margin performance exceeded the 45–50% target, and the company reiterated no need to raise outside equity capital in the foreseeable future; operating cash flow is expected to be positive for FY2025 .
Strategic catalysts: expanding C360 direct ad sales (20B+ monthly CTV ad requests in Oct), 51 podcasts with 15M monthly downloads in Oct, growing FAST viewership, cineSearch AI licensing pipeline, and Matchpoint SaaS/customer pipeline underpin medium-term monetization .

What Went Well and What Went Wrong

What Went Well

Recurring revenue momentum and margin execution: +20% YoY ex-Digital Cinema; +40% QoQ; direct operating margin at 51% (above the 45–50% target) and positive Adjusted EBITDA of $0.5M. “We generated a total operating margin of 51%… and positive Adjusted EBITDA of $0.5 million.” — CEO Chris McGurk .
Ad platform and audience scale: C360 processed 20B+ ad requests in Oct; booked ad revenue up 60% QoQ with blue-chip advertisers; podcast network reached top-10 globally with 15M Oct downloads and 51 shows .
Strategic “blueprint” validated: Terrifier 3 opened #1 with almost $19M opening weekend, now $54M domestic; management sees ≥$20M Q3 theatrical rentals and high-margin ancillary monetization; “we currently see no need to raise any outside equity capital” — CEO .

What Went Wrong

GAAP profitability still negative: net loss attributable to common stockholders was $1.4M and EPS $(0.09), worse than prior year due to prior year’s non-recurring Digital Cinema revenue tailwind .
Adjusted EBITDA down YoY to $0.5M vs $2.4M in prior year quarter (reflecting loss of $2.4M non-recurring Digital Cinema revenue last year); operating loss of $(0.9)M in Q2 FY2025 .
Cash balance declined QoQ to $2.4M at Sept 30 and working capital facility utilization remained; operating cash flow used was $(0.7)M in the quarter (breakeven ex content spend), highlighting reliance on upcoming Terrifier 3 cash inflection in Q3 .

Financial Results

Metric	Q2 FY2024 (YoY)	Q1 FY2025 (QoQ)	Q2 FY2025 (Current)	Consensus (Q2 FY2025)
Revenue ($USD Millions)	$13.012	$9.127	$12.739	N/A (S&P Global consensus unavailable)
Net Loss per Share (Basic) ($)	$(0.04)	$(0.20)	$(0.09)	N/A
Direct Operating Margin %	64% reported; 44% ex-Digital Cinema	51%	51%	N/A
Adjusted EBITDA ($USD Millions)	$2.366	$(1.435)	$0.533	N/A

Notes: Prior year margin boosted by non-recurring, non-cash Digital Cinema revenue; management cites ex-Digital Cinema margin of 44% vs 51% current .

Segment/Contribution Detail (select items)

Contribution to Q2 FY2025 Performance	Amount/Change	Source
Dog Whisperer licensing revenue	$1.6M
Streaming/digital revenue (incl. Dog Whisperer)	+$0.7M YoY
Podcast & other revenue	+$0.6M YoY (+93%)
Base distribution revenue	+$0.8M YoY
SG&A	$(0.5)M YoY (−7%)

KPIs

KPI	Q2 FY2025	Prior Quarter/Period	Trend/Comment
Channel viewership (monthly)	+54% YoY across portfolio	+73% YoY in Q1 FY2025 minutes watched	Strong audience growth fueling ad sales
FAST viewing	+73% YoY growth	2.32B minutes in Q2 (+40% YoY)	Sustained FAST engagement
Podcast network scale	51 podcasts	15M downloads/listens in Oct	Top-10 global network momentum
C360 ad requests	>20B/month in Oct (record month)	—	Scaling direct/programmatic monetization
Terrifier 3 theatrical performance	$54M domestic; #1 opening; almost $19M opening weekend	No Q2 financial impact (released in Q3)	Expected ≥$20M Q3 theatrical rentals

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	Q3 FY2025 (quarter ending Dec 31, 2024)	Not previously quantified	“Material increase in revenue” expected; Terrifier 3 theatrical rentals ≥$20M, plus high-margin ancillary	Raised (qualitative + quantified theatrical)
Direct Operating Margin %	Forward quarters	Target 45–50%	Expect margins “in line with or exceed” 45–50% target	Maintained/Improved
SG&A	Remainder of FY2025	Ongoing cost optimization	Expected to remain relatively flat and decline as % of revenue	Maintained
Operating Cash Flow	FY2025	—	Expect operating cash flow positive for full FY2025	New (positive)
Capital Raising	Near term	—	“No need to raise any outside equity capital”	New (affirmation)

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q2 FY2025)	Trend
AI/technology initiatives (cineSearch, Matchpoint)	Q1: Public beta of cineSearch; partnerships (Gracenote, Vionlabs, Datatonic); Matchpoint sales team signed first SaaS deals and >20-deal pipeline	cineSearch consumer release expected next year; OEM licensing discussions; AI training data licensing pipeline; Matchpoint mid–7-figure pipeline and initial deals closed	Building pipeline; moving toward monetization
Advertising/C360	Q1: Building direct ad sales team; early traction with major studios	Booked ad revenue up >60% QoQ; blue-chip brands added; C360 processed >20B ad requests in Oct	Accelerating direct/programmatic revenue
Streaming/FAST engagement	Q1: 73% YoY increase in minutes watched	73% YoY FAST growth; 2.32B minutes; Dove and Barney channel records	Sustained scale with portfolio expansion
Podcasts	Q1: +143% YoY revenue; scaling shows	51 shows; 15M Oct downloads; top-10 global network; expanding into larger properties	Rapid monetization and audience growth
Theatrical/IP slate	Q1: Teed up Terrifier 3 for Oct 11 release	Terrifier 3 #1, $54M domestic; planning re-release; acquiring Silent Night, Deadly Night remake (worldwide)	New profit line and slate build-out
Capital allocation/repurchase	Q1: 184k shares repurchased; LOC extended	31k shares repurchased in Q2; 215k YTD; no equity raise planned	Active buybacks; balance sheet inflecting with Q3 cash

Management Commentary

“We grew total revenues by 20% excluding the legacy Digital Cinema business…generated a total operating margin of 51%…and positive Adjusted EBITDA of $0.5 million.” — Chris McGurk, CEO .
“We expect to record at least $20 million in just theatrical rental revenues alone in the next reported quarter…we currently see no need to raise any outside equity capital to fund our operations for the foreseeable future.” — CEO .
“Our proprietary C360 platform…processes over 20 billion ad requests per month…as seen with the success of Terrifier 3. We are eager to expand on this approach.” — Erick Opeka, President & CSO .
“We beat our analyst consensus guidance on every key financial metric.” — CEO; CFO reiterated beat across revenue, net income, EPS, and Adjusted EBITDA .
“We expect to be operating cash flow positive for the full fiscal year 2025.” — CFO .

Q&A Highlights

Strategy to leverage Terrifier 3 windfall: Management intends to scale a new profit line by applying the “ecosystem” blueprint (Matchpoint tech, fan channels, social, podcast network) to additional IP across horror, family/faith, animation/anime; targeting wide releases where fan urgency warrants .
Windowing/monetization choices for Terrifier 3: Evaluating trade-offs between boosting Screambox subscribers versus selling pay/streaming windows to maximize returns; decision expected within weeks .
cineSearch monetization model: Bespoke license plus variable/API model potentially complemented by ad-based approaches depending on partner; OEM pipeline active .
Podcast economics: Expect revenue growth to outpace audience near term given monetization headroom; large shows could drive surges; rapid sales hiring, co-selling to maximize fill .
AI training data opportunity: Independents’ diverse content libraries and Matchpoint’s scalable ingest/dispatch provide cost advantages; studios’ guild/IP constraints limit their ability to license at scale; Matchpoint can deliver tens of thousands of hours at low cost .

Estimates Context

Attempted to fetch S&P Global Wall Street consensus for Q2 FY2025; consensus was unavailable due to request limits. As a result, we cannot quantify beat/miss vs S&P consensus for revenue, EPS, or EBITDA this quarter. Management stated they exceeded analyst consensus on key metrics, but we could not verify with S&P Global data .

Key Takeaways for Investors

Q2 was an operational inflection on recurring revenue and margins; the bigger catalyst is Q3, with ≥$20M theatrical rental revenue from Terrifier 3 and high-margin ancillary channels poised to lift revenue, EBITDA, and cash generation .
Margin discipline looks durable (51% direct operating margin vs 45–50% target), and SG&A reductions are holding; expect margins to be “in line with or exceed” target as revenue scales .
C360 and direct ad sales are scaling with blue-chip brands, expanding beyond entertainment into consumer categories; this drives monetization across FAST/SVOD/podcasts and supports multi-pronged revenue growth .
AI/cineSearch and Matchpoint present medium-term SaaS/licensing optionality; OEM discussions and AI training data deals could add incremental, higher-quality revenue streams as pipelines convert .
Capital position should improve meaningfully with Q3 cash inflows; management reiterated no need for equity raises; buybacks continued (31k shares in Q2; 215k FYTD) .
Trading lens: Near-term setup favors upward estimate revisions into/after Q3 print given quantified theatrical rentals and ancillary revenue visibility; watch for windowing decisions (Screambox vs pay/streaming) and any additional slate announcements to gauge sustainability .
Risks: GAAP losses persist absent Terrifier 3 impact; execution on ad monetization and AI/Matchpoint commercialization timing; cash balance at quarter-end highlights importance of Q3 cash conversion .

Sources: Q2 FY2025 press release and financial tables , Q2 FY2025 8-K and exhibits , Q2 FY2025 earnings call transcript , C360 ad platform press release , Q1 FY2025 press release .

Cineverse Corp. (CNVS)·Q2 2025 Earnings Summary