Executive Summary

Q3 FY2025 (quarter ended Dec 31, 2024) was a record quarter: revenue $40.74M, net income to common $7.02M, diluted EPS $0.34, and Adjusted EBITDA $10.82M; direct operating margin at 48% within the 45–50% target .
Management said results beat Street consensus on all key metrics: Revenue $40.7M vs $36.4M, Net Income $7.2M vs $5.1M, EPS $0.34 vs $0.31, Adj. EBITDA $10.8M vs $8.2M; S&P Global estimates were unavailable via API at time of query; these consensus figures are management’s disclosure from the call .
Terrifier 3 was the key driver (>$54M domestic box office; ~$0.5M P&A), with strong spillover into EST/VOD/physical, and an SVOD premiere on Screambox on Feb 14; management expects a “material” revenue increase in Q4 vs prior year and reiterated 45–50% direct operating margin framework .
Balance sheet inflected: as of the call, >$13M cash, zero debt, full $7.5M revolver availability; company is exploring incremental debt to fund slate but “no plans” to issue equity for current operations .
Multi-pronged growth engines showed momentum (Cineverse 360 ad network’s biggest month in Oct; SVOD subs ~1.38M; podcast ~15M monthly downloads); management highlighted a “moneyball” theatrical strategy (8–10 wide/specialty releases over time) and expanding AI monetization (Matchpoint Reel Visuals AI) .

What Went Well and What Went Wrong

What Went Well
- Record top- and bottom-line with operating leverage: $40.74M revenue, $7.02M net income to common, $10.82M Adjusted EBITDA; 48% direct operating margin within target range .
- Terrifier 3 marketing playbook delivered outsized ROI (>$54M domestic box office on sub-$1M lifetime marketing spend) and is catalyzing a repeatable slate (Silent Night Deadly Night in FY3Q next year; The Toxic Avenger on Aug 29, 2025; Wolf Creek: Legacy in 2026) .
- Ad platform and audience flywheel: Cineverse 360 saw October as biggest month; direct ad sales momentum and studio campaigns (e.g., Focus Features/Nosferatu), with management calling Q3 the largest direct-sold period to date .
- Management quote: “This was the strongest quarter in the company's history… now completely debt free… and with approximately $13 million in cash-on-hand as of today” .
What Went Wrong
- SG&A rose $3.0M YoY (+47%) due to Terrifier 3-related activity, though management expects normalization as a % of revenue going forward .
- Direct operating expenses increased $15.5M YoY due to royalties tied to the $27.5M revenue increase—a reminder that royalty-bearing growth constrains drop-through even in blockbuster quarters .
- Heavy dependence on a single franchise as a principal profit driver; management is addressing concentration risk via a broader slate but execution/box office risk remains (screens targeted ~2,000 per release) .

Financial Results

Metric (USD, except %)	Q1 FY2025 (Jun 30, 2024)	Q2 FY2025 (Sep 30, 2024)	Q3 FY2025 (Dec 31, 2024)
Revenue ($M)	$9.13	$12.74	$40.74
Net Income Attributable to Common ($M)	$(3.16)	$(1.38)	$7.02
Diluted EPS ($)	$(0.20)	$(0.09)	$0.34
Adjusted EBITDA ($M)	$(1.44)	$0.53	$10.82
Direct Operating Margin (%)	51%	51%	48%
Adj. EBITDA Margin (%)	(15.7%) (calc from )	4.2% (calc from )	26.6% (calc from )

Actual vs “Consensus” (per management disclosure on the call; SPGI unavailable at query time):

Metric	Q3 FY2025 Actual	Q3 FY2025 Consensus	Surprise
Revenue ($M)	$40.74	$36.40	+$4.34 (Beat)
Net Income ($M)	$7.16 (Net income)	$5.10	+$2.06 (Beat)
Diluted EPS ($)	$0.34	$0.31	+$0.03 (Beat)
Adjusted EBITDA ($M)	$10.82	$8.20	+$2.62 (Beat)

Notes: S&P Global consensus could not be retrieved due to rate limits; consensus figures above are those stated by management on the earnings call .

KPIs and Operating Metrics

KPI	Current Period	Prior Context
Terrifier 3 Domestic Box Office	>$54M (cumulative)	Opened #1 with ~$19M weekend; re-issue at Christmas; strong EST/VOD/physical
Cineverse 360 Ad Requests	>20B CTV ad requests/month; Oct 2024 biggest month to date	Platform used by major brands/studios (e.g., Hulu, WB, Konami)
SVOD Subscribers	~1.38M (+6% YoY)	Screambox +7% last 60 days; Terrifier 2 viewership +45% in Q3
FAST Consumption	>2.1B minutes in Q3	Dove +30% YoY; Barney 455M minutes last month
Podcast Downloads	~15M monthly; Top-10 network	57 podcasts; bundling lifts fill/CPMs

Guidance Changes

Metric/Area	Period	Previous Guidance	Current Guidance/Commentary	Change
Direct Operating Margin	Ongoing	45–50% target	48% in Q3; expect 45–50% going forward	Maintained
Q4 Revenue Outlook	Q4 FY2025	N/A	Expect “material increase” vs prior year quarter	New qualitative
SG&A	Near-term	Flat/down as % of revenue	Q3 elevated due to T3, expected to normalize as % of revenue	Clarified
Operating Cash Flow	FY2025	Positive for FY2025	Reiterated: positive for FY2025	Maintained
Capital Structure	Current ops	N/A	No plans to issue equity for current operations	New qualitative
Liquidity/Debt	Near-term	LOC extended to Sep 2025	Exploring additional debt to expand credit availability; zero balance post-quarter	Expanded access

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3)	Trend
Theatrical Strategy	Building “moneyball” slate; T3 marketing blueprint validated; Christmas re-issue planned	8–10 releases over time; 3–4 in the coming fiscal year; target ~2,000 screens avg; slate adds Silent Night Deadly Night (FY3Q), The Toxic Avenger (Aug 29, 2025), Wolf Creek: Legacy (2026)	Scaling up, diversifying IP
Ad Platform (C360)	20B+ ad requests/month; October record; growing direct sales and non-entertainment advertisers	“Biggest” direct-sold quarter; Endeavor-style multi-title studio partnerships under discussion	Strong momentum
Streaming & Subs	Q2: total subs ~1.36M; strong FAST minutes; Screambox uplift from T2	Subs ~1.38M (+6% YoY); plan to double SVOD growth rate to 15–20% via premium content and CAC investment	Accelerating growth focus
Podcast Network	Rapid expansion; Top-10 by audience	~15M monthly downloads; higher fill/CPMs via bundled 360 campaigns; hiring a Head of Podcast Sales	Monetization mix improving
AI/Technology	cineSearch public preview; Matchpoint pipeline building; AI rights licensing discussions	Matchpoint deals (Multicom, JoySauce); Reel Visuals AI launched; 350k+ hours of represented AI rights; OEM talks for cineSearch	Commercializing
Capital Allocation	Q2: buyback program; no equity need anticipated with T3 cash flows	Debt-free; >$13M cash; exploring debt; no equity for current ops	Balance sheet strengthened
Audience Insights	—	T3 Hispanics = 48% of audience (PostTrak)	Data-driven targeting validated

Management Commentary

CEO (Chris McGurk): “We had the strongest results this quarter… $40.7 million in revenues… $7.2 million in net income… $10.8 million in adjusted EBITDA… completely debt free… ~$13 million in cash-on-hand as of today.”
On slate and model: “We are rapidly filling up our theatrical release slate… These include Silent Night Deadly Night… Toxic Avenger… Wolf Creek: Legacy… with total investments… expected to be less than that of Terrifier 3 for each movie, driven… by our unique blueprint to theatrical marketing.”
President/CSO (Erick Opeka): “This quarter underscores how Cineverse is rewriting the rules for content distribution… our direct ad sales business continues to break records… our technology business is expanding rapidly… Matchpoint secured multi-year software services deals… we unveiled Matchpoint Reel Visuals AI.”

Q&A Highlights

Release footprint: Targeting ~1,500–2,500 screens per title (avg ~2,000), applying the same targeted playbook as T3; focus on known IP with favorable economics .
Genre expansion: Beyond horror, evaluating family, comedy, and other verticals where channel/podcast footprint enables hyper-targeted marketing .
Unit economics: Total investment per film (acquisition + marketing) to be <~$5M; partnerships (e.g., STUDIOCANAL) can halve risk; goal is singles/doubles, not swinging for fences .
cineSearch monetization: Backend/licensing to OEMs in development; next version targeted within a quarter, with commercialization expected next fiscal year .
Podcast monetization: ~15M peak monthly downloads; programmatic fill ~50–55% but rising via 360 bundles and direct sellers; CPMs moving to high-teens/low-20s when bundled .
SVOD growth: Aim to lift SVOD growth rate to 15–20% via content/marketing investment (vs prior ~6–7%) .

Estimates Context

S&P Global consensus could not be retrieved at time of query due to daily rate limits; management disclosed that Q3 actuals exceeded consensus: Revenue $40.7M vs $36.4M, Net Income $7.2M vs $5.1M, Diluted EPS $0.34 vs $0.31, and Adj. EBITDA $10.8M vs $8.2M .
Implication: Estimate revisions likely move higher for Q4 and FY as management called for a “material increase” in Q4 revenue vs prior year and sustained 45–50% direct operating margin; the slate, SVOD acceleration, and ad momentum may support higher outer-year forecasts, tempered by box office execution risk .

Key Takeaways for Investors

Structural profitability inflection: Adj. EBITDA margin ~27% in Q3 with 48% direct operating margin; management expects 45–50% direct operating margin ongoing, suggesting a higher earnings base if slate/ad/streaming momentum persists .
Replicable theatrical model: Data-driven, low-cost fan activation appears portable to multiple IP-led releases; unit economics (<$5M total investment per title) lower break-even risk and cap downside .
Diversified growth engines: C360 ad network scale, Top-10 podcast network monetization, and SVOD growth acceleration create non-box-office levers .
AI monetization optionality: Matchpoint SaaS and Reel Visuals AI (350k+ hours represented) offer emerging, potentially higher-margin revenue streams with defensible tech moat .
Balance sheet strength: Debt-free with >$13M cash and undrawn $7.5M LOC; no equity issuance planned for current ops; exploring additional debt to fund slate—favorable for dilution risk .
Watch near-term catalysts: Screambox SVOD premiere of Terrifier 3 (Feb 14) and potential Pay-1 deal; Q4 revenue inflection; slate announcements and studio ad partnerships .
Risks: Franchise concentration/box office variability; royalty-driven COGS; execution in scaling 8–10 releases/year; and conversion of AI/Matchpoint pipeline to revenue .

Appendix: Primary Source References

Q3 FY2025 8-K / Press Release and financial statements .
Q3 FY2025 Earnings Call (prepared remarks, Q&A, and consensus beat disclosures) .
Prior quarters for trend:
- Q2 FY2025 Press Release and 8-K (financials, KPIs) .
- Q2 FY2025 Earnings Call (operating context) .
- Q1 FY2025 Press Release (financials, margins) .
Additional relevant press releases during Q3 period:
- Cineverse 360 ad platform momentum (Oct 2024 biggest month; 20B+ CTV ad requests/month) .
- Matchpoint Reel Visuals AI launch and AI rights representation scale .
- Younify integration to enhance cineSearch personalization .
- Dog Whisperer channel expansion to Samsung TV Plus .
- Terrifier 3 holiday re-release .

Cineverse Corp. (CNVS)·Q3 2024 Earnings Summary