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Cineverse Corp. (CNVS)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 FY2025 delivered record results driven by Terrifier 3: revenue $40.7M (+207% YoY), direct operating margin 48%, net income to common $7.0M, adjusted EBITDA $10.8M .
  • Management stated results beat Street consensus: revenue $40.7M vs $36.4M, diluted EPS $0.34 vs $0.31, net income $7.2M vs $5.1M, and adjusted EBITDA $10.8M vs $8.2M .
  • Balance sheet strengthened: as of 12/31/24 cash $6.1M and line of credit outstanding $3.8M, with post-quarter cash >$13M and zero debt; working capital surplus $6.8M .
  • Catalysts: continued Terrifier 3 ancillary monetization (EST/VOD, physical media, Screambox), slate expansion (Toxic Avenger 8/29/2025, Silent Night Deadly Night, Wolf Creek: Legacy), and accelerating ad-tech/AI monetization (Matchpoint, cineSearch) .

What Went Well and What Went Wrong

What Went Well

  • Record financial performance: “strongest quarter in the company's history” with $40.7M revenue, $7.2M net income, $10.8M adjusted EBITDA; direct operating margin within 45–50% target .
  • Terrifier 3 economics and marketing model: highest-grossing unrated film ever ($54M domestic box office) achieved on ~$500k P&A via owned ecosystem and Bloody Disgusting virality; driving Q3 and expected Q4 upside .
  • Platform engagement and diversification: monthly viewership up 47% YoY; podcast and related revenues up 39% YoY; ad platform Cineverse 360 hit record direct-sold revenue month in October .

Management quotes:

  • CEO: “We had the strongest results… $40.7 million in revenues… $7.2 million in net income… adjusted EBITDA $10.8 million… completely debt free… approximately $13 million in cash-on-hand” .
  • President/CSO: “Our streaming audience surged 47% year-over-year… biggest direct sold ad revenue period to date… rapidly building a slate… technology-powered entertainment company with a decade-long head start” .

What Went Wrong

  • SG&A increased $3.0M (+47% YoY) in Q3, largely Terrifier 3 related, with management expecting normalization going forward .
  • Programmatic advertising still scaling: podcast monetization relied heavily on programmatic with 50–55% fill rate; bundling to improve CPMs and fill rates but ramp remains in progress .
  • Prior quarter softness underscores volatility: Q2 revenue $12.7M with operating loss and adjusted EBITDA $0.5M; Terrifier 3 upside only began in Q3 .

Financial Results

MetricQ3 2024Q2 2025Q3 2025
Revenue ($USD Millions)$13.276 $12.739 $40.740
Diluted EPS ($)$(0.22) $(0.09) $0.34
Direct Operating Margin (%)N/A51% 48%
Profitability MetricQ3 2024Q2 2025Q3 2025
Operating Income (EBIT) ($USD Millions)$0.427 $(0.861) $9.436
Adjusted EBITDA ($USD Millions)$1.840 $0.533 $10.824

Consensus comparison (Management-stated vs Actual):

MetricActual Q3 2025Mgmt-Cited ConsensusBeat/Miss
Revenue ($USD Millions)$40.740 $36.400 Beat
Diluted EPS ($)$0.34 $0.31 Beat
Net Income ($USD Millions)$7.161 total / $7.024 to common $5.100 Beat
Adjusted EBITDA ($USD Millions)$10.824 $8.200 Beat

KPIs

KPIQ1 2025Q2 2025Q3 2025
Monthly Viewership YoY Change (%)+73% +54% +47%
SVOD Subscribers (Millions)1.39 N/A1.38
FAST Minutes (Billions)N/AN/A2.1

Financial condition trend

MetricQ1 2025 (6/30/24)Q2 2025 (9/30/24)Q3 2025 (12/31/24)
Cash & Cash Equivalents ($USD Millions)$3.955 $2.429 $6.083
Line of Credit Outstanding ($USD Millions)$4.690 $4.637 $3.847
Working Capital Surplus ($USD Millions)N/AN/A$6.8

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Direct Operating Margin Target (%)Forward quarters45–50% target reiterated (Q2) 45–50% expected to remain Maintained
SG&A Run Rate/Percentage of RevenueForward quartersRemain flat and decline as % of revenue (prior guidance) Expect normalization; Q3 at 23% of revenue vs 50% in Q2 Improved mix; Maintained normalization expectation
Operating Cash FlowFY2025N/AExpect operating cash flow positive for full FY2025 New positive guidance
Q4 Revenue TrajectoryQ4 FY2025N/AExpect “material increase” vs prior year quarter Raised trajectory (qualitative)
Financing/Capital StrategyOngoingLOC extended to Sep 2025; no equity issuance indicated No equity issuance planned; exploring additional debt options; zero debt post-quarter Maintained no equity; exploring debt

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
Theatrical slate & distribution strategyTerrifier 3 set for wide release; building sales pipeline; licensing timing impacts Terrifier 3 success; targeting ~2,000 screens per release; slate adds Toxic Avenger (8/29/25), Silent Night Deadly Night, Wolf Creek: Legacy Expanding slate; codified playbook
Advertising monetization (Cineverse 360)Programmatic CPM management; direct sales ramp; expected rebound Biggest direct-sold month in October; omni-channel bundling lifting CPMs Improving yield; direct sales scaling
AI/Tech (Matchpoint, cineSearch)Beta of cineSearch; first Matchpoint SaaS deal ~$0.25M ACV; pipeline ~$6M Multi-year Matchpoint deals (Multicom, JoySauce); cineSearch backend commercialization expected next FY; AI training rights >350k hours Monetization momentum increasing
Streaming KPIsViewership +73% YoY; subscribers ~1.39M Viewership +47% YoY; FAST minutes 2.1B; SVOD subs 1.38M Strong engagement; stable subs
Financing & liquidityLOC extended; cash $4.0M; stock repurchase ongoing Cash >$13M post-quarter; debt free; exploring non-equity financing Liquidity materially improved

Management Commentary

  • CEO (Chris McGurk): “We had the strongest results… $40.7 million in revenues… $7.2 million in net income… $10.8 million in adjusted EBITDA… completely debt free… approximately $13 million in cash-on-hand” .
  • CEO on slate economics: “All three… have very strong risk/reward profiles… total investments for both acquisition and marketing costs expected to be less than that of Terrifier 3… driven by our unique blueprint” .
  • President/CSO (Erick Opeka): “Our streaming audience surged 47% year-over-year… biggest direct sold ad revenue period to date… We are a technology-powered entertainment company with a decade-long head start” .
  • CFO (Mark Lindsey): “We were still able to beat analyst consensus guidance for revenue $40.7 million versus $36.4 million; net income $7.2 million versus $5.1 million; diluted EPS $0.34 per share versus $0.31; and adjusted EBITDA of $10.8 million versus $8.2 million” .

Q&A Highlights

  • Release footprint: Target ~1,500–2,500 screens; avg ~2,000 screens per targeted IP releases .
  • Genre expansion: Beyond horror into family, comedy, urban—leveraging channel/podcast footprint for targeted marketing .
  • Film economics: Total investment per film (acquisition + marketing) targeted below Terrifier 3’s “~$5M”; partners like STUDIOCANAL can halve project risk .
  • Tech monetization: cineSearch backend commercialization expected next fiscal year; Matchpoint ACV ranges from low six figures (SMB) to “many multiples” for enterprise .
  • Podcast monetization: Programmatic fill rates ~50–55%; omni-channel bundling drives CPMs into high-teens/low-20s, with goal to push programmatic share below 50% in 18–24 months .
  • Subscription revenue trajectory: Aim to accelerate growth to 15%+ in 2025 .

Estimates Context

  • We attempted to pull S&P Global consensus for Q3 FY2025 but were unable to retrieve due to request limits; therefore, we reference management’s call-stated consensus and beats (revenue $36.4M, diluted EPS $0.31, net income $5.1M, adjusted EBITDA $8.2M) .
  • Given the magnitude of upside vs management-cited consensus, Street models likely need to raise near-term revenue, EBITDA, and EPS, particularly for Q4 FY2025 given ongoing ancillaries, SVOD window, and potential Pay-1 licensing .

Key Takeaways for Investors

  • Q3 marked an inflection to profitability with robust cash generation prospects; direct operating margin within targeted band and adjusted EBITDA scaled meaningfully—supporting thesis of an asset-light, ecosystem-driven studio model .
  • Terrifier 3 validates hyper-targeted, low-P&A releasing playbook; slate additions with proven IP (Toxic Avenger, Silent Night Deadly Night) provide repeatability and upside with constrained risk capital .
  • Advertising monetization transitioning from programmatic to direct omni-channel bundles is lifting yields; continued integration of ad-tech (Cineverse 360) should expand margin and revenue durability .
  • AI commercialization (Matchpoint, cineSearch, training rights) presents a new revenue vector with enterprise-scale ACVs and multi-year deals; expect contribution to build through FY2026 .
  • Liquidity and capital strategy derisked near term: debt-free post quarter, >$13M cash, no equity issuance planned; exploring non-dilutive financing to fund slate .
  • Near-term trading implications: Continued ancillary monetization and Q4 guidance of “material increase” vs prior year should support upward estimate revisions and sentiment; watch for concrete Pay-1 deals and slate milestones .
  • Medium-term: Execution on 8–10 releases/year, sustained 45–50% direct operating margins, and scaling ad-tech/AI revenues underpin a multi-pronged growth thesis, though SG&A discipline and programmatic-to-direct transition remain key watch items .