Name: Chicken Soup for the Soul Entertainment, Inc. Q4 2022 Earnings Call
Start: 2023-03-31T08:46:04.000Z

Executive Summary

Q4 2022 revenue rose to $113.6M, +57% q/q and +216% y/y; adjusted EBITDA increased to $14.7M, while GAAP net loss widened to $56.3M due to higher operating costs post-Redbox integration .
Management reiterated 2023 guidance of ~$500M revenue and $100–$150M adjusted EBITDA, and issued Q1 2023 guidance of $110–$113M revenue and $18–$20M adjusted EBITDA .
Owned & Operated streaming MAUs reached 60M, and the Chicken Soup for the Soul AVOD app launched on Roku, expanding distribution and advertising reach .
Liquidity and leverage remain key watch items: cash was $18.7M, net debt ~$479.7M at year-end; management highlighted actions to improve working capital (equity offering and equitization of fees) .

What Went Well and What Went Wrong

Revenue and adjusted EBITDA inflected higher, with Q4 revenue $113.6M and adjusted EBITDA $14.7M, both improving sequentially from Q3 ($72.4M, $9.6M) and materially vs. Q4 2021 ($36.0M, $9.3M) .
MAUs reached 60M and CSSE launched its AVOD app on Roku, expanding digital footprint and monetization capacity; management emphasized using expected cash flow to scale operations and pay down debt: “More movies mean more rentals, more revenue, and more cash flow… We plan to use this cash flow to scale our operations and help pay down debt” .
International expansion and ad-rep momentum: KC Global Media partnership broadened AVOD/FAST reach in Asia; ad-rep clients expanded to 20 across AVODs and DOOH networks .

GAAP net loss widened to $(56.3)M in Q4 (EPS $(2.70)), driven by increased operating and integration costs; total operating costs and expenses were $160.7M vs. $55.0M y/y .
Balance sheet leverage increased: net debt rose to ~$479.7M, with total liabilities at ~$804.1M vs. equity of ~$79.7M at year-end, elevating refinancing and servicing risk .
Cash used in operating activities for FY22 was $(62.9)M, reflecting working capital needs and integration/transitional expenses; management warned actual cash flows may be insufficient to service debt without additional financing if operations underperform .

Metric	Q4 2021	Q3 2022	Q4 2022
Revenue ($USD Millions)	$36.0	$72.392	$113.575
Net Loss available to common ($USD Millions)	$(22.405)	$(20.060)	$(56.320)
Diluted EPS ($USD)	$(1.38)	$(1.13)	$(2.70)
Adjusted EBITDA ($USD Millions)	$9.253	$9.572	$14.666

Trend analysis (prior two quarters → current):

Metric	Q2 2022	Q3 2022	Q4 2022
Revenue ($USD Millions)	$37.6	$72.392	$113.575
Adjusted EBITDA ($USD Millions)	$5.6	$9.572	$14.666
Net Loss available to common ($USD Millions)	$(20.8)	$(20.060)	$(56.320)
Diluted EPS ($USD)	$(1.39)	$(1.13)	$(2.70)

Balance sheet and KPIs:

KPI	Q4 2021	Q4 2022
Cash and Cash Equivalents ($USD Millions)	$44.286	$18.738
Net Debt ($USD Millions)	$54.860	$479.654
Total Assets ($USD Millions)	$245.010	$883.879
Total Liabilities ($USD Millions)	$153.411	$804.131
Total Equity ($USD Millions)	$91.599	$79.748
Owned & Operated MAUs (Millions)	—	60
Kiosks (Approx.)	~32,000	~32,000

Note: Segment revenue breakdown was not disclosed in the Q4 press materials .

Metric	Period	Previous Guidance	Current Guidance	Change
Net Revenue	Q1 2023	—	~$110–$113M	New
Adjusted EBITDA	Q1 2023	—	~$18–$20M	New
Net Revenues	FY 2023	$500M run-rate projection at YE 2022 including synergies	~$500M	Maintained
Adjusted EBITDA	FY 2023	$100–$150M run-rate projection at YE 2022 including synergies	~$100–$150M	Maintained

Topic	Previous Mentions (Q2 2022, Q3 2022)	Current Period (Q4 2022)	Trend
Kiosk rebound	Studios returning to theatrical distribution; kiosk lifts observed (e.g., August/October)	“Over 40 major film releases are expected this year… More movies mean more rentals, more revenue…”	Improving
AVOD/FAST audience growth	~40M monthly avg AVOD users; ~150 FAST channels	O&O MAUs reached 60M; Roku launch expanding footprint	Accelerating
Redbox integration & synergies	$41M actionable cost synergies; combined customer base benefits	Plan to use cash flow to scale operations and help pay down debt	Executing
Debt and capital structure	Net debt ~$461.3M at Q3; working capital constraints noted	Net debt ~$479.7M at YE; highlighted equitization and potential ~$20M working capital uplift	Leverage elevated; liquidity actions underway
International expansion	Partnerships (Keshet/Locomotive) broaden monetization	KC Global Media partnership for AVOD/FAST in Asia	Expanding

“The company is well positioned for the coming year… Over 40 major film releases are expected this year… More movies mean more rentals, more revenue, and more cash flow for the company. We plan to use this cash flow to scale our operations and help pay down debt.” — William J. Rouhana, Jr., CEO .
On guidance: Q1 2023 revenue ~$110–$113M and adjusted EBITDA ~$18–$20M; FY 2023 revenue ~$500M and adjusted EBITDA ~$100–$150M, reflecting integration scale and AVOD/TVOD momentum .
Liquidity actions: equity offering ($10.8M) including $3.8M from parent; modification to pay a portion of management/license fees in equity to increase working capital by an estimated ~$20M .

Guidance reaffirmation and growth drivers: management underscored expected kiosk rental uplift from the 2023 theatrical slate and expanding TVOD performance, consistent with prepared remarks and call commentary .
Capital structure and liquidity: discussion focused on equitization of fees, parent participation in equity offering, and working capital measures to support operations amid elevated debt levels .
Integration execution: Redbox synergy capture across content and ad sales continues to be a priority, with near-term focus on driving monetization through kiosks, TVOD, AVOD/FAST .

Wall Street consensus from S&P Global was unavailable for CSSE Q4 2022 due to missing mapping in the SPGI/CIQ company dataset; comparison to estimates could not be provided at this time (attempted via GetEstimates; error encountered). Values retrieved from S&P Global were unavailable.
For context, CSSE stated it exceeded analyst consensus expectations in Q3 2022 across revenue, adjusted EBITDA, and adjusted EPS, but did not provide Q4 consensus comparisons in the press materials .

Sequential operational improvement: Q4 revenue and adjusted EBITDA advanced meaningfully vs. Q3, reflecting early synergy capture and improved monetization across kiosks, TVOD, and AVOD/FAST .
2023 trajectory hinges on theatrical slate and distribution breadth: management expects “more movies” to translate into rentals, revenue, and cash flow, supporting scaling and debt reduction plans .
Balance sheet risk is non-trivial: net debt ~$479.7M and equity ~$79.7M at YE 2022; financing flexibility and execution against guidance are critical to sustain liquidity and service obligations .
Strategic levers: parent equity participation and fee equitization intended to bolster working capital (~$20M), while ad-rep expansion and international partnerships broaden revenue streams .
Near-term trading implications: positive narrative around kiosk/TVOD resurgence and MAU growth may support sentiment; leverage and cash burn could cap upside until consistent cash generation is demonstrated .
Medium-term thesis: if CSSE meets 2023 guidance and continues integrating Redbox (capturing synergies while scaling AVOD/FAST), deleveraging could follow—execution risk remains elevated given debt load and the need for sustained operating cash flow .