Curiositystream - Q1 2023
May 11, 2023
Transcript
Operator (participant)
Please stand by. We're about to begin. Good afternoon, ladies and gentlemen. Welcome to the CuriosityStream 1st quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. Please be advised that this call is being recorded. After the speakers' prepared remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star one on your telephone keypad. If you would like to withdraw your question, simply press star 1 again. Now, at this time, I would like to turn the call over to Ms. Denise Garcia, Investor Relations. Please go ahead, ma'am.
Denise Garcia (Director of Investor Relations)
Thanks, Bo. Welcome to CuriosityStream's discussion of its first quarter 2023 financial results. Leading the discussion today are Clint Stinchcomb, CuriosityStream's Chief Executive Officer, and Peter Westley, CuriosityStream's Chief Financial Officer. Following management's prepared remarks, we'll be happy to take your questions, but first, I'll review the safe harbor statement. During this call, we may make statements related to our business that are forward-looking statements under the federal securities laws. These statements are not guarantees of future performance, but rather are subject to a variety of risks, uncertainties, and assumptions. Our actual results could differ materially from expectations reflected in any forward-looking statements. Please be aware that any forward-looking statements reflect management's current views only, and the company undertakes no obligation to revise or update these statements, nor to make additional forward-looking statements in the future.
For a discussion of the material risks and other important factors that could affect our actual results, please refer to our SEC filings available on the SEC website and on our investor relations website, as well as the risks and other important factors discussed in today's press release. Additional information will also be set forth in our quarterly report on Form 10-Q for the quarter ended March 31st, 2023 when filed. In addition, reference will be made to non-GAAP financial measures. A reconciliation of these non-GAAP measures to comparable GAAP measures can be found on our website at investors.curiositystream.com. Now I'll turn the call over to Clint.
Clint Stinchcomb (CEO)
Thank you, Denise. Hello, everyone. I appreciate you all joining us today. Also on the call is our COO and General Counsel, Tia Cudahy, our CFO, Peter Westley, and our Head of Content, Rob Burk. In the six weeks since our last earnings call, we've made good progress in rolling out our new direct subscriber pricing. We've added several million paying subscribers through new bundle distribution partnerships around the world, and we've enhanced our Critical Mass library with unique and compelling new factual content. We believe that our direct subscriber base, content library, multi-year distribution agreements, strong cash position, and lack of debt are favorable business and strategic attributes that provide us with exceptional flexibility. As such, we will continue to consider opportunities that we believe are in the best interest of our shareholders, including share repurchases, potential business combinations, and scale partnerships.
We finished Q1 in a solid cash position, moved closer to profitability and are encouraged by the positive momentum we are seeing in the business. Looking ahead, I am pleased to report that not only do we expect better results in the second quarter, but we believe our Q1 results represented the trough for revenue. Despite lower revenue compared to the prior year quarter, we significantly increased Adjusted EBITDA and adjusted free cash flow. Our improving financial trajectory reinforces my conviction that our decision to prioritize long-term profitability and cash flow over near-term revenue growth over the past couple of quarters was in the best interest of the company and our shareholders, despite the dampening effect it had on our top-line results.
As Peter will discuss in greater detail, our positive financial outlook is based on favorable trends in our subscription businesses, the growing pipeline of opportunities across other lines of revenue, and our continued commitment to prudent expense management. We remain laser-focused on achieving positive adjusted free cash flow while making the investments necessary to generate efficient, sustainable top-line growth moving forward. We expect the current environment of rising interest rates and tighter financial conditions to result in a growing pipeline of potentially accretive opportunities as less diversified and less well-capitalized players face increasingly daunting challenges. While it's difficult to say exactly when or if we might pull the trigger on any particular opportunity, we won't enter into any transaction that doesn't adequately reflect what we believe to be the full value of what we bring to the table. We are in command of our business and confident about our futureh
Turning to the business, I'll briefly touch on a few key recent developments and highlight some of the exciting new additions we've made to our Critical Mass content library before I turn it over to Peter for more detailed discussion of our first quarter results and Q2 financial guidance. We are pleased by the performance of our direct subscription business in the quarter. Direct subscription revenues grew on a year-over-year basis and were relatively consistent with the prior quarter, even as we significantly reduced marketing investment during our extensive pricing test. While it's only been a few weeks since we rolled out our higher standard service price for new monthly and annual subscribers, early results have been encouraging and consistent with our expectations.
Turning to our global bundle distribution business, our content continues to resonate with scale partners around the world who are seeking high quality, cost-effective alternatives to increasingly pricey content from legacy media companies. Sizable investments we've made in languaging and localizing our content are enabling us to expand quickly and aggressively with a variety of partners. Earlier this quarter, we were pleased to announce key new partnerships which expand our footprint across Asia, Europe, Latin America, North America, and Australia. These new relationships incorporate Curiosity's subscription services and channels, and will help deliver our premium nonfiction films and programs to several million new paying subscribers. Recent launch partners include Amazon's Prime Video channels in India, Fetch TV in Australia. The Netherlands' largest MVPD, Ziggo, the Dutch streamer NLZIET, Mexico's Izzi Telecom, and Central and Eastern European distributors MTS Telecom Slovenia and MegaFon, among others.
We expect meaningful improvement in our revenues from distribution partners moving forward as our full product set from localized channels to integrated app offerings to direct licensing creates a range of monetization paths for both us and our partners as we connect with audiences across the globe. In addition to growing both our direct and partner subscription initiatives, we are thoughtfully and deliberately leveraging AVOD, FAST, and free-to-air opportunities through both direct distribution and through content licensing. As the comps available are now much more clear and increasingly predictable, we're working to ensure that we secure what we believe to be full value for our content. These environments also provide the ability for us to promote to our subscription tiers in an efficient and highly targeted manner.
On the content side, we continue to invest in highly differentiated original content while leveraging our Critical Mass library of over 15,000 programs so that we can deliver new and engaging experiences. In January, we kicked things off with The Lucy Mission, a behind-the-scenes look at NASA's boldest mission yet to unravel the origins of our solar system. In Fusion, harnessing the Power of Stars, a timely deep dive from our hit series Breakthrough into the energy source that could save our planet. In February, we unraveled surprising new mysteries from our past in Vikings: The Lost Kingdom, and embarked on a thrilling voyage to separate fact from Hollywood fiction in The True Story of Pirates.
We also continued our quest to uncover the most consequential untold tales in human history with a six-part series, Deadly Science, an unflinching look at the innovators and explorers who have often paid the ultimate price in the pursuit of progress. The three-part series, California, look at the pioneering engineers, artists, and activists who put the Golden State on the edge of a changing world. In the 90-minute feature doc, Bessie Coleman: Queen of the Skies, a portrait of the pioneering aviator who became the first African American woman to earn a pilot's license. Capping off the quarter, we also premiered a highly anticipated six-part original series, CSI on Trial. A look at the lack of science behind some of the most well-known forensic investigation tools and the tragic impact they've had on the lives of the wrongfully convicted.
The series was augmented with a six-part companion podcast produced and distributed through our partnership with iHeartMedia, which delved further into the origins of flawed crime scene investigation disciplines and the personal nightmares they often inflict on the wrongfully accused. These are just a few of the original series and specials slated for release on CuriosityStream and Curiosity Audio Network in 2023. Other notable titles include GIANTS, a landmark five-part natural history series that unlocks the evolutionary secrets of the biggest beasts that walk our planet. The Real Wild West, a beautiful four-part history series shines a light on the Native American tribes, women, African Americans, and immigrants who shaped the American West. Looking ahead, we are confident that we have the assets and capabilities in place to drive improving profitability and adjusted free cash flow.
With the decisive actions we've taken to reduce our cost base and with the outsized content creation and languaging investments required to build a large-scale library behind us, we believe we've created the foundation for significant operating leverage as we prudently invest to drive growth moving forward. We see many ways to win in this environment as we execute on our organic initiatives while continuing to explore value creation opportunities with a wide variety of strategic and commercial partners. In summary, our Q1 results demonstrate the significant progress we made on the path to achieving positive adjusted free cash flow in the near term. From this baseline, we expect to drive profitable growth and pursue all of the avenues available to us to maximize shareholder value. Now I'll turn the call over to Peter. Peter.
Peter Westley (CFO)
Thanks, Clint. During the first quarter, we made further progress in our efforts to improve our overall financial results by tightly managing our expenses and content spend, focusing on partnerships with attractive overall economics, and concentrating our marketing efforts on our most productive channels of customer acquisition. First quarter revenue and adjusted free cash flow came in toward the high end of our guidance ranges. As Clint mentioned during his remarks, we expect to build from these levels in Q2 and beyond. To provide some context around the extent of our transformation, in the first quarter, we reduced our advertising and marketing expenses by more than $11 million or 79%, and our cash spend on content by more than $15 million or 76% compared with the comparable quarter in 2022.
We were able to achieve these reductions while still growing our direct business on a year-over-year basis. Turning to our first quarter results, revenue was $12.4 million compared to $17.6 million in the prior year quarter. The year-over-year change was primarily driven by a $2.3 million reduction in bundled distribution revenues, a $2.2 million reduction in content licensing revenues, and a $1.1 million reduction in enterprise revenues, partially offset by revenue growth in our direct and other categories. Our largest revenue category this quarter was our direct business. Direct revenue came in at $8.6 million, an increase of 3% compared with the first quarter of 2022.
We believe the most important activity in this part of the business during the quarter was our extensive price testing, which concluded with the price increases for new subscribers that we introduced at the end of March, as we discussed on our last call. Content licensing, which was our second largest revenue category this quarter, we generated $2 million of revenue compared to $4.2 million in the prior year quarter. While content licensing revenues decreased year-over-year, the profitability of this revenue line actually increased due to an improved mix of revenue with a lower percentage of zero margin pre-sales deals in the first quarter this year. Our next largest category was bundled distribution, which saw $1.5 million of revenue in the quarter.
If we deduct $2.6 million of revenue from the first quarter of 2022 related to a contract that we did not renew mid-year last year, bundled distribution revenue would have grown 21% year-over-year. As Clint mentioned, we were pleased to enter into several new bundle distribution partnerships in the first quarter and remain actively engaged with potential distribution partners worldwide. First quarter gross margin of 27.3% decreased from 32.8% in the prior year quarter, driven by lower year-over-year revenue, but improved from 9.4% in the fourth quarter, primarily driven by lower content amortization expense. As I mentioned earlier, our first quarter advertising marketing expense of $3.1 million was down more than $11 million year-over-year.
We did purposefully keep our marketing spend at a reduced level during our first quarter pricing test. We do expect our advertising and marketing expense to be at a higher level in the remaining quarters of the year. G&A expense of $8.1 million during the first quarter was down 23% year-over-year, driven by last year's workforce reduction and continued expense discipline. Moving to profitability, Adjusted EBITDA loss of $6.4 million improved 63% from a loss of $17.5 million in the prior year period, and was 53% better than last quarter's $13.6 million loss. First quarter cash spend on content of $4.9 million was down slightly on a sequential basis and was more than 75% below the prior year quarter.
Adjusted free cash flow use of $6.3 million improved by $6 million year-over-year and $2.5 million sequentially. This underscores the tremendous progress we made in improving cash flow, as well as our continued positive momentum. At the end of the first quarter, cash equivalents, and restricted cash totaled $49.2 million. We had no outstanding debt at the end of the quarter, and we believe our overall balance sheet remained in great shape with $143 million of assets and $32 million of liabilities, translating into book value of $111 million or approximately $2.10 per share.
Moving to our second quarter guidance, we expect revenue in the range of $13 million-$15 million and adjusted free cash flow in the range of negative $6 million to negative $4 million. Our adjusted free cash flow guidance reflects our continuing focus on bringing down our cash burn as this remains a top priority for us. I'd also like to reaffirm the 2023 guideposts that I laid out in last quarter's call. As a reminder, in 2023, we expect content amortization expense of $25 million-$30 million, advertising and marketing expense of $20 million-$25 million, and cash spend on content of $10 million-$15 million. With that, Operator, let's open the call to questions.
Operator (participant)
Thank you, Mr. Westley. Ladies and gentlemen, at this time, if you have any questions, simply press star one. Just a quick reminder, if you find your question has been addressed, you can remove yourself from the queue by pressing star one again. We'll take our first question this afternoon from Tom Forte of D.A. Davidson.
Tom Forte (Managing Director and Senior Research Analyst)
Great. Thanks. It sounds like you're early in determining the customer response to the price increase. How are you gauging that? How will we get a better sense of that as the year progresses? I have a follow-up question on advertising spend.
Clint Stinchcomb (CEO)
Thank you for the question, Tom. Just to summarize, you know, March27, we launched and executed the new pricing for new subscribers. That's moving along, you know, in line with our expectations. This quarter, we're testing upgrade options with a subset of our existing customers. You know, as the majority of our subscribers are on annual plans, it will take, you know, some time to roll through the financials. You know, I think what we did in the first quarter was important. We went through a really intensive process, testing a variety of price points, combinations, and marketing messages with more than 3 million visitors to our service.
You know, as we've looked at the data, we weren't surprised to see, you know, a slight decline in conversion rates and retention, but, you know, also seeing a shift to a higher percentage of monthly plans, and the increase in price, and a shift toward Smart Bundle subscriptions where we did not change the price. All of that's, you know, more than made up for the churn. Overall, we expect this change to give us, you know, greater than 40% increase in the lifetime value per new subscriber. We'll have a lot more to report next quarter.
Tom Forte (Managing Director and Senior Research Analyst)
Thank you, Clint, for that. All right, the second question is, it looks like you spent $3 million on marketing, and you're expecting to spend $20 million-$25 million on a full year basis. In the full year outlook, are there some contractual marketing spend, or is there some contractual marketing spend? How are you thinking about maximizing your return on every dollar of marketing? Are you heavily focused on search engine optimization, or what are you finding is the most effective way to generate the highest return on your marketing dollar?
Clint Stinchcomb (CEO)
I'll take the first part of that, and then I'll hand over to Peter to add any additional color. As it relates to the spend, Tom, we wanna be thoughtful about how we do that, obviously. There are some areas, you know, that we've not where we've not spent marketing money in quite some time that we see as pretty fertile right now. What I mean by that is, you know, we have partners who offer our direct service, our subscription video-on-demand service, who are, you know, really good at marketing.
If you look at how we have acquired direct subscribers in the past and our composition of, you know, pure direct subscribers as compared to those that come through the large channel stores, you know, unlike many SVODs who generate, you know, 50%-85% of their subscribers through those channel stores, that was, you know, less than 20% for us. We are spending some money with those, with those partners. It's, it's fertile territory. It's predictable. We're going to spend appropriately and in a way that where we can scale appropriately.
We're seeing a lot of, you know, really good trends there and, you know, are confident that we'll, you know, continue to increase the marketing spend over the course of the year as we, you know, work with those partners and, you know, as we work closely, you know, with those channels that make the most sense for us.
Peter Westley (CFO)
Yeah. The one thing I'd add to get to the first part of your question, Tom, was, we have roughly 600,000 of contractual commitments for the balance of the year, so less than $1 million of commitments. You know, one of the things that, you know, we did previously have some pretty substantial commitments, so this lack of contractual commitments really does give us the ability and flexibility to concentrate the marketing spend on whatever is the, you know, whatever the most effective channels are for us, which will allow us to drive a much better return on that marketing spend.
Tom Forte (Managing Director and Senior Research Analyst)
Thank you, Clint. Thank you, Peter. I'm gonna get back in the queue.
Peter Westley (CFO)
Thank you, Tom.
Operator (participant)
We'll go next now to Laura Martin of Needham.
Laura Martin (Senior Analyst)
Hey there. Hey, guys. I was really intrigued by this thing that your bundle distribution was $1.5 million in revenues, but it would have been up 21% if you deducted the $2.6 million that wasn't renewed. I guess what I'm questioning is, what kind of deal were you doing in the olden days that actually, it sounds like, wasn't profitable? Now we're signing a lot more bundle deals. How are these different than the one we discontinued last year, which ended up hurting revenue, but actually helping profitability?
Clint Stinchcomb (CEO)
Great question, Laura. Thank you for asking that. Allow me to try to clarify. We entered into a three-year agreement with a, you know, distributor of scale in late 2019. At the point that we entered into that agreement, that distributor owned a number of national networks, both digital and traditional video, owned regional networks and had a really compelling advertising proposition. You know, as we looked at our advertising spend, you know, over the course of the next two years, and we looked at their platforms, it made sense for us to spend with them on that side of the business. We weren't going to spend with them, though, unless there was a distribution component as well.
At the time that we did the deal and over the first two years, we had an advertising commitment, you know, like so many pay services have had for years, and it worked out reasonably well for us. As they shed assets and moved into a different direction, as we looked at it, we didn't see it as something that we wanted to move forward with. We thought we could put the money to use, better use in other places. That was a unique deal.
For the new distribution agreements that we've signed, you know, We entered into those with no obligations beyond sort of traditional, you know, baseline content volume provisions that, you know, are, of course, no problem for us at this point since we've built the library that we have. Does that make sense?
Laura Martin (Senior Analyst)
Yeah, it totally makes sense. Yeah. Super helpful. Then Clint, can we get an update on what's going on with the ad tiers? You were talking about, I think, last quarter launching a FAST channel or an AVOD channel. I'm sort of forgetting. Can you tell us where you are in the advertising revenue stream update?
Clint Stinchcomb (CEO)
Yep. Thank you for asking. I think that, we've been a lot of conversations there. As I mentioned in the last call, while we do have some content, in front of the paywall, we've done very little there to date as we've been, you know, heavily focused on building our subscription tiers. We do have, you know, we have one biography title that we put out in front of the paywall that, you know, very, very limited distribution, you know, generated, you know, around $100,000 just for that single title alone.
Our approach here is to work with the largest AVOD and FAST platforms and secure, you know, the right kind of placements, the right kind of marketing commitments. Since the business has matured, we have a really good idea of, you know, what our content will generate. A lot of comps to look at now. We're trying to do the right deals there. We do have a FAST channel that's in the marketplace. Dipped our toe there with a few distributors. We'll, you know, have several more to report on next quarter. Our intent is to take it internationally as well.
Moving in there, you know, we'll generate revenue, you know, from AVOD and FAST and free-to-air through both direct distribution with these platforms and also through content licensing agreements where we would license certain parties, you know, AVOD and potentially, FAST rights.
Laura Martin (Senior Analyst)
That's super helpful. Thanks very much. Appreciate the answers.
Clint Stinchcomb (CEO)
You bet. Thank you, Laura.
Operator (participant)
Thank you. We go next now to Peter Henderson of Bank of America.
Peter Henderson (Director of Investment Banking)
Yes. Hi. Thank you for taking the question. I guess I'm just wondering, you have now several new distribution partners in the quarter sort of went through. I'm just wondering if you can, you know, sort of talk about how those new deals work and any color on the economics or the subs. You know, just any color that you can provide on those deals would be helpful.
Clint Stinchcomb (CEO)
Yeah. I think so, you know, obviously in the U.S., you know, traditional distributors, as you well know, Peter, are doing whatever they can to reduce fixed costs. outside the U.S., you know, paid TV is still growing at, you know, zero to a few points a year. There are really some wonderful opportunities to work with distributors of scale. Our proposition is typically, you know, in exchange for a multi-year agreement and with a fixed fee. You know, we're not we don't close the door on CPS deals, but we and whenever possible, you know, we try to do fixed fee deals. Just provides more security for everybody.
You know, in light of the additional products and services, that we have to offer today, you know, as compared to a few years ago, it's become certainly easier for us. You know, the other thing I would add is that, you know, the one dynamic going on in the marketplace is that, you know, there are a lot of larger legacy media companies who are looking to drive really significant rate increases. You know, when that happens, where do people turn? Well, they turn to, you know, sort of more cost-effective, high quality alternatives. You know, that's creating some opportunities for us that, you know, we think will continue to grow nicely over this year, next, and, ideally over the next handful of years.
Peter Henderson (Director of Investment Banking)
Thank you. It's helpful.
Operator (participant)
Thank you. We go next now to Jim Goss of Barrington Research.
James Goss (VP and Senior Investment Analyst)
Yeah. Thanks. The content expenditure, frame of $10 million-$15 million, for a year, is that a run rate we should expect? How level is that per quarter, and what will that buy you? Would it buy, for example, say all of those series you listed in the press release?
Peter Westley (CFO)
The $10 million-$15 million, we spent. Hold on. Just bear with me just a sec. We spent $4.9 million in Q1, that leaves, you know, $5.1 million-$10.1 million for the balance of the year. You know, we do expect on a quarterly basis our cash spend on content to come down a little bit for the balance of the year. Call it, you know, that would imply kind of a $2 million-$3 million per quarter range if you average out the balance of the year.
In terms of go forward, you know, we haven't really, you know, set a budget for 2024 and beyond, but it's probably somewhere in that same kind of order of magnitude would be our expectation.
Clint Stinchcomb (CEO)
Yeah. To just add a little bit more color, Jim. We have Certain of that content that I mentioned in my opening remarks has been in production for, you know, 18 to even 24 months in some cases. Some of that's coming from, you know, prior expenditures obviously that gets reflected in the, you know, content amortization. While at the same time, you know, we're seeing even increased consumption for some of our franchise series like Breakthrough. We're confident that with what we have and with what we have coming down the pike, that we have sufficient content to provide people with, you know, plenty of new content and then to continue to provide them with a library of breadth and depth is really is what keeps people.
James Goss (VP and Senior Investment Analyst)
Okay. Can you tell me, what level of involvement do you have through all the stages of creation? Do you have the ideas? Do you actually produce them, or do you curate them?
Clint Stinchcomb (CEO)
Excellent question.
James Goss (VP and Senior Investment Analyst)
Are you buying a lot of this content from producers?
Clint Stinchcomb (CEO)
Yeah. Excellent, excellent question, Jim. What I would say is that, our programming group, you know, in the aggregate has, you know, probably hundreds of years of experience, you know, when you add it all up. Because, you know, because of our heritage and, you know, because of the content that we've created in the past, because of the people that we have, we tend to see nearly every factual idea that you could ever imagine. We have relationships today with well over 150 production partners and distribution partners. We see a lot of ideas, we've seen a lot of ideas, and if we make the decision to commission a piece of content, then yeah, we're heavily involved through the process with them.
You know, every producer has, you know, 5 or 6 milestones that they need to meet. We, you know, in light of the relationships that we have, we know, you know, who's really good as it relates to a particular project. We bring that expertise and experience to bear in all of this stuff. We have, you know, as I said, we have just large partners around the world, you know, whether it's NHK or Banijay or GFE or OTF or GE or whomever it might be. We have great factual relationships around the world. We leverage those. Through all of that, you know, we also see a lot of acquisition opportunities.
The nice thing about the factual space, as we've talked about in the past, is you know, content costs are a fraction of a fraction of what you need to pay for scripted entertainment or sports rights. We're very confident that we have access to plenty of content to keep our subscribers happy and wanting more. Is that helpful, Jim?
James Goss (VP and Senior Investment Analyst)
No, that's very helpful. I have one last one. large streamers have run into some problems recently. Disney was down big today, for example. I'm wondering if you could discuss what this contextual framework implies to your business opportunities and any strategies.
Clint Stinchcomb (CEO)
I'll start and then I'll hand over to my good friend and colleague, Peter. I would say, Jim, that, you know, I think, you know, what we're seeing is sort of reality rearing its head, right? I mean, I think that, you know, we saw early on that it's really difficult to build a business that is 100% reliant on pure direct subscription revenue. You know, the path to victory, the key to success is to take a step back and really consider, you know, what business you are in. In our case, you know, we provide the best factual entertainment in the world, and we wanna help people satisfy their intellectual curiosity through premium factual video. We're happy to do that through direct subscriptions.
We're happy to do that through, you know, working with bundled partners. We're delighted to do that, through working with brand partners and even through licensing our content to other media companies in parts of the world where it can be additive for us. That's our approach. I think there was such a rush to just generate top-line growth, generate subscribers that I think a lot of companies just overspent. I don't know another way to say it. Peter?
Peter Westley (CFO)
Yeah. Look, I'd add a couple of things. You know, one of the things that is great about our category, as we've touched on, as Clint's already touched on and we've talked about in prior calls as well, is that our category of content, kind of by definition, has long life, is low cost, and has global appeal. That is, you know, really a distinctive and differentiated compared to many of the other services out there. The breadth and depth of content that we have in this category is really unrivaled.
You know, we also have the ability not only to offer our service and our selection of services, we also have the ability to bundle a variety of other kind of complementary services in our Smart Bundle, which we think is a really differentiated offering in the marketplace as well. You know, there, there are a number of reasons why we think our story, you know, is different and unique relative to some of the, some of the larger streamers out there who are, who are really kind of butting heads and, and losing, you know, significant amounts of money as they, as they go about trying to build their businesses.
Clint Stinchcomb (CEO)
Well said, Peter. I couldn't emphasize enough the global proposition that we have. Lots of companies talk about going global, Jim. It's, it's not easy, you know, for a variety of reasons, including, you know, fractured rights that are associated with most people's content. In light of the sort of economic profile of the content that we're in, we're able to control, you know, a broad set of rights across a broad set of territories. You know, the beauty of evergreen factual content is what's appealing to someone in India, you know, can be equally appealing to somebody in Indiana.
James Goss (VP and Senior Investment Analyst)
Okay. Thank you very much. Appreciate your response.
Clint Stinchcomb (CEO)
Thank you, Jim.
Just a quick reminder, ladies and gentlemen, star one for any questions. We'll take a follow-up question now from Tom at D.A. Davidson.
Tom Forte (Managing Director and Senior Research Analyst)
Great. Thanks. For my follow-on question, Clint, I can't let you off the hook. Can you give more high-level thoughts on business combinations and scale partnerships? It's too juicy a statement just to let it sit there.
Clint Stinchcomb (CEO)
I think, I guess what I would say, Tom, is it's no secret that Wall Street today has limited affection for small companies. You know, we're unique in the media ecosystem, and what I mean by that is we have considerable cash, no debt, a clear path to positive adjusted free cash flow. We have a wide, deep, and evergreen content library. We have direct subscribers in 178 countries, multi-year bundled agreements in over 100 countries, programming in 11 languages, demonstrated global appeal, considerable dry powder, and a public currency. That's a unique profile, and I think one that is attractive to a broad set of combination partners, you know, including companies who may not be, you know, obvious in the media landscape.
As I said, you know, it's no secret that Wall Street has limited affection for small companies. I think like many people, you know, we wanna do what's in the best interest of our shareholders, and certainly it appears to, you know, today that, you know, we need to be we need to be larger. Where, you know, where those opportunities exist, we're, you know, happy to have conversations with people. Again, I think, you know, in light of our content, in light of our profile, we have the ability to have conversations with, I think, companies that might not be as obvious as they would be for other media companies. Peter?
Peter Westley (CFO)
No, I think, yeah, I think you captured it.
Tom Forte (Managing Director and Senior Research Analyst)
Thank you for the additional comments.
Clint Stinchcomb (CEO)
Thank you, Tom.
Operator (participant)
Thank you. Ladies and gentlemen, it appears we have no further questions this afternoon. I'd like to thank everyone so much for joining the CuriosityStream first quarter 2023 earnings conference call. Again, thank you all so much for joining, and wish you all a great evening. Goodbye.