CuriosityStream Inc. (CURI)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 was a milestone quarter: revenue grew 26% year over year to $15.1M, gross margin expanded to 53.1%, and the company achieved first-ever positive net income ($0.3M) and positive adjusted EBITDA ($1.1M) .
• Strong licensing momentum offset slightly lower direct subscription revenue; management highlighted a ~$4M increase in licensing and “about $9M” direct subscription revenue driving the top line .
• Guidance: Q2 2025 revenue guided to $16.0–$17.0M and adjusted free cash flow to $2.0–$3.0M, indicating continued sequential growth and cash generation .
• Dividend doubled to $0.08 per quarter ($0.32 annualized), underscoring confidence in cash flow and growth, with $39.1M in cash and securities and no debt providing flexibility .
• Near-term stock reaction catalysts: accelerating data licensing for AI training with 40–50% gross margins, international distribution expansion (Prime Video EU, Roku Channel for Curiosity University), and ongoing cost rationalization .

What Went Well and What Went Wrong

What Went Well

• First-ever GAAP profitability: “positive net income and EBITDA for the first time,” driven by 26% YoY revenue growth and margin improvement; adjusted free cash flow hit $2.0M at the high end of guidance .
• Pricing power and mix: licensing growth (“grew by about $4M”) and expanding gross margin to 53% from 44% YoY, aided by lower content amortization and disciplined OpEx (-11% YoY across Ad&Mktg + G&A) .
• Shareholder returns: quarterly dividend doubled to $0.08; management emphasized intent to fund dividends from operations while maintaining significant cash reserves ($39.1M; no debt) .

Quote: “We’re thrilled to begin 2025 with…positive net income and EBITDA for the first time, 26% top-line revenue growth and…positive adjusted free cash flow” — Clint Stinchcomb, CEO .

What Went Wrong

• Direct subscription revenue dipped slightly YoY as management prioritized marketing efficiency and opportunistic spend timing, creating lumpiness in subscription growth .
• Content cash costs rose modestly due to revenue-share rights acquisitions and storage costs, tempering cost-of-revenue reductions even as amortization fell .
• Continued reliance on non-GAAP metrics (Adjusted EBITDA, Adjusted FCF) remains a watchpoint; management outlines limitations and reconciliations but investors should monitor underlying GAAP drivers and any restructuring/nonrecurring items .

Financial Results

Notes: Gross Margin % for Q3/Q4 derived from reported gross profit and revenue; Q4 2024 EPS not disclosed in press release tables.

KPIs and Operating Metrics

Segment breakdown: Management indicated direct subscriptions were “about $9M” and licensing grew “about $4M” YoY in Q1; exact segment table not disclosed .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• Strategy and milestones: “Our Q1 revenue of $15.1 million was up 26% year-over-year…Adjusted EBITDA was positive…and net income positive, landmark achievements…” — Clint Stinchcomb .
• Shareholder returns philosophy: “We are doubling [the dividend] to $0.08…We work for the benefit and interest of our shareholders, and we are proud to do so” — Clint Stinchcomb .
• Licensing outlook: “We have appeal to a broad set of licensees…hyperscalers…other AI companies…public sector…assume a 40% to 50% margin for these types of agreements” — Clint Stinchcomb .
• Subscriptions and marketing: “Direct subscription revenue…is largely a function of our marketing spend…we’ll be opportunistic…churn continues to be low” — Clint Stinchcomb .
• Cost management/GenAI: “We’ve been able to reduce our costs largely without…GenAI…big advantages…in translation…some help in editing” — Clint Stinchcomb .

Q&A Highlights

• Cost trajectory and GenAI: Management sees future GenAI benefits in translation and editing but drove current reductions via disciplined cost control (nonessential spend pruning) .
• Revenue mix: Direct subscriptions slightly down YoY due to marketing efficiency focus; licensing materially higher with broader partner base (tech, media) .
• Dividend coverage: Management confident in funding doubled dividend from operations; reserves provide buffer for quarterly lumpiness .
• AI licensing pipeline: Active with hyperscalers, smaller AI firms, and public sector; anticipated 40–50% gross margins .
• Recurrence of licensing: While agreements often recognize revenue upfront, partners consistently request more data; effectively de facto recurring relationships .

Estimates Context

• Q1 2025 vs consensus: Revenue $15.09M vs $14.80M consensus (beat), EPS $0.01 vs -$0.02 consensus (beat), Adjusted EBITDA $1.10M vs -$0.595M consensus (beat) .
• Q2 2025 setup: Company guides revenue to $16.0–$17.0M; consensus revenue $16.65M*, EPS -$0.005*; watch for licensing execution to support top-end guidance .

Values with asterisk (*) retrieved from S&P Global.

Key Takeaways for Investors

• The pivot to profitability and cash generation appears durable, driven by licensing momentum, disciplined cost structure, and expanding margins .
• Expanded distribution (Roku Channel for Curiosity University, Prime Video EU) should underpin subscription visibility while marketing remains opportunistic to optimize CPA .
• AI/data licensing is an increasingly material, higher-margin growth engine; pipeline breadth and 40–50% gross margin profile are constructive for earnings quality .
• Dividend doubled to $0.08/quarter reflects confidence; cash reserves and no debt reduce risk of funding pressure if quarterly variability arises .
• Watch Q2 revenue delivery vs the $16–$17M guide and adjusted FCF $2–$3M; strong execution could drive estimate revisions upward and support multiple expansion .
• Monitor sustainability of licensing volumes and cadence (quasi-recurring nature), along with continued reductions in amortization and G&A as margin drivers .
• Risk checks: reliance on non-GAAP measures and potential cost creep if marketing ramps; however, management indicates continued G&A decline and disciplined spend .