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CI

CuriosityStream Inc. (CURI)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue of $14.1M slightly exceeded the top end of prior guidance ($12–$14M), and adjusted free cash flow (AFCF) of $3.287M beat guidance ($2–$3M), driven by higher-margin mix and disciplined cost control .
  • Gross margin expanded to 52% (vs. 45% YoY), and adjusted EBITDA loss narrowed to $1.937M from $3.407M YoY, reflecting reduced content amortization and cash cost of revenues .
  • Management raised the quarterly dividend multiple times, ultimately to $0.04 per share (annualized to $0.16), supported by ~$39.7M cash and securities and no debt; Q1 2025 guidance calls for revenue $14.5–$15.5M and AFCF $1.0–$2.0M .
  • Strategic narrative centers on licensing Curiosity’s large video/audio corpus to technology partners for AI model training, which management expects to power double-digit growth in 2025 and lift variable revenue above direct revenue in some periods .

What Went Well and What Went Wrong

What Went Well

  • Positive cash generation: Ninth straight quarter of positive operating cash flow and highest quarterly AFCF ($3.287M), outperforming guidance and reversing prior-year cash use .
  • Margin expansion and cost discipline: Gross margin rose to 52% (from 45%) due to lower content amortization and cost efficiencies; management reiterated breakeven adjusted EBITDA is within reach as revenue scales .
  • Strategic licensing momentum: Management highlighted delivering 8M+ minutes to tech partners and visibility in AI-training demand; direct business remained largest category in Q4 at $9.4M, with variable revenue growing sequentially .

What Went Wrong

  • Top line still below prior-year quarter: Q4 revenue ($14.1M) was down vs. Q4 2023 ($14.8M), as fewer non-cash transactions occurred versus 2023 and licensing timing remains lumpy .
  • Continued GAAP losses: Net loss improved but remained negative at $2.813M in Q4, reflecting amortization and non-cash expenses despite strong cash flow .
  • Advertising/AVOD FAST ramp lag vs. seasonality: Despite expanded distribution, management tempered guidance previously due to acceptance-period lags on large licensing deliveries and the time-to-publish cycles with platform partners .

Financial Results

Core P&L, Cash Flow, and Margins (Quarterly)

MetricQ4 2023Q2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$14.8 $12.395 $12.604 $14.1
Gross Profit ($USD Millions)$6.7 $6.4 $6.8 $7.4
Gross Margin (%)45% 52% 54% 52%
Net Income (Loss) ($USD Millions)$(4.659) $(2.031) $(3.062) $(2.813)
Adjusted EBITDA ($USD Millions)$(3.407) $(1.005) $(0.407) $(1.937)
Cash from Operations ($USD Millions)$(2.542) $2.190 $2.260 $3.035
Adjusted Free Cash Flow ($USD Millions)$(2.398) $2.462 $2.573 $3.287

Revenue Mix (Quarterly)

MetricQ2 2024Q3 2024Q4 2024
Direct Revenue ($USD Millions)$9.8 $9.8 $9.4
Other Categories (Licensing, Bundled, Advertising) ($USD Millions)$2.6 $2.8 $4.7 (14.1 total – 9.4 direct )

KPIs and Balance Sheet Highlights

KPIQ2 2024Q3 2024Q4 2024
Gross Margin ex Content Amortization (%)89% 90% 85%
Cash + Restricted + HTM Securities ($USD Millions, period-end)$39.6 $39.8 $39.7
DebtNone None None

Guidance Changes

MetricPeriodPrevious GuidanceCurrent Guidance/ActualChange
Revenue ($USD Millions)Q4 2024$12.0 – $14.0 $14.1 (Actual) Beat
Adjusted Free Cash Flow ($USD Millions)Q4 2024$2.0 – $3.0 $3.287 (Actual) Beat
Revenue ($USD Millions)Q1 2025N/A$14.5 – $15.5 New
Adjusted Free Cash Flow ($USD Millions)Q1 2025N/A$1.0 – $2.0 New
Dividend per Share2025$0.025 declared (Nov-2024) Raised to $0.03 (Jan-30-2025) , then $0.04 (Mar-10-2025) ; policy updated to $0.16/year Raised (multiple times)

Earnings Call Themes & Trends

TopicQ2 2024 (Prev-2)Q3 2024 (Prev-1)Q4 2024 (Current)Trend
AI/Data LicensingIdentified AI training licensing opportunity; building pipeline across video/audio/images/code; cost efficiencies incl. offshoring 20–30 new partners targeted; 300k+ hours under license; licensing lumpy but catalyst Delivering 8M+ minutes; tech partners’ demand rising; licensing could exceed direct revenue; larger tranches; acceptance-period lags Strengthening and scaling
Margin/Cost DisciplineGross margin up to 52%; content amortization and cash cost reductions; breakeven adj. EBITDA within reach Gross margin at 54%; ex-amortization 90%; continued G&A and A&M declines Gross margin 52%; ex-amortization 85%; continued cost control with AI tools Sustained improvement
Subscription/Direct RevenueDirect ~ $9.8M; price increases; recurring base covers operating expenses Direct $9.8M; recurring predictable stream Direct $9.4M; recurring revenue covers annualized costs; new launches/bundling Stable recurring base
FAST/AVOD ExpansionNew launches (VIZIO, Tubi, Pluto, Samsung, Fetch) with lag to publish/pay 4 FAST channels with Samsung; AVOD packages expanded; durable ad revenue U.S. Hispanic FAST channels outperforming; more partner launches coming; some revenue booked as licensing Building distribution and monetization
Capital ReturnsDividend initiation; strong liquidity, no debt Ongoing dividends; buybacks; balance sheet strength Dividend increased to $0.04; policy $0.16/year; ~1/3 market cap in cash/securities Increasing returns to shareholders

Management Commentary

  • “We generated significant free cash flow of $9.5 million for 2024… 2025 will be an exciting year as we return to double digit growth in both revenue and cash flow.” — Clint Stinchcomb, CEO .
  • “Our direct business remained our largest revenue category, generating $9.4 million in Q4… predictable, recurring revenue stream.” — Phillip (Brady) Hayden, CFO .
  • “We are in licensing agreements with… technology partners that are in need of content to train and fine-tune large language models… we have delivered and licensed over 8 million minutes of video and audio.” — Clint Stinchcomb .
  • “We expect revenue in the range of $14.5 million to $15.5 million and adjusted free cash flow in the range of $1 million to $2 million [for Q1 2025].” — CFO .

Q&A Highlights

  • Mix and revenue composition: Management emphasized recurring subscription revenue covering operating costs, enabling “calculated swings” in variable licensing, which may exceed direct revenue in 2025 in some periods .
  • FAST/AVOD monetization: Expanded channels and AVOD footprints should contribute increasingly, with some deals accounted as licensing depending on economics; lag from launch to monetization acknowledged .
  • AI licensing mechanics: Tech deals differ from traditional media licensing in volume and cadence; acceptance and recognition on term start; relationship quality and on-time delivery underpin repeat orders .
  • Guidance framing: Acceptance-period lags and timing of large tranches led to conservative guidance previously; management sees meaningful upside if timing pulls forward .

Estimates Context

  • Wall Street consensus (S&P Global Capital IQ) for Q4 2024 EPS and revenue was not available at time of analysis due to API request limits; we attempted to fetch EPS, revenue, and EBITDA consensus for Q2–Q4 2024 and FY 2024 but were blocked by a daily limit. As a result, explicit consensus comparisons are unavailable. Estimates would likely need to reflect the Q4 beats on revenue and AFCF and management’s double-digit growth outlook for 2025, particularly for licensing tied to AI training .

Key Takeaways for Investors

  • Cash flow strength is the story: Highest quarterly AFCF and nine consecutive quarters of positive operating cash flow signal durable cash generation even amid GAAP losses .
  • Margins improving and scalable: Structural cost reductions and lower content amortization are lifting margins; breakeven adjusted EBITDA is plausible as licensing and recurring revenue scale .
  • AI licensing could re-rate the model: Large, multi-thousand-hour deliveries to hyperscalers for AI training provide a growing, nontraditional revenue stream with increasing visibility and repeat potential .
  • Recurring base provides downside protection: Direct revenue (~$9.4M in Q4) covers annualized operating costs, enabling opportunistic growth investments and capital returns .
  • Capital allocation is shareholder-friendly: Progressive dividend hikes to $0.04/quarter ($0.16/year) and buybacks, supported by ~$39.7M cash/securities and no debt, are catalysts for investor interest .
  • Near-term setup: Q1 2025 guide ($14.5–$15.5M revenue; $1–$2M AFCF) frames continued momentum; watch for licensing timing/acceptance cycles as swing factors .
  • Medium-term thesis: Double-digit growth targeted in both revenue and cash flow for 2025, with FAST/AVOD, PayTV expansion, and AI licensing as multi-pronged drivers .