SILVER SPRING, Md.–(BUSINESS WIRE)–CuriosityStream Inc. (NASDAQ: CURI), a global factual entertainment company, today announced its financial results for the third quarter ending September 30, 2020.
“We had a strong third quarter, with an 83% year-over-year increase in revenue and growth across all lines of business. Our subscribers more than doubled year over year, with notable increases in annual plans and international subscriptions, as we continued to offer fresh and unique original content every week,” said Clint Stinchcomb, President & CEO. “We continue to be on a three-year trajectory of doubling annual revenue with large recurring revenues and high gross margins as we drive growth across the entire business.”
Third Quarter 2020 Financial Results
Business Highlights
Financial Outlook
For the fourth quarter of 2020, CuriosityStream currently expects the following:
For the full year 2020 & 2021, CuriosityStream currently expects the following:
Conference Call Information
CuriosityStream will host a Q&A conference call today to discuss the Company’s Q3 2020 results at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). A live audio webcast of the call will be available on the CuriosityStream Investor Relations website at https://investors.curiositystream.com. A live dial-in is available domestically at (800) 585-8367 or internationally at (416) 621-4642, with passcode 9085595.
An audio replay of the conference call will be available for two weeks following the call and available on the CuriosityStream Investor Relations website at https://investors.curiositystream.com.
Forward-Looking Statements
Certain statements in this press release may be considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 including, but not limited to, CuriosityStream’s expectations or predictions of future financial or business performance or conditions and the information under the heading “Financial Outlook” in this press release. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Generally, statements that are not historical facts, including statements concerning possible or assumed future actions, business strategies, events or results of operations, are forward-looking statements. These statements may be preceded by, followed by or include the words “believes,” “estimates,” “expects,” “projects,” “forecasts,” “may,” “will,” “should,” “seeks,” “plans,” “scheduled,” “anticipates,” “predicts” or “intends” or similar expressions. Such forward-looking statements involve risks and uncertainties that may cause actual events, results or performance to differ materially from those indicated by such statements. Certain of these risks are identified and discussed under “Risk Factors” in the Definitive Proxy Statement on Schedule 14A filed on September 22, 2020, and in CuriosityStream’s other SEC filings. These risk factors will be important to consider in determining future results and should be reviewed in their entirety. Forward-looking statements are based on the current belief of the management of CuriosityStream, based on currently available information, as to the outcome and timing of future events, and involve factors, risks, and uncertainties that may cause actual results in future periods to differ materially from such statements. However, there can be no assurance that the events, results or trends identified in these forward-looking statements will occur or be achieved. Forward-looking statements speak only as of the date they are made, and CuriosityStream is not under any obligation, and expressly disclaims any obligation to update, alter or otherwise revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law. Readers should carefully review the statements set forth in the reports that CuriosityStream has filed or will file from time to time with the SEC.
In addition to factors previously disclosed in CuriosityStream’s reports filed with the SEC and those identified elsewhere in this communication, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: (i) the effect of the merger on CuriosityStream’s business relationships, operating results, and business generally; (ii) failure to realize the benefits expected from the merger; (iii) risks that the merger disrupts CuriosityStream’s current plans and operations and potential difficulties in CuriosityStream’s employee retention as a result of the merger; (iv) the effects of pending and future legislation; (viii) risks related to CuriosityStream’s limited operating history; (ix) the amount of the costs, fees, expenses and other charges related to the merger; (x) risks of the internet, online commerce and media industry; (xi) the highly competitive nature of the internet, online commerce and media industry and CuriosityStream’s ability to compete therein; (xii) litigation, complaints, and/or adverse publicity; (xiii) the ability to meet Nasdaq’s listing standards and (ix) privacy and data protection laws, privacy or data breaches, or the loss of data.
Non-GAAP Financial Measures
To supplement our condensed consolidated financial statements, which are prepared in accordance with GAAP, we present EBITDA in this press release. Our use of non-GAAP financial measures has limitations as an analytical tool, and these measures should not be considered in isolation or as a substitute for analysis of financial results as reported under GAAP.
We use this non-GAAP financial measure in conjunction with financial measures prepared in accordance with GAAP for planning purposes, including in the preparation of our annual operating budget, as a measure of our core operating results and the effectiveness of our business strategy, and in evaluating our financial performance. This measure provides consistency and comparability with past financial performance, facilitates period-to-period comparisons of core operating results, and also facilitates comparisons with other peer companies, many of which use similar non-GAAP financial measures to supplement their GAAP results. In addition, EBITDA is widely used by investors and securities analysts to measure a company’s operating performance. We exclude the following items from one or more of our non-GAAP financial measures: other income, income taxes, and depreciation and amortization.
Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool. In particular, (1) stock-based compensation expense has recently been, and will continue to be for the foreseeable future, a significant recurring expense for our business and an important part of our compensation strategy, (2) although depreciation and amortization expense are non-cash charges, the assets subject to depreciation and amortization may have to be replaced in the future, and EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements, and (3) EBITDA does not reflect: (a) changes in, or cash requirements for, our working capital needs; (b) or tax payments that may represent a reduction in cash available to us. The non-GAAP measure we use may be different from non-GAAP financial measures used by other companies, limiting their usefulness for comparison purposes. We compensate for these limitations by providing specific information regarding the GAAP items excluded from these non-GAAP financial measures. A reconciliation of these non-GAAP measures has been provided in the financial statement tables included in this press release and investors are encouraged to review the reconciliation.
About CuriosityStream
Launched by media visionary John Hendricks, CuriosityStream is one of the world’s leading global factual streaming services and media companies. Our documentary series and features cover every topic from space exploration to adventure to the secret life of pets, empowering viewers of all ages to fuel their passions and explore new ones. With thousands of titles, many in Ultra HD 4K, including exclusive originals, CuriosityStream features stunning visuals and unrivaled storytelling to demystify science, nature, history, technology, society, and lifestyle. CuriosityStream programming is available worldwide to watch on TV, desktop, mobile and tablets. Find us on Roku, Apple TV Channels and Apple TV, Xbox One, Amazon Fire TV, Google Chromecast, iOS and Android, as well as Amazon Prime Video Channels, YouTube TV, Sling TV, DISH, Comcast Xfinity on Demand, Cox Communications, Altice USA, Suddenlink, T- Mobile, Frndly TV, Vidgo, Sony, LG, Samsung and VIZIO smart TVs, Liberty Global, Com Hem, MultiChoice, StarHub TV, Totalplay, Millicom, Okko, Gazprom and other global distribution partners and platforms. For more information, visit CuriosityStream.com.
|
CuriosityStream Inc. Unaudited Statements of Operations (in thousands, except for per share data) |
||||||||||||||||
|
|
|
For the three months ended |
|
For the nine months ended |
||||||||||||
|
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
|
Revenues |
|
$ |
8,744 |
|
|
$ |
4,791 |
|
|
$ |
28,260 |
|
|
$ |
11,336 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Cost of revenues |
|
|
3,411 |
|
|
|
1,946 |
|
|
|
10,748 |
|
|
|
4,384 |
|
|
Advertising and marketing |
|
|
7,800 |
|
|
|
9,410 |
|
|
|
28,673 |
|
|
|
26,124 |
|
|
General and administrative |
|
|
4,286 |
|
|
|
3,539 |
|
|
|
12,191 |
|
|
|
10,388 |
|
|
|
|
|
15,497 |
|
|
|
14,895 |
|
|
|
51,612 |
|
|
|
40,896 |
|
|
Operating loss |
|
|
(6,753 |
) |
|
|
(10,104 |
) |
|
|
(23,352 |
) |
|
|
(29,560 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Interest and other income (expense) |
|
|
101 |
|
|
|
475 |
|
|
|
519 |
|
|
|
1,719 |
|
|
Loss before income taxes |
|
|
(6,652 |
) |
|
|
(9,629 |
) |
|
|
(22,833 |
) |
|
|
(27,841 |
) |
|
Provision for income taxes |
|
|
41 |
|
|
|
30 |
|
|
|
118 |
|
|
|
103 |
|
|
Net loss |
|
$ |
(6,693 |
) |
|
$ |
(9,659 |
) |
|
$ |
(22,951 |
) |
|
$ |
(27,944 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Less preferred dividends and accretion of issuance costs (Note 6) |
|
|
(4,523 |
) |
|
|
(4,059 |
) |
|
|
(13,114 |
) |
|
|
(11,725 |
) |
|
Net loss attributable to common stockholders |
|
$ |
(11,216 |
) |
|
$ |
(13,718 |
) |
|
$ |
(36,065 |
) |
|
$ |
(39,669 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Net loss per share attributable to common stockholders |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Basic and diluted |
|
|
(0.56 |
) |
|
|
(0.69 |
) |
|
|
(1.80 |
) |
|
|
(1.98 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Weighted average number of common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
CuriosityStream Inc. Balance Sheets (in thousands, except par value) |
||||||||
|
|
|
September 30, |
|
December 31, |
||||
|
|
|
2020 |
|
2019 |
||||
|
|
|
(unaudited) |
|
|
||||
|
Assets |
|
|
|
|
||||
|
|
|
|
|
|
||||
|
Current assets |
|
|
|
|
||||
|
Cash and cash equivalents |
|
$ |
3,374 |
|
|
$ |
8,819 |
|
|
Restricted cash |
|
|
5,000 |
|
|
|
– |
|
|
Short-term investments |
|
|
12,114 |
|
|
|
35,525 |
|
|
Accounts receivable |
|
|
5,800 |
|
|
|
1,777 |
|
|
Other current assets |
|
|
2,951 |
|
|
|
2,460 |
|
|
Total current assets |
|
|
29,239 |
|
|
|
48,581 |
|
|
|
|
|
|
|
|
|
||
|
Investments |
|
|
2,770 |
|
|
|
15,654 |
|
|
Property and equipment, net |
|
|
1,358 |
|
|
|
1,451 |
|
|
Content assets, net |
|
|
23,826 |
|
|
|
16,627 |
|
|
Other assets |
|
|
2,790 |
|
|
|
151 |
|
|
Total assets |
|
$ |
59,983 |
|
|
$ |
82,464 |
|
|
|
|
|
|
|
|
|
||
|
Liabilities, redeemable convertible preferred stock, and stockholders’ equity (deficit) |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
Current liabilities |
|
|
|
|
|
|
||
|
Current content liabilities |
|
$ |
2,165 |
|
|
$ |
3,306 |
|
|
Accounts payable |
|
|
2,323 |
|
|
|
5,245 |
|
|
Accrued expenses and other liabilities |
|
|
2,542 |
|
|
|
2,266 |
|
|
Deferred revenue |
|
|
8,885 |
|
|
|
7,101 |
|
|
Line of credit |
|
|
950 |
|
|
|
– |
|
|
Total current liabilities |
|
|
16,865 |
|
|
|
17,918 |
|
|
|
|
|
|
|
|
|
||
|
Non-current deferred rent liability |
|
|
905 |
|
|
|
824 |
|
|
|
|
|
|
|
|
|
||
|
Total liabilities |
|
|
17,770 |
|
|
|
18,742 |
|
|
|
|
|
|
|
|
|
||
|
Commitments and contingencies |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
Redeemable convertible preferred stock, $0.01 par value, 30,000 shares authorized at September 30, 2020 and December 31, 2019; aggregate liquidation preference of $175,104 and $162,514 as of September 30, 2020 and December 31, 2019, respectively; 14,557 shares issued and outstanding at September 30, 2020 and December 31, 2019 |
|
|
168,288 |
|
|
|
155,174 |
|
|
|
|
|
|
|
|
|
||
|
Stockholders’ equity (deficit) |
|
|
|
|
|
|
||
|
Class A Common stock, $0.01 par value – 50,000 shares authorized at September 30, 2020 and December 31, 2019, respectively; 14 and nil shares issued and outstanding at September 30, 2020 and December 31, 2019 respectively |
|
|
– |
|
|
|
– |
|
|
Class B Common stock, $0.01 par value – 25,000 shares authorized at September 30, 2020 and December 31, 2019; 20,000 shares issued and outstanding at September 30, 2020 and December 31, 2019 |
|
|
200 |
|
|
|
200 |
|
|
Additional paid-in capital |
|
|
– |
|
|
|
– |
|
|
Accumulated other comprehensive income |
|
|
55 |
|
|
|
189 |
|
|
Accumulated deficit |
|
|
(126,330 |
) |
|
|
(91,841 |
) |
|
Total stockholders’ equity (deficit) |
|
|
(126,075 |
) |
|
|
(91,452 |
) |
|
|
|
|
|
|
|
|
||
|
Total liabilities, redeemable convertible preferred stock, and stockholders’ equity (deficit) |
|
$ |
59,983 |
|
|
$ |
82,464 |
|
|
CuriosityStream Inc. Unaudited Statements of Cash Flows (in thousands) |
||||||||
|
|
|
For the nine months |
||||||
|
|
|
2020 |
|
2019 |
||||
|
Cash flows from operating activities |
|
|
|
|
||||
|
Net loss |
|
$ |
(22,951 |
) |
|
$ |
(27,944 |
) |
|
Adjustments to reconcile net loss to net cash used in operating activities |
|
|
|
|
|
|
||
|
Additions to content assets |
|
|
(14,004 |
) |
|
|
(12,029 |
) |
|
Change in content liabilities |
|
|
(1,141 |
) |
|
|
1,241 |
|
|
Amortization of content assets |
|
|
6,805 |
|
|
|
2,441 |
|
|
Amortization, depreciation and accretion |
|
|
399 |
|
|
|
64 |
|
|
Stock-based compensation |
|
|
1,540 |
|
|
|
671 |
|
|
Changes in operating assets and liabilities |
|
|
|
|
|
|
||
|
Accounts receivable |
|
|
(4,023 |
) |
|
|
(244 |
) |
|
Other assets |
|
|
(773 |
) |
|
|
945 |
|
|
Accounts payable |
|
|
(3,263 |
) |
|
|
1,460 |
|
|
Accrued expenses and other liabilities |
|
|
124 |
|
|
|
407 |
|
|
Deferred revenue |
|
|
1,784 |
|
|
|
1,253 |
|
|
Net cash used in operating activities |
|
|
(35,503 |
) |
|
|
(31,735 |
) |
|
|
|
|
|
|
|
|
||
|
Cash flows from investing activities |
|
|
|
|
|
|
||
|
Purchases of property and equipment |
|
|
(299 |
) |
|
|
(590 |
) |
|
Sales of investments |
|
|
39,744 |
|
|
|
30,309 |
|
|
Maturities of investments |
|
|
8,500 |
|
|
|
7,947 |
|
|
Purchase of investments |
|
|
(12,227 |
) |
|
|
(48,243 |
) |
|
Net cash provided by (used in) investing activities |
|
|
35,718 |
|
|
|
(10,577 |
) |
|
|
|
|
|
|
|
|
||
|
Cash flows from financing activities |
|
|
|
|
|
|
||
|
Exercise of stock options |
|
|
36 |
|
|
|
– |
|
|
Borrowings on line of credit |
|
|
8,250 |
|
|
|
– |
|
|
Repayments on line of credit |
|
|
(7,300 |
) |
|
|
– |
|
|
Payment of offering costs |
|
|
(1,646 |
) |
|
|
– |
|
|
Net cash used in financing activities |
|
|
(660 |
) |
|
|
– |
|
|
|
|
|
|
|
|
|
||
|
Net decrease in cash, cash equivalents and restricted cash |
|
|
(445 |
) |
|
|
(42,312 |
) |
|
Cash, cash equivalents and restricted cash, beginning of period |
|
|
8,819 |
|
|
|
62,516 |
|
|
Cash, cash equivalents and restricted cash, end of period |
|
$ |
8,374 |
|
|
$ |
20,204 |
|
|
|
|
|
|
|
|
|
||
|
Supplemental schedule of non-cash financing activities: |
|
|
|
|
|
|
||
|
Preferred dividends and accretion of issuance costs |
|
$ |
13,114 |
|
|
$ |
11,725 |
|
| Reconciliation of GAAP Financial Metrics to Non-GAAP | |||||||||||||||
| (in thousands) | |||||||||||||||
| (unaudited) | |||||||||||||||
| Reconciliation of Net Loss to EBITDA | |||||||||||||||
|
For the three months ended |
|
For the nine months ended |
|||||||||||||
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
|
| Net loss |
$ |
(6,693 |
) |
$ |
(9,659 |
) |
$ |
(22,951 |
) |
$ |
(27,944 |
) |
|||
| Other income |
|
(101 |
) |
|
(475 |
) |
|
(519 |
) |
|
(1,719 |
) |
|||
| Income taxes |
|
41 |
|
|
30 |
|
|
118 |
|
|
103 |
|
|||
| Depreciation and amortization |
|
83 |
|
|
63 |
|
|
256 |
|
|
170 |
|
|||
| EBITDA |
$ |
(6,670 |
) |
$ |
(10,041 |
) |
$ |
(23,096 |
) |
$ |
(29,390 |
) |
|||
Contacts
CuriosityStream Public Relations:
Vanessa Gillon
Vanessa.Gillon@CuriosityStream.com
CuriosityStream Investor Relations:
Denise Garcia
IR@CuriosityStream.com
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