Curiositystream announces second quarter 2022 financial results
Silver spring, md.--(business wire)--curiositystream inc. (nasdaq: curi), a global factual entertainment company, today announced its financial results for the second quarter ended june 30, 2022. “we are pleased to report another quarter of strong, broad-based year-over-year revenue growth, with revenue at the high end of our guidance and ebitda exceeding our first half 2022 guidance, as we continue to deliver the world’s best factual content to the marketplace,” said clint stinchcomb, president & ceo. “under the leadership of our new cfo, peter westley, we made excellent headway during the second quarter with a 52% sequential reduction in cash used in operations. at the same time, we continued to grow our subscriber base, enter into new partnerships, and expand our content library, which stood at over 15,000 assets at the end of the second quarter. with a sound strategy, a strong team, and a solid balance sheet, we look forward to continuing to delight our subscribers with engaging storytelling in the years to come.” second quarter 2022 financial results revenue of $22.3 million, up from $15.3 million in the second quarter of 2021; total paying subscribers of approximately 25 million, up over 25% year over year; gross profit of $9.4 million compared to $9.6 million in the second quarter of 2021; net loss of $(16.0) million compared to net loss of $(8.3) million in the second quarter of 2021; and ebitda of $(12.2) million compared to ebitda of $(10.9) million in the second quarter of 2021. second quarter 2022 business highlights “smartest bundle in streaming” premium svod package gained further traction, with a 215% increase in daily average upgrades since the rollout of our new upgrade path advanced our strategy to build audience engagement in front of the paywall through avod and audio while generating record quarterly advertising revenue continued to build library with over 15,000 video and audio assets welcomed peter westley as cfo from blum capital partners, where he spent the last 10 years as partner and managing partner. peter brings with him 30 years of experience in financial services working primarily with media and technology companies premiered new, original programming, including cracking the code, secrets of the universe, impossible escapes, asteroid rush and season two of engineering the future financial outlook curiositystream expects the following for the third quarter of 2022: revenue within the range of $21 - $23 million ebitda loss within the range of $(11) - $(9) million the company is not able to provide expectations of net loss, the closest comparable gaap measure to ebitda (a non-gaap measure), on a forward-looking basis because the company is unable to predict without unreasonable efforts the ultimate outcome of matters (including accounting fair value adjustments and other such items) that will determine the quantitative amount of the items excluded from the non-gaap measure, which items are further described in the reconciliation tables and related descriptions below. these items are uncertain, depend on various factors, and could be material to the company’s results computed in accordance with u.s. gaap. conference call information curiositystream will host a q&a conference call today to discuss the company's q2 2022 results at 5:00 p.m. eastern time (2:00 p.m. pacific time). a live audio webcast of the call will be available on the curiositystream investor relations website at https://investors.curiositystream.com. participants may also dial-in toll free at (888) 510-2008 or international at (646) 960-0306 and reference conference id# 3957505. an audio replay of the conference call will be available for two weeks following the call 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, the commitment to positive cash flow and future cash balances, success of the 2022 content slate, 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 curiositystream’s annual report on form 10-k for the year ended december 31, 2021, that we filed with the securities and exchange commission (the “sec”) on march 31, 2022, 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) risks related to curiositystream’s limited operating history; (ii) the effects of pending and future legislation; (iii) risks of the internet, online commerce and media industry; (iv) the highly competitive nature of the internet, online commerce and media industry and curiositystream’s ability to compete therein; (v) litigation, complaints, and/or adverse publicity; (vi) the ability to meet nasdaq’s listing standards and (vii) privacy and data protection laws, privacy or data breaches, or the loss of data. non-gaap financial measures to supplement our unaudited consolidated statement of operations, which is prepared in accordance with gaap, we present ebitda in this press release. our use of non-gaap financial measures, such as ebitda, 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 ebitda: interest and other income (expense), provision for income taxes, depreciation and amortization, loss/(gain) on the change in fair value of our warrants, equity interests loss (gain), and impairment of goodwill and intangible assets. investors are cautioned that there are material limitations associated with the use of non-gaap financial measures as an analytical tool. in particular, (1) 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 (2) ebitda does not reflect: (a) changes in, or cash requirements for, our working capital needs; or (b) tax payments that may represent a reduction in cash available to us. the non-gaap financial measures 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 financial measures has been provided in the financial statements tables included in this press release and investors are encouraged to review the reconciliation. about curiosity inc. curiosity inc. is the entertainment brand for people who want to know more. the global media company is home to award-winning original and curated factual films, shows and series covering science, nature, history, technology, society, and lifestyle. with approximately 25 million subscribers worldwide and thousands of titles, the company operates the flagship curiosity stream svod service, available in more than 175 countries worldwide; curiosity channel, the linear television channel available via global distribution partners; and curiosity studios, which oversees original programming. curiosity inc. recently completed the acquisition of one day university, which provides access to engaging talks and lectures by leading university and college professors in the united states. curiosity inc. is a wholly owned subsidiary of curiositystream inc. (nasdaq: curi). for more information, visit curiositystream.com. curiositystream inc. consolidated balance sheets (in thousands, except par value) june 30, december 31, 2022 2021 (unaudited) assets current assets cash and cash equivalents $ 22,761 $ 15,216 restricted cash 500 2,331 short-term investments in debt securities 54,506 65,833 accounts receivable 11,600 23,493 other current assets 2,474 6,413 total current assets 91,841 113,286 investments in debt securities - 15,430 investments in equity method investees 11,140 9,987 property and equipment, net 1,272 1,342 content assets, net 78,855 72,682 intangibles, net 316 1,369 goodwill - 2,793 operating lease right-of-use assets 3,835 - other assets 588 689 total assets $ 187,847 $ 217,578 liabilities and stockholders’ equity (deficit) current liabilities content liabilities $ 5,976 $ 9,684 accounts payable 9,552 3,428 accrued expenses and other liabilities 10,122 12,429 deferred revenue 22,297 22,430 total current liabilities 47,947 47,971 warrant liability 1,323 5,661 non-current operating lease liabilities 4,821 - other liabilities 699 2,011 total liabilities 54,790 55,643 stockholders’ equity (deficit) preferred stock, $0.0001 par value – 1,000 shares authorized as of june 30, 2022 and december 31, 2021; zero shares issued and outstanding as of june 30, 2022 and december 31, 2021 - - common stock, $0.0001 par value – 125,000 shares authorized as of june 30, 2022 and december 31, 2021; 52,786 shares issued and outstanding as of june 30, 2022; 52,677 issued and outstanding as of december 31, 2021 5 5 additional paid-in capital 355,555 352,334 accumulated other comprehensive loss (452 ) (222 ) accumulated deficit (222,051 ) (190,182 ) total stockholders’ equity (deficit) 133,057 161,935 total liabilities and stockholders’ equity (deficit) $ 187,847 $ 217,578 curiositystream inc. consolidated statements of operations (in thousands, except for per share data) (unaudited) for the three months ended june 30, for the six months ended june 30, 2022 2021 2022 2021 revenues $ 22,348 $ 15,344 $ 39,975 $ 25,280 operating expenses cost of revenues 12,988 5,722 24,838 9,880 advertising and marketing 11,208 11,520 25,976 23,769 general and administrative 10,603 9,153 21,106 17,885 impairment of goodwill and intangible assets 3,603 - 3,603 - 38,402 26,395 75,523 51,534 operating loss (16,054 ) (11,051 ) (35,548 ) (26,254 ) change in fair value of warrant liability 478 1,764 4,338 (2,022 ) interest and other (expense) income (29 ) 1,036 (86 ) 1,296 equity interests loss (316 ) - (472 ) - loss before income taxes (15,921 ) (8,251 ) (31,768 ) (26,980 ) provision for income taxes 56 53 101 79 net loss $ (15,977 ) $ (8,304 ) $ (31,869 ) $ (27,059 ) net loss per share basic $ (0.30 ) $ (0.16 ) $ (0.60 ) $ (0.54 ) diluted $ (0.30 ) $ (0.19 ) $ (0.60 ) $ (0.54 ) weighted average number of common shares outstanding basic 52,775 52,567 52,762 50,327 diluted 52,775 52,968 52,762 50,327 curiositystream inc. consolidated statements of cash flows (in thousands) (unaudited) for the six months ended june 30, 2022 2021 cash flows from operating activities net loss $ (31,869 ) $ (27,059 ) adjustments to reconcile net loss to net cash used in operating activities change in fair value of warrant liability (4,338 ) 2,022 additions to content assets (25,303 ) (22,199 ) change in content liabilities (3,708 ) 4,465 amortization of content assets 19,130 6,989 depreciation and amortization expenses 441 217 impairment of goodwill and intangible assets 3,603 - amortization of premiums and accretion of discounts associated with investments in debt securities, net 758 352 stock-based compensation 3,382 3,860 equity interests loss 472 - other non-cash items 211 - changes in operating assets and liabilities accounts receivable 11,893 (3,526 ) other assets 4,040 185 accounts payable 6,146 1,773 accrued expenses and other liabilities (2,850 ) 1,091 deferred revenue (157 ) 8,474 net cash used in operating activities (18,149 ) (23,356 ) cash flows from investing activities purchases of property and equipment (120 ) (175 ) business acquisitions - (4,000 ) investment in equity method investees (1,625 ) - sales of investments in debt securities 2,893 4,882 maturities of investments in debt securities 24,373 11,980 purchases of investments in debt securities (1,497 ) (141,644 ) net cash provided by (used in) investing activities 24,024 (128,957 ) cash flows from financing activities exercise of stock options - 409 exercise of warrants - 54,898 payments related to tax withholding (161 ) (22 ) proceeds from issuance of common stock - 94,101 payment of offering costs - (707 ) net cash (used in) provided by financing activities (161 ) 148,679 net increase in cash, cash equivalents and restricted cash 5,714 (3,634 ) cash, cash equivalents and restricted cash, beginning of period 17,547 17,384 cash, cash equivalents and restricted cash, end of period $ 23,261 $ 13,750 supplemental disclosure: cash paid for taxes $ 398 $ 30 cash paid for operating leases $ 219 $ 43 right-of-use assets obtained in exchange for new operating lease liabilities $ 3,965 $ - curiositystream inc. reconciliation of gaap financial metrics to non-gaap (in thousands) (unaudited) for the three months ended june 30, for the six months ended june 30, 2022 2021 2022 2021 (15,977 ) (8,304 ) (31,869 ) (27,059 ) (478 ) (1,764 ) (4,338 ) 2,022 29 (1,036 ) 86 (1,296 ) 56 53 101 79 316 - 472 - 231 133 440 217 3,603 - 3,603 - $ (12,220 ) $ (10,918 ) $ (31,505 ) $ (26,037 )
