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Dec 31, 2023
Cinedigm Q3 2024 Earnings Report
Cineverse's financial performance was marked by improved direct operating margins and reduced SG&A expenses, despite a decrease in total revenue due to specific one-time factors.
Key Takeaways
Cineverse reported a decrease in revenue due to the runoff of its legacy digital cinema business and a decrease in theatrical revenue, but improved its direct operating margin and significantly reduced selling, general, and administrative expenses. The company generated positive adjusted EBITDA and secured rights to Terrifier 3.
Total revenue was $13.3 million, reflecting impacts from the digital cinema business and theatrical releases.
Subscription-based revenues increased 13% to $3.4 million, with total paid subscribers growing to 1.4 million.
Direct operating margin increased to 59% from 48%, while direct operating expenses decreased to $5.5 million from $14.4 million.
SG&A expenses decreased by 30%, driven by workforce reduction and offshoring initiatives.
Forward Guidance
Cineverse will focus on four key areas: leveraging their partnership with Amagi to drive high-margin technology revenues, expanding distribution of SVOD, AVOD and FAST streaming channels to OEM and tech partner network, expanding licensing their 71,000 title library to those same partners, and growing and driving direct ad sales on their channels and new ad network.
Positive Outlook
- Streamlining efforts continue to pay off.
- Business model of building deep fan bases in popular verticals and providing scale volumes of relevant, library and low-cost first window content is a model that works.
- Continued focus reducing SG&A costs to scale up the bottom line.
- Continue to leverage both automation and offshore services hub and expect to achieve profitability goals over the next two quarters.
- Built a model that has the potential to profitably scale.
Challenges Ahead
- No specific negative aspects were mentioned in the provided text.
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Historical Earnings Impact
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Avg. Return Before/After Earnings
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