CURI - Earnings call transcript Q2 2021

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Operator

Good day and thank you for standing by. Welcome to the CuriosityStream Q2 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advise that today’s conference is being recorded. now today, hand Denise would to conference I speaker your Garcia, Instructions] like the to over [Operator Investor Relations. ahead. go Please

Denise Garcia

Thank CuriosityStream’s Financial Chief Officer. CuriosityStream’s to Officer; and XXXX the Hello. CuriosityStream’s its Executive today Mattie. Chief Eustace, discussion Stinchcomb, quarter Leading financial discussion Clint are Jason second results. you, of Welcome

Following remarks, be will But, we management’s questions. Safe review I’ll the happy first, prepared Harbor to statement. take your

securities forward-looking laws. statements make statements related our statements may under of we are federal a variety guarantees rather call, this not and of During but risks, are These to business are to performance, uncertainties that future assumptions. subject

Our aware and undertakes forward-looking no actual in be that reflected any update expectations obligation to forward-looking future. the company revise management’s materially statements, additional results only, make could or nor statements to from views statements Please any forward-looking these the statements. reflect in differ current

risks affect filings please important of Relations discussion other important factors as and website, a the as on today’s available to could that on refer and in release. website well press SEC the our For factors other risks and Investor results, actual our material the our discussed SEC

forth for Additional June be quarterly also set Form XX-Q our information XXXX on when the will report ended months three in XX, filed.

be In measures. non-GAAP will to addition, reference financial made

turn I’ll the Now, call over to Clint.

Clint Stinchcomb

Emery. review today, Chief the second open Thank of to to Devin Product who want call us everyone our and Jason’s I remarks, comments, people earnings COO more. call CFO, for know EVP factual XXXX quarter of the our questions. up Eustace; brand I’m Counsel, you, and call. CFO, Jason is for like the the my Content will to Curiosity After Tia the joining entertainment Officer to Jason close to Eustace, we our I’d turn At financials. global over will with our Denise. for Cudahy; General delighted have thank Strategy, and our

and distributors. platforms enchanting strong passion with rooted million our We subscription service are XX our informative approximately and direct our storytelling, across deeply for in and subscribers paying

We every revenues services category are line stack, revenue, leading resonating our strong year industry and revenue rely ever. producing, we streaming many the on subscription distributing factual this retention. and recurring original the is one topline content programming on across to of Unlike and that acquiring more are a anchored committed best growth delivering by than genre multifaceted

robust talk direct me of grew second quarter. pleased another Let subscription where I’m subscribers the growth to our about year-over-year. report business, we in quarter XX%

at during annual rapid New who past. anniversaries significant signed in the the the periods subscribers COVID joining a subscribers clip service lockdown and our for up are the most of

lockdowns navigated else concerns We some users percentage fact, the COVID But including in affecting service any about signed better in industry. streaming our There in churn business retaining those have of when an QX lifted. users the U.S. QX than were Netflix. XXXX retained other we than higher in in a up uptick in successfully anyone XXXX, who

subscriber quarter, retention. during remained to streaming and we continued the the churn monthly Our lead digits the industry in low-single as

grew adding to media distribution performing This leading region. our quarter. It prioritizing in believe to accelerated with German sets partnership XX%, accelerates second partnership markets growth and Europe. the distributor we German also iconic programming across content It direct the QX stage in our success end through in reach producer channel pleased strong millions compared subscription partnerships. distribution first hundreds profile by the introduction quarter of increased content to our We’re quarter TV, strategic to XXXX and speaking of bolsters announce by quality through and addition commitment the double-digit of subscriber the driven through of to Europe. the in of $XX.X Paid This the extends contributing high to XX%, global for million, in a our our which SPIEGEL service subscription million, streaming growth globally brand international video-on-demand and substantially at expanding increases Europe, in of audiences. to of hours deal the strength strong also our our in German licensing revenue, dub continued and of XX% speaking our businesses. subscribers demonstrates for growth factual subscribers from million XX year-over-year up the Revenue brand XX Curiosity approximately

to streaming XXXX. second guidance for the of half were and revenue led of our year strong expect the robust second continue a exceptionally by We quarter, our businesses Fundamentals full million low $XX year-over-year XXXX which consumer are during confirming of this analytics year. and a a for months the basis. flat quarter-over-quarter streaming media XX and relatively subscriber May churn, ANTENNA, ended to was direct CuriosityStream retention both provider, industry on in the led According subscriber

of of height of the April pandemic we subscribers service joined May, As during who end XXXX. our XX% the had the in retained of

have churn high success industry and well the Netflix believe as of annual our value XX%, subscription HBO XX% low demonstrates XX%. our Disney our You of Hulu XX%, We the TV+ XX%, strategy. Max as Apple service,

premium consumer higher year who average we While increase the premium per revenue preferences. month a year the annual their their serve year’s industry best promotional direct in proportion leading our to the we pricing and our of content last believe took subscriber rack to quarter-over-quarter and second train of renewal retention our value expect subscriptions, which the context enhanced their especially higher subscriptions subscribers We user, to that of competitors our suits of service, subscribers offering of as have as drove entire tier with a rates. we impressive Higher XXXX, one in to to quarter have learn was this pricing continue. at the of advantage prove value typically algorithms, an renewed combined a

recently subscription success of further by our long-term subscription driven We International business our prospects trends SPIEGEL our with TV. distribution are business. of and growth pay ever strategy, been are growth long-term deals encouraged be by the always announced these as with a largely about worldwide. We by pillar will partnership key excited believe to-date expansion favorable has prospects of TV with as operators our growth enhanced our the

partnership as with which introduction raise help extends millions it includes TV Our the linear distribution will Europe, beyond typical brand Curiosity the to in awareness SPIEGEL speaking deal, branded of of people. well channel German our

will SPIEGEL Kloft Germany of TV. by leader, from Autentic by and programming of Patrick CuriosityStream’s addition one of team be hundreds video-on-demand talented our our of business speaking operated to currently dub In channel three the non-English to associate This current hours led is Hörl service. management friend, subscription continue good top from and markets. Michael Germans

beyond. partnership The with expect consumer establishes direct this accelerate SPIEGEL countries in speaking We to CuriosityStream German more Europe. in firmly growth partnership our subscriber TV and

Over vast the traditional a longer Unlike affluent direct-to-consumer is of by as millions companies, issues Europe hampered rights term enhanced is media by content many opportunity represents with our our how greatly and fractured hundreds less we broadband expansion our of expand customization, we opportunity language believe travels. subscribers. international well

through to on deliver our world groundbreaking unique, content. We new relevant insightful and perspectives continue

look quarter, what find disaster. RESCUE, hurricanes Thron. Access really part left habitat. owners safely to areas, quarter, the featuring out People to their the hit we landmark on them the profiled inside series, to could who to traveled Doug THE pilot at and to spectacular six Rachael also This Hollywood, From docu three to happens viewers revolutionize a the next-generation both using During Doug was an He wildfires, domestic in guys. natural cinematographer hardest Morning in animals eco-machines which as drone aerial know TO drone explores or THE get America, premiered DOUG FUTURE, series beautiful Magazine kept wild gives episodes last Doug Good their ground are Ray culturales and week. of and eye Throughout the he back the series our life the a we way of on technology stranded ENGINEERING in we next-gen behind natural it. animals original new that the aftermath premiered or

our our better already greenlit rise of as second series engineering premieres been strategy original for end five seasons XXXX, engineering, delivered from distant of on achievements the of reveals engage to greatest spectrum, part episodes some viewers innovations have series. key ancient strongest to which how of our tentpole continue past the popular opposite give technological defining our with Now new Both today. to-date our and in returnable some of brand

powerhouse because premiered integration, the U.S., stories East much in series but Another football High which it. the Tennessee, is community. of people most a we Alcoa merely football was to from AND with the where season became embrace not the returnable the which profiles in extraordinary we embedded XTH prism community season football high stronger of iconic FOREVER, just tell This diversity in school programs the that school did of recent their

landmark SAVE along all HUMANITY’S FASTER: We also to premiere QUEST I smart the quirky, the watch first four of our series premieres TIME, you other TO engaging mentioned. with encourage and series, I a episodes

content every We in us, nature, travel, believe science, we in distinct category the genre. that defines invest continue factual to and history, the

offer time more any We will originals new in than our history. this year

expand and to already about. is already goes our topics exploring are We unrivaled library than into that viewers the a options deeper all care anyone

epic and be for remainder Mars we sturdy our of highlights. creating the we announce some team for to yet With the nominated manner recognized to now a to content the honor Documentary speaking SOLAR turn like beachhead to XXXX part series us among Europe, eight leading the and about quality makes over have for nominees factual category our of programs. presentation science robust subscriber and executing for our an an Jason German episode the Excited Eustace to Emmy financial We the discover. that streaming, were SECRETS SYSTEM. strong and recently, library in in more that THE a Science high OF CFO, such of enthusiastic balance to Award I’d momentum, in are strong Outstanding be Technology sheet, It’s beyond. a and

Jason Eustace

this our the excited we also Clint. businesses momentum Thanks, business strong subscription about the landmark I’m activities development and in announced quarter.

options world entertainment goal growth building million We and our increase, our subscribers XX track and to achieve to $XX the year. unabated. million revenue subscriber record for reopens remain As look forward our continues the on

revenue a increase financials, XX% second of Cost a $XX XX% revenue review XXXX QX revenues revenue, $X.X of on year-over-year was $XX.X direct-to-consumer and led compared XXXX. subscription in in or to quarter to The let’s basis. XXXX, up points sales. QX X million program million, of by revenue of from was Now of percentage XX% sales QX million grew CuriosityStream’s decrease

invest marketing a in million when million $X.X the be As QX was QX Advertising and opportunistic to CuriosityStream’s of expenses QX to $XX.X overall compared in our and were in conditions expenses as compared market XXXX. $XX.X XXXX, were XXXX. XX%, of continue operating to to exist. right million, result million, margin marketing XX% of gross with $XX.X spend we compared QX

million, million quarter to being and EBITDA loss compared EBITDA investment. a due increased year, Second personnel with last to costs an of higher of marketing associated $X.X higher $XX.X company, G&A costs public loss

XXXX revenue. our $XX with track on million are plans We for to in deliver

use, line amortize would revenue We on prior presales period original quarters. upon a other Again, with instead to accelerated higher agreements and the in us a expect of as revenues requires estimated shift straight we content over revenue percentage costs basis of accounting the basis cost third quarters of through for GAAP presale in revenue an comprise content. our of on under to mix recognition fourth than as

quarter, are revenues be per they’re programming the the in basis to on of the deals, we strong presale anticipate half expect streaming to contribute GAAP profit. business presale booked lower to low-to-mid in quarter result significant the relative margins cost core a a our GAAP in Due As second we do quarter when gross third not the year. and the expected length in pass-through are fourth for on and on broader to to gross of our industry. margins the Gross subscription XXs remain hour GAAP

for the that subscription several remain GAAP on the over margins quarters gross next of And the will in questions. we business presale mute size impact turn I’ll timing While deals term. to based back over the to and margins we up on now, over and volatile it the Clint growth gross GAAP line open presales, the negative our anticipate of longer expect the

Clint Stinchcomb

Jason. you, Thank

question. open up please for Let’s

Operator

Bank question And with Brisco Instructions] first [Operator comes the from Devin of line of America. your

Devin Brisco

question. Thanks the for

up as the of you in doing some retain So other solve cash terms some insights become any then -- for content spend forward? going Is And bigger side focus churn? Is you sounds full had be quarter pricing of ramping lacking the had is have than in you of in the that Have equation, you retaining good such a a a be subs? might can half? subscribers spends promotional industry? It like rest content promotional going you subs still low $XX in you year? and to second gained the acquisition well into some the million number better what content additional

Jason Eustace

So that part I of can answer question. second

Clint Stinchcomb

Thank you, Devin.

Jason Eustace

Yeah.

Go ahead, Sorry. Clint.

Clint Stinchcomb

Go and I will first and then ahead. the the ahead part. second Go part take take

Jason Eustace

Yeah.

second program Devin, part is on investments the there, still track. So

mentioned As this on high XXs spend. earlier, as low we we’re as our track XXs, year, far still to content

expected, So in this earlier that’s we with line everything year. as

to XXXX of end titles still over We’re be the the going by year.

Clint Stinchcomb

you certainly, what it like, tell may also cadence we’ve Like, it providing reason programming. Devin, because have would friction but anything? subscribing I many, done lot a to and think, cadence new And past to also associated the we’ve CuriosityStream enhanced the the add, yeah, I it user that had we’re an also we as people we’ve also, to continue the have to Thank a a significantly like particular certainly, in quantity, And yes, content experience that. than is greater years do I into there have with quality, you, do minimize significant but and Jason. adding are if you the Devin, of programming. cycle will platform, just of and to retention for to is high idea, is the deeper

Devin Emery

across reiterate our ever been is exclusive elsewhere all originals of coming the higher of has just acquisitions that even our important. it available and tentpole content our Yeah. to curation velocity I platform are new of would those content than the and incredibly

different values for the they’re those So the best user all to critical and all contribute platform of experience. making

our be different and content more Clint we’ve There’ll it all quickly that product data see have. CRM platform more and was that into it’ll on of saying, and also, engagement, You’ll as to of side, ever has technology and be across it types we continue And than the the investing coming been UX before. UI. engineering,

All things engage best are been into quite people of whichever coming when have experience with. of platform, Clint so content that but want finding working a watch been was that they the critical, on pieces these as while, we’ve they’re possible saying, for and really the to have

is then that our right bullet. our unable to silver we continued retention. of over what to There’s all that of with So combined It’s strength, obsession no activate details. audience, all as seen have leading the

Devin Brisco

about the Thanks. That’s helpful. In And we’ve you just mix announced the Are deal will with of play the internationally SPIEGEL TV curious talked prioritize yet DTC what distribution quarter. starting to opportunity an in sort see to you growth. being internationally, there you outside in past, And product I’m going revenue pure like direction? mix bundle a that plan that how look versus more forward? and shift for

Clint Stinchcomb

that, say the I of today. if subscribers Devin, you would have question. we outside Excellent more U.S. bundled --

was U.S. the That subscribers little of that, have to today, countries control direct a underscores said, attraction international the underscores which we of of XXX it say, you in scripted of That’s content content I -- space, easier to we’ll subscribers direct market scope factual are said, also I We prioritize it’s today. and example. fact broader kind Germany the bit distribution more in think in where have the us. as -- rights a with do factual three We the can a we performing. than for for markets continue the top

to because of relates lot of have third-party still exchange, Europe provided every enter believe that So CuriosityStream, that also stage, is this German that added it we into a speaking and look, as opportunity. we we at proper agreement a that, headroom represents value awareness. it’s lot think Germany I to a almost general

in in example, there we our really will that service promote for value to a that Is we way, have today. Europe is SPIEGEL, don’t think a a network able which be So, helpful? of lot subscription to in linear having meaningful

Operator

line Your Aftahi the Darren next comes with ROTH. of from question

Darren Aftahi

questions. for Thanks my guys. Hi, taking

number First, guys all quarter, renew offered? you of discounts rate or annual that plan renewals, the a curious, of COVID on let’s setup. any whether kind of I’m high higher mentioned card those obviously, the kind call of at with subs the, on kind did on a that for

Clint Stinchcomb

the renewals rate. the came of at All rack higher

Darren Aftahi

Okay.

sub question, power, guess still of to story thoughts pricing of this a as aren’t on it have So month-to-month I like, of point? annual kind kind begs are terms go in you your plans at general we the pricing going and power what aggregation about as

Clint Stinchcomb

that. We demonstrated pricing last power. that we We Yeah. think has think have year considerable

continue in engineering take the do whatever maximize foundational lot power, We are we price we At lot when time, do aggregate, that the lot of same so growing can of work, of certainly. work, committed existing we pricing a from we to technical to a to transition a that subs work, advantage the higher implement.

Darren Aftahi

can the and of And on maybe Great. indexing? bundle. kind million And it. the DTC with then partner of versus geographies sub Got bundled sequential you over direct kind of about X mix talk are just added, that any

Clint Stinchcomb

Yeah.

add if subscribers this you out came So the break quarter direct from well, that we the SPIEGEL say the this agreement majority subscribers, -- over subscribers majority direct came But meaningful. grew continue obviously, And outside so from weren’t U.S. subscriber would direct entered subscribers. is was from that was our And the ago. they but then sprinkled -- it a didn’t the from and We are into. those we year, strong I certainly around, almost year-over-year, were way, they bundled then, that we to of XX% everywhere. more year that,

Darren Aftahi

visibility I cross have any gave the kind there, million me, for that think, to update $XX the for kind point? X.X quarter, of guidance, good like, said Last you of last one It’s on XX%, hear. you

Clint Stinchcomb

Yeah.

the to year less than point. definitely $XX guiding this left ago XX% for million whole still definitely and the at We’re we’re

quarters. in still feel So with the three million $XX fairly confident next we that

Jason Eustace

Darren. only we first I’d I the public hit targets as say, company like be It’s and and annual our demonstrate a add, superheroes. to can that full we want year to not

Darren Aftahi

guys. Thanks enough. Fair

Clint Stinchcomb

Got it.

Operator

comes from the line Kurnos question next Benchmark. Dan The with of

Dan Kurnos

or the there? Great. terms obviously, as talk what very U seeing Thanks. back speak a you was into And then that the in trends you of Day whether the interesting not non, that but on just Germany, with maybe side, following to an just on may play development tangentially Maybe how thought head there’s variant asset? that want if a up Western any Delta went if sort to and a international mean, was couple, a doing German, it play and also about, COVID Europe stuff. of language English, retention the that interesting, in localized was we speaks about One role I you’re key of had, and year, And I the develop thought lot I earlier you of just question, half number lot of just obviously, you

of sort kind think about help after table the unique of because of You or forum geography whether get, next in do your we about can go how you more think there’s how of about, we international on large India versus like still partners ton us expect there that you MVPDs maybe the to out kind with guys say, we and balance think just products? on that Australia, a kind

Clint Stinchcomb

Yeah.

prioritizing is, lot and we a are a that’s international thinking I what something additional markets. And question will say great I think about. today we’re

then conversations We’re to basis not about, and on is a of daily thinking it today. that announce going around. obviously, we’re But those lots something

University, question. Day One to think, that’s good to, a I relates it As

most world it that always are on platform tuck-in we we’ve the University But strategy. said now Right on have engaging, recently it, up and of the some work the focused in That’s work. that subscription offer element acquired for lectures Day will right needs is in like only entertaining. They digital they most growth and work. technical been think an that now professors The One awesome. talks what we’re that, it. I about our improve near-term we integration acquisitions launched

in events a concern seemingly or say the new it’s live fourth I to the quarter, virus. we concerned, there’s all other the But launch will whether as are the do of obviously, plan there see. far live variants is, form day, can we every As Delta events some

Dan Kurnos

you. Got it now. it. Thank That’s for

Clint Stinchcomb

it. Got

Operator

[Operator comes next Davidson. with Instructions] Your of Alexia the line question from Tsimikas D.A.

Alexia Tsimikas

my I questions. two. Thanks so have much for taking

ease The is, lifted? restrictions and from being first companies second discussed to able in or with again. your past the impacts you have And any advancing efforts noticed sponsorship is, experienced you restrictions pandemic-related meet you’re the when

how So about sponsorship efforts thinking your you today? are

Clint Stinchcomb

Right.

get of sponsorship it parts like, opened as we not out meetings. the some the to we’ve have in business, those and it they where Internationally, possible been for So, probably it’s U.S. we’re exist. strong yes, the future. aware, line of think to we certain pulling like, finish across relates have as And and able in hoped it would, back more year back finally as really half had up, strong on in-person of fulfilling and you’re will commitments the those commitments working then, interest many and the we

point the opens with a more and yeah, as as at doing in as are us. can. we world quite people, Obviously, for would hoped can is this it we And easy time. it’s we wherever be that tailwind meet not we’d that So, up

Alexia Tsimikas

Great. Thank you.

Operator

line Company. comes the Dan of from next Needham question Your Medina & with

Dan Medina

could the the marketing think year? for if advertising Jason the Thank of a little second rest, question. help you for and for I wondering yeah, spend rest you us bit about half Thank you. was yeah, the,

Jason Eustace

Sure.

be million -- the and to target, conditions. like right with Again, we so given the just were be be op low $XX a So far very $XX around our marketing market for that’s to QX the opportunistic as expected half high half like we kind as second million, year similar of the QX. to to investment first of

million, QX stuff QX take during to should we quarter marketing of the holidays. bit be $XX low $XX because as higher generally fourth be advantage of the as far that. a always opportunity little investment. and But the has the takeaway high might million, And Devin take some advantage So, of

Dan Medina

Thank you. Great.

Operator

This There conference concludes time. at more for you participating. this questions are Thank today’s call. no

You may now disconnect.

CuriosityStream (CURI) 11 Aug 212021 Q2 Earnings call transcript