CuriosityStream Inc

Previous wording

Bundled license fees from distribution affiliates (“Bundled Distribution”),

Current wording

Bundled license fees from distribution affiliates (“Bundled Distribution”), and

Previous wording

CuriosityStream’s award-winning content library features more than 16,000 programs that explore topics ranging from space engineering to ancient history to the rise of Wall Street and includes shows and series from leading nonfiction producers. Our library includes:

Current wording

CuriosityStream’s award-winning content library features more than 15,000 programs that explore topics ranging from space engineering to ancient history to the rise of Wall Street and includes shows and series from leading nonfiction producers. Each week we launch new video titles, which are available on-demand in high- or ultra-high definition. Through new and long-standing international partnerships, substantial portions of our video library have been localized from English into eleven different languages.

Previous wording

The financial data in the following table sets forth selected financial information derived from our unaudited consolidated financial statements for three months ended March 31, 2024, and 2023, and includes our results of operations as a percentage of revenue or as a percentage of costs, as applicable, for the periods indicated:

Current wording

The financial data in the following table sets forth selected financial information derived from our unaudited consolidated financial statements for three and six months ended June 30, 2024, and 2023, and includes our results of operations as a percentage of revenue or as a percentage of costs, as applicable, for the periods indicated:

Previous wording

For the three months ended March 31, 2024, and 2023, operating loss was $3.7 million and $7.8 million, respectively. The decline in operating loss of $4.1 million, or 53%, primarily resulted from the decreases to our operating expenses of $4.5 million, or 22%, which more than offset the decline in revenues of $0.4 million, or 3%, compared to the three months ended March 31, 2023.

Current wording

For the three months ended June 30, 2024, and 2023, operating loss was $2.5 million and $8.0 million, respectively. The decline in operating loss of $5.5 million, or 68%, primarily resulted from the decreases in our operating expenses of $7.2 million, or 32%, which more than offset the decline in revenues of $1.7 million, or 12%, compared to the three months ended June 30, 2023.

Previous wording

For the three months ended March 31, 2024, and 2023, net loss was $5.0 million and $7.8 million, respectively, a decrease in net loss of $2.7 million, or 35%.

Current wording

For the three months ended June 30, 2024, and 2023, net loss was $2.0 million and $9.9 million, respectively, a decrease in net loss of $7.9 million, or 80%.

Previous wording

For the three months ended March 31, 2024, and 2023, revenues totaled $12.0 million and $12.4 million, respectively, a decrease of $0.4 million, or 3%. This decline was primarily driven by declines in Content Licensing and Bundled Distribution of $0.9 million and $0.3 million, respectively, while our Direct Business revenue increased by $0.9 million.

Current wording

For the three months ended June 30, 2024, and 2023, revenues totaled $12.4 million and $14.1 million, respectively, a decrease of $1.7 million, or 12%. This decline was primarily driven by declines in Content Licensing and Bundled Distribution of $2.3 million and $0.4 million, respectively, while our Direct Business revenue increased by $1.4 million.

Previous wording

We are currently in the process of raising the prices for our legacy subscribers in our U.S. dollar-based markets, which represent the vast majority of our Direct Business revenue. These legacy subscribers previously paid $2.99 per month or $19.99 per year. As of March 27, 2023, we increased our standard pricing for new subscribers to this service to $4.99 per month or $39.99 per year. We also provide a Smart Bundle service for $9.99 per month or $69.99 per year. Our Smart Bundle membership currently includes our standard service, plus subscriptions to third-party platforms Tastemade, Kidstream(added in January 2024), SommTV, Da Vinci Kids, and our Curiosity University stand-alone service. Our Smart Bundle pricing remains unchanged. However, we may in the future increase the price of these existing subscription plans, which may have a positive effect on our revenue from this line of our business.

Current wording

We have recently raised the prices for our legacy subscribers in our U.S. dollar-based markets, which represent the vast majority of our Direct Business revenue. These legacy subscribers previously paid $2.99 per month or $19.99 per year. As of March 27, 2023, we increased our standard pricing for new subscribers to this service to $4.99 per month or $39.99 per year. We also provide a Smart Bundle service for $9.99 per month or $69.99 per year. Our Smart Bundle membership currently includes our standard service, plus subscriptions to third-party platforms Tastemade, Kidstream, SommTVand our Curiosity University stand-alone service. Our Smart Bundle pricing remains unchanged. However, we may in the future increase the price of these existing subscription plans, which may have a positive effect on our revenue from this line of our business.

Previous wording

The following table details our Direct Business for the three months ended March 31, 2024, and 2023:

Current wording

The following table details our Direct Business for the three and six months ended June 30, 2024, and 2023:

Previous wording

For the three months ended March 31, 2024, our Direct-to-Consumer revenue increased by $0.6 million, or 8%, compared to 2023. While our overall DTC subscriber count declined, the effects of this were more than offset by the higher pricing that we began to roll out in 2023. Our Partner Direct Business benefited primarily from the adoption of the price increase and continued subscriber growth.

Current wording

For the three months ended June 30, 2024, our Direct-to-Consumer revenue increased by $0.8 million, or 11%, compared to 2023. For the six months ended June 30, 2024, our Direct-to-Consumer revenue increased by $1.4 million, or 9%, compared to 2023. Although our overall DTC subscriber count declined, this was more than offset by the higher pricing we began rolling out in 2023. Additionally, our Partner Direct Business primarily benefited from continued subscriber growth as well as the price increase.

Previous wording

The following table details our Content Licensing results for the three months ended March 31, 2024, and 2023:

Current wording

The following table details our Content Licensing results for the three and six months ended June 30, 2024, and 2023:

Previous wording

For the three months ended March 31, 2024, compared to 2023, Library sales increased by 6%, while presales declined by 75%. Within our content licensing business, our primary focus is on our positive gross margin library-related transactions, although we may continue to enter into presale arrangements with certain partners for strategic purposes.

Current wording

For the three months ended June 30, 2024, compared to 2023, Library sales decreased by 62%, while presales declined by 72%. For the six months ended June 30, 2024, compared to 2023, Library sales decreased by 48%, while presales declined by 74%.

Previous wording

For the three months ended March 31, 2024, and 2023, our Bundled Distribution revenue was $1.1 million and $1.4 million, respectively. This 19% decline was primarily the result of revised affiliate agreements and the non-renewal of certain partnerships. Bundled Distribution is a challenging revenue stream given the pressures being felt in the linear pay television business worldwide.

Current wording

For the three months ended June 30, 2024, and 2023, our Bundled Distribution revenue was $1.1 million and $1.5 million, respectively, reflecting a 25% decline. For thesix months ended June 30, 2024, and 2023, our Bundled Distribution revenue was $2.2 million and $2.9 million, respectively, reflecting a 22% decline. In both periods, the decrease was primarily the result of revised affiliate agreements and the non-renewal of certain partnerships. Bundled Distribution is a challenging revenue stream given the pressures being felt in the linear pay television business worldwide.

Previous wording

For the three months ended March 31, 2024, Other revenue was $0.1 million, a decline of $0.2 million, or 65%, from the same period in 2023. This decline was largely due to certain short-term marketing partnerships that we entered into during the early part of 2023, including a $0.2 million campaign that we provided through a trade and barter arrangement, which were not renewed in 2024.

Current wording

For the three months ended June 30, 2024, Other revenue was $0.2 million, a decline of $0.5 million, or 75%, from the same period in 2023. For the six months ended June 30, 2024, Other revenue was $0.2 million, a decline of $0.6 million, or 73%, from the same period in 2023. These declines were largely due to certain short-term marketing partnerships that we entered into during the early part of 2023, including a campaign that we provided through a trade and barter arrangement, which was not renewed in 2024.

Previous wording

For the three months ended March 31, 2024, and 2023, our operating expenses were $15.7 million and $20.2 million, respectively, a decrease of $4.5 million, or 22%.

Current wording

For the three months ended June 30, 2024, and 2023, our operating expenses were $14.9 million and $22.1 million, respectively, a decrease of $7.2 million, or 32%.

Previous wording

The following table details cost of revenues for the three months ended March 31, 2024, and 2023:

Current wording

The following table details cost of revenues for the three and six months ended June 30, 2024, and 2023:

Previous wording

For the three months ended March 31, 2024, cost of revenues decreased to $6.7 million from $9.0 million, a 62% reduction. This decrease was mostly driven by an 11% decline in content amortization due to fewer presale agreements, as discussed above, a reduction in content acquisitions and releases during the year and the content impairment that we recorded in the third quarter of 2023. Other cost of revenues also declined due to a reduction in revenue share arrangements, including specifically our arrangement with Nebula that expired at the end of 2023.

Current wording

For the three months ended June 30, 2024, cost of revenues decreased to $6.0 million from $9.9 million, a 40% reduction. For the six months ended June 30, 2024, cost of revenues decreased to $12.8 million from $18.9 million, a 33% reduction. These decreases were primarily driven by declines in content amortization of 28% for the three months ended June 30, 2024, compared to the same period in 2023, and of 20% for the six months ended June 30, 2024, compared to the same period in 2023, primarily due to fewer new productions, a reduction in content acquisitions and releases during the year and the content impairment recorded in the third quarter of 2023. Additionally, other costs of revenues declined mainly due to a reduction in revenue share arrangements, including our arrangement with Nebula that expired at the end of 2023.

Previous wording

Our advertising and marketing expenditures are a primary operating cost for our business. While these costs may fluctuate based on advertising and marketing objectives, we generally focus marketing dollars on efficient customer acquisition methods. For the three months ended March 31, 2024, advertising and marketing expenses remained flat when compared to the same period in 2023.

Current wording

Our advertising and marketing expenditures are a primary operating cost for our business. While these costs may fluctuate based on advertising and marketing objectives, we generally focus marketing dollars on efficient customer acquisition methods. For the three and six months ended June 30, 2024, advertising and marketing expenses decreased by $1.2 million compared to the same period in 2023. This decrease reflects our efforts to optimize spending while maintaining our market presence and continuing to invest in strategic initiatives aimed at driving growth.

Previous wording

The following table details general and administrative costs for the three months ended March 31, 2024, and 2023:

Current wording

The following table details general and administrative costs for the three and six months ended June 30, 2024, and 2023:

Previous wording

For the three months ended March 31, 2024, general and administrative expenses decreased to $5.8 million from $8.1 million for the same period in 2023. This decrease of $2.3 million, or 28%, was primarily the result of lower payroll and related costs and stock-based compensation of $0.9 million and 0.6 million, respectively, primarily driven by our smaller average workforce size as well as reduced incentive compensation. Professional services costs also declined by 45% as we streamlined various outside services during the year and brought certain finance and operations functions internal.

Current wording

For the three months ended June 30, 2024, general and administrative expenses decreased to $6.0 million from $8.0 million in the same period in 2023. This decrease of $2.0 million, or 25%, was primarily the result of lower payroll and related costs and professional services, which declined by $1.1 million and $0.6 million, respectively, The reduction in payroll costs was mainly driven by a smaller average workforce size and reduced incentive compensation. Additionally, professional services costs decreased by 43% as we streamlined various external services and brought certain finance and operations functions in-house.

Previous wording

For the three months ended March 31, 2024, the Company recorded a loss of $1.8 million compared to a loss of $0.2 million for the same period in 2023, related to its investments in the Spiegel Venture and Nebula. This increase in losses is primarily attributable to write-downs recorded by the Spiegel Venture.

Current wording

For the three months ended June 30, 2024, the Company recorded a loss of $0.2 million compared to a loss of $2.2 million for the same period in 2023. For the six months ended June 30, 2024, the Company recorded a loss of $1.9 million compared to a loss of $2.5 million for the same period in 2023 related to its investments in the Spiegel Venture and Nebula. The decrease in losses is primarily due to the $2.0 million impairment charge recorded by the Company to its investment in Spiegel Venture during the six months ended June 30, 2023.

Previous wording

For the three months ended March 31, 2024, Income tax expense was immaterial. For the comparative period in 2023, the provision for income taxes was $0.1 million, primarily due to losses generated before income taxes. Our provision for income taxes differs from the federal statutory rate primarily due to the Company being in a full valuation allowance position and not recognizing a tax benefit attributable to generated losses for either federal or state income tax purposes.

Current wording

For thethree and six months ended June 30, 2024, income tax expense was immaterial. For the comparative period in 2023, the provision for income taxes was $0.3 million, primarily due to losses generated before income taxes. Our provision for income taxes differs from the federal statutory rate primarily due to the Company being in a full valuation allowance position and not recognizing a tax benefit attributable to generated losses for either federal or state income tax purposes.

Previous wording

As of March 31, 2024, the Company’s cash and cash equivalents, including restricted cash, totaled $38.9 million. For the three months ended March 31, 2024, the Company incurred a net loss of $5.0 million and generated $0.7 million of net cash in operating activities. There were no significant cash flows from financing activities or investing activities during the three months ended March 31,.

Current wording

As of June 30, 2024, the Company’s cash and cash equivalents, including restricted cash, totaled $39.6 million. For the six months ended June 30, 2024, the Company incurred a net loss of $7.1 million and generated $2.9 million of net cash from operating activities. Additionally, the Company used $1.4 million of net cash in financing activities, while cash flows from investing activities were immaterial.

Previous wording

Our cash and cash equivalents mainly consist of investments in institutional money market funds and short-term deposits held at major global financial institutions. We regularly monitor the creditworthiness of the financial institutions and money market fund asset managers with whom we invest our funds, and we maintain a level of liquidity sufficient to allow us to meet our cash needs in both the short term and long term.

Current wording

As of June 30, 2024, our cash and cash equivalents mainly consist of investments and short-term deposits held at major global financial institutions. We regularly monitor the creditworthiness of the financial institutions and money market fund asset managers with whom we invest our funds, and we maintain a level of liquidity sufficient to allow us to meet our cash needs in both the short term and long term.

Previous wording

We believe that our current cash levels, including investments in money market funds that are readily convertible to cash, will be adequate to support our ongoing operations, capital expenditures and working capital for at least the next twelve months. We believe that we have access to additional funds in the short term and the long term, if needed, through the capital markets to obtain further financing.

Current wording

We believe that our current cash levels, including investments that are readily convertible to cash, will be adequate to support our ongoing operations, capital expenditures and working capital for at least the next twelve months. We believe that we have access to additional funds in the short term and the long term, if needed, through the capital markets to obtain further financing.

Previous wording

Our Board of Directors declared a quarterly cash dividend of $0.025 per share, with the first dividend paid on April 30, 2024, for an aggregate amount paid of $1.3 million. Our Board of Directors declared the next quarterly cash dividend of $0.025 per share to be paid on July 31, 2024, for an aggregate amount paid of $1.3 million. We intend to pay regular quarterly dividends.

Current wording

Our Board of Directors has declared the next cash dividend of $0.025 per share to be paid on October 31, 2024, for an expected aggregate amount of $1.3 million. Subject to future declaration by our Board of Directors, we intend to continue to pay regular quarterly cash dividends.

Previous wording

The following table presents our cash flows from operating, investing and financing activities for the three months ended March 31, 2024, and 2023:

Current wording

The following table presents our cash flows from operating, investing and financing activities for the six months ended June 30, 2024, and 2023:

Previous wording

For the three months ended March 31, 2024, our net cash inflow from operating activities was $0.7 million compared to net cash used in operating activities of $6.3 million for the three months ended March 31, 2023, an increase in operating cash outflow of $7.0 million.

Current wording

For the six months ended June 30, 2024, our net cash inflow from operating activities was $2.9 million compared to net cash used in operating activities of $10.6 million for the six months ended June 30, 2023, an increase in operating cash outflow of $13.5 million.

Previous wording

Although we reported a net loss of $5.0 million for the three months ended March 31, 2024, this amount reflected noncash items such as amortization of content assets, stock-based compensation and equity method investment loss of $5.2 million, $1.8 million, and $0.7 million, respectively. Cash used during the quarter included a $1.5 million change in operating assets and liabilities and additions to content assets and change of content liabilities of $0.4 million and $0.3 million, respectively.

Current wording

Although we reported a net loss of $7.1 million for the six months ended June 30, 2024, this amount reflected noncash items such as amortization of content assets, stock-based compensation and equity method investment loss of $9.9 million, $2.0 million, and $1.9 million, respectively. Cash used during the quarter included a $2.6 million change in operating assets and liabilities and additions to content assets and change of content liabilities of $1.7 million and $0.1 million, respectively.

Previous wording

For the three months ended March 31, 2023, we reported a net loss of $7.8 million. This amount reflected noncash items such as amortization of content assets, stock-based compensation and equity method investment loss of $5.9 million, $1.3 million and $0.2 million, respectively. Cash used during the quarter included additions to content assets and changes in content liabilities of $3.7 million and $1.2 million, respectively, and changes in operating assets and liabilities of $1.3 million.

Current wording

For the six months ended June 30, 2023, we reported a net loss of $17.7 million. This amount reflected noncash items such as amortization of content assets, stock-based compensation and equity method investment loss of $12.3 million, $2.7 million and $2.5 million, respectively. Cash used during the quarter included additions to content assets and changes in content liabilities of $7.1 million and $1.1 million, respectively, and changes in operating assets and liabilities of $2.6 million.

Previous wording

For the three months ended March 31, 2024, there were no investing activities that resulted in cash inflows or outflows. In contrast, for the same period in 2023, our cash inflows were primarily due to maturities of investments in debt securities.

Current wording

For the six months ended June 30, 2024, we had no investing activities that resulted in cash inflows or outflows. In contrast, for the same period in 2023, our cash inflows were primarily due to maturities of investments in debt securities.