Cineverse CNVS Q3 2026 Earnings Transcript Analysis

Call Participants

The key individuals participating in the Cineverse Corp. fiscal year 2026 third quarter financial results conference call included Chairman and CEO Christopher J. McGurk, President and Chief Strategy Officer Erick Opeka, Chief Financial Officer Mark Wayne Lindsey, President of Technology and Chief Product Officer Tony Weedor, Chief Legal and Senior Adviser Gary S. Loffredo, Chief Motion Pictures Officer Yolanda Macias, and Chief People Officer Mark Torres. These executives were present to discuss the company’s performance and future outlook, and they remained available to address questions after the prepared statements.

Financial Highlights and Key Takeaways

During the third quarter of fiscal 2026, Cineverse Corp. recorded revenues amounting to $16,300,000. This figure marked a sequential increase from the $12,400,000 achieved in the previous quarter, although it represented a decrease compared to the $40,700,000 reported in the same period of the prior year. The year-over-year decline was primarily attributable to the lack of theatrical release results from the previous year, which had included substantial contributions from “Terrifier 3” exceeding $20,000,000.

The company posted a net loss of $875,000 for the quarter, which demonstrated a notable improvement of $4,700,000 over the net loss from the prior quarter. Adjusted EBITDA stood at $2,400,000, reflecting a significant $6,000,000 enhancement from the preceding sequential quarter. Direct operating margin reached an impressive 69%, a substantial rise from the 48% recorded in the corresponding quarter of the previous year.

At the end of the quarter, Cineverse maintained a cash position of $2,500,000, complemented by $4,200,000 in available credit on the East West Bank revolver. Additionally, the company issued 1,725,000 shares at $2 per share, generating net proceeds of $3,200,000 intended for working capital and content-related initiatives.

Strategic Acquisitions: Giant and IndiQ

Post-quarter, Cineverse completed two pivotal acquisitions that are poised to reshape its financial trajectory. The acquisition of Giant Worldwide was structured as an all-cash asset purchase valued at $2,000,000, with $350,000 paid at closing and the remaining $1,650,000 deferred across four subsequent quarters. This deal is anticipated to deliver $15,000,000 to $17,000,000 in revenue and $3,500,000 to $4,000,000 in adjusted EBITDA during fiscal 2027.

The IndiQ acquisition involved a business combination with base consideration of $22,000,000, comprising $12,800,000 in cash at close and $9,200,000 deferred, potentially escalating to $40,000,000 upon achieving specified revenue and gross profit targets over three years. The deal brought $3,000,000 in cash and $750,000 in net working capital at closing. IndiQ is projected to contribute over $38,000,000 in revenue and $7,000,000 in adjusted EBITDA in 2027. Together, Giant and IndiQ are expected to add more than $50,000,000 in revenue and $10,000,000 in adjusted EBITDA to the 2027 guidance.

Financing for the IndiQ deal included $13,000,000 in convertible notes from existing long-term shareholders, featuring favorable terms without warrants. This reflects strong investor confidence in the strategic value of these moves.

Fiscal 2027 Guidance

Looking ahead to fiscal 2027, commencing April 1, Cineverse has issued guidance projecting consolidated revenues between $115,000,000 and $120,000,000, alongside adjusted EBITDA ranging from $10,000,000 to $20,000,000. Management has noted potential upside from synergies and growth opportunities beyond the current projections, with $7,500,000 in cost savings fully incorporated into the EBITDA guidance.

Operational and Streaming Metrics

Streaming performance remained robust, with 35.5 million unique monthly viewers and a 15% year-over-year increase in SVOD subscribers to 1.55 million. Monthly streaming minutes totaled approximately 1.14 billion. The content library surpassed 66,000 assets, encompassing nearly 58,000 films, seasons, episodes, and over 8,500 podcasts. Social media followers exceeded 25.4 million, underscoring significant reach and engagement.

Cost management efforts yielded approximately $1,900,000 of the targeted $7,500,000 in reductions, with the balance expected in the coming two quarters. These initiatives contributed to the enhanced operating margins observed this quarter.

Matchpoint Platform Advancements

The Matchpoint platform demonstrated capacity to ingest and master over 15,000 titles monthly, achieving 60%-70% efficiency gains in encoding and delivery following Giant integration. New clients onboarded include ATPN, The Asylum, Spark, and Waypoint, targeting lower and lower mid-market segments. Under Matchpoint, Giant’s operations saw a nearly 470% business increase in the first month compared to the prior year.

IndiQ serves over 40 live clients, with 75 in onboarding, including prominent entities like IMAX, Freecast, and Canela. The platform focuses on connected TV monetization, encompassing ad serving, supply-side, demand-side, and server-side ad insertion.

AI and Future Initiatives

Cineverse announced Matchpoint Creative Labs, an R&D initiative dedicated to generative AI applications in advertising creation and channel branding, positioning the company at the forefront of industry innovation.

Full Earnings Call Transcript

Gary S. Loffredo opened the Cineverse Corp. fiscal year 2026 third quarter financial results conference call by welcoming participants and directing them to the press release available in the Investors section of the company’s website at www.cineverse.com. He noted that a replay of the call would be accessible on the site post-conference. Loffredo cautioned that the discussion included forward-looking statements based on current management expectations, subject to risks and uncertainties detailed in SEC filings. All information shared was current as of February 17, 2026, with no obligation to update except as legally required. Non-GAAP measures were referenced, with reconciliations provided in the earnings release.

As Chief Legal and Senior Adviser, Loffredo introduced the executive team: Chairman and CEO Christopher J. McGurk, President and Chief Strategy Officer Erick Opeka, President of Technology and Chief Product Officer Tony Weedor, CFO Mark Wayne Lindsey, Chief Motion Pictures Officer Yolanda Macias, and Chief People Officer Mark Torres. He handed the call to McGurk for initial remarks.

Christopher J. McGurk thanked Loffredo and participants, providing an overview of quarterly results and the impact of post-quarter acquisitions of Giant Worldwide and IndiQ. He emphasized that these deals, negotiated over months, would dramatically enhance market position, strategy, and financial outlook. While pursuing closures, the team focused on base business improvements, achieving a direct operating margin of 69% (up from 48% year-over-year) and adjusted EBITDA of $2,400,000 (a $6,000,000 sequential gain). These stemmed from rigorous cost management, including utilization of Cineverse Services India, amid technology ramp-up.

McGurk expressed satisfaction with closing both acquisitions, which add substantial recurring revenues, scalable streams, and reinforce Cineverse’s leadership in end-to-end AI-powered technology services for entertainment. Both bring elite client rosters integrable into Matchpoint, strong management aligned via incentives, and significant earn-out potential for IndiQ. Giant’s integration has progressed seamlessly, with industry enthusiasm surpassing expectations, evidenced by unprecedented work orders. IndiQ has outperformed internal forecasts recently, bolstering confidence in fiscal 2027 guidance of $115 million to $120 million in revenue and $10 million to $20 million in adjusted EBITDA.

These moves align with a long-term thesis on the industry’s shift to AI automation amid surging content volumes and outdated manual infrastructure. Matchpoint unifies intelligent processing with monetization, redefining the ecosystem. McGurk then transitioned to Lindsey and Opeka for deeper insights.

Mark Wayne Lindsey detailed financials: revenues at $16.3 million (up sequentially from $12.4 million, down from $40.7 million year-ago due to Terrifier 3), net loss of $875,000 (improved $4.7 million sequentially), adjusted EBITDA $2.4 million (up $6 million), cash $2.5 million plus $4.2 million revolver availability.

On acquisitions, Giant cost $2 million all-cash ($350,000 at close, $1.65 million deferred), expected to yield $15-17 million revenue and $3.5-4 million EBITDA in 2027 at 0.5x valuation without leverage or dilution. IndiQ’s $22 million base ($12.8 million cash close, $9.2 million deferred, up to $40 million with milestones), included $3 million cash and $750,000 working capital, projecting $38+ million revenue and $7 million EBITDA. Financed by $13 million convertible notes from loyal shareholders (no warrants), plus a $3.2 million equity raise at $2/share (team participated). Combined, acquisitions add over $50 million revenue/$10 million EBITDA to 2027 guidance of $115-120 million revenue/$10-20 million EBITDA. Recent share sale funds working capital/content.

Erick Opeka recapped operations: 35.5 million monthly unique viewers, SVOD subs up 15% to 1.55 million, 1.14 billion monthly minutes, 66,000+ assets (58,000 films/seasons/episodes, 8,500+ podcasts), 25.4 million social followers, 45,000 new Cineverse channel subs in 2025. Direct margin 69% (from 48%), $1.9 million of $7.5 million cost cuts realized (rest soon). These form the base for acquisitions.

Giant, serving Hollywood for 20+ years in encoding/QC/delivery, holds top vendor status but faced scaling limits manually. Matchpoint’s AI delivers 60-70% efficiency in encoding/delivery, capable of 15,000+ titles/month. Post-announcement, 470% business surge in first month under Matchpoint, accelerating. Global post/media services market: $25 billion, 11% CAGR to $74 billion by 2034, shifting to AI platforms.

IndiQ provides CTV monetization (ad serving, SSAI, scalable), 40+ live/75 onboarding clients (IMAX etc.), projecting $38 million revenue/$9.6 million EBITDA (25% margin) for 2026. Integrates monetization into Matchpoint for unified distribution-data-monetization. Enables new ad tech. Positions Cineverse in AI infrastructure shift, where platforms with data dominate.

Opeka highlighted industry fragmentation—distribution separate from monetization/data—creating inefficiencies. Acquisitions unify the media supply chain via automated architecture. Giant adds trust/infrastructure/clients; IndiQ the revenue engine. Combined Matchpoint offers full-stack white-label solution unprecedented in the sector.

Management views these as transformative, with immediate priorities on integration, open to further M&A. Streaming growth, efficiencies, and client wins underscore momentum. Cost savings and platform scale position for explosive growth. Investor alignment via participation in raises signals commitment.

Industry Glossary

• SVOD: Subscription Video On Demand, a subscription-based streaming model providing recurring revenue through user fees for content access.
• AVOD: Ad-Supported Video On Demand, where streaming content is monetized primarily through advertising rather than subscriptions.
• FAST: Free Ad-Supported Streaming Television, featuring linear channels with programmed content available gratis, supported by ads.
• SSAI: Server-Side Ad Insertion, a technology enabling dynamic ad integration into streams server-side for seamless viewing and precise targeting.
• Matchpoint: Cineverse’s core platform automating video ingestion, mastering, QC, delivery, and monetization across the media supply chain.

This comprehensive review captures the essence of Cineverse’s strategic evolution, financial progress, and forward-looking posture as articulated during the earnings call. The integration of advanced technologies and key acquisitions sets a robust foundation for sustained growth and profitability in the dynamic entertainment technology landscape.