Cinedigm Corp

Good day, ladies and gentlemen. Today we are hosting a conference call to discuss Synodum's first quarter 2023 results. My name is Drew and I'll be your conference operator. At this time, all participants are in a listen-only mode. We will have a question and answer session at the end of the call, at which time all participants wishing to ask a question will be instructed to press star followed by the number one and identify themselves before asking the question. If anyone needs operator assistance, press star zero on your telephone keypad. you may re-enter the queue. Please note that this call is being recorded. Your host for today is Ms. Laura Atkin, Head of Investor Relations for Synodim. Please go ahead.

Thank you, Drew. Good day, everyone, and welcome to Synodim's first quarter fiscal 2023 earnings call. Before we begin, I would like to point out that certain statements made on today's call contain forward-looking statements. These statements are based on management's current expectations and are subject to risk uncertainties, and assumptions. The company's periodic reports that are filed with the SEC describe potential risks and uncertainties that could cause the company's business and financial results to differ materially from those forward-looking statements. All of the information discussed on this call is as of today, August 16th, and Synodyne undertakes no duty to update it. In addition, certain financial information presented on this call represents non-GAAP financial measures. We encourage you to read our disclosures and the reconciliation table to applicable gap measures in our earnings release carefully as you consider these metrics. With us today, we have Chris McGurk, Chairman and CEO, John Canning, CFO, Yolanda Macias, Chief Content Officer, Gary Lafredo, Chief Operating Officer, General Counsel and President, Erica Pica, Chief Strategy Officer and President of Synodyne Network, and Tony Guidor, Chief Technology and Product Officer, all of whom will be available for questions following the prepared remarks. I will now turn the call over to Chris McGurk to begin.

Thank you, Laura. Welcome, everyone, and thanks for joining us on the call today. Before I get into this quarter's performance, which was outstanding, let me remind you, as we reported in June, just how strong our financial results were in our last fiscal year that ended on March 31st, 2022. For the full year, we posted consolidated revenues of $56.1 million, up 78% over the prior year, with streaming revenues leading the way, up in the triple digits for the year. We generated adjusted EBITDA of $11 million for the year and net income of $1.8 million. We also fully eliminated all of our debt. Those results were outstanding and we overperformed versus our internal expectations in all of our businesses. And we continued that positive trend in the first fiscal quarter of 2023 into June 30th. Our results exceeded both our own and external analyst consensus expectations once again. Our strong business momentum continued with total streaming revenue surging up 98% in our fiscal first quarter, another record quarter, almost doubling our long-term streaming revenue growth target and beating our internal plan target for the quarter. Even more impressive, this dramatic growth was on top of triple digit growth in the prior year. On a two-year basis, we grew our streaming revenues 455% this quarter. We continue to see massive growth in our ad-supported Avon, and Fast streaming revenues, which increased 131% versus last year. As other players in the space scrambled to put in place an advertising-supported streaming strategy, we've had our ad-supported channels in operation since 2018, and Synonyme continues to outperform the rest of the industry. Our diverse portfolio of 30 targeted enthusiast streaming channels, with over 60 advertising demand partners bidding on our ad inventory, now includes 15 wholly owned and operated channels, such as Fan Door, Screen Box, and the Dub Channel, and several premium third-party branded channels, such as the Bob Ross Channel, the Elvis Presley Channel, and Real Madrid TV. This broad and diversified channel portfolio is not only driving continued strong results, but is also mitigating risk, setting us apart from almost every other player in the fast-growing content streaming business who are all mostly dependent on a single streaming channel or a single revenue model for success. As I said, we also have no debt at all on the balance sheet, having fully eliminated over $50 million in debt burden since the start of the pandemic. We achieved such a strong balance sheet despite the multiple investments and acquisitions we made over that period to build our business. Now, in addition to our unique and diversified business strategy, a debt-free, and soon to be sustainably profitable business clearly sets us apart from almost everyone else in our space. Our vastly increased scale has made us an increasingly impactful player in the streaming content and technology business. At 30 channels and with access to over 1.1 billion global streaming devices and every major streaming platform, we now have one of the largest and most widely distributed streaming portfolios in the business. With 46,000 films and TV episodes in our library, we now have one of the largest modern streaming libraries in the world. With full ownership of our MatchPoint technology platform, we now fully control what we believe is the most highly scalable video streaming and end-to-end content distribution platform that exists today. These scaled-up assets have now set the stage for the company to launch four key internal growth initiatives, Centiverse, Synodyne Advertising Solutions, Synodyne Podcast Network, and Matchpoint 2.0. Synodyne's multi-year investments in technology, streaming channels, and content made these initiatives possible. As we've said previously, the seven roll-up streaming acquisitions we made over the last two years alone brought in 15 new channels, 15,000 new films and TV episodes, and full ownership of our industry-leading Matchpoint streaming platform. All of that on top of our triple-digit organic streaming growth during that period. These new initiatives leverage our dramatically scaled-up assets, technology, and workforce with little incremental investment. Our MatchPoint streaming technology is an absolutely key competitive advantage for us here. It gives us the ability to execute faster and lower cost with higher margins and with greater analytical insight than any of our competitors. Along with international business expansion, we expect these four new initiatives will generate incremental annual high margin revenues of over $50 million at steady state. Eric will further expand on all this in his comments. In addition, the synergies and scale benefits from recently acquired assets are enabling us to streamline our cost structure. We fully expect to generate at least $7.5 million in annual cost savings and achieve our aim of long-term sustainable profitability, which we are absolutely committed to achieving this year. John will provide more details on that in a minute. I believe it's also important to point out that the long-planned wind down and monetization of our legacy digital cinema business is close to completion. In this quarter, this resulted in a revenue reduction of $4.8 million because of the timing of revenue recognition of higher digital cinema equipment sales recognized in the first quarter of last year. Without including digital cinema, our revenues were 38% higher than last year's quarter. Despite this long planned wind down and much lower recognition of equipment sales this year, because of our continued hyper growth and streaming, we still expect to generate significantly higher total full year revenues in this fiscal year versus last year, when, as I said, our total revenues increased 78% to 56.1 million as we move toward our strategic goal of 150 million in annual revenues in two to four years. Before I turn things over to John and Eric, I'd like to follow up on some points I made in my recent letter to shareholders. Given our continued convincing financial performance and growth, driven by our unique diversified streaming content strategy, our debt-free balance sheet, and drive to sustainable profitability, We remain as frustrated as we know you all are regarding our extremely undervalued stock price. As I said in my letter, we are considering a stock buyback program given what we believe is a bargain price on our stock. In addition, we plan to keep educating the investment community about our unique streaming strategy while we keep outperforming like we did again this quarter versus consensus estimates on revenues, adjusted EBITDA and net income. And we will keep pushing back against sometimes misinformed negative sentiments about the streaming content sector and keep explaining how we have a unique and winning business model that separates us from other streaming companies. Our results in this quarter clearly back that up as we posted 131% advertising growth in the face of much hand-wringing by entertainment industry pundits about the digital ad marketplace, with Cinedigm again performing way higher than the rest of the industry. Streaming remains the fastest growing segment of the entertainment business, and we are incredibly well positioned in ad-supported streaming, the fastest growing subsegment. Streaming is clearly the future of entertainment. Cinedigm's diversified channel strategy, our huge modern streaming content library, our industry-leading MatchPoint technology, and our stellar management team position us to not only capitalize on that future, but to also quickly become a high-growth, high-margin, and uniquely sustainably profitable streaming company. With that, let me turn it over to John for a more detailed review of our financial results. John?