Cineverse Corp.

Good day everyone and thank you for joining us and welcome to the Cineverse Corporation second quarter fiscal year 2026 financial results conference call. My name is Luca and I'll be your moderator today. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please raise your hand. If you have dialed in to today's call, please press star nine to raise your hand and star six to unmute. I would now like to turn the call over to Gary Lofredo, Chief Legal Officer, Secretary and Senior Advisor for Cineverse. Please go ahead.

Good afternoon, everyone. Thank you for joining us for the Cineverse Fiscal Year 2026 Second Quarter Financial Results Conference Call. The press release announcing Cineverse's results for the fiscal second quarter ended September 30th, 2025, is available at the Investors section of the company's website at cineverse.com. A replay of this broadcast will also be made available at the Cineverse website after the conclusion of this 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 risks, 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 these forward-looking statements. All of the information discussed on this call is as of today, November 14th, 2025, and Cineverse does not assume any obligation to update any of these forward-looking statements except as required by law. In addition, certain financial information presented in this call represent non-GAAP financial measures, and we encourage you to read our disclosures and the reconciliation tables to applicable GAAP measures in our earnings release carefully as you consider these metrics. I'm Gary LoFretto, Chief Legal Officer, Secretary and Senior Advisor at Cineverse. With me today are Chris McGurk, Chairman and CEO, Eric Opica, President and Chief Strategy Officer, Tony Weidor, President of Technology and Chief Product Officer, Mark Lindsay, Chief Financial Officer, Yolanda Macias, Chief Motions Pictures Officer, and Mark Torres, Chief People Officer, all of whom will be available for questions following the prepared remarks. On today's call, Chris will briefly discuss our fiscal year 2026 second quarter business highlights. Then Mark will follow with a review of our financial results. and Eric will provide further details on our business and operating results and new initiatives. I will now turn the call over to Chris McGurk to begin.

Thank you, Gary, and thanks, everyone, for joining us here today. I'd now like to cover some important business highlights, and then Mark will review our financial performance, and then Eric will cover our operating progress and new business initiatives in much more detail. We had a slightly down revenue quarter with strong margin improvement. Total revenues were $12.7 million, down 3% from the prior year quarter. During the quarter, we closed a $1.1 million licensing deal for the Toxic Avenger that will be recognized in future periods. With this license fee revenue, the revenues for the quarter would have been 13.4 million, up 5% from the prior year quarter. Operating margins grew by 7% from the prior year quarter to 58%. Net income and adjusted EBITDA in the quarter were impacted by the investments we've been making to build our technology sales force, grow our match point deal pipeline, and fill and market our theatrical release portfolio. We expect those investments will generate returns over the balance of the year and beyond. At the same time, We continue our intense focus to control costs and leverage the savings and efficiencies of Cineverse Services India to manage SG&A spending. The Toxic Avenger Unrated, released on August 29th, did not perform as well as we hoped at the box office. However, our marketing campaign is helping the film perform very well in the ancillary distribution markets. particularly VOD, physical and licensing with Amazon and Hulu. And the film will be profitable with an expected IRR of 40%. We own the domestic distribution rights to this film in all media in perpetuity. And so we believe it will be a strong and valuable addition to our over 66,000 title film library. Now the performance of the Toxic Avenger Unrated is very instructive. about the risk-reward profile of our portfolio film strategy, as much so as Terrifier 2 and 3 were, two films that dramatically overperformed everybody's expectations at the box office and then in the ancillaries. Because we keep our all-in acquisition and theatrical releasing costs on our films to less than $5 million each, and because we utilize our fan-centric streaming channels, advertising technology, podcast network, and social media footprint to generate millions of dollars in media value with relatively little out-of-pocket marketing costs, our film portfolio has enormous downside protection. While at the same time, our strategy sets the stage for upside breakout performances like Terrifier 3. which opened to number one at the box office and ultimately did 54 million in ticket sales on an opening marketing spend of only $500,000. I can guarantee you that none of our competitors with their traditional film releasing models would have achieved anywhere near a 40% return on investment on the Toxic Avenger Unrated. In fact, I'm very certain that all of them would have lost money on the release. And our next two releases, Silent Night, Deadly Night on December 12th and Return to Silent Hill on January 23rd, 2026, follow the same blueprint to a T. Both are fan-centric IP-based films that have an all-in investment projected to be well below $5 million each and also below our investment level in the Toxic Avenger Unrated. Also of note, our IP-based family film, Air Bud Returns is nearing the completion of principal photography and continues to generate much buzz on social media, the press and late night TV. We expect to release this film in late calendar 2026. Our unique film releasing approach and artist friendly model have both been attracting more and more quality directors, producers and agents to approach Cineverse as a film distribution partner versus the traditional studios and other independents. Nowhere is this more evident than in our announcement last week that we will be releasing the 20th anniversary edition of Pan's Labyrinth, the horror fantasy masterpiece from acclaimed screenwriter and director Guillermo del Toro, who has had a massive recent critical and commercial success with his visionary film version of Frankenstein. Pan's Labyrinth won three Academy Awards and has received over 100 other worldwide film awards it is widely acknowledged as a classic visionary film with a strong message that is tailor-made for the world today when it debuted at the can film festival it received a 22-minute standing ovation the longest tribute in the history of the festival the film has been invited back to can for a special anniversary presentation next may which will kick off our marketing campaign for a late 2026 theatrical release, including large formats. We have a multi-year domestic distribution deal in all media on this movie, making it a terrific addition to our film library. And as he stated in his video announcing his partnership with us, Guillermo brought this classic beloved movie to Centerverse versus the majors in other independent studios because he wanted to take advantage of our unique, non-traditional, artist-friendly approach to film releasing. Expect more announcements in the next few months as we meet with more key industry talent and evaluate multiple new film opportunities that fit our releasing model and ecosystem of marketing assets. And we just received an updated third-party valuation of our content library. The library is now valued at $45 million, significantly above the 3.2 million in book value on our financials. This valuation of just one of our key assets is strong evidence of our belief that we remain very undervalued given our current market cap. We also made very strong progress in building out our MatchPoint technology sales pipeline with dozens of potential partners including large entertainment companies and major studios now actively evaluating our technology. We just recently announced we have already closed four of those deals. And we're also quickly moving forward on our high potential micro drama joint venture with Banyan Ventures, preliminarily called MicroCo. With a goal of becoming the domestic market leader of this more than $8 billion rapidly growing worldwide business, We are very encouraged by the response to our plans by potential investors and strategic partners and by the creative community. We also have already received a funding commitment from a leading venture capital firm. So Eric will speak in more detail on all this in a minute, but now I'd like to turn things over to Mark for a financial review. Mark.