Cineverse Corp.

Hello, everyone. Thank you for joining us and welcome to the Cineverse first quarter fiscal year 2027 earnings call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Gary Loffredo, Chief Legal Officer, Secretary, and Senior Advisor. Gary, please go ahead.

Good afternoon, everyone. Thank you for joining us for the Cineverse first quarter fiscal year 2027 financial results conference call. The press release announcing Cineverse's results for the fiscal first quarter ended June 30, 2026 is available at the investor section of the company's website at www.cineverse.com. A replay of this broadcast will also be made available on Cineverse's 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. 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, August 13, 2026, 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 represents 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 Loffredo, Chief Legal Officer, Secretary, and Senior Advisor at Cineverse. With me today are Chris McGurk, Chairman and CEO, Erick Opeka, President and Chief Strategy Officer, Sean McCabe, Chief Financial Officer, Yolanda Macias, Chief Motion 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 first quarter fiscal year 2027 business highlights. Then Sean will follow with a review of our financial results, and Eric will provide further details on our two recent acquisitions. I will now turn the call over to Chris McGurk to begin.

Thank you, Gary, and thanks everyone for joining us on the call today. We registered yet another very strong quarter. Driven by the acquisitions of Giant Worldwide and IndieQ, which both closed during the fourth quarter of fiscal 2026, we increased total revenues by 175% over last year's first quarter and increased adjusted EBITDA by $2.6 million, our second positive adjusted EBITDA quarter in a row. We feel this is impressive as we had no new wide release theatrical films during this quarter. which also happens to be one of our two most seasonally slow quarters across all our businesses. Importantly, technology revenues represented more than 60% of the consolidated total during the quarter. Clearly, technology is now the largest source of revenue for the company. And much of that revenue is recurring and durable with many A-list industry customers now using our products and services. We're also very optimistic about the business and financial prospects for Vaudeo, a new proprietary ad tech offering that extends brands' audio campaigns onto connected TVs. This new product, which was developed and built by the NDQ executive team, was just announced yesterday. Following our two key acquisitions, we've embarked on several initiatives to reduce costs, improve efficiencies, and generate synergies. We've identified and are now targeting over $13 million in annual upsides from that process, which is well underway, including a $1.8 million reduction in force that occurred after the close of this quarter. And we're not just cutting costs. We're also rationalizing our greatly expanded business footprint to focus on our highest potential and most profitable core products and services to better concentrate management focus and improve margins and profitability. By our third and fourth fiscal quarters, we should see the great majority of those savings and synergies realized. Those quarters also happen to be our two strongest seasonal quarters, and we have three high potential wide release films that exactly follow the TerraFire 2 and 3 model in the lineup for those quarters as well. It's also important to note that we improved operating cash flow by over $13 million this quarter. Based on our acquisitions and business rationalization efforts, we should have a much lower capex to generate cash going forward. Let me now speak to our theatrical releasing business for a moment before I turn things over to Sean. We are in the theatrical releasing business in what we believe is a smarter, less risky way than our competitors for one primary reason, to generate a strong return on investment while at the same time Creating recurring revenues by driving viewers and subscribers to our streaming channels and by adding valuable properties to our film library. Following the same low investment strategy that fully leverages our streaming, podcast, social media, and advertising ecosystem as we did on Terrifier 2 and 3, we've now released three more films to date using that same strategy. Those films had a high return on investment and now join the ultra-profitable Terrifiers in our library. which should only help increase the value of that asset, which was already assessed at approximately $45 million by an independent firm last year. We have three releases coming up this fiscal year that also exactly follow the Terrifier formula. First up on October 9th is Guillermo del Toro's masterpiece, Pan's Labyrinth, presented for its 20th anniversary in 4K and 3D. In addition to opening the Cannes Film Festival classics presentation at the Palais, In May, we recently conducted a panel featuring Guillermo del Toro and talent from the film in the main hall at Comica, where 6,500 fans gave them a rousing reception. Guillermo also showed 3D footage of the film for the first time to 900 fans, and the footage got another incredibly positive response. We also took talent from our next film, Air Bud Returns, which will be released on January 22nd, to Comica. In this case, The talent involved was principally Air Bud himself. The Golden Retriever did his own panel and spent hours taking photos with the fans. We're very encouraged by the reaction we saw at Comic-Con and prior to that at CinemaCon to this iconic and nostalgia-inducing Golden Retriever named Buddy. Finally, we will be releasing the latest installment of the Wolf Creek horror franchise next March. We've seen the rough cut of the film and are very excited about the film's theatrical potential. And with that, I'll now turn things over to Sean for a financial review. Sean?