CuriosityStream Inc.

Good day, and thank you for standing by. Welcome to the CuriosityStream Q3 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press star one. Please be advised that today's conference call is being recorded. Thank you. I would now like to hand the conference over to your speaker today, Denise Garcia, Investor Relations. Please go ahead.

Thanks, Josh. Hi, welcome to CuriosityStream's discussion of its third quarter 2021 financial results. Leading the discussion today are Clint Finchcombe, CuriosityStream's Chief Executive Officer, and Jason Eustace, CuriosityStream's Chief Financial Officer. Following management's prepared remarks, we will be happy to take your questions. But first, I'll review the Safe Harbor Statement. During this call, we may make statements related to our business that are forward-looking statements under the federal securities laws. These statements are not guarantees of future performance, but rather are subject to a variety of risks, uncertainties, and assumptions. Our actual results could differ materially from expectations reflected in any forward-looking statements. Please be aware that any forward-looking statements reflect management's current views only, and the company undertakes no obligation to revise or update these statements nor to make additional forward-looking statements in the future. For a discussion of the material risks and other important factors that could affect our actual results, please refer to our SEC filings available on the SEC website and on our Investor Relations website, as well as the risks and other important factors discussed in today's press release. Additional information will also be set forth in our quarterly report on Form 10-Q for the three months ended September 30, 2021, when filed. In addition, reference will be made to non-GAAP financial measures. A reconciliation of these non-GAAP measures to comparable GAAP measures can be found on our website at investors.curiositystream.com. Now I'll turn the call over to Clint.

Thank you, Denise. I'd like to thank everyone for joining our third quarter 2021 earnings call. I'm delighted to have with us today our COO and General Counsel, Tia Cudahy, our CFO, Jason Eustace, and our Chief Product Officer and EVP of Content Strategy, Devin Emery. After my comments, I'll turn the call over to our CFO, Jason Eustace, to review the financials. At the close of Jason's remarks, we will open up the call for questions. Curiosity is the global factual entertainment brand for people who want to know more. Our flagship subscription video-on-demand service continues to gain traction in the marketplace as we produce, acquire, and distribute compelling content across every genre of the factual category. In light of our deliberate and opportunistic approach to content creation and acquisition, we now as a company have more than 5,000 titles under license or ownership, up from 3,000 a year ago. Not only is our subscription service firing in all cylinders, but we continue to deliver balanced growth across our unique, multifaceted revenue stack. Let me talk about the third quarter. I'm pleased to report another strong quarter, with a year-over-year revenue growth of 114%. With slightly more than seven weeks left in the year, we're delighted to announce that 100% of our full year 2021 revenue guidance of $71 million is committed. Our ability to deliver these results in the midst of the worst global pandemic in a century underscores the resiliency of our business and our leadership in the factual entertainment category. Our 2021 revenue number reflects a nearly eightfold increase over a three-year period. nearly eightfold, truly remarkable achievement. This wouldn't have been possible without the exceedingly talented and hardworking team we have assembled at CuriosityStream. And I would like to thank everyone personally at this moment for their commitment. Our revenue more than doubled in the third quarter, driven by broad-based growth, including strong gains in our direct-to-consumer and licensing businesses. Our success in licensing is a testament to our expertise in content creation, and the global appeal of the factual entertainment category. CuriosityStream's content strategy has always been flexible and opportunistic, with the ultimate objective of providing our subscribers with the best and broadest range of factual content. Our business development initiatives, including our recent acquisition of One Day University and the investment in Nebula we announced last quarter, are consistent with this objective. As the world's largest creator-owned streaming platform, Nebula is in the pole position to capitalize on the rapid growth in creator content, and our investment will help Nebula accelerate its growth while enabling our shareholders to directly participate in the company's success. I'll provide more detail on our enhanced strategic partnership and investment in Nebula later in the call. Revenue in the third quarter grew 114% year-over-year to $18.7 million, driven by continued strength in direct subscription revenue and an anticipated step-up in licensing revenue. Our licensing business are difficult to predict on a quarterly basis, and this quarter is a good example. There's a few programs that could have delivered in Q3 delivered in Q4 due to editorial enhancements we chose to make. Three such films representing over $1.5 million of combined revenue closed during the first week of the fourth quarter. With 100% of revenue committed, we are thrilled to reaffirm our 2021 annual revenue guidance of $71 million, which represents, again, approximately 80% year-over-year growth. We reported another great quarter in our direct consumer business with a 50% year-over-year increase in DTC subscribers, marking the 11th straight quarter of at least 50% DTC subscriber growth. The fundamentals of our direct consumer business remained exceptionally strong during the third quarter, with the lowest churn in the company's history, and a second consecutive quarter-over-quarter increase in average revenue per user. The sequential improvement in ARPU was driven by a lower percentage of subscribers on promotional pricing plans. We see potential for accelerated ARPU growth driven by additional innovative service tiering as we expand our partnerships and deploy our unique offerings such as one-day universities, lectures, and events. With more subscribers adopting standard and premium tier subscriptions, In these service line extensions, we expect ARPU growth to become an increasingly significant driver of our top line growth. Our content licensing business was another highlight of the quarter, with sales of nearly 6 million, up from less than 50,000 a year ago. Factual content travels well internationally, and these agreements allow us to capitalize on the demand in markets where we have yet to establish a significant direct consumer offering. The rights we sublicense to third parties and foreign territories under presales contracts revert back to us after the term of the contract. And due to the largely evergreen nature of factual content, we expect the titles we license under presales agreements to retain significant economic value at the end of the contract period, which is not reflected under GAAP accounting. Our pipeline of presales agreements is strong and provides a solid foundation of revenue in the coming quarters. During the quarter, we entered into a number and variety of distribution partnerships, including a multi-year distribution agreement for CuriosityStream with FuboTV, to which their subscribers gained access to our linear channel and DOD service. During the quarter, we premiered more of our growing slate of tentpole originals. We started investing in these projects more heavily last year, and our investments are beginning to bear real fruit. In July, we premiered Rescued Chimpanzees of the Congo with Jane Goodall. a groundbreaking five-part series filmed over several years that offered unprecedented access to the rehabilitation of orphan chimpanzees struggling to return to the wild. That was followed by the global premiere of Secrets to Civilization, an epic three-part original series about the astonishing new links scientists have uncovered between our planet's ever-changing climate and the fortunes and misfortunes of humankind from the Bronze Age to the collapse of the Roman Empire. and the premier of our acclaimed feature doc of all, the gripping 90-minute profile of Hollywood actor-turned-soldier Michael Enright, who gave up everything to join Kurdish forces in their brutal struggle to defeat ISIS in Syria. Throughout the quarter, we also continued to deliver a strong slate of cutting-edge science and technology programming, including the three-part miniseries Becoming Martian, which chronicles humanity's long and surprising journey to the cusp of reaching Mars. and multiple new episodes of our timely and highly successful science and tech strand, Breakthrough, including Egypt's Lost City, Voyage to Venus, and Secrets of the Dog's Nose. We also premiered four more episodes of Faster, our quirky and irreverent original series that explores the elaborate tools such as the barcode, dishwasher, disposable cup, and microwave that humans have developed to try to save time and the mind-boggling repercussions those inventions end up having on our everyday existence. And we've premiered Season 4 of Butterfly Effect, which uses spectacular reenactments and mind-blowing video game-inspired CGI to show how some of the tiniest events in human history have transformed the entire course of human history, from the invention of electricity to the discovery of quantum physics. We're always looking for creative ways to further extend our leadership in the factual category, which is why we were thrilled last quarter to announce a landmark agreement with Nebula, the world's largest creator-owned streaming and technology platform. We and Nebula share a focus on entertaining, informative, highly engaging content and have partnered in strategic and marketing arrangements since Nebula's inception. With over 140 active creators who together have over 120 million collective YouTube subscribers, Nebula's grown to more than 350,000 paying subscribers in less than two years. This landmark deal enhances our long-standing strategic partnership while affording us the opportunity to help accelerate Nebula's growth through a financial investment in the company. The investment will enable Nebula to more rapidly build new product features, launch new business lines for creators, and market the Nebula platform to new audiences. We believe additional opportunities like accelerated subscription growth, new and larger sponsorship agreements, and meaningful commerce are possible because of the authenticity, credibility, and legitimacy of the Nebula creators. Through our investment, which values Nebula in excess of $50 million, we will attain a significant minority position as well as board representation. Nebula will continue to be run by Dave Wiskus, CEO of Parent Company Standard. We believe Nebula has only scratched the surface of its long-term growth potential, and as CuriosityStream shareholders, we're thrilled by the opportunity to share Nebula's success through our ownership position in the company. In summary, we're pleased to announce another strong quarter with 100% visibility into our full-year revenue guidance of $71 million. The right strategy, the right people in place, we look forward to continued success now and in the coming years. I'd like to turn the presentation over to our CFO, Jason Eustace, for some financial highlights.