CuriosityStream Inc.

Good afternoon, ladies and gentlemen. Welcome to the CuriosityStream first quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode, and please be advised that this call is being recorded. After the speaker's prepared remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star 1 on your telephone keypad. And if you would like to withdraw your question, simply press star 1 again. And now at this time, I would like to turn the call over to Ms. Denise Garcia, Investor Relations. Please go ahead, Van.

Thanks, Beau. Welcome to CuriosityStream's discussion of its first quarter 2023 financial results. Leading the discussion today are Clint Stinchcomb, CuriosityStream's Chief Executive Officer, and Peter Wesley, CuriosityStream's Chief Financial Officer. Following management's prepared remarks, we'll 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 your 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 quarter ended March 31, 2023, 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. Hello, everyone. I appreciate you all joining us today. Also on the call is our COO and General Counsel, Tia Cudahy, our CFO, Peter Wesley, and our Head of Content, Rob Burke. In the six weeks since our last earnings call, we've made good progress in rolling out our new direct subscriber pricing. We've added several million paying subscribers through new bundle distribution partnerships around the world, and we've enhanced our critical mass library with unique and compelling new factual content. We believe that our direct subscriber base, content library, multi-year distribution agreements, strong cash position, and lack of debt are favorable business and strategic attributes that provide us with exceptional flexibility. As such, we will continue to consider opportunities that we believe are in the best interest of our shareholders, including share repurchases, potential business combinations, and scale partnerships. We finished Q1 in a solid cash position, moved closer to profitability, and are encouraged by the positive momentum we are seeing in the business. Looking ahead, I'm pleased to report that not only do we expect better results in the second quarter, but we believe our Q1 results represented the trough for revenue. Despite lower revenue compared to the prior year quarter, we significantly increased adjusted EBITDA and adjusted free cash flow. Our improving financial trajectory reinforces my conviction that our decision to prioritize long-term profitability and cash flow over near-term revenue growth over the past couple of quarters was in the best interest of the company and our shareholders, despite the dampening effect it had on our top line results. As Peter will discuss in greater detail, Our positive financial outlook is based on favorable trends in our subscription businesses, the growing pipeline of opportunities across other lines of revenue, and our continued commitment to prudent expense management. We remain laser focused on achieving positive adjusted free cash flow while making the investments necessary to generate efficient, sustainable top line growth moving forward. We expect the current environment of rising interest rates and tighter financial conditions to result in a growing pipeline of potentially accretive opportunities as less diversified and less well-capitalized players face increasingly daunting challenges. While it's difficult to say exactly when or if we might pull the trigger on any particular opportunity, we won't enter into any transaction that doesn't adequately reflect what we believe to be the full value of what we bring to the table. We're in command of our business and confident about our future. Turning to the business, I'll briefly touch on a few key recent developments and highlight some of the exciting new additions we've made to our critical mass content library before I turn it over to Peter for more detailed discussion of our first quarter results in Q2 financial guidance. We're pleased by the performance of our direct subscription business in the quarter. Direct subscription revenues grew on a year-over-year basis and were relatively consistent with the prior quarter, even as we significantly reduced marketing investment during our extensive pricing test. And while it's only been a few weeks since we rolled out our higher standard service price for new monthly and annual subscribers, early results have been encouraging and consistent with our expectations. Turning to our global bundle distribution business, our content continues to resonate with scale partners around the world who are seeking high-quality, cost-effective alternatives to increasingly pricey content from legacy media companies. Sizable investments we've made in languaging and localizing our content are enabling us to expand quickly and aggressively with a variety of partners. And earlier this quarter, we were pleased to announce key new partnerships which expand our footprint across Asia, Europe, Latin America, North America, and Australia. These new relationships incorporate Curiosity subscription services and channels and will help deliver our premium nonfiction films and programs to several million new paying subscribers. Recent launch partners include Amazon's Prime Video Channels in India, Fetch TV in Australia, the Netherlands' largest MVPD, Ziggo, the Dutch streamer NLZ, Mexico's Izzy Telecom, and Central and Eastern European distributors MTS, Telecom Slovenia, and Megafon, among others. We expect meaningful improvement in our revenues from distribution partners moving forward as our full product set from localized channels to integrated app offerings to direct licensing creates a range of monetization paths for both us and our partners as we connect with audiences across the globe. In addition to growing both our direct and partner subscription initiatives, we are thoughtfully and deliberately leveraging AVOD fast and free to air opportunities through both direct distribution and through content licensing. We have a lot of dry powder for these platforms, and as the comps available are now much more clear and increasingly predictable, We're working to ensure that we secure what we believe to be full value for our content. These environments also provide the ability for us to promote to our subscription tiers in an efficient and highly targeted manner. On the content side, we continue to invest in highly differentiated original content while leveraging our critical mass library of over 15,000 programs so that we can deliver new and engaging experiences. In January, we kicked things off with the Lucy mission. a behind-the-scenes look at NASA's boldest mission yet to unravel the origins of our solar system, and fusion, harnessing the power of stars, a timely deep dive from our hit series, Breakthrough, into the energy source that could save our planet. In February, we unraveled surprising new mysteries from our past in Vikings, The Lost Kingdom, and embarked on a thrilling voyage to separate fact from Hollywood fiction in The True Story of Pirates. We also continued our quest to uncover the most consequential untold tales in human history with a six-part series, Deadly Science, an unflinching look at the innovators and explorers who have often paid the ultimate price in the pursuit of progress. A three-part series, California, a look at the pioneering engineers, artists, and activists who put the Golden State on the edge of a changing world, and the 90-minute feature doc, Bessie Coleman, Queen of the Skies, a portrait of the pioneering aviator who became the first African-American woman to earn a pilot's license. Tapping off the quarter, we also premiered a highly anticipated six-part original series, CSI on Trial. Look at the lack of science behind some of the most well-known forensic investigation tools and the tragic impact they've had on the lives of the wrongfully convicted. The series was augmented with a six-part companion podcast produced and distributed through our partnership with iHeartMedia, which delved further into the origins of flawed crime scene investigation disciplines and the personal nightmares they often inflict on the wrongfully accused. These are just a few of the original series and specials slated for release on CuriosityStream and Curiosity Audio Network in 2023. Other notable titles include Giants, a landmark five-part natural history series that unlocks the evolutionary secrets of the biggest beasts that walk our planet, and the Real Wild West, a beautiful four-part history series that shines a light on the Native American tribes, women, African Americans, and immigrants who shaped the American West. Looking ahead, we are confident that we have the assets and capabilities in place to drive improving profitability and adjusted free cash flow. With the decisive actions we've taken to reduce our cost base and with the outsized content creation and languaging investments required to build a large-scale library behind us, We believe we've created the foundation for significant operating leverage as we prudently invest to drive growth moving forward. We see many ways to win in this environment as we execute on our organic initiatives while continuing to explore value creation opportunities with a wide variety of strategic and commercial partners. In summary, our Q1 results demonstrate the significant progress we've made on the path to achieving positive adjusted free cash flow in the near term. From this baseline, we expect to drive profitable growth and pursue all of the avenues available to us to maximize shareholder value. Now I'll turn the call over to Peter. Peter.