CuriosityStream Inc.

Good afternoon. My name is Krista, and I will be your conference operator today. I'd like to welcome everyone to the CuriosityStream fourth quarter and full year 2024 earnings conference call. Please note that today's call is being recorded. 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, simply press star, then the number one on your telephone keypad. And to withdraw your question, please press star one again. I will now turn the call over to Brett Ma with CuriosityStreams Investor Relations. You may begin your conference.

Thank you, and welcome to CuriosityStreams' discussion of its fourth quarter and full year 2024 financial results. Leading the discussion today are Clint Stinchcombe, CuriosityStream's Chief Executive Officer, and Brady Hayden, 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 Security's 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 board-looking statements in the future. For 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 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 annual report on Form 10-K for the fiscal year ended December 31, 2024, when filed. In addition, reference will be made to non-GAAP financial measures. The reconciliation of these non-GAAP financial measures, comparable GAAP measures, can be found on our website at investors.curiositystream.com. Unless otherwise stated, all comparisons will be against our results for the comparable 2023 period. Now I'll turn the call over to Clint. Clint, the floor is yours.

Thank you, Brett. We took big steps forward in 2024. To speak plainly, we delivered a year-over-year cash flow increase of about $26 million in 2024. More specifically, we lost about $16 million in cash in 23, and we made about $10 million in 2024. We did this by executing on the cost rationalization we promised and by securing higher margin revenue across our subscription services, which represent recurring revenue, and also in our advertising and licensing initiatives, which represent largely variable revenue. I'm gratified to share that 2025 will be a return to top-line growth and continued bottom-line growth. In Q4, we delivered our ninth straight quarter of increased cash flow, and as such, our highest ever adjusted free cash flow at $3.3 million. Our top-line revenue also exceeded our guidance. Our subscription revenue grew both sequentially and year-over-year. Our variable revenue grew sequentially and went down slightly from the prior year quarter We believe it's important and helpful to understand that by increasing our overall roster and categories of partners, which enabled higher margin revenue, we laid additional and critical groundwork for heavy overall improvement in 2025. Our confidence in 2025 is driven by five factors. Number one, we aggregated and amassed rights to hundreds of thousands of hours of monetizable video and audio, which we're putting to work on our own platforms and in licensing agreements. Our licensing agreements are with both traditional media partners and technology partners that are in need of content to train and fine-tune large language models to accelerate their AI product rollouts in an environment of increasing competition. Over the past handful of months, we've delivered and licensed over 8 million minutes of video and audio, and we're in the process of delivering much more. We have much greater visibility today than three, six, and nine months ago in regard to what is possible here. Number two, our overall annualized operational costs are significantly lower than our recurring revenue. This dynamic ensures a hard minimum of annual free cash flow and empowers us with the flexibility to take some calculated swings. Through enhanced simplification and optimization practices, made much easier by improving AI tools, We're continuing to reduce costs while not negatively impacting growth. Number three, falling translation costs driven by AI. While we can't yet dub and subtitle all of our content through synthetic AI solutions, we can for certain subsets, like natural history films with a voice of God narration. We're beginning to translate more subgenres of content within and beyond our current 12 languages, We believe increased localization will be particularly catalytic to factual programming like ours as it travels well as evidenced by our subscribers in 176 different countries. Number four, new currency rollouts. In light of our existing global subscriber base and worldwide appeal, we plan to add 20 to 30 new currency opportunities for our subscribers this year. Number five, enhanced talent density. While we always have ample room for improvement, our high concentration of skilled, motivated, and enthusiastic team members is generating increased productivity, innovation, faster decision-making, faster execution, faster fixing of mistakes, and we believe a competitive advantage for CuriosityStream by enabling us to achieve more with less and to quickly adapt to evolving opportunities. While it's not a metric we obsess over, we believe our revenue per FTE is among the highest in our competitive set. Following our annual dividend review meeting in January, and in accordance with historical best practices of confident dividend-paying companies, we announced an increase from 10 to 12 cents for dividend holders in Q1 2025. We subsequently announced an upwardly revised increase to 16 cents for shareholders through 2025 and which we plan to pay from operations in light of our enhanced visibility into certain third-party agreements and our overall pipeline. We believe this dividend, beginning with 4 cents per share this quarter on March 28th, is a great way to reward our investors and our employees and to raise the broader global profile of CuriosityStream. Today, in addition to participating in the growth potential of a vibrant organization at the intersection of content and generative AI, Shareholders can enjoy a return comparable to cash and other ultra-reliable investment instruments. This increase further underscores our confidence in our trajectory. While I've referenced our dramatic increase in content volume, we premiered some terrific original series and feature specials. Some favorites include a rather irreverent series, Science for Evil Geniuses, starring Game of Thrones actor Paul Kay, the feature doc, Searching for Satoshi, about the mysterious creator of Bitcoin, the fourth season of our high school football series, Fourth and Forever, featuring the DeSoto Eagles and their quest to recapture a Texas state title, our delicious evolutionary biology special, Taste the Flavor of Life, and our epic five-part series, Fateful Planet, which brings to life the most violent chapters in Earth's geologic history. In closing, I'm proud that the well-directed hard work of our talent-dense team enabled us to achieve our ninth straight quarterly increase in cash flow, $3.3 million, and end the year with approximately $40 million in liquidity and no debt, zero. Looking forward, we're returning to top-line revenue growth in the double digits in 2025, and we likewise anticipate double-digit annual percentage growth in free cash flow. Additionally, we continue to believe that our extensive library of now hundreds of thousands of hours of audio and video, our global appeal, our direct subscriber base and direct platforms, our multi-year third-party agreements, our public company currency, and our rationalized cost structure are uniquely favorable attributes that provide us with sustainable, durable, long-term strength, and exceptional flexibility. Over to my friend and colleague, Brady.