CuriosityStream Inc.

Good afternoon. My name is Stacey, and I will be your conference operator today. At this time, I would like to welcome everyone to the CuriosityStream first quarter 2026 earnings conference call. Please note that today's call is being recorded. All lines have been placed on mute to prevent background noise. I will now turn the call over to Vanessa Gillen, CuriosityStream's Senior Vice President of Operations. Thank you. You may begin.

Thank you, and welcome to CuriosityStream's discussion of its first quarter 2026 financial results. Leading the discussion today are Clint Stinchcomb, CuriosityStream's Chief Executive Officer, and Brady Hayden, CuriosityStream's Chief Financial Officer. Following management's prepared remarks, we will take questions from the analyst community. 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 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 quarter ended March 31, 2026, 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. Unless otherwise stated, all comparisons will be against our results for the comparable 2025 period. Now, I'll turn the call over to Clint.

Thank you, Vanessa. Financially, we remain focused on building CuriosityStream into a company with $100 million or more of reliable, recurring, and increasingly predictable annualized revenue. We've done a substantial amount of foundational work to position the company for that objective and and we believe that with continued execution, the path is becoming clearer. To optimize toward that milestone target, we made several deliberate choices in Q1 that affected near-term quarterly revenue, but in our view, strengthened the company's medium and long-term revenue opportunity. This is why we guided to the first half of the year as compared to the first quarter. First, we entered into pilot and framework agreements with certain large-scale partners covering broader and more valuable data sets. This meant prioritizing the structure, scope, and expansion potential of the relationship over maximizing upfront revenue recognition in the quarter. We believe that was the right trade-off. These pilot structures give partners a path to test, validate, and scale across a deeper and wider range of Curie assets, which we believe will lead to larger, more durable licensing relationships over the next year and beyond. Second, we made some modest technology investments that while not required to operate our business in Q1, we believe will enable us to accelerate provisioning and expand and maximize the scope, scale, specificity, and profitability of upcoming partnerships. Third, we developed and organized more licenseable IP at considerable scale, most of which is 100% owned. This is important strategically as diversity of data and full ownership of more IP in our corpus strengthens margins, broadens our addressable partner roster, increases revenue potential, reduces reliance on any single transaction, and makes the licensing business more predictable over time. For Q1, revenue was $15.2 million, up slightly year over year. Subscription revenue was roughly equivalent to the prior quarter. AI licensing revenue, which we have previously said would be lumpy, was indeed lumpy, and this was in light of the pilot-oriented approach we adopted during the quarter. Importantly, while the near-term revenue impact may not be immediately obvious, we entered into agreements with a broader roster of partners than we had at this stage last year. We view that as a meaningful indicator of demand and market validation. The breadth of assets now being discussed and packaged for partners has expanded considerably and includes hundreds of millions of production-grade temporal ground truth tokens for frontier model training and tuning, HDR video, matched raw and finished video, multi-camera video, and egocentric video for physical AI training. Licensing revenue does not always move in a straight line quarter to quarter, especially when we are dealing with larger partners, new partners, broader rights packages, and more complex data products. Further, our corpus is built on assets that are scarce, rights aware, difficult to replicate, and increasingly valuable. We're not talking about a single opportunistic window. We're talking about a monetization model anchored in premium unscripted and scripted media, enriched structured metadata, flexible rights, and growing demand from AI developers and traditional media companies. CuriosityStream has built a large, differentiated content library of rights to over 3 million hours of premium factual content, plus sports, plus news, plus general entertainment, animation, and film. Finished in raw, egocentric, and multi-camera, supported by more than 200 content and data partners and flexible licensing rights. This is not commodity inventory. It is a scaled, unscrapable, curated corpus that took years of capital, relationships, editorial focus, and dense work to assemble. We don't believe it makes sense to discount it for temporary gain. Enduring revenue streams are almost always rooted in assets that are hard to replace and expensive to rebuild. Looking ahead, Q1 sequential revenue decline was anticipated and we believe temporary. We currently expect 2026 to represent a significant step up in both revenue and cash flow compared to 2025. with subscription revenue increasing by single-digit percentages and with licensing becoming the larger growth engine as it surpasses subscriptions for the full year. Several factors support this outlook. The impact of our new pricing and packaging, which is just beginning to roll through our P&L, a solid partner launch pipeline with dominant global distributors, accelerating AI licensing fulfillments, new partner additions, continued expansion of our corpus, and the ramp of advertising opportunities. Visual media licensing remains healthy and diversified, while AI demand continues to broaden across model refresh cycles, enterprise fine-tuning, multimodal applications, source code, physical AI, video understanding, and the need for premium rights-aware structured data. Q1 was a transition quarter in which we deliberately chose to build for larger, broader, and more durable licensing opportunities. We believe those choices position CuriosityStream to generate stronger revenue, higher cash flow, and greater shareholder value as we move through 2026 and beyond. In summary, we believe that we will continue double-digit growth in both revenue and cash flow, driven by subscriptions and licensing expansion. We continue to reduce expenses through non-essential eliminations in the embrace of evolving AI-infused productivity tools. While we are raising our quarterly dividend one half cent to 8.5 cents, we intend to pay 2026 dividends from cash generated by operations as we did in 2024. Our balance sheet remains strong with over $23 million in liquidity and no debt, giving us substantial flexibility. I'll now hand the call over to our CFO, Brady Hayden.