Los Angeles, November 13th / PRNewswire / -- Cineverse Corp. (“Cineverse” or “the Company”) (Nasdaq ticker: CNVS) is a global streaming technology and entertainment company. The company today announced its financial results for the second quarter of the fiscal year 2027, which ended on September 30, 2026.

Highlights of the Second Quarter of Fiscal Year 2027(Unless otherwise specified, the following comparisons are all made against the same period of the previous fiscal year as of September 30, 2025, that is, the second quarter of the 2026 fiscal year):

• Total revenue for this quarter was 26 million US dollars, compared to 12.4 million US dollars in the same period last year, an increase of 13.6 million US dollars, representing a growth rate of 110%. The growth mainly came from the company's technical and media service revenues, which currently account for 55% of the total revenue, whereas in the same period last year they accounted for less than 5%.
• As expected by the company, after acquiring IndiCue, Inc, and Giant Worldwide in the fourth quarter of fiscal year 2026, the company's direct operating margin was 38%, which is lower than the 58% in the same period of the previous year. However, the company stated that the integration and operational efficiency following the mergers and acquisitions continued to lead to improvements in profit margins. Despite a seasonal decrease of $4.6 million in revenue this quarter compared to the previous quarter, the direct operating margin still increased by 300 basis points from 35% in the previous quarter.
• Selling, general, and administrative expenses amounted to $10.1 million, representing a improvement of $1.3 million compared to $11.4 million in the same period of the previous year, even after accounting for the administrative expenses incurred from two acquisitions in the fourth quarter of fiscal year 2026. The decrease was mainly driven by a reduction in marketing costs by $1.6 million and a reduction in compensation expenses by $100,000. The company also continued to cut down on recurring professional consulting fees related to mergers and acquisitions integration, which were $300,000 lower than in the same period of the previous year and in the first quarter of fiscal year 2027.
• After adjustment, EBITDA amounted to 1.7 million US dollars, an increase of 5.4 million US dollars compared to the same period last year. The net profit attributable to common shareholders was 3.2 million US dollars, resulting in an earnings per share of 0.11 US dollars after dilution; in the same period last year, there was a net loss of 5.7 million US dollars, with a loss per share of 0.31 US dollars after dilution. In addition to the factors that contributed to the improvement in adjusted EBITDA, this improvement was also mainly due to a one-time reduction of 7 million US dollars in the valuation of company-related liabilities, which was partially offset by an increase of 600,000 US dollars in regular loan interest expenses and an increase in the utilization of revolving credit lines.

Highlights from the beginning of fiscal year 2027 to date(Unless otherwise specified, all comparisons below are made compared to the same period of the previous fiscal year as of September 30, 2025):

• Revenues from the beginning of the year to date amount to 56.6 million US dollars, compared to 23.5 million US dollars in the same period last year, representing a growth of 141%. The growth mainly comes from the company's advertising technology and media services revenues, which together contribute 33.7 million US dollars and account for 60% of the consolidated total revenue. The direct operating margin from the beginning of the year to date is 36%. The company expects the margin to continue to improve throughout the year.
• Year-to-date selling, general and administrative expenses were $21.8 million, up $1.4 million from $20.4 million in the same period last year. This increase was primarily due to an $0.8 million increase in share-based compensation costs and a $0.7 million increase in integration-related consulting fees, partially offset by a $1.1 million decrease in marketing expenses. The increased costs resulting from the two acquisitions completed in the fourth quarter of fiscal year 2026 have been largely offset by the company's cost reduction measures.

Financial Status Overview

• As of September 30, 2026, cash and cash equivalents amounted to $3.6 million; the company's revolving credit line remains valid and available.
• As of September 30, 2026, the company disclosed a net working capital of negative $9.7 million; however, the company has the option to settle the $8 million performance consideration and deferred consideration related to the acquisition of IndiCue in the form of equity.
• As of March 31, 2026, the valuation of the company's content library indicated $45 million, which is significantly higher than the book value of $6 million as of September 30, 2026.

Operational Progress for This Quarter

• Completed the business and operational integration of Giant Worldwide. Its media service revenue reached $3.1 million in the second full quarter, and in September, it set a record of $1.8 million for a single month. The integrated technology and media service solution combines Giant's mature production studio partnerships with Matchpoint's automated distribution capabilities, covering content preparation, packaging, and delivery to streaming platforms, and has also added content aggregation services.
• The company integrates its product portfolio into the Matchpoint platform, incorporating key standalone products as platform features, thereby simplifying the products offered to customers and reducing engineering, sales, and marketing costs.
• The channels that the company has focused on continue to see increased engagement with streaming media. The total minutes of streaming media consumption increased by 8% year-on-year to 4.05 billion minutes; FAST saw a 7% increase in minutes to 3.84 billion minutes. Excluding the three channels that were discontinued this quarter, the total minutes increased by 36%, and FAST saw a 37% increase in minutes. Dove, The Dog Whisperer, and Yu-Gi-Oh all recorded their highest viewing quarters in history, with Dove leading the way with 854 million minutes, a year-on-year increase of 80%. This is due to a 43% increase in audience and a 26% increase in the average number of minutes watched per viewer. SVOD reached 1.44 million subscribed users at the end of the quarter, a year-on-year increase of 2%; the flagship channel Cineverse and the anime channel RetroCrush both set new historical highs for subscriptions for the second consecutive quarter; Cineverse channel saw a 62% year-on-year increase in subscribed users, and the total number of subscribed users for all channels Roku SVOD also increased by 62%.
• Launched the VAUDIO advertising platform, extending brand audio advertising campaigns to connected TVs. This platform was developed by a team of executives who joined the acquisition team of IndiCue.
• Launched video podcasts Mohr Stories, with, Jay Mohr, and The Stand Presents; as well as the main channels FAST, The Dog Whisperer, and The Bob Ross Channel. All of them are now available on Amazon Fire TV.
• Announces a sponsorship partnership with PEDIGREE and Air Bud Entertainment, launching a cross-city summer film series in Los Angeles, Chicago, and Kansas City. Additionally, Air Bud Returns will be exclusively previewed before its release in theaters in January 2027.

Operational Progress at the End of the Quarter

• On Friday, November 13, 2026, the company launched its issuance plan for the fiscal year 2028, announcing that it has obtained the long-term distribution rights for the 13th film in the Jason Universe series from Horror and Inc. This allows the legendary horror character Jason Voorhees to return to theaters. The company also announced a development partnership with creators Trevor Henderson (including Siren Head and Cartoon Cat) to adapt the popular horror podcast Mayfair Watchers Society into a theatrical release.
• Completed the migration of the first customer workflow from Giant Worldwide to the Matchpoint platform, delivering approximately 5,000 files within a few hours. The processing time was reduced by about 40% compared to the original manual process. Two other long-term partners, Giant customers, also plan to migrate to Matchpoint, thereby extending automation to the existing customer base and bringing higher gross margins and greater production capacity to the media services business.
• Driven by the political season in October 2026, the company's advertising technology revenue recorded its best single-month performance since the acquisition of IndiCue.
• The 20th anniversary edition of Pan's Labyrinth released by Guillermo del Toro has recorded the largest number of pre-orders in the company's history. The product is available in both 4K digital format and physical collectible editions, and with the Cineverse Motion Pictures Group, EST revenue increased by 18.8% year-on-year, and VOD revenue increased by 16.7% year-on-year.
• The company announced the nomination of Dr and Samrat Ganguly to participate in the board of directors election. Dr. Ganguly has previously served as the head of Apple's global infrastructure and is one of the technical founders behind the Matchpoint platform, as well as an infrastructure entrepreneur in the AI sector.
• Expanding the monetization of the high-quality content library through new licensing partnerships, including licensing independent hit films Hundreds, of, and Beavers to the comedy streaming service Dropout.
• Launched a new FAST channel, extending the company's business into the fields of sports and comedy, including the German Soccer Network jointly launched with the German Football Association ( DFB ), which broadcasts matches live on LG Channels, as well as the The Ed Bassmaster Channel jointly developed with Witz Comedy Network and broadcasted on VIZIO WatchFree.

Management Commentary

Cineverse, Chairman and CEO, Chris McGurk stated: "We have once again experienced a very strong quarter, both in terms of operations and finance. Compared to the same period last year, our revenue increased by 110%, mainly driven by the significant positive impact of two acquisitions we completed in the fourth quarter of fiscal year 2026 – IndiCue and Giant Worldwide. After adjustments, EBITDA amounted to 1.7 million dollars, an increase of 5.4 million dollars, marking our third consecutive quarter of positive growth and continued improvement. Net profit was 3.2 million dollars, with earnings per share at 0.11 dollars after dilution, which is an improvement of 0.42 dollars compared to the same period last year. Importantly, we achieved these results during one of the seasonally weakest quarters. Moreover, this momentum continues: in September, we generated over 10 million dollars in revenue, and preliminary estimates for October suggest total revenue of around 15 million dollars, which is the highest monthly revenue we have seen since the release of Terrifier 3 two years ago. The revenue from October will be included in the next fiscal quarter."

"Obviously, the positive impacts of the acquisitions by Giant Worldwide and IndiCue are now being significantly reflected across the entire company this quarter, as our technology business now accounts for the majority of Cineverse's revenue. We have gained tremendous value from these acquisitions in terms of technical platforms, customer relationships, and professional leadership. Advertising technology and media services were the biggest factors contributing to more than doubling our revenue this quarter compared to the same period last year. Coupled with our successful and targeted content acquisition and distribution strategies, the growth of our streaming channels and podcast business, as well as our ongoing efforts to significantly reduce costs, we are very excited about our competitive position in the ever-evolving entertainment and media ecosystem."

In terms of the entertainment content business, just this morning, on Friday the 13th, we announced that we have acquired the North American rights for the latest film of Jason Universe. We are bringing back one of the greatest horror movie icons of all time, the legendary character Jason Voorhees, to the cinemas. This is the 13th installment in this extremely successful series. This should be another highly influential film for us to release in theaters, and it will also add a film copyright asset that will be of great value for the next few decades to our film library. Our film library has just been valued at approximately $45 million, which is more than seven times its current book value. Importantly, despite the high attention and market anticipation for this new Jason series, and although we plan to release it widely in theaters, we intend to rely entirely on internal funds without the need for third-party capital. This is because our theater business model is unique; we adopt an investment approach with low risk and high potential returns, and our marketing ecosystem also has lower cash expenditure costs. In the coming weeks, we expect to announce more specific information regarding the release of this high-potential series of films.

"Based on this quarter's performance and clear momentum for the future, we reaffirm our full-year guidance for the fiscal year 2027, which is total revenue of $115 million to $120 million, with the adjusted EBITDA ranging from $10 million to $20 million."

Finally, we are very pleased to nominate Dr and Samrat Ganguly to participate in the board of directors election. Dr. Ganguly has long served as Apple's global infrastructure leader, is a technological pioneer, and is also the founder behind the Matchpoint platform. Dr. Ganguly is now an infrastructure entrepreneur and will help Cineverse to plan and execute our technology and the future of AI.

Cineverse, President and Chief Strategy Officer, Erick Opeka stated: "This quarter perfectly demonstrates the strong operational leverage we have built for our new Cineverse. Revenue decreased by $4.6 million seasonally compared to the first quarter, but after adjustment, EBITDA still grew to $1.7 million, an increase of more than twice. The most direct evidence is SG &A. We are now bearing the management expenses of two acquired companies, as well as the marketing expenses behind the film lineup for the theaters, yet SG &A is still only $10.1 million, which is $1.3 million lower than the same period last year and also about $1.5 million lower than the first quarter of fiscal year 2027. On this basis, the direct operating margin expanded by another 300 basis points quarter-on-quarter. Cost reductions are leading us into our strongest revenue quarter of the year, which is exactly the sequence we had planned for."

"All three of our key integration points are being realized: our product portfolio has been integrated into Matchpoint; the independent products that were merged or reduced are no longer included in the cost base; the packaging and delivery work for Giant Worldwide is being migrated to Matchpoint, with the first customer migration completed, delivering approximately 5,000 files within a few hours, which represents a reduction of about 40% in processing time compared to the manual process. There are still two existing customers to be migrated next. Our cost reduction and collaboration plan has been increased to $14 million per year, with over $9 million already implemented. The majority of what remains is due to contract terminations, and the timing depends on the exit terms agreed upon in negotiations. We expect to achieve full operational capacity by the end of this fiscal year. As a result, our production studio and streaming media business (including company-wide expenses) are now nearly profitable based on operational capacity. With political advertising this quarter, the record-breaking pre-sales for Labyrinth's Pan in home entertainment, Air Bud Returns in January, and the addition of the legendary horror character Jason Voorhees to the future film lineup, the company's profitability will be fully demonstrated in the second half of this fiscal year."

Teleconference

Cineverse will hold a teleconference on Friday, November 13, 2026, at 8:30 a.m. Eastern Time / 5:30 a.m. Pacific Time. Management will discuss the financial results for the second quarter of the fiscal year ending September 30, 2026, during the call. The teleconference can be listened to via webcast on the company's website's investor page: https :// events.q4inc.com / attendee /421494946. Investors who are unable to attend the live teleconference can listen to the recording, which will be available shortly after the meeting concludes.

About Cineverse

Cineverse (Nasdaq: CNVS) is an entertainment technology company and studio. The company is known for its bold innovation and independence, developing and investing in technologies and content that drive the future of the industry. At its core is Matchpoint ® – a continuously expanding technology ecosystem designed to help content be prepared, distributed, monetized, and continuously optimized on any platform. Matchpoint assists studios of all sizes in scaling up and improving performance and efficiency in an increasingly fragmented distribution environment. In addition, Cineverse also distributes a large number of high-quality films, series, and podcasts in theaters, home entertainment, and streaming; operates dozens of digital assets to provide in-depth services for passionate fan communities around the world; and collaborates with leading brands to connect them with their target audiences. From award-winning technologies to the highest-grossing unrated films in American history, Cineverse has created a business model that combines technology with content to redefine the next stage of entertainment. For more information, please visit cineverse.com.

Safe Harbor Statement

Investors and readers should note that certain statements in this document, as well as certain expressions made by Cineverse in regular press releases and some oral statements by company executives regarding Cineverse, and certain contents in the documents submitted by Cineverse to the U.S. Securities and Exchange Commission (including the registration statement, the Form 10-Q quarterly report, and the Form 10-K annual report), are considered "forward-looking statements" as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include those that are predictive in nature, depend on or involve future events or conditions, and typically contain words such as "expected," "anticipated," "intended," "planned," "possible," "may," "believed," "seek," "estimated," and similar phrases. In addition, any statements regarding future financial performance (including future revenue, earnings, or growth rates), ongoing business strategies or prospects, as well as any plans for future actions that may be provided by the company's management, also fall under the definition of forward-looking statements under this act. These forward-looking statements are based on the company's current expectations and projections for future events and are subject to various risks, uncertainties, and assumptions related to Cineverse, its technology, economic and market factors, and the industry in which it operates. These statements do not guarantee future results, and Cineverse assumes no specific obligation or intention to update these statements after the date of this press release.

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After adjustment, EBITDA

The company will redefine the subsequent EBITDA as: earnings before deducting interest, taxes, depreciation and amortization, equity incentive expenses, merger and acquisition costs, restructuring, transition, and acquisition-related expenses, goodwill impairment, and certain other items.

The adjusted EBITDA is not a financial performance indicator calculated according to the GAAP; as such, it may not be comparable to similar indicators used by other companies. The company utilizes the adjusted EBITDA as a measure of its business financial performance, as management believes it provides additional information regarding the performance of core business activities. Therefore, the company also considers this indicator to be of reference value to shareholders and other stakeholders.

The company disclosed the adjusted EBITDA because it believes that this indicator can serve as a useful supplement to net profit (loss) from continuing operations, aiding in the measurement of operational performance. The company also considers that the adjusted EBITDA is very useful for management and investors when evaluating performance and comparing with competitors. It is also used for planning and assessing financial performance, as this indicator excludes certain incremental expenses or non-cash items, such as equity incentive expenses, which the company believes do not reflect the performance of continuing operations.

The company believes that the adjusted EBITDA is a performance indicator rather than a liquidity indicator. Therefore, a reconciliation from consolidated net profit (loss) to the adjusted EBITDA has been provided in the financial results. The adjusted EBITDA should not be regarded as an alternative indicator to the operating net profit (loss) determined by GAAP, nor should it be considered as an alternative indicator for cash flow from operating activities, nor as a liquidity indicator. In addition, the adjusted EBITDA does not take into account changes in certain assets and liabilities, as well as interest and income tax that may affect cash flow. The company has no intention of using these non-GAAP indicators separately or as a substitute for the performance results prepared in accordance with GAAP. These non-GAAP indicators should only be read in conjunction with the consolidated financial statements prepared by the company in accordance with GAAP.

The following is the reconciliation of the company's consolidated net profit (loss) with the adjusted EBITDA (unit: thousand US dollars):