Good day, everyone. Welcome to Cineverse's Fourth Quarter and Fiscal Year 2025 Financial Results Conference Call. My name is Emily, and I will be your operator today. [Operator Instructions] Please note that this call is being recorded. I would now like to turn the call over to your host, Gary Loffredo, Chief Legal Officer, Secretary and Senior Adviser for Cineverse. Please go ahead.

Good morning, everyone. Thank you for joining us for Cineverse's Fourth Quarter and Fiscal Year 2025 Financial Results Conference Call. The press release announcing Cineverse's results for the fiscal fourth quarter and year ended March 31, 2025 is available at the Investors section of the company's website at www.cineverse.com. A replay of this broadcast will also be made available at Cineverse's website after the conclusion of this call. Before we begin, I would like to point out that certain statements made on today's call may contain forward-looking statements. These statements are based on management's current expectations and are subject to risks, uncertainties and assumptions. The company's periodic reports that are filed with the SEC describe potential risks and uncertainties that could cause the company's business and financial results to differ materially from these forward-looking statements. All the information presented on this call is as of today, June 27, 2025, and Cineverse does not assume any obligation to update any of these forward-looking statements, except as required by law. In addition, certain financial information presented in this call represent non-GAAP financial measures and we encourage you to read our disclosures and the reconciliation tables to applicable GAAP measures in our earnings release carefully as you consider these metrics. I'm Gary Loffredo, Chief Legal Officer, Secretary and Senior Adviser at Cineverse. With me today are Chris McGurk, Chairman and CEO; Erick Opeka, President and Chief Strategy Officer; Tony Huidor, President of Technology and Chief Product Officer; Mark Lindsey, Chief Financial Officer; and Mark Torres, Chief People Officer, all of whom will be available for questions following the prepared remarks. On today's call, Chris will briefly discuss our fourth quarter and fiscal year 2025 financial highlights, the latest operational developments, outlook and long-term growth strategy. Mark will follow with a review of our financial results for the fourth quarter and fiscal year. Erick will provide some details on our streaming business results and operating initiatives. And Tony will provide updates on our technology initiatives before opening the floor for questions. As the market opens at 9:30 A.M. this morning, we would like to conclude our comments and Q&A by that time. I will now turn the call over to Chris McGurk to begin.

Thanks, Gary, and thanks, everyone, for joining us today. As you recall, in February, we reported our third quarter results. That quarter was the best in the company's history with over $41 million in total revenues, an increase of $27.5 million from the prior year quarter. And we also recorded net income of $7.2 million, a $9.9 million increase from the prior year. And we've continued that very strong financial and business momentum in our fourth fiscal quarter, generating impressive growth in all our financial performance measures and beating consensus analyst guidance on all key metrics. In the quarter, we generated total revenue of $15.6 million, a $5.7 million, or 58%, increase over the prior year. Net income was $858,000, a $15.5 million increase over the prior year. Adjusted EBITDA was $4 million, a $2.4 million, or 158%, increase over the prior year quarter. Total direct operating margin was 58% -- 55%, well above our stated margin target of 45% to 50%. Our full year fiscal 2025 results were equally impressive. Total full year revenues increased by 59% to $78.2 million. Total full year net income was $3.8 million, and total full year adjusted EBITDA was $13.9 million, a $9.5 million, or 216% increase over last year. These strong results were driven by growth across all the company's key lines of business particularly streaming, digital and podcast revenue. But most importantly, by the unprecedented success of Terrifier 3, the most successful unrated film release of all time. Our goal now is to build a high-growth, high-profit, low-risk year-round wide theatrical releasing business by following the same acquisition releasing and marketing blueprint that works so well on the Terrifier movies and astonish the entertainment industry. I will speak more about that in just a minute, and Erick will go into much…

Operator, I don't think we can hear Mark.

Mark, we are unable to hear you. If I could please ask you to check that you are not on mute.

Can you hear me?

Yes.

Thank you, Chris. As Chris noted, last quarter was a record quarter for us, and we have been able to follow that up with a very strong quarter which is seasonally our toughest quarter in our fiscal year. We are able to beat analyst consensus estimates for revenue, net income, diluted EPS and adjusted EBITDA for both the fourth quarter and the full year. For the quarter, we reported revenues of $15.6 million compared to $9.9 million for the same quarter last year, or a 58% increase. Net income and adjusted EBITDA were $0.9 million and $4 million, respectively, for the quarter, reflecting significant improvements over the prior year quarter. Again, very strong results for a seasonally low quarter, especially considering the depressed direct and programmatic advertising environment in the first quarter, which is a direct result of companies pulling back on their discretionary advertising spend due to the ever-changing tariff environment. Our direct operating margin for the quarter was 55%, which is above our previously issued guidance of 45% to 50%. Our improved operating margin is a direct result of our cost optimization initiatives implemented over the last 12 to 18 months, as well as our ability to grow revenues while controlling variable costs. We expect our direct operating margin in future quarters to remain in the 45% to 50% range. SG&A expenses for the quarter were $5.4 million, a decrease of $1.4 million compared to the prior year quarter, and 35% of revenues, a material improvement from 69% in the prior year. As I stated last quarter, we expect to continue to see our SG&A expenses decline as a percentage of revenues as we continue to focus on top line revenue growth while maintaining an efficient cost structure, bolstered by our ability to offshore operations to our Cineverse India location. We had $13.9 million in cash and cash equivalents on our balance sheet as of March 31, 2025 with $0 outstanding on our $12.5 million working capital facility. In addition, as of March 31, 2025, we have a working capital surplus of $3.6 million, continuing to reflect our improving financial position over the last 12 to 18 months. For the year, our net cash provided by operations was $18.5 million, a $29.1 million improvement over the prior year. Finally, with a strong fourth quarter and record revenue for the full year, and a $40 million valuation for our content library portfolio, which is almost entirely off balance sheet, we continue to believe that our stock price is undervalued with significant upside, based on yesterday's closing stock price of $4.18 per share. With that, I'll turn the floor over to Erick to discuss our operating and strategic growth initiatives.

Thanks, Mark. I'd like to spend a few minutes reviewing our platform businesses and growth initiatives across distribution, streaming, advertising and podcasting. So let's start with our distribution and content licensing businesses. This past quarter continued to be a solid one for Terrifier 3 on the ancillary side. Transactional and home entertainment revenues continued to exceed expectations. And during the quarter, we closed several windows of licensing deals with both Amazon and Peacock for the film. Compellingly, we were able to preserve a window on our own services while maintaining market value licenses on third parties. This concurrent windowing approach not only maximizes revenue, but enables us to continue to grow our streaming services as well. Since the Home Premier of T3, Screambox subscribers have grown 31%, while preserving valuable third-party license revenues in the mid-7 figure range over the next 18 months. We also expanded our footprint with major fast channel launches on Google TV Freeplay, international rollout of our flagship brands, including Dog Whisperer, and broader domestic distribution as well. As noted in the earnings release, we closed several traditional content licensing deals across genres and saw a meaningful uptick in our catalog revenues as well. Our team also announced new podcast licensing agreements and content expansions with the Cineverse Podcast Network continuing to grow rapidly, thanks to a more diverse content slate and increased advertiser demand. We now have 62 current shows and 4 new original series in development slated for release in the current fiscal year. Podcast revenues were up 57% over the prior year due to the rapid expansion of our slate and the impact of our ad sales strategy. We think we can maintain this robust rate of growth as we scale up the current series and ad efforts. On the comedy front, we're…

Thank you, Erick. I'm excited to share an update on our technology business. As you know, the company recently announced a new organizational structure in which the company's technology assets were placed under a new division named Cineverse Technology Group. The underlying reason for this was to accelerate our sales effort by investing more resources to an area of the company where we hold tremendous value. As many of you know, over the past several years, we have announced various deals with several small channel operators and video distributors. These deals were intended to allow the company to walk before we run by putting Matchpoint through real-world tasks before fully taking it to market as a SaaS product. We use these deals as a way to put Matchpoint through our hardening process where we can onboard real-world clients to help us identify the areas that we needed to further improve. We have learned a lot from these deals and are grateful to our partners for helping us improve Matchpoint. With this work complete, Matchpoint has reached an advanced level of maturity with robust capabilities that finally allow us to target who we feel are the ideal customers, the major Hollywood studios and major media companies. With that, we now have a seasoned sales team that has extensive expertise in the media supply chain of the business as well as deep contacts into the Hollywood community. These factors have allowed us to effectively reach the right decision-makers at major Hollywood studios as well as key media companies and broadcast networks. We plan to present Matchpoint to every major studio before summer's end. In the last 45 days alone, we have presented Matchpoint to 3 major studios, 2 broadcast networks and a leading e-commerce giant. The reception we have received has been…

[Operator Instructions] Our first question today comes from Dan Kurnos with Benchmark.

I'll try to keep it tight per your requests to finish up here. Look, just fantastic into the year. We've got wide releases in the next 3 quarters coming out. I guess, Chris, high level, just if you guys are successful or see early signs of success, how much more are you willing to lean in? And I know Erick kind of intimated that you're talking with some of the streamers, but how do we think about pay windows and licensing opportunities, especially for the licenses that you own?

Yes, I think as we continue to fill out our slate, as Erick said, we really have an overriding objective to set up a pay output deal, and we've started some discussions in that regard. I think what you'll see over the next few months is we'll be announcing more films that are similar to the 3 -- the 4 actually, if you include Wolf Creek that we have in our release slate right now. And it will also be expanding from our focus on horror into family films, another area that we had great strength in the past. And also we're looking at more of a fantasy film as well. And actually some Black Cinema content and comedy, as Erick mentioned. And I think once we put those pieces into our release slate, I think that's when we'll get really serious about negotiating a pay deal.

And just on the profitability because it really matters like it was great in the quarter. You've -- I don't want to lose sight of the offshoring. I know that Mark in his comments said sort of 45%, 50% op margin. You crushed it this quarter with north of that. How do we think about it in quarters where you have a successful owned license film for wide release? And is there any chance that, that margin could creep up over time?

Yes, I forgot what the margin was in our last quarter. Maybe Mark can mention that. But I think with Terrifier in the market, we put up a really, really solid operating margin. So we feel good about the 55% number that we put up, and we feel really good that we'll meet or exceed our operating margin target of 45% to 50% going forward.

Chris, margin last quarter was 49%.

Yes.

Our next question comes from Brian Kinstlinger with Alliance Global Partners.

Great to hear about all the great details on the slate of movies. So I want to focus on some other growth areas. I'm hoping you can frame for investors how to think about cineSearch and Matchpoint. With Tony's comments, how should we think about maybe the pipeline of opportunities? What do deal sizes look like? And maybe when should we expect this will have a significant impact on your overall results?

Thanks, Brian. I'll let Erick and Tony to respond to that.

So I'll frame the top line. So I think, as Tony mentioned, and I'll let Tony go into more detail here. I think as it relates to the overall sales pipeline, the opportunity set of the companies we have, we're now focused more on the enterprise side in the future. In the past, we have been focused on smaller entities as more of a proof of concept. Those kinds of entities are pretty small. It takes a lot of them to generate meaningful revenue. So they're good for testing, but they're not really efficient for scaling the business. Tony, why don't you detail sort of the opportunities that generally, in terms of the number of properties in the pipeline, what do you think the average deal size could end up being?

Sure. Thanks, Erick. Yes. I would say, as Erick pointed out, we were really focused on these -- on small operators. We have one shot to come to market. We didn't want to risk it. So we aim for smaller operators so that we can learn what needed to be fixed and get everything right before we took it to the big media companies. Of the 5 major studios, I would say on average, each of those studios is probably $5 million and up. It really depends on whether they use the platform for domestic distribution worldwide, the partner that we're currently working towards a pilot. Their initial expectation is we start with the back-catalog launching worldwide. And then if this goes well, it can expand into other parts of the company, including their streaming service and then as well as their international operations. So that $5 million can easily scale much higher. But so far, what our expectation is mid-7 figures, and if there's 5 of them, and as I said, we've presented to a good share of them so far. The reception has been very, very robust. After the big studios, we have obviously the big networks and the big media companies. So there's plenty of other potential clients on that list. So we expect that over time within the next few years, we should have a very strong foothold within the business. And I think from there, that is where, as we say, land and expand. We sell them Dispatch. We sell them cineSearch. We sell them any of the other services or analytics. And these are all areas where all the big media companies are struggling. So we find ourselves in a very unique position in that we have technology that really sets us apart from everyone else.

Great. That's wonderful. And just I wanted to follow up just on podcast. I don't know what revenue wise, the segments haven't been out yet. But with your push in to direct hire, and I know one of the initiatives was to better monetize podcasting. Maybe you can provide some more details on, again, direct sponsorship and sizes of those deals and how you maybe frame also monetization of broadcasting over the next 12 to 18 months versus where it is today?

Sure, sure. So first of all, so just thinking about the monetization strategy here, it's really twofold. One is if you think about our efforts in the podcast business, the big advantage that we have there is podcasts are new, fresh content and new releases. So that provides, I think, a premium need for advertisers over FAST channels that are predominantly library. And we're actually seeing podcast CPMs, higher than CTV CPMs, sometimes by even $10 or more higher on a direct basis. And that just reflects the quality and the value of the portfolio we're starting to put together. So number one, it's -- we think the portfolio we're building towards a more premium, higher quality. So our focus is on assembling shows that have 0.5 million to 1 million monthly listeners at a minimum per podcast. I think that's very different for some of the other networks out there that are kind of vacuuming up every show, no matter how small or big it is. So that's number one, and that plays well with advertisers. Number two, we're doing this on a direct basis with -- in addition to bundling it, as I described during our commentary, we've hired up a direct team. We hired some sellers out of the SiriusXM universe who have hit the ground running and doing quite well. So the average deal size we're getting as we're getting larger brands like Progressive and others, can go into the low 6 figures per deal. That's not every deal. You're doing mid-5 deals quite consistently for brands. But interestingly, we're starting to see bigger, more brand and less performance-oriented, which I think is a really good space for us when you think about it from that perspective because branded tend to buy just in bigger packages than performance who are testing. So as we kind of think about the trajectory with our focus on more brand-oriented larger advertisers, given we were at 100% programmatic last year, we think the CPMs on the direct are more than double. And given the velocity, I think we could probably accelerate into the back half of the year to 2x or more what we did last year. But a lot of that is highly dependent, obviously, on macro conditions and other elements, how the ad market continues to play out. But so far, it's looking very solid. And we think just adding more salespeople, we could expand it even further.

There are no further questions remaining. So I'll pass the conference back over to the management team for closing remarks.

Yes, this is Chris. Thank you all for joining us today. And please feel free to reach out to Julie Milstead with any additional questions you might have. And we look forward to speaking to you all again on our next quarterly call. Thank you very much.

That concludes today's conference call. Thank you for your participation. You may now disconnect your lines.