Good day, everyone, and thank you for joining us, and welcome to the Cineverse Corp. First Quarter Fiscal Year 2026 Financial Results Conference Call. My name is Eden, and I will be your operator today. [Operator Instructions] I would now like to turn the call over to Gary Loffredo, Chief Legal Officer, Secretary and Senior Adviser for Cineverse. Please go ahead.

Good afternoon, everyone. Thank you for joining us for the Cineverse Fiscal Year 2026 First Quarter Financial Results Conference Call. The press release announcing Cineverse's results for the fiscal first quarter ended June 30, 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 the Cineverse website after the conclusion of this call. Before we begin, I would like to point out that certain statements made on today's call 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 discussed on this call is as of today, August 14, 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 am 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; Yolanda Macias, Chief Motions Pictures 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 fiscal year 2026 first quarter financial highlights, the latest operational developments, outlook and long-term growth strategy. Mark will follow with a review of our financial results. Erick will provide some details on our streaming business results and operating initiatives, and Yolanda will cover our upcoming theatrical slate before opening the floor for questions. I will now turn the call over to Chris McGurk to begin.

Thanks, Gary, and thanks, everyone, for joining us on the call today. On our last call, Tony Huidor reviewed our technology business in some depth following our recent reorganization, where Tony became our President of Technology and Chief Product Officer to help turbocharge our tech business. On this call, Yolanda Macias, who recently became our Chief Motion Pictures Officer, will review our theatrical business in some detail as well since we have so rapidly built it into a surging new product line for the company. However, before Yolanda goes through that theatrical business review, Mark will detail our financial performance, and then Erick will outline our operational progress and the new initiatives across our businesses. And I will start before them by briefly reviewing some points that I believe are very important for our shareholders. First, we had another strong quarter from a revenue standpoint with significant growth across all our key lines of business. Operating margins also increased markedly from the first quarter of last year. Investments in SG&A and marketing to support our expanding theatrical releasing business and build out our technology, product, business development and sales team impacted our adjusted EBITDA and net income. However, we expect to begin to see some strong returns from these investments beginning in our fiscal second quarter that we are currently halfway through. Mark will get into more detail on all that in just a minute. Second, The Toxic Avenger Unrated hits theaters in 2 weeks on August 29th. We are pleased with the reaction to the film so far, particularly the response to the movie cast and director at Comic-Con, where we got major studio level panel placement in the main hall and lots of attention. Yolanda will get into more detail on the release and marketing strategy in a…

Thank you, Chris. As Chris noted, we had a strong top line revenue and gross margin quarter with $11.1 million in revenue, a $2.1 million (sic) [ $2.0 million ] or 22% increase over the prior year quarter and a gross margin of 57% compared to 51% last year, materially above our guidance of 45% to 50%. For the quarter, we reported a net loss of $3.5 million and adjusted EBITDA of negative $2.1 million compared to a net loss of $3.1 million and adjusted EBITDA of $1.4 million in the prior year quarter. The decline in both numbers is primarily the result of our SG&A expenses impacted by increased investments in sales, legal, marketing and technology to support our expanding theatrical and technology initiatives for the remainder of the fiscal year. We fully expect to see strong top and bottom line results in the remainder of our fiscal year as a result of these upfront investments. We had $2 million in cash and cash equivalents on our balance sheet as of June 30, 2025, with $8.9 million available on our $12.5 million working capital facility. The decline in cash from year-end is directly attributable to the acquisition of content and the payment of royalties during the quarter, the majority of which was related to Terrifier 3. Subsequent to year-end, 1.9 million warrants to purchase shares of our common stock were redeemed for $5.9 million (sic) [ $5.8 million ] in proceeds or $3 per share, leaving approximately 700,000 warrants still outstanding. We would also like to highlight the positioning of our current balance sheet with no long-term debt, no acquisition-related liabilities outstanding. Outstanding warrants have been reduced to 700,000 and $12 million available on our capital facility as of today. Finally, coming off a fiscal year with record revenues and strong revenue and gross margin growth this quarter, we believe the SG&A investments that we've made this quarter will lead to strong top and bottom line results for the remainder of the fiscal year. With that, I'll turn the floor over to Erick to discuss our operating and strategic growth initiatives. Erick?

Thanks, Mark. So this was a quarter of acceleration across all our key business lines, streaming, advertising and platform services. Our strategy is working, and we're starting to see results. Starting with streaming, we delivered 4 billion total minutes viewed, up 38% year-over-year and 20% sequentially. FAST minutes streamed were 3.8 billion, a 39% increase over the prior year. Total streaming viewers climbed to 214 million, up 24%. Subscriber count grew to 1.4 million, an increase of 5% year-over-year and 1% over the prior quarter. Screambox is up 27% since the release of Terrifier 3 on the streaming service. And the Cineverse channel has grown more than 4,300% since January off a small base, but clearly gaining traction. We saw a strong uptick in free trial starts in the quarter, many of which are now converting to paid in the current quarter, and we're leaning into that momentum. Over the next 2 quarters, we expect to pursue aggressive growth through new partnerships, bundling strategies and marketing execution in the period. On advertising, performance was mixed. Headwinds from open market programmatic remain, though we are seeing signs of recovery as brands and agencies begin to restore spending heading into the back half of the year. The real strength came from our direct business, which grew 57% year-over-year. That growth was driven by both new and returning advertisers, including Expedia, Mint Mobile, ZipRecruiter, Warner Bros. Pictures, Sony Pictures, Hulu, Neon, Audible and Universal Pictures, among others. Cineverse continues to be a must-buy for entertainment marketers. Our advantage is scale, targeting and breadth of formats. We're not just offering CTV, we're delivering a full funnel reach across mobile, podcast, display and live events. C360, our proprietary ad platform, is now a core part of that strategy. Subsequent to the quarter end, in July,…

Thank you, Erick. As part of the next-generation studio, the Motion Picture Group is building our strongest slate of wide releases in the company's history. This supports our strategy of IP with addressable and identifiable audiences who match Cineverse's internal media assets while offering the creative community an opportunity to reach their fans with a much better risk-reward profile than anywhere else in town. The next release from our fan-first slate is The Toxic Avenger Unrated directed by Macon Blair, which is reimagination of Troma's 1984 classic and is coming to theaters over Labor Day weekend on August 29th. Also following our trend, of wide unrated releases is Silent Night, Deadly Night, directed by Mike P. Nelson and which will undoubtedly shock audiences in time for the holidays on December 12th. On January 23rd, gamers and fans of creepy storytelling will experience the next installment of the iconic horror game franchise Return to Silent Hill, and it is the 20th anniversary of the original 2006 film. This joins our other previously announced wide release and the third installment of the franchise Wolf Creek: Legacy. Going beyond horror, we recently announced expanding our theatrical slate into the important and popular family category, Air Bud Returns, the iconic franchise created by Robert Vince, who will continue to resonate and delight fans across generations. The marketing campaign launched first on the TODAY Show last Friday, where we announced that your Golden Retriever has an opportunity to be in the next Air Bud movie. The search is on. And look for another exciting announcement very soon about a major film theatrical reissue that is coming to Cineverse and to fans in 2026. All wide releases leverage our unique theatrical strategy blueprint to release in an effective and efficient manner as proven with Terrifier 2…

[Operator Instructions] Your first question comes from the line of Dan Kurnos with Benchmark.

Great. Hopefully, you guys can hear me okay. So just, I guess, 2, first on the MicroCo announcement. I mean, Chris, and Erick, both you guys gave a lot of color, but why you guys -- why partner with you? It's obviously a huge market. We've got Netflix talking about it, YouTube talking about it, we've got Mountain on the DSP side getting in there. The long tail of SMB is huge here. So, a, why you guys? B, how much money do you put to work in the space if it's a 50-50 joint venture? And c, how do you think about monetizing it? And then just on the expense side, if you guys could just give us some color on where you invested and how the leverage is going to occur in the coming quarters, would appreciate it.

Well, Dan, this is Chris. You did a good job there of getting like 15 questions in with your one question, one follow-up, but good on you. Just in terms of the micro drama, Microseries initiative, I think it emphasizes one compelling point. People are coming to us now, not just filmmakers, but other businesses and people in the industry who now understand that we built a collection of assets that nobody else has. And again, whether it's launching a wide release movie business in a smarter way, we think, than everybody else with virtually no risk, or a Microseries business where we've already spent 10 years investing in kind of the infrastructure, the technology, the AI, the streaming, the podcast, our marketing operation, C360. So we've done most of the heavy lifting already to basically be the first domestic company to launch into the space, which, as we said, is going to be a $10 billion business in 1.5 years. So I think Lloyd and company, who are all incredibly experienced and have been around the block, wanted to be involved in a game-changing new business that had already done really well overseas. And I think they saw that we could really be sort of their secret weapon and helping them leverage all their creative talents and their relationships, but to do it in an incredibly smart, cost-effective way and do it really quickly and really be the first mover in the space. So generally, I think that is why they came to us. I'll let Erick get into more detail on your 14 other questions.

Sure. Thanks, Chris. And the other thing of why us, I think you look at the kind of business we've built already out of the fandom business, where effectively, we've taken some very compelling assets individually, built them into a platform on the horror side with the Bloody Disgusting, Screambox ecosystem, which is now able to spawn and release wide theatrical movies, where we've built a very substantial ad business around it. We see the same dynamics in the micro drama space. So when -- we're not just building another brand to compete with all of the other brands. We have -- we really have a plan to do what we did with Bloody Disgusting and that type of thing, immense fandom, multi-platform, lots of revenue, home of record for the information and data. And this model leverages all the things that we've been working on, including Synacor, including Matchpoint, including C360. So we think we can build competing products, not just to -- our game is not just -- we're going to build our own original content on top of it. But the way -- in the way that Amazon Prime sells channels, has an ad-supported business, a marketing business, has IMDb and other businesses. We're going to do the same thing for the micro drama sector so that these businesses are not only are they providing a base of fandom, but lots of monetization around them. So we're not just building once again yet another micro drama app, 1 of 40 or so out there in the market, we're building the home base for the micro drama industry and the fandom around it. In terms of your question on investment, we have -- there's a lot of options. We have a very, very strong team. And you can imagine we've had considerable interest from large -- small, medium and large players that really like what we're assembling here. So we'll have more details on that as the financing strategy culminates. Our goal now is really to internally between our partners, bootstrap and fund this to launch and then evaluate the other investment opportunities. I think this is the kind of business that can go very large and very big depending on how much capital we deploy. And if the capital needs, we think are beyond what we're able to do, we're more than willing to bring on additional equity partners into the endeavor. I hope that gives you a little bit of color without -- I can't get into the exact specifics just yet.

Your next question comes from the line of [ Kevin Pimentel ] with Alliance Global Partners.

This is Kevin for Brian Kinstlinger. On the June earnings call, you highlighted that Matchpoint was closer to monetization with the big studios evaluating the technology. Is there anything more you can share on the progress here? And can you help manage expectations for sales cycle and feedback from studios?

Yes. Thanks, Kevin. This is Chris. I'm going to turn that over to Tony, who's basically in the midst of filling up our tech pipeline right now, and he can give you an update on where we stand and maybe a little bit better sense of sort of the time line.

Thanks, Chris. Kevin, thank you for the question. I think as we communicated at the last earnings call, we've made significant inroads in terms of bringing Matchpoint to market. One of the challenges that we had previously was really getting Matchpoint in front of the decision-makers, the champions at the studios. With the recent hiring and announcement of Michele Edelman and the sales team that we've built around that, I'm confident that we now have the right sales team to really grow this business out rapidly. The traction and the robust response, positive response we've received from the studios has been tremendous. I would say that over the last quarter, our pipeline has easily more than tripled in terms of potential deals, some of these deals, obviously, the larger studios are going to take a little longer to close. The deal cycles are longer. But the revenue potential is far exceeds the smaller deals that we've currently announced. We will continue to do small deals because the deal cycles are smaller. So that's the meat and potatoes of the business. But our goal really is to continue to target larger big whales that we think will drive meaningful revenue to the business. We're pretty bullish. I would say that we're also making some traction with cineSearch. We're in a process of entering a pilot with a major TV OEM, one of the top 5 global TV manufacturers. So once again, I think as we've said before, Matchpoint is really the sphere that gets us in front of the big clients, Matchpoint Dispatch. And then from there, we upsell the other services and products that we've developed. The product portfolio that we have is bar none, far superior to anything any of our competitors are out there pitching. We're seeing movement in the industry in terms of competitors to Matchpoint. We're seeing some other competitors fall out of the business, go under, be sold. So it really has opened up tremendous opportunity for us. So we feel very bullish on where we stand on the technology sales side.

Great. And then could you go into a little bit more detail on the strategy to drive strong revenue contributions from podcast?

Erick, do you want to take that?

Sure. So I think the first phase of the podcast business was building up a scale audience, which we've done just given the base of the podcast we have. I think the second phase of this was bringing in the sales capabilities to effectively shift from programmatic and third-party sales deals, which have a high hit to gross margin under those business models. So we brought in a dedicated team of sellers. We're fully staffed up now. And we've been -- these sellers have been -- the first part of -- they've been around less than a quarter. So obviously, getting them going around to their base of contacts, we brought in a team that's extremely experienced in podcast monetization coming from SiriusXM. And so they're making great progress. We've already seen significant low to mid-6-figure deals coming in under this team. So we think -- combining this with the bigger push we're making on C360, we think the combined mix of direct podcast sellers plus the rest of our team selling CTV, podcast and other parts of our ecosystem is really a good one-two punch. And so that's really the game plan over the next few quarters. It takes a new sales team about a quarter or 2 to really get up to their full potential, but we're already seeing them. So I have really strong belief that they're going to be ready for the back half of the year, which is the prime selling period.

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 again for joining us today. And please feel free to reach out to Julie Milstead with any additional questions you might have. We look forward to speaking with you all again on our next quarterly call. Thank you.

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