What Cineverse (CNVS) Said on Its Q2 Earnings Call

Key Points

• Fiscal Q2 revenue rose 110% to $26 million, while net income reached $3.2 million and adjusted EBITDA was $1.7 million, marking a third consecutive quarter of positive, growing adjusted EBITDA. Acquisitions drove much of the growth, though direct operating margin declined to 38% from 58% a year earlier.
• Cineverse reaffirmed fiscal 2027 guidance of $115 million to $120 million in revenue and $10 million to $20 million in adjusted EBITDA. It ended September with $3.6 million in cash and negative working capital of $9.7 million, while management cited cost savings and financing arrangements to support operations.
• The company secured 25-year North American rights to a new Jason Universe film for a planned wide theatrical release and raised subscription prices by an average of 25% to 40%. Subscribers were up about 2% to 1.44 million, and streaming minutes increased 8% year over year.

Cineverse NASDAQ: CNVS reported a 110% increase in revenue for its fiscal second quarter, as acquisitions expanded its advertising technology and media services businesses. The company also reaffirmed its full-year outlook and announced distribution rights to a new Jason Universe film.

Revenue for the quarter ended Sept. 30, 2026, rose to $26 million from $12.4 million a year earlier. Net income attributable to common stockholders was $3.2 million, or $0.11 per share, an improvement of $8.8 million from the prior-year quarter.

Adjusted earnings before interest, taxes, depreciation and amortization, or adjusted EBITDA, were $1.7 million, up $5.4 million from a year earlier. Chairman and CEO Chris McGurk said it was the company’s third consecutive quarter of positive and growing adjusted EBITDA.

McGurk attributed much of the revenue growth to Giant Worldwide and IndiCue, which Cineverse acquired near the end of its previous fiscal year. He said the technology business now accounts for the majority of company revenue and growth.

Acquisitions Lift Revenue as Margins Shift

Chief Financial Officer Sean McCabe said direct operating margin fell to 38% from 58% a year earlier, a decline the company anticipated after the acquisitions. The margin improved by 3 percentage points from the first quarter, however, and McCabe said he expects further improvement in the second half as seasonal and theatrical revenue increases and cost initiatives advance.

McCabe said a $7 million nonrecurring decrease in the valuation of acquisition-related liabilities contributed to the year-over-year improvement in net income. Higher depreciation, amortization and interest costs partially offset that benefit.

Selling, general and administrative expenses were $10.1 million. President and Chief Strategy Officer Erick Opeka said that was $1.3 million below the year-earlier quarter and roughly $1.5 million below the fiscal first quarter.

The company has implemented more than $9 million in annualized cost savings and expects to exit the fiscal year at a $14 million run rate, Opeka said. Much of the remaining savings depends on the timing of existing technology and other contracts. McGurk said Cineverse is shifting positions from the U.S. to lower-cost locations, including India, Poland and Moldova, while increasing automation.

Full-Year Outlook and Liquidity

Cineverse reaffirmed fiscal 2027 guidance of $115 million to $120 million in revenue and $10 million to $20 million in adjusted EBITDA. McGurk said the company generated more than $10 million in September revenue and preliminarily estimated approximately $15 million for October, which falls in the fiscal third quarter.

The company ended September with $3.6 million in cash and negative working capital of $9.7 million. McCabe said the company has the right to settle $8 million of deferred consideration and earn-out liabilities in equity. He added that Cineverse was incurring marketing and content costs ahead of revenue from its second-half theatrical releases.

McCabe said Cineverse secured a $3 million loan from BondIt for Pan’s Labyrinth to better align the timing of theatrical commitments with related revenue. He also said the company had paid more than $4 million of cash-based acquisition liabilities, with $0.4 million remaining due in January.

Jason Film Rights and Streaming Price Increases

Cineverse said it secured 25-year North American rights across all media to the latest feature film in the Jason Universe franchise and plans a wide theatrical release. McGurk said the producers are financing the film and that Cineverse expects to fund its investment in the release internally, without third-party capital. He said the company’s all-in investment would be lower than for Terrifier 3, although the new film’s budget is higher.

Opeka said Cineverse recently raised prices across its subscription services on third-party platforms, with increases averaging 25% to 40%. He expects the resulting subscription revenue increase to outweigh any temporary customer losses.

Asked whether the increases signaled a plan to leave the subscription business, Opeka said Cineverse was not planning an exit. He said some services had been priced at $3 or $4 and had not kept pace with the broader market. The company ended the quarter with 1.44 million subscribers, up about 2%.

Total streaming minutes rose 8% year over year to 4.05 billion, Opeka said, or 36% excluding three channels that wound off during the quarter. He also said a major broadcaster became the first large enterprise customer to run a fully automated workflow on Cineverse’s Matchpoint platform.

About Cineverse (NASDAQ:CNVS)

Cineverse NASDAQ: CNVS is a digital entertainment and streaming technology company that develops, distributes and operates content across streaming, digital, television and physical-media platforms. The company serves audiences through advertising-supported, subscription and transactional models, as well as through licensing and distribution arrangements with content owners and platform partners. Cineverse operates a portfolio of streaming services and entertainment brands focused on areas such as anime, Asian cinema, horror, documentaries and classic film and television.

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