CuriosityStream (CURI) Q3 2026 Earnings Call Transcript

Motley Fool Transcribing, The Motley FoolThu, November 12, 2026 at 2:03 AM UTC

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Wed, Nov 11, 2026

CALL PARTICIPANTS -

Senior Vice President of Operations - Vanessa Gillen

Chief Executive Officer - Clinton Larry Stinchcomb

Chief Financial Officer - Sean Piche

TAKEAWAYS -

Revenue -- $20.7 million, growing 13% year over year due to increased demand for content and data assets.

Adjusted EBITDA -- $5 million, a 67% increase year over year reflecting improved operating leverage and cost discipline.

Licensing Revenue -- $11.7 million, up 35% year over year as artificial intelligence-related opportunities expanded.

Gross Margin -- 49%, down from 59% in the prior year period reflecting revenue sharing on AI licensing agreements.

Operating Cash Flow -- $4.5 million, supported by the timing of payments and improved profitability.

Full-year Revenue Guidance -- $79 million to $82 million, narrowed from the previous range based on results through the first nine months.

Full-year Adjusted EBITDA Guidance -- $20 million to $22 million, raised from the previous range due to improved expense management.

Marketing and Administrative Expenses -- $8.8 million decline, representing a 58% reduction year over year through more efficient spending.

Annualized Expense Structure -- Below $40 million, aimed at supporting operations and dividends using subscription business revenue.

Reduction in Force -- $600,000 one-time charge, recorded as part of a commitment to optimizing the cost structure.

Annualized Savings -- $1.2 million to $1.5 million, anticipated from the recent headcount reductions.

Content Library -- 3.4 million hours, including raw footage and scripted entertainment used for training AI models.

Nine-month Adjusted EBITDA -- $17.1 million, compared to $7.1 million in the same period of 2025.

Advertising and Marketing Spend -- $1.9 million lower year over year as the company focused acquisition on efficient channels.

G&A Costs -- $800,000 lower year over year, driven by reductions in professional fees and compensation.

Non-cash Gain -- $900,000, stemming from the remeasurement of the interest in the Spiegel venture.

Second-half Expense Goal -- 20% reduction compared to the first half, targeting marketing and administrative costs.

Net Income -- $4.8 million, improving by $8.6 million from the prior year loss.

Non-GAAP EPS -- $0.08 per diluted share, representing a $0.14 increase from the prior year loss of $0.06.

Subscription Profitability -- Improved significantly despite a slight revenue decline, reflecting disciplined customer acquisition and retention.

Revenue Sharing -- 50% or more of AI licensing deals, occurring when partner content is utilized in the transaction.

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RISKS -

Stinchcomb stated that "quarterly results will not always follow a straight line," particularly in licensing where the size and timing of individual transactions can affect reported performance.

Piche warned that "the margins on our AI licensing will look different from what you might expect" because revenue sharing with content partners can represent 50% or more of a given deal.

CuriosityStream Inc. (NASDAQ:CURI) reported its seventh consecutive quarter of positive adjusted EBITDA, driven by expansion in licensing revenue and sustained cost reduction. Management stated that licensing agreements with artificial intelligence developers now comprise over half of the company’s total top-line revenue. The company reduced its headcount and adopted productivity tools to lower its annualized expense structure below $40 million, with the objective of funding the dividend entirely from subscription revenue. Strategic initiatives include expanding the scripted content library and leveraging automated translation to reach international markets in up to 80 languages.

CEO Stinchcomb stated that the company is transitioning to an expense structure where the cost to operate and pay the annual dividend is "funded virtually entirely from our subscription business."

Management reported that nearly all cash licensing revenue in the third quarter was generated directly from AI developers, with Stinchcomb noting that the training market could expand from 20 companies to 5,000 by 2029.

The company has expanded its content offerings for AI training to include proprietary software code and development records, which are in demand for model training beyond traditional streaming.

Management noted that AI-enabled translation tools will allow the company to expand from 13 languages to 80 languages, potentially accelerating international growth.

The company acquired the remaining interest in the Spiegel venture, which covers German-speaking Europe, the company's top non-English speaking territory.

CEO Stinchcomb identified companies like Starlink and YouTube Premium as examples of potential future bundling partners that control millions of subscribers.

INDUSTRY GLOSSARY -

SVoD: Subscription Video on-Demand.

LLM: Large Language Model.

Linear Offerings: Traditional television services where content is delivered on a fixed schedule.

Barter Agreements: Contracts where companies exchange content rights for programming or services rather than cash.

Tier 1 LLMs: The most advanced and widely used large language models developed by major technology companies.

Full Conference Call Transcript

Operator: Good afternoon. My name is Shamali, and I will be your conference operator today. I would like to welcome everyone to the Curiosity Stream Third Quarter 26 Earnings Conference Call. Please note that today's call is being recorded. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. And if you would like to ask a question, you put. You may press *1 on your telephone keypad. I will now turn the call over to Vanessa Gillen, Curiosity Stream's senior vice president of operations. You may begin your conference.

Vanessa Gillen: Thank you, and welcome to Curiosity Stream's discussion of its third quarter 26 financial results. Leading the discussion today are Clinton Larry Stinchcomb, CuriosityStream's Chief Executive Officer and Sean Piche, Curiosity Stream's Chief Financial Officer. Following management's prepared remarks, we will take questions from the analyst community. But first, I will 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 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 September 30, 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 will turn the call over to Clinton.

Clinton Larry Stinchcomb: Thank you, Vanessa. Q3 was a strong quarter for Curiosity. We are reporting revenue of $21 million up from $18.4 million a year ago. Net income increased by $8.6 million to $4.8 million Adjusted EBITDA grew 67% to $5 million Licensing revenue increased 35% to $11.7 million And while subscription revenue declined slightly, the profitability of our subscription business improved significantly. Earnings per share increased $0.14 from a loss of $0.06 to a profit of $0.08 roughly equivalent to our quarterly dividend pay. The value and durability of the extensive intellectual property we control millions of hours and terabytes of premium video and audio and operational data, continues to drive momentum.

We are pleased with our progress, but our focus remains squarely on execution and on our longer term objective. Building curiosity into a company that informs, inspires and entertains and in so doing, generates $100 million or more in reliable recurring, and increasingly profitable and predictable annualized revenue. Our progress reflects the strength of the business model built around valuable intellectual property, proven revenue streams, and disciplined capital allocation. What is particularly encouraging about our performance is the operating leverage we are beginning to demonstrate. Revenue grew 13% this quarter, while adjusted EBITDA increased 67%. That relationship is important.

It illustrates the potential for our business to generate meaningful earnings growth as we expand revenue without a corresponding increase in our cost structure. In reimagining how we work internally, and with what and whom we work externally and through adopting and embracing AI productivity tools, we have created an annualized expense structure going forward for our cost to operate the business, and to pay our annual dividend are below $40 million annually. And that, as such, can be funded virtually entirely from our subscription business. We have spent years assembling and developing a substantial library of premium content establishing distribution relationships, building the capabilities to monetize our assets across different platforms, markets and customers.

Today, those investments are creating opportunities that extend well beyond traditional streaming. Nowhere is this more apparent than in licensing. The continued investment in superintelligence is creating new markets for high quality, rights controlled data. Nearly all of our cash licensing revenue in Q3 was generated directly from AI developers. Curiosity is well positioned to continue to serve these partners and markets through our premium video and audio library and our expanding portfolio of operational data including proprietary software code and associated development records. We believe the value of these assets extends beyond any single license transaction, As AI models become more capable, the demand differentiated, legally licensable, and high quality data is likely to evolve.

Our strategy is to position Curiosity to address that demand across multiple data types, customers, and use cases. Importantly, we are focused not simply on generating licensing revenue, but on building durable commercial relationships that create opportunities for recurring revenue, the exploitation of additional rights, and expanded use of our intellectual property over time. Our subscription business remains an equally important component of our strategy, We are managing this business with a clear emphasis on profitability. Retention and the lifetime value of our subscribers. Our objective is not growth at any cost. It is to build a durable, profitable subscriber base through compelling content, effective distribution partnerships, and disciplined customer acquisition.

The significant improvement in subscription profitability demonstrates the value of that approach. We continue to believe there are attractive opportunities to expand our reach our subscriber relationships. But we will pursue these opportunities with the same financial discipline that is contributing to our current results. Our intellectual property can be monetized repeatedly. Across multiple customers and distribution channels. As we continue to scale, an increasing portion of incremental revenue can contribute to earnings and cash flow. That is fundamental to how we think about building long term shareholder value. We also recognize that quarterly results will not always follow a straight line. Particularly in licensing. With the timing and size of individual transactions can affect reported performance.

Our responsibility is to continue expanding our pipeline of opportunities improving revenue visibility building a more predictable business over time. Much of our success is always going to be the direct or indirect results of talented, smart, and amazing people who are motivated to accomplish an important mission doing great work. On that note, I want to welcome Sean Piche, who joined Curiosity in September as our new CFO. Sean brings an exceptional combination of financial, operational, and transactional experience accumulated over 30 years of working with some of the world's leading media and technology companies. Sean is joining Curiosity at an important point in our evolution.

We have established a profitable business, demonstrated the growing value of our intellectual property, and created opportunities to scale our revenue and earnings. His expertise in capital allocation, strategic transactions and financial management will be invaluable as we pursue these opportunities. I am particularly pleased to have a CFO who thinks not only about financial performance, but about how to create and maximize long term shareholder value. That is our shared objective, and I believe Sean will make an important contribution to achieving. Looking ahead, our priorities are straightforward. Grow and diversify licensing revenue, sustain and improve subscription profitability, expand the value of intellectual property, and maintain rigorous discipline over cost and capital allocation.

We believe Curiosity is a differentiated set of assets business model with increasingly attractive economics, and significant opportunities ahead. Our third quarter results provide further evidence that our strategy is working. We intend to build on that progress, remain focused on the work that creates the greatest value, and continue translating the strength of our intellectual property into revenue, earnings, cash flow and returns for our shareholders. Our objective is not simply to build a larger curiosity, it is to build a more valuable curiosity, 1 with stronger earnings, more predictable revenue, increasing cash flow and a growing capacity to return capital to shareholders over to Sean.

Sean Piche: Thank you, Clinton, and good afternoon, everyone. This is my first earnings call since joining Curiosity Stream as Chief Financial Officer in September. Look forward to getting to know many of you in the months ahead. Like to focus my remarks on 3 things. Our top line revenue, the growth of our licensing business, including cash licensing and the progress we are making in reducing expenses and running the company more efficient. I will then turn to cash flow, including how we are investing to grow the business while generating the cash to support a sustainable dividend before closing with our outlook.

We generated third quarter revenue of $20.7 million an increase of 13% compared to $18.4 million in the prior year period. Licensing revenue was $11.7 million up 35% year-over-year and accounted for 57% of our revenue this quarter. Over $7 billion came from cash licensing agreements, led by new AI licensing deals entered into during the quarter. The balance came from barter arrangements, in which we exchanged titles from our library to acquire new programming for our subscription service. That growth reflects continued demand for our content and data assets across both traditional content licensing and AI related opportunities.

Gross profit was $10.1 million representing a gross margin of 49%, compared to $10.8 million and a gross margin of 59% in the third quarter last year. We view a gross margin approaching 50% as a strong result. Reflecting the shift in our revenue mix toward AI licensing. The change from last year is driven by our revenue mix. Including revenue sharing with our content partners on AI licensing, and amortization of programming acquired through Barter, and we believe our licensing model continues to offer attractive opportunities to monetize our library and seed assets. We continue to make meaningful progress on our cost structure.

Advertising and marketing and general and administrative expenses declined by $8.8 million or 58%, compared to the third quarter of 25. Excluding stock based compensation and restructuring costs, these expenses declined by $3 million or 36%, reflecting more efficient marketing spend and our focus on aligning our expense base with the business. Subsequent to quarter end, we completed a reduction in force as part of our broader commitment to optimizing our cost structure. As a result, we expect to record a 1 time charge of approximately $600,000 in the quarter. Primarily related to severance and associated employee benefit costs.

We expect these actions to result in annualized savings of approximately $1.2 million to $1.5 million Together with the other cost actions we have taken this year, and greater use of productivity tools across the organization, we expect advertising and marketing, and general and administrative expenses excluding stock based comp, and restructuring costs, to be approximately 20% lower in the second half of the year than in the first half. While these decisions are never easy, we believe they are important steps in maintaining a disciplined cost structure and supporting our longer term goal of building a sustainable, cash generative business.

GAAP net income was $4.8 million an improvement of $8.6 million compared to a net loss of $3.7 million in the prior year quarter. Net income includes $900,000 of non-cash gains related to our acquisition of the remaining interest in the Stifel venture primarily from the remeasurement of our previously held interest. The third quarter was our seventh consecutive quarter of positive adjusted EBITDA, which increased 67% to $5 million and our adjusted EBITDA margin expanded to 24% from 16% a year ago. Through the first 9 months of the year, adjusted EBITDA totaled $17.1 million at a margin of 29%, compared with $7.1 million in the same period of 2025.

The improvement in adjusted EBITDA was driven by our continued cost Advertising and marketing expenses were $1.9 million lower as we continue to focus our subscriber acquisition spending on the most efficient channels. And general and administrative expenses, excluding stock based compensation and other items, excluded from adjusted EBITDA, were $800,000 lower. Reflecting reduced professional fees, and compensation costs. These savings more than offset the effect of our revenue mix on gross profit. At the same time, our licensing business, which accounted for 57% of our revenue this can grow with little incremental fixed costs so that it becomes a larger share of the business, more of each additional dollar of revenue, goes through to earnings.

As a result, we generated operating income of $3.7 million, compared with an operating loss of $4.5 million a year ago, and net income of $4.8 million, or $0.08 per diluted share. I would also like to spend a moment on the economics of our AI licensing business. Because they differ from those of our traditional content licensing. The agreements we are signing with companies developing AI technologies include large, multi million dollar deals. They draw on our library, including raw footage and other assets, and they also draw on content from our partners.

Where partner content is included, we share a portion of the revenue with those partners, and that revenue share can represent 50% or more of a given deal. These agreements generate attractive returns with little incremental fixed cost, and our ability to aggregate and deliver content at that scale is an important reason AI developers choose to work with us. It does mean, however, that the margins on our AI licensing will look different from what you might expect if that revenue came entirely from our own library, and you can see that reflected in our cost of revenues this quarter. Turning to cash flow. Operating activities generated $4.5 million of cash in the third quarter.

Bringing operating cash flow for the first 9 months of 2026 to $1.5 million In the first half of the year, operating cash flow was negative despite strong adjusted EBITDA. And the main reason was timing. The $10 million licensing agreement we entered into in the second quarter which we recognized as $8.5 million of revenue, is payable on 4 annual installments of $2.5 million beginning in mid-27. So the revenue and EBITDA recognized in the second quarter while the cash will come in over the next several years. We are focused on investing to grow the business while generating the cash support a sustainable dividend.

As we have stated, we need to fund the entire dividend in 2027 from free cash flow. And we view the third quarter as a step in that direction. Our earnings of $0.08 per share were in line with our quarterly dividend. During the quarter, we paid our regular quarterly dividend of $0.08 per share, or approximately $5 million, and we ended the quarter with $10 million in cash and investments no debt, and an undrawn $10 million revolving credit facility. Turning to our outlook.

Based on our results through the first 9 months and our current visibility, we are raising our full year 2026 guidance of revenue between $77 million and $82 million to $79 million and $82 million and adjusted EBITDA from $18 million and $22 million to $20 million to $22 million To sum up the quarter, revenue grew 13%, licensing grew 35%, and our cost discipline drove a 67% increase in adjusted EBITDA to $5 million Our cost actions position us to reduce advertising and marketing general and administrative expenses by approximately 20% in the second half. Supporting our focus on investing to grow the business while generating the cash to support a sustainable dividend.

With that, I will turn the call back to the operator for questions.

Operator: Thank you. We will now be conducting a question and answer session. A confirmation tone will indicate your line is in the question queue. You may press *2 to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. Our first question comes from the line of Jason Kreyer with Craig Hallum. Please proceed with your question.

Jason Kreyer: Thank you, guys. Welcome to the call, Sean. Thank you. So really nice quarter. On the license revenue side. You know, Sean or. Sorry. Clinton, you had mentioned that the vast majority of that came from AI license deals. Wondering if you can unpack that a little bit, you know, where those sources are. Like, a year ago, we had talked about a little bit more contribution from the tier 1 LLMs. And in the last couple of quarters, we talked about contribution from tier twos and kind of some off the shelf packaging. So just wondering if you can kind of square away where demand came from.

Clinton Larry Stinchcomb: Yeah, no, I appreciate that question, and Jason, we are glad to have Sean as well. So thank you for that. In this quarter, the AI licensing revenue was primarily from the tier 1 guys. I mean, that is just still where the kinda overwhelming majority of spending is happening. You know, we fully anticipate that the roster will expand, but that is where it was for-- that is where it was for Q3 for sure. If I can as far as the concentration is concerned, I think, you know, that trend will continue for some time.

But, you know, our point of view, and so point of view from talking to a lot of people every single day, is that the overall training market is going way, way up before it goes down. And, you know, we believe, like many others, that most enterprise companies will have their own models by 2028-2029. And all of these enterprise companies will need data for training their models just not as much as the Frontier Labs. So it. it is not inconceivable that you could have a market for training data that goes from, like, 20 companies today to 5000.

Jason Kreyer: Can you talk about the appetite for those off the shelf solutions that we talked a little bit more about last quarter?

Clinton Larry Stinchcomb: Yeah. I think in this. In the most recent quarter, there is a heavy appetite for some of the most scarce content. I think the most scarce content, at least on the video side, is in the scripted space. And you know, just in an effort to meet people where they are, we have a wide variety of content. I do not know the people necessarily associate CuriosityStream. Certainly on the subscription side as being a company that controls a lot of scripted entertainment, but we control a lot of scripted entertainment. that is in high demand. A number of reasons. Obviously, the. You know, AI is good at a lot of things today.

You know, it is still kind of early stages as it relates to being able to, I think, tell stories and tell compelling stories. So you know, among other things, scripted entertainment is an in demand I think, to help those efforts.

Jason Kreyer: And then last 1 for me. I just wanted to ask about, you know, the appetite for these barter deals. Why these barter deals, make sense for curiosity, and kind of what we should anticipate going forward between the mix of these barter arrangements versus kind of cash generating revenue deals? Thanks, man.

Clinton Larry Stinchcomb: Yeah. No, a great question. I really appreciate that. I think you know, 1 area among others where, you know, Sean has already been really helpful is in really-- you know, just continuing to focus on our on our cost base. And as I mentioned in my remarks, we really believe today that based on a lot of the work that we have done, you know, with whom we are working with now externally, with whom we are working with internally, productivity tools at our disposal, we have created an annualized expense structure going forward where our cost to operate the business and to pay our annual dividend are below $40 million annually.

And as such, can be funded virtually entirely from our subscription business. And 1 way to ensure that we do that is through sort of thoughtful, barter consideration that is fulfilling various content needs that we have through means other than pure cash spending.

Jason Kreyer: Thanks. Thank you.

Operator: Thank you, Jason. Patrick. Patrick, your line is now live.

Patrick Sholl: Thanks for taking the question. Just wanted to follow-up on something from the prepared remarks on the licensing revenue You had mentioned that some of the licensing revenue would be paid in installments of 2027. Was just kinda curious if there is been any, like, if shift over, I guess, the terms over when those receivables come in on the AI licensing side, and if there is any sort of mismatch between when the LLMs pay you versus when you have revenue share to your other partners that you are aggregating the rights on. Thank you.

Clinton Larry Stinchcomb: Oh, thanks for that question, Patrick. The deal that Sean was referring to was a traditional licensing deal that we did in the second quarter. And in light of the, you know, scope and scale of that agreement and we agreed to a payment schedule that went out, over a period of time. That we would not agree to and that we have never agreed to as it relates to our AI licensing agreements. Typically, with our AI licensing agreements, we are getting paid everything. Within, you know, call it 4 to 6 months. And then we have a period of time where we can pay out our rev share partners as well.

Sean Piche: Yeah. I would just add to that. Okay. Really like about that business is that it is it is no investment in working capital for us. So we can grow the AI licensing business, and the way our deals are structured with our customers and then our partners is such that we do not need to make an investment in working capital to grow that business. So I like it from that perspective. it is cash flow positive for us, and working capital positive. So hopefully, that helps.

Patrick Sholl: Yes. Yeah. Thank you. Thank you. Sorry. I missed the comments about the traditional licensing. Other question I had on the subscription business. You have I guess, could you outline, like, any additional market launches or channel store launches that you kind of view as opportunities to help kind of maintain that business so that you would be able to largely fund the operating expense levels out of out of that business? Or I guess, you know, maybe just sort of where you kind of see, like, the that business's in its, I guess, maturity state. Thank you.

Clinton Larry Stinchcomb: Yes. No, great question, Patrick. Appreciate that. Yeah. Our subscription business is, you know, absolutely critical to our strategy. I mean, and we are managing the business with a clear emphasis on profitability and retention. Lifetime value, and essentially sort of leveraging every third party distribution opportunity that is available to us to continue to grow our overall subscription revenue. So in the last quarter, we had. We launched with. In a couple of places I think most significantly with Amazon in Canada. With some launches in Latin America. Beauty is we have a global service. So as our channel store partners, as they roll out services, throughout the world, will roll out with them.

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And we have had a we have had a steady stream of that this year. We anticipate a more significant stream of that next year as they move into more international markets. And, you know, with the-- we are in 13 languages today, but with the you know, really kinda terrific advancements that are being made in translation in large part enabled by AI. We see next year as kind of an inflection point as it relates to languaging our content far beyond the number of languages that we have today. But done in a you know, really compelling way. Based on just a lot of the advancements that we have seen.

Patrick Sholl: Okay. Thank you. Thank you.

Operator: Our next question comes from the line of Laura Martin with Needham and Company. Please proceed with your question.

Laura Martin: Hi there. My 1 for you is how many hours are you up to total that you are licensing at LLMs? I know you used to report it every quarter. And then secondly, 1 of the things staying on LLMs. 1 of the things you said, Clinton, is that over time, you were hoping, it sounds like if it is true, the big guys will come back and license for different rights and different things. So can you give us an update on that? And then do you have any churn? You either have content churning out or you are no longer representing them or LLM who have stopped licensing from you. Those are my 3 questions for you.

And then, Sean, welcome. I would like you to explain what is happening to the cash. So I am looking at the balance sheet, and your cash in the last 9 months between cash and your short term investment is down $20 million And you just told us that the working capital for AI licensing is positive because you get it for 6 or 7 months, and then you have to pay out your rev shares after that. So I do not understand where is the cash going in this on the balance sheet, please.

Sean Piche: Good question. I will let Clinton go ahead.

Clinton Larry Stinchcomb: Well, let me. I think that is a really important question. So I am glad that you asked that, Laura. I think if you look at where it went sequentially from Q2 to Q3, it is roughly flat. In the first half of the year, we had some significant expenses that we are not having in the second half of the year and do not anticipate having going forward. And a lot of that was around, timing. We also. You know, we bought back stock. We paid a larger bonus than we paid in the past and that will you know, that we would pay in the future.

And obviously, we paid the dividend as-- we increased the dividend as well. So do you wanna add anything to that, Sean?

Sean Piche: Yeah. No, I would just say, mean, and it is a good observation and a good point in that, I mean, historically, right, a lot of the dividend was being funded from excess cash on the balance sheet, I would say. And we did have a couple of transactions. Clinton mentioned the 1 in Q2 where significant amount of revenue related to this transaction we did, but we are going to see the cash flow in over time. But there is a timing aspect of things.

And when we look at the business now, what we are focused on is and I think this quarter is a great proxy for it, EBITDA for us is a really good proxy for our cash generation for the business. And it is relatively in line with the dividend that we are paying. And you could see that, you know, coming through this quarter, And you know, we feel good that, you know, going forward, we will have the cash from the, you know, from the business to sustain the dividend from operating cash flow as opposed to excess cash flow on the balance sheet. And these deals I am talking about yeah, that in the.

On the AI side, the way they are structured, and the reason that there is no investment in working capital is because, you know, the way they are structured is we pay our partners after we get paid. And, you know, these are large deals. The timing of which when they hit, could have a significant impact on revenue in the quarter. But not necessarily cash. So if we have a few big deals that hit like they did, towards the end of the quarter, we are going to see the revenue. But not necessarily the cash for until the subsequent quarter.

So as it becomes a more consistent revenue mix, with that business, I think you will see the cash flow start to even out over time.

Clinton Larry Stinchcomb: But thank you for asking that, Laura. I wanna make sure that everybody's clear that we do not have any concerns about our cash. The first half of the year was different than, I think, the profile of the company you will see going forward. Particularly because we have. On the 1 large deal, we gave them payment schedule that is atypical to what we usually do. It relates to our volume of content, we continue to add to our overall volume. We are over probably 3.4 million hours when you consider everything that we control rights to today. At the same time, we are being a little bit more selective about what we bring in.

We have done a number of bespoke deals. You know, I think over the last 6 months. So we tend to know kind of what is in what is in highest demand there. So we can meet people's volume requirements at the same time. We wanna be able to meet you know, specific bespoke, requirements. And also as, things like code and other operational data are becoming more important to, LLMs. We are bringing in that type of data as well. As it relates to. Thank you for asking about the. As it thank you for asking about the rights. It does seem as if, you know, there is an.

A sort of a new grant of right that emerges, you know, every couple of weeks in the world that we are in today. You know? A lot of lawyers really enjoy that. I know, our general counsel, Becky, does. And so as it relates to, you know, are we are we monetizing now? Additional sort of stated rights that we did not in the past? The answer is yes. And I think that is you know, I think going forward, like, we will even we will even see new grants of rights that emerge that do not necessarily have a name today. And so that is why it is key for us that you know? And we look at.

We consider that to be really good for Curie because we have we have really solid sort of providence around all of the all the IP that we control and license. So does that get to the answer to your question, Laura?

Laura Martin: Sure. Yeah. No. Super helpful. Appreciate the color and the granularity. Super helpful.

Clinton Larry Stinchcomb: You got it.

Laura Martin: Thank you. Thank you.

Operator: As a reminder, if anyone has any questions, you may press *1 on your telephone keypad to join the queue. Our next question comes from the line of Frank DiLorenzo with Singular Research. Please proceed with your question.

Frank DiLorenzo: Thank you. And yeah, it is a couple good quarters in a row now. I want to go back to the discussion on AI and offerings. The question is if, you there is a lot of talk about the different types of models out there, open models. Internal models, etcetera. And do you feel that irrespective of kind of where that trend goes moving forward that you are offerings are model agnostic and the demand will be there. And kind of a follow on to that, there is been a lot of noise around data centers and the build out. And I was wondering if you think that would have any impact on the demand on your side at all.

Thank you.

Clinton Larry Stinchcomb: I appreciate that question, Frank. As it relates to us, I would characterize all of that conversation as noise. We do not see the we do not see the demand for data going down. Not in any way. Now what labs are looking for, I think, continues to, expand. And you know, as it relates to video and audio and certain, you know, code and other proprietary data, we feel like we have a an expansive collection and a sufficient collection to meet the needs that are out there today. We are not gonna meet every need. But we do not need to meet every need to have a great business in that space.

And so we are again, you know, it is it is still a little bit of Wild West, which we are, you know, certainly not afraid of and embrace. But what that creates is you know, you will you will occasionally get some bad actors. And as bad actors emerge, that do not. I think only makes the labs and others run to the good actors. And so we are already seeing where you know, not dissimilar to sort of the entertainment business, you know, the last 30, 40 years where the biggest companies will, you know, work with a finite number of super producers. So seeing that same dynamic in the in the AI licensing as well.

And, again, you know, we have a variety of intellectual property that we can license for a variety of use cases. Know, across a variety of platforms. As you mentioned, you know, we have had we have had now 7 quarters in a row of positive adjusted EBITDA. You know, we are on track to double-- to generate, you know, double digit top line growth this year, do over $20 million in adjusted EBITDA. In 2026. So we feel good about our hand today. And our ability to meet the demand as it evolves.

Frank DiLorenzo: Okay. Thanks. Also, can you give us a little update on the bundling side of the business? Do you see any opportunity there? You have talking about that in the past. There might be some opportunity kind of early on but where you see that going in the future? And just 1 follow on to that, not really directly, but just maybe a expound upon a little more of the international strategy and what you are looking toward there. Are you looking to expand significantly? Or kind of at the pace you have been doing recently? Thanks.

Clinton Larry Stinchcomb: Yeah. that is a great question. And, you know, as it relates to the subscription business, I just emphasize from the outset that you know, that is a business that if you are not careful, you can spend hundreds of millions of dollars on it. Around acquisition and marketing. And that is not a business that we wanna be in. So yes, we love bundling. The nice thing about being in good solid bundled relationships is that you know, while the. While you are, you know, receiving a wholesale rate, the revenue is recurring and it is multiyear. And, you know, we will continue to work with the traditional, you know, bundled providers that are obvious to everybody.

But, you know, at the same time, we do believe that there are an emerging group of companies who control you know, a large number of subscribers you know, with whom we will look to have bundled agreements if we do not. And I am not saying that. I will I will mention a few companies. And I am not saying that we have agreements with these companies. But just as an example of what I am talking about, you know, Starlink as an example. What? 13 million customers today? They are probably going to 50 to 100 over the next several years. So know, you think they will have a video package.

I would say it is know, it is it is probably not unlikely. You know, do you think, you know, like a YouTube premium with 125 million? Will have something like that? Those are just a couple of examples of companies who have, you know, amassed, you know, millions and millions of subscribers and sort of have the attributes of a company that not necessarily a traditional bundler of media, but, you know, it is not hard to imagine how they might be going forward.

So you know, as it relates to the subscription side of the business, we will continue to spend some thoughtfully as it relates to acquiring customers on the direct side, and then we are we are a big advocate of bundling it makes sense to bundle.

Frank DiLorenzo: Okay. Thanks. And maybe just a quick point on the international and related to that, your prime relationship if there is further upside there. For expansion with the with Prime partnerships. Thanks.

Clinton Larry Stinchcomb: And that would be a-- Yeah. Well, that is job. So, you know, we. We now control, you know, what was a joint venture that we had with this with, their Spiegel. Throughout, German speaking Europe. Germany is the top non English speaking language for Curiosity Stream. And so, you know, we see additional upside in that territory. And then as it relates to other international markets, you know, as our channel store partners roll out, I think, you know, as they roll out in more international markets, they will roll out Curiosity Stream. At a at a similar pace. You know, in light of some of the advancements, just like, you know, payment providers like Stripe.

Like, it is real easy now to a lot easier than it was to go into foreign currencies. And so I think that will be something that ideally enables and accelerates our growth internationally and then as I mentioned before, as we as translation cost you know, come down significantly, you know, largely enabled by AI. And as they get a lot better, I think, yeah, that. Well, we know that is only a good trend for us. We can go from we can go from 13 languages to 80. You know, in a. Essentially, you know, over a month or 2 period. I think they will have a positive impact on our subscription business. You for that question, Frank.

Frank DiLorenzo: Okay. Thanks. May. Maybe just. Could you touch on the prime relationship you have in any further thoughts on that? Going forward?

Clinton Larry Stinchcomb: Sure. I think, you know, we have a good relationship with Prime Video. If you look out over the marketplace, there are a lot of, subscription services. That. Where 80, 85% of their customers come from Prime Video. Sean, we have a good relationship with Prime Video, but nothing like that, for us. I mean, it is a you know, it is a it is it is a fraction of our overall business. They are a great partner, though. They are really good at acquiring subscribers and you know, they are only in a handful of international markets today with their subscription services. And we are in, at most, if not all of them.

And if we are not in a particular place, we are usually on the we are usually in the queue. To be rolled out when they do, roll out additional services. So great partner. Brett relationship, and we do not see that changing anytime soon.

Frank DiLorenzo: Thanks. Thank you.

Operator: And this concludes, we have reached the end of the question and session. And this also concludes today's conference, and you may disconnect your line at this time. We thank you for your participation. Alright, Joe.

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