Cineverse Reports Third Quarter Fiscal Year 2026 Results
Rhea-AI Summary
Cineverse (NASDAQ: CNVS) reported Q3 FY2026 revenue of $16.3 million, Adjusted EBITDA of $2.4 million, and Direct Operating Margin of 69%. The company completed two post-quarter acquisitions expected to add ~$53M revenue and ~$10M Adjusted EBITDA for FY2027, and initiated FY2027 guidance of $115–$120M revenue and $10–$20M Adjusted EBITDA.
Quarterly cash was $2.5M with $4.2M available on a credit facility; net working capital was –$1.4M. Company emphasized SG&A reductions and integration of Matchpoint™ technology.
Positive
- Guidance of $115–$120M revenue for FY2027
- Acquisitions adding ~ $53M revenue and ~$10M Adjusted EBITDA
- Direct Operating Margin improved to 69% from 48%
- IndiCue acquisition expected to add ~$38M revenue and ~$7M Adj EBITDA
- Giant acquisition expected to add $15–$17M revenue and $3.5–$4M Adj EBITDA
- Content library valuation indicated at $45M (as of Mar 31, 2025)
Negative
- Q3 revenue declined 60% to $16.3M versus prior-year quarter
- Net loss attributable to common stockholders of $(1.0)M in Q3
- Cash and cash equivalents of only $2.5M at quarter end
- Net working capital deficit of $(1.4)M as of Dec 31, 2025
- SG&A increased 14% to $10.7M due to marketing and transaction costs
Key Figures
Market Reality Check
Peers on Argus
CNVS is up 20.19%, while key peers are mixed: LVO up 6.57%, RDI down 0.93%, MPU down 1.17%, others flat. Moves do not show a sector-wide pattern.
Previous Earnings Reports
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Nov 14 | Q2 FY2026 earnings | Negative | -5.1% | Revenue decline, wider losses and tighter liquidity versus prior year. |
| Aug 14 | Q1 FY2026 earnings | Positive | -13.4% | Revenue and streaming growth but wider net loss from higher SG&A. |
| Jun 27 | FY2025 results | Positive | +14.8% | Strong FY2025 growth, return to net income and cash-rich balance sheet. |
| Feb 13 | Q3 FY2025 earnings | Positive | -6.7% | Terrifier 3-driven revenue and EBITDA strength with solid cash. |
| Nov 14 | Q2 FY2025 earnings | Positive | +23.1% | Revenue growth, margin expansion and positive Adjusted EBITDA. |
Earnings have produced mixed reactions: strong FY2025 results sometimes rallied the stock, while recent FY2026 quarters with weaker trends drew selling. Market reactions often hinge on the balance between growth headlines and profitability/expense trends.
Over the last five earnings events, Cineverse has moved from strong FY2025 growth, driven by Terrifier 3, to a tougher FY2026 with tightening liquidity and higher losses. FY2025 results showed $78.2M revenue and a return to net income, while FY2026 quarters highlighted margin improvements but pressured cash. Today’s Q3 FY2026 release continues that narrative: weaker revenue versus the prior year, higher direct operating margins, and an emphasis on technology-driven, recurring revenue growth and acquisition-led expansion.
Historical Comparison
Over the last five earnings releases, CNVS averaged a 2.54% move. Today’s 20.19% reaction to Q3 FY2026 results is a notable outlier in magnitude.
Earnings have evolved from FY2025 box-office-driven strength to FY2026 quarters focused on cost control, margin improvement and transitioning toward higher-margin, recurring technology and streaming revenues.
Market Pulse Summary
This announcement combines Q3 FY2026 results with a clear pivot toward higher-margin, recurring revenue via IndiCue and Giant. Revenue was $16.3M with a 69% direct operating margin, and Adjusted EBITDA reached $2.4M. Guidance for FY2027 targets $115–$120M revenue and $10–$20M Adjusted EBITDA. Investors may watch integration of the two acquisitions, progress on planned $5.5M SG&A reductions, liquidity, and streaming subscriber growth as key proof points.
Key Terms
adjusted ebitda financial
convertible notes financial
svod technical
AI-generated analysis. Not financial advice.
Total Revenue of
Direct Operating Margin of
Adjusted EBITDA of
Announces Guidance of
Acquisitions (Subsequent Events)
Subsequent to quarter end, the Company completed two acquisitions expected to add approximately
Giant Worldwide Acquisition
Subsequent to quarter end, Cineverse purchased the assets of Giant Worldwide ("Giant"), a global media services provider serving the world's leading
IndiCue, Inc. Acquisition
Subsequent to quarter end, Cineverse acquired IndiCue, Inc. ("IndiCue") for
We are initiating financial guidance for Fiscal Year 2027 that includes the anticipated impact of the Giant and IndiCue transactions. Revenue is expected to be
(1) The Company does not provide a reconciliation of forward-looking Adjusted EBITDA guidance due to the inherent difficulty in forecasting and quantifying adjustments necessary to calculate such non-GAAP measure without unreasonable effort. Material changes to such adjustments, including warrant liability and non-core operating items, could affect future GAAP results. |
Q3 FY 2026 Highlights (all comparisons are to the prior year fiscal quarter ended December 31, 2024, or Q3 FY 2025):
Revenue for the quarter was
Direct Operating Margin was
SG&A expenses increased by
Net loss attributable to common stockholders was
Financial Condition Overview:
- Cash and Cash Equivalents of
$2.5 million $4.2 million $12.5 million $15 million - As of December 31, 2025, net working capital was
$(1.4) million - The Company's content library, comprised of more than 66,000 titles, was valued as of March 31, 2025 with a Valuation Indication of
$45 million $3.2 million - The Company continues to have its previously approved share repurchase program available which will continue to be utilized as appropriate.
Operational Developments During the Quarter:
Streaming audience growth:
- Total streaming viewers increased approximately
10% year-over-year in Q3 FY26 to 149 million, with total minutes streamed up33% to more than 3.4 billion and FAST channel minutes up33% to 3.2 billion. - Expanded international lineup of owned and/or operated streaming fandom channels through LG Channels in
Australia &New Zealand , Rock Bot, and The Roku ChannelUK . - Launched new streaming network, JoySauce, dedicated to 'American Asian' entertainment.
SVOD expansion:
- Led by our flagship Cineverse channel, SVOD subscribers grew approximately
15% year-over-year to 1.55 million.
Technology:
- Announced launch of Matchpoint™ 3.0, an automated AI‑driven media supply chain platform featuring advanced automation, conversational analytics, deeper ad integration, and a fresh new UI/brand identity.
- Announced DEG EnTech Emerging Technology Award win for cineSearch, Powered by Matchpoint™.
- Announced four new customers for Matchpoint™ media supply chain platform: ATPN, The Asylum, Spark, and Waypoint.
- Unveiled new branding, CTV & voice features for cineSearch, Powered by Matchpoint™ ahead of CES.
Motion Picture & Premium Content Releasing:
- Acquired exclusive rights to the award-winning global director Guillermo del Toro's classic fantasy film Pan's Labyrinth — to celebrate the 20th anniversary by leveraging the Company's theatrical distribution model for a 2026 theatrical re-release in 3D and 4k. The multi-year deal includes all North American distribution rights.
Bloody Disgusting & Podcast Business Development:
- Announced Bloody Disgusting partnership with Veeps.com, to perform a global livestream Halloween concert of horror master and iconic composer John Carpenter. The one-night-only event marks Carpenter's return to the stage, streaming live worldwide on Halloween night.
Operational Developments Subsequent to Quarter-End:
- Announced acquisition of Giant and the integration of service into Matchpoint™ platform – bringing deep studio relationships into its automated media services ecosystem. Also announced new leadership team for Giant, a Matchpoint™ company.
- Completed approximately
$2 million $5.5 million - Ended the quarter with approximately 44,600 subscribers to the Cineverse-branded streaming service.
- Announced Hulu's acquisition of the streaming rights for The Toxic Avenger, to debut on the platform on January 8, 2026.
- Announced innovative partnership with GameStop to promote Return to Silent Hill theatrical release.
- Announced theatrical release date for Air Bud Returns – August 21, 2026. The film also recently completed principal photography.
- Launched Matchpoint® Creative Labs – leveraging generative AI to enable creative services for FAST and ad-supported streaming services.
- Announced release of Silent Night, Deadly Night on digital, with dates announced for physical releases.
Management Commentary:
Chris McGurk, Cineverse Chairman and CEO, stated: "Our financial objective during this quarter was to focus on improving operating results in our base business in anticipation of closing the transformative Giant and IndiCue acquisitions. We are very pleased that these efforts paid off, with significant increases in both Direct Operating Margins and Adjusted EBITDA. Our Direct Operating Margin climbed to
"The Giant and IndiCue acquisitions are truly transformative for Cineverse. Both immediately add significant revenues and Adjusted EBITDA to the Company. They both also bring large, durable and scalable streams of recurring revenues to the Company and significantly strengthen our market position as an AI-powered comprehensive technology services and infrastructure solutions provider for the entertainment industry. We believe both acquisitions featured favorable valuations and deal structures and will be strongly accretive."
"Already, we have seen extremely positive results from the Giant acquisition over the last 6 weeks, and IndiCue's month-over-month financial performance prior to acquisition was scaling up very rapidly. Therefore, we feel very confident in the financial guidance we are issuing for Fiscal Year 2027, which begins April 1, 2026, of
Erick Opeka, Cineverse President and Chief Strategy Officer, stated: "Our focus continues to be on identifying and executing accretive acquisitions that deepen the competitive moat for Matchpoint™ and shifts the Company toward durable, recurring revenue streams. The Giant and IndiCue acquisitions do exactly that – together they connect distribution, data, and monetization into a single, unified solution, positioning Matchpoint™ as the only full-stack streaming distribution and monetization platform for studios and global digital platforms."
"At the same time, we are continuing to improve margins and see meaningful growth in our recurring subscription business. We ended the quarter and the 2025 calendar year adding a net 45,000 streaming subscribers to our newest channel, Cineverse. We believe our low-cost theatrical model drives substantial brand awareness for this service, and we will continue to maintain cost discipline in that channel while completing our focus on SG&A reductions. We completed approximately
Conference Call
Cineverse will host a conference call at 4:30 p.m. EST/1:30 p.m. PST (Tuesday, February 17, 2026), during which management will discuss the results of its fiscal third quarter ended December 31, 2025.
Call details are as follows:
- The conference call will be accessible online via the Cineverse Investor Relations website, https://investor.cineverse.com.
- You can also register in advance to access the live conference call at: Cineverse Corp Fiscal 2026 Third Quarter Earnings Call.
- An audio recording of the conference call will be available for replay shortly after its completion. To access the replay, visit the Events and Presentations section of the Cineverse Investor Relations website.
About Cineverse
Cineverse (Nasdaq: CNVS) is a next-generation entertainment studio that empowers creators and entertains fans with a wide breadth of content through the power of technology. It has developed a new blueprint for delivering entertainment experiences to passionate audiences and results for its partners with unprecedented efficiency, and distributes more than 66,000 premium films, series, and podcasts. Cineverse connects fans with bold, authentic, independent stories. Properties include the highest-grossing unrated film in
Safe Harbor Statement
Investors and readers are cautioned that certain statements contained in this document, as well as some statements in periodic press releases and some oral statements of Cineverse officials during presentations about Cineverse, along with Cineverse's filings with the Securities and Exchange Commission, including Cineverse's registration statements, quarterly reports on Form 10-Q and annual report on Form 10-K, are "forward-looking'' statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act''). Forward-looking statements include statements that are predictive in nature, which depend upon or refer to future events or conditions, which include words such as "expects," "anticipates,'' "intends,'' "plans,'' "could," "might," "believes,'' "seeks," "estimates'' or similar expressions. In addition, any statements concerning future financial performance (including future revenues, earnings, or growth rates), ongoing business strategies or prospects, and possible future actions, which may be provided by Cineverse's management, are also forward-looking statements as defined by the Act. Forward-looking statements are based on current expectations and projections about future events and are subject to various risks, uncertainties, and assumptions about Cineverse, its technology, economic and market factors, and the industries in which Cineverse does business, among other things. These statements are not guarantees of future performance, and Cineverse undertakes no specific obligation or intention to update these statements after the date of this release.
For additional information, please contact:
Julie Milstead
424-281-5411
investorrelations@cineverse.com
CINEVERSE CORP. | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
(in thousands) | ||||||||
As of | ||||||||
December 31, | March 31, | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | 2,461 | $ | 13,941 | ||||
Accounts receivable, net | 17,400 | 15,752 | ||||||
Content advances | 7,949 | 6,736 | ||||||
Other current assets | 1,424 | 1,652 | ||||||
Total current assets | 29,234 | 38,081 | ||||||
Property and equipment, net | 3,528 | 2,876 | ||||||
Intangible assets, net | 17,733 | 18,168 | ||||||
Goodwill | 6,799 | 6,799 | ||||||
Content advances, net of current | 9,239 | 4,053 | ||||||
Other long-term assets | 2,041 | 2,539 | ||||||
Total Assets | $ | 68,574 | $ | 72,516 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current Liabilities | ||||||||
Accounts payable and accrued expenses | $ | 22,068 | $ | 31,109 | ||||
Line of credit | 8,281 | — | ||||||
Current portion of deferred consideration | — | 2,956 | ||||||
Current portion of operating lease liabilities | 290 | 187 | ||||||
Other current liabilities | 8 | 183 | ||||||
Total current liabilities | 30,647 | 34,435 | ||||||
Operating lease liabilities, net of current | 182 | 275 | ||||||
Other long-term liabilities | 1 | 14 | ||||||
Total Liabilities | $ | 30,830 | $ | 34,724 | ||||
Commitments and contingencies | ||||||||
Stockholders' Equity | ||||||||
Preferred stock | 3,559 | 3,559 | ||||||
Common Stock | 197 | 194 | ||||||
Additional paid-in capital | 559,496 | 548,405 | ||||||
Treasury stock, at cost | (13,158) | (12,193) | ||||||
Accumulated deficit | (511,248) | (500,908) | ||||||
Accumulated other comprehensive loss | (279) | (305) | ||||||
Total stockholders' equity of Cineverse Corp. | 38,567 | 38,752 | ||||||
Deficit attributable to noncontrolling interest | (823) | (960) | ||||||
Total equity | 37,744 | 37,792 | ||||||
Total Liabilities and Equity | $ | 68,574 | $ | 72,516 | ||||
CINEVERSE CORP. | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
(In thousands, except for per share data) | ||||||||
(Unaudited) | ||||||||
Three Months Ended | ||||||||
2025 | 2024 | |||||||
Revenues | $ | 16,286 | $ | 40,740 | ||||
Operating expenses | ||||||||
Direct operating | 5,049 | 20,997 | ||||||
Selling, general and administrative | 10,690 | 9,361 | ||||||
Depreciation and amortization | 1,203 | 946 | ||||||
Total operating expenses | 16,942 | 31,304 | ||||||
Operating (loss) income | (656) | 9,436 | ||||||
Interest expense | (195) | (2,342) | ||||||
Other (expense) income, net | (5) | 73 | ||||||
Net (loss) income before income taxes | (856) | 7,167 | ||||||
Income tax expense | (19) | (6) | ||||||
Net (loss) income | (875) | 7,161 | ||||||
Net income attributable to noncontrolling interest | (49) | (48) | ||||||
Net (loss) income attributable to controlling interests | (924) | 7,113 | ||||||
Preferred stock dividends | (89) | (89) | ||||||
Net (loss) income attributable to common stock holders | $ | (1,013) | $ | 7,024 | ||||
Net (loss) income per share attributable to common stock holders: | ||||||||
Basic | $ | (0.05) | $ | 0.38 | ||||
Diluted | $ | (0.05) | $ | 0.34 | ||||
Weighted average shares of common stock outstanding: | ||||||||
Basic | 19,218 | 15,880 | ||||||
Diluted | 19,218 | 17,774 | ||||||
Adjusted EBITDA
We define Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, stock-based compensation expense, merger and acquisition costs, restructuring, transition and acquisitions expense, net, goodwill impairment and certain other items.
Adjusted EBITDA is not a measurement of financial performance under GAAP and may not be comparable to other similarly titled measures of other companies. We use Adjusted EBITDA as a financial metric to measure the financial performance of the business, because management believes it provides additional information with respect to the performance of its fundamental business activities. For this reason, we believe Adjusted EBITDA will also be useful to others, including our stockholders, as a valuable financial metric.
We present Adjusted EBITDA because we believe that Adjusted EBITDA is a useful supplement to net income (loss) from continuing operations as an indicator of operating performance. We also believe that Adjusted EBITDA is a financial measure that is useful both to management and investors when evaluating our performance and comparing our performance with that of our competitors. We also use Adjusted EBITDA for planning purposes, and to evaluate our financial performance because Adjusted EBITDA excludes certain incremental expenses or non-cash items, such as stock-based compensation charges, that we believe are not indicative of our ongoing operating performance.
We believe that Adjusted EBITDA is a performance measure and not a liquidity measure, and therefore a reconciliation between net income (loss) from operations and Adjusted EBITDA has been provided in the financial results. Adjusted EBITDA should not be considered as an alternative to net income (loss) from operations as an indicator of performance, or as an alternative to cash flows from operating activities as an indicator of cash flows, in each case as determined in accordance with GAAP, or as a measure of liquidity. In addition, Adjusted EBITDA does not take into account changes in certain assets and liabilities as well as interest and income taxes that can affect cash flows. We do not intend the presentation of these non-GAAP measures to be considered in isolation or as a substitute for results prepared in accordance with GAAP. These non-GAAP measures should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP.
Following is the reconciliation of our consolidated net income (loss) to Adjusted EBITDA (in thousands):
Three Months Ended | ||||||||
2025 | 2024 | |||||||
Net (loss) income | $ | (875) | $ | 7,161 | ||||
Add Back: | ||||||||
Income tax expense | 19 | 6 | ||||||
Depreciation and amortization ⁽¹⁾ | 1,332 | 1,031 | ||||||
Interest expense | 195 | 2,342 | ||||||
Stock-based compensation | 1,027 | 490 | ||||||
Other expense (income), net | 5 | (73) | ||||||
Net income attributable to noncontrolling interest | (49) | (48) | ||||||
Acquisition-related costs | 603 | — | ||||||
Employee severance costs | 97 | — | ||||||
Adjusted EBITDA | $ | 2,354 | $ | 10,909 | ||||
(1) - Includes of Operations for the three months ended December 31, 2025 and 2024, respectively | ||||||||
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SOURCE Cineverse Corp.
FAQ
What guidance did Cineverse (CNVS) issue for Fiscal Year 2027 on February 17, 2026?
How much revenue and Adjusted EBITDA will Giant contribute to Cineverse (CNVS) in FY2027?
What are the financial details and expected contribution of IndiCue to Cineverse (CNVS)?
How did Cineverse (CNVS) perform in Q3 FY2026 on February 17, 2026 results?
What is Cineverse's (CNVS) cash position and liquidity as of December 31, 2025?
