CuriosityStream signals 38%-42% revenue growth for 2025 while targeting AI licensing dominance

Earnings Call Insights: CuriosityStream Inc. (CURI) Q3 2025

MANAGEMENT VIEW

* CEO Clint Stinchcomb reported "strong Q3 results" with revenue growing 46% year-over-year to $18.4 million, noting that this result exceeded guidance. He highlighted that adjusted free cash flow rose 88% to $4.8 million and adjusted EBITDA improved by $3.4 million year-over-year. Stinchcomb stated that CuriosityStream’s "3 complementary growth pillars, subscriptions, licensing and advertising are driving momentum and strengthening CuriosityStream's position at the intersection of knowledge, media and AI."
* Licensing revenue increased over 40% year-over-year, reflecting robust demand and the company's growing reputation among traditional media partners and hyperscalers. Stinchcomb explained, "To achieve dominance as a provider of AI training data, we've assembled nearly 2-million hour library of video and audio across multiple genres, content largely cannot be scraped from the open web."
* Stinchcomb detailed that subscription revenue, both retail and wholesale, was down year-over-year but increased sequentially each quarter in 2025, emphasizing that "sequential growth in subscription revenue has been driven by daily operating focus, not simply by implementing price increases like many subscription services."
* The company expanded its advertising business with recent launches on Amazon, Roku, LG, and Truth+, and introduced a branded block on Australia TV's free-to-air broadcast channel. Stinchcomb announced plans "to install a proven leader to run the business in early 2026."
* Stinchcomb emphasized cost discipline as a "strategic advantage," allowing the company to offset higher storage and delivery expenses. He projected that "we expect overall subscription revenue, retail and wholesale to grow faster in 2026 than in 2025" and anticipated licensing to "exceed subscription revenue in 2027, possibly earlier."
* CFO Phillip Hayden stated, "in the third quarter, we reported revenue of $18.4 million, exceeding our guidance and a 46% increase compared to $12.6 million a year ago." He highlighted adjusted EBITDA of $3 million, representing the company's third sequential quarter of positive results, and said, "Adjusted free cash flow came in at $4.8 million, an increase of $2.3 million compared to last year."

OUTLOOK

* The company expects fourth quarter revenue in the range of $18 million to $20 million, which would imply full year 2025 revenue in the range of $70 million to $72 million, representing a 38% to 42% increase from 2024.
* Fourth quarter adjusted free cash flow is anticipated to be between $2.5 million and $3.5 million, guiding to full year 2025 adjusted free cash flow of $12 million to $13 million.
* Management indicated they are "not yet providing guidance for 2026," but expressed confidence that "top line and bottom line growth will continue into next year."
* Stinchcomb said, "We intend to pay 2026 dividends from cash generated by operations as we did in 2024."

FINANCIAL RESULTS

* Revenue for the quarter was $18.4 million, with subscription business contributing $9.3 million and content licensing delivering $8.7 million, described by Hayden as "an increase of over $7 million or 425% from last year, driven by continued growth in AI training fulfillments."
* Gross margin for Q3 was 59%, up from 54% last year.
* Combined costs for advertising, marketing, and G&A were higher by 52% due to a noncash charge for stock-based compensation of $7 million and onetime expenses from a secondary stock offering.
* The company reported a net loss of $3.7 million or $0.06 a share, attributed by Hayden to "onetime charges and noncash SBC" and clarified, "Were it not for these specific nonrecurring or noncash charges, we would have posted our third quarterly net income this year."
* The company ended the quarter with $29.3 million in cash and securities and no outstanding debt.

Q&A

* Laura Martin, Needham & Company, LLC: Asked about the rationale for investing in media leadership in lower margin markets instead of focusing solely on AI licensing. Stinchcomb replied, "We do need some additional sales leaders, even some who are really seasoned... if you can bring on an A+ player with real talent, you take the opportunity to do that... really helping on the revenue generation side."
* Martin followed up on the company's commitment to AI, to which Stinchcomb confirmed, "Yes. 100% Yes, yes. Absolutely, Laura."
* Martin raised a concern about smoothing out licensing revenue. Stinchcomb responded, "there will always be some lumpiness in licensing, but we're going to smooth it out over time... we're accomplishing this by both operational and contractual means," and discussed structuring some agreements as "Content as a Service."
* Jason Kreyer, Craig-Hallum: Inquired about the evolution of AI licensing, partner demand, and content library size. Stinchcomb detailed, "we've done about 18 fulfillments to date... done 2 or 3 more renewals with some key existing partners... we suspect really the revenue from our existing partners, they'll probably comprise 60% to 80% of the AI licensing revenue and 20% to 40% will come from new partners."
* Kreyer asked about the near 2-million hour library, and Stinchcomb clarified, "The overwhelming majority of that is for AI licensing."
* David Marsh, Singular Research: Sought clarification on the stock-based compensation expense. Hayden explained, "a number of employees received a market-based SBC warrants and awards during the quarter... the market-based components of those were something new this quarter."
* Marsh also asked about the impact on share count and SG&A. Hayden answered, "I wouldn't expect there to be anything to that level in the next several quarters... the majority of what we will do for this year's grants we had to expense in Q3."
* Marsh requested an update on new subscription markets. Stinchcomb responded, "we have had a number of new launches with partners like Amazon in Australia, in New Zealand... we're supremely confident that our overall subscription revenue, retail and wholesale will grow at a higher rate in '26 than in '25."
* Patrick Sholl, Barrington Research: Asked about free cash flow guidance and library composition. Stinchcomb attributed lower growth in free cash flow to a "timing issue" and discussed content partnerships, stating, "the overwhelming majority is for AI licensing... there is some content that goes well beyond the factual content that you would see on any of our subscription services or our ad-supported services."

SENTIMENT ANALYSIS

* Analysts raised pointed questions about strategic focus, recurring revenue, cost structure, and library composition, indicating a neutral to slightly positive tone with some skepticism about diversification and cost management.
* Management’s tone was confident and occasionally defensive, particularly when affirming commitment to AI licensing and cost discipline. Stinchcomb used affirming language such as "100% Yes, yes. Absolutely, Laura" and explained cost discipline as a "strategic advantage."
* Compared to the previous quarter, management maintained a similarly confident tone but addressed more direct questions about strategic focus and cost increases. Analyst tone remained consistent with prior skepticism over diversification beyond high-return AI licensing.

QUARTER-OVER-QUARTER COMPARISON

* Revenue guidance for Q4 2025 is higher than Q3’s actuals, while full year revenue guidance has moved up to $70 million to $72 million, compared to Q2’s guidance of $15 million to $18 million for Q3.
* Licensing revenue growth accelerated, with content licensing at $8.7 million for the quarter, representing a 425% year-over-year increase, compared to Q2’s emphasis on strong sequential growth.
* Gross margin improved to 59% from 53% in Q2.
* Stock-based compensation and a secondary offering introduced higher noncash and onetime expenses this quarter, impacting net income.
* Management’s confidence in AI licensing and subscription growth for 2026 was reiterated, and analysts continued to press on the strategic mix and cost implications, mirroring prior concerns.

RISKS AND CONCERNS

* Management acknowledged ongoing "lumpiness" in licensing revenue and outlined operational and contractual strategies to mitigate it.
* Significant noncash stock-based compensation and onetime expenses contributed to a net loss, which management described as nonrecurring.
* Analysts expressed concerns about strategic focus, the impact of hiring, and the risk of diluting high-return AI licensing with lower-margin media or advertising initiatives.
* Storage and delivery costs increased, but management stated these were offset through cost discipline.

FINAL TAKEAWAY

CuriosityStream delivered strong third quarter revenue growth and robust gains in adjusted free cash flow and EBITDA, powered by momentum in AI licensing, subscription, and advertising pillars. Management expects full year 2025 revenue growth of 38% to 42% and remains confident in further acceleration of subscription and licensing revenue in 2026. The company highlighted its balance sheet strength, commitment to dividends, and strategic focus on AI data licensing, while addressing cost increases and the timing of free cash flow. The outlook signals continued double-digit top- and bottom-line growth, as CuriosityStream aims to solidify its position among the leading licensers of video for AI development.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/curi/earnings/transcripts]

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