Q3 2026 Cineverse Corp Earnings Call

February 17, 2026

Speaker #1: Corporation, fiscal 2026 third quarter earnings call. My name is Luca, and I will be your operator today. After today's prepared remarks, we will host a question-and-answer session.

Operator: Corporation Fiscal 2026 Third Quarter Earnings Call. My name is Luca, and I will be your operator today. After today's prepared remarks, we will host a question-and-answer session. If you would like to ask a question, please raise your hand. If you have dialed in to today's call, please press star nine to raise your hand and star six to unmute. I would now like to turn the call over to Gary Loffredo, Chief Legal Officer, Secretary, and Senior Advisor for Cineverse. Please go ahead.

Speaker #1: If you would like to ask a question, please raise your hand. If you have dialed in to today's call, please press *9 to raise your hand and *6 to unmute.

Speaker #1: I would now like to turn the call over to Gary Loffredo, Chief Legal Officer, Secretary, and Senior Advisor for Cineverse. Please go ahead.

Speaker #2: Good afternoon, everyone. Thank you for joining us for the Cineverse fiscal year 2026 third quarter financial results conference call. The press release announcing Cineverse's results for the fiscal third quarter ended December 31, 2025, is available in the Investors section of the company's website at www.cineverse.com.

Gary Loffredo: Good afternoon, everyone. Thank you for joining us for the Cineverse Fiscal Year 2026 third quarter financial results conference call. The press release announcing Cineverse's results for the fiscal third quarter ended December 31, 2025, is available at the investor section of the company's website at www.cineverse.com. A replay of this broadcast will also be made available at Cineverse's 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.

Speaker #2: A replay of this broadcast will also be made available at Cineverse's 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.

Speaker #2: 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.

Speaker #2: All the information discussed on this call is as of today, February 17, 2026. And Cineverse does not assume any obligation to update any of these forward-looking statements except as required by law.

Gary Loffredo: All the information discussed on this call is as of today, 17 February 2026, 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 represents non-GAAP financial measures, and we encourage you to read our disclosure and the reconciliation tables to applicable GAAP measures in our earnings release carefully as you consider these metrics. I'm Gary Loffredo, Chief Legal Officer and Senior Advisor 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 Motion Pictures Officer, and Mark Torres, Chief People Officer, all of whom will be available for questions following the prepared remarks.

Speaker #2: In addition, certain financial information presented in this call represents non-GAAP financial measures, and we encourage you to read our disclosure and the reconciliation tables to applicable GAAP measures in our earnings release carefully as you consider these metrics.

Speaker #2: I'm Gary Loffredo, Chief Legal Officer and Senior Advisor at Cineverse. With me today are Chris McGurk, Chairman and CEO; Erick Opeka, President and Chief Strategy Officer; Tony Weidor, President of Technology and Chief Product Officer; Mark Lindsey, Chief Financial Officer; Yolanda Macias, Chief Motion Pictures Officer; and Mark Torres, Chief People Officer.

Speaker #2: All of whom will be available for questions following the prepared remarks. On today's call, Chris will briefly discuss our fiscal year 2026 third quarter business highlights.

Gary Loffredo: On today's call, Chris will briefly discuss our fiscal year 2026 Q3 business highlights. Then Mark will follow with a review of our financial results, and Erick will provide further details on our two most recent acquisitions. I will now turn the call over to Chris McGurk to begin.

Speaker #2: Then Mark will follow with a review of our financial results, and Erick will provide further details on our two most recent acquisitions. I will now turn the call over to Chris McGurk to begin.

Speaker #3: Hey, thanks, Gary. And thanks, everyone, for joining us on the call today. I'll first give a brief overview of our results, and the anticipated impact of the two transformative acquisitions—Giant Worldwide and IndiQ—that we made after the end of our fiscal third quarter.

Chris McGurk: Hey, thanks, Gary, and thanks everyone for joining us on the call today. I'll first give a brief overview of our results and the anticipated impact of the two transformative acquisitions, Giant Worldwide and IndiCue, that we made after the end of our fiscal third quarter. Then Mark will go into our financial results and outlook in more detail, plus further outline both acquisitions to underscore why we believe they will be very accretive and were done with very attractive valuations and have deal economics that will dramatically improve our financial growth and profitability outlook. After that, Erick will get into more detail about how these two acquisitions transform Cineverse into a powerhouse, comprehensive, AI-powered technology services provider to the entertainment industry, with assets and reach that we believe none of our competitors can match. Then we'll take your questions.

Speaker #3: Then Mark will go into our financial results and outlook in more detail, plus further outline both acquisitions to underscore why we believe they will be very accretive and were done with very attractive valuations and have deal economics that will dramatically improve our financial growth and profitability outlook.

Speaker #3: After that, Erick will get into more detail about how these two acquisitions transform Cineverse into a powerhouse, comprehensive, AI-powered technology services provider to the entertainment industry, with assets and reach that we believe none of our competitors can match.

Speaker #3: Then we'll take your questions. Okay. So we had been negotiating the Giant and IndiQ acquisitions for months. And while we realized the dramatic impact both would have on our market position, go-forward strategy, and financial outlook, our first order of business, while we aggressively moved to close both, was results in our base businesses to further set the stage for financial success in the future.

Chris McGurk: Okay, so we had been negotiating the Giant and IndiCue acquisitions for months, and while we realized the dramatic impact both would have on our market position, go-forward strategy, and financial outlook, our first order of business, while we aggressively moved to close both deals, was to improve operating results in our base businesses to further set the stage for financial success in the future. So, in this last fiscal quarter, we concentrated on improving our cost structure and operating margins in our base businesses. We generated some strong results, improving our direct operating margin to 69%, up from 48% in the prior year quarter, and generating Adjusted EBITDA of $2.4 million, a $6 million improvement from the prior sequential quarter.

Speaker #3: And so in this last fiscal quarter, we concentrated on improving our cost structure and operating margins in our base businesses, and we generated some strong results.

Speaker #3: Improving our direct operating margin to 69%, up from 48% in the prior year quarter, and generating adjusted EBITDA of $2.4 million—a $6 million improvement from the prior sequential quarter.

Speaker #3: This was a result of our intense and ongoing efforts to manage the cost side of the business, including leveraging Cineverse Services India, even as we ramped up operations on the technology side of the business in anticipation of these two acquisitions.

Chris McGurk: This was a result of our intense and ongoing efforts to manage the cost side of the business, including leveraging Cineverse Services India, even as we ramped up operations on the technology side of the business in anticipation of these two acquisitions. We are extremely pleased that we were able to successfully acquire both Giant and IndiCue. This one-two punch immediately transforms our company financially by adding significant revenues and Adjusted EBITDA. Both acquisitions bring large, durable, and scalable streams of recurring revenues to the company and significantly solidify our position as a leading end-to-end, AI-powered provider of technology services and infrastructure solutions for the entertainment industry. They both have an A-plus level roster of industry clients and will be easily integrated into our industry-leading Matchpoint technology ecosystems.

Speaker #3: And we are extremely pleased that we were able to successfully acquire both Giant and IndiQ. This one-two punch immediately transforms our company financially by adding significant revenues and adjusted EBITDA.

Speaker #3: Both acquisitions bring large, durable, and scalable streams of recurring revenues to the company and significantly solidify our position as a leading end-to-end AI-powered provider of technology services and infrastructure solutions for the entertainment industry.

Speaker #3: They both have an A-plus-level roster of industry clients and will be easily integrated into our industry-leading Matchpoint technology ecosystems. Both acquisitions also bring very strong, experienced, and highly motivated management teams that clearly see the synergies and share our larger vision for the future of Matchpoint and Cineverse.

Chris McGurk: Both acquisitions also bring very strong, experienced, and highly motivated management teams that clearly see the synergies and share our larger vision for the future of Matchpoint and Cineverse. Like the Cineverse team they are joining, our new team members have incentive plans based on generating explosive future growth in revenues, margins, and profits. And in the case of IndiCue, those incentives also include a very significant earn-out potential over three years. So we believe we are completely aligned with our new team members to generate strong financial results and create significant value going forward. And already, the integration of Giant has been going very smoothly, and the overwhelmingly positive industry response to joining Matchpoint has exceeded our expectations. If there were any doubts about the long-term potential of Matchpoint, those doubts have been roundly dismissed.

Speaker #3: Like the Cineverse team, our new team members are joining with incentive plans based on generating explosive future growth in revenues, margins, and profits.

Speaker #3: And in the case of IndiQ, those incentives also include a very significant earnout potential over three years. So we believe we are completely aligned with our new team members to generate strong financial results and create significant value going forward.

Speaker #3: And already, the integration of Giant has been going very smoothly. And the overwhelmingly positive industry response to joining Matchpoint has exceeded our expectations. If there are any doubts about the long-term potential of Matchpoint, those doubts have been roundly dismissed.

Speaker #3: The immediate response we received within days of our announcement proves that merging Matchpoint with an established media delivery company with highly coveted approved vendor badges is the ideal profile for the type of service provider entertainment companies seek.

Chris McGurk: The immediate response we received within days of our announcement proves that merging Matchpoint with an established media delivery company with highly coveted approved vendor badges is the ideal profile for the type of service provider entertainment companies seek. In the days following our announcement, Giant received more work orders than they have in the history of the company. At this early juncture, we confirm our prior expectations for Giant's short- and long-term revenue and profit contribution, and we feel very, very positive about how things are looking so far. In addition, IndiCue has consistently outperformed their own internal monthly revenue and profit forecast over the last several months while we were in negotiations.

Speaker #3: In the days following our announcement, Giant received more work orders than they have in the history of the company. And at this early juncture, we confirm our prior expectations for Giant's short- and long-term revenue and profit contribution, and we feel very, very positive about how things are looking so far.

Speaker #3: And in addition, IndiQ has consistently outperformed their own internal monthly revenue and profit forecast over the last several months while we were in negotiations.

Speaker #3: So both of those factors, combined with the financial improvement we generated in our base business this quarter, give us great confidence in the financial guidance we just issued for fiscal year 2027.

Chris McGurk: So both of those factors, combined with the financial improvement we generated in our base business this quarter, give us great confidence in the financial guidance we just issued for fiscal year 2027, which starts 1 April. We project $115 million to $120 million in annual revenues and $10 million to $20 million in Adjusted EBITDA from our consolidated operations this next fiscal year. In the end, these acquisitions were the result of a long-term thesis built on closely tracking our industry's delayed transition to true AI integration and automation. The content volume needed to compete in the streaming war has accelerated, yet the video delivery infrastructure remained manual and slow to market, while costs for video and high volume became untenable. This created the opportunity for a unified, intelligent platform with a unique monetization component that redefines the current ecosystem.

Speaker #3: Which starts this April 1st. We project $115 million to $120 million in annual revenues and $10 million to $20 million in adjusted EBITDA from our consolidated operations this next fiscal year.

Speaker #3: In the end, these acquisitions were the result of a long-term thesis built on closely tracking our industry's delayed transition to true AI integration and automation.

Speaker #3: The content volume needed to compete in the streaming wars accelerated, yet the video delivery infrastructure remained manual and slow to market, while costs for video and high volume became untenable.

Speaker #3: This created the opportunity for a unified, intelligent platform with a unique monetization component that redefines the current ecosystem. I believe we've finally achieved this.

Chris McGurk: I believe we finally achieved this, and with that, I will now turn things over to Mark and then Erick to get into all this in more detail. Thank you.

Speaker #3: And with that, I will now turn things over to Mark, and then Erick, to get into all this in more detail. Thank you.

Speaker #2: Thank you, Chris. First, a few highlights from our fiscal third quarter. Revenues were $16.3 million, up from $12.4 million last quarter, and down from $40.7 million in the same fiscal quarter last year.

Mark Lindsey: Thank you, Chris. First, a few highlights from our fiscal Q3. Revenues were $16.3 million, up from $12.4 million last quarter, and down from $40.7 million in the same fiscal quarter last year. If you recall, the prior year fiscal quarter included the theatrical results of Terrifier 3, which were in excess of $20 million. Our net loss for the quarter was $875,000, a $4.7 million improvement over the prior quarter. Adjusted EBITDA for the quarter was $2.4 million, a $6 million improvement over the prior quarter. We ended the quarter with $2.5 million of cash and $4.2 million of availability on our East West Bank revolver. Now, let's talk about the exciting subsequent events this quarter.

Speaker #2: If you recall, the prior year fiscal year prior year fiscal quarter included the theatrical results of Terrifier 3, which were in excess of $20 million.

Speaker #2: Our net loss for the quarter was $875,000, a $4.7 million improvement over the prior quarter. Adjusted EBITDA for the quarter was $2.4 million, a $6 million improvement over the prior quarter.

Speaker #2: We ended the quarter with $2.5 million of cash and $4.2 million of availability on our East/West Bank revolver. Now, let's talk about the exciting subsequent events this quarter.

Speaker #2: As Chris noted, we closed on two acquisitions after quarter end. Giant was an all-cash asset acquisition for $2 million, with only a $350,000 initial payment on closing and $1.65 million in deferred payments over the next four quarters. This is for a business that we conservatively expect to generate revenues of $15 to $17 million and adjusted EBITDA of $3.5 to $4 million for our 2027 fiscal year.

Mark Lindsey: As Chris noted, we closed on 2 acquisitions after quarter end. Giant was an all-cash asset acquisition for $2 million, with only a $350,000 initial payment on closing and $1.65 million in deferred payments over the next 4 quarters. This for a business that we conservatively expect to generate revenues of $15 to 17 million and Adjusted EBITDA of $3.5 to 4 million for our 2027 fiscal year. The ability to acquire assets that will perform at this level for just 0.5 times Adjusted EBITDA with no leverage or dilution is the first step of our company's financial transformation. The IndiCue acquisition was step two. This acquisition was a business combination for 100% of the equity of IndiCue for base consideration of $22 million.

Speaker #2: The ability to acquire assets that will perform at this level for just 0.5 times adjusted EBITDA, with no leverage or dilution, is the first step of our company's financial transformation.

Speaker #2: The IndiQ acquisition was step two. This acquisition was a business combination for 100% of the equity of IndiQ for base consideration of $22 million.

Speaker #2: $12.8 million, of which was paid at closing and included deferred consideration of $9.2 million due within one year of closing in cash or equity at the company's discretion.

Mark Lindsey: $12.8 million of which was paid at closing and included deferred consideration of $9.2 million due within one year of closing in cash or equity at the company's discretion. Total consideration could increase to $40 million if IndiCue meets certain future revenue and gross profit milestones over the next three years. In addition, the acquisition included $3 million of cash and $750,000 of net working capital at closing. The additional earn-out consideration is payable in cash or equity at the company's discretion. IndiCue is expected to contribute more than $38 million of revenue and $7 million of adjusted EBITDA for our 2027 fiscal year.

Speaker #2: Total consideration could increase to $40 million if IndiQ meets certain future revenue and gross profit milestones over the next three years. In addition, the acquisition included $3 million of cash and $750,000 of net working capital at closing.

Speaker #2: The additional earnout consideration is payable in cash or equity at the company's discretion. IndiQ is expected to contribute more than $38 million of revenue and $7 million of adjusted EBITDA for our 2027 fiscal year.

Speaker #2: We financed the IndiQ acquisition with $13 million of convertible notes with existing long-term Cineverse shareholders at company-friendly terms, reflecting the investors' strong conviction in our investment strategy and the long-term valuation creation of this acquisition for our current shareholders.

Mark Lindsey: We financed the IndiCue acquisition with $13 million of convertible notes, with existing long-term Cineverse shareholders at company-friendly terms, reflecting the investors' strong conviction in our investment strategy and long-term value creation of this acquisition for our current shareholders. Importantly, the capital came from aligned long-term investors with no warrants attached, and the additional equity raise was priced at or near market with fundamental investors. The entire Cineverse team also invested alongside the transaction, reinforcing our alignment with shareholders. The combined acquisitions are expected to contribute in excess of $50 million of revenue and $10 million of adjusted EBITDA for our 2027 fiscal year. As a combined entity, post Giant and IndiCue acquisitions, we are providing guidance for fiscal year 2027 of $115 to 120 million of revenue and $10 to 20 million of adjusted EBITDA.

Speaker #2: Importantly, the capital came from aligned long-term investors with no warrants attached, and the additional equity raised was priced at or near market with fundamental investors.

Speaker #2: The entire Cineverse C team also invested alongside the transaction, reinforcing our alignment with shareholders. The combined acquisitions are expected to contribute in excess of $50 million of revenue and $10 million of adjusted EBITDA for our 2027 fiscal year.

Speaker #2: As a combined entity, post-Giant and IndiQ acquisitions, we are providing guidance for fiscal year '27 of $115 to $120 million of revenue and $10 to $20 million of adjusted EBITDA.

Speaker #2: The combined impact of the Giant and IndiQ acquisitions represents a financial transformation for the company and is expected to create significant shareholder value in the future.

Mark Lindsey: The combined impact of the Giant and IndiCue acquisitions represents a financial transformation for the company and is expected to create significant shareholder value in the future. Separately from the acquisitions, on 12 February and closed this morning, the company sold 1.725 million shares of common stock at a purchase price of $2 per share, for net proceeds of $3.2 million. We intend to use the net proceeds for working capital and for general corporate purposes, including the financing of content acquisition and development. With that, I'll turn the floor over to Erick to discuss our operating highlights and the acquisitions in greater detail. Erick?

Speaker #2: Separately from the acquisitions, on February 12th and close this morning, the company sold 1.725 million shares of common stock at a purchase price of $2 per share, for net proceeds of $3.2 million.

Speaker #2: We intend to use the net proceeds for working capital and for general corporate purposes, including the financing of content acquisition and development. With that, I'll turn the floor over to Erick to discuss our operating highlights and the acquisitions in greater detail.

Speaker #2: Erick?

Speaker #3: Thanks, Mark. So I want to start with a quick recap of what we've delivered operationally this quarter, and then spend the bulk of my time on why the Giant and IndiQ acquisitions are so strategically important to where we're positioning Cineverse for the next chapter.

Erick Opeka: Thanks, Mark. So I wanna start with a quick recap of what we've delivered operationally this quarter, and then spend the bulk of my time on why the Giant IndiCue acquisitions are so strategically important to where we're positioning Cineverse for the next chapter. So on the operational side, we continue to see strong momentum across this, our streaming ecosystem. We reached 35.5 million unique viewers on a monthly basis over the quarter, with our S5 subscriber base growing 15% year over year to 1.55 million. On a monthly basis, we're streaming about 1.14 billion minutes each month. Our content library now exceeds 66,000 total assets, including nearly 58,000 films, seasons, and episodes, plus over 8,500 podcasts. Our social footprint has now grown to more than 25.4 million followers. These aren't vanity metrics.

Speaker #3: So, on the operational side, we continue to see strong momentum across our streaming ecosystem. We reached 35.5 million unique viewers on a monthly basis over the quarter, with our S5 subscriber base growing 15% year over year to 1.55 million.

Speaker #3: On a monthly basis, we're streaming about 1.14 billion minutes each month. Our content library now exceeds 66,000 total assets, including nearly 58,000 films, seasons, and episodes, plus over 8,500 podcasts.

Speaker #3: Our social footprint has now grown to more than 25.4 million followers. These aren't vanity metrics. This is reach, engagement, and content gravity that matters when you're building distribution advantages.

Erick Opeka: This is reach, engagement, and content gravity that matters when you're building distribution advantages. And specifically, on the Cineverse channel, our namesake channel, we added approximately 45,000 subscribers in calendar 2025, giving us real momentum heading into our new fiscal year. I also wanna highlight our operating leverage. Our direct operating margin hit 69% this quarter, up from 48% a year ago. That's a significant inflection. On the cost side, between personnel optimization, vendor eliminations, and cost renegotiations, we've already realized approximately $1.9 million of the targeted $7.5 million in projected cuts across our studio operations and corporate overhead. We expect to see most of the remainder come through over the next two quarters. You're starting to see the company find its operational rhythm. That foundation is a critical context for what I'm about to describe with these acquisitions.

Speaker #3: And specifically, on the Cineverse channel—our namesake channel—we added approximately 45,000 subscribers in calendar '25, giving us real momentum heading into our new fiscal year.

Speaker #3: I also want to highlight our operating leverage. Our direct operating margin hit 69% this quarter, up from 48% a year ago. That's a significant inflection.

Speaker #3: On the cost side, between personnel optimization, vendor eliminations, and cost renegotiations, we've already realized approximately $1.9 million of the targeted $7.5 million in projected cuts across our studio operations and corporate overhead.

Speaker #3: We expect to see most of the remainder come through over the next two quarters. You're starting to see the company find its operational rhythm.

Speaker #3: That foundation is a critical context for what I'm about to describe with these acquisitions. So let me talk about Giant and IndiQ, because they're not really about getting bigger for the sake of it.

Erick Opeka: So let me talk about Giant and IndiCue, because they're not really about getting bigger for the sake of it. They're about filling a specific gap we identified in the market and then building the architecture that solves for it. For years, we've been building Matchpoint as an advanced infrastructure layer for digital video distribution. We've invested heavily in machine learning, automation, and what I'd call the operational plumbing that the streaming industry desperately needs. But the deeper we got into conversations with studios, distributors, and platforms, the clearer it became. The industry is hopelessly fragmented. Content distribution is separate from monetization, monetization is separate from data, and that fragmentation creates friction, inefficiency, and critically, it leaves money on the table. So first, Giant Worldwide has been serving top Hollywood studios and streaming platforms for over two decades.

Speaker #3: They're about filling a specific gap we identified in the market, and then building the architecture that solves for it. For years, we've been building Matchpoint as an advanced infrastructure layer for digital video distribution.

Speaker #3: We've invested heavily in machine learning, automation, and what I'd call the operational plumbing that the streaming industry desperately needs. But the deeper we got into conversations with studios, distributors, and platforms, the clearer it became.

Speaker #3: The industry is hopelessly fragmented. Content distribution is separate from monetization, monetization is separate from data, and that fragmentation creates friction, inefficiency, and, critically, it leaves money on the table.

Speaker #3: So first, Giant Worldwide has been serving top Hollywood studios and streaming platforms for over two decades: digital preparation and coding, quality control, standards and practice compliance, delivery across every format.

Erick Opeka: Digital preparation, encoding, quality control, standards and practice compliance, and delivery across every format. They're trusted by four of the major studios and top independent distributors, and they hold approved vendor status with those studios and the key platforms. So this isn't something you just get. It's earned over years of reliability, security, and quality, and it's a substantial moat. But Giant was operating on traditional infrastructure with manual workflows and labor-dependent processes. And critically, they were actually turning away business because they couldn't scale hiring people fast enough to meet studio demand. So as we started integrating MatchPoint's AI video and audio quality, quality control, automated ingest, frame-by-frame analysis, and transparent mastering workflows, we are already starting to see immediate efficiency gains. We're seeing. We're already achieving 60 to 70% efficiency improvements in coding delivery in the short time we've already been deploying them.

Speaker #3: They're trusted by four major studios and top independent distributors, and they hold approved vendor status with those studios and the key platforms. So this isn't something you just get.

Speaker #3: It's earned over years of reliability, security, and quality, and it's a substantial moat. But Giant was operating on traditional infrastructure, with manual workflows and labor-dependent processes.

Speaker #3: And critically, they were actually turning away business because they couldn't scale hiring people fast enough to meet studio demand. So, as we started integrating match points, AI video and audio quality control, automated ingests, frame-by-frame analysis, and transparent mastering workflows, we are already starting to see immediate efficiency gains.

Speaker #3: We're seeing we're already achieving 60% to 70% efficiency improvements in coding delivery in the short time we've already been deploying them. Match Point is capable of ingesting—and to remind you, Match Point is capable of ingesting and mastering over 15,000 titles per month, and can scale far beyond that.

Erick Opeka: MatchPoint's capable of ingesting and to remind you, MatchPoint is capable of ingesting and mastering over 15,000 titles per month and can scale far beyond that. So that's the power of automation at genuine scale. And I wanna be clear, we haven't even fully optimized Giant for software-like margins yet. That's a future state. So right now, MatchPoint is solving the scale problem, and the whole margin optimization opportunity is still largely ahead of us. So the market opportunity here is substantial. On a global basis, post- and media services is a $25 billion fragmented market, growing at 11% CAGR, and expected to hit globally $74 billion by 2034. The industry is shifting from these labor-led workflows to AI-powered, platform-led workflows. And that transition is happening whether companies are ready or not.

Speaker #3: So that's the power of automation and genuine scale. And I want to be clear, we haven't even fully optimized Giant for software like Margins yet.

Speaker #3: That's a future state. So right now, Matchpoint is solving the scale problem, and the whole margin optimization opportunity is still largely ahead of us.

Speaker #3: So the market opportunity here is substantial. On a global basis, post and media services is a $25 billion fragmented market, growing at 11% CAGR, and expected to hit $74 billion globally by 2034.

Speaker #3: The industry has been shifting from these labor-led workflows to AI-powered, platform-led workflows. And that transition is happening whether companies are ready or not. So we're positioning Match Point to lead it.

Erick Opeka: So we're positioning MatchPoint to lead it, and the market response has confirmed our thesis. The announcement was the right message at the right exact moment for this industry. In our first month of operating Giant under the MatchPoint umbrella, we saw a nearly 470% increase in business over the prior year period. And that trend has accelerated into February, as studios and platforms are telling us they really need this. They need the scale, they need the automation, and they need it from a partner they can trust. So now, IndiCue is the other critical piece. IndiCue built a proprietary connected TV monetization platform, ad serving, supply side, demand side, SSAI, or server-side ad insertion, on a very scalable infrastructure. So we have real control over that stack.

Speaker #3: And the market response has confirmed our thesis. The announcement was the right message at the exact right moment for this industry. And in our first month of operating Giant under the Matchpoint umbrella, we saw nearly a 470% increase in business over the prior year period.

Speaker #3: And that trend is accelerated into February, as studios and platforms are telling us they really need this. They need the scale. They need the automation.

Speaker #3: And they need it from a partner they can trust. So now, IndiQ is the other critical piece. IndiQ built a proprietary connected TV monetization platform.

Speaker #3: Ad serving, supply side, demand side, SSAI, or server-side ad insertion, on a very scalable infrastructure. So we have real control over that stack. They have over 40 live clients today with 75 more onboarding, including major names like IMAX, FreeCast, Canela, and more.

Erick Opeka: We have over 40 live clients today, with 75 more onboarding, including major names like IMAX, FreeCast, Canela, and more. They're projecting $38 million in revenue and about $9.6 million EBITDA for calendar 2026, with a 25% margin. Those are the economics of a platform that works. But here's what really matters: IndieCue is the monetization layer we were missing. MatchPoint gets content to market at scale, but how you sell ad inventory, optimize yield, price, and package ads, that was happening in a completely separate silo. IndieCue closes that loop. Distribution, data, monetization now work as a single system with a real-time feedback engine. We see performance, can act on it immediately, and improve results for our own content and for some of the largest media companies in the world.

Speaker #3: They're projecting $38 million in revenue, about $9.6 million EBITDA for calendar '26, with a 25% margin. And those are the economics of a platform that works.

Speaker #3: But here's what really matters. IndiQ is the monetization layer we were missing. So Matchpoint gets content to market at scale. But how you sell ad inventory, optimize yield, price, and package ads—that was happening in a completely separate silo.

Speaker #3: So IndiQ closes that loop. Distribution, data, monetization now work as a single system with a real-time feedback engine. We see performance, can act on it immediately, and improve results for our own content and for some of the largest media companies in the world.

Speaker #3: So what we built is something the industry has never had—an independent, full-stack, white-label solution that unifies content delivery and ad monetization that's actually integrated, not loosely connected.

Erick Opeka: So what we built is something the industry has never had, an independent, full-stack, white-label solution that unifies content delivery and ad monetization that's actually integrated, not loosely connected. And the combined teams are already developing new ad tech products on the MatchPoint stack that neither company could have built alone. So I want to spend a moment on why this positioning matters beyond today's customers. There's a structural shift underway in tech right now that's directly relevant. In the AI era, value is migrating away from interface layers and toward platform and infrastructure layers. AI agents don't need dashboards. They need real platforms with real underlying data beneath them, systems that can execute thousands of decisions per second. The companies that own the infrastructure and data are the ones that will matter, and that's exactly what we've built. So MatchPoint is the platform layer.

Speaker #3: And the combined teams are already developing new ad tech products on the Match Point stack that neither company could have built alone. So I want to spend a moment on why this positioning matters beyond today's customers.

Speaker #3: There's a structural shift underway in tech right now that's directly relevant. And the AI era value is migrating away from interface layers and toward platform and infrastructure layers.

Speaker #3: AI agents don't need dashboards. They need real platforms with real underlying data beneath them—systems that can execute thousands of decisions per second. The companies that own the infrastructure and data are the ones that will matter.

Speaker #3: And that's exactly what we've built. So Matchpoint is the platform layer. Giant brings proven infrastructure, trust, and customers, and IndiQ brings the monetization engine.

Erick Opeka: Giant brings proven infrastructure, trust, and customers. IndiCue brings the monetization engine. Together, combined with our Matchpoint platform, they create a system of record for the entire media supply chain, from ingestion through encoding, quality control, delivery, yield optimization. It's not a dashboard that sits on top of someone else's stack. This is an actual operating system. And because monetization is integrated directly into that infrastructure, data is flowing in real time. That means higher CPMs, better yields, and smarter targeting for advertisers, better calibrated ad loads for consumers. And when these systems are disconnected, everyone loses. So we've closed that gap. So to close this out, with these two acquisitions, we've made a deliberate strategic choice. We're building what this industry does not have, a unified, automated architecture for the entire media supply chain.

Speaker #3: Together, combined with our Match Point platform, they create a system of record for the entire media supply chain from ingestion through encoding, quality control, delivery, yield optimization. It's not a dashboard that sits on top of someone else's stack.

Speaker #3: This is an actual operating system. And because monetization is integrated directly into that infrastructure, data is flowing in real time. That means higher CPMs, better yields, and smarter targeting for advertisers.

Speaker #3: Better calibrated ad loads for consumers. And when these systems are disconnected, everyone loses. So we've closed that gap. So, to close this out, with these two acquisitions, we've made a deliberate strategic choice.

Speaker #3: We're building what this industry does not have: a unified, automated architecture for the entire media supply chain. That's the moat, and it positions us to serve not just today's market.

Erick Opeka: That's the mode, and it positions us to serve not just today's market, where consolidation means customers need scale, speed, and transparency, and we are meeting that today, but also the future market, where intelligent systems will be making the vast majority of decisions in tandem with media companies. So across the company, our focus remains clear. We're building for scale, for margin, and for durability. We now have multiple high-growth engines that reinforce one another, supported by technology, data, and a fast-growing audience footprint, and we feel very well positioned for the quarters ahead and for the long term. So with that, operator, we can open the line for questions.

Speaker #3: Where consolidation means customers need scale, speed, and transparency. And we are meeting that today, but also the future market, where intelligent systems will be making the vast majority of decisions.

Speaker #3: In tandem with media companies. So, across the company, our focus remains clear. We're building for scale, for margin, and for durability. We now have multiple high-growth engines that reinforce one another, supported by technology, data, and a fast-growing audience footprint.

Speaker #3: And we feel very well positioned for the quarters ahead and for the long term. So with that, operator, we can open the line for questions.

Speaker #2: Thank you. We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star 9 to raise your hand, and star 6 to unmute.

Operator: Thank you. We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star nine to raise your hand and star six to unmute. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. First question comes from the line of Brian Kinstlinger of Alliance Global Partners. Brian, your line is open. Please go ahead.

Speaker #2: We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you're muted locally, please remember to unmute your device.

Speaker #2: Please stand by while we compile the Q&A roster. First question comes from the line of Brian Kinslinger of Alliance Global Partners. Brian, your line is open.

Speaker #2: Please go ahead.

Speaker #3: Great. Can you hear me?

Brian Kinstlinger: Great. Can you hear me?

Speaker #4: Yes.

Chris McGurk: Yes.

Speaker #3: Congratulations on the strategic positioning through these acquisitions. My first question is, when I looked at the filings on IndiQ, their business went from virtually no revenue in 2023 to $10 million to $32 million each of the last two years.

Brian Kinstlinger: Congratulations on the strategic positioning through these acquisitions. My first question is, when I look at the filings on IndiCue, their business went from virtually no revenue in 2023 to $10 million to $32 million each the last two years. Can you talk about the evolution of this business? I think there are three customers that make up the majority of the revenue. And is this recurring? And how, and, you know, is the growth generally penetrating new customers, or is it penetrating the wallets of those existing customers?

Speaker #3: Can you talk about the evolution of this business? I think there are three customers that make up the majority of the revenue. And is this recurring?

Speaker #3: And how is the growth generally—penetrating new customers, or is it penetrating the wallets of those existing customers?

Speaker #4: Hey, Brian. I think Eric will take that question. And I think the concentration has improved quite a bit year over year. So go ahead, Eric.

Chris McGurk: Hey, Brian, I think Erick will take that question. And I think the concentration has improved quite a bit year-over-year. So go ahead, Erick.

Speaker #5: Yeah, sure. So, I think there is a moment in time that IndiQ really was built for, and that's independent CTV monetization platforms. With the prior acquisitions of companies like SpringServe and Publica, the need for real independent platforms has emerged.

Erick Opeka: Yeah, sure. So, you know, I think, you know, there is a moment in time that IndieCue really was built for, and that's independent CTV monetization platforms. You know, with the prior acquisitions of companies like SpringServe and Publica, the need for real independent platforms has emerged. It's not uncommon in early-stage businesses like IndieCue to have pretty high concentration early on as they leverage strong long-term relationships of the founders and so on, and that's what happened in this case. But that underlying concentration has been improving pretty dramatically. You know, looking at the rearview mirror of the filings, the concentration has only improved, both on the supply and demand side.

Speaker #5: It's not uncommon in early-stage businesses like IndiQ to have pretty high concentration early on, as they leverage strong long-term relationships of the founders and so on.

Speaker #5: And that's what happened in this case. But that underlying concentration has been improving pretty dramatically, looking at the rearview mirror of the filings. The concentration has only improved, both on the supply and demand side.

Speaker #5: But I think one of the things that's very compelling and differentiated from, say, other network plays and other things is the combination of the technology and the volume of business that's flowing through.

Erick Opeka: But I think one of the things that's very compelling and differentiated from, say, other network plays and other things, is the combination of the technology, and the volume of business that's flowing through, leads to a much stickier and durable relationship than the people that don't own the tech or that partners have not built their businesses, decisioning on top of. So that durability, you know, some of the, you know, of the core customer base, you know, one represents, a large hold co that has, beneath that, hundreds of different advertisers flowing through it and spending through it. And some of the other players are very large-scale players. So I think it's important for a business like this to build strong nodes of consistent, recurring business that is mutually beneficial, and expand from there.

Speaker #5: Leads to a much stickier and durable relationship than people that don't own the tech, or that partners have not built their business decisioning on top of.

Speaker #5: So that durability, some of the core customer base — one represents a large hold-co that has beneath that hundreds of different advertisers flowing through it and spending through it.

Speaker #5: And some of the other players are very large-scale players. So I think it's important for a business like this to build strong nodes of consistent, recurring business that is mutually beneficial, and expand from there.

Speaker #5: And I think that's exactly what they've done also on the supply side, adding in major CTV partners and OEMs that have dramatically diversified the business over the last few months.

Erick Opeka: And I think, you know, that's exactly what they've done. Also on the supply side, adding in major CTV partners and OEMs that have dramatically diversified the business over the last few months. So really, it's having the right product at the right time for a market that needs autonomy and independence from SSPs, to be able to allow companies to do the things that they need to do to maximize their returns and yields in a CTV market that's maturing. And I think this is sort of the exact right product at the right time for that.

Speaker #5: So really, it's having the right product at the right time for a market that needs autonomy and independence from SSPs to be able to allow companies to do the things that they need to do to maximize their returns and yields in a CTV market that's maturing.

Speaker #5: And I think this is sort of the exact right product at the right time for that.

Speaker #3: Great, my one follow-up—and then I'll get back in the queue. I think you guys want us to keep to two—maybe an update on Matt's point.

Brian Kinstlinger: Great. My one follow-up, and then I'll get back in the queue. I think you guys want us to keep it to is maybe an update on Matchpoint. It looks like in your press release, you talked about announcing four new customers, APTN, The Asylum, Spark, and Waypoint. Can you size these wins, what they mean in your revenue guidance for next year? And did they include the full stack that you acquired, or will they grow as you add those new capabilities as part of Matchpoint?

Speaker #3: It looks like in their press release, you talked about announcing four new customers: ATPN, The Asylum, Spark, and Waypoint. Can you size these wins?

Speaker #3: What do they mean in your revenue guidance for next year? And did they include the full stack that you acquired, or will they grow as you add those new capabilities, as part of Matt's point?

Speaker #5: Yeah, so I'll defer to Tony on how, sort of, the business will evolve. But I think with most of our customers, we really have a—they're coming to us through one door for a specific need.

Erick Opeka: Yes, I'll defer to Tony on how sort of the business will evolve. But I think, you know, with most of our customers, we really have, you know, they're coming to us through one door for a specific need. Some of them are coming to us for media processing, others are coming through for quality control, others are coming through because they need an app platform. And still, others now are going to be coming through because they need monetization. So with that base of customers, most of those customers came through because they needed either an app platform solution or an encoding solution.

Speaker #5: Some of them are coming to us for media processing. Others are coming through for quality control. Others are coming through because they need an app platform.

Speaker #5: And still, others now are going to be coming through because they need monetization. So with that base of customers, most of those customers came through because they needed either an app platform solution or an encoding solution.

Speaker #5: I think we're following a pretty classic land-and-expand type model, where we get the customer in, and then they have a lot of other integrated services that they can add in later on.

Erick Opeka: I think, you know, we're following a pretty classic land-and-expand type model, where we get the customer in, and then they have a lot of other integrated services that they can add and layer on. So, Tony, I don't know if you can speak to sort of total value of these types of customers without specifics on any one specific. I think I'd characterize them as kind of lower, lower mid-market customers, but steady, stable customers. Tony, do you wanna, do you wanna take that?

Speaker #5: So, Tony, I don't know if you can speak to sort of total value of these types of customers without specifics on any one specific.

Speaker #5: I think I'd characterize them as kind of lower mid-market customers. But steady, stable customers. Tony, do you want to take that?

Speaker #3: Yeah, I'll take that. Thank you, Eric. So Brian, I think what we haven't really spoken a lot about is really the synergy between Giant and Matt's point.

Tony Huidor: Yeah, I'll take that. Thank you, Eric. So, Brian, I think what you want, what we haven't really spoken a lot about is really the synergy between Giant and Matchpoint. So think of a lot of the work that we've been doing with Matchpoint over the last, you know, 2 years, has been really on gaining a foothold within the market, market validation, traction. And we had started kind of on the low end of the ecosystem by doing deals with channel operators, fast channel providers, and so on. And then, as you may recall from earlier meetings, some of the studio deals, there was interest, but the vetting and the process to get onboarded was a year or 2 years. It's just a very long, slow process.

Speaker #3: So, think a lot of the work that we've been doing with Matt's point over the last two years has been really on gaining a foothold within the market, market validation, traction.

Speaker #3: And we had started kind of on the low end of the ecosystem by doing deals with channel operators, FAST channel providers, and so on.

Speaker #3: And as you may recall from earlier meetings, some of the studio deals, there was interest, but the vetting and the process to get onboarded was a year, two years.

Speaker #3: It's just a very long, slow process. So, by doing the giant acquisition overnight, we had deep studio relationships with four of the largest studios.

Tony Huidor: So by doing the Giant acquisition, overnight, we had deep studio relationships with, you know, four of the largest studios and a slew of other large media companies. So now what we've done is the synergy that the Giant deal brings us, is we now have the ability to start selling MatchPoint, not just delivery services, but other parts of the MatchPoint stack to this big-- to these big media clients. Some of these clients, one of the studios we were talking to, we were going through the vetting process. Once we acquired Giant, we no longer had to go through that process. We were an approved vendor. So think of it that way, that Giant really short-circuited the vetting process that could have taken MatchPoint a year for us to get into market.

Speaker #3: And a slew of other large media companies. So now what we've done is, the synergy that the giant deal brings us is we now have the ability to start selling, to Matt's point, not just delivery services, but other parts of the Matt's Point stack to these big media clients.

Speaker #3: Some of these clients, one of the studios we were talking to, we were going through the vetting process. Once we acquired Giant, we no longer had to go through that process.

Speaker #3: We were an approved vendor. And so, think of it that way—that giant really short-circuited the vetting process that could have taken, to Matt's point, a year for us to get into market.

Speaker #3: So now, to Erick's point, we have the ability to land and expand with these big media clients, and start selling more services than just what Giant was providing.

Tony Huidor: So now, to Eric's point, we have the ability to land and expand with these big media clients, and start selling them more services than just what Giant was providing. So some of these, you know, I would say our largest studio partner, you know, they, they were spending roughly $1 million a month with Giant. We think we could double that, easily, and that's just for the existing services. There's substantial upside there. It's, it's a little early to say how, how high the, the ceiling is, but we think that there's tremendous growth opportunity there.

Speaker #3: So some of these—I would say our largest studio partner—they were spending roughly $1 million a month with Giant. We think we could double that.

Speaker #3: Easily. And that's just for the existing services. There's substantial upside there. It's a little early to say how high the ceiling is, but we think that there's tremendous growth opportunity there.

Speaker #3: Great. I'll get back in the queue with some more questions. Thank you.

Brian Kinstlinger: Great. I'll get back in the queue with some more questions. Thank you.

Speaker #4: Thank you.

Tony Huidor: Thank you.

Speaker #1: Your next question comes from the line of Dan Kernos of Benchmark. The line is open. Please go ahead.

Erick Opeka: Your next question comes from the line of Dan Kurnos of Benchmark. The line is open. Please go ahead.

Operator: Your next question comes from the line of Dan Kurnos of Benchmark. The line is open. Please go ahead.

Dan Kurnos: Great. Thanks. First and foremost, guys, let me just say congratulations. I mean, it took a lot of time, effort, and guts to completely change the narrative here. So kudos to you guys for basically shifting the premise, which I think is great, and completely de-risking the other side of the business. With that in mind, Tony kind of just answered the first question I was going to ask, but maybe I'll ask it in sort of a broader sense, which is: We got some color from all three of you now, basically, on sort of the synergistic elements of these deals and how they work together. So, you know, within the confines of the guidance that you guys have given, you've got cost cuts, you've got other synergies you can make, you can improve Giant margins.

Speaker #3: Great. Thanks. First and foremost, guys, let me just say congratulations. I mean, it took a lot of time, effort, and guts to completely change the narrative here.

Speaker #3: So kudos to you guys for basically shifting the premise, which I think is great, and completely de-risking the other side of the business. So, with that in mind, Tony kind of just answered the first question I was going to ask.

Speaker #3: But maybe I'll ask it in sort of a broader sense, which is we've got some color from all three of you now, basically, on sort of the synergistic elements of these deals and how they work together.

Speaker #3: So within the confines of the guidance that you guys have given, you've got cost cuts. You've got other synergies you can make. You can improve giant margins.

Dan Kurnos: Like, how much of the combined synergies are we anticipating over the next twelve months? And how much do you think things could ramp if you guys kind of get the execution right, fold this all in, and then, you know, really show what the consolidated entity can do? So I'm just trying to understand what you guys have embedded in the guide for fiscal 2027. And I'll ask a follow-up after.

Speaker #3: How much of the combined synergies are we anticipating over the next 12 months? And how much do you think things could ramp if you guys kind of get the execution right, fold this all in, and then really show what the consolidated entity can do?

Speaker #3: So, I'm just trying to understand what you guys have embedded in the guide for fiscal '27. And I'll ask a follow-up after.

Speaker #4: And this is Chris, Dan. I just want to thank you for those comments. But I think probably Eric and Mark Lindsey are probably best to respond to your specific questions about fiscal 2027 and the guidance.

Chris McGurk: This is Chris. Dan, I just want to thank you for those comments, but I think probably Erick and Mark Lindsey are probably best to respond to your specific questions about fiscal 2027 and the guidance.

Speaker #5: Yeah, so I'll tee it up. I think I'll give the general sort of basket of these things. I'll let Mark Lindsey talk some specifics about the forward guidance.

Erick Opeka: Yeah. So I'll tee it up. I think, you know, I'll give the general sort of basket of these things. I'll let Mark Lindsey talk some specifics about, you know, forecast synergies as part of the forward guidance. I'll talk in generality. So if we really kind of think about, you know, what is, how are we stacking up the various elements here to get to those EBIT and revenue numbers. First and foremost, you know, just to rehash the cost, you know, the cost reductions in the studio business is really to get that business refocused and aligned on recurring revenue growth out of the streaming business at high margins.

Speaker #5: I'll talk in generalities. So if we really kind of think about what is how are we stacking up the various elements here to get to those even revenue numbers?

Speaker #5: First and foremost, I'll just rehash the cost. The cost reductions in the studio business are really to get that business refocused and aligned on recurring revenue growth out of the streaming business at high margins.

Erick Opeka: You know, obviously, you know, getting the studio model to a place where it's more predictable, and I think, you know, smoother, smoother revenue ramps. And, you know, one of the ways to do that is obviously push the margins as high up as we possibly can, and that'll, you know, that'll help absorb, you know, the natural volatility you see in a movie releasing business. Hopefully, we increase the throughput of movies to smooth out the volatility on that studio business. But that, that's sort of job number one in the studio. So that, you know, that's realizing about $7.5 million of cost reductions.

Speaker #5: Obviously, getting the studio model to a place where it's more predictable. And I think smoother revenue ramps—and one of the ways to do that is, obviously, push the margins as high up as we possibly can.

Speaker #5: And that'll help absorb the natural volatility you see in a movie-releasing business. Hopefully, we increase the throughput of movies to smooth out the volatility on that studio business.

Speaker #5: But that’s sort of job number one in the studio. So that’s realizing about $7.5 million of cost reductions. We also have a plan to move a lot of the content costs that today were being borne by our balance sheet off balance sheet into other financing mechanisms.

Erick Opeka: You know, we also have a plan to move a lot of the content costs that today were being borne by our balance sheet, off balance sheet, into other financing mechanisms that are, you know, kind of industry standard for studios to make that business look even better. So that's job number one there. Job number two is on these two acquisitions, what are the immediate synergies that can be provided? So we're talking about IndiCue. Mark Lindsey, you can confirm this. I believe we're looking at somewhere up to, you know, between $8 and 9 million of potential synergies by deploying IndiCue's capabilities across our media portfolio on the revenue side.

Speaker #5: That is kind of industry standard for studios to make that business look even better. So that's job number one there. Job number two is on these two acquisitions.

Speaker #5: What are the immediate synergies that can be provided? So we're talking about IndiQ. Mark Lindsey, you can confirm this. I believe we're looking at somewhere up to between $8 and $9 million of potential synergies.

Speaker #5: By deploying IndiQ's capabilities across our media portfolio, on the revenue side, Mark, can you speak to that a little bit on the revenue and potential EBITDA synergies as we kind of deploy IndiQ into monetization and improvements in our existing sort of ad-based infrastructure?

Erick Opeka: Mark, can you speak to that a little bit on the revenue and potential EBITDA synergies as we kind of deploy IndiCue into monetization and improvements in our existing sort of ad-based infrastructure?

Speaker #3: Yeah, sure. Sure. Absolutely. So I'll hit on a few of them. I definitely don't want to reset our guidance because they're good numbers as they are.

Mark Lindsey: Yeah, sure, sure. Absolutely. So, I'll hit on a few of them. I definitely don't want to reset our guidance, because, you know, they're good numbers as we, you know, as they are. But there's some significant revenue synergy upsides from both Giant acquisition and IndiCue and how they integrate with MatchPoint. And then as well as how, you know, the revenue synergies that come from IndiCue and their ability to leverage our existing infrastructure and our ad platform and our various channels. So we, as Brian noted earlier, IndiCue has had a significant growth profile. As Chris mentioned, they've exceeded estimates, exceeded their forecast the last three or four months. So they're growing rapidly. They're very profitable.

Speaker #3: But there's some significant revenue synergy upsides from both giant acquisition and IndiQ. And how they integrate with Match Point. And then as well as how the revenue synergies that come from IndiQ and their ability to leverage our existing infrastructure and our ad platform and our various channels.

Speaker #3: So as Brian noted earlier, IndiQ is at a significant growth profile. As Chris mentioned, they've exceeded estimates exceeded their forecast the last three or four months.

Speaker #3: So they're growing rapidly. They're very profitable. There are we believe revenue synergies that we're going to have the opportunity to execute on and realize.

Mark Lindsey: There are, we believe, revenue synergies that we're going to have the opportunity to execute on and realize that we don't have built into our guidance. This guidance is clearly numbers that we think we're going to be able to obtain. So there's some upside there. There's a lot of revenue synergies that are attainable, but we want to put a fairly conservative number out there. We have, you know, bigger numbers for fiscal 2028 and fiscal 2029 as it'll take a few months to ramp up and see those synergies take place and have traction.

Speaker #3: That we don't have built into our guidance. This guidance is clearly numbers that we think we're going to be able to obtain. So there's some upside there.

Speaker #3: There's a lot of revenue synergies. That are attainable. But we want to put a fairly conservative number out there. And we have bigger numbers for fiscal '28 and fiscal '29 as it'll take a few months to ramp up and see those synergies take place.

Speaker #3: And have traction. So without putting specific numbers out there, the 110 to 120—that's including mid-$50 million of revenue combined from the two acquisitions.

Mark Lindsey: So, you know, without putting specific numbers out there, the $110 to 120, that's including, you know, mid $50 million of revenue combined from the two acquisitions and $10 million plus of EBITDA coming from the acquisitions. But we think there's definitely some upside there, you know, related to the synergies. And then Erick mentioned there's about $7.5 million of cost savings that we have fully built into the adjusted EBITDA guidance that we put out there. So, while it's aggressive numbers, we think they're very attainable, and there's definitely some upside there.

Speaker #3: And $10 million-plus of EBITDA coming from the acquisitions. But we think there's definitely some upside there. Related to the synergies, and as Erick mentioned, there's about $7.5 million of cost savings that we have fully built into the adjusted EBITDA guidance that we put out there.

Speaker #3: So while it's aggressive numbers, we think they're very attainable. And there's definitely some upside there.

Speaker #5: And then I'll just finish up the last bit on the talking a little bit about the margin improvement on giant one so today, if you think about that business model, it's a labor-dependent with sort of labor and SG&A costs or depending on how it's characterized in some cases, it could be OPEX costs.

Erick Opeka: And then I'll, and I'll just finish up the last bit on, on the, talking a little bit about, the, margin improvement in, on Giant. One, so today, you know, if you think about that business model, you know, it's, it's a labor dependent with sort of, labor and, and SG&A costs, or depending how it's characterized, in some cases, it could be OpEx costs, tracking with revenue. So there, there is no, there is no scale benefit to that business. If you book more revenue, you got to hire more people. Well, we saw the limits of that, that was happening over the last couple of months, with them, where just not enough, you can't scale people enough to meet the demands of the industry.

Speaker #5: Tracking with revenue. So there is no scale benefit to that business. If you book more revenue, you got to hire more people. Will we saw the limits of that that was happening over the last couple of months?

Speaker #5: With them where just not enough you can't scale people enough to meet the demands of the industry. We look at it and see about 70% of the work can be done for encoding and delivery part of that business, which is the lion's share of the revenue.

Erick Opeka: We look at it and say about 70% of the work can be done for encoding and delivery part of that business, which is, you know, the lion's share of the revenue, can operate within Matchpoint's automation platform, which would kind of flip gross margins from, you know, low 30s to mid-70s, give or take. So that, in and of itself, is I think one of the biggest parts of the transformation, is not only is the volume, I wouldn't call it infinitely scalable, but near so, but it also, you know, more than, you know, 2x the margin out of the business. So we have to build, obviously, the mechanisms and systems that make it easy.

Speaker #5: Can operate within Match Point's automation platform, which would kind of flip gross margins from the low 30s to the mid-70s, give or take. So that in and of itself is, I think, one of the biggest parts of the transformation. Not only is the volume—we'll call it infinitely scalable—but near so.

Speaker #5: But it also more than 2x is the margin out of the business. So we have to obviously build the mechanisms and systems that make it easy.

Speaker #5: The good news is, porting that over is not exactly the most challenging technological thing in the world. It's more workflow and process in the early days.

Erick Opeka: The good news is porting that over is not exactly the most challenging technological thing in the world. It's more workflow and process in the early days, and it will be more automated in the later part of the year. But I think that also reflects on some of the cost basis. And then the last piece is we kind of look at these two businesses, you know, we don't really need to do. These are very differentiated businesses. There are some improvements we made on Giant pre-acquisition. It was an asset purchase. We didn't take all the people, all the cost structure. So we, on day one, we improved the cost structure there. There are minor things you do in any business, but that business, you know, for the most part, the cost realization, a lot of it's done already.

Speaker #5: And it's going to be more automated in the later part of the year. But I think that also reflects on some of the cost basis.

Speaker #5: And then the last piece is, we kind of look at these two businesses—we don't really need to do these. These are very differentiated businesses.

Speaker #5: There were some improvements we made on Giant pre-acquisition. It was an asset purchase. We didn't take all the people, all the cost structure. So on day one, we improved the cost structure there.

Speaker #5: There are minor things you do in any business. But that business for the most part, the cost realization a lot of it's done already.

Speaker #5: And IndiQ is a small, lean, highly profitable, smartly structured company that we don't have to do. There’s not really any synergies to reap there.

Erick Opeka: IndiCue is a, you know, small, lean, highly profitable, smartly structured company that we don't have to do. There's not really any synergies to reap there. Most synergies are gonna be coming from optimizations to the business models of the respective companies on either side of the equation.

Speaker #5: So most synergies are going to be coming from optimizations to the business models of the respective companies on either side of the equation.

Speaker #4: That is incredibly comprehensive. Thank you for that—very helpful. And don’t worry, Mark; no one includes revenue synergies in acquisitions, so I think you’re fine.

Dan Kurnos: That is incredibly comprehensive. Thank you for that. Very helpful. And don't worry, Mark, we, no one includes revenue synergies in acquisitions, so I think you're fine. The only other thing I'd ask for you guys, because I know this is gonna be a sort of an unprecedented, or at least in recent times, question, which is: How should we think about free cash flow conversion now that you guys are gonna have real meaningful EBITDA? And I know, you know, we have the really favorable convertible note that's out there, but, you know, you guys are gonna have to think about now what to do with the cash that you're gonna start generating.

Speaker #4: The only other thing I'd ask for you guys because I know this is going to be sort of an unprecedented or at least in recent times question, which is how should we think about free cash flow conversion now that you guys are going to have real meaningful EBITDA?

Speaker #4: And I know we have the really favorable convertible note that's out there. But you guys are going to have to think about now what to do with the cash that you're going to start generating.

Speaker #3: Yeah. I'll tee it up, and then Mark, you can kind of dig into that. But the good news on these two businesses is not big CapEx—no big CapEx investments really are going to be required.

Erick Opeka: Yeah. I'll, I'll tee it up, and then Mark, you can kind of dig into that, but-

Dan Kurnos: Sure.

Erick Opeka: You know, the good news on these two businesses is not big CapEx. No big CapEx investments really are gonna be required. They've been, you know, the improvements and the sort of synergies and benefits to growth are coming from, you know, over a decade of investment into our software platform. So we start to realize the benefits of those, applying those to other scale economics. And/or they've built out many years more capacity than we'll need to. So realistically, free cash flow flows back into growth initiatives for the company.

Speaker #3: They've been the improvements and the sort of synergies and benefits to growth are coming from over a decade of investment into our software platform.

Speaker #3: So we start to realize the benefits of applying those to other scale economics, and/or they've built out many years' more capacity than we'll need to.

Speaker #3: So realistically, free cash flow flows back into growth initiatives for the company. So I think that's one of the core benefits here is we see an environment where there's a lot of companies, similar to giant and IndiQ, that are highly accretive and add to the flywheel of this platform.

Erick Opeka: So I think that's one of the core benefits here, is we see an environment where there's a lot of companies similar to Giant and IndiCue, that are highly accretive and add to the flywheel of this platform, as sort of a baby version of what you know, Salesforce did years ago, bolting things on or other things, that can scale this up even larger. It also allows for other areas of investment and growth of things that we've been discussing internally. So that's a good place to be where we can leverage free cash flow, as opposed to, say, dilution, for some of these growth initiatives.

Speaker #3: As sort of a baby version of what Salesforce did years ago, bolting things on or other things, that can scale this up even larger.

Speaker #3: It also allows for other areas of investment and growth of things that we've been discussing internally. So, that's a good place to be, where we can leverage free cash flow as opposed to, say, dilution for some of these growth initiatives.

Speaker #1: Yeah.

Dan Kurnos: Yeah. Congrats, guys.

Speaker #2: Congrats, guys.

Speaker #3: Oh, okay. Go ahead.

Erick Opeka: Oh, okay. Go ahead.

Mark Lindsey: Oh, okay. Go ahead.

Speaker #1: No, that's it, Mark. Congrats. So, whatever you want to finish up with.

Dan Kurnos: No, that's it, Mark. If you got something, go ahead, but I just... Congrats. So whatever you want to finish up with.

Erick Opeka: No, that's it, Mark. If you got something, go ahead, but I just... Congrats. So whatever you want to finish up with.

Speaker #4: Thank you.

Laura Martin: Thank you.

Dan Kurnos: Thank you.

Speaker #3: I was just going to summarize what Erick said. I mean, this is a great position to be in. It's a little bit different than where we've been the last few years.

Erick Opeka: No, I was just, I was just gonna summarize, you know, what, what Erick said. I mean, this is a great position to be in. It's a little bit different than where we've been the last few years. You know, we're 5 weeks on one acquisition and 2 days or 3 days into the other one, so you know, still some time to get our arms around them. But, definitely an opportunity to put some dry powder on our balance sheet, you know, reduce the, the, the outstanding balance on our revolver. As, as Erick alluded to, there's, there's some unique opportunities out there for us for some tuck-in acquisitions to continue to help grow the company. That will be day one accretive, that we feel like we can get at a great price.

Mark Lindsey: No, I was just, I was just gonna summarize, you know, what, what Erick said. I mean, this is a great position to be in. It's a little bit different than where we've been the last few years. You know, we're 5 weeks on one acquisition and 2 days or 3 days into the other one, so you know, still some time to get our arms around them. But, definitely an opportunity to put some dry powder on our balance sheet, you know, reduce the, the, the outstanding balance on our revolver. As, as Erick alluded to, there's, there's some unique opportunities out there for us for some tuck-in acquisitions to continue to help grow the company. That will be day one accretive, that we feel like we can get at a great price.

Speaker #3: We're five weeks on one acquisition and two or three days into the other one, so still some time to get our arms around them.

Speaker #3: But definitely an opportunity to put some dry powder on our balance sheet, reduce the outstanding balance on a revolver. As Erick alluded to, there are some unique opportunities out there for us for some tuck-in acquisitions to continue to help grow the company that will be day-one accretive, that we feel like we can get at a great price.

Speaker #3: And hopefully, we're in a position where we can utilize cash and/or equity as capital to make those acquisitions. So we can talk free cash flow in the next quarter and start reporting on it.

Erick Opeka: You know, hopefully, we're in a position where we can utilize cash and/or equity as a capital to make those acquisitions. We can talk free cash flow and

Mark Lindsey: You know, hopefully, we're in a position where we can utilize cash and/or equity as a capital to make those acquisitions. We can talk free cash flow and... in next quarter and start reporting on it. So, you know, I know you're excited to see that number, so, you know, we'll start doing it.

Tony Huidor: ... in next quarter and start reporting on it. So, you know, I know you're excited to see that number, so, you know, we'll start doing it.

Speaker #3: So I know you're excited to see that number. So we'll start doing it.

Speaker #5: Just a reminder: if you are muted locally, please remember to unmute your device. Your next question comes from the line of Laura Martin with Needham.

Erick Opeka: Just a reminder, if you are muted locally, please remember to unmute your device. Your next question comes from the line of Laura Martin, Needham. Your line is open. Please go ahead. Laura, just a reminder to unmute your line locally.

Operator: Just a reminder, if you are muted locally, please remember to unmute your device. Your next question comes from the line of Laura Martin, Needham. Your line is open. Please go ahead. Laura, just a reminder to unmute your line locally.

Speaker #5: Your line is open. Please go ahead. Or just a reminder to unmute your line locally.

Speaker #6: Okay. Can you hear me okay?

Laura Martin: Hi, guys. Can you hear me okay?

Speaker #4: Can you hear me now?

Erick Opeka: We can hear you now.

Speaker #6: Great. Okay. So, congratulations. It seems like you've made transformative acquisitions here. Chris, my first question is for you. So, the studios absolutely need to cut costs, and they need to automate their workflows.

Laura Martin: Great. Okay. So congratulations. Seems like you've made transformative acquisitions here. Chris, my question, my first question is for you. So the studios absolutely need to cut costs, and they need to automate their workflows. But I sort of feel like the studios just. Look, I think Wall Street has a consensus that generative AI tools are gonna lower the cost of content creation and proliferate content makers, and that's gonna ultimately hurt the studios over a longer term frame. So my question is, when I think about Matchpoint, which I saw a demo at CES, and I thought it was fantastic already, it's gonna be even better now. Are there tools and features of Matchpoint that are applicable to the next generation of content creators who run lean, right? They're five guys, and they have their great software narrative guys.

Speaker #6: But I sort of feel like the studio is just—look, I think Wall Street has a consensus that generative AI tools are going to lower the cost of content creation and proliferate content makers.

Speaker #6: And that's going to ultimately hurt the studios over a longer-term frame. So my question is, when I think about Matchpoint, which I saw demoed at CES and I thought it was fantastic already.

Speaker #6: It's going to be even better now. Are there tools and features of Matchpoint that are applicable to the next generation of content creators who run lean?

Speaker #6: Right? There’s five guys, and they have their great software narrative guys. So, is there something here that is applicable to the next generation?

Chris McGurk: Yeah.

Laura Martin: Is there something here that is applicable to the next generation?

Speaker #4: Yeah. Well, first, Laura, thank you very much for joining the call. We're very happy that you listened in. Thank you. Yeah. One of the things that I really like about what we're doing on the AI front is we're putting forth, I think, positive AI tools that help the industry, whether it's what we're doing here with giant where we're using AI and our technology basically to power fulfillment and drive down costs for the studios, or what we're doing on CineSearch with Ava, our Siri for streaming search.

Chris McGurk: Yeah. Well, first, Laura, thank you very much for joining the call. We're very happy that you, you listened in. Thank you. Yeah, one of the things that I really like about what we're doing on the AI front is we're putting forth, I think, you know, positive AI tools that help the industry, whether it's, you know, what we're doing here with Giant, where we're using AI and our technology basically to power fulfillment and drive down costs for the studios, or what we're doing on CineSearch, you know, with Ava, our Siri for streaming search. They're done in a way that doesn't have any negative impact at all on the creative side of the business, and yet they're positive applications of AI within the industry.

Speaker #4: They're done in a way that doesn't have any negative impact at all on the creative side of the business. And yet, they're positive applications of AI within the industry.

Speaker #4: We just made an announcement the other day, and I'm going to turn this over to Tony, about how we're going to be developing AI tools on the creative side of the business.

Chris McGurk: We just made an announcement the other day, and I'm going to turn this over to Tony about how, you know, we're gonna be developing AI tools on the creative side of the business. So, Tony, do you want to do you want to respond to that question?

Speaker #4: So Tony, do you want to respond to that question?

Speaker #2: Yeah, of course. Thanks, Chris. Laura, thanks for the question. Yeah. Obviously, as an AI-forward company, we continue to monitor and watch all the key developments within the industry.

Tony Huidor: Yeah, of course. Thanks, Chris. Laura, thanks for the question. Yeah, you know, obviously, as an AI forward company, we continue to monitor and, you know, watch all the key developments within the industry. On Monday, we announced the formation of the Matchpoint Creative Labs. That's essentially our R&D unit for Gen AI. So we're already working with some clients on taking Gen AI and using it for ad creation, which would tie in with IndiCue. We're also using it for channel branding, station IDs, and so on, and this is a service that we can provide our Matchpoint clients. They use Matchpoint Blueprint or Fast Channels, but we continue to invest in that area. I think in terms of your question, definitely where we are compared to the rest of the industry, we're pretty far ahead.

Speaker #2: On Monday, we announced the formation of the Matchpoint Creative Labs. That's essentially our R&D unit for GenAI. So we're already working with some clients on taking GenAI and using it for ad creation, which would tie in with IndiQ.

Speaker #2: We're also using it for channel branding, station IDs, and so on. And this is a service that we can provide our Matchpoint clients. They use Matchpoint Blueprint or FAST channels.

Speaker #2: But we continue to invest in that area. I think in terms of your question, definitely we are compared to the rest of the industry, we're pretty far ahead.

Tony Huidor: Agentic AI is something that Erick spoke about in during his portion of the script. I would say Agentic AI and creating an intelligence layer related that sits on top of the data that we manage is a big focus of ours, that we'll be doing some announcements later this year. But we get it. We're very invested in this space, and I think we have a very good handle in terms of how we can leverage AI in what we feel is an ethical way that doesn't, you know, hurt the business. But we're here ultimately to build, as we say, picks and shovels to help the rest of the entertainment industry move forward, and we think we have a huge foundational head start compared to any of our competitors.

Speaker #2: Agentic AI is something that Eric spoke about during his portion of the script. I would say Agentic AI and creating an intelligence layer related that sits on top of the data that we manage is a big focus of ours that we'll be doing some announcements later this year.

Speaker #2: But we get it. We're very invested in this space, and I think we have a very good handle, in terms of how we can leverage AI in what we feel is an ethical way that doesn't hurt the business.

Speaker #2: But we're here, ultimately, to build, as we say, picks and shovels to help the rest of the entertainment industry move forward. And we think we have a huge foundational head start compared to any of our competitors.

Speaker #3: And I'll add one thing, Laura. So, I think your question really is whether the studios catch up and start to focus on AI—and there's sort of an innovator's dilemma at play there—or if other companies emerge.

Erick Opeka: I'll add one thing, Laura. So, you know, I think your question really is whether the studios catch up and start to focus on AI, and there's sort of an innovator's dilemma at play there, or if other companies emerge. I think our position is that AI is gonna massively increase the volume of total content. So if anything, you know, a platform that can organize, monetize, route it is gonna become even more critical. You know, apply other tools to make it distributable into, you know, beyond just YouTube and other sort of social platforms. Because we believe, you know, looking at the quality leaps, generational leaps that are happening, this is gonna democratize the quality of available and the volume of content.

Speaker #3: I think our position is that AI is going to massively increase the volume of total content. So, if anything, a platform that can organize, monetize, and route it is going to become even more critical.

Speaker #3: Apply other tools to make it distributable into beyond just YouTube and other sort of social platforms. Because we believe, looking at the quality leaps—generational leaps—that are happening, this is going to democratize the quality available in this and the volume of content. But we think that this will make what we do—being able to ingest, normalize the metadata so it can go into the various sales and monetization channels, doing things like localization, tracking rights, delivery to all the FAST, AVOD, other platforms, performance tracking.

Erick Opeka: But we think that this is- this will make what we do, you know, being able to ingest, normalize the metadata so it can go into the various sales and monetization channels, doing things like localization, tracking rights, delivery to all the FAST AVOD, other platforms, performance tracking, providing real-time data and feedback that can inform the models that are making it. That's where I think our platform actually is going to add massive value if that is the future universe that happens. And we believe that's likely. So we think we're in a very good position to handle that explosion of content.

Speaker #3: Providing real-time data and feedback that can inform the models that are making it. That's where I think our platform actually is going to add massive value, if that is the future universe that happens.

Speaker #3: And we believe that's likely. So we think we're in a very good position to handle that explosion of content.

Speaker #6: Great. And then my second question, and then I'll stop there, is do you guys just made transformative? You transformed the business with these two acquisitions.

Laura Martin: ... Great. And then my second question, and then I'll stop there, is you guys just made transformative. You transformed the business with these two acquisitions. So what next? Are we done? Are we done with acquisitions? Do you need to get more stuff? Do you listen to your clients about what they need, and they lead the way in what you add or bolt on to these acquisitions? What happens next on the M&A front?

Speaker #6: So what next? Are we done? Are we done with acquisitions? Do you need more stuff? Do you listen to your clients about what they need and they lead the way in what you add or bolt on to these acquisitions?

Speaker #6: What happens next on the M&A front?

Speaker #4: So I would add that, number one, we've got a lot of work to do to digest these two acquisitions. So the short term is about post-merger integration, making these all work, getting all the teams aligned to the growth that we're putting out there.

Erick Opeka: So I would add that, you know, number one, we've got a lot of work to do to digest these two acquisitions. So the short term is about, you know, post-merger integration, making these all work, getting all the teams aligned to the growth that we're putting out there. But I think, you know, the environment that we find ourselves where, you know, the media services industry, the processing, the packaging data, there are a lot of companies that were, you know, private equity and other buyers, corporates, and strategics bought these businesses at the peak of COVID, at high valuations or under theses that don't make sense anymore. And those companies are gonna become available over the next months and years.

Speaker #4: But I think the environment that we find ourselves in, where the media services industry, the processing of the packaging data, there are a lot of companies that were private equity and other buyers—corporates and strategics—bought these businesses at the peak of COVID, at high valuations, or under theses that don't make sense anymore.

Speaker #4: And those companies are going to become available over the next months and years. And we think finding the best of the best that have strong assets that fit with our flywheel, stripping out cost structures in the same way we're doing here and automating them to capture scale and more value, is a model that we think is worthy of pursuing. First, we're going to prove the thesis, though, over the next months and quarters here.

Erick Opeka: And we think finding the best of the best that have strong assets that fit with our flywheel, stripping out cost structures the same way we're doing here, and automating them to, you know, capture scale and more value, is a model that we think is worthy of pursuing. And you know, first, we're gonna prove the thesis, though, over the next months and quarters here.

Chris McGurk: You know, I agree with that, Erick. But I would just say, if you look at these two deals, if you drill down into these two deals, they're gonna be enormously accretive. They were done, you know, with great valuations, and there are incredible synergies between the two companies. And even though, you know, it's always a challenge to integrate companies together, we think in the grander scheme of things, both companies are very easily integratable, you know, into Matchpoint. So, and the short answer is, if we can find other opportunities like Giant and like IndiCue, that we think just have enormous upside, of course, we're gonna do that because it's in the best interest of our shareholders.

Speaker #2: I agree with that, Eric. But I would just say if you look at these two deals, if you drill down into these two deals, they're going to be enormously accretive.

Speaker #2: They were done with great valuations. And there are incredible synergies between the two companies. And even though it's always a challenge to integrate companies, together, we think in the greater scheme of things, both companies are very easily integratable into Matchpoint.

Speaker #2: So the short answer is, if we can find other opportunities like Giant and like IndiQ that we think just have enormous upside, of course we're going to do that because it's in the best interest of our shareholders.

Speaker #6: Thank you very much.

Laura Martin: Thank you very much.

Operator: There are no further questions remaining, so I'll pass the conference back over to Chris McGurk, Chairman and CEO of Cineverse, for closing remarks.

Speaker #7: There are no further questions remaining, so I'll pass the conference back over to Chris McGurk, chairman and CEO of Cineverse for closing remarks.

Speaker #4: Thank you. Thank you all for joining us today. And please feel free to reach out to Julie Millstead with any additional questions you might have from this call.

Chris McGurk: Thank you. Thank you all for joining us today. Please feel free to reach out to Julie Milstead with any additional questions you, you might have from this call. So we look forward to speaking to you all again on our next quarterly call. Thank you all very much.

Speaker #4: So, we look forward to speaking to you all again on our next quarterly call. Thank you all very much.

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

Q3 2026 Cineverse Corp Earnings Call

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