CuriosityStream Inc.

CuriosityStream Inc. operates as a media and entertainment company specializing in premium video and audio programming within factual entertainment categories such as science, history, society, nature, lifestyle, and technology. The company's mission is to provide factual entertainment that informs, enchants, and inspires, primarily through subscription video on-demand (SVOD) platforms, content licensing, bundled content licenses for SVOD and linear offerings, talks and courses, and partner bulk sales. The company operates as a single operating segment, delivering content through various applications, partnerships, and affiliate relationships. Its content library features approximately 14,000 programs ¹, with new video titles launched weekly in high- or ultra-high definition. Substantial portions of the library have been localized into eleven different languages through international partnerships.

The core business model relies on a collaborative effort between content acquisition, legal and finance, creative services, and content operations and technology teams. Revenue is generated from four main sources: Subscription and license fees from its Direct-to-Consumer business and Partner Direct subscribers ("Direct Business"), license fees from content licensing arrangements ("Content Licensing"), bundled license fees from distribution affiliates ("Bundled Distribution"), and other revenue, including advertising and sponsorships ("Other"). The company aggregates rights to millions of video and audio programs, course materials, and other assets for its own services and for licensing to other media and technology companies.

The Direct Business, comprising Direct-to-Consumer (DTC) and Partner Direct, provides streaming content to consumers. DTC offerings include monthly or annual subscriptions through the company's website and applications for electronic devices, with pricing varying by location, tier, and term. The "Smart Bundle" service is also offered, including access to Tastemade, Kidstream, SommTV, and Curiosity University. Partner Direct involves license fees from MVPDs, vMVPDs, and digital distributors like Comcast, Cox, Dish, Amazon Prime Video Channels, Apple Channel, Roku Channel, Sling TV, and YouTube TV, where subscribers access content as a premium add-on.

The Content Licensing business provides factual content to entertainment media companies and licenses high volumes of content and data assets for training next-generation AI models. These AI-related licensing activities, along with traditional content licensing deals (including non-monetary barter transactions), are reported as Library sales. The company also previously sold selected rights to content prior to production to reduce risk and generate upfront revenue, though no new presale arrangements were entered into during fiscal years 2025 or 2024.

Bundled Distribution involves affiliate relationships with MVPD and vMVPD partners, such as Multichoice, FuboTV, and Izzi, offering a broad scope of rights including 24/7 linear channels, on-demand content, mobile rights, and pricing flexibility in exchange for annual fixed fees or per-subscriber fees. This segment provides long-cycle and recurring revenue and access to a global subscriber base. The "Other" revenue stream includes advertising and sponsorship services through integrated digital brand partnerships, such as program integration, branded social media videos, and broadcast advertising spots. Content is also delivered via advertising-based video-on-demand (AVOD) and free advertising-supported streaming television (FAST) platforms, including dedicated YouTube channels, to maximize brand reach and digital ad inventory. Non-monetary barter transactions for promotional services or media campaigns are also recognized as Other revenue.

For the year ended December 31, 2025, total revenue was $71.7 million ², an increase of $20.5 million ³ or 40% ⁴ from $51.1 million ⁵ in 2024. Gross profit, calculated as total revenues less cost of revenues, was $40.545 million ⁶ in 2025, compared to $25.771 million ⁷ in 2024. This translates to a gross margin of 56.6% ⁸ in 2025, up from 50.4% ⁹ in 2024. Operating loss for 2025 was $7.3 million ¹⁰, a reduction of $6.0 million ¹¹ or 45% ¹² from an operating loss of $13.3 million ¹³ in 2024. Net loss for 2025 was $6.4 million ¹⁴, a decrease of $6.5 million ¹⁵ or 50% ¹⁶ from a net loss of $12.9 million ¹⁷ in 2024. Diluted EPS for 2025 was $(0.11) ¹⁸, compared to $(0.24) ¹⁹ in 2024. Net cash provided by operating activities was $13.1 million ²⁰ in 2025, up from $8.2 million ²¹ in 2024. As of December 31, 2025, cash and cash equivalents totaled $18.318 million ²², with an additional $8.966 million ²³ in short-term investments in debt and other securities. Total liabilities were $34.244 million ²⁴ and total stockholders' equity was $41.487 million ²⁵. The company had an accumulated deficit of $335.8 million ²⁶ as of December 31, 2025.

Revenue growth was primarily driven by a $25.4 million ²⁷ increase in Content Licensing revenue, which surged by 326% ²⁸ year-over-year. This was partially offset by a $5.0 million ²⁹ or 13% ³⁰ decrease in Direct Business revenue and a $0.6 million ³¹ or 14% ³² decrease in Bundled Distribution revenue. Other revenue increased by $0.6 million ³³ or 78% ³⁴. The Direct-to-Consumer (DTC) segment within Direct Business saw a decrease of $7.6 million ³⁵ or 24% ³⁶ in revenue, while Partner Direct revenue increased by $2.6 million ³⁷ or 36% ³⁸. Cost of revenues increased by $5.750 million ³⁹ or 23% ⁴⁰, primarily due to a $9.5 million ⁴¹ increase in distribution costs, which includes higher revenue share payments associated with distribution and licensing partnerships. This was partially offset by a $4.6 million ⁴² or 24% ⁴³ decline in content amortization. General and administrative expenses increased by $9.2 million ⁴⁴ or 37% ⁴⁵, largely due to a $7.8 million ⁴⁶ rise in stock-based compensation.

During 2025, the company made a minority equity investment of $0.2 million ⁴⁷ in a private AI technology company, acquiring 1,217,730 Series 2 Seed Preferred Shares ⁴⁸, representing approximately a 2.60% ⁴⁹ ownership interest on a fully diluted basis. The company also early adopted ASU 2025-05, Financial Instruments—Credit Losses (Topic 326), and ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40), both effective January 1, 2025. The company continued to engage in non-monetary trade and barter transactions, with $12.6 million ⁵⁰ in content licensing revenue from these transactions in 2025, up from $4.5 million ⁵¹ in 2024. All outstanding warrants expired unexercised on October 14, 2025.

The company expects to continue generating positive cash flow from operating activities, building on the trend observed in 2024 and 2025. Current cash levels and investments, combined with anticipated operating cash flows and the newly established Senior Secured Revolving Credit Facility, are believed to be adequate to support ongoing operations, capital expenditures, dividend payments, and working capital for at least the next twelve months from the date of filing.

A major growth area is the Content Licensing business, particularly new licensing agreements related to AI model training. This involves both the company's existing library content and content from partners under revenue-sharing arrangements. The company is in the early stages of these content licensing efforts and aims to grow them into a sustainable business. The company also continues to expand its offerings across YouTube and other similar ad-supported distribution channels to maximize brand reach and digital ad inventory, with an intent to develop integrated digital brand partnerships with advertisers.

The company intends to increase revenues by expanding its subscriber base, continuing international market expansion, and developing its Content Licensing business, as well as increasing its focus on AVOD, TVOD, and FAST channels. To improve operational efficiency and reduce localization costs, the company is exploring and testing Artificial Intelligence (AI) solutions for subtitling and dubbing, which it believes may offer a more scalable path for future international expansion. The company also seeks partnerships with strong platforms in international territories, subject to existing geographic and media restrictions on content distribution.

In terms of operational outlook, the company has undertaken cost-savings initiatives, including workforce reductions and other cost reduction efforts, to operate more efficiently and control expenditures. These initiatives are designed to reduce operating costs without loss of productivity. The company also periodically discontinues operations and business partnerships that are no longer considered additive or complementary to its business or strategic direction.

Planned capital allocation includes continued expenditures for purchases of property and equipment. The amount, timing, and allocation of these capital expenditures are discretionary, allowing management to defer budgeted expenditures to achieve a desired balance between sources and uses of liquidity and prioritize projects with the highest expected returns and cash flow potential. The company may also significantly increase capital expenditures to capitalize on attractive opportunities, subject to financing alternatives. The Board declared a cash dividend of $0.08 per share ⁵² to be paid on March 20, 2026 ⁵³, for an expected aggregate amount of $4.7 million ⁵⁴. The company intends to continue paying regular quarterly cash dividends, subject to Board approval and market conditions. On March 10, 2026, the Board authorized an additional $2.0 million ⁵⁵ for its share repurchase program, increasing the total approved amount to $6.0 million ⁵⁶. As of December 31, 2025, $3.7 million ⁵⁷ remained available for future repurchases.

The company faces structural headwinds in its Bundled Distribution business due to the ongoing disruption of the global linear pay-television industry. Execution risks include the uncertainty of sustaining revenues from AI content licensing efforts, as this is a new and evolving market without an established track record. AI developers may find alternative content sources on more favorable terms, and the intellectual property rights of generative AI software are not fully interpreted by courts or addressed by legislation, potentially allowing AI developers to use public, unlicensed data. Demand for AI models may also be limited by regulation or other factors, reducing the value of content licensed for AI training. The reliance on non-cash barter transactions, while preserving liquidity, does not generate cash inflows for ongoing operations, debt service, or cash-based content acquisitions, potentially impacting cash flow and financial flexibility if the perceived value of content assets declines.

The company faces several material risks, including the inability to attract and retain users, which could be adversely affected by competitive offerings, unsatisfactory content, or macroeconomic conditions like inflation. Failure to realize intended efficiencies from cost-savings initiatives, including workforce reductions, could adversely affect profitability. The company has a history of net losses, with an accumulated deficit of $335.8 million ²⁶ as of December 31, 2025, and anticipates continued net losses. Operating results are difficult to predict due to factors such as revenue-generating relationships, gross margins, subscriber growth, content development, competition, and regulatory changes. Unsuccessful management of growth, including international expansion and new business segments, could adversely affect the business. Strategic acquisitions and investments, including the Spiegel Venture joint venture, carry risks such as integration difficulties, unforeseen costs, and potential liabilities, including a put option that could require the company to purchase the Spiegel Venture partners' interests for an estimated range of $1.8 million ⁵⁸ to $2.2 million ⁵⁹. Untested growth strategies, such as AI-driven localization, may not meet quality standards or achieve broad audience acceptance. Excessive user churn, influenced by pricing, content, and competition, could harm revenues. The company may be unable to compete successfully against current and future competitors, many of whom have greater resources and brand recognition. Risks associated with content acquisition, production, licensing, and distribution include potential liability for infringement and unforeseen costs if content does not meet expectations. Reliance on third-party partners for service availability and payment processing exposes the company to performance uncertainties and payment disruptions. Cybersecurity risks, including cyber-attacks and unauthorized access to systems or data, could lead to service degradation, data loss, and reputational harm. The company relies heavily on Amazon Web Services (AWS), and any disruption or interference with its use could impact operations. International operations expose the company to economic, political, and regulatory risks, including differing laws, tax consequences, and currency fluctuations. Changes in U.S. and non-U.S. tax laws, including digital services taxes, could increase tax obligations. The company's common stock could be delisted from Nasdaq if it fails to meet listing requirements, including maintaining a $1.00 ⁶⁰ minimum share price, which would limit investor transactions and liquidity.

Management's message emphasizes a strategic shift towards prioritizing high-margin revenue opportunities and cost-optimization over aggressive subscriber acquisition, despite a decline in total Direct-to-Consumer subscriptions during 2024 and 2025. The company is focused on retaining high-value subscribers and growing other revenue streams, particularly content licensing, AVOD, and FAST platforms, with a significant focus on data licensing for AI model training. Management highlights the importance of continuous value provision to users, including improvements to service, content range and quality, ease of use, and competitive pricing. Key strategic priorities for the period ahead include expanding the subscriber base, continuing international market expansion, developing the Content Licensing business, and increasing focus on AVOD, TVOD, and FAST channels. Management also intends to continue developing integrated digital brand partnerships with advertisers. The Board has declared a cash dividend of $0.08 per share ⁵² to be paid on March 20, 2026 ⁵³, for an expected aggregate amount of $4.7 million ⁵⁴, and intends to continue paying regular quarterly cash dividends, subject to financial condition and Board approval. Additionally, the Board authorized an additional $2.0 million ⁵⁵ for the share repurchase program, increasing the total approved amount to $6.0 million ⁵⁶.