Cineverse (NASDAQ:CNVS) executives used the company’s fiscal 2026 third-quarter earnings call to highlight improved profitability in its base businesses and to outline the strategic and financial impact of two acquisitions completed after quarter end: Giant Worldwide and IndiCue.
Quarterly performance and cost actions
For the fiscal third quarter ended December 31, 2025, Cineverse reported revenue of $16.3 million, up from $12.4 million in the prior quarter and down from $40.7 million in the year-ago quarter. Chief Financial Officer Mark Lindsey noted the prior-year period included more than $20 million of theatrical results from Terrifier 3, which created a difficult comparison.
On margins, CEO Chris McGurk said direct operating margin improved to 69% from 48% in the prior-year quarter. President and Chief Strategy Officer Erick Opeka added that the company has realized approximately $1.9 million of a targeted $7.5 million in projected cost reductions across studio operations and corporate overhead, driven by personnel optimization, vendor eliminations, and cost renegotiations. He said most of the remaining reductions are expected to flow through over the next two quarters.
Cineverse ended the quarter with $2.5 million in cash and $4.2 million of availability under its East West Bank revolver.
Acquisitions: Giant Worldwide and IndiCue
Management described the two post-quarter acquisitions as a “one-two punch” intended to expand Cineverse’s recurring revenue base and strengthen its positioning around Matchpoint, the company’s technology platform for media supply chain services.
Giant Worldwide was an all-cash asset acquisition for $2 million, including a $350,000 initial payment and $1.65 million in deferred payments over the next four quarters, according to Lindsey. Cineverse said it conservatively expects Giant to generate $15 million to $17 million in revenue and $3.5 million to $4 million in Adjusted EBITDA in fiscal 2027. McGurk also said integration has been going smoothly and that the industry response to combining Giant with Matchpoint has been “overwhelmingly positive.”
Executives emphasized Giant’s long-standing relationships with major studios and platforms, including approved vendor status. Opeka said Giant historically relied on manual, labor-dependent workflows and had been turning away work because it could not scale hiring quickly enough. He said early deployments of Matchpoint capabilities at Giant are already driving 60% to 70% efficiency improvements in encoding and delivery.
IndiCue was acquired as a business combination for 100% of equity for base consideration of $22 million. Lindsey said $12.8 million was paid at closing and included $9.2 million of deferred consideration due within one year in cash or equity at the company’s discretion. Total consideration could rise to $40 million if IndiCue meets future revenue and gross profit milestones over the next three years, with any earn-out payable in cash or equity at Cineverse’s discretion. The transaction also included $3 million of cash and $750,000 of net working capital at closing.
Management said IndiCue is expected to contribute more than $38 million of revenue and $7 million of Adjusted EBITDA in fiscal 2027. Opeka described IndiCue as a connected-TV monetization platform with capabilities spanning ad serving, supply-side and demand-side functions, and server-side ad insertion, and said the company had more than 40 live clients with another 75 onboarding.
Fiscal 2027 outlook and financing
Following the acquisitions, Cineverse issued fiscal 2027 guidance (beginning April 1) of $115 million to $120 million in revenue and $10 million to $20 million in Adjusted EBITDA. McGurk said the company’s confidence in the outlook was supported by improved base-business profitability and early indicators at both acquired businesses, including IndiCue outperforming its internal monthly revenue and profit forecast during the negotiation period.
Lindsey said the combined acquisitions are expected to contribute more than $50 million of revenue and $10 million of Adjusted EBITDA in fiscal 2027. In the Q&A, management also characterized its guidance as conservative with potential upside from revenue synergies, though it did not quantify those synergies in the guidance framework.
To finance the IndiCue acquisition, Lindsey said Cineverse issued $13 million of convertible notes to existing long-term shareholders on what management described as “company-friendly terms,” emphasizing there were no warrants attached. He also said an additional equity raise was priced at or near market and that the Cineverse team invested alongside the transaction.
Separately, Lindsey said the company sold 1.725 million shares at $2 per share on February 12 and closed that offering the morning of the call, generating net proceeds of $3.2 million. Management said proceeds are intended for working capital and general corporate purposes, including financing content acquisition and development.
Matchpoint strategy: combining delivery and monetization
Executives framed the acquisitions as filling gaps in a fragmented media supply chain. Opeka said Matchpoint has been built to automate digital video distribution and that the market is shifting from labor-led workflows to AI-powered, platform-led workflows. He cited a “post and media services” market he described as fragmented and growing, and said studios and platforms are seeking scale, automation, and trusted partners.
On Giant, President of Technology and Chief Product Officer Tony Huidor said the acquisition effectively short-circuited lengthy studio vetting cycles by bringing existing approved vendor status and deep studio relationships “overnight.” He said one large studio partner had been spending roughly $1 million per month with Giant, and management believes that could “easily” double even before selling additional Matchpoint services.
On IndiCue, Opeka said the platform provides the monetization layer that was missing from Matchpoint, enabling distribution, data, and monetization to operate as “a single system with a real-time feedback engine.” In response to a question about customer concentration and growth, Opeka said concentration has been improving and argued the technology and volume running through the platform supports durable, sticky relationships.
AI initiatives and M&A outlook
Management also addressed how its AI efforts extend beyond delivery infrastructure. McGurk said Cineverse is focused on “positive” AI tools that reduce costs and improve workflows without negatively impacting the creative side of the business. Huidor said the company recently announced the formation of Matchpoint Creative Labs, described as an R&D unit for generative AI, and said the team is working with clients on use cases including ad creation, channel branding, and station IDs.
Looking ahead, executives said near-term focus is on integrating the acquisitions, but they left the door open for further M&A. Opeka said management sees opportunities to buy additional companies at attractive prices, streamline cost structures, and automate operations using Matchpoint. McGurk said Cineverse would consider additional deals if they resemble Giant and IndiCue in being “enormously accretive” with significant upside.
During the Q&A, management also discussed potential free cash flow implications of higher EBITDA, with executives noting the acquired businesses do not require significant capital expenditures and suggesting cash generation could support growth initiatives, balance sheet flexibility, and potential tuck-in acquisitions.
About Cineverse (NASDAQ:CNVS)
Cineverse (NASDAQ: CNVS), formerly known as Cinedigm, is a digital entertainment company that acquires, produces and distributes film and television content across a range of platforms. Through its streaming division, the company offers a portfolio of direct-to-consumer channels and apps—spanning genres such as horror, faith and family, documentaries and classic cinema—on both AVOD (ad-supported) and FAST (free ad-supported television) services. Cineverse also licenses its curated libraries to third-party streaming platforms, pay-TV operators and retail video-on-demand providers.
In addition to its consumer-facing streaming business, Cineverse operates a digital cinema network that supplies hardware, software and content delivery solutions to cinema exhibitors throughout North America.
