Curiositystream Inc.

11/12/2026 | Press release | Distributed by Public on 11/12/2026 07:52

Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis provides information that management believes is relevant to an assessment and understanding of our results of operations and financial condition. The following discussion should be read in conjunction with the Company's unaudited condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10-Q ("Quarterly Report"). Unless the context otherwise requires, references in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" to "we," "us," "our," and "the Company" are intended to mean the business and operations of CuriosityStream Inc.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report contains certain statements that are, or may be deemed to be, "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, regarding the Company's plans, expectations, thoughts, beliefs, estimates, goals and outlook for the future that are intended to be covered by the protections provided under the Private Securities Litigation Reform Act of 1995.
All statements other than statements of historical fact included in this Quarterly Report including, without limitation, statements under this "Management's Discussion and Analysis of Financial Condition and Results of Operations" regarding the Company's financial position, business strategy and the plans and objectives of management for future operations, such as subscription plan price increases, the development of integrated digital brand partnerships with advertisers and our dividend plans, are forward-looking statements. When used in this Quarterly Report, words such as "anticipate," "attribute," "believe," "continue," "hope," "estimate," "expect," "intend," "may," "might," "potential," "seek," "should," "will" and "would," and similar expressions, as they relate to us or the Company's management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of management, as well as assumptions made by, and information currently available to, the Company's management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors detailed in our filings with the SEC. All subsequent written or oral forward-looking statements attributable to us or persons acting on the Company's behalf are qualified in their entirety by this paragraph. These forward-looking statements are subject to risks and uncertainties that could cause actual results and events to differ materially from those included in forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 12, 2026 (the "Annual Report") and any other subsequent periodic reports and future periodic reports. We assume no obligation to revise or publicly release any revision to any forward-looking statements contained in this Quarterly Report, unless required by law.
OVERVIEW
Founded by John Hendricks, former Chairman of Discovery Communications and founder of the Discovery Channel, CuriosityStream is a media and entertainment company that offers premium video and audio programming across the principal categories of factual entertainment, including science, history, society, nature, lifestyle and technology. Our mission is to provide premium factual entertainment that informs, enchants and inspires.
We seek to meet the demand for high-quality factual entertainment via subscription video on-demand ("SVOD")
platforms, content licensing, bundled content licenses for SVOD and linear offerings, and partner bulk sales.
The main sources of our revenue are:
1.Subscription Revenue, which includes fees earned from our direct subscriber business and wholesale distribution agreements;
2.Licensing Revenue, which reflects fees from content licensing including trade and barter transactions, and AI data licensing; and
3.Other Revenue, which primarily consists of advertising, sponsorships, and integrated brand partnerships.
We operate our business as a single operating segment that provides premium content through multiple channels, including the use of various applications, partnerships and affiliate relationships.
CuriosityStream's award-winning content library features 15,000 hours of programming that explore topics ranging from space engineering to ancient history to the rise of Wall Street, and includes shows and series from leading nonfiction producers. Each week we launch new video titles, which are available on demand in high- or ultra-high definition. Through new and long-standing international partnerships, substantial portions of our video library have been localized from English into eleven different languages. The Company also owns, licenses or has access to millions of hours of premium video and audio content, both finished and raw, across the landscape of content genres and languages, as well as a production-grade code library of over 1,000 repositories with decades of contextual history, 100,000 pull requests, and assets from seven operating companies for sublicensing to technology companies to train artificial intelligence (AI) models and products that utilize AI.
Since July 2021, the Company has held a 32% interest in SPIEGEL TV Geschichte und Wissen GmbH & Co. KG and its general partner (together, the "Spiegel Venture"), a German joint venture with SPIEGEL TV GmbH and Autentic GmbH that it accounted for under the equity method. The Spiegel Venture operates two pay television documentary channels and a FAST channel and distributes the Company's Curiosity Stream service in German-speaking Europe. In April 2026, the other two owners exercised put options requiring the Company to purchase their interests, and on July 1, 2026, the Company acquired the remaining 68% interest for $1.9 million in cash, bringing its ownership to 100%. The acquisition provides the Company with a local platform for distributing its content and services in German-speaking Europe. The Company recognized gains of $0.9 million in connection with the acquisition, primarily from remeasuring its previously held 32% interest to fair value. The results of the Spiegel Venture are included in the Company's consolidated results beginning July 1, 2026. See Note 17 - Acquisition of Spiegel Venture to the Unaudited Condensed Consolidated Financial Statements for further discussion.
During the second quarter of 2026, the Company disposed of its educational lifelong-learning, faith-based, and audio-format content brands (Curiosity University, Catholic Stream and Curiosity Audio, respectively) to an unrelated third party, concurrently entering into a long-term content license agreement with the buyer to continue monetizing the underlying content library, alongside a Distribution and Services Agreement under which the Company receives a fee equal to 10% of the buyer's net revenue for providing ongoing operational and distribution services. This transaction reflects the Company's ongoing strategy to concentrate its resources on its core streaming and technology platform, including the continued expansion of its AI content and technology licensing initiatives, while divesting non-core brand assets that are not central to this strategic focus. See Note 16 - Disposition of Curiosity Brands, LLC and Related Agreements to the Unaudited Condensed Consolidated Financial Statements for further discussion.
RESULTS OF OPERATIONS
The financial data in the following table sets forth selected financial information derived from our Unaudited Condensed Consolidated Financial Statements for the three and nine months ended September 30, 2026, and 2025, and includes our results of operations as a percentage of revenue or as a percentage of costs, as applicable, for the periods indicated:
Three Months Ended September 30,
Change
Nine Months Ended September 30,
Change
(unaudited and in thousands)
2026 2025
Total
%
2026 2025
Total
%
Revenues
Subscription $ 8,691 $ 9,313 $ (622) (7 %) $ 26,387 $ 27,898 $ (1,511) (5 %)
Licensing 11,718 8,694 3,024 35 % 31,794 23,597 8,197 35 %
Other 314 352 (38) (11 %) 948 966 (18) (2 %)
Total revenue
20,723 18,359 2,364 13 % 59,129 52,461 6,668 13 %
Operating expenses
Cost of revenues 10,620 7,588 3,032 40 % 23,590 23,532 58 - %
Advertising and marketing 1,516 3,442 (1,926) (56 %) 6,931 9,651 (2,720) (28 %)
General and administrative 4,910 11,820 (6,910) (58 %) 17,295 23,210 (5,915) (25 %)
Total operating expenses 17,046 22,850 (5,804) (25 %) 47,816 56,393 (8,577) (15 %)
Operating income (loss) 3,677 (4,491) 8,168 n/m 11,313 (3,932) 15,245 n/m
Other income (expense)
Change in fair value of warrant liability - 174 (174) n/m - 88 (88) n/m
Interest and other income
1,050 290 760 262 % 1,361 1,140 221 19 %
Equity method investment income (loss)
60 76 (16) (21 %) 125 (231) 356 (154 %)
Income before income taxes $ 4,787 $ (3,951) $ 8,738 n/m $ 12,799 $ (2,935) 15,734 n/m
Provision for (benefit from) income taxes (53) (207) 154 n/m 405 (294) 699 n/m
Net income (loss) $ 4,840 $ (3,744) $ 8,584 n/m $ 12,394 $ (2,641) 15,035 n/m
* n/m = percentage not meaningful
For the three months ended September 30, 2026, the Company reported operating income and net income of $3.7 million and $4.8 million, respectively, compared to an operating loss and net loss of $4.5 million and $3.7 million, respectively, for the three months ended September 30, 2025. This improvement in results was attributable to a $2.4 million, or 13%, increase in total revenue, driven by higher licensing revenue, and a $5.8 million, or 25%, decrease in total operating expenses, driven by a reduction in general and administrative and advertising and marketing expenses, partially offset by an increase in cost of revenues.
For the nine months ended September 30, 2026, the Company reported operating income and net income of $11.3 million and $12.4 million, respectively, compared to an operating loss and net loss of $3.9 million and $2.6 million, respectively, for the same period in 2025. This improvement in results was attributable to a $6.7 million, or 13%, increase in total revenue, driven by higher licensing revenue, and a $8.6 million, or 15%, decrease in total operating expenses, driven by a reduction in general and administrative and advertising and marketing expenses.
Revenue
Subscription
The Company's programming is provided to subscribers directly, via the Company's website, applications, and channel stores offerings, as well as through wholesale distribution agreements.
Individual customers can purchase subscriptions directly via the Company's SVOD platform accessible by internet connected devices and applications for such devices as well as through distributor channel stores offering subscriptions to Company products on an a la carte basis. Individual subscriptions may be monthly or annual and pricing may vary based on the customer's location worldwide. Customers may also subscribe to Company services indirectly via distribution partners who deliver CuriosityStream content via the distributor's platform or system. Such wholesale distribution agreements typically convey a broad scope of rights, such as access to a 24/7 linear channel and an on-demand content library, with pricing and packaging flexibility, in exchange for an annual fixed fee or per-subscriber fee as part of a multi-year deal. The programming library is composed of thousands of accessible on-demand and ad-free productions and includes shows and series from leading nonfiction producers.
The Company continually evaluates pricing structures to align with market conditions, including price adjustments for legacy subscribers initiated in March 2026. Alongside standard subscriptions, the Company offers the "Smart Bundle" service, which includes access to Tastemade, Kidstream, SOMM TV, and Curiosity University.
For the three and nine months ended September 30, 2026, subscription revenue decreased due to a lower overall subscriber count, which reflects our deliberate focus on acquiring and retaining more profitable subscriber relationships. This decrease was partially offset by an increase in average monthly revenue per paying subscriber reflecting the strategic price increases implemented in March 2026, which applied to our subscription offerings across our direct business platforms, and the subscription revenue from the Spiegel Venture, which we have consolidated since its acquisition on July 1, 2026.
Licensing
Through our licensing business, we deliver content and data assets across two primary models: traditional cash licensing and non-cash barter arrangements. Under our cash licensing arrangements, we license titles from our library to various media companies. We also license and sublicense high volumes of content and data assets to technology organizations developing artificial intelligence technologies, such as large language models (LLMs), small language models (SLMs), and physical AI applications. Under our non-cash barter arrangements, we exchange existing titles from our library for new programming, which allows us to expand our content offerings while preserving liquidity.
For the three months ended September 30, 2026, licensing growth was driven by an increase in AI and non-cash barter licensing. For the nine months ended September 30, 2026, the growth in licensing reflects higher traditional cash licensing, including the long-term content license agreement with Curiosity Brands, as well as expanded barter activity, partially offset by lower AI licensing revenue. Because acquiring content under non-cash barter transactions requires the concurrent recognition of licensing revenue at the estimated fair value of the assets received, increased barter volume directly impacts recognized revenue. The frequency and timing of these arrangements fluctuate based on when content exchanges are executed with our partners.
Operating Expenses
Cost of Revenues
Cost of revenues encompasses content amortization, distribution fees, and other costs, including hosting and streaming delivery costs, AI storage costs, commissions, subtitling and broadcast costs. Producing and co-producing content and commissioned content is generally more costly than content acquired through licenses.
Distribution fees include revenue share arrangements related to our licensing business, Smart Bundle and digital distributor partners, and payment processing fees. We pay a percentage fee to our AI training content partners, which varies depending on the nature of the licensed content. We also pay fixed percentage fees to certain distribution partners for allowing their subscriber base to access our subscription platform.
The following table details cost of revenues for the three and nine months ended September 30, 2026, and 2025:
Three Months Ended September 30,
Change
Nine Months Ended September 30,
Change
(in thousands) 2026 2025
Total
%
2026 2025
Total
%
Content amortization
$ 4,985 $ 3,583 $ 1,402 39 % $ 13,026 $ 10,696 $ 2,330 22 %
Distribution 4,576 3,041 1,535 50 % 6,822 10,196 (3,374) (33 %)
Other 1,059 964 95 10 % 3,742 2,640 1,102 42 %
Total cost of revenues
$ 10,620 $ 7,588 $ 3,032 40 % $ 23,590 $ 23,532 $ 58 - %
Cost of revenues increased $3.0 million, or 40%, for the three months ended September 30, 2026 compared to the same period in 2025, principally due to an increase in distribution costs, driven by higher revenue share expense on higher AI licensing revenue, and an increase in content amortization reflecting the mix of content.
Cost of revenues were flat for the nine months ended September 30, 2026, compared to the same period in 2025. Increases in content amortization and other cost of revenues, primarily driven by higher storage and other technology costs reflecting the investment in our data library for AI training in the first half of the year, were offset by a decrease in distribution costs, reflecting lower revenue share expense on lower AI licensing revenue.
Advertising and Marketing
Our advertising and marketing expenditures are principally focused on the acquisition and retention of Direct subscribers. While these costs may fluctuate based on our specific outreach objectives, we prioritize the allocation of marketing dollars toward efficient customer acquisition methods for our streaming service.
For the three and nine months ended September 30, 2026, advertising and marketing expenses decreased $1.9 million, or 56%, and $2.7 million, or 28%, respectively, compared to the same periods in 2025 primarily driven by more efficient marketing spend.
General and Administrative
Our general and administrative costs are associated with certain administrative functions, including corporate governance, executive management, information technology, finance and human resources. These costs consist largely of compensation expense, subscriptions that support our business, professional services, and rent. While personnel levels may fluctuate based on our needs, we tend to focus on hiring and retaining revenue-generating personnel, such as sales staff and roles that support the improvement, maintenance and marketing of our different revenue streams.
The following table details general and administrative costs for the three and nine months ended September 30, 2026, and 2025:
Three Months Ended September 30,
Change
Nine Months Ended September 30,
Change
(in thousands) 2026 2025
Total
%
2026 2025
Total
%
Payroll and related $ 2,443 $ 2,747 $ (304) (11 %) $ 7,780 $ 7,836 $ (56) (1 %)
Stock-based compensation 1,000 6,977 (5,977) (86 %) 5,101 10,054 (4,953) (49 %)
Professional services 452 1,374 (922) (67 %) 1,596 $ 2,818 (1,222) (43 %)
Technology and subscriptions
283 283 - - % 944 891 53 6 %
Other1
732 439 293 67 % 1,874 1,611 263 16 %
Total general and administrative
$ 4,910 $ 11,820 $ (6,910) (58 %) $ 17,295 $ 23,210 $ (5,915) (25 %)
1 Includes facilities costs, depreciation and amortization, insurance, travel and other expenses.
For the three and nine months ended September 30, 2026, general and administrative expenses decreased $6.9 million, or 58%, and $5.9 million, or 25%, compared to the same periods in 2025, respectively, primarily driven by a decrease in stock-based compensation expense resulting from the RSUs granted in July 2025 which were subject to accelerated expense recognition due to certain vesting provisions and a decrease in professional services, reflecting our ongoing commitment to disciplined expense management and operational efficiency.
Other Income (Expense)
Change in Fair Value of Warrant Liability
As of September 30, 2026, there were no warrants outstanding, and the Company no longer carried a warrant liability on its consolidated balance sheet.
Interest and Other Income
Interest and other income increased $0.8 million for the three months ended September 30, 2026, compared with the same period in 2025, primarily due to a $0.9 million gain on the remeasurement of our previously held equity interest in the Spiegel Venture upon acquisition. Interest income decreased $0.1 million, as lower interest earned on our investments, reflecting lower investment balances, was partially offset by $0.1 million of interest accretion on the long-term licensing fee receivable, which began in the third quarter.
For the nine months ended September 30, 2026, interest and other income increased $0.2 million compared with the same period in 2025, as the gain on the Spiegel Venture remeasurement was largely offset by a $0.8 million decrease in interest earned on our investments, reflecting lower investment balances.
Equity Method Investment Income
Equity method investment income, which represents our share of Nebula's results, was $0.1 million for each of the three and nine months ended September 30, 2026, compared with income of $0.1 million and a loss of $0.2 million for the same periods in 2025, respectively.
Income Taxes
Our income tax provision was not material for the three and nine months ended September 30, 2026 and 2025. We have net operating loss carryforwards available to substantially offset our taxable income and maintain a full valuation allowance against our deferred tax assets.
LIQUIDITY AND CAPITAL RESOURCES
Liquidity
As of September 30, 2026, we had cash, cash equivalents and restricted cash of $5.6 million and investments in debt securities of $4.4 million. We also have a $10.0 million revolving credit facility, which was undrawn as of September 30, 2026.
Our principal uses of cash are advertising and marketing, working capital and quarterly dividends. We fund these needs with cash on hand, investments and cash generated from operations, and may draw on our credit facility if needed. We also use trade and barter transactions to acquire high quality content through licensing agreements without using cash.
For the nine months ended September 30, 2026, operating activities provided $1.5 million of net cash. Additionally, the Company generated $2.7 million in net cash from investing activities, mainly related to maturities of investments in debt securities. Net cash used in financing activities was $17.0 million, mainly due to dividends paid and repurchase of treasury stock.
We believe that cash on hand, investments, cash expected to be generated from operations and availability under our credit facility will be sufficient to fund our operations, capital expenditures, dividends, and working capital needs for at least the next twelve months from the date of this filing.
The following table provides details of dividends declared and paid as of September 30, 2026.
Declaration Date Record Date Payment Date Per Share Aggregate Amount
January 29, 2026 March 6, 2026 March 20, 2026 $0.080 $4.9 million
May 14, 2026 June 5, 2026 June 19, 2026 $0.085 $5.0 million
August 11, 2026 September 4, 2026 September 18, 2026 $0.085 $5.1 million
Our Board of Directors has declared the next cash dividend of $0.085 per share to be paid on December 15, 2026, for an expected aggregate amount of $5.0 million. We intend to continue paying regular quarterly cash dividends, subject to Board approval and market conditions.
In June 2024, our Board of Directors authorized a share repurchase program for up to $4.0 million of our common stock, which it increased to $6.0 million in March 2026. Through September 30, 2026, we had repurchased $1.1 million of common stock under the program, and $4.9 million remained available. We did not repurchase any shares during the three months ended September 30, 2026. We may repurchase shares through open market repurchases, privately negotiated transactions, block purchases or otherwise in accordance with applicable securities laws.
Cash Flow Analysis
The following table presents our cash flows from operating, investing and financing activities for the nine months ended September 30, 2026, and 2025:
Nine Months Ended
September 30,
(unaudited and in thousands)
2026 2025
Net cash provided by operating activities $ 1,523 $ 9,088
Net cash provided by investing activities 2,691 16,916
Net cash used in financing activities (17,020) (19,787)
Net (decrease) increase in cash, cash equivalents and restricted cash $ (12,806) $ 6,217
Operating Activities
Cash flows from operating activities primarily consist of net income, changes to our content assets (including additions and amortization), and other working capital items.
Nine Months Ended
September 30,
(in thousands) 2026 2025
Net income $ 12,394 $ (2,641)
Adjustments to reconcile net income to net cash provided by (used in) operating activities
Change in fair value of warrant liability - (88)
Additions to content assets (14,351) (7,276)
Change in content liabilities (218) (196)
Amortization of content assets 13,026 10,696
Stock-based compensation 5,101 10,054
Equity method investment loss
(125) 231
Other depreciation, amortization and non-cash items
(303) (86)
Changes in operating assets and liabilities (14,001) (1,606)
Net cash (used in) provided by operating activities $ 1,523 $ 9,088
For the nine months ended September 30, 2026, our net cash provided by operating activities was $1.5 million compared to $9.1 million for the same period in 2025.
For the nine months ended September 30, 2026, net income was $12.4 million. Operating cash flows reflected non-cash adjustments, including $13.0 million of amortization of content assets, $5.1 million of stock-based compensation and $0.3 million of other depreciation, amortization and non-cash items, which do not represent cash inflows or outflows and are reconciling items between net income and operating cash flow. Additions to content assets of $14.4 million, acquired primarily through barter activities, were similarly non-cash and are excluded from operating cash flow. Cash used during the period primarily consisted of a $14.0 million net use of cash from changes in operating assets and liabilities, principally reflecting the impact of the long-term content licensing agreement entered into with the buyer of Curiosity Brands and the timing of certain payables, partially offset by the impact of overpayments received from a distribution partner that self-reports and remits fees under its agreement, which we identified in the third quarter and expect to refund to the partner by December 31, 2026.
Investing Activities
Cash flow from investing activities consists of purchases, sales and maturities of investments, business acquisitions, net of cash acquired, and purchases of property and equipment.
For the nine months ended September 30, 2026 and 2025, we recorded a net cash inflow in investing activities of $2.7 million and $16.9 million, respectively. The 2026 inflow was primarily driven by $7.5 million of maturities and $1.0 million of sales of investments in debt securities, partially offset by $3.9 million of purchases of investments in debt securities and $1.8 million paid for our acquisition of the Spiegel Venture, net of cash acquired, which closed on July 1, 2026 (see Note 17 - Acquisition of Spiegel Venture). The 2025 inflow was primarily driven by $25.3 million of maturities and $3.5 million of sales of investments in debt securities, partially offset by $11.8 million of purchases of investments in debt securities.
Financing Activities
For the nine months ended September 30, 2026 and 2025, net cash used in financing activities was $17.0 million and $19.8 million, respectively. The decrease in cash used was primarily driven by a $2.3 million decrease in dividends paid and a $1.5 million decrease in payments related to tax withholding, partially offset by $0.9 million used for repurchases of common stock in 2026, with no comparable activity in 2025.
Capital Expenditures
Going forward, we expect expenditures for purchases of property and equipment to remain minimal. The amount, timing and allocation of capital expenditures are largely discretionary and within management's control. Depending on market conditions, we may choose to defer a portion of our budgeted expenditures until later periods to achieve the desired balance between sources and uses of liquidity and prioritize capital projects that we believe have the highest expected returns and potential to generate cash flow. Subject to financing alternatives, we may also increase our capital expenditures significantly to take advantage of opportunities we consider to be attractive.
OFF BALANCE SHEET ARRANGEMENTS
As of September 30, 2026, we had no off-balance sheet arrangements.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Our discussion and analysis of our financial condition and results of operation is based upon our financial statements, which have been prepared in accordance with U.S. GAAP. Certain amounts included in or affecting the financial statements presented in this Quarterly Report and related disclosures must be estimated, requiring management to make assumptions with respect to values or conditions which cannot be known with certainty at the time the financial statements are prepared. Management believes that the accounting policies set forth below comprise the most important "critical accounting policies" for the Company. A critical accounting policy is one which is both important to the portrayal of a company's financial condition and results of operations and requires management's most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Management evaluates such policies on an ongoing basis, based upon historical results and experience, consultation with experts and other methods that management considers reasonable in the particular circumstances under which the judgments and estimates are made, as well as management's forecasts as to the manner in which such circumstances may change in the future.
For more detailed information on our critical accounting policies, including those related to content assets, revenue recognition and trade and barter transactions, refer to the "Summary of Significant Accounting Policies" section in the Annual Report filed with the Securities and Exchange Commission on March 12, 2026. This comprehensive discussion helps to ensure that stakeholders have a complete understanding of the accounting methodologies and principles that influence the financial statements presented herein. During the quarter ended September 30, 2026, there were no significant changes made to the Company's critical accounting policies from those disclosed in our Annual Report.
RECENT ACCOUNTING PRONOUNCEMENTS
The information set forth in Note 2 - Basis of Presentation and Summary of Significant Accounting Policies in the Unaudited Notes to Interim Unaudited Condensed Consolidated Financial Statements is incorporated herein by reference.
Curiositystream Inc. published this content on November 12, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT) on November 12, 2026 at 13:52 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]