Yahoo Finance Cineverse Q4 Results Underwhelm Wall Street, But CEO Chris McGurk Touts October Wide Release Of ‘Terrifier 3’: “We Know What We Have This Time”
Cineverse missed Wall Street estimates in its fiscal fourth quarter, but CEO Chris McGurk tapped his Hollywood studio executive background to turn attention to this fall’s release of Terrifier 3 during an earnings call with analysts.
In the period ended March 31, total revenue came in at $9.9 million compared with $12.5 million in the same period of the prior year. The company said the slide reflected a $1.3 million drop in the company’s physical business, an $800,000 impact from digital cinema in the prior-year the Digital Cinema ($0.8 million) impact in the prior-year quarter, and the impact of our channel portfolio optimization efforts.
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Net losses per share widened to $1.10 from a loss of 35 cents in the year-ago period, while adjusted EBITDA increased by $2.4 million to $1.6 million.
The consensus expectation among analysts was a net loss of 21 cents a share and revenue of $10.55 million. The company’s stock slipped 2% in after-hours trading on the results, though it wound up back where it had closed the regular trading day, at 90 cents. After peaking north of $50 three years ago, Cineverse shares have been punished along with many peers as Wall Street has taken an increasingly skeptical view of the streaming business.
Cineverse, formerly Cinedigm, was founded as an equipment-based business helping exhibitors to transition from traditional film to digital methods. Over the past few years, it has phased out all equipment sales in order to focus on its portfolio of streaming services, among them Fandor, Docurama and Screambox. It also operates a number of widely distributed FAST channels, including ones dedicated to the Dog Whisperer (Cesar Millan) and painting how-to immortal Bob Ross..
While it has generally pulled back on its theatrical distribution goals compared with prior iterations of the company, strong results from the Terrifier horror franchise have provided an exception. In 2021, Cinedigm acquired horror media brand Bloody Disgusting as well as streaming service Screambox. Among the properties that bubbled up there was a slasher tale centered on the murderous Art the Clown (played by David Howard Thornton). In October 2022, a second installment in the series, produced for just $250,000, got a specialty release and took in $15 million at the worldwide box office.
“We intend to use the exact same playbook” with the third installment, which will come out on October 11, McGurk said on the call. “We know what we have this time,” he added, noting that Terrifier 3 will get a wide release on more than 2,000 screens.
“Even though this film is more expensive for us,” he said, without citing a specific budget, “we have a break-even for this given our plan that’s well below the box office we generated on the last one. And we fully expect to generate at least as much box office revenue as the last one and hopefully significantly more.”
While the theatrical run of Terrifier 2 fell outside of the quarter, ancillary revenue came in during the period, across VOD, Screambox and other ancillaries.
Even in success, McGurk said, the proceeds from Terrifier 3 will not go toward funding an ever-more-ambitious film slate. The exec grew familiar with that high-leverage gambit while leading MGM and Overture Films and holding senior exec posts at Universal Pictures and Disney. “The bulk of that money will be spent back against the key initiatives that we’ve been talking about … the podcast business, developing new technology and A.I. tools and new content and channel investments.”
While the movie business is “unpredictable,” McGurk conceded. “We think with a risk-reward profile like Terrifier, the upside is far greater than the downside.”
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