Cinedigm reports record ad-supported streaming revenue

Cinedigm, a premier streaming technology and entertainment company super-serving enthusiast fan bases, today announced its financial results for the second quarter of fiscal year 2023, which ended September 30, 2022, highlighting the Company's positive business results and momentum, growth trajectory, financial targets and plan for sustainable profitability and positive cash flow.

Chris McGurk, Chairman and CEO of Cinedigm, said: "Our strong business momentum continues with total streaming revenue increasing 78% in our fiscal second quarter - generating another record revenue quarter for the Company. Our advertising-supported streaming revenues more than doubled versus last year, thanks to our smart pivot into the AVOD and FAST businesses years ago, while other major streaming companies are just now scrambling to put their advertising strategies in place. We have now had 10 consecutive quarters of record ad revenue growth. Additionally, despite Q2 being our seasonally slowest quarter, we increased consolidated revenue by 39% versus the prior year quarter. We are very well-positioned going into our next fiscal quarter, the seasonally best of the year, where, in addition to continued strong streaming growth, the success of the breakout film phenomenon Terrifier 2 is going to provide a significant upside to our fiscal Q3 financial results and beyond. This financial upside will underscore the growing impact that our multifaceted horror strategy, led by our Bloody Disgusting and Screambox units, is having on our long-term business and financial performance."

Mr. McGurk continued, "One of the most important elements of our streaming strategy successfully debuted in fiscal Q2 when we launched our flagship service, Cineverse, powered by our proprietary Matchpoint technology. Showcasing our growing portfolio of free, ad-supported linear channels and more than 12,000 titles, alongside enhanced content discovery and social networking capabilities, we believe that Cineverse has the best user experience in the streaming business. It is the key driver toward our goal of becoming the ‘Spotify' of independent streaming video."

"Looking to the months ahead, we see several reasons to be optimistic about our financial prospects, with potential revenue opportunities ranging from our growing audio business - now with 30 podcasts, including our recent hit, Mayfair Watchers Society; to Matchpoint 2.0, which has already successfully rolled out as a SaaS and content aggregation platform; and continued success in leveraging our demonstrated capabilities and business assets in horror- the hottest genre in the entertainment business. We also plan to aggressively employ the same business and promotional leverage we have demonstrated in horror to our other enthusiast verticals such as Asian, anime and family content via multiple touchpoints, including theatrical, streaming, TVOD, PVOD, licensing, DVD/Blu-ray, ancillary production, podcasts, editorial, graphic novels, merchandising and NFTs."

Erick Opeka, Chief Strategy Officer and President of Cinedigm Networks, added: "During the past quarter, we made great strides in growing and scaling our business. The launch of our next-generation streaming platform, Matchpoint 2.0, at the beginning of the quarter led to the successful launch of Cineverse, our flagship streaming service, along with the subsequent re-launch of our enthusiast horror service Screambox. We continue to scale revenue on multiple fronts, having surpassed the one million subscriber milestone during the quarter, and reached the 20 million social follower/subscriber mark as well. On the distribution front, we expanded our FAST channels business into the lucrative virtual cable space via new deals with FuboTV, Philo and Vidgo, while expanding our FAST channel footprint, adding new channels to distribution partners including Dish Network's Sling TV, Atmosphere and Amazon FreeVee. Most importantly, we made considerable progress on our key internal initiatives. We continued to scale up Cinedigm Ad Solutions with key hires and saw our podcast business continue to grow to more than 66 million downloads. With the wind at our backs and the success of Terrifier 2, the biggest hit film for our streaming business to date, we expect the current quarter to show even greater success."

Key Second Quarter Financial Results (Quarter Ended September 30, 2022):

• Total streaming revenue increased 78% to $8.0 million,driven by an increase of 102% in record ad-supported revenues and a 38% increase in subscription revenue over the prior year quarter.
• Content and Entertainment revenue of $11.4 million grew by 66%, driven by organic user growth, increasing market demand for Cinedigm's extensive Connected TV ad inventory, and the impact of new streaming channels versus the prior year.
• Consolidated revenue was $14.0 million, up 38.6% compared to $10.1 million in the prior year quarter.
• Adjusted EBITDA was negative $1.3 million in the current year quarter, compared to positive Adjusted EBITDA of $0.7 million in the prior year quarter, due to a decrease in legacy Digital Cinema system sales and eligible VPF systems as that business winds down, as well as higher direct and SG&A costs immediately following Q1 acquisition activity.
• Net loss of $5.8 million, or $(0.03) per share, compared to net loss of $0.3 million or $0.00 per share in the prior year quarter. This was driven by the reduction in legacy Digital Cinema equipment sales and also included a non-operating charge of $0.6 million for the Company's investment in A Metaverse Company (f/k/a Starrise Media Holdings Ltd.), as well as the previously mentioned increased direct and SG&A costs immediately following Q1 acquisition activity.

Key Business Highlights During the Quarter:

• Total streaming minutes viewed in the quarter were 2.17 billion, up 78% over the prior year quarter.
• Cinedigm's total ad-supported streaming audience, including web, mobile, social and Connected TVs, averaged approximately 81.9 million average monthly viewers, up 149% over the prior year quarter.
• Total subscribers to the Company's subscription video streaming services increased to approximately 1,058,000, representing an increase of 48% over the prior year quarter.
• Expanded FAST distribution partnerships with SlingTV, Atmosphere and Amazon FreeVee, among others.
• Launched Matchpoint 2.0, Cinedigm's next-generation streaming platform-as-a-service technology, which will be used to power all of Cinedigm's streaming services as well as forthcoming select partner services.
• Completed the launch of Cineverse, the company's flagship general entertainment streaming service that will be the home of the company's growing 50,000 title library and portfolio of 30 streaming channels.
• Expanded Cinedigm's distribution partnerships with virtual cable providers via three new deals: Philo, FuboTV and Vidgo.
• Achieved 20 million social media subscriber milestone during the quarter and launched the company's first social media content partnership with Snapchat.
• Grew cumulative podcast downloads to more than 66 million downloads by quarter end, across 30 podcasts.

The Company Reiterates Its Long-Term Growth Goals for The Next 2-4 Years:

• Targeting at least 50% annual revenue growth in streaming.
• Growing annual revenue to $150 million through both organic and acquired revenue.
• Growing the content library to 75,000 titles.
• Obtaining 100 million monthly viewers.
• Growing podcast portfolio to more than 100 podcasts.

Conference Call

Cinedigm will host a conference call and webcast to discuss these results on November 15, 2022 at 12:00pm ET / 9:00am PT.

Investors may access a live webcast of the call on the Company's website at https://investor.cinedigm.com/events-and-presentations or by dialing 1-833-927-1758 within North America or +1-929-526-1599 from international locations using access code 030622 to be connected to the call. Participants should dial in at least 10 minutes prior to the start of the call.

A replay of the webcast will be available on the Company's website at https://investor.cinedigm.com/events-and-presentations approximately one hour after the conference call concludes.