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DATE

Thursday, Aug. 13, 2026 at 4:30 p.m. ET

CALL PARTICIPANTS

  • Chief Legal Officer, Secretary, and Senior Adviser - Gary S. Loffredo
  • Chairman and CEO - Christopher J. McGurk
  • President and Chief Strategy Officer - Erick Opeka
  • Chief Financial Officer - Sean McCabe
  • Chief Motion Pictures Officer - Yolanda Macias
  • Chief People Officer - Mark Torres

TAKEAWAYS

  • Total Revenue -- $30.6 million, representing a 175% increase driven by the addition of new advertising technology and media services revenue streams.
  • Technology Revenue -- over 60% of the consolidated total, reflecting a shift toward recurring and durable revenue from industry customers.
  • Adjusted EBITDA -- $500,000, an increase of $2.6 million over the prior year quarter due to integration progress and improved operating profit.
  • Advertising Technology Revenue -- $15.9 million, exceeding the previous quarter by $8 million as the IndiCue business continued its growth trajectory.
  • Media Services Revenue -- $3.5 million, reflecting efforts to transition manual asset delivery to automated workflows.
  • Direct Operating Margin -- 35%, down from 57% in the prior year quarter due to a 79% revenue share expense paid to Advertising Technology supply partners.
  • Net Loss -- $5.8 million, widening by $2.1 million from the prior year quarter because of increased compensation, interest, and depreciation costs.
  • Operating Cash Flow -- improved by more than $13 million, as the company moved beyond nonrecurring acquisition payments and current theatrical commitments.
  • Synergy and Cost Savings Target -- $13 million in total annual upside, with $8.3 million already actioned and $7.5 million expected to be realized in fiscal year 2027.
  • Headcount Reduction -- $1.8 million in annualized savings from a reduction in force conducted after the first quarter ended.
  • Streaming Engagement -- 4.5 billion minutes streamed, a 33% increase driven by higher per-viewer consumption and engagement.
  • Streaming Viewers -- 122.8 million, growing 12% compared to the prior year quarter.
  • SVOD Subscribers -- 1.52 million, an increase of 12% following the launch of premium channels on Roku and Amazon.
  • Docurama Subscribers -- exceeded 100,000, growing 66% with Roku subscribers nearly quadrupling over the past year.
  • Content Library Value -- approximately $45 million, representing a library of 66,000 titles that carries a book value of only $4.8 million.
  • Advertising Opportunities -- 3.4 trillion total opportunities, resulting in 3.39 trillion ad impressions served during the first quarter.
  • Vadio Run Rate Target -- $12 million by the end of the fiscal year, targeting 5% to 7% of the $3 billion annual podcast ad market.
  • Fiscal Year 2027 Revenue Guidance -- $115 million to $120 million, reaffirmed by management based on the anticipated strength of the second half film slate.
  • Fiscal Year 2027 Adjusted EBITDA Guidance -- $10 million to $20 million, reaffirmed as integration efforts move toward margin expansion.
  • Cash and Liquidity -- $4.3 million in cash, with $1.1 million of availability under a $12.5 million line of credit.
  • Net Working Capital -- negative $18.9 million, which includes $18 million in deferred and earnout consideration that the company may settle in equity.

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RISKS

  • Sean McCabe stated, "While we do anticipate seasonal, typical seasonal softness in our advertising business in the second quarter," noting a potential near-term headwind before the expected second-half recovery.
  • Sean McCabe noted that the Advertising Technology business carried a 79% revenue share expense paid to supply partners in the first quarter, which reduced the overall direct operating margin compared to the prior year.

SUMMARY

Management of Cineverse Corp. (CNVS -4.80%) reported that the first quarter marked the substantial completion of post-merger integration for the Giant Worldwide and IndiCue acquisitions. The company is transitioning its focus from organizational unification to capturing $13 million in identified annual cost reductions and synergies. Management stated that technology services now generate more than 60% of total revenue, with a significant portion of that income classified as recurring and durable. The company reaffirmed its full-year fiscal year 2027 guidance, supported by an upcoming slate of three wide theatrical releases and expected seasonal strength in advertising during the third and fourth quarters.

  • Chief Strategy Officer Opeka noted that the core work of post-merger integration is substantially complete, stating, "Systems, teams, and workflows are now unified, and the organizational heavy lifting is behind us."
  • Management is simplifying the company portfolio by integrating standalone products into the Matchpoint platform, an initiative expected to save approximately $2.7 million in annualized sales and marketing costs.
  • Management reported that viewing minutes grew at three times the rate of audience growth, indicating that viewers are watching substantially more content per session.
  • The company reported that the upcoming theatrical release of Pan's Labyrinth in 4K and 3D will appear on 1,500 to 2,000 screens starting Oct. 9.
  • CEO McGurk stated that the company's theatrical model involves lower risk than competitors, noting, "Our breakeven at the box office is well below $10 million at the box office."
  • Existing clients of the Giant Worldwide business, including PBS and Pluto, increased their delivery output by 45% to 75% following the initial integration of Matchpoint automation.

INDUSTRY GLOSSARY

  • Matchpoint: Cineverse's proprietary technology platform used for content preparation, distribution, and monetization.
  • FAST: Free ad-supported streaming television, a model that provides linear TV channels without a subscription.
  • SVOD: Subscription video on demand, a service where users pay a recurring fee to access content.
  • AVOD: Ad-supported video on demand, a service that provides content for free but includes advertisements.
  • CTV: Connected television, referring to TV sets that connect to the internet to stream video content.
  • Vadio: A Cineverse ad-tech product that extends audio-based advertising campaigns into connected television environments.
  • CPM: Cost per mille, a metric representing the cost an advertiser pays for every 1,000 advertisement impressions.

Full Conference Call Transcript

Operator: Hello, everyone. Thank you for joining us. And welcome to the Cineverse First Quarter Fiscal Year 27 Earnings Call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press *1 to raise your hand. To withdraw your question, press *1 again. I will now hand the conference over to Gary Lofredo, chief legal officer, secretary, and senior adviser. Gary, please go ahead.

Gary S. Loffredo: Good afternoon, everyone. Thank you for joining us for the Cineverse first quarter fiscal year 27 financial results conference call. The press release announcing Cineverse's results for the fiscal first quarter ended 06/30/2026 is available at the Investors section of the company's website at www.cineverse.com. A replay of this broadcast will also be made available on Cineverse's website after the conclusion of this call. Before we begin, I would like to point out that certain statements made on today's call contain forward looking statements. These statements are based on management's current expectations and are subject to risks uncertainties, and assumptions.

The company's periodic reports that are filed with the SEC describe potential risks and uncertainties that could cause the company's business and financial results to differ materially from these forward looking statements. All of the information discussed on this call is as of today, 08/13/2026. And Cineverse does not assume any obligation to update any of these forward looking statements except as required by law. In addition, certain financial information presented in this call represents non GAAP financial measures. And we encourage you to read our disclosures and the reconciliation tables to applicable GAAP measures in our earnings release carefully as you consider these metrics. I am Gary Lofredo, chief legal officer, secretary, and senior adviser at Cineverse.

With me today are Christopher McGurk, chairman and CEO. Erick Opeka, president and chief strategy officer Sean McCabe, chief financial officer, Yolanda Macias, chief motion pictures officer, and Mark Torres, chief people officer. All of whom will be available for questions following the prepared remarks. On today's call, Christopher will briefly discuss our first quarter fiscal year 27 business highlights. Then Sean will follow with a review of our financial results and Erick will provide further details on our 2 recent acquisitions. I will now turn the call over to Christopher McGurk to begin.

Christopher J. McGurk: Thank you, Gary, and thanks everyone for joining us on the call today. We registered yet another very strong quarter. Driven by the acquisitions of Giant Worldwide and IndiCue, which both closed during the fourth quarter of fiscal 26, increased total revenues by 175% over last year's first quarter. And increased adjusted EBITDA by $2.6 million, our 2nd positive adjusted EBITDA quarter in a row. We feel this is impressive as we had no new wide release theatrical films during this quarter. Which also happens to be 1 of our 2 most seasonally slow quarters across all our businesses. Importantly, technology revenues represented more than 60% of the consolidated total during the quarter.

Clearly, technology is now the largest source of revenue for the company. And much of that revenue is recurring and durable. With many A-list industry customers now using our products and services. We are also very optimistic about the business and financial prospects for Vadio, a new proprietary ad tech offering that extends brands audio campaigns onto connected TVs. This new product, which was developed and built by the IndiCue executive team, was just announced yesterday. Following our 2 key acquisitions, we have embarked on several initiatives to reduce costs, improve efficiencies, and generate synergies. We have identified and are now targeting over $13 million in annual upsides from that process which is well underway.

Including a $1.8 million reduction in force that occurred after the close of this quarter. And we are not just cutting costs, we are also rationalizing our greatly expanded business footprint to focus on our highest potential and most profitable core products and services to better concentrate management focus improve margins and profitability. By our third and fourth fiscal quarters, we should see the great majority of those savings and synergies realized.

Those quarters also happen to be our 2 strongest seasonal quarters, and we have 3 high potential wide release films that exactly follow the Terrifier 2 and 3 model in the lineup for those quarters as well. it is also important to note that we improved operating cash flow by over $13 million this quarter. And based on our acquisitions and business rationalization efforts, we should have a much lower CapEx to generate cash going forward. Let me now speak to our theatrical releasing business for a moment before I turn things over to Sean. We are in the theatrical releasing business in what we believe is a smarter, less risky way than our competitors for 1 primary reason.

To generate a strong return on investment while at the same time creating recurring revenues by driving viewers and subscribers to our streaming channels and by adding valuable properties to our film library. Following the same low investment strategy that fully leverages our streaming, podcast, social media, advertising ecosystem as we did on Terrifier 2 and 3, we have now released 3 more films to date. Using that same strategy. Those films had a high return on investment and now join the ultra-profitable Terrifiers in our library. Which should only help increase the value of that asset which was already assessed at approximately $45 million by an independent firm last year.

We have 3 releases coming up this fiscal year that also exactly follow the Terrifier formula. First up on October 9th is Guillermo del Toro's masterpiece. Pan's Labyrinth. Presented for its 20th anniversary 4K and 3D. In addition to opening the Cannes Film Festival Classics presentation at the Palais, in May, we recently conducted a panel featuring Guillermo del Toro and talent from the film in the main hall at Comic-Con, where 6.5 thousand fans gave them a rousing reception. Guillermo also showed 3D footage of the film for the first time to 900 fans. And the footage got another incredibly positive response.

We also took talent from our next film, Air Bud Returns, which will be released on January 22nd, to Comic-Con. In this case, the talent involved was principally Air Bud himself. The golden retriever did his own panel and spent hours taking photos with the fans. We are very encouraged by the reaction we saw at Comic-Con and prior to that at CinemaCon, to this iconic and nostalgia inducing golden retriever named Buddy. Finally, we will be releasing the latest installment of the Wolf Creek horror franchise next March. We have seen the rough cut of the film, and are very excited about the film's theatrical potential.

And with that, I will now turn things over to Sean for a financial review. Sean?

Sean McCabe: Thank you, Christopher. A few highlights from our first fiscal quarter. Revenues were $30.6 million, up 175% from $11.1 million in the same quarter last year. This was primarily driven by our $19.4 million increase from our new advertising technology and media services revenue streams. Our direct operating margin for the quarter was 35%, down from the prior year quarter of 57%. This direct operating margin performance, however, was in line with our expectations. Reflecting the impact of our fourth quarter acquisitions including our new advertising technology revenue stream that carried an average 79% revenue share expense paid to supply partners in Q1.

And our media services revenue stream, a business that we are focused on optimizing throughout the course of fiscal year 27. We expect margins to improve as we complete our cost reduction and synergy initiatives. Particularly by our third and fourth quarters where the majority of our impact will be reflected in our financial statements. Net loss attributable to common stockholders for the quarter was $5.8 million, a $2.1 million greater net loss than the $3.6 million net loss in the same quarter last year.

The decline was driven by a $2.7 million increase in SG&A from increased compensation costs following our fourth quarter acquisitions, $1.8 million from depreciation and amortization, primarily driven by purchase price accounting, from our fourth quarter acquisitions. A $1.3 million noncash accounting adjustment from the fair value from the change in the fair value of our IndiCue earn out and deferred consideration liabilities, and an $800 thousand increase in interest costs from higher utilization of our line of credit from paying down nonrecurring acquisition related liabilities and convertible note interest. This compared to the prior year nonrecurring interest income recognized from a reduction in accrued interest following the accelerated payback of our Terrifier 3 loan.

These cost increases, however, were partially offset by $4.3 million in increased direct operating profit. Adjusted EBITDA for the quarter was $500 thousand an increase of $2.6 million over the prior year quarter and an increase of $400 thousand from just last quarter. This represents integration progress. This is now the second consecutive quarter positive and improving EBITDA, following the acquisition of IndiCue and Giant. This also occurred with only 1 new theatrical release during those 2 quarters. This momentum affirms our new operating model, and when combined with the full impact of integration and cost saving initiatives, we are looking forward to the opportunity ahead.

While we do anticipate seasonal, typical seasonal softness in our advertising business in the second quarter, the upcoming US midterm elections and holiday season, in addition to the release of Pan's Labyrinth in October, Air Bud Returns in January, and Wolf Creek in March are anticipated to contribute to a strong second half of the fiscal year. As such, as a combined entity, we are reaffirming our previously announced guidance for fiscal year 27 of $115 million to $120 million of revenue and $10 million to $20 million of adjusted EBITDA. From a liquidity standpoint, we ended the quarter with $4.3 million of cash, and our $12.5 million revolver still effective.

While our net working capital as of June 30 was negative $18.9 million, this does include $18 million of deferred consideration in the current portion of the IndiCue earnout. Both of which the company has the right to pay in equity. Finally, Finally, our cash flow from operations has improved by more than $13 million from the first quarter in fiscal 26. As we move beyond our nonrecurring acquisition related payments, and current theatrical commitments, we see liquidity improvement continuing throughout fiscal year 27. With that, I will turn it over to Erick to discuss our operating highlights in greater detail.

Erick Opeka: Thanks, Sean. Last quarter, I walked through strategy, but this quarter, I am gonna focus on execution. How we are how we are integrating the acquired businesses, reducing our cost structure, and making the combined company work the way we designed it to. So let me start with the most important takeaway. The core work of post merger integration is substantially complete. Systems, teams, and workflows are now unified, and the organizational heavy lifting is behind us. From here, our energy goes towards reducing costs capturing synergies that we have identified, and then growing the combined businesses. That shift from integrating to capturing value is what the rest of my remarks are gonna be about.

So everything we are doing right now falls under a few priorities. The first is simplifying our product portfolio. Over the last several years, we have built a number of stand alone products some may not meet however, some may not meet our contribution margin targets. And some of them are excellent technologies, but do not justify the sales and marketing commitments a full fledged product offering. So during the quarter, we have decided to integrate several of our key products directly into Matchpoint as platform features rather than selling them as stand alone offerings. This does 3 things at once.

It makes Matchpoint more valuable to every customer, It makes our story much easier to understand, and it takes out approximately $2.7 million in annualized vendor sales and marketing costs. Second priority, transforming how Giant operates. Giant was built on 2 decades of studio trust doing packaging and delivery work largely through skilled manual operation. Our goal is for Giant to run predominantly on the Matchpoint platform with automation doing the heavy lifting and our people managing exceptions and quality. The margin implications of this move are significant. Work running through the platform can carry gross margins in the mid seventies or higher, versus mid forties for traditional manual workflows depending on the character of the work.

We will also be leveraging our operations in India and Yolanda to bring more of the non-automated work in at structurally higher margins. The commercial results are already showing up. Air and Giant's studio relationship with Matchpoint's automation is winning work orders that neither company could have won alone. Our Revry partnership this quarter, for example, automating the delivery of thousands of content assets through Matchpoint dispatch is a good example of the model. The client results are validating the transition. Existing giant clients, including Neon, PBS, and Pluto, a division of Paramount, increased their delivery output individually with us between 45 and as high as 75%.

We have also begun moving giant customer workflows directly into Matchpoint with the first conversions delivering roughly 40% time savings versus manual processing. So that is the margin story actually showing up in real workflows. And we have barely begun. And it should be reflected in our financial results more and more as the year rolls on. The third priority is cost reduction. Part of the integration process was rightsizing our cost structure to match the current focus in the company. We made $3.8 million of headcount reductions just prior to the start of this fiscal year, plus additional RIFs and vendor eliminations During and subsequent to the end of Q1.

That totaled more than $8.3 million, of which $7.5 million will be realized within the current fiscal year. Additionally, we have identified and are in the process of eliminating $5.5 million of additional costs, which include the product streamlining I mentioned earlier. Altogether, we estimate total operating and SG&A reductions of $13 million within this fiscal year and we expect our cutting efforts to be materially complete by the end of the current quarter. or Q2. On IndyQ, integration is ahead of plan on the metric that matters most. Durability. We have cut SaaS customer concentration by nearly half since the acquisition, and churn has remained consistently low, and net revenue retention sits at approximately 98%.

We added We added new SaaS customers during the quarter as well as new ad network partners. And strengthen the commercial team with a new head of business development recruited from 1 of the leading cloud broadcast platforms. The business continues to scale with increasing monetizable supply and better yields. Total ad opportunities in the quarter reached 3.4 trillion, with 3.39 trillion ad impressions served for our customers in Q1. We expect this growth to scale even faster with the launch of Vadio, the new ad tech offering, that extends brands' audio campaigns into connected TV.

We believe that 5% to 7% of the $3 billion annual podcast ad spend could eventually migrate into CTV opportunities in the near to midterm and we are poised with our product to materially help OEMs and channels participate in this innovative new approach. Our goal is to make IndiCue and Vadio 2 high performing growth streams over the course of this fiscal year. Now onto our streaming business. This was the most watched quarter in company history. With 4.5 billion minutes streamed up 33% year over year. Streaming viewers grew 12% to 122.8 million in the quarter, and we ended the quarter with 1.52 million SVOD subscribers, up 12%. Note what these numbers mean together.

Minutes are growing nearly 3 times as fast as our audience. Viewers are not just more numerous. They are also watching substantially more. That engagement is what ultimately feeds discovery, first party data, and monetization across the platform. The fandom model keeps compounding channel by channel. Docurama, our documentary network, crossed 100 thousand subscribers during the quarter, up 66% year over year, with its Roku subscribers nearly quadrupling over the past year. Our flagship January 2025, hit another all time high, driven first by Amazon and now its May launch on Roku, where we also introduced our new premium channel, So Real, in partnership with All3Media.

And we also launched Gorilla Comedy Plus, a premium ad free comedy service entirely on Matchpoint. On the ad supported side of our streaming business, Dove The Dog Whisperer, Screambox, and Yu Gi Oh channels all delivered their most watched quarters ever. The Dog Whisperer channel grew 54% year over year, Screambox grew 48%, with 5 straight quarters of growth. And Yu-Gi-Oh! grew 80%, with record per viewer engagement. Our Midnight Pulp cult channel grew more than 10x year over year. Put simply, the acquisitions gave us the assets and with integration substantially behind us, this is now 1 company built to capture value.

Costs will come down rapidly every quarter across the entire organization from here, and margins will expand as work moves onto the platform just as our strongest seasonal quarters in our film slate arrive in the back half of the year. We believe we are exactly where we want to be. With that operator, we can open up the line for questions.

Operator: We will now begin the question and answer session. Please limit yourself to 1 question and 1 follow-up. If you would like to ask a question, please press *1. To raise your hand. To withdraw your question, press 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Dan Kurnos with StoneX. Your line is open. Please go ahead.

Dan Kurnos: Great. Thanks. Good afternoon. Another solid quarter from you guys in terms of progress. So let me let me take it just from the top line first. IndiCue is about a million better than we anticipated in the quarter. I know Erick, you gave some color on some of the things you are doing. Super excited by Vadio as well. How do we think about the incrementality of Vadio in the near term? what is driving kind of the short term upside and as we get into the back half of the year here with political driving up CPMs, just how do we think about sort of IndiCue's ability to benefit from that environment?

Erick Opeka: I will dive in and take that. So first up on Vadio, I think, our goal, you know, we gave some steady state guidance for that business at around a $12 million run rate. This is based off of, you know, the IndiCue team's projections on that business given what they are already seeing in early and pretty extensive trials. The directionality we gave is to hit that rate by the end of the fiscal year.

But we think that given the high demand that we are seeing from customers and the strong willingness of large OEMs to participate in what looks to be a unique and robust new opportunity at frankly, higher CPMs than they are seeing in the CTV market. That we think adoption could be quite rapid. So that is the outside guidance, but we are pushing very hard, to do it as quickly as possible. So our hope is to start to see real meaningful contribution out of that business towards the end of this quarter and into the very busy season that we are starting to see that starts in our next quarter.

In terms of the political upside, you know, I think once we are, you know, we are we are getting into the full ramp of that season, the spending is slowly starting to increase. Increase now. We think the full intensity comes post summer lull. You know, a lot of people are not really at home or paying attention to politics yet, and in turn, the advertising has not really ramped to the full that we are gonna expect in the next quarter, but we think that is gonna that is gonna be commencing quite rapidly after the Labor Day holiday. So we are poised to take as much of that business as we can.

Dan Kurnos: Got it. And then on the cost side, you know, we went from sort of modest cost reductions, $8 million, now $13 million in savings in synergies. I do not think there is any real revenue synergy baked into that number. So if you can clarify that. But you know, you guys have always done a great job, sort of pruning and readjusting the portfolio. Do you feel like after this round, you guys have sort of core where you want it to be? Is there more work to be done? Is there more upside to that? Just any additional color you can give there.

Christopher J. McGurk: Yeah. This is Christopher. I will I will let Erick answer that in detail, but I want to step back a second and say, you know, with these 2 acquisitions, we basically doubled the size of the company. We added about 150 employees. We are now spread across 3 continents. And we have 5 offices. So, you know, the process of winnowing that down and streamlining it and realizing all the synergies is job number 1 for us right now. And it is a real fertile area we are very comfortable with the $13 million target. And as we said, we are gonna see most of that really hit our P&L in the third and fourth quarter.

I will let Erick talk a little bit more about the specifics.

Erick Opeka: Yeah. Sure. So you know, that number is predominantly focused on cost reductions. So you are right. it is not inclusive of the broader synergies that will come as the businesses continue to evolve together. But that cost reduction, you know, as I noted, in the in the comments, we have already made about $8.3 million worth of cuts of which $7.5 million will fully realize this fiscal year.

And then the balance of these cuts will as I mentioned, come from the streamlining of the product portfolio. there is not a lot of fluff or you know, hypotheticals in that number that is actually all realizable reductions that are identified and in the process of being made with the goal of being complete by 9/30. So you know, that those numbers are you know, very actualizable.

Christopher J. McGurk: Just to your other point, Dan, about revenue synergies, Vadio is a perfect example of revenue synergies coming out of an acquisition. The IndiCue people were very interested in us because of our strength in connected TV. And they were very interested in our podcast business. They had this audio idea previously. And obviously we love their brand relationships in their ad technology. You put the 3 things together, there you have a potential $12 million annual business. And I think that is the first in many synergistic revenue upsides that are gonna come from the acquisitions that we did.

Dan Kurnos: Alright. It seems like we are just getting started Christopher, for sure, and I appreciate that additional color. So I just wanna tie it all together with 1 thing Sean said just around CapEx. Spend, feels like if you add all of these things together, potential revenue synergies, the EBITDA upside from the cost saves now and then the lower CapEx, it feels like free cash flow is gonna turn meaningfully positive and accelerate from here. Is that a fair statement?

Christopher J. McGurk: Correct. And there is no need to add any more color to that. Kind of what I figured, Christopher. Alright. Thank you guys for all the thank you for all the answers to my question.

Operator: Thank you. Your next question comes from the line of Brian Kinstlinger with Alliance Global Partners. Your line is open. Please go ahead.

Brian Kinstlinger: Great. Thanks so much for taking my question. I saw in your prepared remarks and your press release you highlighted there has been some conversion in Giant's manual process to match point. But I assume it is modest given it is early. So I am curious how long you see the process taking what are studios indicating, And are they interested in fully transitioning to Matchpoint, and over what time frame might you think?

Erick Opeka: Yeah. Sure. So I can take that. So first up, you are right. It is early days. You know, the first goal was just to have the business operating as 1 unified company And so, you know, we are getting that we are getting to that place now. The second piece is really getting the teams up and trained on it. You know, to our customers, the really critical thing is all of them actually have pressure to move fast and to drive more work. So the natural business demand is driving towards automation anyways. So we are finding our customers actually demanding more automation, more reporting, more visibility.

So we are playing right to the sweet spot of where the market is. Part of that is really driven by the shift of the industry towards you know, from individual distribution of 1 title to thousands of locations to mass catalog pushes, reworks of catalogs, redeliveries, and so on. Today, when we get orders, there are thousands and thousands of title orders, not just, you know, 10 pieces here to lots and places. So that number 1, the market is doing it. 2, what is compelling is Matchpoint is transparent to our They do not have to do anything for them to take advantage of benefit when they are working with Giant They just get the benefit of it.

So there is no real resistance to or there is no work to drive adoption. it is more of internal pushing Matchpoint into workflows, and that is a process of training. it is a process of some development work to make it work with existing systems and so on. But we the goal is to have materially all of the packaging and delivery work, which accounts for 80% of that revenue, done in an automated or semi automated fashion by the closeout of this fiscal year.

And then second goal by the end of the quarter is obviously to take advantage of the of the offshore resources we have to help further improve margins for parts that cannot be fully automated.

Brian Kinstlinger: Great. That was helpful. 1 question on theatrical releases. Can you share how many theaters is Pan's Labyrinth expected to be showing on? And while I know monetization does not stop at box office sales, Remind us what your all in cost to Cineverse is and what would success be from a box office sales perspective?

Christopher J. McGurk: Yeah. Good question. Again, I will reiterate, it is coming out on October 9th, we expect it to be in between 1.5 thousand and 2,000 screens. And our releasing partner on this film is Fathom Entertainment. Which is a releasing arm of AMC, Regal, and Cinemark. And we are very confident that they are gonna be able to secure really great placement on this movie. Particularly since it is being presented in 4K and 3D. They had a release a couple years ago of the, 75% of its business on 3D and ended up doing really, really well. It did over $30 million at the box office.

Again, the beauty of our model we do not have to do $30 million at the box office in order to breakeven and make a very, very nice return. Our all in investment on this movie marketing and acquisition cost for 20 year distribution term. Is less than $5 million. So our breakeven at the box office is well below $10 million at the box office.

And we feel pretty good where we are at right now as I mentioned in my remarks, the response to Guillermo in this movie wherever we have taken it, whether it is Cannes or Comic-Con or screening it, is remarkably positive because he is become 1 of the most respected and beloved filmmakers in the world. And the movie trailer in front of The Odyssey, we got great trailer placement on it, and reaction in theater was very, very positive as well. So we are we are very bullish on this movie. both from the fact that the risk reward profile is great, and the response so far among the fans out there has been fantastic.

Brian Kinstlinger: Right. Thank you so much.

Christopher J. McGurk: Thanks.

Operator: We have reached the end of the question and answer session. I will now turn the call back to Christopher McGurk for closing remarks.

Christopher J. McGurk: Thank you, you know, and thanks to all of you for joining us on this call today. You know, as always, Julie Milstead will be available if you have any follow-up questions. At all. And we look forward to speaking with you again on our next quarterly call. Thank you all.

Operator: This concludes today's call. Thank you for attending. You may now disconnect.