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CuriosityStream Earnings: What Investors Should Know

By Beth McKenna - Mar 24, 2021 at 9:47AM

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The stock of this fast-growing video-streaming company deserves a place on your watch list.

CuriosityStream (CURI -2.47%) reported fiscal fourth-quarter and full-year 2020 results after the market close on Tuesday.

Shares of the factual entertainment (documentary) subscription video-streaming service rose 1.7% in Tuesday's after-hours trading session. We can probably attribute the market's reaction largely to full-year 2021 revenue guidance coming in higher than Wall Street was expecting. That said, the company also turned in solid Q4 results, too.

CuriosityStream stock has gained 63% since it became publicly traded on Oct. 15, 2020, via the company's reverse merger with a special purpose acquisition company (SPAC). (This method is faster and less expensive than a traditional initial public offering.) The S&P 500 has returned about 13% over this period.

Titles of a handful of the company's shows, including Ancient Earth, Prescription Nutrition, and Science Shorts.

Image source: CuriosityStream.

CuriosityStream's key quarterly numbers

Metric Q4 2020 Q4 2019

Change

Revenue $11.4 million $6.7 million 70%
GAAP operating income ($15.6 million) ($14.9 million) Loss expanded 5%
GAAP net income ($15.7 million) ($14.6 million) Loss expanded 8%

Data source: CuriosityStream. Earnings per share (EPS) not presented because company was not publicly traded a year ago, so a comparison is not possible. GAAP = generally accepted accounting principles. 

The quarter's revenue growth was driven by the number of paying subscribers jumping 50% year over year to about 15 million. CuriosityStream is not profitable because it's investing in growth initiatives, as is typical for a company in the tech realm that's new to the public markets.

For Q4, Wall Street was looking for revenue of $11.2 million, so the company slightly beat the top-line estimate.

For full-year 2020, CuriosityStream's revenue soared 120% year over year to $39.6 million, and its net loss narrowed 9% to $38.6 million. Gross margin for the year was 61%, about the same as in 2019, when it was 62%.

The company ended the year with $42.4 million in cash, cash equivalents, restricted cash, and investments.

What management had to say

CEO Clint Stinchcomb said in the earnings release:

We had a strong 2020, ending the year with more than double our 2019 revenue with approximately 15 million subscribers. More recently, we raised approximately $100 million in a follow-on [stock] offering completed in February of this year. We enter 2021 with a strong balance sheet, one of the largest libraries of factual content in the world and a world-class team of experienced media executives executing strongly against our plans. 

2021 guidance

For full-year 2021, management guided for revenue of "at least $71 million," which represents growth of at least 80% year over year. As is quite typical for newly public companies, management didn't issue an outlook for the bottom line. At this stage, growth in paid subscriber count and revenue is much more important than bottom-line results.

Going into the earnings release, Wall Street had been modeling for 2021 revenue of $70.6 million, so the company's guidance was somewhat better than expected.

A stock worth at least putting on your watch list

CuriosityStream had a good quarter and year, given it's only been in business since 2015 and has only traded publicly since October 2020. Its stock is worth putting on your watch list. Why?

  • It's briskly adding subscribers and growing revenue.
  • It's not weighed down by legacy cable operations like most of the media companies that have launched streaming services. An example is Walt Disney. Its Disney+ streaming service has been extremely successful, but its cable business has struggled in recent years due to consumers cutting the cord and embracing streaming services, such as Netflix.
  • It was founded by its chairman, John Hendricks, who previously founded and was chairman of Discovery, formerly named Discovery Communications.

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Stocks Mentioned

CuriosityStream Inc. Stock Quote
CuriosityStream Inc.
CURI
$1.58 (-2.47%) $0.04
Netflix, Inc. Stock Quote
Netflix, Inc.
NFLX
$182.67 (-1.98%) $-3.68
The Walt Disney Company Stock Quote
The Walt Disney Company
DIS
$102.92 (0.49%) $0.50
Warner Bros. Discovery, Inc. Stock Quote
Warner Bros. Discovery, Inc.
DISC.A

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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