CuriosityStream Inc.: Form 10-Q for the period ended Mar 31, 2026

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, talks and courses 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 14,000 programs 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 aggregates rights to millions of video and audio programs, course materials and other assets to utilize on our own services as well as license to other media and technology companies.

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 months ended March 31, 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:

(unaudited and in thousands)

For the three months ended March 31, 2026, the Company reported an operating loss of $1.5 million, compared to an operating income of $0.1 million for the three months ended March 31, 2025. This $1.6 million decrease in operating results was primarily driven by a $1.7 million, or 11%, increase in total operating expenses, largely due to higher stock-based compensation charges.

The Company recognized a net loss of $1.3 million for the three months ended March 31, 2026, compared to net income of $0.3 million in the prior year period, resulting in a year-over-year decrease of $1.6 million. The decrease in our net result of $1.6 million, was primarily due to higher general and administrative expenses of $1.5 million.

Our future operating results and cash flows are dependent upon a number of opportunities, challenges, and other factors, including our ability to efficiently grow our subscriber base, increase our prices and expand our service offerings to maximize subscriber lifetime value.

Revenue

Since the Company was founded in 2015, we have generated the majority of our revenues from consumers directly accessing our content in the form of monthly or annual subscription plans.

For the three months ended March 31, 2026, total revenue increased slightly by $0.1 million compared to the same period in 2025, as a $0.6 million increase in Licensing revenue was offset by a $0.5 million decline in Subscription revenue.

Subscription

The Company’s streaming content 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 streaming 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 2023 as well as 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 months ended March 31, 2026, direct business revenue decreased due to a lower overall subscriber count. However, this portion of our business benefited from a strategic price increase implemented in March 2026, which applied to our subscription offerings across our direct business platforms. Additionally, new partnerships and revised affiliate agreements drove a net increase in wholesale distribution revenue for the quarter.

Licensing

Through our Licensing business, we license collections of existing titles from our content library to various media companies. These transactions include traditional cash licenses as well as non-cash barter arrangements (whereby we license out our content in exchange for new programming to expand our library while preserving liquidity). Additionally, we license and sublicense high volumes of content and data assets to organizations developing large language models (LLMs) and other artificial intelligence (AI) products.

The growth in licensing was primarily driven by expanded barter activity. Under these non-cash arrangements, the Company acquires additional content to expand its content library, which consequently required the concurrent recognition of licensing revenue at the estimated fair value of the content received. The volume of these transactions varies based on the timing of content exchanges between the Company and its partners.

Other

We provide advertising and sponsorship services by developing integrated digital brand partnerships designed to offer CuriosityStream content in a variety of forms. These include short- and long-form program integration, branded social media promotional videos, and broadcast advertising spots within our video and audio programs. Our services are made available via our linear programming channels, in front of the paywall, and through an increasing focus on digital display ads. Additionally, we deliver content through advertising-based video-on-demand (AVOD) and free advertising-supported streaming television (FAST) platforms. This includes our dedicated YouTube channels (Curiosity and Curiosity University), where we generate advertising revenue from our digital content without transactional video-on-demand (TVOD) components. We continue to expand these offerings across YouTube and other similar ad-supported distribution channels to maximize our brand reach and digital ad inventory.

In the future, we intend to continue developing integrated digital brand partnerships with advertisers. These sponsorship campaigns offer companies the chance to be associated with CuriosityStream content in the forms described above. We believe the impressions accumulated in these multi-faceted campaigns would result in verifiable metrics for the clients.

Operating Expenses

Our primary operating costs relate to the cost of producing and acquiring our content, the costs of advertising and marketing our service, personnel costs, and distribution fees.

For the three months ended March 31, 2026, and 2025, our operating expenses were $16.7 million and $15.0 million, respectively, an increase of $1.7 million, or 11%.

Cost of Revenues

Cost of revenues encompasses distribution fees, content amortization, hosting and streaming delivery costs, payment processing costs, commission costs, and 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 with our content, Smart Bundle and digital distributor partners, payment processing fees and fees owed to the Spiegel Venture related to its streaming service. We pay a fixed percentage fee to our AI training content partners. 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 months ended March 31, 2026, and 2025:

(in thousands)

Cost of revenues decreased to $6.7 million for the three months ended March 31, 2026, a 6% decrease from $7.1 million for the same period in 2025. These decreases were primarily driven by a $1.3 million, or 45% decreases in distribution costs, resulting from reductions in music licensing fees and AI revenue share costs compared to the same period in 2025. These decreases were partly offset by $0.7 million, or 93% increase in Other for the three months ended March 31, 2026, primarily due to higher storage costs and web service costs directly related to the delivery and management of data assets under our increased AI licensing agreements.

Advertising and Marketing

Our advertising and marketing expenditures are a primary operating cost for our business, focused specifically 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 months ended March 31, 2026, advertising and marketing expenses increased by $0.6 million, compared to the same period in 2025. The increase primarily reflects expanded digital advertising efforts targeted at high-growth strategic initiatives. We continue to optimize our marketing mix to balance efficient spending with the maintenance of a robust market presence.

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 months ended March 31, 2026, and 2025:

(in thousands)

For the three months ended March 31, 2026, general and administrative expenses increased to $6.5 million from $5.0 million for the same period in 2025. The increase of $1.5 million, or 31% was primarily driven by $1.4 million higher stock-based compensation expense from the RSUs granted in July 2025 and during the period, and $0.3 million higher payroll and related primarily due to increased accruals for full-year incentive compensation. These increases were partially offset by a $0.1 million decrease in Professional services, mainly due to lower legal expense.

Other Income (Expense)

Change in Fair Value of Warrant Liability

The fair value of the Company's warrant liability was estimated using the Black-Scholes valuation model, which took into account a number of economic assumptions, including the market price of the Company's common stock and its expected volatility. Changes in these inputs from period to period significantly affected the reported changes in fair value during the periods the warrants were outstanding. As of March 31, 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 for the three months ended March 31, 2026, was $0.2 million compared to $0.4 million for the same periods in 2025. The decrease in 2026 was primarily due to less interest income earned resulting from an overall decrease in investment balance starting in 2025 and continued through the first quarter of 2026.

Equity Method Investment Income

For the three months ended March 31, 2026, the Company recorded an immaterial income compared to a loss of $0.2 million for the same period in 2025. The Company no longer recognizes its share of losses from the Spiegel Venture, as the investment balance was fully reduced in 2024 due to cumulative losses. The Company continues to record its share of income and losses from Nebula.

Income Taxes

For the three months ended March 31, 2026 and 2025 income tax expense was immaterial. Our provision for income taxes differs from the federal statutory rate primarily due to the Company being in a full valuation allowance position and not recognizing a tax benefit attributable to generated losses for either federal or state income tax purposes.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity

As of March 31, 2026, the Company’s cash, cash equivalents and restricted cash totaled $17.0 million, with an additional $6.5 million held in investments in debt securities that can be readily converted to cash to support ongoing cash flow needs.

For the three months ended March 31, 2026, the Company generated $1.2 million of net cash from operating activities. Additionally, the Company generated $2.5 million in net cash from investing activities, mainly related to maturities of investments in debt securities. Net cash used in financing activities was $5.2 million, mainly due to dividends paid and repurchase of treasury stock.

As of March 31, 2026, we principally use cash to promote our services through advertising and marketing and to provide working capital for our operations. While we have experienced net losses since inception, we have generated positive cash flow from operating activities in 2024 and 2025 and expect this trend to continue. We believe that our current cash levels and investments, supplemented by anticipated operating cash flows and the availability under our new Credit Facility will be adequate to support our ongoing operations, capital expenditures, dividend payments, and working capital for at least the next twelve months from the date of this filing.

We have used, and expect to continue to use, cash on hand to fund our quarterly dividend, subject to Board approval and market conditions. As of March 31, 2026, we continue to utilize trade and barter transactions, a strategy initiated in 2023, to exchange content assets through licensing agreements. These transactions allow us to acquire high-quality, monetizable content while preserving our cash liquidity.

The following table provides details of dividends declared and paid as of March 31, 2026.

Our Board of Directors has declared the next cash dividend of $0.085 per share to be paid on June 19, 2026, for an expected aggregate amount of $5.0 million. Subject to future declaration by our Board of Directors, we intend to continue to pay regular quarterly cash dividends.

On June 10, 2024, our Board of Directors authorized and approved a share repurchase program for up to $4.0 million of the then-outstanding shares of our common stock. Under the stock repurchase program, we may repurchase shares through open market purchases, privately negotiated transactions, block purchases, or otherwise in accordance with applicable federal securities laws. On March 10, 2026, the Board authorized an additional $2.0 million for the purchase of the Company’s common stock under this existing program, increasing the total authorized amount to $6.0 million. Since the program’s inception through March 31, 2026, we had repurchased $0.6 million of common stock under this program. As of March 31, 2026, $5.4 million remains available for future repurchases under the Board-authorized program.

Subsequent to March 31, 2026, in April 2026, the minority partners of the Spiegel Venture exercised their respective put options. As a result, the Company is committed to acquiring the remaining 68% ownership interest for an aggregate purchase price of approximately $1.9 million, based on the formula set forth in the relevant Share Purchase Agreement. The Company expects to finalize this transaction in mid-2026 and intends to fund the acquisition using existing cash on hand. Upon closing, the Company will own 100% of the Spiegel Venture and will begin consolidating its financial results.

We cannot predict when or if we will repurchase any additional shares of common stock as this stock repurchase program will depend on a number of factors, including constraints imposed by applicable federal securities laws, price, general business and market conditions, and alternative investment opportunities. This program does not obligate us to acquire any particular amount of common stock. The program has no expiration date and may be modified, suspended or discontinued at any time at our discretion.

Cash Flow Analysis

The following table presents our cash flows from operating, investing and financing activities for the three months ended March 31, 2026, and 2025:

(unaudited and in thousands)

Operating Activities

Cash flows from operating activities primarily consist of net (loss) income, changes to our content assets (including additions and amortization), and other working capital items.

(in thousands)

For the three months ended March 31, 2026, our net cash from operating activities was $1.2 million compared to $1.9 million for the same period in 2025.

For the three months ended March 31, 2026, net loss was $1.3 million. Operating cash flows reflected non-cash adjustments, including $3.7 million of amortization of content assets, $2.2 million of stock-based compensation and $0.2 million of other depreciation, amortization and non-cash items. Cash used during the quarter primarily consisted of a $4.0 million of additions to content assets acquired primarily through barter activities, and $0.6 million inflow from changes in operating assets and liabilities.

Investing Activities

Cash flow from investing activities consists of purchases, sales and maturities of investments, business acquisitions and equity investments and purchases of property and equipment.

For the three months ended March 31, 2026 and 2025, we recorded a net cash inflow in investing activities of $2.5 million and $2.1 million, respectively, mainly due to maturities of investments in debt securities.

Financing Activities

For the three months ended March 31, 2026 and 2025, net cash used in financing activities was $5.2 million and $2.6 million, respectively, reflecting an increase of $2.5 million primarily due to dividends paid.

Capital Expenditures

Going forward, we expect to continue making expenditures for purchases of property and equipment. 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 March 31, 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 March 31, 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.

DISCLOSURE CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures designed to provide reasonable assurance that information required to be disclosed in our reports that we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) are recorded, processed, summarized and reported within the specified time periods in the rules and forms of the SEC, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosure.

Our management, with the participation of the CEO and the CFO, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) or 15d-15(e) promulgated under the Exchange Act) as of March 31, 2026. Based on these evaluations, our CEO and CFO concluded that our disclosure controls and procedures were effective as of March 31, 2026.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management is required to evaluate, with the participation of our CEO and our CFO, any changes in internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during each fiscal quarter that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. There were no changes in our internal control over financial reporting during the quarter ended March 31, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Factors that could cause our actual results to differ materially from those in this Quarterly Report are any of the risks described in our Annual Report on Form 10-K filed with the SEC on March 12, 2026. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations.

There have been no material changes from the risk factors previously disclosed under the heading “Risk Factors” in our Annual Report on Form 10-K filed with the SEC on March 12, 2026.