CuriosityStream Inc.: Form 10-Q for the period ended Jun 30, 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 15,000 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.

During the second quarter of 2026, the Company disposed of its educational lifelong-learning, faith-based, and audio-format content brands (Curiosity University, Catholic Stream and Curiosity Audio, respectively) to an unrelated third party, concurrently entering into a long-term content license agreement with the buyer to continue monetizing the underlying content library, alongside a Distribution and Services Agreement under which the Company receives a fee equal to 10% of the buyer's net revenue for providing ongoing operational and distribution services. This transaction reflects the Company's ongoing strategy to concentrate its resources on its core streaming and technology platform, including the continued expansion of its AI content and technology licensing initiatives, while divesting non-core brand assets that are not central to this strategic focus. See Note 16 — Disposition of Curiosity Brands, LLC and Related Agreements to the Unaudited Condensed Consolidated Financial Statements for further discussion.

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 and six months ended June 30, 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 June 30, 2026, the Company reported operating income and net income of $9.2 million and $8.9 million, respectively, compared to operating income and net income of $0.5 million and $0.8 million, respectively, for the three months ended June 30, 2025. This improvement in results was attributable to a $4.2 million, or 22%, increase in total revenue, driven by higher licensing revenue and a $4.5 million, or 24%, decrease in total operating expenses, driven by a reduction in costs across all operating expense categories.

For the six months ended June 30, 2026, the Company reported operating income and net income of $7.6 million each, compared to operating income and net income of $0.6 million and $1.1 million, respectively, for the same period in 2025. This improvement in results was attributable to a $4.3 million, or 13%, increase in total revenue, driven by higher licensing revenue, and a $2.8 million, or 8%, decrease in total operating expenses, reflecting lower cost of revenues and advertising and marketing, partially offset by higher general and administrative expenses.

Our future operating results and cash flows are dependent upon a number of opportunities, such as our AI licensing initiatives and other factors, including our ability to efficiently grow our subscription business.

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 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 and six months ended June 30, 2026, subscription revenue decreased due to a lower overall subscriber count, partially offset by an increase in average monthly revenue per paying subscriber reflecting the strategic price increases implemented in March 2026, which applied to our subscription offerings across our direct business platforms.

Licensing

Through our licensing business, we deliver content and data assets across two primary models: traditional cash licensing and non-cash barter arrangements. Under our cash licensing arrangements, we license titles from our library to various media companies. We also license and sublicense high volumes of content and data assets to technology organizations developing artificial intelligence technologies, such as large language models (LLMs), small language models (SLMs), and physical AI applications. Under our non-cash barter arrangements, we exchange existing titles from our library for new programming, which allows us to expand our content offerings while preserving liquidity.

Licensing growth during the period was driven by an increase in traditional cash licensing, including the long-term content license agreement with Curiosity Brands, as well as expanded barter activity. Because acquiring content under non-cash barter transactions requires the concurrent recognition of licensing revenue at the estimated fair value of the assets received, increased barter volume directly impacts recognized revenue. The frequency and timing of these arrangements fluctuate based on when content exchanges are executed with our partners.

Operating Expenses

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 and six months ended June 30, 2026, and 2025:

(in thousands)

Cost of revenues decreased $2.6 million, or 29%, and $3.0 million, or 19%, for the three and six months ended June 30, 2026, respectively, compared to the same periods in 2025, primarily driven by a decrease in distribution costs, principally reflecting the timing of AI revenue share expenses. These increases were partially offset by an increase in Other, primarily driven by higher storage and other technology costs reflecting the investment in our data library for AI training. We expect these costs to decline in the second half of 2026.

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 and six months ended June 30, 2026, advertising and marketing expenses decreased $1.4 million, or 42%, and $0.8 million, or 13%, respectively, compared to the same periods in 2025. The decreases were primarily driven by more efficient marketing spend.

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 and six months ended June 30, 2026, and 2025:

(in thousands)

For the three months ended June 30, 2026, general and administrative expenses decreased $0.5 million, or 8%, compared to the same period in 2025, primarily driven by a $0.4 million decrease in stock-based compensation expense resulting from the RSUs granted in July 2025 and a $0.2 million decrease in professional services, reflecting our ongoing commitment to disciplined expense management and operational efficiency.

For the six months ended June 30, 2026, general and administrative expenses increased $1.0 million, or 9%, from the same period in 2025, primarily driven by a $1.0 million increase in stock-based compensation expense resulting from the RSUs granted in July 2025, and a $0.2 million increase in payroll and related expenses primarily due to a higher accrual for annual incentive compensation, partially offset by a $0.3 million decrease in professional services.

Other Income (Expense)

Change in Fair Value of Warrant Liability

As of June 30, 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 and six months ended June 30, 2026, was $0.1 million and $0.3 million, respectively, compared to $0.4 million and $0.9 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 half of 2026.

Equity Method Investment Income

For the three and six months ended June 30, 2026, the Company recorded immaterial income compared to losses of $0.2 million and $0.3 million for the same periods in 2025, respectively. 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 and six months ended June 30, 2026, the Company recorded income tax provision of $0.4 million and $0.5 million, respectively, compared to income tax benefits of $0.1 million each for the same periods in 2025. The change in the income tax provision was primarily driven by changes in our estimated annual effective tax rate, reflecting projected full-year valuation allowance utilization and state income tax liabilities.

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 June 30, 2026, the Company’s cash, cash equivalents and restricted cash totaled $5.4 million, with an additional $5.4 million held in investments in debt securities.To support ongoing working capital and operational needs, the Company plans to leverage cash generated from operations, as well as potential drawdowns on our credit facility if needed.

For the six months ended June 30, 2026, the Company used $3.0 million of net cash in operating activities. Additionally, the Company generated $1.6 million in net cash from investing activities, mainly related to maturities of investments in debt securities. Net cash used in financing activities was $11.6 million, mainly due to dividends paid and repurchase of treasury stock.

As of June 30, 2026, we principally use cash for advertising and marketing, working capital, and quarterly dividend payments. While we generated positive cash flow from operating activities in 2024 and 2025, we experienced negative cash flows from operations for the three and six months ended June 30, 2026. Although we continue to focus on operational efficiency, operating cash flows may fluctuate in future periods. We believe that our current cash levels and investments, supplemented by anticipated operating cash flows, will be adequate to support our ongoing operations, capital expenditures, dividend payments, and working capital needs for at least the next twelve months from the date of this filing.

We have used, and expect to continue to use, cash generated from operations and cash on hand to fund our quarterly dividend, subject to Board approval and market conditions. As of June 30, 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 June 30, 2026.

Our Board of Directors has declared the next cash dividend of $0.085 per share to be paid on September 18, 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 June 30, 2026, we had repurchased $1.1 million of common stock under this program. As of June 30, 2026, $4.9 million remains available for future repurchases under the Board-authorized program.

Cash Flow Analysis

The following table presents our cash flows from operating, investing and financing activities for the six months ended June 30, 2026, and 2025:

(unaudited and in thousands)

33

Operating Activities

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

(in thousands)

For the six months ended June 30, 2026, our net cash used in operating activities was $3.0 million compared to $4.7 million for the same period in 2025.

For the six months ended June 30, 2026, net income was $7.6 million. Operating cash flows reflected non-cash adjustments, including $8.0 million of amortization of content assets, $4.1 million of stock-based compensation and $0.4 million of other depreciation, amortization and non-cash items, which do not represent cash inflows or outflows and are added back in reconciling net income to operating cash flow. Additions to content assets of $9.5 million, acquired primarily through barter activities, were similarly non-cash and are excluded from operating cash flow. Cash used during the period primarily consisted of a $13.1 million net use of cash 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 six months ended June 30, 2026 and 2025, we recorded a net cash inflow in investing activities of $1.6 million and $8.3 million, respectively. The 2026 inflow was primarily driven by $6.5 million of maturities and $1.0 million of sales of investments in debt securities, partially offset by $3.9 million of purchases of investments in debt securities and a $2.0 million deposit paid in advance of the closing of our acquisition of Spiegel Venture, which closed on July 1, 2026 (see Note 17 — Subsequent Events). The 2025 inflow was primarily driven by $17.5 million of maturities and $2.0 million of sales of investments in debt securities, partially offset by $11.1 million of purchases of investments in debt securities.

Financing Activities

For the six months ended June 30, 2026 and 2025, net cash used in financing activities was $11.6 million and $14.0 million, respectively. The decrease in cash used was primarily driven by a $2.8 million decrease in dividends paid and a $0.6 million decrease in payments related to tax withholding, partially offset by $0.9 million used for repurchases of common stock in 2026, with no comparable activity in 2025.

Capital Expenditures

Going forward, we expect to continue making expenditures for purchases of property and equipment, which we expect to remain minimal. 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 June 30, 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 June 30, 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 June 30, 2026. Based on these evaluations, our CEO and CFO concluded that our disclosure controls and procedures were effective as of June 30, 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 June 30, 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.

Except as set forth below, 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.

We are subject to credit risk and counterparty concentration risk related to the license fee receivable from Curiosity Brands, LLC.

In June 2026, we entered into a 30-year content license agreement with Curiosity Brands, LLC, under which we recorded a licensing fee receivable payable in four annual installments of $2.5 million beginning in June 2027. Curiosity Brands, LLC is a newly formed entity with limited operating history and independent financial resources. Our ability to collect the scheduled annual installment payments is dependent on the financial condition, operational performance, and creditworthiness of Curiosity Brands, LLC over the four-year payment period.

If Curiosity Brands, LLC fails to satisfy its payment obligations, experiences liquidity difficulties, or becomes subject to insolvency proceedings, we may suffer credit losses, delays in collection, or impairment of the underlying receivable. Any such failure could adversely affect our business, financial condition, cash flows, and results of operations.