CuriosityStream Inc. (NASDAQ: CURI), a global factual entertainment company, today announced its financial results for the fourth quarter and fiscal year ended December 31, 2022.

“We made excellent progress in our march toward positive free cash flow during the quarter, improving our Adjusted Free Cash Flow by more than $22 million year over year. Prioritizing business sustainability and profitability, we made some strategic decisions in our content licensing line of business that sacrificed significant quarterly revenue performance, but that enhance our long-term strength and optionality,” said Clint Stinchcomb, President & CEO. “In a time of rapid evolution in our industry that will determine who survives and thrives, we are confident in our strategy. We believe that our strong balance sheet, with more than $50 million of cash and investments and no debt, our new increased subscription pricing following extensive testing with millions of consumers, the run-off of considerable legacy spending obligations, our deep and globally appealing factual library, and several recent partner launches in Eastern Europe, India, Australia and Western Europe, put us in a powerful position in 2023.”

“Separately, on March 27th, we increased our subscription pricing to $4.99 per month from $2.99 per month for new monthly subscribers and to $39.99 per year from $19.99 per year for new annual subscribers. We had long maintained our pricing despite the significant investments we have made to expand our content library and improve the user experience. We believe our new price points continue to represent exceptional value relative to other subscription services available in the market.”

Fourth Quarter 2022 Financial Results

• Revenue of $14.5 million, compared to $27.3 million in the fourth quarter of 2021;
• Gross profit of $1.4 million, compared to $10.0 million in the fourth quarter of 2021;
• Total advertising and marketing and general and administrative expenses of $16.7 million, a 40% year-over-year reduction;
• Net loss of $(14.5) million, compared to net loss of $(11.4) million in the fourth quarter of 2021;
• Adjusted EBITDA of $(13.6) million, compared to Adjusted EBITDA of $(16.3) million in the fourth quarter of 2021;
• Adjusted Free Cash Flow of $(8.8) million, compared to Adjusted Free Cash Flow of $(31.5) million in the fourth quarter of 2021; and
• Cash, restricted cash and available-for-sale investments balance of $55.5 million and no debt as of December 31, 2022.

Full Year 2022 Financial Results

• Revenue of $78.0 million, compared to $71.3 million in 2021;
• Gross profit of $26.5 million, compared to $34.6 million in 2021;
• Net loss of $(50.9) million, compared to net loss of $(37.6) million in 2021;
• Adjusted EBITDA of $(44.3) million, compared to Adjusted EBITDA of $(44.9) million in 2021; and
• Adjusted Free Cash Flow of $(39.7) million, compared to Adjusted Free Cash Flow of $(73.6) million in 2021.

Full Year 2022 Business Highlights

• Demonstrated continued Smart Bundle subscriber momentum with 32% year-over-year growth and record monthly subscriber net additions in December;
• Added the Da Vinci Kids educational streaming and interactive learning platform to Curiosity’s Smart Bundle, which now provides subscribers with access to Tastemade, Topic, SOMM TV, One Day University, Nebula and CuriosityStream for $69.99 per year;
• Premiered new, original programming, including: CRACKING THE CODE; PLANET INSECT; TRACKER’S DIARY: BEARS OF KATMAI; TITANS: THE RISE OF HOLLYWOOD; CELTS: THE UNTOLD STORY; TRAITOR/PATRIOT; SECRETS OF THE UNIVERSE; IMPOSSIBLE ESCAPES; ASTEROID RUSH; Season Two of ENGINEERING THE FUTURE; TITANS: THE RISE OF WALL STREET; the 6-part series INSIDE THE MIND OF A CON ARTIST; RED ELVIS: THE COLD WAR COWBOY; and three new episodes of the ongoing series ANCIENT YELLOWSTONE; and
• Provided subscribers with our 100 Days of Curiosity promotion, which showcased our most engaging titles across science, technology, history, nature, lifestyle and more, resulting in a 5x-25x increase in daily viewership for top performers.

Financial Outlook

CuriosityStream expects the following for the first quarter of 2023:

• Revenue within the range of $11 - $13 million
• Adjusted Free Cash Flow within the range of $(8) - $(6) million

Conference Call Information

CuriosityStream will host a Q&A conference call today to discuss the Company's Q4 and full year 2022 results at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). A live audio webcast of the call will be available on the CuriosityStream Investor Relations website at https://investors.curiositystream.com. Participants may also dial-in toll free at (888) 510-2008 or International at (646) 960-0306 and reference conference ID# 3957505. An audio replay of the conference call will be available for two weeks following the call on the CuriosityStream Investor Relations website at https://investors.curiositystream.com.

Forward-Looking Statements

Certain statements in this press release may be considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 including, but not limited to, CuriosityStream’s expectations or predictions of future financial or business performance or conditions, and the Company’s continued success. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Generally, statements that are not historical facts, including statements concerning possible or assumed future actions, business strategies, events or results of operations, are forward-looking statements. These statements may be preceded by, followed by or include the words “believes,” “estimates,” “expects,” “projects,” “forecasts,” “may,” “will,” “should,” “seeks,” “plans,” “scheduled,” “anticipates,” “predicts” or “intends” or similar expressions. Such forward-looking statements involve risks and uncertainties that may cause actual events, results or performance to differ materially from those indicated by such statements. Certain of these risks are identified and discussed under “Risk Factors” in CuriosityStream’s Annual Report on Form 10-K for the year ended December 31, 2022, that we expect to file with the Securities and Exchange Commission (the “SEC”) on March 31, 2023, and in CuriosityStream’s other SEC filings. These risk factors will be important to consider in determining future results and should be reviewed in their entirety. Forward-looking statements are based on the current belief of the management of CuriosityStream, based on currently available information, as to the outcome and timing of future events, and involve factors, risks, and uncertainties that may cause actual results in future periods to differ materially from such statements. However, there can be no assurance that the events, results or trends identified in these forward-looking statements will occur or be achieved. Forward-looking statements speak only as of the date they are made, and CuriosityStream is not under any obligation, and expressly disclaims any obligation to update, alter or otherwise revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law. Readers should carefully review the statements set forth in the reports that CuriosityStream has filed or will file from time to time with the SEC.

In addition to factors previously disclosed in CuriosityStream’s reports filed with the SEC and those identified elsewhere in this communication, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: (i) risks related to CuriosityStream’s limited operating history; (ii) the effects of pending and future legislation; (iii) risks of the internet, online commerce and media industry; (iv) the highly competitive nature of the internet, online commerce and media industry and CuriosityStream’s ability to compete therein; (v) litigation, complaints, and/or adverse publicity; (vi) the ability to meet Nasdaq’s listing standards; and (vii) privacy and data protection laws, privacy or data breaches, or the loss of data.

Non-GAAP Financial Measures

To supplement our unaudited consolidated statement of operations, which is prepared in accordance with GAAP, we present Adjusted EBITDA and Adjusted Free Cash Flow in this press release. Our use of non-GAAP financial measures, such as Adjusted EBITDA and Adjusted Free Cash Flow, has limitations as an analytical tool, and these measures should not be considered in isolation or as a substitute for analysis of financial results as reported under GAAP.

We use these non-GAAP financial measures in conjunction with financial measures prepared in accordance with GAAP for planning purposes, including in the preparation of our annual operating budget, as a measure of our core operating results and the effectiveness of our business strategy, and in evaluating our financial performance. These measures provide consistency and comparability with past financial performance, facilitate period-to-period comparisons of core operating results, and also facilitate comparisons with other peer companies, many of which use similar non-GAAP financial measures to supplement their GAAP results. In addition, Adjusted EBITDA and Adjusted Free Cash Flow are widely used by investors and securities analysts to measure a company’s operating performance. We exclude the following items from net income to calculate Adjusted EBITDA: interest and other income (expense), provision for income taxes, depreciation and non-content amortization, loss/(gain) on the change in fair value of our warrants, equity interests loss (gain), impairment of goodwill and intangible assets, and stock-based compensation. Adjusted Free Cash Flow is calculated as net cash flow used in operating activities less purchases of property and equipment.

Investors are cautioned that there are material limitations associated with the use of non-GAAP financial measures as an analytical tool. In particular, (1) although depreciation and amortization expense are non-cash charges, the assets subject to depreciation and amortization may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; (2) Adjusted EBITDA does not reflect: (a) changes in, or cash requirements for, our working capital needs; or (b) tax payments that may represent a reduction in cash available to us; and (3) Adjusted Free Cash Flow does not reflect: (a) our cash flow available for discretionary payments; (b) our future contractual commitments (such as any debt service requirements or dividend payments); (c) funds available for investment or other discretionary uses; (d) certain capital expenditure requirements; or (e) the total increase or decrease in our cash balances for the stated period. The non-GAAP financial measures we use may be different from non-GAAP financial measures used by other companies, limiting their usefulness for comparison purposes. We compensate for these limitations by providing specific information regarding the GAAP items excluded from these non-GAAP financial measures. A reconciliation of these non-GAAP financial measures has been provided in the financial statements tables included in this press release and investors are encouraged to review the reconciliation.

About Curiosity Inc.

Curiosity Inc. is the entertainment brand for people who want to know more. The global media company is home to award-winning original and curated factual films, shows, and series covering science, nature, history, technology, society, and lifestyle. With approximately 23 million total paying subscribers worldwide and thousands of titles, the company operates the flagship Curiosity Stream SVOD service, available in more than 175 countries worldwide; Curiosity Channel, the linear television channel available via global distribution partners; Curiosity Now, a free, ad-supported channel; Curiosity Audio Network, featuring original content and podcasts; and Curiosity Studios, which oversees original programming. Curiosity Inc. also owns and operates One Day University, which provides access to engaging talks and lectures from leading university and college professors in the United States. Curiosity Inc. is a wholly owned subsidiary of CuriosityStream Inc. (Nasdaq: CURI). For more information, visit CuriosityStream.com.

(1) Includes adoption of new leasing guidance effective January 1, 2022.

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