Chicken Soup for The Soul Entertainment Inc (CSSE) 2023 Q2 法說會逐字稿

Good day, and thank you for standing by. Welcome to the Chicken Soup for the Soul Entertainment Second Quarter 2023 Earnings Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded.

美好的一天，感謝您的支持。歡迎參加心靈雞湯娛樂2023年第二季財報電話會議。 （操作員指示）請注意，今天的會議正在錄製中。

I would now like to hand the conference over to your speaker today, Zaia Lawandow, Head of Investor Relations. Please go ahead.

現在我想將會議交給今天的發言人、投資者關係主管 Zaia Lawandow。請繼續。

Good afternoon, everyone, and thank you for joining us. We'll begin with opening remarks from our Chairman and CEO, William J. Rouhana; followed by remarks from our CFO, Jason Meier. After their remarks, we'll open the call for questions.

大家下午好，感謝您加入我們。首先，我們的董事長兼執行長 William J. Rouhana 致開幕詞；接下來是我們的財務長 Jason Meier 的演講。在他們發言後，我們將開始提問。

The matters discussed on this call include forward-looking statements, including those regarding the performance of future fiscal years. Such statements are subject to a number of risks and uncertainties. Actual results could differ materially and adversely from those described in the forward-looking statements as a result of various factors. This includes the risk factors set forth in our most recent annual report on Form 10-K and in our most recent quarterly report on Form 10-Q. The company undertakes no obligation to update any forward-looking statements. Please refer to the earnings release in the Investor Relations section of the company's website for a discussion of certain non-GAAP forward-looking measures discussed on this call.

本次電話會議討論的事項包括前瞻性陳述，包括有關未來財政年度業績的陳述。此類聲明存在許多風險和不確定性。由於各種因素，實際結果可能與前瞻性陳述中所述的結果有重大且不利的差異。這包括我們最新的 10-K 表年度報告和最新的 10-Q 表季度報告中列出的風險因素。該公司不承擔更新任何前瞻性陳述的義務。請參閱公司網站投資者關係部分的收益發布，以了解本次電話會議中討論的某些非公認會計準則前瞻性措施的討論。

Now I'll turn the call over to William Rouhana, Chairman and CEO. Bill, please go ahead.

現在我將把電話轉給董事長兼執行長威廉·魯哈納 (William Rouhana)。比爾，請繼續。

Thank you, Zaia, and good afternoon, everybody.

謝謝你，Zaia，大家午安。

August 11 was the 1-year anniversary of our Red Box acquisition. It's been an action-packed year as we've integrated two companies to create one of the largest providers of premium entertainment for value-conscious consumers. It's worth noting that as we've gone through this first year, there have been massive changes in the media space and in the broader economy, and they're affecting everyone.

8 月 11 日是我們收購 Red Box 一週年紀念。這是充滿活力的一年，我們整合了兩家公司，為注重價值的消費者創造了最大的優質娛樂提供者之一。值得注意的是，在我們度過第一年的過程中，媒體領域和更廣泛的經濟領域發生了巨大的變化，它們正在影響每個人。

The Fed funds rate was below 2%, it's now above 5%. The ability to borrow has become more expensive. And at the same time, stock prices of many media companies are down 50%, 60% and even 90%. Streaming losses have piled up and major SVOD services creating uncertainty about the VOD space, linear advertising declined and some of these concerns crept into our market, although not really appropriately, and ongoing writer and actor strikes create other uncertainties.

聯邦基金利率低於2%，現在高於5%。借貸能力變得更加昂貴。同時，許多媒體公司的股價下跌了50%、60%甚至90%。串流媒體損失不斷增加，主要的SVOD 服務為VOD 空間帶來了不確定性，線性廣告下降，其中一些擔憂悄悄進入了我們的市場，儘管並不真正合適，而持續的作家和演員罷工也帶來了其他不確定性。

So in short, this is an entire industry which is feeling some pain, but despite these changes, we're fully committed to growing our business and streamlining it in the most cost-effective way, and we're capable of doing that. And I'm going to discuss that in a moment.

簡而言之，整個行業都感受到了一些痛苦，但儘管發生了這些變化，我們仍完全致力於發展我們的業務並以最具成本效益的方式簡化業務，而且我們有能力做到這一點。我稍後將討論這個問題。

We said before, we rely on our relationships with the studios and the cadence and consistency of new titles for the kiosks. Taking, for instance, successful partnership with Universal, a major studio that has demonstrated its commitment to traditional windowing particularly for its tent-pole titles. It's evident that the strategy of committing to home video is working. We saw this reflected in the performance of Super Mario Brothers across both TVOD and physical.

我們之前說過，我們依賴我們與工作室的關係以及資訊亭新遊戲的節奏和一致性。以與環球影業的成功合作為例，環球影業是一家大型電影公司，它展現了對傳統窗口技術的承諾，尤其是其主力作品。顯然，致力於家庭視訊的策略正在發揮作用。我們在《超級瑪利歐兄弟》在 TVOD 和實體遊戲中的表現中看到了這一點。

At kiosks, it was a massive hit, breaking the record for top movie rental in 2023 and the most rented movie in its first week since Top Gun and the most first week rentals for a family film since The Croods: A New Age. The film also broke TVOD and premium VOD records. So we view our relationship with Universal as a template for a successful partnership with a studio that recognizes the tremendous value of the home video window, and we expect to replicate that template with other studios.

在售貨亭，這部電影大受歡迎，打破了2023 年電影租賃最高紀錄，也是自《壯志凌雲》以來首周租賃次數最多的電影，也是自《瘋狂原始人：新紀元》以來首周租賃次數最多的家庭電影。該片還打破了 TVOD 和付費 VOD 記錄。因此，我們將與環球影業的關係視為與認識到家庭視訊視窗巨大價值的工作室成功合作的模板，並且我們希望與其他工作室重新製作該模板。

In addition to our record-breaking performance of Mario Brothers, we had a number of highlights in recent months, including on our digital owned and operated platforms. TVOD revenue was up 16% year-over-year, driven by a strong spring release slate. Revenue on our O&O FAST and AVOD networks were up 8% year-over-year despite what people say is a soft ad environment. Fill rates improved sequentially from Q1, driven by AVOD's strength on Redbox and Crackle. In fact, a recent report from Samba TV showed that Crackle saw a 5% increase in total viewership in the first half of 2023 compared to a year ago, in line with viewership growth at Hulu and Roku, and surpassing growth at some of the other well-known SVODs and AVODs.

除了《瑪利歐兄弟》破紀錄的表現外，最近幾個月我們還取得了許多亮點，包括在我們的數位擁有和營運平台上。在強勁的春季上映計畫的推動下，TVOD 營收年增 16%。儘管人們所說的廣告環境軟弱，但我們的 O&O FAST 和 AVOD 網路的收入年增了 8%。在 AVOD 在 Redbox 和 Crackle 上的優勢推動下，填充率從第一季開始連續提高。事實上，Samba TV 最近的一份報告顯示，與一年前相比，Crackle 在2023 年上半年的總收視率增長了5%，與Hulu 和Roku 的收視率增長一致，並且超過了其他一些網站的收視率增長眾所周知的 SVOD 和 AVOD。

In the quarter, our mix of ad sales shifted slightly more to direct sales, reflecting the importance of our ability to sell direct at a time when reseller and programmatic selling is soft. And as we head into an election year, we remain optimistic that the broader advertising environment, which is already rebounding, will continue to grow viewership and fill rates.

本季度，我們的廣告銷售組合稍微更多地轉向直接銷售，這反映出在經銷商和程序化銷售疲軟的情況下我們直接銷售能力的重要性。隨著我們進入選舉年，我們仍然樂觀地認為，已經在反彈的更廣泛的廣告環境將繼續增加收視率和填充率。

So turning to other highlights. In the spring, we announced we'll be adding an additional 1,500 kiosks over the next 2 years with 1 of our most profitable retail partners, Dollar General. We recently completed the planning phase of that expansion and began rolling out these additional kiosks this month. We also expanded our FAST channel offering to nearly 180 channels, including through our recent partnership with AMC Networks for channels that include The Walking Dead and Portlandia, two very popular series.

所以轉向其他亮點。今年春天，我們宣布將在未來 2 年內與我們最賺錢的零售合作夥伴之一 Dollar General 一起增加 1,500 個攤位。我們最近完成了擴張的規劃階段，並於本月開始推出這些額外的資訊亭。我們還將 FAST 頻道產品擴展到近 180 個頻道，包括最近與 AMC Networks 合作推出的頻道，包括《陰屍路》和《波特蘭迪亞》這兩個非常受歡迎的劇集。

On the international front, our production company in India, Locomotive Global, saw a record quarter and signed content deals with All3Media, Fremantle and others. Locomotive Global's hit series, Rana Naidu, received a green light from Netflix for a second season and was named a Top 10 Globally Streamed Series on Netflix which is pretty amazing, actually. It's being watched all around the world.

在國際方面，我們位於印度的製作公司 Locomotive Global 實現了創紀錄的季度業績，並與 All3Media、弗里曼特爾等公司簽署了內容協議。 Locomotive Global 的熱門影集《Rana Naidu》獲得了 Netflix 的第二季批准，並被評為 Netflix 十大全球串流影集，這確實非常了不起。全世界都在關注它。

And more recently, we announced an arrangement with TikTok, which will provide branded content to over 3,000 Redbox kiosk video screens nationwide. It will utilize both the scale and breadth of our digital out-of-home network.

最近，我們宣布與 TikTok 達成協議，後者將為全國 3,000 多個 Redbox 資訊亭視訊螢幕提供品牌內容。它將利用我們數位戶外網路的規模和廣度。

So turning to the environment in which we're operating today. Despite the channels I outlined earlier, when we began the year, we anticipated a number of tailwinds that would drive our performance throughout the year, including studios recommitting to the home video window, a significant rental rebound and the CTV ad market fully insulated from the broader advertising showdown.

因此，轉向我們今天所處的營運環境。儘管我之前概述了這些管道，但在今年伊始，我們預計會出現一些推動我們全年業績的有利因素，包括工作室重新投入家庭視頻窗口、租金大幅反彈以及 CTV 廣告市場完全不受影響。更廣泛的廣告攤牌。

And although these tailwinds have materialized, the pace at which some of them have rebounded has been slower than expected. Add to that concerns around production slowdowns, and we find ourselves an immediate climate that remains uncertain. In that kind of an environment, we believe we have to be very careful and make decisions that underscore our commitment to paying down debt and generating free cash flow. In other words, we need to adapt to the current market conditions.

儘管這些利好因素已經成為現實，但其中一些利好因素的反彈速度卻慢於預期。再加上對生產放緩的擔憂，我們發現眼前的氣氛仍然不確定。在這種環境下，我們認為我們必須非常謹慎，所做的決策必須強調我們對償還債務和產生自由現金流的承諾。換句話說，我們需要適應當前的市場狀況。

We recently conducted a review of all our operations to identify ways to drive greater cash flow, and we've already begun implementing those changes. We are actively de-risking our business model focusing on driving free cash flow through several channels.

我們最近對我們的所有業務進行了審查，以確定增加現金流的方法，並且我們已經開始實施這些變更。我們正在積極降低業務模式的風險，並專注於透過多種管道推動自由現金流。

One, we're streamlining future content commitments. We've identified a number of content deals that could generate EBITDA but not cash in the near term. In fact, some of these content deals we wouldn't see a return for a number of years. So we've [won around] those deals with millions of dollars of those deals with millions more to come.

第一，我們正在簡化未來的內容承諾。我們已經確定了一些可以在短期內產生 EBITDA 但不能產生現金的內容交易。事實上，其中一些內容交易在幾年內都看不到回報。因此，我們已經[贏得了]這些價值數百萬美元的交易，並且未來還會有數百萬美元的交易。

Two, we utilized our kiosks in a much more diverse and strategic way. There's no question we have a unique and irreplicable asset in our nearly 30,000 kiosk base. The reach of that base is unmatched and valuable, especially to retailers, independent producers, studios and advertisers. As a result, we focused on creating optionality with our kiosks to create additional cash flow beyond simply renting major studio titles.

第二，我們以更多樣化和策略性的方式利用我們的資訊亭。毫無疑問，我們擁有近 30,000 個資訊亭基地，擁有獨特且不可複製的資產。該基礎的影響力是無與倫比的且有價值的，特別是對於零售商、獨立製片人、工作室和廣告商。因此，我們專注於透過資訊亭創造更多選擇，以創造額外的現金流，而不僅僅是簡單地租用主要工作室的作品。

We're creating this optionality in a number of ways, implementing cost reductions across our physical footprint, streamlining locations for profitability with certain partners like we did with Dollar General; increasing our pipeline of clients in our servicing business and our kiosk servicing business; growing our digital out-of-home business through our deals with TikTok, Coinstar and Velocity.

我們正在透過多種方式創造這種選擇，在我們的實體足跡中實施成本削減，簡化地點以提高與某些合作夥伴的盈利能力，就像我們對 Dollar General 所做的那樣；增加我們的服務業務及自助服務終端服務業務的客戶管道；透過與 TikTok、Coinstar 和 Velocity 的交易來發展我們的數位戶外業務。

Just in case you don't understand, that is using our kiosk and video screens attached to them to create yet another revenue stream from the kiosks, and then implementing slotting of paid titles allowing independent films to have the same reach as major studios.

萬一您不明白，那就是使用我們的資訊亭和附加的視訊螢幕從資訊亭創建另一個收入來源，然後實施付費影片的插檔，使獨立電影具有與主要製片廠相同的影響力。

Third, we've increased our FAST platform. We continue to scale that service and [add] channels. However, some of the third-party FAST channels don't meet our revenue thresholds, and we're insisting that they optimize those channels for profitability.

第三，我們增加了FAST平台。我們繼續擴展該服務並[新增]管道。然而，一些第三方 FAST 管道不符合我們的收入門檻，我們堅持要求他們優化這些管道以提高獲利能力。

Fourth, our service business, which includes AdRapid, Crackle Connex and the kiosk servicing business. Both these businesses have tremendous value for us, and we're doubling down on driving customer growth.

第四，我們的服務業務，包括AdRapid、Crackle Connex和自助服務終端服務業務。這兩項業務對我們來說都具有巨大的價值，我們正在加倍努力推動客戶成長。

The economics of the service businesses are very favorable with each incremental client, providing additional cash flow with limited additional investment. We went from 2 to 26 AdRapid partners over the past year and have several potential kiosk service customers pipeline. It's actually more than several. It's actually a pretty robust pipeline now.

服務業務的經濟效益對每個增量客戶都非常有利，以有限的額外投資提供額外的現金流。去年，我們的 AdRapid 合作夥伴從 2 個增加到 26 個，並且擁有多個潛在的自助服務終端服務客戶管道。其實不只幾個。現在它實際上是一個非常強大的管道。

Five, putting content distribution into overdrive. We've licensed content to resellers in cost-effective ways, expanding our relationships with our reseller customers. I think I mentioned earlier, the writers and actors strike. And as that strike continues through the second half of the year, the demand for library content continues to increase.

五是加大內容分送力道。我們以經濟高效的方式向經銷商授權內容，擴大了我們與經銷商客戶的關係。我想我之前提到過，編劇和演員罷工。隨著罷工持續到今年下半年，對圖書館內容的需求持續增加。

We have a large catalog. We can monetize that in the event of a prolonged slowdown. And in other words, the longer the strike continues, the more valuable the library becomes. In addition, our 1091 distribution business in particular, which releases between 25 and 35 titles monthly, provides attractive cash flows, and we're focused on making sure that that continues to grow.

我們有一個很大的目錄。如果經濟長期放緩，我們可以將其貨幣化。換句話說，罷工持續的時間越長，圖書館的價值就越高。此外，特別是我們的 1091 發行業務，每月發行 25 到 35 部作品，提供了有吸引力的現金流，我們致力於確保其持續成長。

Six, we're refining our licensing strategy. We proactively deferred the timing of licensing deals from Q2 to Q3 to conserve cash, including licensing deals that would have sacrificed cash flow for revenue. As a result, licensing revenue in the quarter was lighter than anticipated. However, cash spend was enhanced. In fact, we more than doubled our licensing -- by the way, in fact, we've more than doubled our licensing in Q3 than all of what we recorded in Q2. That's already occurred.

第六，我們正在完善我們的授權策略。我們主動將授權交易的時間從第二季度推遲到第三季度，以節省現金，包括會犧牲現金流以換取收入的授權交易。因此，本季的授權收入低於預期。然而，現金支出增加。事實上，我們的許可數量增加了一倍以上——順便說一句，事實上，我們第三季的許可數量比第二季的所有許可數量增加了一倍多。這已經發生了。

Seven, integrating our digital assets for more efficiency. As part of our strategic review, we identified additional cost savings across our digital products, eliminating vendor relationships and further consolidating our tech platforms. We're anticipating approximately $15 million of additional cost savings in the first year alone.

第七，整合我們的數位資產以提高效率。作為策略審查的一部分，我們確定了數位產品可以節省更多成本，消除供應商關係並進一步鞏固我們的技術平台。我們預計僅第一年就可以節省約 1500 萬美元的額外成本。

Eight, our asset monetization program. We've identified certain assets that are non-core to our operations, and that can be monetized.

八，我們的資產貨幣化計劃。我們已經確定了某些非我們營運核心但可以貨幣化的資產。

And then lastly, our increased focus on G&A and cost management will minimize costs, drive cash flow, and it remains our priority. We've ended certain vendor relationships. We've optimized our org structure by promoting talent internally, we paused on backfilling existing roles and hiring new ones, we brought our headcount down by 50 people since January 1 mostly through attrition. And so overall, we've seen an increase in cash flow from operations.

最後，我們對一般行政費用和成本管理的更多關注將最大限度地降低成本，推動現金流，這仍然是我們的首要任務。我們已經終止了某些供應商關係。我們透過內部提拔人才來優化我們的組織結構，我們暫停了現有職位的填補和招募新職位，自 1 月 1 日以來，我們的員工人數減少了 50 人，主要是透過人員流失。總的來說，我們看到營運現金流增加。

Finally, in recent months, we've seen an increase in strategic activity within our space, and we've had incoming requests from financial and strategic partners. We're going to form a strategic review committee consisting of independent Board members to evaluate these opportunities, and we'll pursue transactions that check all the boxes in creating value for our shareholders, and this is clearly not reflected in our stock price.

最後，最近幾個月，我們看到我們領域內的策略活動增加，並且我們收到了來自財務和策略夥伴的請求。我們將成立一個由獨立董事會成員組成的策略審查委員會來評估這些機會，我們將尋求為股東創造價值的所有交易，這顯然不會反映在我們的股價中。

In closing, we've identified ways in which we can rightsize the business, reduce costs, improve cash flow and particularly by driving efficiencies within our kiosk network, licensing and distribution strategy, growing service clients, expanding ad rep through Crackle Connex. We've made great strides in our strategic priorities and remain optimistic in our ability to drive meaningful cash flow and pay down debt.

最後，我們確定了調整業務規模、降低成本、改善現金流的方法，特別是透過提高自助服務終端網路的效率、許可和分銷策略、發展服務客戶、透過 Crackle Connex 擴大廣告代表。我們在戰略重點方面取得了長足進步，並對我們推動有意義的現金流和償還債務的能力保持樂觀。

I'm turning it over to Jason.

我把它交給傑森。

Thank you, Bill, and good afternoon, everyone.

謝謝比爾，大家下午好。

Second quarter revenue was $79.9 million, up 112% year-over-year, and adjusted EBITDA was $700,000. As Bill outlined, the performance in the quarter reflects our strategic pivot to higher cash-generating activities in lieu of lower return ROI investments in content, which is already being reflected positively in our margins. In the quarter, the combined business had a blended gross profit margin of 22%, up from 16% in the prior year and nearly double that of the first quarter margin of 12%.

第二季營收為 7,990 萬美元，年增 112%，調整後 EBITDA 為 70 萬美元。正如比爾所概述的那樣，本季的業績反映了我們的策略重點轉向更高的現金產生活動，而不是投資報酬率較低的內容，這已經在我們的利潤率中得到了積極的體現。本季度，合併後業務的綜合毛利率為 22%，高於去年同期的 16%，幾乎是第一季 12% 利潤率的兩倍。

Bill discussed a number of initiatives we've undertaken to reduce our cost structure and drive cash flow across our business lines. One primary area in which we reduce costs has been G&A, where we've realigned our organizational structure for greater efficiency. Our total employee headcount has decreased by 4% since January 1 primarily due to attrition, and the reduction in headcount will result in annualized G&A run rate savings of approximately $12 million.

比爾討論了我們為降低成本結構並推動整個業務線的現金流而採取的一系列舉措。我們降低成本的一個主要領域是一般管理費用，我們重新調整了組織結構以提高效率。自 1 月 1 日以來，我們的員工總數減少了 4%，主要是由於人員流失，員工人數的減少將導致年化管理費用節省約 1,200 萬美元。

Additionally, we reviewed our office footprint and made the decision to exit our Seattle office and move our corporate employees in that region to a fully remote model, and we continue to reevaluate the need of our physical offices in other locations and anticipate further streamlining.

此外，我們審查了我們的辦公室佔地面積，並決定退出西雅圖辦事處，並將該地區的公司員工轉移到完全遠端模式，我們將繼續重新評估其他地點的實體辦公室的需求，並預計進一步精簡。

Finally, we've put in place plans that target approximately $15 million of incremental cash flow savings through streamlining of our digital and distribution businesses. Operating loss for the second quarter was $25.9 million compared to an operating loss of $16.8 million in the prior year. The variance is driven by continued higher amortization expense related to the merger with Redbox.

最後，我們制定了計劃，目標是透過簡化我們的數位和分銷業務來節省約 1500 萬美元的增量現金流。第二季營運虧損為 2,590 萬美元，而上年同期營運虧損為 1,680 萬美元。此差異是由於與 Redbox 合併相關的攤銷費用持續增加所致。

Our physical kiosk network, we ended the quarter with approximately 30,000 kiosks nationwide.

我們的實體資訊亭網絡，本季末在全國擁有約 30,000 個資訊亭。

Finally, turning to our balance sheet. As of June 30, the company had $6.9 million of cash on hand. As you'll recall, in the beginning of the quarter, we closed a public offering of our Class A common stock for $10.8 million, the proceeds of which were primarily used for working capital purposes. We continue to focus on improving working capital through accelerated collection and monetization efforts for our long-dated receivables. We continue to have flexibility under our HPS agreement to finance receivables and sell assets under specified terms.

最後，轉向我們的資產負債表。截至6月30日，該公司手頭上有690萬美元現金。您可能還記得，在本季度初，我們以 1,080 萬美元的價格完成了 A 類普通股的公開發行，所得款項主要用於營運資金目的。我們繼續專注於透過加速長期應收帳款的催收和貨幣化工作來改善營運資本。根據 HPS 協議，我們繼續具有靈活性，可以根據特定條款為應收帳款融資和出售資產。

Speaking of HPS, as a reminder, we have favorable debt terms on our HPS credit facility that has no financial covenants for 2 years and provides us the ability to pick interest through February of 2024, giving us runway given our expectations on timing of free cash flow.

說到HPS，提醒一下，我們的HPS 信貸安排擁有優惠的債務條款，該信貸安排在2 年內沒有任何財務契約，使我們能夠在2024 年2 月之前選擇利息，考慮到我們對自由現金時間的期望，為我們提供了跑道流動。

Turning to our outlook. As Bill and I just outlined, we are shifting our priorities to cash-generating activities in lieu of future revenue drivers. As a result, we expect full year revenue to come in between $400 million and $450 million, adjusted from our previous estimate of $500 million. Our estimate for the full year adjusted EBITDA will be less impacted by our pivot, and as a result, we are anticipating full year adjusted EBITDA to be between $75 million and $100 million. And this is in line given our cash flow profile of our initiatives. We anticipate higher free cash flow conversion for the remainder year.

轉向我們的展望。正如比爾和我剛剛概述的那樣，我們正在將重點轉向現金產生活動，而不是未來的收入驅動因素。因此，我們預計全年營收將在 4 億美元至 4.5 億美元之間，從我們先前估計的 5 億美元進行調整。我們對全年調整後 EBITDA 的估計受我們的轉型影響較小，因此，我們預計全年調整後 EBITDA 將在 7500 萬美元至 1 億美元之間。考慮到我們措施的現金流狀況，這符合我們的計劃。我們預計剩餘年份的自由現金流轉換將更高。

Now I'll turn the call back over to Zaia.

現在我將把電話轉回 Zaia。

Thank you, Jason.

謝謝你，傑森。

Operator, can we please open the call for questions?

接線員，我們可以打開電話提問嗎？

(Operator Instructions) And our first question will come from Jason Kreyer from Craig-Hallum.

（操作員說明）我們的第一個問題將來自 Craig-Hallum 的 Jason Kreyer。

Bill, can you just maybe walk through the cadence of the quarter, what you saw evolve across the industry? And maybe if you can do so with kind of talking about this in terms of business segments? I'm just curious, top line performance, how that varied via -- or how they vary relative to expectations across kiosks and streaming and licensing, and things like that?

比爾，您能否簡單介紹本季的節奏，以及您所看到的整個產業的演變？也許您可以從業務部門的角度來討論這個問題？我只是很好奇，頂線性能如何變化，或者它們相對於資訊亭、串流媒體和許可等方面的期望如何變化？

Sure. Okay. So let's start with the licensing because there, Jason, we basically decided we're not going to invest in longer-term deals that consume cash upfront and generate cash over time. And as a result, we turned away, I would say, about $30 million of licensing deals that were originally in our projections for the year. Turns out, we've already more than doubled the second quarter's licensing deals in the third quarter with ones that will generate cash in the near term, so I think that was a good decision.

當然。好的。因此，讓我們從許可開始，傑森，我們基本上決定不會投資於預先消耗現金並隨著時間的推移產生現金的長期交易。結果，我想說，我們拒絕了原本在今年預測中的約 3000 萬美元的許可交易。事實證明，我們已經在第三季將第二季的授權交易增加了一倍多，這些交易將在短期內產生現金，所以我認為這是一個很好的決定。

In the digital business, which I -- which is TVOD and the AVODs and the FAST business and the ad rep, we had a decent quarter. Things were up, as you heard, 8%, I think, year-over-year, and there were -- we had good fill rates. Little CPM pressure but not much. The direct billing -- the direct sales did well.

在數位業務方面，即 TVOD、AVOD、FAST 業務和廣告代表，我們有一個不錯的季度。正如你所聽到的，我認為同比增長了 8%，而且我們的填充率很高。 CPM 壓力不大，但也不是很大。直接計費——直接銷售做得很好。

And I'd say, once again, while there's definitely been pressure on the advertising industry in general, we've been a little bit insulated from it by the fact that we've got that direct selling organization that manages to get a lot of really good things done, including getting custom content deals done like the ones we did in the quarter, Inside the Black Box and a couple of others, At Home with Genevieve, and there's a couple of other shows that we did that were funded by advertisers.

我想說，雖然廣告行業總體上確實面臨著壓力，但我們已經有點免受壓力了，因為我們有一個直銷組織，能夠設法獲得大量的信息。做了非常好的事情，包括完成定制內容交易，就像我們在本季所做的那樣，《Inside the Black Box》和其他一些節目，《At Home with Genevieve》，還有我們做過的一些由廣告商資助的其他節目。

And because we go to advertisers in a different way than most people and with connected TV inventory, we've got a better thing to offer. And as a result, we've been doing okay.

因為我們以與大多數人不同的方式接觸廣告商，並且擁有網路電視庫存，所以我們可以提供更好的東西。結果，我們一直做得很好。

The kiosks -- the kiosk could have not done as well as we wanted them to do. They've grown, they've gone up, but they haven't grown at the pace we were hoping they would. And so we've been focusing really heavily on making sure we find other ways to monetize those things, hence the TikTok deal, the addition of the screens, the launch of the digital out-of-home business, which is off to a good start, and we focused it on the service business where we can add new service customers.

資訊亭－資訊亭可能沒有達到我們希望的效果。他們成長了，他們進步了，但他們並沒有以我們希望的速度成長。因此，我們一直非常注重確保找到其他方式將這些東西貨幣化，因此 TikTok 交易、增加螢幕、推出數位戶外業務，這一切都進展順利首先，我們將重點放在服務業務上，我們可以在其中添加新的服務客戶。

We already have cut the -- well, I should say this carefully. The service business has already cut our net cost of operating our kiosks in half. As we grow that service business, we should be able to bring the cost of operating the kiosks down even more so that the place at which we're reaching cash flow generative rentals comes down in an absolute number. I hope that was clear. And so that, we've made a lot of progress on.

我們已經削減了——好吧，我應該小心地說。服務業務已經將我們營運資訊亭的淨成本削減了一半。隨著我們服務業務的發展，我們應該能夠進一步降低自助服務終端的營運成本，以便我們能夠產生現金流的租金的絕對數量下降。我希望這是清楚的。因此，我們已經取得了巨大進展。

But I would say, if you look -- if you looked across the board, I was satisfied with most of what happened. But the focus of -- we've started looking at the business strictly as cash flow, Jason, because it's -- that's where we're at. I mean, that's where the world is at. Everybody wants cash flow, including us, and so we focused in on 1091 of the distribution business. We focused it on the ad rep business, in the AVOD business, we focused it on the kiosk service business. Those are the places we can drive cash flow rapidly and without significant capital investment, and we don't want to be investing in content. It's not where we want to be right now. We have too much of it, so we want to be harvesting it.

但我想說，如果你全面審視的話，我對發生的大部分事情都很滿意。但傑森，我們已經開始嚴格地將業務視為現金流，因為這就是我們現在的處境。我的意思是，世界就在那裡。每個人都想要現金流，包括我們，所以我們專注於1091的分銷業務。我們專注於廣告代表業務，在AVOD業務中，我們專注於資訊亭服務業務。這些是我們可以快速推動現金流而無需大量資本投資的地方，而且我們不想投資內容。這不是我們現在想要的地方。我們擁有的太多了，所以我們想要收穫它。

Okay. And then is there any way you can -- maybe providing like a July snapshot would be helpful. I guess, back of the envelope math here, you're calling for -- what would that be? A little less than $200 million in revenue in the back half of the year, but over $50 million in EBITDA against it. That's about a 30% EBITDA margin. I think we saw things peak out at about 18% in Q1. So that -- I mean, that's a heavy lift. Are there any...

好的。那麼有什麼辦法可以——也許提供 7 月的快照會有所幫助。我想，從數學的角度來看，你所要求的──那會是什麼？下半年的營收略低於 2 億美元，但 EBITDA 超過 5,000 萬美元。 EBITDA 利潤率約 30%。我認為我們在第一季度看到了 18% 左右的峰值。所以——我的意思是，這是一個沉重的負擔。有沒有什麼...

Jason, it's a little over $200 million in the second half. And yes, we do think that the EBITDA margin is going to be better, but it's because of the way we've approached it. And we already know that the third quarter has got locked in a bunch of EBITDA without any cash spend because we've already done a bunch of deals. I tried to refer to that in my talk.

傑森，下半年的金額略高於 2 億美元。是的，我們確實認為 EBITDA 利潤率會更好，但這是因為我們的處理方式。我們已經知道，第三季已經鎖定了一堆 EBITDA，但沒有任何現金支出，因為我們已經完成了很多交易。我試著在演講中提到這一點。

So it won't be a heavy lift to get to the kind of EBITDA we're talking about, but we're mostly focused on making sure that EBITDA doesn't consume any of our cash, but rather just cash generative. And that's why Jason mentioned the fact that we were focused on the free cash flow percentage of that EBITDA.

因此，達到我們正在討論的 EBITDA 並不是一個艱鉅的任務，但我們主要關注的是確保 EBITDA 不會消耗我們的任何現金，而只是產生現金。這就是為什麼傑森提到我們關注 EBITDA 的自由現金流百分比這一事實。

Okay. Maybe last one. You gave an updated guide. I'm curious if you can maybe give a little bit more transparency on your outlook for free cash flow generation? If that's something you can achieve on a quarterly basis? Or you still achieve that this year? Or what the time line looks like?

好的。也許是最後一張。您提供了更新的指南。我很好奇您是否可以對自由現金流產生的前景提供更多的透明度？如果這是你每季都能實現的目標？或者今年你仍然實現了這個目標？或是時間軸是什麼樣的？

Yes, this year. And I didn't -- I haven't broken it down quarterly, but yes, this year for sure.

是的，今年。我沒有——我沒有按季度進行細分，但是是的，今年是肯定的。

Our next question will come from Mike Grondahl from Northland Securities.

我們的下一個問題將來自北國證券公司的麥克·格隆達爾。

This is Mike Pochucha on for Mike Grondahl.

我是麥克‧波丘查 (Mike Pochucha)，代表 Mike Grondahl)。

Maybe first, I think you said this is about $15 million of incremental sort of free cash flow savings. Is that already in place? Or are we going to see more of that in the second half?

也許首先，我想你說過這大約是 1500 萬美元的增量自由現金流節省。那已經到位了嗎？或者我們會在下半年看到更多這樣的情況嗎？

Well, actually, it's more than $15 million. $12 million has already been as a result of what's already happened. There's another $15 million from the consolidation of systems and tech and vendors in the digital side. That took a while to plan out. It's now planned and it's now being implemented. So it will be more like $30 million more, $27 million more than the original plans we had when we first combined the companies.

嗯，實際上，它超過了 1500 萬美元。由於已經發生的事情，我們已經損失了 1200 萬美元。另外還有 1500 萬美元來自數位方面的系統、技術和供應商的整合。計劃花了一段時間。現在已經規劃好了，現在正在實施中。因此，這將比我們最初合併公司時的原始計劃多出 3000 萬美元、2700 萬美元。

We found that we could really consolidate a lot of stuff that we hadn't consolidated before, and that we didn't need as heavy a staff as we've got. Look, this has resulted in -- and we've taken advantage of the fact that there's been attrition. And we've given people promotions and opportunities to expand their horizons, and I think it's been good for them. So we've been able to do this in a way that I feel good about.

我們發現我們確實可以整合很多以前沒有整合過的東西，而且我們不需要像我們現有的那樣繁重的員工。看，這導致了——我們利用了人員流失這一事實。我們為人們提供了晉升和擴大視野的機會，我認為這對他們有好處。所以我們能夠以一種我感覺良好的方式做到這一點。

Do you have anything?

你有什麼東西嗎？

No, I think it's -- the incremental streamline will happen over the next couple of quarters. It's going to take time to put in place, but it's going to produce meaningful results on an annualized basis.

不，我認為增量精簡將在接下來的幾個季度內發生。實施起來需要時間，但按年計算將會產生有意義的結果。

Much done and more to come.

已經做了很多工作，還有更多工作要做。

Got it. And then on that $30 million of licensing revenue that's basically was turned down in the second quarter, is that something you can pick up some of that again in end of the year next year if other things kind of turn around?

知道了。然後，在第二季度基本上被拒絕的 3000 萬美元許可收入中，如果其他事情有所好轉，您是否可以在明年年底再次獲得其中的一部分？

This happened once before. You may remember, Mike, a year or two ago where we deferred something from one quarter to the next and then the next -- I don't know if you remember it, but it happened once before, and it worked out incredibly well for the company. We ended up having a great follow-on quarter.

這種事以前發生過一次。你可能還記得，麥克，一兩年前，我們把一些事情從一個季度推遲到下一個季度，然後是下一個季度——我不知道你是否還記得，但以前發生過一次，而且效果非常好。公司。我們最終度過了一個很棒的後續季度。

In this case, what we did is we shifted the focus away from these -- the licensing deals that require you to go in with capital at the beginning to get it back over time. And we've already more than doubled what we did in the second quarter with deals that we've already struck in the third quarter. And all of them fit the parameters that we're looking to meet, which are not consuming cash but generating cash, either immediately or over time.

在這種情況下，我們所做的就是將焦點從這些許可交易上轉移開，這些許可交易要求您從一開始就投入資金，隨著時間的推移才能收回資金。我們在第三季達成的交易已經比第二季增加了一倍以上。所有這些都符合我們希望滿足的參數，即不消耗現金，而是立即或隨著時間的推移產生現金。

So I think we've already done what we wanted to do there, but I wasn't willing to do deals that we -- that I knew were going to consume cash upfront. It just didn't make sense to me.

所以我認為我們已經在那裡做了我們想做的事情，但我不願意做那些我們知道會預先消耗現金的交易。這對我來說沒有意義。

(Operator Instructions) Our next question will come from Eric Wold from B. Riley Securities.

（操作員說明）我們的下一個問題將來自 B. Riley 證券公司的 Eric Wold。

A few questions. Just a couple of follow-ups first. Just on the incremental $27 million to $30 million of cost savings that you've identified since the acquisition, how much of that is reflected in the new $75 million to $100 million guidance? And then will all of that be reflected next year?

幾個問題。首先進行一些後續行動。僅就自收購以來您已確定的 2700 萬至 3000 萬美元增量成本節省而言，其中有多少反映在新的 7500 萬至 1 億美元指導中？那麼所有這些都會在明年得到體現嗎？

I would say about half of it is reflected in the new guidance, Eric, and then all of it will be reflected in next year for sure. But I don't think we're done with this, frankly, because as Jason said, there are further opportunities to reduce costs by looking at our office footprint, and that takes time to deal with, and there are other things that we're looking at.

我想說，大約一半的內容反映在新的指導方針中，埃里克，然後所有這些內容肯定會反映在明年。但坦白說，我認為我們還沒有完成這個任務，因為正如傑森所說，透過查看我們的辦公室佔地面積，還有進一步降低成本的機會，這需要時間來處理，而且我們還有其他事情需要處理。正在看。

This was just the -- what we identified here were already existing changes to G&A that have taken place, and $15 million of consolidation savings from really making sure the digital business doesn't have 2 of everything because we had Redbox Digital and Chicken Soup Enterprises Digital. Now what we've got is -- under this model will have one unified digital business, which is -- which will save us a ton of money in terms of outside vendors and in terms of other costs.

This was just the -- what we identified here were already existing changes to G&A that have taken place, and $15 million of consolidation savings from really making sure the digital business doesn't have 2 of everything because we had Redbox Digital and Chicken Soup Enterprises數位的.現在我們所得到的是 - 在這種模式下將擁有一個統一的數位業務，這將為我們在外部供應商和其他成本方面節省大量資金。

But we're not done. I mean, as we've gone through this process, we've seen other places that we can continue to add additional incremental savings. So I'd say next year will reflect even more.

但我們還沒完成。我的意思是，當我們經歷這個過程時，我們已經看到其他地方可以繼續增加額外的增量節省。所以我想說明年會反映出更多。

Okay. And then back on the free cash flow question. It sounds like -- I think on the last call, you talked about $50 million of free cash flow for the year. It sounds like from the prior question, you're still comfortable with that given what will come in the back half of the year. I just want to make sure that's correct? And do you have the first half of the cash flow number?

好的。然後回到自由現金流問題。聽起來——我想在上次電話會議上，您談到了今年 5000 萬美元的自由現金流。從上一個問題來看，考慮到下半年會發生什麼，你仍然對此感到滿意。我只是想確定這是正確的嗎？你有現金流量的前半部嗎？

We'd have to -- let's do that in the after call because Jason needs to do some work to get to the answer.

我們必須——讓我們在後續通話中這樣做，因為傑森需要做一些工作才能得到答案。

Okay. Last question...

好的。最後一個問題...

I am comfortable the second half is going to look like it was -- in terms of cash flow, is going to look the way it should.

我對下半年的情況感到滿意——就現金流而言，將會像應有的一樣。

Got it. And this last question, kind of going back to the Redbox comment you made. Obviously, they're not growing at the pace you wanted, you looked to other things. I know you have a lot of data to lean on, what do you think has been adversely impacting kind of the core demand, core rental demand, core revenue trends at the kiosk? Is it title mix, changes in demographic profile, consumer spending had to do? What do you think -- you know exactly what it is, but what do you think is driving that? Is it something you can control?

知道了。最後一個問題，有點回到你發表的 Redbox 評論。顯然，他們沒有按照你想要的速度成長，你關注了其他事情。我知道您有很多數據可以依靠，您認為是什麼對自助終端的核心需求、核心租賃需求、核心收入趨勢產生了不利影響？是標題組合、人口結構的改變、消費者支出造成的嗎？你怎麼看——你確切地知道它是什麼，但你認為是什麼驅動了它？這是你可以控制的嗎？

I think it's been primarily driven by the sporadic new content, on and off nature of it. When we get it for a few weeks in a row, it goes great. When we don't, it doesn't. We're getting closer to what I think would be a steady pace, but we're not there yet. I think that's what's driving it. That's what seems to be driving it.

我認為這主要是由斷斷續續的零星新內容所推動的。當我們連續幾週得到它時，一切都會很棒。當我們不這樣做時，它就不會。我們正在接近我認為的穩定步伐，但我們還沒有實現。我認為這就是推動它的原因。這似乎就是推動它的原因。

My view of this is that we have to make it so that the cash flow breakeven for the Redbox is as low as possible. And if you look at the service business, which is what I look at to do that, plus these additional ways we can generate revenue from the Redboxes, we're going to approach a point where it will be a very small amount of revenue that will start to generate free cash flow as we continue to reduce the cost of that operation.

我的觀點是，我們必須讓 Redbox 的現金流損益平衡盡可能低。如果你看看服務業務，這就是我所希望做到的，再加上我們可以從紅盒中產生收入的其他方式，我們將接近這樣一個點，即只有非常少量的收入隨著我們繼續降低運營成本，將開始產生自由現金流。

And if we -- when we look at the service business, Eric, there's been a tremendous contribution made by that service business, but it's also really positioned to grow considerably over the next little bit of time. There are at least three pilots now underway with new customers, there are two being planned, and there are three or four more customers -- sizable customers who are in the beginning phases of coming -- becoming customers. And we only have, I think, today, five customers in that business, so this would more than double the number of customers, and these are substantial companies. Plus we have Pokemon growing like crazy, which is one of our existing customers, and we've completed the Amazon [key] trial, and that's gone well so that's been successful.

如果我們——當我們審視服務業務時，埃里克，該服務業務做出了巨大的貢獻，但它也確實有能力在接下來的一段時間內大幅增長。目前至少有三個針對新客戶的試點正在進行中，有兩個正在計劃中，還有三到四個客戶（處於即將到來的初始階段的大量客戶）成為客戶。我認為，今天我們在該業務中只有五個客戶，因此這將使客戶數量增加一倍以上，而且這些都是實力雄厚的公司。另外，我們的寶可夢正在瘋狂成長，這是我們現有的客戶之一，而且我們已經完成了亞馬遜[關鍵]試用，一切進展順利，因此取得了成功。

So there's been a lot of progress in that business. That business can quickly absorb the costs involved in maintaining the Redboxes and merchandising them. And to me, that's really the key to this because you'd like to have free cash flow from those Redboxes start at a very low number with very little to cover.

因此，該業務取得了巨大進展。該業務可以快速吸收維護紅盒和銷售它們所涉及的成本。對我來說，這確實是關鍵，因為你希望這些 Redbox 的自由現金流以非常低的數字開始，幾乎沒有什麼可涵蓋的。

(Operator Instructions) Our next question will come from Brian Kinstlinger from Alliance Global Partners.

（操作員說明）我們的下一個問題將來自 Alliance Global Partners 的 Brian Kinstlinger。

I just want to put some context into some of the discussion, forward-looking, on licensing and others. I assume you're going to put the Q out any minute. Maybe you can help us with separating revenue from video on demand, streaming, retail and licensing and other that you give every quarter?

我只是想為一些關於許可和其他方面的前瞻性討論提供一些背景資訊。我猜你隨時都會把 Q 拿出來。也許您可以幫助我們將視訊點播、串流媒體、零售和授權以及您每季提供的其他收入分開？

Yes. It's in the Q. And the Q, I believe was filed. I think it is filed now. Yes. So it was roughly $30 million for VOD and streaming, roughly $30 million for retail and $17 million for licensing. So when I say we've already done over $30 million of licensing in the third quarter, you can see why I say it's about twice what we've already done there.

是的。我相信問題已經提交了。我想現在已經提交了。是的。因此，隨選視訊和串流媒體費用約為 3000 萬美元，零售費用約為 3000 萬美元，授權費用約為 1700 萬美元。因此，當我說我們在第三季度已經完成了超過 3000 萬美元的許可時，您就會明白為什麼我說這大約是我們已經完成的兩倍。

I guess I'm confused on the retail piece, $30 million of retail is lower than the first quarter. You had this constant flow that you've discussed for the last 1.5 quarters of new releases. And while it might not be completely linear, you've had some of the best weeks, it sounds like for Mario and others. I'm a little confused why the June quarter would have less retail revenue than the March quarter? Maybe you can speak to that.

我想我對零售部分感到困惑，零售額比第一季低了 3000 萬美元。您已經在過去 1.5 個季度的新版本中討論過這種持續的流程。雖然這可能不是完全線性的，但你已經度過了一些最好的幾週，這聽起來對馬裡奧和其他人來說都是如此。我有點困惑為什麼六月季度的零售收入會比三月季度少？也許你可以談談這一點。

I think it may be the way we've defined it now, Brian, but I think we need to go through that with you in more detail on the post call.

我認為這可能是我們現在定義它的方式，布萊恩，但我認為我們需要在電話會議後與您更詳細地討論這個問題。

Okay. Well, at $30 million with, again, notwithstanding the future next year which is obviously uncertain in terms of theatrical releases, right, the second. But in the second half of the year, again, you've laid out the releases happening on a weekly basis throughout the year. Is there a reason to believe it will improve from that $30 million in September or December? Or are you realizing the trends with this level of theatrical releases might not achieve those aggressive targets that you had before?

好的。嗯，3000萬美元，儘管明年的未來在院線上映方面顯然是不確定的，對吧，第二年。但在今年下半年，您再次列出了全年每週發布的版本。有理由相信它會比 9 月或 12 月的 3000 萬美元有所改善嗎？或者您意識到這種水平的院線發行趨勢可能無法實現您先前設定的那些激進目標？

I think there's reason to believe it will continue to increase, but we're not betting on it any -- to the exclusion of making sure we're driving the cost down. I mean it's really -- we're going for both now. We've got to drive cost down in case it doesn't happen. That's what we really need to do.

我認為有理由相信它會繼續增加，但我們並沒有對此下任何賭注——排除了確保我們降低成本的可能性。我的意思是，我們現在確實要兩者兼顧。我們必須降低成本，以防這種情況發生。這才是我們真正需要做的。

I do believe it will continue to go up, though.

不過，我確實相信它會繼續上漲。

Those are our questions. So thank you for joining us, and we will talk to you again next quarter.

這些都是我們的問題。感謝您加入我們，我們將在下個季度再次與您交談。

This concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone, have a wonderful day.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。祝大家有美好的一天。