Earnings Call Transcript - CURI Q2 2022

Operator, Operator

Good day to everyone. My name is Devin, and I will be your conference operator today. I would like to welcome everyone to the CuriosityStream Q2 2022 Earnings Call. Ms. Denise Garcia, Investor Relations, you may begin your conference.

Denise Garcia, Investor Relations

Thanks, Devin. Welcome to CuriosityStream's discussion of its second quarter 2022 financial results. Leading the discussion today are Clint Stinchcomb, CuriosityStream's Chief Executive Officer; and Peter Westley, CuriosityStream's Chief Financial Officer. Following management's prepared remarks, we will be happy to take your questions. But first, I'll review the safe harbor statement. During this call, we may make statements related to our business that are forward-looking statements under the federal securities laws. These statements are not guarantees of future performance, but rather are subject to a variety of risks, uncertainties, and assumptions. Our actual results could differ materially from expectations reflected in any forward-looking statements. Please be aware that any forward-looking statements reflect management's current views only, and the company undertakes no obligation to revise or update these statements nor to make additional forward-looking statements in the future. For a discussion of the material risks and other important factors that could affect our actual results, please refer to our SEC filings available on the SEC website and on our Investor Relations website as well as the risks and other important factors discussed in today's press release. Additional information will also be set forth in our quarterly report on Form 10-Q for the quarter ended June 30, 2022, when filed. In addition, reference will be made to non-GAAP financial measures. A reconciliation of these non-GAAP measures to comparable GAAP measures can be found on our website at investors.curiositystream.com. I'll turn the call over to Clint.

Clint Stinchcomb, CEO

Thank you, Denise. I'd like to thank everyone for joining our second quarter earnings call. Also joining us today is our COO and General Counsel, Tia Cudahy; our Chief Strategy Officer, Devin Emery; and of course, our new CFO, Peter Westley. Peter joined us in May from Blum Capital Partners, where he spent the last 10 years as a partner and managing partner. Peter brings with him 30 years of experience in financial services, working with media and technology companies. Recently, as Chairman of Avid Technologies, whose solutions empower media creators, Peter helped lead the company through a period where its market cap increased from $200 million to more than $1.3 billion. I've already seen Peter's insights in strategy and shareholder value creation start to positively impact the way that we are managing the business and charting our future direction. A players can make a real difference, particularly for companies of our size. Not only do they perform well in their role, but they tend to help elevate the performance of their peers and their teams, and true A players tend to hire more A players, which makes the overall organization stronger and better. As a globally focused organization with a multifaceted revenue stack, we made clear progress across the board during the second quarter. Due to better-than-expected financial performance in Q2, we exceeded our first half EBITDA guidance and delivered first half revenue at the high end of our guidance range. We reduced cash used in operating activities by 50% from Q1 to Q2, while revenue grew strongly on both a year-over-year and sequential basis. We ended the quarter with $78 million of cash and investments on our balance sheet. We continue to grow the business in Q2, with revenue up 46% year-over-year. We ended the quarter with approximately 25 million paying subscribers, up from 24 million last quarter and added hundreds of new titles to our critical mass library of over 15,000 video and audio assets. We also advanced a number of strategic objectives during the quarter as we focused on maximizing the performance of our global streaming service, our best-in-class content, and our promotional outreach. Under Devin Emery's leadership, our Smartest Bundle in Streaming premium SVOD package gained further traction in Q2 with a 215% increase in daily average upgrades since the rollout of our new upgrade path. As a reminder, Smart Bundle subscribers get 6 streaming services for $69.99 a year, a 79% savings compared to subscribing to each service individually. This represents both an incredible value for our subscribers and a compelling financial proposition for CuriosityStream. With the Smart Bundle, the average revenue per user is multiples greater than that of our standard service. We recently announced that Da Vinci Kids, an educational streaming and interactive learning platform will join the Smart Bundle as our seventh service later this summer. The expanded Smart Bundle, which offers 35,000 to 40,000 additional episodes, will have more value and smart entertainment options for families than ever before. With Curiosity's kids collection plus family-friendly viewing across all the bundled services and now the extensive kids programming from Da Vinci Kids. We expect continued strong uptake of our Smart Bundle as Devin and his team execute on our content monetization strategy. As we discussed last quarter, we are increasingly focused on building audience engagement in front of the paywall through integrated multi-platform brand partnerships, additional fast channel launches, AVOD, audio, and through our social channels. In Q2, we had our strongest advertising quarter-to-date in part due to our fast channel strategy. In light of the flexible rights we control across our thousands of hours of content, we can be swiftly responsive to the needs of subscription resistant consumers directly and through our distribution partners. Under Rob Burk's leadership, we continued to release groundbreaking original content across a wide array of factual genres and formats. During the quarter, we premiered the second season of Engineering The Future with award-winning actor, David Oyelowo, a thrilling look at the new breed of visionaries creating the technology of tomorrow. From next-gen electric vehicles and hyperloops to the Metaverse and beyond. Our in-depth analysis of contemporary history also allowed us to quickly create a special Putin and the Oligarchs, a timely deep dive into the secret world of Russia's super-rich and the man who ultimately rules over them. And our ongoing collaboration with some of the world's best science filmmakers allowed us to reach even deeper into our past, premiering 2 new episodes of our ever-popular Ancient Earth, which brings the long-lost creatures of prehistoric Antarctica to life through ice continent, archaeology, and state-of-the-art CGI. Looking ahead, we're in the finishing stages on a number of exciting new productions, including 4 Gamers, the story of an unlikely group of British women who develop tactics to defeat, and Science for Evil Geniuses, a hilarious real-world test of super villain science and engineering, starring Game of Thrones actor Paul Kaye. We're also making significant progress in our strategy to monetize our substantial factual audio content library. With thousands of audio titles we acquired from One Day University and learned 25 last year as the foundation, we were thrilled last month to launch the Curiosity Audio Network in partnership with iHeartMedia, the #1 podcast publisher globally according to Podtrac. Our first foray into the podcasting Curiosity Audio Network will feature original content as well as podcasts to complement programming from our library of documentary films, shows, and series. Later this year, we will premiere our first original podcast co-produced with iHeartMedia, mixing pop culture, history, and true crime. With an expanded look into the mystery surrounding the life and death of Cold War Cowboy, Dean Reed. It's a follow-on to the Curiosity original feature documentary Red Elvis, available exclusively on CuriosityStream. Also upcoming is the untold history of sports in America, which dives deep into the role sports have played in shaping the American psyche. We couldn't be more excited to make our move into audio in partnership with the #1 podcast publisher in the world, and look forward to delighting our subscribers with Curiosity-catalyzing audio content this year and beyond. Looking ahead, with our critical mass factual content library, tens of millions of global subscribers, a sizable cash position, and an improving financial trajectory, I really like our hand. While the competitive battles rage on between the scripted content streamers, Curiosity stands alone as a reliable destination for on-demand premium factual content in history, science, nature, technology, human adventure, space, medicine, and exploration. This is a good place to be. We look forward to continuing to fulfill our mission to provide the world with quality entertainment that informs, challenges, and inspires. Before turning the call over to Peter for a more detailed discussion of our financials, I'd like to thank our dedicated employees, partners, and shareholders for their continued support.

Peter Westley, CFO

Thanks, Clint. It's great to be here on my first call as Curiosity CFO, and I'd like to thank the entire team for the warm welcome I've received since joining the company in May. Before getting into our results, I'd like to take a minute to provide my thoughts about the company and the opportunity ahead of us. Over the past several years, CuriosityStream has built an enduring mission-driven global media brand. We've established ourselves as a global category leader in factual entertainment with tens of millions of subscribers worldwide and a massive library of factual audio and video content. Our segment of the market is inherently attractive with content that has an exceptionally long shelf life, global appeal, is far less costly to produce than most general scripted entertainment and sports content, and is brand safe for advertisers. We've also developed a diversified revenue stack to maximize our opportunities to monetize that content. Last but not least, John and Clint have assembled a team of world-class leaders, including our Chief Strategy Officer, Devin Emery and Head of original content, Rob Burk, who continue to extend our category leadership through innovative content, service bundles, and partnerships. All of these elements combine to make CuriosityStream a compelling opportunity. Turning to our second quarter results, I'm pleased to report Q2 revenue of $22.3 million, up 46% year-over-year. International growth was particularly strong, up 136% year-over-year. From a product perspective, our growth was broad-based, with each of our business lines seeing sequential growth over Q1. Our strength in advertising was particularly noteworthy during the quarter as we started to gain traction in generating revenue in front of the paywall. We're excited to have another source of revenue for monetizing our content and think that our diversified revenue streams are an important element of the CuriosityStream story. As Clint mentioned, for the first half of the year, revenue was at the high end of our previously provided guidance range and EBITDA exceeded guidance. Q2 gross margin of 41.9% created more than 900 basis points relative to Q1 gross margin of 32.8%. As we improved the margins in most of our business lines and saw particularly strong growth in some of our higher-margin business lines. We also significantly reduced our cash burn in Q2 with net cash used in operating activities of $5.9 million, a 52% reduction compared with the first quarter. At the end of the second quarter, cash, restricted cash, and available for sale investments totaled $77.8 million. While we expect some lumpiness in our cash flow in the coming quarters, we will continue to take a hard look at all of our spending for marketing to content to G&A, along with our commercial partnerships as we look to reduce the cost base of the business and improve our overall economics. Before turning to our outlook, I should mention that we took a $3.6 million non-cash charge in Q2 related to the impairment of goodwill and other intangible assets. We do not believe this accounting charge has an impact on our business going forward. Looking ahead to the third quarter, we expect revenue of $21 million to $23 million and an EBITDA loss of $9 million to $11 million as we continue to focus on improving the company's financial profile. Like many other companies in the media and technology sectors, we're looking to do what we can to reduce our cost base, improve cash flow, and reduce long-term commitments to increase our flexibility and optionality going forward. With that, operator, let's open the call for questions.

Operator, Operator

Your first question comes from Laura Martin with Needham.

Laura Martin, Analyst

I want to start with you on advertising, as you know, I'm a super fan of advertising revenue. Could you size for us how big ad revenue is? Is it up to 10%? Or am I being way too aggressive? And I'm very curious in your go-to-market, did you end up hiring direct salespeople, did you go programmatic? And third, as you know, Disney and Netflix are coming into this space, I'm very interested in your learnings and specifically challenges that you didn't expect before you entered the advertising business? And then what was easy that was sort of easier. So I'm sort of interested in your experience to date in adding this advertising revenue stream. That's my first question.

Clint Stinchcomb, CEO

Thank you for the question, Laura. I appreciate the chance to discuss this. When we consider advertising, revenue is crucial, and we anticipate that the advertising segment will continue to grow, reaching a high single-digit percentage of our overall business. Currently, while revenue is important, we also focus on the number of partners we have, their quality, and the categories they represent. Over the second and third quarters, we have witnessed increases in all these areas. Our approach is multiplatform, encompassing fast, AVOD, social channels, audio, and even pay TV. We currently have some pay TV channels where we can run ads and sponsorships, but we are prioritizing maximizing viewership in those regions for now. However, we plan to activate those channels and expand both fast and AVOD offerings. Our brand-safe environment is appealing, and in the second and third quarters, we have attracted good sponsorships in sectors like finance, electronics, and automotive, which is promising. One factor that boosts our confidence, aside from the monetization of brand-safe factual content, is Devin Emery, who has been instrumental in developing Cheddar's brand partnership strategy with a strong focus on fulfilling our commitments to partners. We currently have two consultants assisting with outreach and plan to hire a full-time leader for that team in the future. As of now, we are pleased with our progress and see significant potential for growth. As we expand, we will likely incorporate more programmatic approaches to seize emerging opportunities. That was quite a bit of information, Laura, and I hope it helps.

Laura Martin, Analyst

Yes. Super helpful. It sounds like you're equating the word sponsorship with advertising. So you're doing sponsorship so far, basically, right?

Clint Stinchcomb, CEO

Both, yes. But yes. But yes, for us, it's a higher return on sponsorship packages for sure.

Laura Martin, Analyst

Okay. My other question is whether we are still committed to achieving cash from operations to be positive by the first quarter of 2023. Peter, could you also clarify why, in this firm, revenue increases by $7 million while the cost of revenue rises by $7.3 million? This creates a situation where it appears that for every dollar earned in revenue, more is spent on the cost of goods. Can you explain why this occurs each quarter and how the accounting works?

Clint Stinchcomb, CEO

Yes. I think as it relates to moving to positive from operations, absolutely, our goal and our target, Laura, is really important. And I think we made a lot of progress toward that objective in this quarter. All of that said, if there are opportunities that come up for us over the next year where we can make some investments that we think are going to have a meaningful long-term payoff, we want to preserve the ability to potentially go below a $50 million balance, but we are laser-focused on getting to positive.

Peter Westley, CFO

Yes. In terms of the second part of your question, I mean, if I look at just Q2 versus Q1, we had revenue growth of just a little shy of $5 million, and our cost of revenues grew a little over $1 million, and we had expanding gross margin over the quarter. So I'm happy to take this up in a follow-on conversation, but I'm not sure I'm following the argument that the cost of revenues grew faster than the revenues.

Clint Stinchcomb, CEO

There is an accounting...

Laura Martin, Analyst

We can do that offline. I'm looking at year-over-year in both the first quarter and second quarter, your cost of revenue year-over-year goes up more than your revenue. But it's an accounting question; we can do it offline.

Peter Westley, CFO

Okay.

Operator, Operator

Your next question comes from Tom Forte with D.A. Davidson.

Thomas Forte, Analyst

So Clint, I have one exciting question, and I apologize if I have one boring question. So the exciting one first. So you touched on this a fair amount in your prepared remarks, but I wanted to follow on this. Your favorable position against your SVOD peers because you're relatively low content costs and your low monthly pricing to the consumer. I would love your current thoughts on your pricing model.

Clint Stinchcomb, CEO

Well, as we mentioned before, we think we offer a tremendous value proposition right now for consumers. And so we believe that we have pricing flexibility, and we plan to take advantage of that, Tom.

Thomas Forte, Analyst

All right. And now the boring one, and I apologize for this point. But all right, how are you impacted at the sales line and its operating expense line by the strong U.S. dollar?

Peter Westley, CFO

I don't have a specific answer to that right now. I can say that international business is a significant part of what we do, accounting for about a third of our business this year. A lot of that revenue is still in U.S. dollars. I will need to follow up with you, Tom, to provide a more detailed response to your question. However, it's important to note that U.S. dollar-denominated revenue and expenses make up a considerable portion of our international exposure.

Operator, Operator

And your next question comes from Peter Henderson with Bank of America.

Peter Henderson, Analyst

So I'm just curious on your guidance for Q3. At the low end of the guidance range, there is potentially a decline sequentially and just wondering if you could talk through the pieces there a little bit? I mean, is it program sales that's going to drive that decline? Or is there like some sort of conservatism built in about the advertising environment? Just any sort of color you can give there.

Peter Westley, CFO

Look, I think that there are some different puts and takes in terms of the different business lines. I do think inherently, there is some conservatism in there. I don't think as like kind of look at it. I don't know if there are any specific items we want to call out at this time. I think it's more kind of general conservatism. I don't know if you have anything you'd like to add to that.

Clint Stinchcomb, CEO

Yes, we engage in numerous third-party partnerships, and there are often timing issues that can affect a particular quarter. We experienced broad growth across all our business lines in the second quarter. Our foundation is solid, and our cost structure is improving daily, especially under Peter's management. Ultimately, this relates primarily to the timing and scope of specific third-party agreements, including distribution, content licensing, and sponsorship agreements.

Peter Westley, CFO

Yes. And we also obviously had quite strong growth in Q2 as well.

Peter Henderson, Analyst

What do you see as the revenue opportunity for podcasting? I understand podcasting is set to launch later this year. Is there any more specific timing on that?

Clint Stinchcomb, CEO

So we have officially launched commercially now.

Peter Henderson, Analyst

Oh, You are. Okay, sorry.

Clint Stinchcomb, CEO

Yes, I apologize for any confusion regarding that. We have some high-quality original specials scheduled for release later this year. We are realistic about the possibilities in the podcasting sector, but we appreciate the economic benefits it offers us because producing video content doesn't incur significant additional costs. Similarly, providing audio content related to that video content also has low incremental costs. With some fantastic intellectual property, we see great opportunities to leverage it in audio. Over time, we believe audio will contribute positively to our overall advertising and sponsorship revenue. It's certainly another area for growth, serving as a great way to generate revenue while also promoting our subscription video-on-demand service and other CuriosityStream offerings.

Operator, Operator

Your next question comes from Darren Aftahi with ROTH Capital Partners.

Darren Aftahi, Analyst

Congrats, Peter, on your new role. 2 if I may. First, can you speak to the, I guess, size and growth in the direct subscriber business? And then two, as it pertains to kind of mix, like how should we think about gross margins maybe in the third quarter? It looks like you're guiding to kind of flattish revenue at the midpoint, but a $2 million EBITDA improvement.

Peter Westley, CFO

Yes. In terms of subscribers, we experienced growth in the second quarter and we anticipate continued growth moving forward. One of the most exciting developments in that aspect of the business is the growth of the Smart Bundle, which has a higher price point and offers us more attractive economics overall. Whether it involves bringing in new subscribers to that package or encouraging existing customers to upgrade, that will be an ongoing part of our strategy. What was the second question?

Clint Stinchcomb, CEO

Margin. So...

Peter Westley, CFO

In terms of margin, I think the third quarter margin will be consistent with what we observed in the first half of the year. I don't anticipate any significant deviation from the first half figures. We do not expect a dramatic change in the business mix during Q3. Therefore, we are not expecting a significant change in margin. However, we believe that the improvement in EBITDA will mainly result from a reduction in costs during Q3.

Clint Stinchcomb, CEO

Darren, did we answer your questions, Darren?

Darren Aftahi, Analyst

Yes. Perfect.

Operator, Operator

And your next question comes from Dan Kurnos with The Benchmark Company.

Daniel Kurnos, Analyst

Welcome, Peter. To clarify further on your comments and the answer provided earlier regarding the guidance and outlook. Clint, you mentioned wanting to keep some resources available for potential opportunities. Could you elaborate on what types of opportunities you are considering in this market? Additionally, Peter, as you continue to refine and enhance the cash flow outlook, are there any short-term trade-offs you are making between growth and cash that could possibly affect longer-term outcomes, particularly if there are any immediate impacts?

Clint Stinchcomb, CEO

I'll take the first part, Dan. Thank you. As expected, we have reviewed nearly every content idea from producers worldwide and considered various content libraries. This presents us with numerous opportunities. We aim to be careful about how we manage our cash. What I meant to express earlier is that if there are opportunities our Board believes would benefit our shareholders, we might consider going below $50 million in cash as an example. That is something we would evaluate, and we are not disregarding that objective. Is that helpful?

Daniel Kurnos, Analyst

Yes. No, that's helpful. And I guess just maybe in context of how you and/or Peter are thinking about kind of growth versus cash flow trade-offs maybe in the near-term understanding? Because I do want to ask a follow-up on some of the channel partner and partner expansion strategy.

Clint Stinchcomb, CEO

Yes. And I think that is one of the ways that we're thinking about it. So we're confident that we can continue to grow in all areas. The environment that we're in right now, I think it's rewarded our global approach to this business. As we know, factual content travels well. The language as well. It has a considerable shelf life cost structure. We have this and we've built this critical mass library much faster than we anticipated. So as it relates to channel partners, we still think we have a lot of upside there, whether it's working with kind of traditional distribution partners. I mean we have great new partners that came on over the last few months in Latin America and Scandinavia and in India. And then even as it relates to the ala carte app partners and channel store partners, I think if you look at the makeup of our direct subscribers, as an example, we have a much higher percentage of kind of pure direct subscribers compared to most other services. So most other services, other than Netflix, other than Apple, as an example, they get most of their subscribers from the app stores from the channel stores. And so we do see a lot of upside there. We've just not worked within that closely over the years. We see upside there for CuriosityStream. I also see a lot of upside there for One Day University. And we have really today just one third-party partner carrying One Day University. Caring for a few months, the growth has been considerable and really encouraging. So we do see significant opportunity not only in the advertising space, but also traditional distribution partners and then with the app stores and channel partners. Was that what you were getting at, Dan?

Daniel Kurnos, Analyst

You addressed much of my question already, Clint. In this environment where there are concerns about subscription video on demand, it's impressive that you continue to grow. I'm also interested in whether others are approaching you because of your unique offerings compared to the abundance of scripted content available. Additionally, with Da Vinci Kids launching, could you share your thoughts on pricing, particularly regarding breaking up the bundle offering? I'm curious about how you might parse things out, like adding One Day University, to optimize revenue in this uncertain economic climate.

Clint Stinchcomb, CEO

Yes. Since we have Devin Emery here today, who designed our premium tier, I think it would be beneficial for him to discuss it a bit. Just to recap for everyone, we offer our standard service that anyone in the world can sign up for at $2.99 a month or $19.99 a year. We believe this is an excellent value that provides us with a lot of flexibility for the future. We are pleased with the growth of our premium tier, which has been intentional. Devin, could you provide some additional insights on that?

Devin Emery, Chief Strategy Officer

Yes, definitely. So we have a bunch of partners across a lot of different genres, as Clint was talking about earlier. Our growth rate since we've rolled this out and improved our upgrade flow has been very significant as we were giving you a few numbers earlier. We also have a ton of optionality in how we work with those partners and how we drive people into upgrading or signing up for those tiers. And so all of this falls under how we increase our ARPU on the direct service. So we think about that, obviously, in terms of where our pricing strategy is across the board. We also think about it in terms of what our upgrade strategy is because our ARPU is multiples higher on the premium tier, we are focusing a lot of our effort on the 3 different ways that we can get people to sign up. And those 3 different ways are people who are coming in to sign up for CuriosityStream, who we can get to choose the higher-priced SKU. It is people who sign up for CuriosityStream on the standard plan who find an upgrade path. We have been very successful so far in running promotions to standard plan users within our app to tell them about the upgraded services they can get and improve that flow. We've been very encouraged by that. And we also have the opportunity to market, as you're saying, the Smart Bundle, but also some potential different types of bundling that we have. One Day University is in the Smart Bundle as is Nebula, which we own a minority stake in, but we also can work with partners in slightly different capacities at slightly different price points. So we view pricing strategy as well as marketing strategy around this as a very important piece of what our overall ARPU growth plans are.

Operator, Operator

And our final question comes from Jim Goss with Barrington Research.

James Goss, Analyst

Thank you for including me. I know most of your content was established early, but even with Netflix, there will be a lot of content, and unless there's something new, it's difficult to attract and retain customers. Clearly, you can't save your way to prosperity. I'm curious if you can rotate the mix of content, and whether you have flexibility between owned and licensed content. Do you move some of that content into the premium tier from the general tier to encourage customers to choose the higher-priced product? This is the first area I want to discuss.

Clint Stinchcomb, CEO

That's a great question, Jim. I believe that with the content we have today, we can continue to launch 4 to 6 new titles a week well into 2023. We will also have additional content and production to support that. Regarding your second point, yes, we are improving daily at personalizing and resurfacing specific content for individual users. With the vast number of titles we offer, this becomes increasingly important. It would be challenging for anyone to watch 7,000 titles in a year, but we want to ensure that viewers have the best experience possible. Just last Friday, we launched The Rise of Hollywood, an exceptional 6-part series about Hollywood's history, produced by Stephen David Entertainment, the same team behind The Men Who Built America. It stands out and could compete with anything you would find on any other media service globally. This is certainly premium content that we can use to encourage viewers to explore different tiers. Did I address all your questions, Jim? I just want to ensure you get a complete response.

James Goss, Analyst

Well, given the large base of content, do you try to hold some of it back to keep it feeling fresh and revived, especially for premium tiers, even if some of it has been available before and may come back later? Or are you still keeping everything available all the time? I know that has been a significant effort.

Peter Westley, CFO

Yes. So to answer about the premium tier piece, currently, we are not making any differences in what is available through CuriosityStream, whether you are on the standard or premium tier. There are other benefits that you get on the premium tier, including the Smart Bundle, including unlimited concurrent streams, assuming you're all in the same household and a bunch of other things that we're building there. But what we don't want to do is devalue the value of our standard plan. And so while there will be things that we experiment with in the future around content availabilities for potential interactive experiences that are available only to premium tier subscribers. Right now, we are not looking at holding back content only available to them because, again, we don't want to devalue our standard plan. In terms of having content come on the platform and go off the platform. Not exactly, but we have been putting a lot of work on the product side into making sure that our content recommendations are pulling a lot of our evergreen and library content that people may have not seen when it came out back into their feeds. Obviously, we are growing quickly. And so we often and always have a lot of new users. And so content that might have not been new when they are signing up for the service, but it's still something that we know has engaged with our audience. We want to make sure that that is hitting their feeds. And if they miss something because they're not signing in for a week, but that is also hitting their feeds. So we are putting a lot of work on the engagement side just to make sure that our recommendations and discovery do, I think, exactly what you're getting at there, which is make sure that the library that we have, while always available, is easily discoverable.

James Goss, Analyst

Okay. And one last thing. I think that some of the technology behind the video. I wonder if you could talk about how it might relate to your role and how it might factor into CuriosityStream. If there's any way or if it's not directly applicable.

Peter Westley, CFO

Yes, absolutely. I would say that our focus should be on the exercise we undertook and the necessary steps moving forward. Rather than emphasizing the potential benefits from collaboration between the two companies, I believe the real advantage lies in the process of reevaluating our business model and its evolution. This approach aims to enhance shareholder value by developing a more profitable and predictable business model while making adjustments to our operations. We examined our cost structure closely and identified strategic investments needed to create value, positioning the company even better than it was five years ago. Thus, it's more of an intellectual framework than a discussion on business synergies, but conducting this analysis remains valuable. It allows us to review our business model, cost structures, and all our strategic partnerships, guiding us on where to invest more heavily and where to consider scaling back.

Operator, Operator

Thank you. This concludes the CuriosityStream Q2 2022 Earnings Call. Thank you for attending today's presentation. You may now disconnect.