Why Is Cineverse Stock Rising Despite Missing Q3 Revenue and Earnings Estimates?

The company said it expects $115 million to $120 million in revenue for fiscal year 2027, however analysts on average were expecting the revenue of $85.23 million, as per data from fiscal.ai.

• The company also said it expects $10 million to $20 million in adjusted EBITDA in FY2027. 
• The company said for the third quarter its revenue was $16.3 million versus $40.7 million in the prior-year quarter, a 60% decrease.
• Direct Operating Margin was 69%, compared to 48% in the prior year quarter, reflecting the company's continued focus on cost management. 

Shares of Cineverse (CNVS) jumped on Tuesday after it posted higher-than-expected outlook for its FY 2027 revenue. 

The company said it expects $115 million to $120 million in revenue for fiscal year 2027, that commences from April 1, 2026. Analysts on average were expecting the revenue of $85.23 million, as per data from fiscal.ai. 

The company also said it expects $10 million to $20 million in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) in FY2027. 

"Already, we have seen extremely positive results from the Giant acquisition over the last 6 weeks, and IndiCue's month-over-month financial performance prior to acquisition was scaling up very rapidly. Therefore, we feel very confident in the financial guidance we are issuing for Fiscal Year 2027, which begins April 1, 2026, of $115 to $120 million in Revenue and $10 to $20 million in Adjusted EBITDA," said Chris McGurk, Cineverse Chairman and CEO. 

Q4 Snapshot

The company said for the third quarter its revenue was $16.3 million versus $40.7 million in the prior-year quarter, a 60% decrease, due to approximately $22.8 million of theatrical revenue from Terrifier 3 in the prior year fiscal quarter. The revenue was also below analysts’ estimates of $20 million, as per data from fiscal.ai. 

Direct Operating Margin was 69%, compared to 48% in the prior year quarter, reflecting the company's continued focus on cost management. 

The company said its total streaming viewers increased approximately 10% year-over-year in Q3 FY26 to 149 million. 

The company’s net loss attributable to common stockholders was $1.0 million, or $0.05 per basic and diluted share, compared to a net profit of $7.0 million, or $0.34 per share, in the prior-year quarter. Analysts expected a loss of $0.03 per share. 

"Our financial objective during this quarter was to focus on improving operating results in our base business in anticipation of closing the transformative Giant and IndiCue acquisitions. We are very pleased that these efforts paid off, with significant increases in both Direct Operating Margins and Adjusted EBITDA,” said McGurk. 

How Did Stocktwits Users React?

Retail sentiment around CNVS trended in ‘bullish’ territory amid ‘high’ message volume. 

Shares in the company have fallen 36.4% over the past year. 

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