• Revenue and EPS fell short of estimates, with revenue at $16.3 million and EPS at -$0.05.
• Direct operating margin improved significantly to 69%, showcasing operational efficiency.
• Future guidance projects revenue between $115 million and $120 million, with adjusted EBITDA ranging from $10 million to $20 million.

Cineverse Corp. (NASDAQ: CNVS) is a global streaming technology and entertainment company. It recently reported its earnings for the third quarter of fiscal year 2026, ending December 31, 2025. The company generated a revenue of $16.3 million, which was below the estimated $20 million. The earnings per share (EPS) was -$0.05, falling short of the estimated EPS of -$0.03.

Despite the revenue shortfall, CNVS achieved a direct operating margin of 69%, a significant improvement from the 48% margin in the same quarter of the previous year. The adjusted EBITDA for the quarter was $2.4 million. However, the company is currently experiencing losses, as indicated by its negative price-to-earnings (P/E) ratio of approximately -42.19.

Looking ahead, Cineverse has announced guidance for fiscal year 2027, projecting revenue between $115 million and $120 million, and adjusted EBITDA ranging from $10 million to $20 million. The company has also completed two acquisitions expected to contribute approximately $53 million in annual revenue and around $10 million in adjusted EBITDA for fiscal year 2027.

CNVS has a price-to-sales ratio of about 0.66, suggesting that its stock is valued at less than its sales revenue. The enterprise value to sales ratio is approximately 0.73, reflecting the company's total valuation including debt and excluding cash. The enterprise value to operating cash flow ratio is around -27.41, indicating challenges in generating positive cash flow from operations.

The company's debt-to-equity ratio is about 0.19, suggesting a relatively low level of debt compared to its equity. However, the current ratio is approximately 0.95, indicating potential challenges in covering short-term liabilities with short-term assets. Despite these challenges, CNVS remains focused on its strategic direction and future growth.