Growth driven by increased distribution, expanded offerings of original, exclusive, and overall library of content and new user platforms 

Affirms 2021 revenue outlook

Board sets $10 million common stock repurchase authorization

COS COB, CT – Chicken Soup for the Soul Entertainment, Inc. (Nasdaq: CSSE) (the “Company”), one of the largest operators of streaming advertising-supported video-on-demand (AVOD) networks, today announced its financial results for the third quarter ended September 30, 2021.

“We delivered a strong quarter that increases our confidence that we can meet our 2021 goals, with record all-time revenue and the second-best Adjusted EBITDA performance in our history,” said William J. Rouhana Jr., chairman and chief executive officer of Chicken Soup for the Soul Entertainment. “We are seeing momentum in our AVOD networks, highlighted by viewership growth at Crackle in Q3 and strong growth at Popcornflix since our September relaunch. This growth reflects our focus on expanding distribution of our networks and our lineup of original and exclusive content, including additional titles from the recently acquired Sonar assets, as well as our new technology platforms. With the initial launch of our highly anticipated Chicken Soup for the Soul streaming service, as well overall ad impression growth at Crackle Plus, consolidation of our television production activities, Screen Media’s growing lineup of acquired films, and our recent international partnership and acquisition activity, we are poised to accelerate execution of our strategy into 2022.” 

Third Quarter 2021 Financial Summary

• Net revenue of $29.1 million, compared to $22.1 million in the second quarter of 2021, and $19.4 million in the year-ago period. The 50% year-over-year growth was driven by an increase in ad sales and licensing. Gross revenue for the third quarter was $29.6 million.
• Net loss of $16.7 million compared to a net loss of $11.1 million in the second quarter of 2021, and a net loss of $13.0 million in the year-ago period; $14.5 million net loss before preferred dividends, compared to an $8.8 million net loss in the second quarter 2021 and a $12.0 million net loss in the year-ago period.
• Adjusted EBITDA of $4.9 million compared to $3.2 million in the second quarter 2021, and $4.2 million in the year-ago period. Adjusted EBITDA growth was partially offset by investments in the Company’s recently launched technology platforms, marketing and employee compensation.

Recent Business Highlights 

• Launched new free ad-supported streaming service, Chicken Soup for the Soul, which will use the beloved and internationally recognizable megabrand to bring its original mission of “Changing Your World One Story at a Time” to platforms around the world.
• Announced the formation of the Chicken Soup for the Soul Television Group led by industry leader David Ellender, which consolidates TV production activities and will help capitalize on the global appeal of the brand.
• Made significant progress on international growth strategy with the acquisition of a majority stake in Locomotive Global Inc., a production company based in India, and the signing of an international VOD agreement with Keshet Broadcasting, the largest broadcaster in Israel.
• Increased Popcornflix’s viewership by 50% following the re-launch of its AVOD technology platform with a new user experience.
• Grew original and exclusive content to a record 22% of total ad impressions, including the recently integrated Sonar content.
• Sold out of ad inventory for the fourth quarter in a row and continued to drive advertising innovation by integrating ads with high-quality advertising partners.

Common Stock Repurchase Authorization

The Company’s Board of Directors today approved a two-year authorization for the repurchase of up to $10 million in Chicken Soup for the Soul Entertainment, Inc. common stock. The Company anticipates that any potential repurchase activity would be conducted opportunistically, in open-market transactions.

Third Quarter Financial Highlights

Gross profit for the quarter ended September 30, 2021, was $6.2 million, or 21% of net revenue, compared to $6.7 million in the second quarter of 2021, or 30% of net revenue, and compared to $4.5 million, or 23% of net revenue for the year-ago period. 

Operating loss for the quarter ended September 30, 2021, was $13.2 million compared to an operating loss of $7.8 million in the second quarter 2021, and $11.3 million in the year-ago period.

Net loss was $16.7 million, or $1.04 per share, compared to a net loss of $11.1 million, or $0.79 per share, in the second quarter 2021, and a net loss of $13.0 million, or $1.04 per share in the prior-year period. 

Adjusted EBITDA for the quarter ended September 30, 2021, was $4.9 million, compared to $3.2 million in the second quarter 2021, and $4.2 million in the same period last year. 

As of September 30, 2021, the company had $66.9 million of cash and cash equivalents compared to $14.7 million as of December 31, 2020, and outstanding debt net of deferred financing costs of $55.2 million as of September 30, 2021, compared to $39.8 million as of December 31, 2020. The company completed a common stock offering in July 2021 that raised gross proceeds of $75.0 million. 

For a discussion of the financial measures presented herein which are not calculated or presented in accordance with U.S. generally accepted accounting principles (“GAAP”), see "Note Regarding Use of Non-GAAP Financial Measures" below and the schedules to this press release for additional information and reconciliations of non-GAAP financial measures.

The company presents non-GAAP measures such as Adjusted EBITDA to assist in an analysis of its business. These non-GAAP measures should not be considered an alternative to GAAP measures as an indicator of the company's operating performance.