Today, investors in Cinedigm (NASDAQ:CIDM) are seeing a lot of green. Shares of CIDM stock are currently up more than 35% at the time of writing on some rather impressive results.
Cinedigm reported very strong revenue and user growth. In particular, streaming channel revenue soared from a year prior, signaling growth in the streaming world isn’t slowing down. For investors in CIDM stock, this is music to their ears.
The video-distribution company has been shifting toward streaming in a big way, away from the company’s legacy businesses. According to Cinedigm’s CEO Chris McGurk, “We have now successfully completed the transition of Cinedigm from its legacy digital cinema equipment business to a high-growth, independent streaming entertainment channel and content company.” Indeed, it appears investors are viewing these results this way.
Let’s dive a bit more into the numbers that Cinedigm reported.
CIDM Stock Is Surging on Revenue Growth
Cinedigm’s recently reported financials have taken Wall Street aback, in a good way.
The streaming company noted revenue grew by 7% year-over-year this past quarter to $8.3 million. Of note, content and entertainment revenue made up the majority ($7.2 million) of this increase. This segment grew by 25% year-over-year.
Additionally, the company’s streaming channel revenue soared nearly 200% higher on a year-over-year basis. Total streaming minutes were also up by 285%, signaling strength in this growth segment.
These businesses more than offset a significant decline in the company’s legacy cinema equipment revenue. With this business expected to continue to decline, investors will keep an eye on how its streaming and content/entertainment segments perform. This past quarter was a home run for investors looking at these data.
As a result of this strong performance, Cinedigm was able to further reduce its debt load. The company cut $37 million of debt, reducing its debt load from $49 million to just $12 million this quarter.
Today, investors appear to be pricing in much more positive forward-looking free cash flow estimates for Cinedigm. Indeed, such a view appears to be warranted. This is a stock that may have room to run from here.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
