Angel Studios, Inc. (ANGX) Earnings Call Transcript & Summary

Good afternoon. At this time, I'd like to welcome everyone to Angel's Q3 2025 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It's now my pleasure to introduce your host, Jeanette Masters, Investor Relations. You may begin your conference.

Hello, everyone, and welcome to Angel's Third Quarter 2025 Earnings Call. Joining me are Angel's Co-Founder and CEO, Neal Harmon; and Angel's Chief Financial Officer, Scott Klossner. Our third quarter earnings press release is available on our Investor Relations website at angx.com, where we also encourage you to sign up for our e-mail alerts. Neal and Scott will make about 30 minutes of opening remarks before we turn over the call to questions from our sell-side analysts as well as questions pre-submitted by our Guild members. Thank you all for joining us. Let me pass the call over to Neal.

Thank you, Jeanette, and good morning, everyone. It's an honor to speak with you today on our first earnings call as a publicly traded company. Scott and I are delighted that we're getting started with a great set of third quarter results, where our most important major success, our Guild membership is $1.6 million, up more than 500% year-over-year and up 19% sequentially. Also, today, we're announcing acquisitions of the highest performing franchises on the Angel platform and a successful AI-driven discovery technology in the Angel app, which has positively impacted watch times by 12%. These watch times are the most significant driver of Angel Guild retention, but more on all of this shortly. This moment marks the culmination of a journey years in the making. The successful completion of our listing resulting in Angel's debut on the New York Stock Exchange. It reflects the strength of this community. Our mission to tell values-driven stories and the power of our unique audience first model. As Jeanette mentioned, I'm joined today by Scott Klossner, who brings a wealth of experience in his 35-year career as an executive across capital markets, M&A and financial leadership at multiple public companies. And he's been instrumental in preparing Angel for life as a public company. I'm grateful for his partnership and steady hand. On behalf of our leadership team, I also wanted to express sincere gratitude of everyone who helped us get here. Our Guild members, our early supporters, are investors and our entire team. Your hard work, faith and dedication have made today in every milestone possible, and this is just the beginning. About 2 months ago, the Angel team was welcomed by the New York Stock Exchange, marking the milestone of our public debut. It feels like the starting line. Don't underestimate the importance of this milestone in our journey. It elevates the Angel brand, increasing our reach. It allows us to grow the Angel Guild more rapidly, our recurring revenue business. It supports engagement of the Angel Guild, which is our differentiating edge in the over $100 billion per year global TV and streaming market that is growing in excess of 20% annually. Angel was founded on a fundamental belief that telling values-driven stories will inspire families and communities around the world. Our company is a response to an increasingly out-of-touch Hollywood studio model. At Angel, 1.6 million members of the Angel Guild not remote Hollywood gatekeepers, decide what films and television series get produced and distributed in theaters and on the Angel platform, which inspires mainstream audiences. Our Guild members put their money where their eyes, heart and values are. The Angel Guild details the kind of programming they crave and act as virtual coproducers on every project. This fast-growing community is at the heart of everything we do. As of the end of third quarter, our Guild is 1.6 million paying members and continues to grow at an exciting pace. But for those new to the Angel story, it's worth highlighting just how significant this growth has been. Because paid marketing for the Guild launched in the second quarter of 2023. And by the end of 2024, membership had reached just shy of [ 550,000 ], and accounted for just over 1/3 of total revenue. Today, just 11 months later, members now contribute to 77% of our revenue, underscoring the power and the scalability of this community-driven model. The Angel Guild does 3 things that define our business model, vote to select films and TV series; second, rallies and theaters to support theatrical releases and spark cultural movements; and third, funds in part future films and TV shows through their monthly memberships. Together, they are helping us reorient the Hollywood studio model to one that is audience-centric and mainstream. In our model, we don't guess what audience want to pay to see. They tell Angel and filmmakers what they want to see and back it up with their dollars. Evan Shapiro from the media Odyssey podcast believes that this is the future of Hollywood and also that Angel is pioneering it. In less than 2 years, we found 1.6 million people who agree with us, and we believe that this represents only a fraction of the total audience that can become part of our Angel Guild. I'll tell you what, we cannot wait to welcome all of you. Our approach is confirmed by independent data. The average Rotten Tomatoes audience score for Angel theatrical releases is 93%, significantly above those -- of any major distributor or streaming platform globally. Allowing audiences to decide which films and television series can come onto our platform is going to be massively disruptive. Every deal member also makes a pledge what we call the Pledge to Amplify Life, which says, when I vote, I pledged to help choose excellent entertainment that is true, honest, noble -- just authentic lovely or admirable. That pledge is more than words. It's our reason for being. It's how a fast-growing global community aligns around a shared mission. It's what unites us. It's why we started this company. For shareholders, the Guild isn't just a curation machine. It's a recurring revenue engine. Membership fees provide consistent recurring income that helps fund new projects, support filmmakers and build long-term shareholder value. There is power behind a story that resonates. I've met countless billionaires who after decades of building businesses decide it's now time to make a movie. But they understand that film is more than entertainment, it's culture, it's legacy. And this desire to leave a mark isn't unique to billionaires, it's universal. The Angel Guild makes that possible for regular people. We partner with those who share the same passion to create stories that inspire and endure and Guild members get to interact with filmmakers and they get to see films be produced and come to the silver screen. And one of the most rewarding things for me to see is how fast the Angel brand has grown. I can wear an Angel T-shirt in an airport anywhere in the world and someone will stop and thank us for what we are doing. That recognition isn't the result of traditional marketing spend. It's the result of a movement that aligns around values-driven family-friendly storytelling that's making our world a little bit better place. This quarter was a foundational one. While it followed a naturally lower theatrical release period as the back-to-school season concluded, there was a strong demonstration of the stability and scalability of our recurring Guild revenue and the resilience of our community model. Revenue reflected the smaller slate of new releases, but the underlying metrics that matter most, engagement, retention and Guild membership continue to grow. That's the key story for investors. Our business isn't solely defined by the timing of film releases or the seasonality of entertainment, but by the enduring relationships we facilitated by building this technology to connect audiences and filmmakers. Every new Guild member contributes to a growing base of high-margin recurring revenue that compounds over time. And as the Guild grows, their joint decisions become smarter, smarter picking the winners for mainstream audiences. We call it Audience Intelligence. While Sound of Freedom showcase the potential of the model for scale, the Guild itself has now grown to more than twice the size of the revenue of our previously biggest hits. The Guild is an engaged vibrant community that continues to expand and strengthen our long-term foundation. Looking ahead, we have a strong theatrical lineup that we expect will meaningfully contribute to both top line growth and Guild expansion in the fourth quarter. Last month, we announced our first significant strategic development that reflects our commitment to long-term intellectual property ownership and brand-defining storytelling. This was the acquisition of the David franchise in partnership with 2521 Entertainment. David is an EPIC animated film and TV series based on the timeless story of David's journey from Humble Shepherd to King. It tests the limits of faith, courage and love culminating in a battle for the soul of a Kingdom. It's Angel's most highly anticipated theatrical release, and it's the largest crowd-funded film in history. It's the kind of film that makes our work at Angel totally worth doing. This animated Epic features original music by claimed musicians, Phil Wickham, Mary Musica and Loren Dagel, and is set to premiere in theaters on December 19, 2025, just in time for Christmas for all our families. I'm thrilled to share that David has already earned nearly 3 million in theatrical presales in just 3 weeks, the highest in Angel's history, outpacing even King of Kings and Sound of Freedom. Also, this is actually the highest ever reported for an animated theatrical musical in such a time frame this far out from the movie's release. And perhaps our greatest achievement, at least in our home, it's giving my children to seeing something other than [indiscernible] Demon Hunters. They've got David now, the David Soundtrack playing on repeat, and it's been part of our strategic release to release all the songs for David, which are available for streaming right now. As previously mentioned, this morning, we announced the definitive agreements to acquire our 3 highest performing series on the Angel platform, Tuttle twins, Homestead and The Wingfeather Saga. Homestead is a premium postapocalyptic thriller film and television series. The film starring Neal McDonough and season 1 of the series draw audiences into a fractured America struggling to survive after a nuclear blast, delivering suspense with a deeply human story of faith, family and resilience. We are releasing additional episodes of Season 1 shortly, and we'll soon begin production on season 2. Homestead differentiates itself with strong production value, high rewatchability and measurable pull to the Angel Guild for both acquisition and retention. It stands as the strongest member acquisition title in the Angel library. In fact, Homestead is growing faster than season 1 of our previously highest-performing series based on the new testament. Earlier this month, Season 4 of the hit animated television series Tuttle Twins premiered, and my little boys made me very aware of it. The series takes families on an adventure that teaches liberty and virtue through laughter and imagination. Tuttle Twins is the most watched TV series on Angel. And we're very excited Season 3 of The Wingfeather Saga based on Andrew Peterson's best-selling fantasy series is also now streaming exclusively on Angel and my boys have asked me to watch it tonight with them. It remains one of the most successful, crowd-funded family animated series ever produced. The important takeaway from the acquisitions I just touched on comes back to the Guild. Strategically, these 3 acquisitions give Angel intellectual property and highly successful franchises, compounding the long-term value of our library and increasing the retention numbers of the Guild. Whichever the genre, whether fiction or nonfiction, fail or television series, Angel delivers the values-driven entertainment that our Guild tells us they're looking for in theaters and on the Angel platform. And in addition to David, and these 3 other series, we have a diverse lineup of coming releases. I Was a Stranger, is a powerful story of resilience and hope set against the backdrop of the [indiscernible] a war. It has been featured in more than 50 film festivals worldwide and received the Amnesty International Film Award. It's a beautiful film and it's set to debut in theaters on January 9, 2026. Then on February 6, we plan to release Solo Mio, our first romantic comedy, starting the incredibly talented Kevin James. We're also preparing to launch Season 18 of [indiscernible], our flagship funny for everyone franchise with more than 6 billion views, praised by JLo and featuring specials such as Adam Carolla comes cleaner. Driver comedy has a library of 400 hours of family-friendly entertainment, much of which is available exclusively on Angel. Wave finders highly successful pilot episodes sparked tremendous excitement within the Angel Guild, and we're eagerly anticipating that Season 1 debut on the Angel app on December 16, 2025. The series exemplifies exceptional storytelling that found its home at Angel after creative differences with a major streamer, proof that great stories thrive where filmmakers are free to stay true to their original vision. This momentum segues perfectly into how the Guild serves as the key driver of our recurring revenue stream, while taking a moment to expand on additional revenue lines. We currently have 4 primary revenue streams, each one reinforcing the other, Angel Guild memberships, theatrical releases, licensing and other revenue. Angel Guild memberships are monthly and annual membership fees that provide a growing base of recurring revenue. Both basic and premium tiers include voting rights and early access to releases with premium offering, complementary theatrical tickets and merchandise discount. We have recently introduced Basic Plus without ads. Second, theatrical releases bring revenue from releasing our original films through direct relationships with exhibitor partners. Every ticket sold generates a share of box office receipts with international distribution typically routed through local partners. Theatricals purpose at Angel is to give the Guild a moment to celebrate and to attract new filmmaker partners as theatrical releases help retention. Third, licensing our films and TV shows to major platforms like Amazon, Apple and Netflix. Longer term, we intend to extend those rights into -- we intend to extend our rights into derivative experiences such as video games, live productions and themed attractions. And fourth, other revenue is a small catch all for merchandise and physical media sales in our direct-to-consumer online store as well as wholesale partnerships with retailers. This diversified model reflects how the Angel Guild powers not only our creative pipeline, but also our economic engine. As our membership base grows, each of these categories benefits from higher engagement, cross-promotion and cross-pollination. Ultimately creating a reinforcing cycle of growth, loyalty and recurring revenue. So while the timing of theatrical releases and other factors may create quarter-to-quarter variability, as I noted earlier, our long-term focus and strength is clear. Base hits and blockbusters both help Angel expand and strengthen the Angel Guild. Every investment we make in our technology is designed to deepen the relationship between artists and community. We're innovating ways for members to interact directly with filmmakers, vote on projects and participate in the success of stories they crave. That connection will allow Angel to scale both sustainably and profitably in the years ahead. During third quarter, Angel expanded our library across key platforms, including Samsung, Amazon and Apple, which, by the way, reduced in-app purchase fees from 30% to 15%, saving over 3.5 million annually. Angel also strengthened partner relationships with Roku, LG and others, with improved revenue terms and record TV performance. Approximately 30% of Guild membership sign-ups come from these channels. On web and mobile, key optimizations boosted engagement in revenue, redesigns to onboarding, sign-up flow and pricing, increased skilled sign-ups by 9% and revenue by 6%. Mobile enhancements included over-the-air updates and flexible checkout options, and they continue to improve the overall experience. Our simplified submission process and automated upflows enabled a record 150 concurrent film submissions by filmmakers. New member plans and parental controls expand options and personalized experiences for our audience. These initiatives reinforce Angel's commitment to innovation and delivering exceptional experiences to viewers and filmmakers alike. Finally, and this is huge. Our teams are already seeing breakthroughs from adopting AI. We ran a sophisticated A/B test, traditional discovery is the control, AI-driven discovery is the experiment. The result, the AI version boosted average watch time for Guild members by a full 12%. And remember, watch time is the most significant factor to increase retention. To summarize, Angel's value isn't just measured by quarterly box office results, but by the strength, growth and recurring nature of the Guild that powers them. To our early supporters, team, filmmakers and the entire Guild, thank you for your courage, creativity, engagement and faith. You've proven that when people unite around a mission to tell values-driven stories, we can transform an industry. And maybe, just maybe we can make the world a better place for our children. With that, I'll turn over the time to Scott to walk through our financial results in more detail.

Thanks, Neal. Good morning. It's a privilege to be here to walk you through the details behind what was really a historic quarter for Angel. As Neal outlined, our results this quarter highlight both the strength of our model and the scale of the community supporting it. It's important to understand how balancing rapid growth with responsible investment to position the company to take advantage of this enormous opportunity. I believe the Q3 results reflect the success of our strategy. Our Q3 top line was $76.5 million in revenue, which is a 280% increase over 2024 when we did $20 million in the third quarter. For the first 9 months of 2025, revenue grew 223% to $211.6 million, up from $65.5 million last year. The Guild revenue accounted for 77% of total revenue in this quarter as compared to last year when it accounted for only 45%. Total Guild membership as of September 30 reached 1.6 million members. That's up from 1.3 million, a 19% increase in the second quarter and up over 500% year-over-year, contributing an additional $50 million in revenue from the Guild for the quarter over last year. Trailing 12 months average revenue per Guild member, ARPM, per month, is currently $13.70, and this is a new metric we are disclosing publicly. What's important to note in all these numbers is the foundation we are building. We're continuing to see our investment in member acquisition, delivering significant top line growth and momentum. This level of growth we're seeing is the result of the value proposition to our members, leading to significant value creation for our shareholders. Cost of revenues was $34.3 million compared to $8.1 million in the same quarter last year. This is due to more memberships and the transaction fees related to that growth, along with the higher royalty payments to filmmakers as they benefit from their performance, which in turn, fuels Guild growth, a true financial meritocracy for our filmmakers is key to the Angel strategy. Selling and marketing expense was $64.7 million, up from $16.6 million in the same quarter last year. And as long as we can efficiently grow the Angel Guild, you'll continue to see this investment. Along with Guild investment, we had 2 theatrical releases during the period as well, contributing to the increase in selling and marketing expense. General and administrative expenses were $10.1 million, and research and development totaled $4.2 million in the quarter. We are seeing significant economies of scale as G&A expenses are relatively flat year-over-year to date. Now as a public company, we feel -- we will feel pressure to expand G&A, but we'll work to be efficient in our support of the company and its growth. Our investment in growth of the Guild over 500% year-over-year led to a net loss of $38.6 million in the quarter or $0.25 per share compared to a net loss of $13.9 million or $0.10 per share in the same period last year. This includes expenses related to our merger and the process of trading on the New York Stock Exchange. As to the balance sheet, Angel ended the quarter with $63.3 million in cash and cash equivalents compared with $7.2 million at the end of 2024. As to IP acquisitions, as we did with the David film and the other franchises we're acquiring, we continue to remain opportunistic as amazing films and our television series come along that fulfill an economic and strategic benefit to Angel. These are few in number compared to the Angel Guild library, but we believe have the potential to accelerate growth and provide enormous value to Angel and our members. We also continue to invest in technology to extend our reach, scale the business and strengthen the ecosystem. These are intentional and responsible investments carefully aligned with the mission of Angel to grow the Guild and deliver high-quality values-driven entertainment to the world. Unlike traditional studios that rely on high cost, in-house content production, our audience-first approach along with our distinctive filmmaker royalty partnership model allows us to scale efficiently by funding and distributing projects based on real audience demand and filmmakers believe in their fine product. This approach reduces execution risk and capital intensity. Now just before our public listing, we also closed a $100 million credit facility with [ Trinity ] Capital, providing additional flexibility to fund continued growth of the Angel Guild. As of the quarter, we had drawn $40 million on that facility. And since 2021, we have been holding Bitcoin as part of our treasury strategy. That balance is reflected in the Q at $34.6 million. This equates to about 1.8 bitcoin per 1 million shares of Angel. And to provide the company with greater flexibility and with Angel now shelf eligible, we have filed a shelf registration of $400 million and expect to file an at-the-market ATM offering shortly after the government reopens. We believe that having this in place is a matter of sound corporate governance and prudent capital planning, providing optionality as strategic opportunities arise. And before I close, I'd like to address our approach to guidance. We're in a period of exceptionally high growth and with that comes in a number of dynamic variables, including the timing of theatrical releases, Guild membership momentum and film and television related investments that can shift from quarter-to-quarter. While things will change and evolve to provide guidance now would be premature given the pace and variability of our expansion. Like entertainment platforms that have gone before us, in their early years, our focus is on scaling efficiently before shifting toward formal targets. We will continue to provide transparency through our quarterly updates. And we're a fast-growing company, prioritizing disciplined execution and sustainable growth. In summary, the third quarter marked a historic period for Angel Studios, an exciting beginning to our journey as a public company. Our results demonstrate the power of the Angel Guild model, a recurring revenue engine fueled by a passionate global community. We have millions more members to add to the Guild as we believe Angel curated films will serve the majority of families in America seeking excellent value-driven stories to share with each other. We have a lot of work ahead to meet our goals. And as value-driven entertainment continues to expand globally, we're uniquely positioned to lead that movement. Thank you. And with that, I'll turn it back to the operator to open the line for further questions.

[Operator Instructions] Our first question is coming from Jason Holstein from Oppenheimer.

Congratulations on your first earnings call and joining the public markets. So Neal, maybe just one for you and then a few financial questions for Scott, and then I'll go back in queue. So help us to think about like in like the David franchise, I don't know if you're going to disclose how much that acquisition was? I assume you look at this as an incremental driver of subscriber acquisition. Maybe just talk through like how you think about the ROI of this type of franchise. And then I'll ask a few questions to Scott.

You bet. So the David acquisition was $80 million, and it was done in conjunction with 2521 Entertainment who's been a great long-term partner. And strategically, it was about the combination of a film and a series. And the -- this is the highest Guild rated title in our history and the series they're 5-minute shorts and have performed exceptionally well on our service. And so when you look at -- when you actually see the David movie, you'll find that the quality of this movie. It was produced by talent from Pixar, Disney, DreamWorks, the script was reviewed by the rider for the -- the head of story for some Pixar movies anyway. It's just phenomenal work. And as I've done early screenings, people are like, "Wow, they think it looks like a $200 million movie. And so between the fact that it's the highest level of work that we've ever done. And then we have the potential to turn it into a series and have all of the IP rights associated with derivative works and such, this is a long-term play and a real great opportunity for 2026 because we'll do the release of the film at the end of the year and fourth quarter, which is the second best quarter for theatrical releases. And then it's the best quarter historically for streaming. And so we'll be able to take advantage of the young David series right here during the fourth quarter, and then we'll be able to take the momentum from the theatrical release and carry that as it goes into the Guild and into other windows into our 2026 results. So very excited about that. There'll be more to come on that in our report next year.

That's great. That's actually a perfect segue. So Scott, I guess, I understand you're not giving guidance and understand a lot of care. But just maybe help us think a little bit about seasonality for net adds between 3Q and 4Q? I mean just -- just how 4Q is typically a strong time for streaming, but just elaborate there. And then I'm going to do just then 2 more after that, and I'll go back in the queue.

I'm sorry, Jason, could you repeat that again?

But I'll repeat the question, Jason, so you can hear it while they turned it up. So he was asking about how many net membership adds will have in fourth quarter in terms of like how do we think the seasonality of the quarter and how it affect net adds?

Yes. So generally, as Neal mentioned, fourth quarter is the strongest streaming month or quarter of the year, generally speaking, it's 4 and 2 are generally the 2 strongest. As we move towards the holiday season, and as people start to come on and as we release more and more of the content that we have, obviously, we have the big David release, which we talked about. We anticipate that's a number that will grow as it goes into the fourth quarter. It's an effective month for us. We measure everything in the way that we acquire acquisition, both -- we're looking at what our costs are, how much we have to invest, what's our return on those assets on and on and on. And so we see as we're doing that, we're measuring, we will lean in as we're getting response from the customer base, but we would anticipate to see fourth quarter being a strong quarter for us for sure.

If I could -- could I add something there, if you don't mind, Jason, the release lineup for streaming, we've got Wingfeather Saga that came out a couple of days ago, the first 2 episodes, Tuttle Twin Season 4, Homestead is coming out here in November. Wave Finders is coming out in December, Young David, like the lineup for the titles that are hitting the platform in fourth quarter, they're our biggest IP, our biggest titles with brand-new content. And I think that, that bodes well for the net adds in the fourth quarter.

Great color. So then I just want to ask a bit about the content licensing revenue in the quarter. What were the dynamics that drove the sequential increase there? And maybe tie that back, I think the gross margin was like -- so despite theatrical similar to 1Q, gross margins were below 1Q levels, and I think it ties back to content licensing. So just talk about the dynamics that are impacting the sequential increase in content licensing revenue and like kind of like how that flows through the swing factors around gross margins on a consolidated basis?

Yes. Generally speaking, the mix of theatrical and Guild as it's evolving over time, we're getting more and more Guild revenue as a percentage of our total revenue. Guild revenue includes things -- excuse me, Guild COGS includes things like transaction costs, the Guild tickets that we provide for our premium members and those things so that the actual Guild gross margin is slightly -- is somewhat lower than theatrical. In theatrical, so as we -- we recognize revenue from theatrical. A lot of those costs have been taken out by the theater, and then we get our cut from the theaters as those -- as that occurs. So if we have a huge release in the theater or multiple releases in the theater, you'll see gross margins going up somewhat. And as the Guild grows and becomes a bigger and bigger piece of the big -- the whole pie, you'll see some variability in the gross margin that way. It's not -- the ARPM that we measure doesn't change dramatically from month to month. There can be some variability in it. But for the most part, the gross margin is more affected by mix of theatrical and gross margin than anything else really.

And if I could add, on content licensing, one of the big innovations that happened this year was we got direct relationships with a lot of distributors, Apple, Amazon, Fandango and others for premium video on demand, and that had a sizable impact on the content licensing revenue item.

Well, Neal also mentioned...

[indiscernible].

I was just going to say, Neal mentioned in the call a little bit that we're actually, as we're gaining more and more volume in a lot of our activities with our vendors, there will also be some benefits to scale throughout the expense structure of the company over time. We talked about some of the Apple benefits that we've gotten from the deals we've been able to come from them.

Next question today is coming from Ryan Meyers from Lake Street Capital.

Congratulations on the first earnings call as a public company. First question for me, and I appreciate the color that you guys gave us on average revenue per member. Just can you talk us through this, maybe what you guys are targeting here? Is this kind of $13 to $14, the target range for you? Or is there opportunity for that to get higher?

Well, there's always opportunities in many ways. ARPM over the measurement that we're using is over a 12-month period. So you won't see high volatility from month-to-month or quarter-to-quarter in general. But the things that would affect that would be that -- which is the mix of premium to basic plus to basic with ads, as those things adjust over time, you'll see some movement in that. We would like to end also the percentage of customers or members that are coming in on an annual basis because we discount -- there's a discount for annual memberships. So those things will move the number. It could -- as the volume grows and as the Guild grows over time, that mix will adjust and change. So we're not actually targeting a specific number. We don't see a huge movement at the moment. But adding this third tier will be we're AB-testing this all the time. And so we have some idea what that will do, which will obviously, if you add a third tier to higher amount, it would imply that there would be some upward movement in that number. But again, it's one of those things like if ARPM is slightly dropping, but volume is increasing massively, At the end of the day, it's about that -- the ability to generate the revenue from the members. But it shouldn't move too hard. I think where it's currently at is -- it's a math problem driven by those factors that we just talked about mostly.

Okay. Got it. Makes sense. And then just thinking about marketing spend for the quarter, it came in about $65 million. Any sort of commentary you can give us as far as how we should be thinking about that for maybe the fourth quarter and then the balance of 2026?

Yes. I think, again, there's going to always be some volatility in that number, particularly as we offer theatrical releases. When you see a David go out, if it extends beyond -- if it goes from a double to triple to a home run, you'll see us lean in on marketing expense in those instances. So there will be some -- that could cause some significant variability in that number. We measure, we A/B test. We're always looking at the data. So as we are looking at our ability to acquire customers at a cost and it's efficient, we will continue to lean in as we see things like, as you mentioned, is ARPM starts to move in terms of we see the different tiers that are coming in. It affects customer lifetime value. We will always lean into most effective and efficient sort of space or ban for us to operate in. I wouldn't think of $65 million as a static number, though. I think that will move particularly depending on the different theatrical releases we have.

And then we expect incremental increases. I mean we're now -- to be helpful, we are now tracking the average revenue per member, and we're breaking out the marketing for the Guild and the revenue for the Guild to help investors to understand how that's incrementally growing in terms of marketing spend and Guild memberships and overall Guild revenue.

Next question today is coming from Thomas Forte from Maxim.

So first off, Neal, Scott, congratulations on going public. I have deep respect for your mission and also enjoy your movies quite a bit. One question, one follow-up. Now that you're a publicly traded company, how has that impacted your ability to attract members of the Guild?