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

At this time, I would like to welcome everyone to Angel's Q4 2025 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Luke Janssens. You may begin your conference.

Hello, everyone, and welcome to Angel's Fourth Quarter 2025 Earnings Call. Joining me are Angel's Co-Founder and CEO, Neal Harmon; and Angel's CFO, Scott Klossner. Before we begin, I would like to remind everyone that certain statements made on today's call are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and assumptions and involve risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Information regarding these risks and uncertainties is included in our filings with the Securities and Exchange Commission, including our most recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q. These forward-looking statements represent our outlook only as of the date of this call, and we undertake no obligation to update any forward-looking statements. Our fourth 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 20 minutes of opening remarks before we turn the call over to questions from our sell-side analysts. Thank you all for joining us. And now I'll turn over the call to Neal.

Thank you, and good morning, everyone. It's an honor to be with you for Angel's Fourth Quarter 2025 Earnings Call, our second call as a publicly traded company. Six months ago, we rang the closing bell at the New York Stock Exchange and began a new chapter as a public company. But the most important thing that happened when we went public wasn't the listing. It was that our core business, our community of then 1.6 million paying Angel Guild members and all the work that we've done together became visible to the entire world. Today, our Guild is 2.2 million paying members strong, and they generate approximately $360 million in annual recurring revenue with corresponding growth in filmmaker royalties. As Scott will explain shortly, we also expect to make big strides in profitability in 2026. To appreciate how far we've come, at the end of 2024, we had 550,000 Guild members, generating $90 million in recurring revenue. We believe that our total addressable market in the U.S. is over 35x where we are today. And the global market is estimated to grow over 20% each year through 2034. So we're just getting started. Angel was never created in a boardroom. It was created at kitchen tables. We believed that there were millions of people across cultures, faith and generations who wanted stories that honored the best parts of humanity that treated them as citizens capable of recognizing truth, authenticity and excellence for themselves, capable of choosing stories that amplify Light. The last 6 months have reinforced that conviction in so many remarkable ways. The most powerful signal is the continued growth of the Angel Guild. What began as a bold experiment, inviting the audience to vote on what films and TV shows should be produced and distributed has become one of the most engaged entertainment communities in the entire world. The Guild is at the heart of our model, expanding from 1% of our total revenue in 2023 to 37% in 2024 to 65% last year. We're seeing sustained engagement from people who are not just signing up, they are staying, choosing and championing the values-driven stories they want to watch. In Q4 alone, that translated to $69 million in revenue from the Guild, contributing to total revenues of $110 million, which is more than 3.5x the total revenue we delivered a year ago. And just think about how powerful their collective wisdom has been. Over the last year, guided by their feedback and ideas, we released 8 films theatrically and had 2 of the top 10 highest grossing animated domestic theatrical releases of 2025, DAVID and The King of Kings. We also achieved the highest average domestic box office per title among all independent distributors, surpassing Focus Films, Fox Searchlight, A24 and Neon. These companies have been around for decades. And Solo Mio, which was released in theaters last month, recently became the highest audience-rated romantic comedy of all time. It was an amazing year for the Angel Guild. That success tells us something important about this moment in our culture. Audiences are no longer content to sit on the sidelines. They want to participate. And most importantly, they want to enjoy stories that reflect their values, the ones they live by every single day and the ones that they want to pass down to their children. In Q4, we launched our animated musical epic, DAVID in theaters, and it was the highest-rated film of 2025. This year, the film drove the second largest wave of new paying Guild members in our company's history, trailing only the Homestead franchise. DAVID represents far more than a stand-alone release. It's a strategic franchise that we acquired and integrated in the Angel platform with a vision of where it continues to enhance retention, unlock licensing opportunities and inspire potential spin-off series and innovative projects. Most importantly, it is poised to attract guild members for years to come. In fact, DAVID is tracking to surpass Homestead as the most significant driver of active Guild memberships in the company's history, a truly exceptional outcome for a film that premiered just 12 weeks ago. But again, as I said before, our greatest success is getting my kids to listen to something other than KPop Demon Hunters. It has an incredible sound track. And all this success, the theatrical assess and the growth of the Guild directly flows to our filmmaker partners. Filmmakers have cumulatively earned $228 million since inception, and that royalty number grows with the size of the Guild. That is the financial meritocracy model working exactly as designed. When the Guild grows, filmmakers win. It is one of the most important reasons that some of the best storytellers want to partner with Angel, and they're catering what they do to the Angel Guild and this audience. On the business side, we also made meaningful progress improving unit economics for both Angel and our filmmaker partners across major digital platforms. During the quarter, we were accepted into the Apple Partner Program, which lowered our platform fees and is expected to add roughly $300,000 per month to our bottom line. We also established direct business relationships with the major digital transactional, electronic sell-through and video-on-demand platforms on market level terms, further strengthening our economics of distribution. On the library side, we entered 2026 with a very ambitious goal, 500 episodes, 200 films and 30 comedy specials to be added to the Angel platform, which is nearly double our library at the end of 2025, making Angel one of the most significant and fastest-growing libraries of beloved values-driven films and television series anywhere in the world. We are also actively pursuing partnerships with studios and distributors to bring more of their films to the platform. The theatrical slate ahead of us is one of the strongest and most exciting we have ever assembled, including Animal Farm directed by Andy Serkis of Lord of the Rings fame and featuring the famous voices of Seth Rogen, Woody Harrelson, Glenn Close, Kathleen Turner, Gaten Matarazzo, and Kieran Culkin, which will be released in May. Young Washington, starring Ben Kingsley, Kelsey Grammer, and Mary-Louise Parker opens on July 3 tied to the 250th anniversary of the United States of America. and Zero A.D., starring Jim Caviezel, Sam Worthington, Gael García Bernal, Ben Mendelsohn, and Deva Cassel, and directed by Alejandro Monteverde will be released in the fourth quarter. These are films with broad cultural relevance and they're timed, time to moments when audiences crave values-driven stories that they can watch with their families. And at CinemaCon in April, we plan to make several more exciting theatrical announcements, so stay tuned. On the product side, we're building and we've released a number of meaningful improvements in 2025. Our new recommendation engine offers personalized discovery of new films and series for our members. And as we discussed in Q3, increased watch time by 12%. We are also now integrated into search feeds of more connected TV platforms, including Vizio, Samsung and Fire TV, which enables viewers to find Angel titles on their smart TVs and for new audiences to discover all the great titles chosen by the Guild. And with the new Gift the Guild feature, members are now able to gift a Guild membership to family and friends on their own billing information and further grow and expand the Angel Guild. This will support long-term retention while deepening household engagement. But in 2026, when people refer to product or technology, they're actually wanting to talk about artificial intelligence, right? So this one force is collapsing the cost of VFX, production, marketing and software development faster than anyone predicted, and it is rocking the stock market. So what actually becomes valuable when one AI engineer can replace an entire SaaS platform quicker than a large team of legacy engineers can finish their training or a small team can deliver a film that resembles $150 million Hollywood production in record time and at a fraction of the cost. Or AI agents run flawless search engine optimization and ad campaigns 24/7, while agencies scramble to justify their existence. There's a lot of fear about Angel's impact -- or not Angel's. There's a lot of fear about Angel, too. There's a lot of fear about AI's impact. But at Angel, we know AI will never replace human relationships, at least not until it has a family. So in reality, AI tools used effectively can strengthen the relationships in the Angel community, relationships between real people, between filmmakers and guild members. Let me show you what AI looks like at Angel. Now many of you know that we built our own software platform to support the Angel Guild, ticketing and our streaming technology. And we've been working with AI tools for years. In 2025, we set a bold goal to achieve a 10x productivity increase in key functions using AI, and we made significant progress. Our engineering team writes most of its code with AI assistance. As a small example, a strike team built and launched the SKETCH app in a matter of weeks, almost entirely AI written. Kids -- and this made me the most popular dad at the family reunion, but kids loved to draw their pictures and bring their creations to life using the SKETCH App, sharing them with their families and seeing their creations in the end credits on the big screen. We also believe like-minded communities that form around the moviegoing experience or the theater or attending a premier, these will become more valuable, not less. In fact, last year, Cinema United found that young people, Gen Z are not only the most frequent moviegoing demographic, but also the fastest growing, increasing from 4.9 to 6.1 visits per year. That's 25% year-over-year growth. Young people, they look to unplug and share experiences with the community. On the tech front, we're accelerating the pace at which we build for the Guild. In January, a single engineer in order to upgrade our apps and provide better backwards compatibility, rewrote the entire code base for our Apple TV. The new app launched last month and simultaneously improved video playback smoothness, playback quality and app start-up time. 1 engineer, 3 improvements at once, all in the same month. The productivity gains are expanding beyond engineering as well. Our theatrical distribution team built its own internal scheduling application without engineering help. Our media operations team reduced content scrub time from 1 hour to 1 minute. Again, these are not technical people. These are real breakthroughs and they're not temporary. They are the new pace of work at Angel. Product managers, support agents, finance professionals and most importantly, executives are all harnessing the power of AI to benefit the Guild and filmmakers and everyone else on the team. We're so proud of what this team has accomplished. Imagine we have just barely over 300 people, and we're doing the work of studios in the past that have had thousands of people. Finally, as AI tools become more capable, our partners will be able to produce more projects at a lower cost. Our Guild curation model means we can identify and distribute more of the best values-driven films and television series efficiently without sacrificing quality, transparency or storytelling power. We're about to get flooded with more stories than humans have ever seen. It's so exciting. And that tsunami doesn't devalue storytelling. It multiplies what great curation is worth, and no one in the world curates like the Angel Guild. So in this ever-changing world of AI, what cannot be easily replicated, human connections, shared identity, community and family trust. That is the Angel Guild. Thank you to our Guild members. Thank you to our investors. Thank you to our filmmaker partners, and thank you to everyone who believes in what we are building here at Angel. The first chapter as a public company has just begun. We can't wait to see the stories we will share in the months and the years to come. Now with all of these efficiencies and innovations, I'm excited to now turn it over to Scott to talk through how all of this is affecting Angel's bottom line in 2026.

Thanks, Neal, and welcome, everyone. I'm going to walk you through the financial details behind a great quarter for Angel. 2025 Q4 revenue was $110 million, up 254% from $31 million in Q4 of 2024. For the full year, we delivered almost $322 million in total revenue. That's up 233% from $97 million in the prior year. As mentioned, our Guild continues to grow and as of today, has eclipsed 2.2 million members. Now if you do the simple math, as Neal stated, take members times an average revenue per month of $13.67 for 12 months, that represents $360 million in annual recurring revenue. Guild revenue as a share of total revenue was 62.9% in Q4. That's up from 46.3% in Q4 of 2024, and this is by design and will continue to increase through the years ahead. Accordingly, Guild membership revenue was the largest driver, contributing $69 million year-over-year in the quarter. Theatrical contributed $31 million powered almost entirely by the film DAVID. The remaining growth came from digital purchases, rentals, physical product and licensing, each growing and each reinforcing the other. Our trailing 12-month average revenue per Guild member stands at $13.67. This figure will evolve slightly over time as we continue rolling out new features. For instance, the gifted membership feature Neal mentioned, could influence ARPM downward some while still contributing positively to our margins. Now as previously announced, we closed the quarter with 2 million Guild members, up from 1.6 million in Q3 and up from 550,000 at the end of 2024. Today, as I mentioned, we stand at 2.2 million Guild members. Net loss for Q4 2025 was $79 million compared to a net loss of $37 million in Q4 of 2024. Selling and marketing expense was $121 million compared to $38 million in 2024. Now it's important that I speak to both of these numbers. Q4 featured 3 releases, emblematic of Angel's mission to amplify light. One of them in DAVID was an unexpected opportunity, an epic history-making film to have and to share, but it required a significant investment in Q4 promotion and advertising to bring the film to screens. And given its late release date, December 19, only 11 days of revenue were recognized during the quarter for that film. However, the bulk of the advertising spend was deployed in 2025. Now the returns on this marketing spend and investment, things like international distribution, premium video on-demand and the real prize of Guild membership growth will materialize throughout 2026. Unit economics with our Guild continue to improve as well. We are attracting Guild members more efficiently than ever. Marketing spend remains a growth driver. However, the cost to acquire each new member is improving, and that improvement is flowing directly to the bottom line. And we expect this to translate into an improved adjusted EBITDA loss in 2026 of no greater than $25 million for the year, representing meaningful progress relative to 2025. Our gross margin percentage was at 60% and G&A expenses grew at only 25% year-over-year compared to our revenue growth of 233% year-over-year. Now Angel ended Q4 with $44 million in cash and cash equivalents compared to $7 million in 2024 at the year-end. Now let me say how pleased we are with the team's execution and the performance of the films and television series that are now part of Angel. We will continue to provide in 2026 and beyond transparency through our quarterly updates, and we will look forward to sharing more as the year develops. Thank you. And with that, I'll turn it back to the operator to open the line for questions.

[Operator Instructions] And your first question comes from Eric Wold with Texas Capital.

So a couple of questions. I guess, first off, Scott, it sounds like, obviously, on the adjusted EBITDA guidance of being no greater than $25 million loss. It clearly doesn't sound like you want to slow down on subscriber growth, but that growth is coming a lot more efficiently. Maybe talk a little bit about what is driving that efficiency. What are you seeing? Is it better targeting, improved choice of where you advertise, stronger retention? I guess, maybe all of the above? And kind of what's driving that more -- that better efficiency? And I have a follow-up as well.

It's good to hear from you. I think the important thing to understand is, look, we've talked a little bit about the flywheel in prior calls and in different meetings as we talk about the business. And what we're seeing is with this amazing slate of films that we have out there and series that we're bringing to the platform, we're seeing better and better retention. We're seeing better content, which leads to more customers coming onboard. It means that as those -- as more customers come onboard, that creates greater royalties for the filmmakers. As we get bigger and larger royalty pool available for the filmmakers, we'll get better filmmakers and better content. And that just grows and grows and sort of is that flywheel effect. We're seeing that happen. We're seeing the growth of Guild. We added 400,000 members in Q4 of this year. That was a 25% increase. That increase provided much greater opportunity for us to be able to acquire films and series through the royalty pool. And that flywheel, of course, sort of represents itself in terms of the customer offering with a greater customer offering, we're able to look at the retention numbers will be coming -- are coming down -- or excuse me, the opposite. The retention numbers are going up, which then gives us a better ability to invest in acquisition. You don't look at CAC, just the expense piece of the ROI. You have to consider in terms of the CLV, the customer lifetime value. So as that customer lifetime value grows with greater retention, it gives us the ability to invest more efficiently in acquisition. And these great films in and of themselves help with the conversion numbers. So as conversion goes up, we're able to, again, acquire more efficiently, more cash effectively to bring those customers onboard and grow the company. As you've seen, we're at 2.2 million members as of right now. We're not backing off on growth in any way, shape or form. This is a growth company, and there's no trade-off to become more profitable. This is -- as we've talked through in the past, this is sort of an artifact of what happens as you gain a great membership base that wants to be a part of the Guild and continues to enjoy the films and series that we're bringing.

No, that's perfect. I guess the follow-up would be, I guess, on the content side, I guess, in the past, you've kind of talked about theatrical content as being really a driver of subscriber growth. And clearly, that was the case with DAVID in the fourth quarter and first quarter. I guess as that -- the Angel Guild becomes increasingly self-sufficient going forward and getting closer to kind of driving profitability on its own, is there a point at which theatrical releases will increase and themselves to be more of a profit driver than more of a driver of marketing towards -- I know they kind of work hand in hand, but would you think of the theatrical side as being more of a -- I don't say stand-alone, but more of a stand-alone profit center, so to speak?

That's a great question, Eric. So we think of theatrical as lead generation and as community building. So it's going to be important in this era. As you know, Gen Z is the largest demographic when it comes to attending theaters. They're also -- they grew up on devices. And they -- it's really important to them for -- to have these experiences in person as a community. And they grew 25% in their attendance to theaters over the last year from 4.9 to 6.1, I believe, and visits per year in theaters. So that's really important. People want to experience things together. And this is particularly important for the Guild. The Guild wants to go and see their work have an impact on the rest of the culture and society. And they might want to bump into Guild members while they're there in the theaters laughing together, watching Solo Mio. And so this theatrical experience is really, really important for the community side of Angel. But it's also important for the filmmakers. Filmmakers feel like the pinnacle of any filmmaking or storytelling career is to be on the silver screen. And it's one of the key reasons that Kevin James came to Angel is because he wanted Solo Mio. He knew that, that would be experienced better in person. And sure enough, true to form, it was. When I attended, like people were laughing in person, clapping, and it was really, really fun to experience that. We see that as so beneficial to the growth of the Guild and to getting filmmakers excited about coming to Angel that it's critical to the growth of the Guild. But it's not important for that division to be a profitable business for us. We see those as marketing events. We see those as breakeven events. That's our strategy is to keep them as close to breakeven as possible. And then once in a while, you'll have a breakout that will generate profitability, but that's going to be the exception, not the rule, and it's not part of the strategy. The strategy is to turn those events, whether they are small releases like I Was a Stranger or midsized releases like Solo Mio or large releases like DAVID, every single one of those is going to be measured by new filmmakers it brings in and how well it grows the Guild. That's the way that we track the business. That's the way that we measure the success of theatrical, and that's the way we'll continue to do so.

Your next question comes from Ryan Meyers with Lake Street Capital.

First one for me. If we think about the selling and marketing that you reported in the fourth quarter, can you give us how much of that actually came from the DAVID marketing spend? And then how we should think about that in 2026 as you're targeting that adjusted EBITDA for the full year?

Yes, that's a great question, and I'm glad you asked it. So we -- fortunately, we break out now our marketing Guild line. And then every -- all the rest of the marketing for the other verticals is another bucket in our reports. So that gets you pretty close. So we haven't published that specific number, but it gets you pretty close to where you should be thinking about it. The very powerful thing about selling and marketing expenses in Q4 is the move that we made, Ryan. And so if you follow the history, I think we signed and resolved the litigation item on DAVID October, the beginning of October. And then we launched December 19. So it was like 80 days roughly. It was a bold move for us to pull that off in fourth quarter to acquire that film, acquire all the rights launch it in about 80 days, but it is so exciting and the reason that we have so many great results already so far this year is because we made that decision. And DAVID is going to give us the opportunity from a derivative standpoint for additional series content, a Broadway musical and video games among other things. But the most important thing about DAVID is that we have the highest Guild-rated title in our history, the highest Rotten Tomatoes audience score of last year like for the entire industry or at least tied with it. And this -- and then it's an animated feature that's 5 plus as rated by the Guild. This is title, we haven't even begin to see where this title is going to take the Guild growth and attract and bring in families into the platform and additional titles along these lines. So it's roughly broken out for you. At least the Guild is very clear for you, and DAVID was a big chunk of the rest of it. And it was an important move. It was a bold move, and it's going to be paying dividends throughout 2026 and beyond.

Okay. Got it. And then just wondering if you can comment now that the Guild has grown the way that it has over the past 12 months or so. Just maybe some early signs of what you're seeing in terms of customer churn there? Maybe how long a lot of the Guild members are sticking with the platform? Just any sort of color and visibility into that would be helpful.

Great. Great question, Ryan. So we don't publish our churn numbers, but I will say that with the growth of the library, we're seeing improvements in our retention. And we -- and it's also giving us more breadth in audience growth, more diversity in audience growth, more scale, which is why we've broken into numbers way beyond what we had originally projected for 2025. And so far, we've already added 10% to the Guild in 2026. So we're seeing improvements on that front. We're actually seeing improvements this quarter, and the report for this quarter will come up on us quickly in terms of marketing efficiency. But it's really important that the reason that we are bullish about both growth and our path to profitability is because these numbers are turning out better than expected and they're improving.

Could I add a point to that? I think it's really important. If you -- if you had the opportunity to meet our acquisition team, the team that acquires content for us, they have found -- one of my favorite meetings of the week is to sit down with the acquisition team because it's amazing to watch the innovation that's occurring, whether it's utilizing AI or just their smarts and their ability to find better ways and they're constantly improving every day, they wake up as the score is 0-0, and they have to win that day. And it's fun to watch. These people are just doing amazing things in terms of their abilities and their capability and what it's bringing to the team. We're adding great content. We're doing great things, but it's really the people behind it that are driving all of that activity and the results, which so far have been -- they've been great, and we're excited about it. And we're even more excited as what's coming because it just -- it's not a -- it's not a linear function. We're seeing geometric sort of progression improvements almost in every area of the business.

Your next question comes from Jason Helfstein with Oppenheimer & Company.

So I have 2 questions. So first, yes, you gave us the breakdown of sales and marketing in the K, so we can kind of get a sense of basically like the variable contribution profit or loss between the Guild and theatrical. I guess as you're thinking with the build to the or the EBITDA guide for 2026, i.e., the better than '25 loss, I mean, how -- obviously, you're not going to give specifics, but does one line versus the other have a disproportionate impact? So if we're thinking about like the unit economic improvement at the Guild versus, let's say, theatrical, is one of those disproportionately moving that kind of EBITDA loss improvement? Or should we think about it even? Or any other color, I guess, as you're thinking about like efficiency of adding Guild members for '26?

Yes, I can address part of that for sure. I think we've talked about it in some -- to some degree in regards to the flywheel and how we are funding investments and unit economic benefit, both in the -- well, particularly in the Guild, and that's why the Guild continues to grow so fast. And at the same time, we're able to look at our guidance in terms of the EBITDA loss that we reflected upon. I think we will continue to see that. It's mostly -- it's happening on both sides as well. We're getting better about understanding our customer in the theatrical. I think to date, we've done 15. How many theatricals have we done?

I think we're over 17 now.

17 now, all right, because all this years, 17. And it's a learning process as you do each one, and we're getting better at them, and it varies. Every theatrical release is a little bit different. But the real sort of changes that we're seeing in terms of the guidance or the profitability of the company or moving towards profitability. The majority of that is coming from seeing, number one, the size of the Guild. It's just spinning off more and more resource that we can then use for acquisition, et cetera. And then number two is that the team has just found some -- the usage of this content that we have, these great films that we're bringing in, the retention numbers that would improve through the series, et cetera, that we've got continues to see it. So that's really driving what's behind a lot of this.

If I could add, Scott, Jason, thanks for your question. We also we -- at the scale of a release like DAVID, we got some key learnings through that process that we haven't been able to experience before that are very exciting around awareness and conversion marketing and that mix and the strategy in which it's rolled out. And it's applicable to the entire business. So we've already taken some of those principles, and we've applied them to the Guild acquisition strategy. And so some of our key efficiencies that we're going to experience in 2026 are due to the learnings and the scale of the DAVID release.

And then a follow-up question. So I guess, post the Warner Bros. Paramount acquisition, they're going to be -- meaning the Paramount is going to be looking for a lot of cost synergies. I assume that's going to mean probably a lot of unhappy talent and how you think about that potentially opens up more doors for you to work with more talent? And I guess, if you had many more doors open of talent to work with, do you feel like you have enough capital to support those projects? Or are you thinking about potentially how you work on bringing more outside capital to support more creative projects, if that was an opportunity?

I love that question. So we just feel like that lots of stars are aligning for Angel in terms of what's going on in technology, what's going on in society culturally. We are -- Angel is a -- has managed to become a uniting force in the world because we're values driven. And for example, there's -- we got some kind words and Amy Redford, Robert Redford's daughter was in the office yesterday presenting and thanking the company for providing such an innovative path to market when Hollywood is facing so many problems right now. And so between Amy Redford and Ben Kingsley and Mary-Louise Parker and Andy Serkis and all the talent that are beginning to come and work with Angel, we just feel like that we have a very big tent and a lot of opportunities as long as the filmmaker partners are willing to serve an audience and serve an audience first, and that's what they need to do. And the people who are coming to Angel are excited about that. And we're pleased in the way that all of that has turned out because we've started licensing some great titles from Samuel Goldwyn and other names are slipping me. But if you've been in the Guild, you've also seen titles coming through from Lionsgate and there are other titles that are coming through the Guild right now where larger studios are now seeing the advantage and the benefit and the economic power of the Guild. And so we have hopes that some of those titles could one day be on Angel as long as they amplify light. And as our library grows and becomes a beloved, trusted library that our ability to attract filmmakers will improve and then also our ability, like Scott said about the flywheel, our ability to attract broader and broader audiences to the guild will improve as well. So we -- all positive for us, the way that, that's going down, there's a positive side that there might be licensing opportunities there. But there's also the side where the old model is breaking down and people are trying to figure things out. And it almost feels like that with the AI innovations that are happening that investors are sensing that there's something going on. And it's like if you imagine a wave or the tide that the water is all going out and funding around film production is drying up right now because everyone senses that something is a foot where things are going to actually change dramatically. Now we believe at Angel that AI can be a support to film production. It's going to drop the cost of film production. But there will always be this human element, the element of soul, where people can recognize when there's soul behind the story, behind the actor, behind the script, they can recognize that it's another person, and they sense and fill that. But what we think is going to happen is that this water is going to recede and all this investment is going to recede. And then somebody in the next 12 months is going to release a film that looks like it's $150 million production, and they're going to do it with a very small team, maybe in a basement and then that title is going to rock the world. And then as soon as the path to doing like soul-filled titles that are also assisted like bring down the VFX production costs and all the other production costs of the titles, then there will be a tsunami of investment in smaller, tighter, more focused storytelling. And then the 1,000 independent films that are produced every year are going to turn into 3,000, 5,000, 10,000. We just have no idea where it's going to grow, but there's a tsunami of opportunity that's coming. And what Angel needs to do as this investment has receded is take advantage of the opportunities in the titles and that have been coming to us, grow them as far as possible and build our community to the point that we will be the best positioned as a community to build an amazing library and sift through all of that -- all these titles that will be coming and the new investment that will be coming once people have figured it out. And we just think we're so well positioned to do so, and we're embracing these AI tools that these AI companies are losing billions of dollars, and we just feel like AI is on sale. We need to just get as much of this -- of much gains and leapfrog what is possible with the Angel Guild during this window. And then the funding is going to come. As soon as people can see clearly, how do I make sure that my invested dollars in storytelling are used well. And that's coming, and we're excited about it, and it's coming soon.

Your next question comes from Thomas Forte with Maxim Group.

So first off, Neal and Scott, congratulations on an excellent fourth quarter and full year, and congrats on DAVID, Solo Mio. One question and one follow-up. So I think there's a misperception in the marketplace that your films are only religious-based. I've watched your whole theatrical release library. And while some of the content heavily focused on religion, such as DAVID, His Only Son and The King of Kings or has strong religious ties such as Bonhoeffer, Cabrini and Sound of Hope, it's clear to me your efforts to amplify light go beyond religion as illustrated by a growing number of titles, including the Sketch, Sound of Freedom, Solo Mio and the upcoming Animal Farm. So I'd appreciate your thoughts if you believe consumers, investors and content creators are starting to realize that your excellent content goes beyond religious theme work and what, if any, are the implications of that?

Well, Tom, first off, -- you watched our entire library. That's amazing. So for you to pick up on that, pick up on the fact that Angel is broad. It is very broad and values driven is a broad idea the way that you have, very impressed that you've done so. So we -- and it is what you're seeing is happening. You'll see a release right now, Tom, on the Amy Redford project. And then, of course, we've got Animal Farm with Andy Serkis and Seth Rogen and an incredible cast and the guild found amplifies light. And this is just represent -- in fact, if you look at this year, we have -- I was a stranger, was not necessarily faith. It was values. Solo Mio, it was so fun. It was values-driven romantic comedy. Animal Farm, values-driven. Young Washington, it's a war epic and historical project for the 250th anniversary of the United States of America. And Zero A.D., it's a thriller, like -- but it is related to a religious story. So if you look at just the slate so far this year, and there's more coming at CinemaCon, 4 of the 5 announced titles are values-driven and ones faith, but it's a broad title and that it's a thriller and the story is told in a way that it can reach all kinds of audiences. So I'm glad you picked up on it. I think that, that is accelerating just by virtue of like Animal Farm is a great example. Amy Redford announcement is a great example. And the audience is appreciated as well. If there's anything that we hear consistently from Guild members and then other people in the audience is that what Angel knows is how to tell a story in a way -- and when they say that, they're actually meaning the Guild is -- they believe that we're making them. But in reality, Angel doesn't make stuff. We just build a community and tool so that the Guild can select stuff that's the best. But people recognize the excellence of what's coming through Angel and how good the storytelling and that they generally speaking, come away from an Angel project thoughtful wanting to do better, wanting to change their lives for the better or feeling uplifted. And that's a core brand element that's just building in power momentum as we go. So glad you picked up on that, Tom.

Great. So Neal, for my follow-up, can you talk about your curation process for theatrical releases? For example, your recent release, I Was a Stranger was an excellent movie, had high scores on both the Rotten Tomatoes, Tomato Meter and Popcorn Meter, but it had a very modest box office performance. Beyond the guild voting for a title, how do you determine which ones are released in theaters?