Financial Data and Key Metrics Changes - Revenue grew 11% year over year to $254 million, driven by strong demand across physical media, collectibles, and direct-to-consumer channels [5][13] - Adjusted EBITDA increased to $12.2 million from $3.4 million a year ago, a 259% improvement, with a margin of 4.8% [5][14] - Gross margin expanded 340 basis points to 14.6%, up from 11.2% in the prior year [5][14] - Net income rose to $4.9 million, or $0.10 per diluted share, compared to $0.4 million or $0.01 per share in the prior year [14] Business Line Data and Key Metrics Changes - The Handmade by Robots brand continues to scale rapidly, contributing to the collectibles strategy [6] - The collectibles segment is seeing exceptional sell-through and expanded retail placement [5] - Direct-to-consumer sales now contribute 37% of total net revenue, highlighting the growth in this channel [17] Market Data and Key Metrics Changes - The company reported a 59% year-over-year increase in physical movie sales in the first quarter, largely attributed to the Paramount licensing agreement [23] - Vinyl sales are experiencing strong demand, driven by new releases and reissues from popular artists [44] Company Strategy and Development Direction - The company is focused on expanding its exclusive content base and creating long-term value for shareholders [7] - Strategic M&A priorities remain active, with a focus on opportunities that extend licensing relationships and enhance e-commerce capabilities [25] - The company is advancing its AI-powered sales transformation to improve efficiency and lead prioritization [6][57] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining strong margin performance, citing operational investments and a dedicated team [66] - The company is optimistic about the holiday season, anticipating strong consumer demand across various product categories [59] Other Important Information - The company ended the quarter with $3.2 million in cash, inventory of $121.7 million, and debt of $66 million, reflecting improved financial flexibility [9] - A new five-year, $120 million senior secured revolving credit facility was established, reducing borrowing costs and enhancing liquidity [9] Q&A Session Summary Question: Could physical media outperform this holiday season? - Management noted strong sales across entertainment categories, with collectors excited about their collections [29] Question: How did Taylor Swift's album perform compared to her last? - Management indicated that while they fulfilled a lot for the album, it was not booked in the reported quarter, but overall demand for vinyl remains strong [30][31] Question: What are the thoughts on exclusive deals with other studios? - Management is actively pursuing new opportunities with various studios to maximize physical media sales [35] Question: Will Handmade by Robots have a significant impact in the near term? - Management expects Handmade by Robots to ramp up but does not anticipate a major financial impact until fiscal 2027 or 2028 [42] Question: What factors are driving vinyl sales? - Continuous consumer demand and new releases from popular artists are contributing to strong vinyl sales [44] Question: How significant is the Paramount licensing agreement? - The Paramount agreement has been a key driver of growth, with strong sales in collectible formats like Steelbook [48]

Financial Performance - Revenue increased by 11% year-over-year to $254 million, driven by strong performance in physical media and collectibles[2] - Adjusted EBITDA surged 259% to $12.2 million, with an adjusted EBITDA margin improvement of 330 basis points to 4.8%[2] - Net income rose to $4.9 million, or $0.10 per diluted share, compared to $0.4 million, or $0.01 per diluted share in the prior-year quarter[14] - Gross margin expanded by 340 basis points to 14.6%, reflecting a gross profit increase of 46% to $37.2 million[14] - Net income for the three months ended September 30, 2025, was $4,880 thousand, a significant increase from $397 thousand in the same period last year, reflecting a year-over-year growth of over 1,100%[25] - Adjusted EBITDA for the three months ended September 30, 2025, was approximately $12,208 thousand, compared to $3,413 thousand in the prior year, indicating an improvement of $8,795 thousand or 257%[26] Sales and Revenue Growth - Physical movie sales grew 59% year-over-year to $84 million, supported by an exclusive distribution agreement with Paramount Pictures[2] - Collectibles revenue advanced 32% to $6.4 million, driven by strong sell-through of exclusive licensed merchandise[2] Cash and Working Capital - The company ended the quarter with $53.2 million in working capital and $3.2 million in cash, reflecting efficient inventory and payable management[8] - Cash and cash equivalents at the end of the period were $3,223 thousand, an increase from $1,236 thousand at the beginning of the period, marking a net increase of $1,987 thousand[25] Liabilities and Inventory - Total current liabilities rose to $189,026 thousand as of September 30, 2025, compared to $172,729 thousand as of June 30, 2025, reflecting an increase of approximately 9.4%[23] - Inventory increased to $121,728 thousand as of September 30, 2025, up from $102,848 thousand as of June 30, 2025, representing a growth of approximately 18.4%[23] - Accounts payable increased to $173,845 thousand as of September 30, 2025, compared to $155,300 thousand as of June 30, 2025, indicating an increase of approximately 12%[23] Interest and Expenses - Interest expense decreased by 17% year-over-year, attributed to a lower average revolver balance and improved rates[8] - Cash paid for interest decreased to $2,313 thousand for the three months ended September 30, 2025, down from $2,975 thousand in the same period last year, a reduction of approximately 22.2%[25] Strategic Focus and Future Outlook - The company is leveraging AI tools to enhance sales enablement and operational efficiency, aiming for further productivity gains[5] - Looking ahead, the company is focused on sustaining profitability and cash generation while scaling AI adoption for long-term growth[11] Assets and Retained Earnings - Total assets increased to $382,991 thousand as of September 30, 2025, up from $361,228 thousand as of June 30, 2025, representing a growth of approximately 6.1%[23] - Retained earnings increased to $59,603 thousand as of September 30, 2025, up from $54,723 thousand as of June 30, 2025, reflecting a growth of approximately 8.5%[23] Fair Value Changes - The company reported a change in fair value of warrants amounting to $1,462 thousand for the three months ended September 30, 2025, compared to $41 thousand in the prior year[27]

Financial Performance Highlights - Alliance Entertainment's EBITDA soared to $122 million in Q1 FY26, a 259% year-over-year increase from $34 million[11] - Net income increased significantly from $04 million to $49 million[41, 137] - Adjusted EBITDA increased from $34 million to $122 million, a 258% increase year-over-year[43, 134] - Gross Margin increased by 340 basis points to 146%[133] Revenue and Sales - Alliance Entertainment drives over $1 billion in annual revenue across diverse categories[22] - Revenue for the twelve months ended September 30, 2025, was $1088 million[25] - Q1 FY26 revenue increased to $254 million from $229 million in Q1 FY25[32] - Direct-to-consumer (DTC) contributes 37% of Alliance Entertainment's net revenue[58] Balance Sheet - Inventory rose from $1028 million to $1217 million, reflecting holiday build[30, 135] - The Revolving Credit Facility, Net balance improved from $88 million to $56 million year-over-year[135] Strategic Initiatives and Partnerships - Alliance Entertainment has signed an exclusive multi-year Home Video and Digital Rights License Agreement with The Horror Section Inc[11] - Alliance Entertainment is the Category Advisor for Walmart's video category[63] - Exclusive distribution and licensing agreements drive annual sales exceeding $365 million[68]

Revenue Growth - For the three months ended September 30, 2025, net revenues increased to $253.974 million, up 11% from $228.990 million in the same period last year [141]. - Physical movie sales surged by 58.7% year-over-year, rising from $52.9 million to $84.0 million, driven by higher unit shipments and a 2.5% increase in average selling price [144]. - Vinyl record sales grew by 7.6%, increasing from $70.5 million to $75.8 million, supported by an 8.3% rise in sales volume despite a slight decline in average selling price [142]. - Consumer products revenue, including collectibles and electronics, rose by 14.4% from $7.3 million to $8.3 million, with collectibles revenue growing by 31.9% [145]. - Gaming product revenue declined by 20.2%, from $57.1 million to $45.6 million, despite a 42% increase in unit volume due to a significant drop in average selling price [146]. Strategic Initiatives - The acquisition of Handmade by Robots for $7.6 million in December 2024 has diversified the product offerings and contributed to revenue growth [130]. - The exclusive distribution agreement with Paramount Pictures enhances Alliance's position in home entertainment distribution, providing access to a vast library of content [128]. - Direct-to-consumer (DTC) solutions accounted for approximately 33% of gross revenue for the three months ended September 30, 2025 [141]. Financial Performance - The merger with Adara Acquisition Corp. resulted in a decrease in net equity of $787,000 compared to Legacy Alliance's consolidated balance sheet [133]. - Macroeconomic uncertainties, including inflation and geopolitical tensions, may negatively impact future business growth and financial performance [135]. - Total cost of revenues increased from $203 million to $217 million (+$13 million, +7%) year-over-year, with gross margins expanding from 11.2% to 14.6% (+3.4 percentage points) due to higher sales and improved margins [147]. - Total operating expenses rose from $23.4 million to $26.6 million (+$3.2 million, +13.7%), with selling, general, and administrative costs increasing from $13.1 million to $15.1 million (+$2.0 million, +15.1%) year-over-year [148][149]. - Interest expense decreased from $2.8 million to $2.3 million (-$0.5 million, -17.3%) due to a reduction in the average revolver balance and a lower effective interest rate [150]. - The company reported a pretax income of $6.7 million for the three months ended September 30, 2025, compared to a loss of $0.8 million for the same period in 2024 [151]. - Non-GAAP Adjusted EBITDA improved to approximately $12.2 million from $3.4 million year-over-year, reflecting an increase of $8.8 million [152]. Cash Flow and Liquidity - As of September 30, 2025, the company had a revolver balance of $58 million, down from $88 million a year earlier, representing a reduction of $30 million (-35%) [156]. - Net cash provided by operating activities was $2.7 million for the three months ended September 30, 2025, compared to cash used of $11.6 million in the prior year [158]. - Cash used in investing activities was $0.3 million for the three months ended September 30, 2025, compared to $0.1 million provided in the prior year [159]. - Net cash provided by financing activities totaled $0.4 million for the three months ended September 30, 2025, compared to $14.8 million in the prior-year period [161]. - The company has sufficient cash to fund its operations for at least twelve months from the issuance of the consolidated financial statements, supported by a new $120 million senior secured revolving credit facility [154].

Core Insights - Alliance Entertainment Holding Corporation reported a strong financial performance for the fiscal first quarter ended September 30, 2025, with net revenues increasing by 11% year-over-year to $254 million, driven by growth in physical media and collectibles [1][2][12] - The company achieved a significant increase in adjusted EBITDA, which rose 259% to $12.2 million, reflecting improved profitability and operational efficiency [1][2][17] - The integration of AI tools is yielding early productivity gains, enhancing sales enablement and operational workflows as the company prepares for the holiday season [2][6][11] Financial Performance - Net income for the quarter was $4.9 million, or $0.10 per diluted share, compared to $0.4 million, or $0.01 per diluted share, in the same period last year [2][17] - Gross profit increased by 46% to $37.2 million, with gross margin expanding by 340 basis points to 14.6% [2][12] - Adjusted EBITDA margin improved by 330 basis points to 4.8%, indicating effective cost management and a shift towards higher-margin content [2][8] Revenue Breakdown - Physical media sales surged by 59% year-over-year to $84 million, bolstered by an exclusive distribution agreement with Paramount Pictures and strong demand for premium formats [2][5] - Vinyl sales increased by 8% to $75.8 million, reflecting ongoing consumer interest in collector-grade releases [2][5] - Collectibles revenue grew by 32% to $6.4 million, driven by the success of the Handmade by Robots™ brand and exclusive licensed merchandise [2][5] Operational Efficiency - Distribution and fulfillment expenses remained stable at 3.9% of net revenue, showcasing operational efficiency through warehouse automation [2][8] - Selling, general, and administrative (SG&A) expenses slightly increased to 5.9% of net revenue, reflecting targeted investments in technology and infrastructure [2][8] Balance Sheet and Liquidity - The company ended the quarter with $3.2 million in cash and $53.2 million in working capital, indicating strong liquidity management [2][10] - Inventory rose to $121.7 million to support holiday demand, while accounts payable totaled $173.8 million [2][10] - Interest expense decreased by 17% year-over-year, attributed to a lower average revolver balance and improved rates [2][10] Strategic Outlook - The company is focused on sustaining profitability and cash generation while scaling AI adoption to enhance productivity across various functions [11] - Alliance Entertainment is well-positioned to capture market share in growth categories and deliver long-term value for shareholders through disciplined execution and exclusive content partnerships [7][11]

Group 1 - The virtual annual meeting of stockholders for Alliance Entertainment Holding Corporation is being held to consider and vote on the election of 2 Class II Directors [1] - Bruce Ogilvie serves as the Executive Chairman of the Board and is acting as the Chairman of the meeting [2] - Tony Timpano is acting as the Secretary of the meeting, and Erika Young represents Continental Stock Transfer & Trust Company as the Inspector of Election [2] Group 2 - Procedural matters are being addressed, including the agenda and rules of conduct for the virtual annual meeting [3] - A report regarding the calling of the meeting and the presence of a quorum is requested from the Secretary [3]

Core Points - Alliance Entertainment Holding Corporation (Nasdaq: AENT) is a leading distributor and omnichannel fulfillment partner in the entertainment and pop culture collectibles industry, offering over 340,000 unique SKUs to more than 35,000 retail and e-commerce storefronts [1][7] Group 1: Upcoming Events - Alliance Entertainment will participate in the 14th Annual ROTH Technology Conference on November 18-19, 2025, at the Hard Rock Hotel NYC in New York [1] - CEO Jeff Walker will represent the company in one-on-one and small-group meetings with institutional investors on November 19, 2025, following the release of Fiscal 2026 Q1 earnings [2] - A conference call to discuss the financial results for the first quarter of fiscal year 2026, ended September 30, 2025, will be held on November 12, 2025, at 4:30 p.m. Eastern Time [4][8] Group 2: Financial Information - The conference call will be hosted by CEO Jeff Walker, CFO Amanda Gnecco, and Executive Chairman Bruce Ogilvie, followed by a Q&A session [5] - A press release detailing the financial results will be issued prior to the call [4] Group 3: Company Overview - Alliance Entertainment offers the largest selection of physical media in the market, including over 57,300 exclusive titles across various formats [7] - The company's collectibles portfolio includes products like Handmade by Robots™, featuring licensed characters from leading entertainment franchises [7] - Alliance leverages operational expertise, exclusive licensing partnerships, and a scalable infrastructure to serve top entertainment brands and retailers [7]

Core Points - Alliance Home Entertainment has signed an exclusive multi-year Home Video and Digital Rights License Agreement with The Horror Section Inc., founded by Eli Roth [1][2] - The partnership aims to leverage Alliance's distribution network and The Horror Section's innovative horror content approach, focusing on physical and digital platforms in the U.S. [2][4] - Eli Roth expressed excitement about collaborating with Alliance to build The Horror Section into a leading horror brand [3] - The agreement is expected to create a consistent pipeline of new releases, enhancing revenue streams across various channels [4] Company Overview - Alliance Home Entertainment is a division of Alliance Entertainment (NASDAQ: AENT), specializing in licensing and distributing film and television content across North America [7] - The division offers a comprehensive suite of services, including post-production, marketing, and omnichannel distribution, targeting both mass-market and collector audiences [8] - Alliance Entertainment boasts over 340,000 unique in-stock SKUs, including more than 57,300 exclusive titles, making it a significant player in the entertainment and collectibles market [9] The Horror Section - The Horror Section is a fan-owned media company focused on creating a robust library of horror intellectual property across various formats, including film, television, and gaming [5] - Recent projects from The Horror Section include "Jimmy and Stiggs," "Dream Eater," and Eli Roth's upcoming film "Ice Cream Man" [6]

Core Points - Alliance Entertainment Holding Corporation will hold a conference call on November 12, 2025, at 4:30 p.m. Eastern Time to discuss its Q1 fiscal year 2026 results [1] - The call will be hosted by CEO Jeff Walker, CFO Amanda Gnecco, and Executive Chairman Bruce Ogilvie, followed by a Q&A session [2] - The company is a leading distributor and logistics provider in the entertainment and pop culture collectibles industry, offering over 340,000 unique SKUs to more than 35,000 retail and e-commerce storefronts [4] Company Overview - Alliance Entertainment provides a vast selection of physical media, including over 57,300 exclusive titles across various formats such as CDs, vinyl LPs, DVDs, and video games [4] - The company also offers licensed merchandise, toys, retro gaming products, and collectibles, enhancing its position in the market [4] - Alliance's operational expertise and exclusive licensing partnerships enable it to serve as a trusted partner to top entertainment brands and retailers [4]

Core Insights - The article revisits four growth stocks identified in December 2024, assessing their performance nearly one year later [1] Group 1: Investment Strategy - The focus is on high-yield income investments to support retirement lifestyle, emphasizing dividend-paying stocks and funds such as BDCs, REITs, CEFs, and ETFs [1] - The author expresses a commitment to making informed long-term investment decisions after experiencing the Great Recession [1] Group 2: Market Psychology - There is an interest in the human psychology of markets, which is viewed as both fascinating and complex [1]