Core Insights - Alliance Entertainment Holding Corporation has appointed Brian Maggio as Vice President of Sales for its Handmade by Robots™ brand, aiming to accelerate commercial growth following strong performance since joining the Alliance portfolio last year [1][2][3] Company Overview - Alliance Entertainment is a leading distributor and omnichannel fulfillment partner in the entertainment and pop culture collectibles industry, offering over 340,000 unique SKUs across various categories including music, video, and collectibles [1][5] - The company serves over 35,000 retail and e-commerce storefronts, providing a vast catalog that includes licensed merchandise and exclusive collectibles [5] Brand Development - Handmade by Robots™ is recognized for its unique vinyl figures that resemble knitted and crocheted characters, gaining traction among major retailers and fan communities [2][4] - The brand has established licensing partnerships with iconic entertainment franchises and has a loyal global collector base, positioning it for expanded retail penetration and product innovation [2][3] Leadership and Strategy - Brian Maggio brings extensive experience in sales strategies for licensed products across various channels, which is expected to enhance retail partnerships and support the brand's roadmap of character franchises and new product formats [3][4] - The appointment of Maggio is seen as a strategic move to deepen engagement with licensors and strengthen the brand's market presence [3][4]

Company Overview - 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 across various categories including music, video, video games, licensed merchandise, and exclusive collectibles [1][4] - The company serves more than 35,000 retail and e-commerce storefronts, providing the largest selection of physical media in the market, including over 57,300 exclusive titles [4] Upcoming Event - Alliance Entertainment's management team will present at the Noble Capital Markets' 21st Annual Emerging Growth Equity Conference on December 2-3, 2025, in Boca Raton, Florida [1][3] - The conference is designed to enhance visibility and engagement for small and mid-cap companies through presentations and one-on-one investor meetings [2] Industry Context - NobleCon is an annual event that gathers public company executives, institutional investors, family offices, and industry leaders, focusing on emerging growth companies and investor access [2]

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]