Core Insights - Alliance Entertainment Holding Corporation (AENT) is showcasing its Handmade by Robots brand at New York Comic Con, featuring exclusive figures from popular franchises [1][4] - The company has rapidly expanded the Handmade by Robots brand since its acquisition in December 2024, with major new releases planned for 2025 and 2026 [5] Company Overview - Alliance Entertainment is a leading distributor and fulfillment partner in the entertainment and pop culture collectibles industry, offering over 340,000 unique SKUs across various media [1][5] - The company serves more than 35,000 retail and e-commerce storefronts, providing a vast selection of physical media, licensed merchandise, and collectibles [5] Product Highlights - At the New York Comic Con, Alliance will debut several exclusive Handmade by Robots figures, including first-to-market items at the 7 Bucks A Pop booth [4] - The figures are crafted in a unique "knit-look" aesthetic, designed to resemble hand-stitched items while being made from high-quality vinyl [4]

Core Insights - Alliance Entertainment Holding Corporation successfully launched Taylor Swift's album "The Life of a Showgirl," shipping over 330,000 units across vinyl and CD formats to various retail and e-commerce channels [1][5] Company Performance - The Consumer Direct Fulfillment (CDF) program was a standout feature, with nearly 70% of shipments delivered directly to consumers, most processed within a 48-hour window before the release date [2] - The company demonstrated its capability in omnichannel distribution, ensuring timely deliveries while adhering to high-security protocols [2][5] Operational Excellence - Alliance's infrastructure allowed for quick and secure scaling across all sales channels, showcasing the effectiveness of its end-to-end logistics during the album release [3] - The company implemented enhanced security measures at its distribution center to prevent leaks and ensure the integrity of the release [3][4] - The strategic warehouse location in Shepherdsville, KY, and the commitment of nearly 700 employee owners contributed to the efficient execution of the launch [4] Industry Position - Alliance Entertainment is recognized as a reliable distributor in the entertainment and pop culture collectibles industry, trusted by top-tier partners for executing complex, high-volume releases [5][6] - The company offers the largest selection of physical media in the market, with over 340,000 unique SKUs, including exclusive titles across various formats [6]

Core Insights - Alliance Entertainment Holding Corporation (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][3] Company Overview - Alliance Entertainment provides a vast selection of physical media, including over 57,300 exclusive titles across various formats such as compact discs, vinyl LPs, DVDs, Blu-rays, and video games [3] - The company also offers licensed merchandise, toys, retro gaming products, and collectibles, enhancing its position in the collectibles market [3] - Alliance's collectibles portfolio includes the Handmade by Robots™ line, featuring stylized vinyl figures of licensed characters from popular entertainment franchises [3] - The company leverages operational expertise, exclusive licensing partnerships, and a scalable infrastructure to serve top entertainment brands and retailers [3] Upcoming Events - Bruce Ogilvie, Executive Chairman, and Jeff Walker, CEO of Alliance Entertainment, will present at Noble Capital Markets' Emerging Growth Virtual Equity Conference on October 8, 2025, at 10:30 a.m. Eastern Standard Time [1] - The presentation will include a fireside style Q&A session and scheduled 1x1 meetings for registered, qualified investors [1][2]

Core Insights - Alliance Entertainment Holding Corporation has closed a new $120 million senior secured revolving credit facility with Bank of America, replacing its previous asset-based lending facility and reducing borrowing costs by up to 250 basis points [1][4]. Financial Details - The new credit facility has a term of five years and an interest rate of SOFR plus 150 basis points through March 2026, increasing to SOFR plus 162.5 basis points thereafter [7]. - At the closing on October 1, 2025, the loan balance was $68.5 million, with total undrawn availability at $51.5 million [7]. Strategic Implications - The new facility is expected to enhance financial flexibility, supporting operations, growth initiatives, and working capital needs [1][4]. - The agreement reflects Bank of America's confidence in Alliance's business model and progress in improving margins, allowing the company to advance long-term growth initiatives while maintaining capital discipline [4]. Company Overview - Alliance Entertainment is a leading distributor and fulfillment partner in the entertainment and pop culture collectibles industry, offering over 340,000 unique SKUs across various media formats and serving over 35,000 retail locations [5]. - The company has built category leadership by focusing on scale, exclusive content, and operational efficiency, positioning itself for disciplined, profitable growth [4].

Summary of Alliance Entertainment Holding Corporation Conference Call Company Overview - **Company**: Alliance Entertainment Holding Corporation (NasdaqCM:AENT) - **Industry**: Distribution of entertainment products including toys, collectibles, music, movies, and video games [2][3] Core Business Model - Alliance Entertainment operates as a stocking distributor, providing e-commerce fulfillment and drop shipping services to independent and chain retailers [2][3] - The company manages a wide selection of over 340,000 SKUs from major suppliers in the entertainment sector [2][3] Financial Performance - **Revenue**: Over $1 billion, with a breakdown as follows: - Vinyl: 32% (~$320 million) - Gaming: 24% (~$240 million) - Movies (DVD, Blu-ray, UHD): 26% (~$260 million) - CDs: 12% (~$120 million) [5][6] - **Earnings Per Share (EPS)**: Increased from $0.05 to $0.11, more than doubling despite a slight revenue decline [9] - **Gross Profit**: Increased from $11.4 million to $15.8 million year-over-year [9] - **Adjusted EBITDA**: Significant growth noted, contributing to stock performance [9] Growth Drivers - Licensing agreements with major studios like Paramount have boosted revenue and gross profit margins [6][7][14] - The company has a strong focus on operational efficiency, including investments in automation (e.g., AutoStore system) that reduced labor costs significantly [11][22] - Direct-to-consumer fulfillment accounts for 40% of the business, enhancing revenue streams [12][33] Market Trends - Vinyl sales are experiencing a resurgence, with significant consumer interest in physical media as collectibles [35] - The company capitalizes on events like Record Store Day, shipping over 600,000 units during the latest event [12] Strategic Initiatives - Alliance Entertainment is exploring further licensing opportunities and potential acquisitions to enhance its market position [25][32] - The company aims to maintain gross profit margins above 15% while expanding its top line through strategic growth initiatives [25] Financial Health - The company has reduced its line of credit from $70 million to $55 million, with expectations to lower it further [21] - Interest expenses are decreasing, and the company is in the process of refinancing for better rates [22] Insider Ownership - Insiders own approximately 77% of the company, indicating strong alignment with shareholder interests [19] Analyst Coverage - Maxim has initiated coverage with a target price of $10, while the stock is currently trading above $7 [22] Conclusion - Alliance Entertainment is positioned for growth through strategic licensing, operational efficiencies, and a focus on consumer trends favoring physical media. The company is actively seeking opportunities to expand its market presence while maintaining strong financial health.

Group 1 - The analyst initiated coverage of Alliance Entertainment Holding Corporation (NASDAQ: AENT) as a Buy, suggesting a contrarian view against the consensus for this microcap [1] - The focus is on producing objective, data-driven research primarily about small- to mid-cap companies, which are often overlooked by many investors [1] Group 2 - The analyst has a beneficial long position in the shares of AENT through stock ownership, options, or other derivatives [2]

Financial Data and Key Metrics Changes - In fiscal 2025, the company reported net income of $15.1 million, a 229% increase from the previous year [6][11] - Adjusted EBITDA grew 51% to $36.5 million, with gross margin improving from 11.7% to 12.5% year-over-year [6][11] - Earnings per share rose to $0.30, more than tripling from $0.09 in fiscal 2024 [6][11] - For Q4, net income was $5.8 million, or $0.11 per diluted share, compared to $2.5 million, or $0.05 per share in the prior year [7][9] Business Line Data and Key Metrics Changes - Q4 net revenue was $227.8 million, down from $236.9 million in Q4 fiscal 2024, while gross profit increased 34% year-over-year to $36 million [9][10] - Direct-to-consumer fulfillment accounted for 37% of gross revenue, up from 36% in fiscal 2024, reflecting broader retailer adoption [18][19] Market Data and Key Metrics Changes - The company has built a differentiated platform to lead in the collectibles and physical media market, with over 340,000 SKUs and relationships across 35,000 retail storefronts [5][6] - Exclusive partnerships accounted for more than $350 million in revenue, or over a third of total sales [13][52] Company Strategy and Development Direction - The company focuses on exclusive distribution and licensing strategies to access unique, in-demand products, enhancing margins and profits [13][52] - The strategy includes scaling high-margin categories, deepening exclusive content partnerships, and strengthening the fulfillment model [22][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the sustainability of margins and profitability, expecting continued growth driven by strong consumer demand and exclusive content partnerships [8][23] - The company is preparing for significant new releases in fiscal 2026, including franchises like DC Comics, Disney, and Marvel [16][22] Other Important Information - The company has made significant progress on its balance sheet, reducing revolver debt by 22% and generating $26.8 million in cash flow from operating activities [7][11] - Automation and warehouse optimization have led to measurable cost savings and improved operational efficiency [20][21] Q&A Session Summary Question: How should investors think about your ability to sign similar deals with other studios? - Management is actively working on long-term opportunities in the consolidation of physical DVD distribution [25][26] Question: How are you impacted by tariffs, and what efforts are you undertaking to mitigate the impact? - The company has minimal impact from tariffs in music and video, but some price increases are seen in collectible products due to tariffs on items manufactured in China [27][28] Question: Can you talk about your preferences regarding capital allocation? - The company focuses on paying down debt and reinvesting cash into strategic acquisitions and internal investments for growth [29] Question: How sustainable is the lift from the Paramount Pictures exclusive license? - The company expects incremental growth from the Paramount deal, with a focus on expanding sales opportunities across various channels [33][34] Question: What does it mean to be selected as Walmart's video category advisor? - This designation allows the company to assist Walmart with overall planning in the video category, enhancing its strategic partnership [36] Question: Can you share the profile of your current M&A pipeline? - The company is actively engaged in multiple acquisition conversations, focusing on strategic fits and operational synergies [38][39] Question: How much of the margin expansion is structural versus cyclical? - The margin enhancement is attributed to structural improvements and significant cost savings from operational efficiencies [41] Question: How is AI going to help the business? - AI initiatives are aimed at improving sales efficiency and operational processes, with ongoing training and integration into various functions [42][44] Question: How do you balance investing in legacy categories versus building out higher growth segments? - The company continues to see growth in legacy categories like vinyl while also investing in new initiatives [46][47] Question: What gives you confidence Handmade by Robots can break out? - The brand has a strong design and licensing potential, with a robust growth strategy and existing operational infrastructure to support it [48][50] Question: Why is exclusivity such a big advantage for Alliance? - Exclusive partnerships allow the company to become the sole supplier for major retailers, enhancing sales opportunities and competitive positioning [52][54]

Financial Data and Key Metrics Changes - In fiscal 2025, the company reported net income of $15.1 million, a 229% increase from the previous year [6][11] - Adjusted EBITDA grew 51% to $36.5 million, with gross margin improving from 11.7% to 12.5% year-over-year [6][11] - Earnings per share rose to $0.30, more than tripling from $0.09 in fiscal 2024 [6][11] - For Q4, net income was $5.8 million, or $0.11 per diluted share, compared to $2.5 million, or $0.05 per share in the prior year [9][10] Business Line Data and Key Metrics Changes - Q4 net revenue was $227.8 million, down from $236.9 million in Q4 fiscal 2024, while gross profit increased 34% year-over-year to $36 million [9][10] - The company achieved a gross margin of 15.8% in Q4, up from 11.4% in the prior year [9][10] - Direct-to-consumer fulfillment accounted for 37% of gross revenue, up from 36% in fiscal 2024, reflecting broader retailer adoption [18][19] Market Data and Key Metrics Changes - The company has established exclusive partnerships that accounted for over $350 million in revenue, representing more than a third of total sales [13][52] - The exclusive distribution agreement with Paramount Pictures is expected to contribute significantly to sales growth in fiscal 2026 [35] Company Strategy and Development Direction - The company is focused on expanding exclusive content partnerships and enhancing its fulfillment model to drive growth [22][23] - The strategy includes scaling high-margin categories and leveraging automation and AI to improve operational efficiency [20][21] - The company aims to lead in the collectibles and physical media market by building a differentiated platform [8][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the sustainability of margin improvements and profitability as the company enters fiscal 2026 [23] - The company anticipates strong consumer demand heading into the holiday season, supported by exclusive content releases [8][16] - Management highlighted the importance of exclusive partnerships in driving competitive advantage and revenue growth [13][52] Other Important Information - The company reduced revolver debt by 22% and improved inventory alignment, ending the year with $26.8 million in cash flow from operating activities [7][11] - Automation investments and warehouse consolidation have led to measurable cost savings and improved operational efficiency [10][20] Q&A Session Summary Question: How should investors think about your ability to sign similar deals with other studios? - The company is actively pursuing long-term opportunities in the consolidation of physical DVD distribution and is engaged in ongoing conversations with other studios [26] Question: How are you impacted by tariffs, and what efforts are you undertaking to mitigate the impact? - The company has minimal impact from tariffs in music and video, but some price increases have been observed in collectible products due to tariffs on items manufactured in China [27][28] Question: Can you talk about your preferences regarding capital allocation? - The company prioritizes paying down debt and reinvesting in strategic acquisitions and internal investments to support growth [29] Question: How sustainable is the lift you've seen from the Paramount Pictures exclusive license? - The company expects to see continued growth from the Paramount deal, with incremental impacts anticipated in fiscal 2026 [34] Question: What does it mean for the company being selected by Walmart as its video category advisor? - This designation allows the company to assist Walmart with strategic planning and operations in the video category, enhancing its partnership with a major retailer [36] Question: Can you share the profile of your current M&A pipeline? - The company is actively engaged in multiple acquisition conversations and evaluates opportunities based on strategic fit and operational synergy [38][39] Question: How much of the margin expansion is structural versus cyclical or one-time factors? - The margin enhancement is attributed to structural improvements and cost savings from operational efficiencies, not one-time factors [41] Question: How is AI going to help the business? - The company is implementing AI initiatives to improve sales efficiency and operational processes, focusing on enhancing the capabilities of its sales team [42][44] Question: How do you balance investing in legacy categories versus building out higher growth segments? - The company continues to invest in legacy categories while also pursuing growth opportunities in higher-margin segments [46][47] Question: What gives you confidence Handmade by Robots can really break out? - The company sees significant potential in the Handmade by Robots brand due to its unique design and licensing opportunities, supported by existing operational infrastructure [48][50] Question: Why is exclusivity such a big advantage for Alliance Entertainment? - Exclusivity allows the company to become the preferred supplier for major retailers, enhancing sales opportunities and competitive positioning in the market [52][55]

Financial Data and Key Metrics Changes - In fiscal 2025, the company reported net income of $15.1 million, a 229% increase from the previous year [6][11] - Adjusted EBITDA grew 51% to $36.5 million, with gross margin improving from 11.7% to 12.5% year-over-year [6][11] - Earnings per share rose to $0.30, more than tripling from $0.09 in fiscal 2024 [6][11] - For Q4, net income was $5.8 million, or $0.11 per diluted share, compared to $2.5 million, or $0.05 per share in the prior year [7][9] Business Line Data and Key Metrics Changes - Q4 net revenue was $227.8 million, down from $236.9 million in Q4 fiscal 2024, while gross profit increased 34% year-over-year to $36 million [9][10] - Adjusted EBITDA for Q4 grew nearly fivefold to $12.2 million, up from $2.1 million in the prior year [9][10] - Direct-to-consumer fulfillment accounted for 37% of gross revenue, up from 36% in fiscal 2024, reflecting broader retailer adoption [19] Market Data and Key Metrics Changes - The company has established exclusive partnerships that accounted for over $350 million in revenue, representing more than a third of total sales [14][55] - The exclusive distribution agreement with Paramount Pictures is expected to contribute significantly to sales growth in fiscal 2026 [34][36] Company Strategy and Development Direction - The company aims to scale high-margin categories and deepen exclusive content partnerships while strengthening its fulfillment model [23][24] - The focus on automation and AI initiatives is intended to enhance operational efficiency and drive sales growth [21][22][45] - The company is actively pursuing strategic acquisitions to expand its content and capabilities [23][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the sustainability of margin improvements and profitability, attributing it to structural advantages in the business model [24][41] - The company anticipates strong consumer demand heading into the holiday season, supported by exclusive content releases [8][36] Other Important Information - The company reduced revolver debt by 22% and improved inventory alignment, ending the year with $26.8 million in cash flow from operating activities [7][11] - The company has modernized its fulfillment hub, leading to significant cost savings and increased throughput [20] Q&A Session Summary Question: How should investors think about your ability to sign similar deals with other studios? - Management is actively working on opportunities for similar deals in physical DVD distribution [26] Question: How are you impacted by tariffs, and what efforts are you undertaking to mitigate the impact? - The company has minimal impact from tariffs in music and video, but some price increases are seen in collectible products due to tariffs on imports from China [27][28] Question: Can you talk about your preferences regarding capital allocation? - The company focuses on paying down debt and strategic acquisitions, with no current plans for stock buybacks [30] Question: How sustainable is the lift from the Paramount Pictures exclusive license? - The company expects continued growth from the Paramount deal, with incremental sales opportunities across various channels [34] Question: What does being selected as Walmart's video category advisor mean for the company? - This designation allows the company to assist Walmart with strategic planning in the video category, enhancing its partnership with a major retailer [37] Question: Can you share the profile of your current M&A pipeline? - The company is engaged in multiple acquisition conversations and continuously evaluates opportunities that align with its strategic goals [39][40] Question: How much of the margin expansion is structural versus cyclical? - The margin expansion is attributed to structural improvements, including higher-margin products and significant cost savings from operational efficiencies [41] Question: How is AI going to help the business? - AI initiatives are focused on improving sales efficiency and operational processes, with ongoing training and integration of AI tools [43][45] Question: How do you balance investing in legacy categories versus building out higher growth segments? - The company continues to invest in both legacy categories and new initiatives, seeing growth potential in both areas [47] Question: What gives you confidence Handmade by Robots can break out? - The brand has strong design and licensing potential, with a robust growth strategy and existing operational infrastructure to support scaling [49][50] Question: Why is exclusivity such a big advantage for Alliance Entertainment? - Exclusive partnerships allow the company to be the sole distributor for certain products, enhancing its competitive position and access to major retailers [53][55]

Financial Performance - Revenue for FY25 reached $1063 million, compared to $1100 million in FY24[19, 32] - Adjusted EBITDA for FY25 was $365 million, a significant increase from $243 million in FY24[19, 38] - Earnings per share increased from $009 in FY24 to $030 in FY25[19, 35] - Gross margin improved from 117% in FY24 to 125% in FY25[34] - Net income increased substantially from $46 million in FY24 to $151 million in FY25[37] Q4 FY25 Performance - Revenue for Q4 FY25 was $228 million, slightly lower than $237 million in Q4 FY24[21] - Cost of revenue decreased from $210 million in Q4 FY24 to $192 million in Q4 FY25[23] - Gross margin percentage increased from 114% in Q4 FY24 to 158% in Q4 FY25[25] - Earnings per share increased from $005 in Q4 FY24 to $011 in Q4 FY25[27] - Net income increased from $25 million in Q4 FY24 to $58 million in Q4 FY25[28] - Adjusted EBITDA increased significantly from $21 million in Q4 FY24 to $122 million in Q4 FY25[30] Business Overview - The company's exclusive distribution and licensing agreements drive annual sales exceeding $375 million[40] - Direct-to-consumer (DTC) sales contribute 37% of the company's net revenue[64]