Core Insights - Alliance Entertainment Holding Corporation has entered into an exclusive home entertainment license agreement with Amazon MGM Studios Distribution for physical media distribution in the U.S. and Canada [1][4] 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 formats [5] - The company serves more than 35,000 retail and e-commerce storefronts, providing a vast selection of physical media, including music, video, and collectibles [5] Partnership Details - The partnership with Amazon MGM Studios is described as a milestone, allowing Alliance to distribute a significant library of iconic films and new titles [2] - The agreement includes new releases such as Fallout Season 2 and Mercy, as well as revitalized catalog programs featuring franchises like James Bond and Rocky [3] Market Strategy - Alliance aims to redefine the collectibles market by leveraging its scale and technology-driven solutions to enhance consumer access and experience [2] - The collaboration emphasizes premium physical formats, including collector editions and expanded UHD offerings, to honor the storytelling behind the titles [3]

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]