Core Insights - WildBrain is undergoing a significant transformation with the sale of its 41% stake in Peanuts for $630 million, which is expected to eliminate debt and provide approximately CAD 40 million in cash proceeds after expenses [3][7][17] - The company is focusing on a more streamlined operating structure and plans to reinvest in its franchises, digital monetization, and infrastructure modernization following the transaction [2][7][20] Financial Performance - In Q2, WildBrain reported continuing operations revenue of CAD 72 million, an 11% increase year-over-year, and adjusted EBITDA of CAD 15 million, up 30% [5][23] - The net loss for the quarter was CAD 20 million, a significant improvement from a CAD 86 million loss in the prior period [5][23] - Discontinued operations revenue was CAD 132 million, reflecting an 83% year-over-year increase, driven by the Peanuts library renewal with Apple TV [17] Licensing and Digital Engagement - Strong performance was noted in licensing, particularly with Strawberry Shortcake and Teletubbies, with Strawberry Shortcake retail sales around $200 million in the trailing twelve months [6][9] - WildBrain CPLG, the licensing agency, also experienced growth, supported by expanded partnerships [11] - Digital engagement remains robust, with FAST viewership increasing by 46% to 24 billion minutes, and YouTube watch time for Teletubbies up 11% year-over-year [14][10] Strategic Focus and Future Outlook - Management has paused fiscal 2026 guidance to assess transformation investments related to the Peanuts sale, with plans to resume guidance for fiscal 2027 [18][20] - The company aims to leverage its strengthened balance sheet and capital reallocation to enhance profitability and sustainable EBITDA growth in the future [20]

Core Insights - WildBrain's Global Licensing business showed strong performance in Q2 2026, driven by brands like Strawberry Shortcake and Teletubbies, along with the successful Netflix debut of Finding Her Edge, which was quickly renewed [1][14] - The sale of WildBrain's interest in Peanuts is expected to eliminate debt and provide financial flexibility for reinvestment in high-growth opportunities, marking a strategic shift towards a more focused and scalable business model [2][3] - The company is entering a new phase of opportunity with a streamlined cost structure and enhanced capital flexibility, aiming for strong revenue, EBITDA, and free cash flow growth [3][4] Q2 Financial Highlights - Revenue from continuing operations increased by 11% to $72.4 million in Q2 2026, compared to $65.5 million in Q2 2025 [6][14] - Global Licensing revenue rose by 24% to $27.3 million in Q2 2026, driven by owned brands and the global licensing agency WildBrain CPLG [6][14] - Adjusted EBITDA from continuing operations increased by 30% to $14.9 million in Q2 2026, compared to $11.5 million in Q2 2025 [9][14] Discontinued Operations - Revenue from discontinued operations was $131.8 million, up 83% year-over-year, primarily due to the Peanuts library renewal deal with Apple TV [14] - Adjusted EBITDA from discontinued operations attributable to WildBrain was $22.6 million, reflecting a 54% increase year-over-year [13][16] Operational Efficiency and Future Outlook - The company plans to invest in structural reorganization and automation initiatives to reduce SG&A costs and improve scalability, with measurable benefits expected from 2027 onwards [4][5] - Fiscal Year 2026 guidance remains paused as the company focuses on its transformational agenda, with expectations to resume guidance for Fiscal 2027 [5][14] - Leverage at the end of Q2 2026 was 4.88x, with proceeds from the Peanuts sale expected to fully repay outstanding debt [11][14]

Summary of WildBrain's Conference Call Company Overview - **Company**: WildBrain - **Transaction**: Sale of 41% interest in Peanuts to Sony Music Entertainment Japan and Sony Pictures Entertainment for CAD 630 million [3][4] Key Points and Arguments 1. **Transaction Impact**: The sale will result in a debt-free balance sheet, saving approximately CAD 50 million in annual interest payments and leaving over CAD 40 million in cash surplus [4][24] 2. **Strategic Focus**: The transaction allows WildBrain to reinvest in high-margin franchises like Strawberry Shortcake and Teletubbies, as well as in digital content and advertising technologies [4][10] 3. **Valuation**: The transaction represents a 23 times fiscal 2025 attributable EBITDA multiple, highlighting the strength of the Peanuts franchise and the value created during WildBrain's ownership [3][4] 4. **Future Growth**: WildBrain aims to leverage its Flywheel strategy to enhance its wholly-owned brands, focusing on premium storytelling and global licensing [5][11] 5. **Financial Restructuring**: The company has undergone significant restructuring, including debt refinancing and winding down its legacy television business, which has reshaped its operating and financial profile [6][24] 6. **Guidance Update**: Fiscal 2026 guidance has been paused until the resegmentation of financial reporting is complete [7][8] 7. **Ownership Benefits**: WildBrain retains 100% ownership of Strawberry Shortcake, which is expected to generate higher returns compared to Peanuts due to full economic participation [9][12] 8. **Market Dynamics**: The kids' media landscape is shifting towards digital platforms like YouTube and FAST, with traditional linear TV viewership declining significantly [18][19] 9. **Advertising Opportunities**: WildBrain's extensive reach on digital platforms positions it well to capture advertising revenue in a fragmented market [19][20] 10. **Content Creation**: The company is focused on producing both premium and lower-cost digital-first content, with a strong pipeline including a Peanuts feature film for Apple [21][22] Additional Important Insights - **Retail Sales Potential**: Strawberry Shortcake's retail sales potential is estimated at CAD 800 million, while Teletubbies is projected at CAD 1 billion [15][16] - **Licensing Agency**: WildBrain CPLG is one of the largest independent licensing agencies, enhancing the company's ability to manage both owned and third-party brands [16][17] - **AI Integration**: WildBrain is exploring AI tools to improve production efficiency and reduce costs, which could enhance returns on franchise content [22][24] - **Long-term Strategy**: The company plans to maintain a clean balance sheet while exploring share buybacks and strategic acquisitions to drive growth [24][25] This summary encapsulates the key aspects of WildBrain's conference call, focusing on the company's strategic direction, financial implications of the recent transaction, and future growth opportunities in the evolving media landscape.

Core Viewpoint - WildBrain Ltd. has signed an agreement to sell its 41% stake in Peanuts Holdings LLC to Sony for $630 million, which will eliminate the company's debt and provide capital for reinvestment in high-growth opportunities [1][4][12] Financial Impact - The net proceeds from the sale will fully repay WildBrain's Senior Secured Credit Facility, resulting in over $40 million cash surplus and annual interest savings of approximately $50 million [2][4][12] - WildBrain's EBITDA attributable to its 41% ownership in Peanuts was $27 million in Fiscal 2025, with recognized EBITDA including consolidation benefits at $43 million [7] Strategic Focus - The transaction allows WildBrain to reinvest in wholly owned franchises like Strawberry Shortcake and Teletubbies, expand its premium digital content network, and invest in emerging technologies [4][5][9] - WildBrain aims to create efficiencies and simplify its business model, having closed its broadcast television channels in Canada to enhance strategic flexibility [10][11] Partnership and Future Growth - WildBrain will remain a multi-year partner to Peanuts for key services, including licensing, production, and distribution, ensuring continued collaboration with Sony [2][4] - The company plans to invest approximately $50 to $100 million in growth opportunities to enhance its strategic platform and drive shareholder value [8][12] Historical Context - WildBrain acquired 80% of Peanuts in 2017 for $448 million and has since generated over $1 billion in total sale proceeds and distributions from its ownership [6]

Core Insights - WildBrain Ltd. reported its Q1 2026 results, highlighting strong growth in its Global Licensing business and a strategic exit from its Television operations to focus on higher-margin opportunities [3][4][5]. Q1 Operational Highlights - The Global Licensing business achieved a 29% year-over-year revenue increase, reaching $81.1 million, driven by brands like Peanuts, Strawberry Shortcake, and Teletubbies [8]. - Content Creation and Audience Engagement revenue decreased by 3% to $39.8 million, reflecting growth in production but softness in content distribution [9]. Q1 Financial Highlights - Total revenue for Q1 2026 was $125.5 million, a 13% increase from $111.0 million in Q1 2025. Excluding Television, revenue was $120.8 million, up 16% year-over-year [6][7]. - Net loss attributable to shareholders was $32.6 million, compared to a loss of $10.6 million in Q1 2025. Excluding Television, the net loss was $31.4 million, compared to $15.1 million in Q1 2025 [11]. - Adjusted EBITDA increased by 37% to $20.9 million, with a 53% increase to $17.4 million when excluding Television [10][12]. Fiscal Year 2026 Outlook - The company expects strong growth in Global Licensing, projecting a 29% year-over-year increase in revenue, and reaffirmed its outlook for Fiscal Year 2026 [6][13]. - Revenue is anticipated to be between $560 million and $590 million, with Adjusted EBITDA expected to be approximately $80 million to $85 million, reflecting a growth of 15% to 20% [13].

Social Commentary & Industry Impact - The report highlights concerns about the inclusion of a "TransBerry" character in a Strawberry Shortcake show on Netflix, questioning the motives behind such representation in children's programming [1] - The report suggests that activists are actively targeting children with their ideologies, implying a potential negative impact on the industry's reputation and consumer trust [1]

Core Insights - WildBrain Ltd. reported its full year and Q4 2025 results, highlighting strong growth in its Global Licensing business and improved financial metrics compared to the previous year [5][6][8] Q4 Financial Highlights - Revenue including Canadian Television Broadcasting was $139.1 million, up 7% year over year, while revenue excluding Television was $129.4 million, up 6% year over year [7][10] - Net income including Television was $9.5 million, a significant improvement from a net loss of $80.7 million in Q4 2024; net income excluding Television was $11.2 million compared to a net loss of $17.0 million in Q4 2024 [7][13] - Adjusted EBITDA including Television was $24.6 million, up 3% year over year; adjusted EBITDA excluding Television was $19.1 million, down 1% year over year [7][12] Fiscal 2025 Financial Highlights - Total revenue including Television was $523.4 million, up 13% year over year; revenue excluding Television was $487.3 million, up 14% year over year [7][14] - Net loss including Television was $89.8 million, an improvement from a net loss of $106.0 million in FY 2024; net loss excluding Television was $97.6 million compared to a net loss of $58.2 million in FY 2024 [7][14] - Free Cash Flow for FY 2025 was positive $49.5 million, compared to negative $29.5 million in FY 2024 [7][12] Global Licensing Performance - Global Licensing revenue increased 29% to $69.4 million in Q4 2025, driven by strong growth in owned brands such as Peanuts, Strawberry Shortcake, and Teletubbies [10] - Strawberry Shortcake revenue grew nearly 200% year over year, while Peanuts recorded its strongest year ever with broad-based global demand [7][10] Strategic Focus and Future Outlook - The company announced its decision to exit the Canadian broadcast television business to concentrate on higher-margin, higher-growth opportunities [8] - For Fiscal Year 2026, the company expects revenue growth of approximately 15% to 20% and adjusted EBITDA growth of approximately 15% to 20% [15]

Core Viewpoint - WildBrain Ltd. is ceasing its television broadcast business due to the inability to negotiate new carriage agreements with Rogers Communications and Bell, leading to the conclusion that the Channels are no longer commercially viable [2][3][5]. Company Update - WildBrain has announced that it will surrender the Channel licenses to the Canadian Radio-television and Telecommunications Commission (CRTC) and will simplify its voting structure to a single class, enhancing strategic flexibility [3]. - The decision to discontinue the Channels is expected to have minimal impact on the broader business strategy, as WildBrain continues to focus on monetizing its entertainment IP across various platforms [5]. Financial Performance - The company reported a 17% growth year-to-date through the third fiscal quarter, indicating strong performance beyond the television business despite industry challenges [6]. Strategic Direction - WildBrain is aligning its business with changing consumer habits, strategically exiting the declining broadcast space in Canada while leveraging its iconic IP such as Peanuts, Strawberry Shortcake, and Teletubbies across streaming and consumer products [5][6].