Alliance Entertainment (AENT) investor relations material

Executive summary

• Net income rose to $9.4M ($0.18/share) in Q2 FY26, with adjusted EBITDA up to $18.5M and gross margin expanding to 12.8%, driven by premium physical media, collectibles, and exclusive content partnerships.

• The company operates a large-scale physical media distribution platform, serving 175 online retailers and over 35,000 retail locations, with DTC channels contributing 37% of net revenue.

• Strategic acquisitions, including Endstate and Handmade by Robots, and technology integration are enhancing authentication and lifecycle management for collectibles.

• Focus remains on premium, high-margin categories and exclusive partnerships, reinforcing a shift to higher-value products and experiences.

• DTC and digital platforms, along with exclusive content, are key growth drivers.

Financial highlights

• Q2 FY26 net revenue was $369M, down 6% year-over-year, with gross profit at $47.1M and gross margin at 12.8%.

• Net income for Q2 FY26 was $9.4M ($0.18/share), up from $7.1M ($0.14/share) year-over-year.

• Adjusted EBITDA for Q2 FY26 was $18.5M (5% margin), up from $16.1M (4.1% margin) year-over-year.

• Six-month net revenue was $623M, flat year-over-year; net income nearly doubled to $14.3M ($0.28/share) from $7.5M ($0.15/share).

• Six-month adjusted EBITDA increased to $30.7M from $19.5M year-over-year.

Outlook and guidance

• Management expects durable profitability and long-term value creation, focusing on exclusive content, premium inventory, and technology platforms.

• Priorities include scaling Alliance Authentic, expanding exclusive partnerships, and growing the collectibles portfolio.

• The Amazon MGM Studios agreement, effective January 2026, is expected to expand the physical media portfolio and support growth.