Alliance Entertainment (AENT) Noble Capital Markets Virtual Equity Investor Conference summary

Distribution platform

• Stocking distributor with 340,000+ SKUs in Shepherdsville, Kentucky; top 20% of suppliers generate over 80% of revenue.

• Revenue mix is 65% wholesale and 35% retailer drop-shipping; serves 200+ online retailers and 30,000+ physical store locations.

• Provides retailer product data and inventory updates every 15 minutes; Amazon fulfillment orders can require shipment within six hours.

FY2026 performance and market trends

• For the 12 months ended June 30, 2026, vinyl sales rose to $383 million from $340 million, up 13%; video rose to $339 million from $279 million, up 22%.

• CD sales increased to $156 million from $125 million; collectibles revenue rose to $32 million from $22 million, while electronics increased 1%.

• Overall revenue increased 8%; gross margin expanded 80 bps; adjusted EBITDA rose 14% to $41.5 million from $36.5 million, and adjusted earnings rose to $46 million from $37 million.

• GAAP EPS was $0.26, including a one-time $0.15 per-share charge tied to a vendor's unpaid balance; management said the charge would not recur.

• Physical-media demand was supported by consumers' preference for ownership, new music releases and CDs' value; digital migration by Microsoft and Sony creates gaming headwinds.

Margin and cash-flow outlook

• Direct Walmart video sales began September 1, 2026, replacing a third-party route; full benefits are expected by fiscal Q2 ending December 31, with improved margin and faster receivables.

• The direct arrangement restores access to Walmart supply-chain financing through Wells Fargo and eliminates third-party costs; management expects stronger cash flow and margins.

• Fiscal 2027 growth drivers include stronger music trends, additional Amazon MGM contribution and the Walmart change; only six months of the Amazon MGM relationship had contributed to the period discussed.

• Over a 3–5 year horizon, licensing and rights-related work are intended to increase the mix of higher-margin activities; traditional distribution margins are difficult to raise above 15%.