Alliance Entertainment (AENT) Q3 2026 earnings summary

Executive summary

• Net revenues for Q3 FY26 rose 21% year-over-year to $258.2M, with net income up 25% to $2.3M and adjusted EBITDA up 4% to $5.1M.

• Year-to-date net income surged 78% to $16.6M, and adjusted EBITDA climbed 47% to $35.7M, reflecting strong operating leverage and a shift toward higher-value, collectible-focused products.

• Growth was broad-based across physical media, collectibles, gaming, and electronics, with notable gains in CDs (up 90–93%), vinyl (up 15%), and collectibles (up 48–51%).

• Strategic initiatives included the launch of Alliance Authentic and Endstate Authentic, expanding authentication and digital product identity capabilities.

• DTC channel contributed ~35% of net revenue over the trailing twelve months, and the relaunch of Movies Unlimited targeted collector engagement.

Financial highlights

• Q3 FY26 net revenues: $258.2M (+21% YoY); gross profit: $33M (+13% YoY); gross margin: 12.8% (down from 13.6%).

• Q3 FY26 net income: $2.3M (+25% YoY); EPS: $0.05; adjusted EBITDA: $5.1M (+4% YoY).

• Nine months FY26 net revenues: $880.9M (+5% YoY); net income: $16.6M (+78% YoY); EPS: $0.33; adjusted EBITDA: $35.7M (+47% YoY).

• Operating expenses increased 16% YoY to $29.7M for the quarter, but declined as a percentage of revenue; SG&A at 6.5%, distribution/fulfillment at 4.3%.

• Working capital at quarter end: ~$60M; $56M available under revolving credit facility; debt at $64.3M; equity at $120M.

Outlook and guidance

• Management expects continued revenue growth and earnings expansion, supported by efficient cost structure, new releases, exclusive content, and licensed products.

• Focused on scaling premium physical media, high-value collectibles, and expanding owned brands and platform capabilities.

• Strategic investments in technology, infrastructure, and platform initiatives are expected to drive long-term growth.

• Expect Alliance Authentic and Endstate Authentic to become more meaningful contributors in fiscal 2027.

• Ongoing macroeconomic uncertainty, inflation, and evolving trade policies may impact demand and cost structure.