Thunderbird Entertainment Group (TBRD) Q2 2025 earnings summary

Executive summary

• Q2 2025 revenue increased 6% year-over-year to CAD 47.2 million, with year-to-date revenue up 19% to CAD 92.8 million, driven by increased production service engagements.

• Adjusted EBITDA grew 8% to CAD 4.2 million for the quarter and 30% to CAD 8.3 million for the six-month period, with margin improvements due to higher revenue and lower G&A costs.

• Net income for the quarter was CAD 0.8 million, and CAD 2.3 million for the six months, marking the fifth consecutive quarter of profitability and reflecting operational efficiencies.

• Free Cash Flow improved to CAD 0.6 million for Q2 and CAD 10.3 million for the six months, mainly due to higher deferred revenue and accounts payable.

• The company remains on track with guidance for 20% revenue growth and 10% adjusted EBITDA growth for fiscal 2025.

Financial highlights

• Production service revenue rose 42% year-over-year, driven by both animation and scripted/unscripted projects.

• Licensing and distribution revenue fell 79% due to timing of show airings.

• Gross margin for the quarter was 21.3%, down from 23.2% last year, reflecting a higher mix of lower-margin production services.

• Adjusted EBITDA margin improved due to cost discipline, reaching 9.0% for Q2.

• No corporate debt, maintaining a strong balance sheet and flexibility for growth investments.

Outlook and guidance

• Reaffirmed targets for 2025: 20% revenue growth and over 10% adjusted EBITDA growth, supported by a strong content pipeline and strategic investments.

• Good visibility into 2025 and 2026 with ongoing production contracts and new IP launches.

• Adjusted EBITDA growth expected to lag revenue due to mix shift toward lower-margin services.

• Gross margin expected to differ due to project mix; focus remains on efficiency and quality.

• Outlook based on internal projections, with risks detailed in the June 30, 2024 MD&A.