AENT

Shares of Alliance Entertainment Holding Corporation (NASDAQ:AENT) jumped after the company reported broad-based growth in revenue and adjusted earnings on September 10. The company reported its financial and operational results for its fiscal year ended June 30, 2026. Net revenues reached $1.15 billion, up 8% year-over-year. Gross profit increased 15% to $152.3 million, while gross margin expanded to 13.3% from 12.5%, an improvement of 80 basis points. “The market for physical entertainment continues to evolve toward premium formats, collectible products and more specialized distribution, and those changes are playing directly to the capabilities we have built over more than three decades,” CEO Jeff Walker said. Adjusted EBITDA rose 14% to $41.5 million, while adjusted net income increased 24% to $23.4 million. Adjusted diluted earnings per share also climbed 24% to $0.46. Alliance Entertainment Holding Corporation (NASDAQ:AENT) saw strong growth across its key physical entertainment businesses during the fiscal year. Vinyl revenue increased 13% to $383 million, while CD revenue jumped 25% to $156 million. At the same time, physical movie revenue also increased 22% to $339 million. This growth was driven by higher unit volumes and the company’s expanding studio relationships. The company’s exclusive physical-media distribution relationship with Paramount, along with the addition of Amazon MGM Studios during fiscal 2026, further strengthened its position as a distribution partner for content owners across wholesale, retail, and e-commerce channels. Higher Costs Weigh on GAAP Results Despite the growth in adjusted results, Alliance Entertainment Holding Corporation’s (NASDAQ:AENT) GAAP profitability declined during fiscal 2026. GAAP net income declined to $13.1 million from $15.1 million, while GAAP operating income fell to $27.2 million from $30.1 million. The company said the results were partly affected by a $7.8 million non-cash write-off. Operating cash flow was also affected by higher working-capital investment as the company focused on supporting its higher revenue base and anticipated customer demand. Working capital reached $62.4 million as of June 30, 2026, up from $45.4 million a year earlier. Inventory and trade receivables grew faster than the company’s 8% revenue growth during the year, which contributed to the year-over-year decline in operating cash flow. Selling, general and administrative expenses also rose to $66 million from $56 million. The company said this increase was primarily driven by higher payroll and employee-related costs needed to support growth, along with increased consulting and professional-service expenses related to strategic initiatives and public-company operations. What the Numbers Say Hedge fund interest in the stock increased slightly in the second quarter of 2026. According to Insider Monkey's database, 4 hedge funds held positions in Alliance Entertainment Holding Corporation (NASDAQ:AENT) in the second quarter of 2026, compared with 3 in the first quarter. Meanwhile, short interest stood at 9.89% of the company’s float as of August 31, showing some level of bearish positioning in the stock. Analysts, however, remain positive on Alliance Entertainment Holding Corporation (NASDAQ:AENT). As of September 11, the stock had a consensus Buy rating and a median 12-month price target of $8.50. This suggests a potential upside of about 32.40% from the current stock price. The company’s fiscal 2026 results showed growth in revenue and adjusted profitability, supported by higher demand for vinyl, CDs, and physical movies. However, rising operating expenses, working-capital needs, and weaker GAAP earnings remain key risks for investors to look out for. While we acknowledge the potential of AENT as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: Bernstein Backs Shopify (SHOP) Despite Stock Drop, Is It Time to Buy? and Could Tesla’s (TSLA) Cybercab Unlock a New Growth Driver?. Disclosure: None. Follow Insider Monkey on Google News.

This article first appeared on GuruFocus. Net Revenue: Increased 8% to $1.15 billion vs. $1.06 billion in fiscal 2025. Q4 Revenue: Rose 18% year-over-year to $268.1 million. Gross Profit: Up 15% to $152.3 million from $132.9 million. Gross Margin: Expanded 80 basis points to 13.3% from 12.5%. SG&A Expenses: Increased to $66 million from $56 million. GAAP Operating Income: $27.2 million vs. $30.1 million, including a $7.8 million non-cash vendor rebate write-off. Net Income: $13.1 million vs. $15.1 million in the prior year. Adjusted EBITDA: Increased 14% to $41.5 million from $36.5 million. Adjusted Net Income: Rose 24% to $23.4 million. Adjusted Diluted EPS: Increased 24% to $0.46 from $0.37. Interest Expense: Declined 28% to $7.6 million from $10.6 million; average effective interest rate improved to 6.1% from 9.2%. Operating Cash Flow: Net cash used in operating activities of $1.7 million vs. $26.8 million provided in fiscal 2025. Working Capital: Increased to $62.4 million at June 30, 2026, from $45.4 million a year earlier. Vinyl Revenue: Increased 13% to $383 million. CD Revenue: Increased 25% to $156 million. Physical Movie Revenue: Increased 22% to $339 million. Collectibles Revenue: Increased 45% to $32 million. Distribution and Fulfillment Fee Revenue: Increased 26% to $18.6 million. Revolving Credit Facility: $74.3 million outstanding under $120 million facility; $45.7 million availability; up to $50 million additional borrowing capacity subject to conditions. Debt Repayment: Repaid $10 million of related party borrowings. Warning! GuruFocus has detected 2 Warning Signs with AENT. Is AENT fairly valued? Test your thesis with our free DCF calculator. Release Date: September 10, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Revenue increased 8% to $1.15 billion, with gross margin expanding 80 basis points to 13.3% and adjusted EBITDA growing 14% to $41.5 million. Physical music, home entertainment, and collectibles all showed strong growth: vinyl revenue up 13%, CD revenue up 25%, physical movie revenue up 22%, and collectibles revenue up 45%. New exclusive distribution partnerships with Paramount and Amazon MGM Studios are driving growth and position Alliance Entertainment Holding Corp (NASDAQ:AENT) as a key partner for major studios. Fulfillment fee revenue increased 26% to $18.6 million, and the company continues to invest in automation (e.g., adding 5,000 AutoStore totes) to support scalable growth. Strategic initiatives like Alliance Authentic, Endstate Authentic, and Handmade by Robots offer higher-margin opportunities and expand the company's presence in authentication and premium collectibles. GAAP operating income declined to $27.2 million from $30.1 million, and net income fell to $13.1 million from $15.1 million, partly due to a $7.8 million non-cash write-off. Operating cash flow turned negative, with net cash used in operating activities of $1.7 million compared to $26.8 million provided in the prior year, due to higher working capital requirements. SG&A expenses increased 18% to $66 million, rising faster than revenue, which pressured operating margins. Working capital increased to $62.4 million from $45.4 million, and inventory and receivables grew faster than revenue, indicating potential efficiency challenges. Gaming category underperformed relative to other segments, and the company remains dependent on major releases like Grand Theft Auto 6 to drive future growth in that area. Q: Michael Kupinski of Noble Capital Markets asked about the incremental revenue opportunity remaining from the Paramount and Amazon MGM relationships as the company cycles into fiscal 2027, and whether there are discussions with other studios or content owners about consolidating distribution.A: CEO Jeffrey Walker said sales for both Paramount and MGM are strong, with a major focus on adding new catalog products including titles previously unreleased or never issued in 4K or Steelbook formats. He noted Paramount has significantly more releases in the second half of calendar 2026, which should bolster the catalog position. On other studios, he declined to comment specifically but said Alliance is in many conversations, and believes it offers a strong licensing opportunity given its e-commerce, retail, and fulfillment capabilities. Q: Michael Kupinski asked how much of the growth is coming from proprietary products like Handmade by Robots versus third-party licensed merchandise.A: CEO Jeffrey Walker said the majority of growth is currently coming from third-party products. However, the company is heavily investing in Handmade by Robots, Alliance Authentic, and Endstate all of which carry significantly stronger margin profiles including building teams and marketing to generate new business in those three categories. Q: Michael Kupinski asked how much additional revenue the existing infrastructure and AutoStore capacity can accommodate before another meaningful capital investment is required.A: CEO Jeffrey Walker said the company still has capacity and sees no pressing need for a large CapEx investment. Any future CapEx would lean toward automation rather than building size. He emphasized Alliance's prudent approach of investing in systems only after sales and opportunities materialize, rather than building ahead of demand. Q: Michael Kupinski asked how to think about SG&A leverage in fiscal 2027 given the 18% increase in SG&A expense.A: CEO Jeffrey Walker said much of the increase supports growth in new categories, and that AI projects in the works could improve efficiency in SG&A expenses. He described himself as very pro-AI and technology, noting the leadership team is working on AI solutions to grow sales and reduce operational expenses, with continued improvements expected. Q: Michael Kupinski asked whether there are specific commercial milestones to watch for on Alliance Authentic and Endstate.A: CEO Jeffrey Walker said the primary milestone is the number of collectors in the ecosystem people owning collectible items such as vinyl, Handmade by Robots, or encapsulated Funko products, with encapsulated Steelbooks about to launch. Growing that collector base supports the second phase: a peer-to-peer marketplace using NFC chips. He noted the marketplace is operational today, and that New York Comic Con is coming up after a successful San Diego Comic-Con. Q: David Heiserman of ThinkEquity asked about the horizon for Endstate Authentic and whether it could extend to every sports team and event worldwide.A: CEO Jeffrey Walker said the NFC-based technology has huge opportunities across collectible platforms, with proprietary software and non-replicable digital codes. He said the chips can be embedded in graded or authenticated items like cards and collectibles, or placed into products at manufacture to prove authenticity and prevent counterfeits. He noted growing adoption even in high-end fashion, and said he and the head of Endstate are in many conversations under NDAs about integrating the technology. Q: Thomas Forte of Maxim Group asked whether Alliance was able to secure any tariff refunds in the June quarter.A: CEO Jeffrey Walker confirmed the company secured some credits back and has received the majority of the credits it was waiting on. Q: Thomas Forte asked why CDs are performing so well and how the trend compares with vinyl.A: CEO Jeffrey Walker attributed the strength to fans collecting products from favorite artists. About 18 months ago, labels acknowledged that in-stock and fill percentages for CDs had been poor, prompting a push to keep classic and top albums available which has helped sales over the past year. He also noted independent music stores are expanding CD sections as sales rise, similar to the vinyl recovery, where more stores and broader selection supported growth. He expects the trend to continue as consumer demand, retailers, wholesalers, and labels all align. Q: Thomas Forte asked how the company views its gaming efforts given softer gaming performance, and how it decides when to emphasize or de-emphasize categories.A: CEO Jeffrey Walker said the company emphasizes and de-emphasizes based on trends. He called Grand Theft Auto 6 a historic game that will change the gaming industry, predicting a huge fourth quarter "a Grand Theft Auto Christmas" for the retail side. Q: In a webcast question, Jeff was asked what he is seeing in DVD demand going forward.A: CEO Jeffrey Walker said DVD has declined significantly for over a decade but he believes the market is very close to the bottom, with much slower rates of decline. He pointed to social media conversation similar to CD and vinyl, with consumers wanting to own favorite movies at home amid frustration over finding titles across streaming platforms. He noted few retailers stock DVD, positioning Alliance to help, and said he is optimistic the bottom arrives in 2027 or 2028 followed by growth. Q: A webcast question asked what was learned from the reaction at San Diego Comic-Con that could influence future products.A: CEO Jeffrey Walker said Comic-Con's fan base is fantastic and focused on favorite IP and characters, and that there is a broader human shift toward attending events and experiences. He cited Comic-Con exclusives from Handmade by Robots and Alliance Authentic, including encapsulated Star Wars vinyl and Japanese vinyl pressings. He said the company is looking at more movie exclusives for such shows, and that the collector audience is heavy on social media, amplifying Alliance's presence. Q: A webcast question asked what a retail buyer will be able to do differently once the AI-enabled WebAMI platform goes live.A: CEO Jeffrey Walker explained WebAMI is the B2B platform used by nearly 2,000 independent retailers to place orders and search products, driving a significant share of sales. The rebuilt, AI-enabled back end is complete, with front-end functionality in progress and launch planned for January 2027 after the holiday season. Improvements include significant speed gains and cross-category search for example, a Star Wars search surfaces movies, music, and collectibles which should help retail buyers find hot products and related items, and he expects it to be the top B2B platform in the industry. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Image source: The Motley Fool. Thursday, Sept. 10, 2026 at 4:30 p.m. ET Chief Executive Officer - Jeffrey Walker Chief Financial Officer - Amanda Gnecco Executive Chairman - Bruce Ogilvie Investor Relations - Paul Kuntz Operator: Greetings, and welcome to Alliance Entertainment's fiscal year 26 Financial Results Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the call over to Paul Kuntz, a member of Alliance Entertainment's IR team at Red Chip. Paul Kuntz: Thank you. Before we begin the formal presentation, I would like to remind everyone that statements made on the call webcast may include predictions, estimates or other information that might be considered forward looking. While those forward looking statements represent the company's current judgment on what the future holds, they are subject to risks and uncertainties that could cause actual results to differ materially. You are cautioned not to place undue reliance on these forward looking statements, which reflect the company's opinions only as of the date of this presentation. Keep in mind that the company is not obligating itself to revise or publicly release the results of any revision to these forward looking statements in light of new information or future events. Throughout today's discussion, management will attempt to present some important information relating to the business that may affect predictions. You should also review the company's Form 10 k, filed today, 09/10/2026, for a more complete discussion of these factors and other risks particularly under the heading Risk Factors. During this conference call, management will discuss non GAAP financial measures, including a discussion of adjusted EBITDA, adjusted net income and adjusted earnings per share. Management believes non GAAP disclosures enable investors to better understand Alliance Entertainment's core operating performance. Please refer to the Investor presentation or today's earnings press release for reconciliation of each non GAAP measure to the most directly comparable GAAP financial measure. Your host today, Jeffrey Walker, Chief Executive Officer, and Amanda Gnecco, Chief Financial Officer, will present the results of operations for the fiscal year ended 06/30/2026. Bruce Ogilvie, Executive Chairman, is also on the line and will participate during the Q&A session. Before I turn the call over, I would like to congratulate Jeffrey on being named Billboard's Executive of the Week last week. Recognizing Alliance's role in helping drive the continued growth of physical music. With that, Jeffrey, the call is yours. Jeffrey Walker: Thank you, Paul, and good afternoon, everyone. We appreciate you joining us. Fiscal 26 was a year of acceleration for Alliance. Both financially and strategically. We grew the business, expanded margins, strengthened our position across physical entertainment and collectibles, and continued building new capabilities that can drive the next phase of growth. Revenue increased 8% to $1.15 billion Gross margin expanded 80 basis points to 13.3% and adjusted EBITDA increased 14% to $41.5 million We also finished the year with strong momentum as fourth quarter revenue increased 18% year over year to $268.1 million We saw a broad based growth across physical music, home entertainment, collectibles, and fulfillment while continuing to shift the business toward premium products, exclusive content, and higher valued services. Several changes occurring across the entertainment industry are also increasing the value of the distribution and fulfillment infrastructure we have built over the past 3 decades. Physical entertainment is becoming more specialized and increasingly centered around ownership fandom, and premium products. Consumers have virtually unlimited digital access to music and entertainment yet they continue to purchase vinyl records, CDs, 4K Ultra HD titles, field books, and other physical products. Those purchases are increasingly about owning something connected to an artist, movie, franchise, or community that matters to them. The latest industry data shows how strong that demand remains. The RIAA's 2026 midyear report showed US physical music revenue increasing nearly 26% in the first half of calendar 26. Including 17.7% growth in vinyl revenue and 58.6% growth in CD revenue. In home entertainment, DEG reported that consumer spending on 4K Ultra HD increased 12% calendar 25 even as the broader physical video market declined. We saw those same trends in our own results. For fiscal 26, final revenue increased 13% to $383 million CD revenue increased 25% to $156 million and physical movie revenue increased 22% to $339 million. In home entertainment, that growth also reflects the expanding role Alliance is playing with major studios. Over the last 2 years, we have added significant relationships with Paramount and Amazon MGM Studios. Paramount became an exclusive physical media distribution partner for us in The US and Canada beginning in calendar 25. And we added Amazon MGM at the beginning of calendar 26. These relationships are important not only for the products they bring to our portfolio, but for what they say about Alliance's position in the market. As studios and labels increasingly consolidate their physical media operations, content owners need partners that can coordinate manufacturing, inventory, retail execution, distribution, and ecommerce fulfillment efficiently at scale. That is exactly what Alliance has spent more than 3 decades building. We support more than 340 thousand in stock SKUs across more than 35 thousand retail and ecommerce storefronts with capabilities spanning wholesale distribution, drop ship fulfillment, inventory management, and direct to consumer execution. That infrastructure is becoming increasingly valuable as more content owners look to scaled specialists to manage these functions. Fiscal 26 also demonstrated that our growth is becoming broader across categories. In addition to the strength in music and movies, collectibles revenue increased 45% to $32 million and distribution and fulfillment fee revenue increased 26% to $18.6 million. Collectibles, in particular, remain an important area of investment and growth. We are increasingly moving towards licensed premium and differentiated products with higher average selling prices and better margin characteristics. And because we already have relationships with entertainment licensors, major retailers, and ecommerce platforms, we can use infrastructure that already exists to expand into adjacent fan and collector categories without having to recreate the distribution platform. Handmade by robots is 1 example of that strategy. Owning the brand gives us greater participation in product development, licensing, and economics rather than serving solely as the distributor of a third party product. We see opportunities to apply that approach selectively as we are developing our collectibles portfolio. Our fulfillment business is another extension of the same infrastructure. As retailers expand online assortments, they increasingly need partners that can efficiently manage large catalogs and fulfill products directly to consumers. Our breadth of inventory and drop ship capabilities allow retailers to offer substantially more selection without carrying every product in their own stores or distribution centers. We also continue investing in automation to improve the scalability of that platform, During fiscal 26, we ordered 5 thousand additional totes for our auto store system bringing total capacity to 57 thousand totes. These investments are helping us create higher throughput while maintaining labor efficiency which is important as we continue growing fulfillment volumes. We are bringing the same focus on automation to sales and marketing. We implemented HubSpot in January 2026 to give our teams better visibility automate workflows, and strengthen customer engagement. We are also rebuilding our WebAMI B2B platform with AI enabled capabilities designed to help retail buyers discover products more efficiently improve purchasing accuracy, and make our sales organization more productive. The new WebAMI platform is scheduled to launch in first quarter 27. Across the organization, we are using AI assisted tools to reduce manual work and cost. Improve decision making, and increase productivity. We are also extending our participation beyond the initial sale of physical product. Following our acquisition of Endstate Authentic, at the beginning of the calendar year, we continued developing NFC-enabled authentication and digital product identity capabilities through Endstate Authentic and Alliance Authentic. We are already expanding Alliance Authentic beyond music have launched preserved and encapsulated hand made by robots and select Funko collectibles on the platform. And we are preparing to bring the same treatment to premium video steelbooks. By combining preservation, authentication, and premium presentation, we believe we can transform products fans already value into what Alliance Authentic is designed to deliver. The ultimate collectible. And because these are products we already source, distribute, and fulfill, we have an opportunity to expand that model across categories at scale. As we enter fiscal 27, several growth factors are coming together. We intend to build on the exceptional momentum in physical music, capture a full year of Amazon MGM, accelerate our higher margin collectibles business and owned brands, and expand Alliance Authentic and Endstate Authentic into additional product categories. We also expect continued growth in fulfillment while using automation and AI from warehouse operations to sales and marketing to the WebAMI redevelopment to make the business more productive. Our objective is to pair growth in these higher value areas with better operating leverage and stronger cash conversion. We believe the changes taking place across physical entertainment are creating attractive opportunities for scaled specialized operators. Alliance has spent decades building the infrastructure relationships, and capabilities required to operate in that environment. At fiscal 26, provided meaningful evidence that those assets are becoming increasingly valuable With that, I will turn the call over to Amanda to discuss our fiscal 26 financial performance in more detail. Amanda Gnecco: Thanks, Jeffrey. I will walk through our fiscal 26 financial results, Beginning with revenue and gross margin, Then covering operating expenses, profitability, cash flow, and our balance sheet. Net revenue for fiscal year 26 increased 8% to $1.15 billion compared to $1.06 billion in fiscal year 25. Gross profit increased 15% to $152.3 million from $133 million. And gross margin expanded 80 basis points to 13.3% from 12.5%. The improvement in gross margin reflected stronger margins in physical movies and collectibles. Increased contribution from premium and exclusive content, favorable product mix, returns activity, and lower wholesale freight cost as a percentage of sales. Gross profit grew faster than revenue during the year. Reflecting improvement in the economics of our business as our mix continues to evolve. Turning to operating expenses. Selling, general, and administrative expenses increased to $66 million from $56 million in fiscal year 25. The increase primarily reflected higher payroll and employee related costs to support the larger business. As well as increased consulting and professional service costs associated with strategic initiatives and public company operations. As we enter fiscal year 27, expense discipline and converting gross profit growth into stronger operating leverage are important priorities. Fiscal 26 also included a $7.8 million noncash write off of a historical vendor rebate receivable. Associated with tape makers, following the counterparty cessation of operations. We do not consider this charge representative of our ongoing operating performance. Including that charge, GAAP operating income was $27.2 million compared with $30.1 million in fiscal year 25. Net income was $13.1 million compared to $15.1 million in the prior year. On a non GAAP basis, adjusted EBITDA increased 14% to $41.5 million up from $36.5 million last year. Adjusted net income increased 24% to $23.4 million and adjusted diluted earnings per share increased 24% to $0.46 per share up from $0.37 in fiscal year 25. Turning to interest expense. We saw substantial benefit from the refinancing of our credit facility. Interest expense declined 28% to $7.6 million. from $10.6 million. And our average effective interest rate improved to 6.1% from 9.2%. This improved our borrowing economics and provides a stronger financing platform as we manage the working capital requirements of our business. Moving to cash flow. Net cash used in operating activities was $1.7 million in fiscal year 26. Compared with $26.8 million of cash provided by operating activities in fiscal year 25. The year over year change was primarily driven by higher working capital requirements including increased inventory and receivables. Both balances grew faster than revenue during the year, contributing to the decline in operating cash flow. In fiscal year 27, our objective is to convert a greater share of earnings into operating cash flow. By moderating working capital growth relative to revenue improving inventory productivity, and strengthening receivable collections. As a result, working capital increased to $62.4 million at 06/30/2026, compared with $45.4 million a year earlier. As Jeffrey noted, improving cash conversion is a key priority in fiscal year 27. Our focus is on disciplined inventory management, receivable collections, and working capital efficiency. While continuing to support attractive growth opportunities across the business. At year end, $74.3 million was outstanding under our $120 million revolving credit facility. leaving $45.7 million of availability. The facility also provides subject to certain conditions and lender consent up to $50 million of additional borrowing capacity. Providing further potential financial flexibility as the business grows. During fiscal year 26, we also repaid $10 million of related party borrowings further simplifying our financing structure. Our capital allocation priority remain straightforward. First, we will fund working capital required to support attractive organic growth. Second, we will invest selectively in initiatives designed to increase both growth and productivity. Including automation and AI, our WebAMI B2B redevelopment, Endstate and Alliance Authentic, and the continued expansion of Handmade by Robots. Third, we are focused on improving cash conversion and balance sheet efficiency. And finally, we will continue to evaluate acquisition selectively, where the strategic fit and expected return justify the use of capital. With that, I will turn it back to Jeffrey. Jeffrey Walker: Thank you, Amanda. Before we open the call for questions, I want to close with a few recent examples that bring our strategy to life and explain why I am so excited about where Alliance is going. In July, I had the opportunity to spend time with sir Richard Branson on Necker Island and present him with an Alliance Authentic preserved copy of the Sex Pistols Never Mind the Bullocks Here's the Sex Pistols. Because that album is so closely connected to the history of Virgin Records, It was a particularly meaningful moment for myself and Richard. We were taking an iconic physical record, 1 with real cultural and personal significance, and showing how preservation, authentication, and digital identity can help protect its condition, provenance, and story over time. For someone who has spent his entire career in physical entertainment, It was a remarkable illustration of what Alliance Identity can become. Later that month, we brought the strategy direct to collectors at San Diego Comic-Con. Alliance Authentic joined Handmade by Robots inside the Lucasfilms Pavilion where we presented preserved music and licensed collectibles to 1 of the most engaged fan communities in the world. We also secured an additional 5 thousand units of the previously sold out Project Hail Mary Amazon exclusive limited edition collector's steelbook. These units sold out again on the same day they were made available. Our studio and label relationships give us access to some of the most important products and franchises in entertainment. Handmade by Robots gives us an owned brand through which we can participate directly in product design, licensing, exclusivity, and go to market execution. Alliance Authentic adds preservation, authentication, and digital product identity. And our distribution and fulfillment network gives us the ability to bring those products to retailers and consumers at scale. When those capabilities come together, we are doing more than moving units through a distribution network. We can help shape the product, create scarcity and differentiation, build a direct relationship with the collector, protect the product's identity, and participate more fully in the value created around it. We are focused on turning moments like these into repeatable commercial capabilities across licensed products, premium limited edition, direct collector engagement, and authentication services, with additional opportunities across the life cycle of the product. The response we saw this summer strengthened our conviction that collectors want products with meaning, quality, scarcity, authenticity, and the story. Alliance is increasingly positioned to help content owners and licensors create those products and bring them to market. We are also seeing extraordinary excitement around the major entertainment release heading into fiscal 27 Grand Theft Auto VI is a great example. Rockstar's extended look debuted on Netflix in late August and generated enormous level of consumer engagement highlighting just how significant this release has become as a cultural event. We buy directly from Take 2 and expect to participate across the launch, including the game itself and related products. We also expect to participate in the excitement around GTA VI through music. A GTA VI vinyl release featuring recording artist, is expected through Atlantic Records And given the level of interest around the franchise, believe it could be among our strongest selling album releases of the holiday season. It is a great example of how a major entertainment event can create demand across several parts of Alliance at once. Gaming, hardware, accessories, and physical music. Opportunities like these are why we are so excited about fiscal 27. We have momentum in our core business, new growth platforms and collectibles and authentication, and new tools in AI and automation that can make alliance more productive as we scale. Alliance has spent more than 3 decades building relationships, infrastructure, and capabilities across physical entertainment. Today, that foundation is supporting a much broader opportunity Premium formats, exclusive products, own brand, authentication, fulfillment, and direct collector engagement. We believe Alliance is increasingly positioned not just to participate in the evolution of physical entertainment but to help shape it. I want to thank our employees across Alliance for their hard work and contributions. I would also like to thank our customers content, and licensing partners collectors and shareholders for their continued support. Operator, we are ready to open the line for questions. Operator: Thank you. Now be conducting a question and answer session. If you would like to ask a question, please press 1 on your telephone keypad. 1 moment, please, while we poll for questions. Our first question is from Thomas Forte with Maxim Group. Thomas Forte: Great. So Bruce, Jeffrey, Amanda, congratulations on a very strong fiscal year. I have 3 questions. Jeffrey, They get progressively harder. I will go 1 at a time. So the easiest 1 first I do not think you were very affected by tariffs meaning that most of your music efforts and your movie efforts were not subject to tariffs I think you had some small tariffs on handmade by robots. But we have been hearing a lot about tariff refunds in the June quarter. And I am just curious if you were able to secure any. Jeffrey Walker: Hey, Tom. Good to hear from you. Yes. We definitely secured some credits back and we have received the majority of the credits that we are waiting for to come back. Good. Alright. And then my second question is it is very interesting and impressive to see the very strong growth in CDs I know it is way too early. To talk about you know, when you looked at the 19 years you have seen a recovery in vinyl. But I would appreciate it if you could compare and contrast what you are seeing in CDs why do you think CDs are doing so well, And how it is similar to and different from trends in vinyl? Yeah. I think first off, there. there is there is a big push for people that are fans to collect product. of their favorite artists. I will say in CDs in particular, I recall maybe about 18 months ago, we were at a our music trade show, and we were talking with the labels about CDs and what we were seeing as the growth of it. And 1 of the big topics was that everybody had kind of forgotten about CDs a little bit, and you know, the in stock percentages and the fill percentages and things like that were not that great. And there was a lot of conversation about we. We have gotta make sure that all the classic albums, the top albums need to be in stock and available and you know, and so forth there. And so that is really happened over the last year, which is definitely helping the sales here. And then the second part of that consumers were coming in, buying CDs, and you have independent music stores and so forth going, hey. Sales are going up. Maybe we build back up our section a little bit. So now you are seeing more selection at the store and on the store shelves. And all of that continues to enhance it. 1 of the things in the decline that was a big challenge is there is no product on the store shelf as it kept declining, declining, declining. There was fewer and fewer and fewer places to buy it. It also goes the other way. So you see vinyl more stores, bigger selections, and more different retailers as well. that is been helping support the sales of vinyl. And so now you are seeing that trend happening on CDs. So I do expect it to continue with what we are seeing because the consumer demand is there. The retailers, the wholesalers, and the labels are all producing product, making sure product is available. And that is the whole combination needs to work together. Thomas Forte: Alright. Great. And then third and final for me, I know that you are excited with good reason for Grand Theft Auto VI. But I feel like if you looked at your performance, in your fiscal fourth quarter, and just your fiscal year and you looked at your gaming versus kind of the rest of the portfolio, that the gaming did not do as well So when you step back, how do you look at your efforts in gaming and how do you consider from a portfolio standpoint when to emphasize or deemphasize different categories of physical media. Jeffrey Walker: I think. I mean, we are emphasizing and deemphasizing based on the trends we are seeing, Tom, on that. You know, this is this Grand Theft Auto 1 in particular is a historic game it is going to change the gaming industry here as well as there is there is a lot of other aspects revolving around this particular game. So it will be a huge fourth quarter. it is gonna be you could say, a Grand Theft Auto Christmas and that is what is coming for everybody on the retail side. it is a big thing happening there. Thomas Forte: Okay. Thank you for taking my questions. Jeffrey Walker: Thank you, Tom. Operator: Our next question is from Michael Kupinski with Noble Capital Markets. Michael Kupinski: Thank you for taking the questions and I offer my congratulations on a great year. A couple of questions here. Your physical movie revenue obviously increased strongly 22% due to Paramount and Amazon MGM, as you mentioned. Now that they are on the platform, I was wondering how much incremental revenue opportunity remains from those relationships as we cycle into fiscal 27? And then I was wondering maybe you can just give us an update on some discussions you might have with other major studios or content owners that would consolidate your distribution with you. Jeffrey Walker: Hey, Michael. Good to hear from you. With respect to Paramount and MGM, 1 of the things that we are seeing we are seeing pretty strong sales numbers on both of those. As well as we have been very much focusing on adding new catalog products to their collections. There was a lot of great content that both Paramount and MGM did not have released. Previously or it was released in 1 format, but maybe not released in a 4K format. Or in a steelbook format. So those type of items are stuff that we are expanding the catalog. And in particular, with Paramount right now in the second half here of 26, we have got a significantly more new releases They are not new movies. They are releases of existing movies that are really gonna help bolster our catalog position there with Paramount. So we are pretty excited about that side of it. And so from that perspective, With respect to the other studios, I really cannot comment too much. We are in a lot of different conversations, obviously, on that side as we have seen in the past. And it is each 1 of them has a different situation and different conversation, and we still do believe that Alliance is a great opportunity for a studio to license product to us. Because at the end of the day, we have really a huge substantial sales channel with all of our ecommerce capabilities, our store capabilities, fulfillment side of it. To help maximize the sales of those. Studios. So I think that is where we are at on that right now. Michael Kupinski: Gotcha. Thanks. And then on your proprietary products, it was just wondering if you can maybe give us a little color, the growth How much of the growth is coming from proprietary products like handmade by robots versus third party licensed merchandise? Jeffrey Walker: Yeah. The majority of our growth is coming from our third party products right now. We are pretty heavily investing in handmade by robots Alliance Authentic, as well as Endstate. Those are all opportunities for alliance that have very significantly strong margin profiles in those 3 categories. And we are definitely we have quite a bit of investment dollars into those right now. From building our teams on that side as well as working to market and generate new business. In all 3 of those categories. So you are gonna continue to see that investment that we are making right now on those 3 categories in particular. And on our current sales level, it is to your specific question, it is really the third party ones that are that are really significantly growing. Michael Kupinski: Gotcha. And then your fulfillment fee revenue increased a strong 26%. And you said that you added 5 thousand totes onto your AutoStore capacity. I was just wondering if you can just tell us how much additional revenue can the existing infrastructure and auto store capacity accommodate before another meaningful CapEx investment is required. Jeffrey Walker: We still have capacity currently, and we are always looking at how we maximize our capacity there. I do not think we have a pressing need right now for a huge CapEx investment. If we go down the CapEx side, it will be for more towards automation rather than size of the building per se. So we are looking at new opportunities to make the warehouse more efficient through different automation. So different product than the auto store, but same type of result where we use some technology there to really help reduce our overall costs on that aspect. So we still do have capacity, but you know, as different things pick up in 1 area and move around, we definitely are maneuvering with that in our warehouse operations. I will I will also say that we have also really run the business where we get the sales and we get the opportunity, and then we invest in the systems to make that happen. We are not we are not really a company that likes to go build a bunch of stuff and hope that the sales and opportunities show up. And so we are pretty prudent about that. We, you know, we get the capacity up there and the volume up there, and then we look at, okay, how do we how do we, you know, solve this capacity challenge? So we are pretty prudent on our capital expenditures. Michael Kupinski: Yep. And it seems like your SG and A expense increased a fairly strong 18%. I was just wondering, it sounds like a lot of that was to support future growth. I was just wondering, how should we look at SG and A leverage as we go into fiscal 27? Jeffrey Walker: I think there is a lot in there to support the growth, especially in some of the new categories So that I was just mentioning there. We do have some AI projects in the works Those could help us be a little more efficient. With some of our SG and A expenses. as well. So we are we are. We are pretty heavy on that side right now. I am a I am a CEO that is that is very pro AI and technology. So we have got a lot of our leadership team working on a lot of different AI solutions that can help us not only grow sales, which is the number 1 priority, but help with operational expenses as well. And we are going to continue to see some improvements in that a lot directly From those AI initiatives. Michael Kupinski: And Jeff, if I could squeeze 1 more in. About Alliance Authentic. I was just wondering if you are there specific commercial milestones that we should look for On Alliance Authentic and Endstate we have our own commercial milestones. Jeffrey Walker: I think, really, the biggest things that we are looking at first and foremost is the number of collectors that we have in the ecosystem. So what that means is how many people have 1 of the collectible items we have, whether it is vinyl or handmade robot or a Funko. Encapsulated. We are also right about ready to launch SteelBook encapsulated as well. And so the bigger that we grow that ecosystem, of our collectors, really helps us with the second phase of that, which is the peer to peer marketplace. Using the NFC chips there and developing that. So when people have their collectible, if they want to sell it or you know, sell it basically or buy them. We have a good marketplace and ecosystem for that. So we are investing quite a bit to develop that whole component there. it is operational today. And we are working on building more people with, the collectible products. The last part is we do have Comic Con New York coming up, and we did a lot with Alliance Authentic in San Diego Comic-Con and got a lot of collectors into the ecosystem through the Comic Con there as well. Michael Kupinski: Gotcha. Thank you. that is all I have. Luck on 2027. Jeffrey Walker: Thank you, Mike. Operator: Thank you. Our next question is from David Heiserman with ThinkEquity. David Heiserman: Thank you very much. Thank you, Jeffrey. Thank you, Amanda. 1 of my questions was specifically about the development of secondary market peer to peer marketplace so that you would control the entire distribution delivery in chain of custody provenance for all your collectibles. But my second question as an Eagles fan, I love seeing, the Eagles player up there on your super exciting brand. With Endstate Authentic, can you describe what the horizon would be for that going forward? Is that something that would be on every sports team around the world? And every event especially within the NFL team in Australia tonight. Jeffrey Walker: Yeah. So with Endstate Authentic, the technology that we have is great there. There is a huge amount of opportunities across all sorts of different collectible platforms. it is based on an NFC digital chip, And we have our own proprietary software with that. But it is really becomes an authentication aspect. That chip has its own digital codes to it that cannot be replicated and so forth. And so when you put that product, that chip into an encapsulated product, it could go into any items that are graded or authenticated. So you think of cards and collectibles and things like that people grade and authenticate. Chips like that are very valuable in those particular areas. It can also go into products when products are originally manufactured and made, putting a chip in there and that you then can prove the authentication and you know, the aspect that it is not a fake 1 of it or something that is been knocked off. So you are gonna continue to see not just with Endstate across the board, a significant movement into these NFC chips into a lot of different products. And you see them even in high end fashion products right now. They are starting to put them in some of the high end fashion bags and different things like that as well. it is it is really, really valuable for the authentication of the product. And so we are in the forefront of that, and we are focused heavily on collectibles and those type of things with the NFC technology. And I have been myself and Ben, who heads up Endstate, We are in a lot of different conversations right now of getting the. You know, our Endstate technology integrated into a lot of good opportunities. I do not really wanna speak on specifics about them right now because we are working under NDAs on a lot of those, but there is some great opportunity there with that technology. No doubt. David Heiserman: Thank you very much. Jeffrey Walker: Thank you. Operator: I would now like to pass the floor over to Paul Kuntz for any webcast questions. Thank you. Paul Kuntz: And we actually, I covered a few of these already, but we do have some. And I just wanna let attendees know we are running past 45 minutes now. So if we do not get to any of your questions and you have left contact information, we will reach out after we wrap up. But 1 of the questions we have, Jeffrey, what are you seeing in the DVD demand going forward? Jeffrey Walker: Yeah. So on the DVD side, my personal opinion on DVD is you know, we have we have been seeing a decline on DVD for you know, more than the last decade, a significant decline on that. And I personally have a belief that we are very close to the bottom of the decline. We are definitely seeing much slower rates of decline And with that, I am seeing a lot of social media conversation on DVD similar to what we are seeing on CD and vinyl that consumers wanna have their favorite movie at home and their collection And, you know, on the video side, we all know how complicated it is trying to find the movie you wanna watch and what platform it is on and whether it is on a platform or not. And so the DVD side is definitely ripe for a turnaround there. 1 of the challenges we have is not very many retailers stock DVD, and you know, we are in the right position to try to help that. Right now going forward. So I am I am I am optimistic that whether it is 2027 or 2028, we are gonna see the bottom of DVD, and we are gonna start to see it increasing similar to what we are seeing in vinyl and CD. it is people wanna collect their favorite movies. They wanna have them at their house. it is the same situation there. So I am pretty optimistic about that. And the trends that we are seeing seem to be going in that direction. Paul Kuntz: Great. Thank you. And our next question you learn anything from the reaction at San Diego Comic-Con that could influence the products Alliance develops or brings to market next? Jeffrey Walker: Well, Comic Con is a fantastic convention for people that have not been there before. there is they have a New York Comic Con coming up in just about a month from now. The fan base at Comic Con is fantastic. You know, they are they are focused on all their favorite products and IP and characters and it is a fantastic thing to watch there as well as you know, just like there is a shift to physical product and collectability, there is also a human shift to go to events and spend time at an event. And have experiences and do all of that. You know, the people pay a lot of money to go to Comic Con, and they go there because it is it is part of their life and part of their experience. And you know, you are seeing not just Comic Cons, but anime shows, vinyl record shows, collector shows. Trading card shows, all that kind of stuff being very robust right now as it is an experience for people, and it feeds their fandom and what they are collecting. So when we look at our products in there, we are definitely focused on what we can do as far as providing like, Comic Con exclusives of Handmade by Robots Same thing with Alliance Authentic. We had some great Star Wars collectibles on vinyl that were encapsulated. From Japanese pressings of the vinyl records that we sold there at Comic Con. We are at more that we can do with movies and so forth. With exclusives and those type of shows. it is really a culmination of all these different IP and fandom there. And it is it is where the collectors that we are trying to develop where they are they are coming through. And those people also, as you all can realize, are fairly heavy on social media and posting and developing that stuff. So when we are with a strong presence, that rolls out into a lot of social media going forward there. So we are. You know, as you can tell, we are also investing in shows like that to build our brands as well. And you know, there is cost to do that, but we are definitely seeing a win in that side by focusing on those Comic Cons and other collector shows. Paul Kuntz: Great. Thank you, Jeffrey. Then we had another question. On the new WebAMI platform, what will a retail buyer actually be able to do different once the AI enabled version goes live. Jeffrey Walker: So what. Just for everybody's info, WebAMI is our web platform for our b to b So we have almost 2,000 independent retailers and so forth. They use that website to place orders, to look up product, to search for products. it is a pretty robust website. It does a significant amount of our sales come through there. With the enhancement, we are rebuilding the entire back end of it as well as new enhancements. it is all been AI enabled coming from the back end. The core part of it is completed. We are we are now working on different functionality on the front end and we are planning to launch this in January 2027 after the holiday season. It includes significant speed improvements, in the platform as well as search capabilities. And when I talk about search capabilities, it goes beyond only searching for basic product, kind of a linear search, but it will also help if you are looking for something Star Wars related, it will bring up the movies, the music, the collectibles, all things revolving around that. Or if you wanted to go into some other category, it can it can cross search across all the different products. And 1 of the things that is important for us is being able to communicate to our buying customers all the different things that Alliance stocks and all these different categories And that will really help the buyers at the retail locations find stuff when something's hot and selling. Or, you know, they are going to have an in store appearance or a listening party for a new release on a music title? What other products from that artist are available and so forth. So it. We would expect it to dramatically help our sales in that in that side. It will be a big improvement for Alliance and we are. The way it is turning out right now, it is gonna be 1 of the top well, it will be the top b to b platform within our industry for sure. Paul Kuntz: Great. Thank you, Jeffrey. And as we are coming close to the. Full hour here, this will be, I guess, the last question we do. Beyond GTA VI, are there other major releases or franchises coming up that could create opportunities across several alliance categories at the same time. Jeffrey Walker: Oh, yeah. there is lots on that product side. We have actually put together our own product council here with music, movies, and collectible altogether because we have and gaming. So we have teams from each of those, and we get together and look at what is coming out in the future and what the combined opportunities and things are. Some of those definitely revolves around movies. And I will give you 1 piece of information that is coming. Of the new James Bond movie is an Amazon MGM movie. it is, they are working on that movie right now. it is looking like we are kind of hearing maybe theater is the end of 27. And you know, that will go into DVD for us through Amazon MGM in 2028. And then we are looking at, okay, what other collectibles revolving around James Bond, What are the music soundtracks and things revolving around that? And you can imagine when they put out a big movie like that has such a history to it, what that looks like in the 20. Late 27 and 2028 revolving around kind of everything James Bond. And so we are trying to coordinate all of our different configurations to plan ahead for something like that. 1 other 1 that is coming up that was really, was communicated by Tony is the new Beatles movie that is coming out in April 2028. there is multiple movies that the Beatles are putting out. And you guys can all imagine the combination that we have from music and the movie side and the collectible side trying to revolve around The Beatles coming up in 2028 and what that does for us. So those are kind of 2 examples, but you can see how there is such a correlation between all these platforms and these configurations altogether. And what those opportunities can present for us when we put our 4 teams of gaming and collectibles and music and video all together to try to strategize on how we have the best combination of product offering for those big initiatives that are happening. Very exciting opportunities there. Yes, sir. Paul Kuntz: Very exciting. Jeffrey, if you have any final comments you would like to leave before we wrap up? Jeffrey Walker: Well, I am super excited on where we are going. I know you guys see our collectible sales increase over the last year. They have really ramped up even more recently, and you know, I people told me to get out of the music industry a long time ago, and those people are I am kind of telling them I told you so now that we are seeing vinyl and CD resurgence like it is. So we are we are definitely in the right place at the right time, and we have got a fantastic team of people at Alliance. And there is a lot of great business conversations happening every day. And that is what we are all focused on here. And making some stuff happen as you can see. Operator: Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you again for your participation. Before you buy stock in Alliance Entertainment, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Alliance Entertainment wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Alliance Entertainment (AENT) Q4 2026 Earnings Call Transcript was originally published by The Motley Fool

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Performance growth was driven by a strategic shift toward premium products, exclusive content, and higher-valued services across physical music, home entertainment, and collectibles. Management attributes the 26% midyear growth in U.S. physical music revenue to a consumer shift toward 'ownership fandom,' where physical products serve as a tangible connection to artists and franchises. The company is successfully positioning itself as a scaled specialist for major studios like Paramount and Amazon MGM, who are consolidating physical media operations to leverage Alliance's manufacturing, inventory, and retail execution infrastructure. Collectibles growth of 45% reflects a pivot toward licensed premium products with higher average selling prices and better margin profiles compared to standard distribution items. Operational efficiency is being enhanced through a 'prudent' capital expenditure model, where investments in AutoStore automation and AI tools are triggered by realized volume growth rather than speculative capacity. The acquisition of Endstate Authentic is central to a new strategy of extending participation beyond the initial sale by creating digital product identities and authentication for high-value collectibles. Fiscal 2027 strategy focuses on capturing a full year of Amazon MGM distribution and accelerating the expansion of owned brands like Handmade by Robots to capture higher margins. Management expects the launch of Grand Theft Auto VI to be a significant cultural event, driving multi-category demand across gaming hardware, accessories, and physical music soundtracks. The new AI-enabled WebAMI B2B platform, scheduled for a Q1 2027 launch, is designed to improve retail buyer productivity through cross-category search and automated workflows. Financial priorities for the coming year include converting a greater share of earnings into operating cash flow by moderating working capital growth and improving inventory productivity. The company intends to build a peer-to-peer marketplace for authenticated collectibles, utilizing NFC technology to maintain a relationship with the product throughout its secondary lifecycle. Fiscal 2026 results included a $7.8 million noncash write-off of a historical vendor rebate receivable following the cessation of operations by a tape maker counterparty. Interest expense declined 28% following a successful credit facility refinancing, which improved the average effective interest rate from 9.2% to 6.1%. The company repaid $10 million of related party borrowings during the year to simplify its financing structure and improve balance sheet efficiency. Management secured the majority of expected tariff refunds during the June quarter, primarily related to the Handmade by Robots product line. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management noted that labels and retailers had previously 'forgotten' about CDs, leading to poor in-stock percentages that are now being corrected. Increased store shelf space and a focus on keeping classic albums in stock are meeting a renewed consumer demand for physical ownership. Alliance is focusing on releasing existing catalog titles in new premium formats, such as 4K Ultra HD and steelbooks, which were previously unavailable. Management believes their expansive sales channel makes them an attractive licensing partner for other studios looking to maximize catalog value. Current infrastructure has remaining capacity; future CapEx will prioritize automation technology to reduce labor costs rather than expanding physical building footprints. The company follows a 'sales-first' investment model, only expanding capacity once volume growth is secured. Management believes the DVD market is nearing a bottom, with rates of decline slowing as consumers grow frustrated with the complexity of streaming platforms. They anticipate a potential turnaround in 2027 or 2028 as DVD follows the 'ownership' trend seen in vinyl and CDs.

GAAP net income was $13.1 million, or $0.26 per diluted share; adjusted EBITDA increased 14% to $41.5 million; adjusted net income rose 24% to $23.4 million and adjusted diluted EPS increased 24% to $0.46 Vinyl revenue increases 13% to $383 million; CD revenue rises 25% to $156 million Physical movie revenue increases 22% as relationships with Paramount and Amazon MGM Studios reinforce Alliance’s position as a scaled physical entertainment distribution partner Collectibles revenue increases 45% as Alliance expands its portfolio of higher-value, premium and proprietary products PLANTATION, Fla., Sept. 10, 2026 (GLOBE NEWSWIRE) -- Alliance Entertainment Holding Corporation (Nasdaq: AENT), a scaled entertainment commerce and collectibles platform serving content owners, brands, retailers and fans across music, movies, gaming, licensed merchandise and collectibles, with proprietary brands, authentication technology and reach across more than 35,000 retail and e-commerce storefronts, reported its financial and operational results for its fiscal year ended June 30, 2026. Fiscal 2026 Financial Highlights Net Revenues: Increased 8% to $1.149 billion, compared with $1.063 billion in fiscal 2025. Gross Profit and Margin: Gross profit increased 15% to $152.3 million from $132.9 million, while gross margin expanded 80 basis points to 13.3% from 12.5%. GAAP Results: Operating income was $27.2 million and net income was $13.1 million, compared with $30.1 million and $15.1 million, respectively. Fiscal 2026 included a $7.8 million non-cash write-off of a historical vendor rebate receivable. Adjusted EBITDA: Increased 14% to $41.5 million, compared with $36.5 million in fiscal 2025. Adjusted Net Income and Adjusted Diluted EPS: Adjusted net income increased 24% to $23.4 million, compared with $18.9 million in fiscal 2025, while adjusted diluted earnings per share increased 24% to $0.46 from $0.37. Interest Expense: Decreased 28% to $7.6 million from $10.6 million, reflecting a lower average effective interest rate following the Company’s refinancing. Cash Flow and Liquidity: Net cash used in operating activities was $1.7 million, compared with $26.8 million of net cash provided in fiscal 2025, primarily reflecting increased inventory and receivables to support growth. The Company ended fiscal 2026 with $45.7 million of availability under its $120 million revolving credit facility. “Fiscal 2026 demonstrated that the strategy we have been executing is strengthening both the quality of our business and our position across the entertainment ecosystem,” said Jeff Walker, Chief Executive Officer of Alliance Entertainment. “The market for physical entertainment continues to evolve toward premium formats, collectible products and more specialized distribution, and those changes are playing directly to the capabilities we have built over more than three decades. Our expanding relationships with major content owners, including Paramount and Amazon MGM Studios, reinforce the value of our scale, infrastructure, and ability to manage increasingly complex physical entertainment programs across wholesale, retail, and e-commerce channels.” “Our opportunity is increasingly broader than traditional distribution,” Walker continued. “We are using the same infrastructure and relationships that support our core business to expand into higher-value collectibles, proprietary products, fulfillment services and new capabilities such as authentication and digital product identity. Our focus is not simply on putting more volume through the platform, but on improving the value and economics of what moves through it. As the entertainment market becomes more specialized and content owners and retailers look for scaled partners that can manage that complexity, we believe Alliance is increasingly well positioned to capture those opportunities and create durable long-term value.” “Fiscal 2026 was a year of strong execution for Alliance Entertainment," said Amanda Gnecco, Chief Financial Officer of Alliance Entertainment. "We expanded gross margins, grew gross profit faster than revenue and delivered growth in adjusted EBITDA, adjusted net income and adjusted diluted earnings per share. These results demonstrate the progress we've made in strengthening the earnings profile of the business while continuing to invest in the products, capabilities and partnerships that support our long-term growth strategy." "Looking ahead to fiscal 2027, we are excited about the opportunities in front of us," Gnecco added. "Our focus remains on driving profitable growth, improving cash generation and increasing operating leverage as we continue to scale the business. Combined with lower borrowing costs, solid liquidity and continued investment in automation and technology, we believe we are well positioned to deliver continued value for our customers, partners and shareholders.” Strategic & Operating Highlights Physical Music Demand Remained Strong Across Formats: Vinyl revenue increased 13% to $383 million, while CD revenue increased 25% to $156 million. Growth across both formats reflects sustained consumer demand for physical ownership, premium editions and collectible-oriented releases, reinforcing the durability of physical music as an important part of Alliance’s portfolio. Home Entertainment Growth Reinforced Alliance’s Strategic Position with Major Studios: Physical movie revenue increased 22% to $339 million, supported by higher unit volumes and the Company’s expanding studio relationships. Alliance’s exclusive physical-media distribution relationship with Paramount and the addition of Amazon MGM Studios during fiscal 2026 further strengthen the Company’s role as a scaled partner for content owners seeking to manage physical entertainment distribution across wholesale, retail and e-commerce channels. Collectibles Continued to Expand as a Higher-Value Growth Category: Collectibles revenue increased 45% to $32 million, supported by higher average selling prices, expanded licensed merchandise offerings and continued development of proprietary products. The Company is leveraging its existing entertainment relationships and distribution infrastructure to broaden its participation in premium fan and collector categories, including through its owned Handmade by Robots™ brand. Fulfillment Growth and Automation Investments Enhanced Platform Scalability: Distribution and fulfillment fee revenue increased 26% to $18.6 million as Alliance continued to expand its role as an omnichannel logistics and fulfillment partner. During fiscal 2026, the Company ordered 5,000 additional totes for its AutoStore system, increasing capacity to 57,000 totes and supporting higher throughput while maintaining fulfillment labor efficiency. Authentication and Digital Identity Expanded Alliance’s Platform Capabilities: Following the acquisition and integration of Endstate, Alliance continued developing NFC-enabled authentication and digital product identity capabilities through Endstate Authentic and Alliance Authentic™. These initiatives are designed to extend the Company’s participation beyond initial product distribution into areas such as authenticated ownership, provenance, brand protection and resale, creating additional long-term opportunities across premium physical products and collectibles. Fiscal 2026 Financial Review The improvement in gross margin during fiscal 2026 reflected stronger margins in physical movies and collectibles, increased contribution from premium and exclusive content, favorable product mix and returns activity, and lower wholesale freight costs as a percentage of sales. A portion of the increase in gross profit was offset by higher selling, general and administrative expenses, which increased to $66.0 million from $56.0 million, primarily reflecting higher payroll and employee-related costs to support growth, as well as increased consulting and professional-service costs associated with strategic initiatives and public-company operations. Fiscal 2026 also included a $7.8 million non-cash write-off of a historical vendor rebate receivable associated with Tastemakers following the counterparty’s cessation of operations. The Company does not consider this charge representative of its ongoing operating performance. Operating cash flow in fiscal 2026 was principally affected by increased working-capital investment to support the Company’s higher revenue base and anticipated customer demand. Working capital increased to $62.4 million at June 30, 2026, from $45.4 million a year earlier. Inventory and trade receivables increased at rates above the Company’s 8% revenue growth during the year, contributing to the year-over-year decline in operating cash flow. In fiscal 2027, management’s objective is to convert a greater share of earnings into operating cash flow by moderating working-capital growth relative to revenue, increasing inventory productivity and strengthening receivable collections. The Company benefited from lower borrowing costs during fiscal 2026, with its average effective interest rate declining to 6.1% from 9.2% following its refinancing with Bank of America in October 2025. The Company had $74.3 million outstanding under its $120 million revolving credit facility, with $45.7 million of remaining availability, The facility also provides, subject to certain conditions and lender consent, for up to $50 million of additional borrowing capacity, providing further potential financial flexibility as the business grows. The Company was in compliance with applicable covenants at year-end. During fiscal 2026, the Company also repaid $10.0 million of related-party borrowings, further simplifying its financing structure. Conference Call Alliance Entertainment Chief Executive Officer Jeff Walker, Chief Financial Officer Amanda Gnecco, and Executive Chairman Bruce Ogilvie will host the conference call, which will be followed by a question-and-answer session. A presentation will accompany the call and can be viewed during the webcast or accessed via the investor relations section of the Company’s website here. To access the call, please use the following information: Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact RedChip Companies at 1-407-644-4256. The conference call will be broadcast live and available for replay at https://viavid.webcasts.com/starthere.jsp?ei=1774079&tp_key=92e32c8d84 and via the investor relations section of the Company’s website here. A telephone replay of the call will be available approximately three hours after the call concludes and can be accessed through October 10, 2026, using the following information: About Alliance Entertainment Alliance Entertainment (NASDAQ: AENT) is a scaled entertainment commerce and collectibles platform serving content owners, brands, retailers and fans across music, movies, gaming, licensed merchandise and collectibles. The Company also owns and develops proprietary brands and platforms, including Handmade by Robots™ and Alliance Authentic™, while Endstate Authentic adds NFC-enabled authentication and digital product identity capabilities supporting provenance, brand protection and authenticated resale. Leveraging decades of industry relationships and distribution, fulfillment and inventory-management expertise, Alliance reaches more than 35,000 retail and e-commerce storefronts, connecting entertainment franchises and collectible products with consumers across channels and generations. For more information, visit www.aent.com. Forward Looking Statements Certain statements included in this Press Release that are not historical facts are forward-looking statements for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied by words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “should,” “would,” “plan,” “predict,” “potential,” “seem,” “seek,” “future,” “outlook,” and similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, statements regarding estimates and forecasts of other financial and performance metrics and projections of market opportunity. These statements are based on various assumptions, whether identified in this Press Release, and on the current expectations of Alliance’s management and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as and must not be relied on by an investor as, a guarantee, an assurance, a prediction, or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the control of Alliance. These forward-looking statements are subject to a number of risks and uncertainties, including risks relating to the anticipated growth rates and market opportunities; changes in applicable laws or regulations; the ability of Alliance to execute its business model, including market acceptance of its systems and related services; Alliance’s reliance on a concentration of suppliers for its products and services; increases in Alliance’s costs, disruption of supply, or shortage of products and materials; Alliance’s dependence on a concentration of customers, and failure to add new customers or expand sales to Alliance’s existing customers; increased Alliance inventory and risk of obsolescence; Alliance’s significant amount of indebtedness; our ability to refinance our existing indebtedness; risks that a breach of the revolving credit facility could result in the lender declaring a default and that the full outstanding amount under the revolving credit facility could be immediately due in full, which would have severe adverse consequences for the Company; known or future litigation and regulatory enforcement risks, including the diversion of time and attention and the additional costs and demands on Alliance’s resources; Alliance’s business being adversely affected by increased inflation, uncertainty regarding tariffs, higher interest rates and other adverse economic, business, and/or competitive factors; geopolitical risk and changes in applicable laws or regulations; as well as our financial condition and results of operations; substantial regulations, which are evolving, and unfavorable changes or failure by Alliance to comply with these regulations; product liability claims, which could harm Alliance’s financial condition and liquidity if Alliance is not able to successfully defend or insure against such claims; availability of additional capital to support business growth; and the inability of Alliance to develop and maintain effective internal controls. For investor inquiries, please contact: Dave GentryRedChip Companies, Inc.1-800-REDCHIP (733-2447)[email protected] Non-GAAP Financial Measures: EBITDA, Adjusted EBITDA, Adjusted Net Income, and Adjusted Earnings per Diluted Share (collectively, the “Non-GAAP Financial Measures”) are supplemental measures of our performance that are not required by, or presented in accordance with, U.S. GAAP. The Non-GAAP Financial Measures are not measurements of our financial performance under U.S. GAAP and should not be considered as alternatives to net income, earnings per share or any other performance measure derived in accordance with U.S. GAAP. We define EBITDA as net income before interest expense, net, income tax expense, depreciation and amortization. We define Adjusted EBITDA as EBITDA further adjusted for non-cash charges related to equity-based compensation programs, acquisition and deal-related costs, changes in the fair value of warrants and vendor transaction loss, insurance claim recoveries, and restructuring costs and net gains and losses on the disposal of assets. We define Adjusted Net Income as net income adjusted for the impact of certain non-cash charges and other items that we do not consider in our evaluation of ongoing operating performance. These items include, among other things, non-cash charges related to equity-based compensation programs, acquisition and deal-related costs, amortization of acquisition-related intangible assets, amortization of deferred financing costs, changes in the fair value of warrants and litigation costs and settlements, regulatory assessments and insurance settlements, and the income tax expense effect of these adjustments. We define Adjusted Earnings per Diluted Share as Adjusted Net Income divided by the weighted-average shares outstanding used in the calculation of diluted earnings per share in accordance with U.S. GAAP. We caution investors that amounts presented in accordance with our definitions of the Non-GAAP Financial Measures may not be comparable to similar measures disclosed by our competitors, because not all companies and analysts calculate the Non-GAAP Financial Measures in the same manner. We present the Non-GAAP Financial Measures because we consider them to be important supplemental measures of our performance and believe they are frequently used by securities analysts, investors, and other interested parties in the evaluation of companies in our industry. Management believes that investors’ understanding of our performance is enhanced by including these Non-GAAP Financial Measures as a reasonable basis for comparing our ongoing results of operations. The following tables reconcile the Non-GAAP Financial Measures to the most directly comparable U.S. GAAP financial performance measure, which is net income, for the years presented: (1) Represents non-cash charges related to equity-based compensation programs, which vary from period to period depending on the timing of awards.(2) Represents costs incurred in connection with completed and contemplated business combinations, including advisory, legal, accounting and other professional fees.(3) Represents amortization of intangible assets acquired in business combinations. The revenue generated by those intangible assets is not excluded from the Non-GAAP Financial Measures.(4) Represents amortization of debt issuance costs incurred in connection with our credit facility with Bank of America and the terminated White Oak Credit Facility.(5) Represents non-cash gains and losses resulting from the remeasurement of warrant liabilities and contingent consideration to fair value at each reporting date.(6) Represents a loss recognized on a receivable due from a vendor for rebates owed before the company went out of business.(7) Represents legal fees, settlement amounts and other costs associated with litigation matters that we do not consider indicative of our ongoing operating performance.(8) Represents recoveries received under insurance claims(9) Represents the income tax effect of the above adjustments. This adjustment uses a blended federal and state statutory income tax rate of 25% for all periods presented and is applied only to those adjustments that carry an income tax consequence. Changes in the fair value of warrants and contingent consideration are not deductible for income tax purposes and accordingly have not been tax effected. (10) Represents total depreciation and amortization determined in accordance with U.S. GAAP, which includes amortization of acquisition-related intangible assets. Accordingly, no separate adjustment for that amortization is presented in the reconciliation of EBITDA to Adjusted EBITDA.(11) Represents restructuring costs.(12) Represents net gains and losses on the disposal of property and equipment.(13) State Tax refund for abandoned property

Interested in Alliance Entertainment Holding Corporation? Here are five stocks we like better. Fiscal 2026 growth accelerated: Revenue rose 8% to $1.15 billion, while gross profit increased 15% and gross margin expanded to 13.3%. Vinyl, CDs, physical movies and collectibles all posted strong gains, helping fourth-quarter revenue grow 18%. Adjusted profitability improved despite a write-off: Adjusted EBITDA increased 14% to $41.5 million and adjusted EPS rose 24% to $0.46, although a $7.8 million non-cash vendor-rebate write-off reduced GAAP operating income and net income. Fiscal 2027 priorities center on cash and technology: Alliance plans to improve inventory and receivables management while investing selectively in automation, AI-enabled B2B tools, authentication technology and owned brands. The company also expects growth from premium content, collectibles and major entertainment franchises. 3 Small-Cap Stocks With Big Growth Potential Alliance Entertainment (NASDAQ:AENT) reported fiscal 2026 revenue growth, wider gross margins and higher adjusted EBITDA, as demand for physical music, premium home entertainment and collectibles increased. The company also outlined investments in automation, artificial intelligence, authentication technology and owned brands as it enters fiscal 2027. For the fiscal year ended June 30, 2026, revenue rose 8% to $1.15 billion from $1.06 billion in the prior year. Gross profit increased 15% to $152.3 million, while gross margin expanded 80 basis points to 13.3%. → 3 Lesser-Known Quantum Plays the Market May Be Overlooking Right Now Chief Executive Officer Jeff Walker said the company closed the year with momentum, reporting fourth-quarter revenue growth of 18% to $268.1 million. He attributed the performance to broad-based gains across physical music, home entertainment, collectibles and fulfillment services, as well as a continued shift toward premium products, exclusive content and higher-value services. Alliance reported fiscal 2026 vinyl revenue of $383 million, up 13% from the prior year. CD revenue climbed 25% to $156 million, while physical movie revenue rose 22% to $339 million. Collectibles revenue increased 45% to $32 million, and distribution and fulfillment fee revenue grew 26% to $18.6 million. → Qualcomm’s Data Center Bet Looks More Real After Amazon’s AI Deal Walker said the company benefited from consumer demand for products tied to artists, movies, franchises and collector communities. He also cited industry data showing U.S. physical music revenue rose nearly 26% during the first half of calendar 2026, including vinyl revenue growth of 17.7% and CD revenue growth of 58.6%. During the question-and-answer session, Walker said stronger CD sales have been supported by labels, retailers and wholesalers improving product availability, especially for catalog and classic albums. He said retailers have begun expanding CD selections as demand has increased. → Defense, Solar, and Refining Stocks Split as the Iran Conflict Raises Energy Risk In home entertainment, Alliance said its growth reflected expanded work with major studios. Paramount became an exclusive physical-media distribution partner in the U.S. and Canada beginning in calendar 2025, and Alliance added Amazon MGM Studios at the start of calendar 2026. Walker said the company is adding catalog titles from both studios in formats including 4K and SteelBooks. Walker said Alliance currently supports more than 340,000 in-stock SKUs across more than 35,000 retail and e-commerce storefronts. Its capabilities include wholesale distribution, drop-ship fulfillment, inventory management and direct-to-consumer execution. Chief Financial Officer Amanda Gnecco said gross-margin expansion reflected stronger margins in physical movies and collectibles, a greater contribution from premium and exclusive content, favorable mix, returns activity and lower wholesale freight costs as a percentage of sales. Selling, general and administrative expenses increased to $66 million from $56 million in fiscal 2025. Gnecco said the increase was primarily driven by payroll and employee-related costs supporting the larger business, along with consulting and professional-services expenses associated with strategic initiatives and public-company operations. Fiscal 2026 results included a $7.8 million non-cash write-off of a historical vendor rebate receivable related to Tastemakers after that counterparty ceased operations. Including the charge, GAAP operating income declined to $27.2 million from $30.1 million, while net income decreased to $13.1 million from $15.1 million. On a non-GAAP basis, adjusted EBITDA increased 14% to $41.5 million. Adjusted net income rose 24% to $23.4 million, and adjusted diluted earnings per share increased 24% to $0.46 from $0.37. Interest expense declined 28% to $7.6 million, compared with $10.6 million a year earlier, following the refinancing of the company’s credit facility. The average effective interest rate improved to 6.1% from 9.2%. Net cash used in operating activities was $1.7 million in fiscal 2026, compared with $26.8 million of operating cash generated in fiscal 2025. Gnecco said the change was driven by higher inventory and receivables, which both increased faster than revenue. Working capital rose to $62.4 million at June 30 from $45.4 million a year earlier. Alliance ended the year with $74.3 million outstanding under its $120 million revolving credit facility, leaving $45.7 million available. The company also repaid $10 million of related-party borrowings during the year. Management said it intends to improve cash conversion in fiscal 2027 through inventory discipline, receivables collections and better working-capital efficiency. The company also plans to invest selectively in automation, AI tools, the redevelopment of its Webb-AMP business-to-business platform, Endstate Authentic, Alliance Authentic and Handmade by Robots. Alliance ordered 5,000 additional totes for its AutoStore system during fiscal 2026, bringing capacity to 57,000 totes. Walker said the company still has warehouse capacity and does not see an immediate need for a major capital investment, though it is evaluating additional automation intended to improve efficiency. The company implemented HubSpot in January 2026 and is rebuilding its Webb-AMP B2B platform with AI-enabled search and purchasing tools. Walker said the new platform is expected to launch in January 2027, following the holiday season. Alliance is expanding its authentication and digital-product-identity initiatives following its acquisition of Endstate Authentic earlier in calendar 2026. The company has launched preserved and encapsulated Handmade by Robots and select Funko collectibles through Alliance Authentic and is preparing to add premium video SteelBooks. Walker said Alliance is focused on increasing the number of collectors in its authentication ecosystem before expanding a peer-to-peer marketplace. He said NFC-enabled chips can support product authentication and provenance across collectibles and other categories. Looking ahead, management highlighted expected opportunities around major entertainment releases, including Grand Theft Auto VI. Walker said Alliance expects to participate in the launch through the game, related products, hardware, accessories and a planned vinyl release through Atlantic Records. Walker also pointed to longer-term opportunities tied to an Amazon MGM James Bond film and new Beatles films that Sony has said are expected in 2028. He said Alliance has formed a product council spanning music, movies, gaming and collectibles to identify franchise-related opportunities across its categories. Alliance Entertainment (NASDAQ: AENT) is a distributor of physical media and related entertainment products, serving retailers, public libraries and online merchants. The company’s core business revolves around the wholesale distribution of music and video titles on CD, DVD and Blu-ray formats, as well as vinyl records, audiobooks, video games and select gift and novelty items. By maintaining a broad catalog of new and catalog titles, Alliance Entertainment enables brick-and-mortar and e-commerce channels to access an extensive range of products from major and independent labels. In addition to its product offerings, Alliance Entertainment provides supply-chain and logistics services designed to streamline inventory management and order fulfillment. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Alliance Entertainment Q4 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for September 2026.

PLANTATION, Fla., Aug. 27, 2026 (GLOBE NEWSWIRE) -- Alliance Entertainment Holding Corporation (Nasdaq: AENT), a premier distributor, logistics provider, and omnichannel fulfillment partner to the entertainment and pop culture collectibles industry, supplying more than 340,000 unique SKUs across physical media, video games, toys, licensed merchandise, and exclusive collectibles to over 35,000 retail and e-commerce storefronts, will hold a conference call on Thursday, September 10, at 4:30 p.m. Eastern Time to discuss its results for the fiscal year ended June 30, 2026. A press release detailing these results will be issued prior to the call. Alliance Entertainment Chief Executive Officer Jeff Walker, Chief Financial Officer Amanda Gnecco, and Executive Chairman Bruce Ogilvie will host the conference call, which will be followed by a question-and-answer session. A presentation will accompany the call and can be viewed during the webcast or accessed via the investor relations section of the Company’s website here. To access the call, please use the following information: Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact RedChip Companies at 1-407-644-4256. The conference call will be broadcast live and available for replay at https://viavid.webcasts.com/starthere.jsp?ei=1774079&tp_key=92e32c8d84 and via the investor relations section of the Company’s website here. A telephone replay of the call will be available approximately three hours after the call concludes and can be accessed through October 10, 2026, using the following information: About Alliance Entertainment Alliance Entertainment (NASDAQ: AENT) is a premier distributor and fulfillment partner for the entertainment and pop culture collectibles industry. With more than 340,000 unique in-stock SKUs - including over 57,300 exclusive titles across compact discs, vinyl LPs, DVDs, Blu-rays, and video games - Alliance offers the largest selection of physical media in the market. Our vast catalog also includes licensed merchandise, toys, retro gaming products, and collectibles, serving over 35,000 retail locations and powering e-commerce fulfillment for leading retailers. Alliance also owns and operates proprietary collectibles brands, including Handmade by Robots™, a stylized vinyl figure line featuring licensed characters from leading entertainment franchises, and Alliance Authentic™, a premium platform for authentic, certified, and individually numbered entertainment collectibles. In addition, Alliance operates Endstate Authentic, a dedicated NFC-enabled authentication and digital product identity platform supporting authenticated collectibles, resale, and brand protection. Leveraging decades of operational expertise, exclusive sourcing relationships, and a capital-light, scalable infrastructure, Alliance connects fans and collectors to the products, franchises, and experiences they value across formats and generations. For more information, visit www.aent.com. For investor inquiries, please contact: Dave GentryRedChip Companies, Inc.1-800-REDCHIP (733-2447)[email protected]

Image source: The Motley Fool. Thursday, May 14, 2026 at 4:30 p.m. ET Chief Executive Officer — Jeffrey Walker Chief Financial Officer — Amanda Gnecco Executive Chairman — Bruce Ogilvie Need a quote from a Motley Fool analyst? Email [email protected] Jeff Walker, Chief Executive Officer; and Amanda Gnecco, Chief Financial Officer, will present the results of operations for the third quarter and nine months ended March 31, 2026. Bruce Ogilvie, Executive Chairman, is also on the line and will participate during the Q&A session. At this time, I will turn the call over to Alliance Entertainment's CEO, Jeff Walker. Jeffrey Walker: Thank you, Paul, and good afternoon, everyone. We appreciate you joining us today. I want to begin by framing the third quarter in very clear terms because the most important takeaway this quarter is that we are now seeing both sides of our model working together, sustained revenue growth and continued earnings expansion driven by the structural shift in our business. During the third quarter, Alliance delivered a strong top line growth with net revenue increasing 21% year-over-year alongside continued profitability with net income increasing 25% and adjusted EBITDA reaching $5.1 million. For the year-to-date period, net income is up 78% and adjusted EBITDA has increased 47%. These results are important not just because of the growth, but because of how that growth is being generated. What we're seeing is the continued execution of a strategy we've been building over the last several years, a shift toward higher-value products, stronger mix and a more scalable operating model. The revenue growth this quarter was broad-based across our core categories, including Music, Video, Gaming and Collectibles, and it reflects both underlying demand and our ability to align inventory, content and distribution with where the collectors are going. At the same time, we continue to operate with discipline, even as we scale the business, we're maintaining a cost structure that allows us to generate operating leverage and sustain profitability. That balance, growth with discipline is what defines the earnings profile we're building. Stepping back, what's important is that the performance is not being driven by short-term factors. It reflects a structural shift in how collectors engage with physical products today. We've been very clear in how we think about this. We are not in a declining physical media business. We are in the Collectible business. And what we're seeing in the market continues to validate that. Collectors are buying vinyl, CDs and premium video formats, not because they need access to content, but because they want to own something tied to the artists, franchises and brands they care about. That shift towards ownership, scarcity and premium formats is driving stronger demand, better pricing and more consistent sell-through across our portfolio. It is also reinforcing our position as a key partner to studios, labels and licensors who are increasingly looking to Alliance to manage the full life cycle of these products. At the same time, we are extending that model beyond traditional distribution, during the quarter, we advanced the next phase of our strategy with the launch of Alliance Authentic and the continued integration of Endstate. These initiatives begin to layer authentication, provenance and life cycle engagement into the products we already distribute at scale, moving us towards a platform that supports Collectibles from initial sale through resale. Taken together, the third quarter reinforces that Alliance is evolving into a more scalable, high-quality business, one that combines growth, profitability and increasing participation across the full life cycle of Collectible products. With that context, I'd like to walk through the key drivers behind this performance, starting with how our content strategy and category focus are shaping results across the portfolio. During the third quarter, we saw strong growth in Music and Video. Vinyl revenue increased 15% year-over-year to $99 million. CD revenue increased a staggering 90% to $39 million and Physical Movie revenue grew 5% to $61 million. What's notable here is not just the growth itself, but the breadth of that performance. We're seeing strength across multiple formats, price points and release types. In Music, demand continues to be driven by both new releases and ongoing catalog engagement with particularly strong performance in Collectible-oriented segments such as limited editions and international titles, including K-pop. At an industry level, this trend continues to build with U.S. Vinyl sales surpassing $1 billion last year, marking nearly two decades of consistent growth. And what's important is how consumers are engaging with that product. When you look at major releases, whether it's Taylor Swift or other top artists, millions of Vinyl records and CDs are being sold alongside streaming access that is readily available. Those purchases are not about access. They're about ownership. People want something tangible, connected to the artist, and that's what continues to drive demand in the category. We also saw incremental demand tied to event-driven moments like Record Store Day, which continues to expand in both scale and participation. This year was the largest Record Store Day ever, and we shipped over 700,000 units to independent retailers, reflecting both the strength of the event and our role in enabling it at scale. In Video, while the category has gone through a long period of decline, what we're seeing now is a more stable demand environment, supported by a steady cadence of new releases and continued interest in premium formats such as 4K, UltraHD and Collectible additions such as SteelBooks. Industry data shows that 4K UltraHD formats grew approximately 12% in 2025, reinforcing the shift towards higher-quality collector-focused home entertainment. Over the past year, we've significantly expanded our access to high-quality content through our license agreements with Paramount, which became effective at the beginning of calendar 2025 and MGM Studios, which we added at the start of calendar 2026. Together, these partnerships give us distribution rights to some of the most valuable franchises in the industry, strengthening our position with both retailers and collectors. Just as importantly, they allow us to consistently bring premium high-demand releases to the market, which supports stronger sell-through, better pricing and improved visibility across key retail channels. What we're also seeing is that scale matters more in this environment. As the market shifts towards Premium and Collectible formats, retailers and licensors increasingly rely on partners who can manage complexity, whether that's broader SKU assortments, shorter production runs or more targeted release strategy. That plays directly into our strengths in distribution, fulfillment and inventory management. So when you look at the Physical Media category today, the takeaway is that it's becoming more focused, more premium and more execution driven. And within that environment, our role continues to expand, not just as a distributor, but as a partner that helps bring these products to market in a way that maximize value across the entire ecosystem. Turning to Collectibles. This continues to be one of the most important areas of our growth and value creation in the business. During the third quarter, Collectibles revenue increased 48% year-over-year. That growth was driven by a combination of higher average selling prices, expanded sourcing activity and continued improvement in product mix towards more premium and differentiated offerings. What we're focused on in this category is very deliberate. We're not trying to scale Collectibles through volume alone. We're focused on building a portfolio that emphasize licensed higher-value products that resonate with collectors and carry stronger margin characteristics. This aligns with what we're seeing more broadly across the industry. Large retailers like Target are increasing investment in pop culture and Collectibles categories, while specialty players such as GameStop are seeing Collectibles becoming a growing share of their overall business. What that tells us is that this is not isolated demand. It's a broader structural shift towards higher-value fan-driven products. And that reinforces our focus on building a more differentiated Premium Collectibles portfolio. That approach starts with sourcing, but it extends well beyond that. Over the past year, we've expanded our vendor base and added new relationships that are bringing incremental high-quality product into the portfolio. At the same time, we've been refining the mix within existing brands, moving away from more commoditized items and towards products with stronger fan engagement, better pricing power and more consistent sell-through. The result is a Collectible business that is not only growing but improving in quality with higher average selling prices, stronger margins and better inventory efficiency. That positions us to scale the category in a way that drives both revenue and profitability over time. A key contributor to that progress is Handmade by Robots. Since transitioning to an owned brand, Handmade by Robots have given us a much greater control over product design, licensing and go-to-market strategy. We've expanded the licensing pipeline, increased retail distribution and are continuing to invest in new product development. What's important here is that this is not just a revenue contributor, it's a margin driver, and it represents a scalable model that we can apply across additional owned and controlled brands over time. More broadly, what we are seeing in Collectibles is very consistent with what we are seeing across the rest of the business. Demand is being driven by fans who are looking for products that are unique, limited and connected to the content they care about. That creates an opportunity to introduce high-quality products, manage supply more intentionally and ultimately improve both margins and inventory efficiency. As we continue to build out this category, we see Collectibles both complementary to our core distribution business and increasingly important to our overall earnings profile. It deepens our relationship with licensors, expands our presence with retailers and allows us to participate more directly in the value creation of the products we sell. Building on that foundation, the next phase of our strategy is extending beyond the product itself and into the full life cycle of Collectibles. During the quarter, we advanced that effort with the launch of Alliance Authentic and the integration of Endstate Authentic. Alliance Authentic represents the first commercial application of this strategy within our portfolio. We began with premium vinyl Collectibles encapsulated individually numbered releases that are authenticated at the point of origin and designed specifically for collectors. These products are not just sold, but curated with scarcity, provenance and long-term value in mind. What Endstate Authentic enables is the infrastructure behind that. Through NFC-enabled authentication and digital product identity, we can verify each item, track it over time and connect it to a digital record that supports ownership, authenticity and resale. That allows us to extend our role beyond initial distribution and supporting the product throughout its entire life cycle. This matters because as Collectibles become more valuable, the importance of trust, verification and transparency increases. Collectors want to know what they own, where it came from and that is authentic. Licensors want to protect their brands and marketplaces require a reliable way to validate transactions. What we're building addresses all three. Over time, this creates additional opportunities that did not previously exist in physical products, including authenticated resale, direct engagement with collectors and participation in secondary market activity. Importantly, this is more than near-term revenue contribution. It's about establishing the infrastructure and ecosystem that can support long-term value creation across a growing base of Collectible products. We are already moving forward to expand this model beyond Vinyl into other categories, and we're continuing to explore partnerships, both within and outside of our existing portfolio. This is a natural extension of the business we built. We already source, distribute and fulfill these products at scale. What we're now adding is the ability to track, authenticate and engage with those products over time. That evolution moves us from a transactional model towards a platform that participates more fully in the value of products we bring to market. With that, I'll turn it over to Amanda to walk through the financial results in more detail. Amanda Gnecco: Thanks, Jeff. I'll start with our financial performance for the third quarter. Net revenue for the quarter was $258 million, an increase of 21% compared to $213 million in the prior year period. This growth reflects broad-based strength across our core categories, as Jeff discussed, and continued alignment of our product mix with areas of higher consumer demand. Cost of revenue increased 22% year-over-year to $225 million, generally in line with the revenue growth, reflecting the higher volume of products flowing through the business. Gross profit for the quarter was $33 million compared to $29.1 million in the prior year period. Gross margin was 12.8% compared to 13.6% last year. The year-over-year change primarily reflects category and product mix within the quarter, including the relative contribution of certain lower-margin categories as we scaled revenue. Importantly, we continue to see the benefits of mix improvement and pricing discipline across higher-value categories, which support the overall earnings profile of the business over time. Net income for the quarter increased 25% to $2.3 million or $0.05 per diluted share compared to $1.9 million or $0.04 per share in the prior year period. Adjusted EBITDA was approximately $5.1 million, up from $4.9 million last year, representing a 4% increase. While EBITDA growth was more modest than revenue growth in the quarter, it reflects the continued scaling of the business alongside targeted investments in growth initiatives, including technology and platform capabilities. Overall, the third quarter reflects a business that is growing, generating consistent profitability and continuing to operate with discipline as we invest in areas that support long-term expansion. Turning now to our year-to-date results, which provides a broader view of the underlying momentum in the business. For the nine months ended March 31, 2026, net revenue was $881 million, an increase of 5% compared to $836 million in the prior year period. While overall revenue growth was more modest on a year-to-date basis, it reflects continued strength in higher-value categories and the impact of mix improvements across the portfolio. That mix shift is clearly reflected in profitability. Gross profit for the nine-month period increased to $117.3 million compared to $96.9 million in the prior year, and gross margin expanded by 170 basis points to 13.3%. This improvement was driven by increased contribution from Premium Physical Media, Collectibles and Exclusive Content as well as continued discipline in pricing and inventory management. Net income for the 9-month period increased 78% to $16.6 million or $0.32 per diluted share compared to $9.3 million or $0.18 per share in the prior year period. Adjusted EBITDA increased 47% to $35.7 million, up from $24.4 million last year. What these results demonstrate is the operating leverage inherent in our model. As we continue to shift the business towards higher-value products and more efficient execution, we are seeing a disproportionate improvement in earnings relative to revenue. Importantly, this performance reflects consistency across multiple quarters. The margin expansion and earnings growth we are delivering are not isolated to a single period, but the result of deliberate changes in mix, cost structure and operating discipline that are compounding over time. Overall, our year-to-date results reinforce that we are building a structurally stronger business with improving profitability and increasing scalability as we continue to grow. Before I turn it back to Jeff, I'll touch on our balance sheet and liquidity position. We ended the quarter with approximately $60 million in working capital, reflecting continued discipline in managing both inventory and payables as we support growth across the business. Inventory increased during the quarter, consistent with higher revenue and the timing of inbound product. Importantly, our inventory levels remain aligned with current demand and reflect our focus on higher value, faster-moving categories where we have strong visibility into sell-through. From a liquidity standpoint, we ended the quarter with approximately $56 million of availability under our revolving credit facility. This provides us with ample flexibility to support working capital needs, invest in inventory tied to exclusive partnerships and fund strategic initiatives across the business. More broadly, our balance sheet remains well positioned to support both near-term operating requirements and longer-term growth. We continue to take a measured approach to capital management with a focus on maintaining liquidity, managing risk and preserving flexibility as we scale the business. I'll close with a brief comment on our approach to capital allocation. Our framework remains consistent and disciplined. We prioritize investments that directly support the strategy Jeff outlined and that enhance the quality and durability of our earnings. First, we continue to allocate capital towards inventory and exclusive content partnerships where we have strong demand visibility and attractive returns. These investments support higher-value products, improve overall mix and reinforce our relationships with key licensors and retail partners. Second, we invest selectively in technology and infrastructure that improve scalability and efficiency. This includes automation, systems that support our exclusive partnerships and capabilities tied to initiatives like Alliance Authentic and Endstate Authentic. These investments are targeted and are evaluated based on clear operational and financial returns. Throughout all of this, maintaining flexibility remains a priority. We are not pursuing growth for growth's sake, and we remain focused on deploying capital in a way that balances near-term performance with long-term value creation. That discipline has been an important contributor to the earnings growth and operating leverage we've delivered, and it will continue to guide our decision-making going forward. With that, I'll turn it back to Jeff. Jeffrey Walker: Thanks, Amanda. Before we open the call for questions, I want to spend a few minutes on how we're thinking about the business from here. As we look at the third quarter and year-to-date performance, what's most important is the consistency we're seeing across the model. We've now demonstrated the ability to grow revenue, expand earnings and maintain discipline all at the same time. That's a meaningful shift from where the business was even a few years ago. Looking ahead, we remain confident in the trajectory we're building. From an execution standpoint, our priorities are clear. We're focused on continuing to scale our core categories, particularly in areas where we're seeing strong demand and favorable mix, including Premium Physical Media and higher-value Collectibles. The pipeline of new releases, exclusive content and licensed products remains strong, and we believe that supports continued growth and earnings quality as we move forward. We are also continuing to expand our owned and controlled brands. Handmade by Robots is a good example of how we can create additional value by controlling design, licensing and distribution, and we see opportunities to extend that model across new categories and partnerships over time. We are also expanding the Platform side of the business, which is becoming an increasingly important part of how we create value across the ecosystem. That includes Alliance Authentic, where we are bringing premium authenticated Collectibles directly to market through curated limited releases designed specifically for collectors. This allows us to participate more directly in product design, scarcity and pricing and deliver higher value offerings to our consumer base. Alongside that, Endstate Authentic provides the underlying infrastructure that enables authentication, providence and lifestyle tracking through NFC-enabled technology. Our focus there is on building out that foundation, deepening integrations and expanding use cases across additional products and partners. And most recently, we relaunched Moviesunlimited website as a curated destination for collectors, supporting high-value purchasing behaviors like preorders and limited editions and strengthening the collector lifetime value. Taken together, these platforms extend our role beyond traditional distribution. We will continue to manage the business with a focus on profitability, operating leverage and return on capital while investing selectively in areas that support long-term growth. Stepping back, what we're building is a more scalable and more differentiated business. We're moving beyond a traditional distribution model and towards a platform that connects content owners, retailers and collectors across the full life cycle of the products we bring to market. That evolution is already reflected in the quality of our earnings and the strength of our performance, and we believe it positions Alliance to create durable long-term value for our shareholders. Before we turn to questions, I want to thank our employees across the organization for their continued execution and commitment. I'd also like to thank our partners, customers and shareholders for their ongoing support. Operator, we're ready to open the line for questions. Operator: [Operator Instructions] The first question comes from the line of Thomas Forte with Maxim Group. Thomas Forte: Great. So first off, Bruce, Jeff and Amanda, I apologize in advance if you touched on these in your prepared remarks. I'm juggling multiple calls right now. And then I'm going to ask both questions at once, and thank you in advance for your answers. So the first question is, this past Record Store Day, you offered Handmade by Robots, a limited release of Ozzy Osbourne and a Hello Kitty SKU. How would you characterize the success of the initiative, including to drive brand awareness for Handmade by Robots? And then my second question is, you added Amazon MGM Studios just ahead of its breakout box office hit, Project Hail Mary, which was an amazing movie. Can one title be a needle mover for your DVD business? Jeffrey Walker: Thank you, Tom. This is Jeff. I'll start with the Handmade and the Record Store Day there. It's really the first time that Record Store Day had approved a Collectible, their focus on vinyl records there. And we have a huge business with the Record Stores and Record Store Day. On those two titles, one of the things that's important for Record Store Day is to make sure that there's not an oversupply of the product. So, we made 2,000 units of each of those. We actually had orders come in for just over 6,000 units on each of them. So, the stores were allocated down on their orders. And then on top of that, we added another little wrinkle. They all did sell out in the stores. The stores were extremely happy with them. They were hit. We actually started a new Record Store series on them. So you will see on the outside of the packaging, it says Record Store Day exclusive, and it's a 001 and 002. So, as we move forward, there will be additional ones. We do have titles presented to them for November Record Store Day and next April that we're working on with licensors right now. Then the other part that was a huge home run in that with those Handmade was that we encapsulated 30 units of each of the characters. In the encapsulation through Alliance Authentic, we added an NFC chip to those. And it was, those were the hot tickets. A store got, some of the top stores got one of those. And what you see a lot after Record Store Day is there's some resellers that sell them on eBay and things. We were seeing the Ozzy and the Hello Kitty in that $75 range on eBay. The encapsulated ones, we saw ones in the $400 to $500 range. When you look at it, people really wanted those characters. There's 2,000 of them, but there's only 30 of them that are encapsulated, uncirculated with an NFC chip. The people that have those 30 are going to have a fantastic investment over time because you can imagine we continue to drive this over the next 10 to 20 years. That's going to be a very famous two pieces that we created with Handmade. On Project Hail Mary, yes, that's going to be a home run title for us. Its release date is in August. And yes, it's one of the, I think it's the biggest theatrical release we've had last, in calendar '25 and here into '26. So, we're doing a lot of different planning and preparation for that right now. And we expect that to be a very good release and high volume on DVD in all formats. Operator: Next question comes from the line of Michael Kupinski with NOBLE Capital Markets. Unknown Analyst: It is Jacob Muchler on for Michael today. So, my first question is also regarding Alliance Authentic. I was just curious if you could talk about some of the products that might hit Alliance Authentic next. I understand that it could be multiple different kinds of Collectibles could be put on to the platform. But I am just curious if there's some additional Collectible categories that seem most likely to reach a platform next. Jeffrey Walker: Yes. We're, we have vinyl in there right now. Those are numbered Collectibles. And then we have launched Funko Pops encapsulated as well as our Handmade by Robots. In the future, we do have cases right now for DVD SteelBook, and we have cases for video games, PlayStation, Xbox and Nintendo Switch. There is the aspect within all of this that it's, we're really looking at preserving uncirculated copies of all these types of products and put an NFC digital chip with it, encapsulate it and it has become a piece of history. When you think about going backwards and think about products that came out years ago, the idea here is that these get encapsulated at the beginning and over time, 5, 10, 20 years down the road, even 50 years down the road, it's really a substantial piece of history, and we know it's authentic, and we know it's encapsulated. That's the intention with this product. I think we're on to something really big in this category here. Unknown Analyst: Got you. And would you be able to talk about some of the favorable undercurrents in the music industry this year and also the video game industry. It looks like there's a number of high-profile album releases and then also Grand Theft Auto VI in the back half of the year. Just curious what your expectations are this year with a big release schedule. Jeffrey Walker: Yes. We're all pretty excited on the release schedule. On the Music side, we just keep getting significant great artist releases. This last quarter that we're reporting here, we had a big Bruno Mars release, big release from Harry Styles, and then we topped it off with the BTS release. Those were huge titles for us. They're continuing to come hot and heavy. And then with that, we're also seeing some crazy numbers on vinyl sales and CD sales were off the chart. There's a lot of social media conversation about building your own collection and music, having your own collection of CDs and vinyl. That conversation is bleeding over into video and DVDs right now. People want to own stuff and collect it and have their collections. And it's a big push on social media right now we're seeing. With respect to Grand Theft Auto, it's going to be a home run for Q4, there's huge numbers being projected in the industry for it. We will be selling the game. We do buy direct from Take-Two. So it will be a huge release for us. We even, on top of that, we just came back from Music Biz this week, and we got like a home run coming out of Music Biz because there's a Grand Theft Auto soundtrack that is coming. Same thing in November. It's got, I think, 20-plus songs on it. all the A-list artists each have a song on it. It's a compilation of artists. Some of the songs are in the game. Some of the songs are additional songs. It's going to be a home run vinyl release for us also revolving around that Grand Theft Auto. So we're pretty excited about that one coming in fourth quarter. Operator: Next question comes from the line of Linda Bolton Weiser with Water Tower Research. Unknown Analyst: With regard to your adding Handmade by Robots to your portfolio, do you envision looking for more similar acquisitions? And do you think you'll stick mostly in the Collectible figure category? Or do you see opportunity in some other product categories as well? Jeffrey Walker: Thank you, Linda. From an acquisition standpoint, we're heavily engaged in lots of potential acquisition opportunities. And we've got several NDAs out right now in conversations that we're in. We do like licensed products. And so there could be other collectible stuff. It could be in a lot of other categories. With the wide range of products that we carry and that aspect, it does widen the net for what we can look at for acquisitions that become accretive to Alliance. So that's a good thing. If we're only in one really tight category, it makes it hard for acquisitions. But for us, we're pretty diversified in a lot of different areas. And if we have an opportunity to pick up a company that really can be accretive through Alliance and create new sales opportunities for us, maybe new vendor opportunities. That's a home run, and we're actively looking at those right now. Operator: We have no questions at this point of time. Over to you, Paul. Thank you. Paul Kuntz: We do have several webcast questions. We had a couple around CDs. So I'm just going to combine these two. One was, can you provide a bit more color on the strong CD sales? And then a related question was the growth in vinyl and CDs this quarter related primarily to Record Store Day? Or was it more of a structural shift toward collecting? Jeffrey Walker: Before I answer that one, I'm going to go back to Linda's question real quick. If anybody knows of any possible acquisitions that you think would be a good fit for Alliance, definitely reach out to me on that. I'm always looking for new leads and new opportunities there. So that's a request from the community out there. If there's anything you think you have an insight to or anything you think would be a good fit for us, definitely reach out to me, and we'd be, I'd be definitely interested in looking at that. Paul, on the question with CDs, I mean I've been selling CDs since I started in 1990 with the music store. And it was hotter than hot in 1990 when everybody was buying CDs. And we are honestly shocked right now is the growth we're seeing on the CD side. It definitely is a trend, and we saw the trend on the vinyl side. If you look back in our business 7 or 8 years ago, we were doing $5 million a year in vinyl, and we stayed in it. We never were out of it, and we've organically seen that business now. We just finished the quarter at $99 million in vinyl for a quarter. So with fourth quarter sales and stuff, I mean, that's more than $400 million run rate. On the CD, that's a significant growth over last year. And I will go back one second to 2025. On the vinyl side, we sold 16.8 million units of vinyl. On the CD side, it was 13.5 million. It wasn't a small number. And now we're looking at this type of growth here on the CD side, we're continuing to see it go here. I think the other piece on CD is kind of happened in the vinyl as vinyl was coming back and seeing a resurgence. You're starting to see the record labels refocusing on CD as far as marketing it and also making sure that they have stock on hand, their stock available on CD. We had a little stretch a few years ago where people kind of had an eye off the ball on the CD, and we were not getting our fill percentages and stuff from our vendors as good, but people are improving that right now because of the demand. When an artist is bringing out a new release, we're seeing vinyl and CD. And it's, that music side is extremely strong right now. And last thing I want to say is we've seen a lot of DVD decline over the last 10 years. The rate of decline on DVD has been shrinking over the last two years. And there's definitely a real possibility that we're going to be at a bottom out on the DVD, and we could see DVD start to move similar to what we're seeing on the CD side right now because as it bottoms out and these conversations continue with collectors and people want their fans and they want to have a DVD collection on their wall, that's what's driving this. Paul Kuntz: And our next question, can you comment on how you're developing the direction of Endstate authentic? Will they ultimately authenticate in all sports and music, for example? Jeffrey Walker: So we acquired Endstate Authentic, Bennett and Stephanie, who lead that division. I've been working super closely with them over the last four months here. And we're in a lot of very interesting conversations. They do work with accounts outside of Alliance Authentic with companies that do watch authentication and there are several other different categories that we're in. We are in very active conversations with new customers on that Endstate Authentic side. And I think over this next fiscal year, you're going to see some pretty good inroads with the Endstate aspect there and what we can do. I really can't disclose too much as to a lot of those conversations under NDAs right now. Paul Kuntz: Thank you. And our next question, are you seeing overlap between customers that are buying media and those that are buying Collectibles or electronics? Or are those all still fairly distinct customer groups? Jeffrey Walker: Well, there's, yes, they're definitely all intermixed for sure. And, and there is a crossover between music and video and the Collectibles. I will say, in a lot of cases, there's a lot of ways to kind of divide up the fans and what they collect. There's also collectors that are in different genres, so you have collectors that are huge fans and followers of horror. So they like horror movies. They like horror Collectibles. You have fans of anime and they like everything related around anime. Then you have your music fans that are all around everything music, not only the music itself, but anything they can collect of their favorite movie music artists. Then you have fans that are revolving around movies and their movie bus and anything they can get their hands on with respect to all types of movies. So we work across all those different channels and really try to put all the pieces together. There's a lot of synergies between our different departments. So, and I just even an example there on Grand Theft Auto. So we got a big video game. So our gaming team, and now we got a music vinyl record with it. There's, we're probably going to be seeing some other products that are relating to that franchise. Across all of our purchasing teams and sales teams, there's a lot of cohesive work happening here at Alliance to cross-sell those. And so somebody who has a store that's a gaming store and doesn't really sell vinyl, they might come in and say, "Hey, I can sell 60 units of that vinyl record because I'm going to have this huge amount of customers coming in to pick up the video game and so forth there. So that's where we're seeing a lot of this win that we talk about to everybody. We're seeing that cross being very robust for us right now. Paul Kuntz: Thanks, Jeff. Our next question, with Alliance Authentic and Endstate Authentic, how should we think about the pacing of that opportunity? What are the key milestones that would signal it's becoming a meaningful contributor? Jeffrey Walker: Well, both of those are in extreme start-up phase. I call it concentration right now. We are, we have a lot of resources on it. We got a lot of people on it. We got a lot of focus from me and other leaders to really develop both of those, the Alliance Authentic and the Endstate Authentic. I think here in fiscal '27, we're going to start to see some aspects where, on the Alliance Authentic, we started getting some more key titles encapsulated and seeing some solid demand on those. stuff like the Ozzy and Hello Kitty start to make people think about it. Now all of a sudden, the music stores saw those. They saw what happened to it. It's a training. We got to educate people on what those products are and so forth. And we're making good progress with that. Record labels are starting to really understand what the product is and the importance of that product in the history and life cycle of vinyl records. We're trying to encapsulate a limited quantity of those that become the ultimate vinyl Collectible of that album. And on the Endstate side, there's a lot of different types of businesses that could really use an NFC chip in what they're doing. And we're in a lot of conversations on that side. So I think in this next fiscal year, you're going to see quite a few announcements of deals that we've been able to make for both of those areas. And I can't communicate any of the details until we have those deals in place, and we'll have press releases and things revolving around those. Paul Kuntz: It looks like we have one more question at this point. You called out strength across multiple categories this quarter. Are you seeing any meaningful differences in how demand is trending across those categories? Or is it fairly broad-based right now? Jeffrey Walker: I would say it's fairly broad-based. I mean, even our gaming side has been pretty solid. We are cautiously optimistic even on gaming right now with the change over there at Microsoft on the Xbox side with new leadership there. So we're, as I said, cautiously optimistic about maybe a little more push towards consoles and physical product compared to where Microsoft was kind of leaning in the last couple of years. Our Collectible business is super strong and that side of it. It's a combination on, in Collectibles of expanding sales and adding new stores and customers and adding even more Collectibles in the music stores and things like that. But it's also, we brought on quite a few Collectible suppliers into our distribution side. I'll give you a quick example. If we bring on a supplier and their product line through our sales channels, we can generate $3 million a year on that supplier's product. That's as valuable as bringing on a customer that can buy $3 million a year. So we're working on both sides of those, right? So when we're at toy fair or a convention like that. We have our whole sales team there working on selling to customers that are there, but we have our whole purchasing team talking with our current vendors and working on opportunities to bring in product from vendors that we aren't currently supplying. That's why you're seeing some really strong numbers on the Collectible side right now because it's not only adding new accounts and expanding the product that we have into more accounts. And so we're adding significant amount of vendors on the Collectible side. And that's, so we're getting that doubling of the growth in that space. Operator: Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation. Before you buy stock in Alliance Entertainment, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Alliance Entertainment wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. AENT Q3 2026 Earnings Transcript was originally published by The Motley Fool

This article first appeared on GuruFocus. Net Revenue: $258 million, an increase of 21% year-over-year. Net Income: $2.3 million, up 25% from the prior year. Adjusted EBITDA: $5.1 million, a 4% increase from last year. Gross Profit: $33 million, compared to $29.1 million in the prior year. Gross Margin: 12.8%, down from 13.6% last year. Vinyl Revenue: Increased 15% to $99 million. CD Revenue: Increased 90% to $39 million. Physical Movie Revenue: Grew 5% to $61 million. Collectibles Revenue: Increased 48% year-over-year. Year-to-Date Net Revenue: $881 million, a 5% increase from the prior year. Year-to-Date Net Income: $16.6 million, up 78% from the prior year. Year-to-Date Adjusted EBITDA: $35.7 million, a 47% increase from last year. Working Capital: Approximately $60 million at the end of the quarter. Revolving Credit Facility Availability: Approximately $56 million. Warning! GuruFocus has detected 4 Warning Signs with AENT. Is AENT fairly valued? Test your thesis with our free DCF calculator. Release Date: May 14, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Alliance Entertainment Holding Corp (NASDAQ:AENT) reported a 21% year-over-year increase in net revenue for the third quarter, reflecting strong top-line growth. Net income increased by 25% year-over-year, demonstrating continued profitability. The company saw significant growth in its music and video segments, with vinyl revenue increasing by 15% and CD revenue by 90%. Collectibles revenue grew by 48% year-over-year, driven by higher average selling prices and improved product mix. The launch of Alliance Authentic and integration of Endstate are advancing the company's strategy to support the full lifecycle of collectible products. Gross margin decreased from 13.6% to 12.8% year-over-year, primarily due to category and product mix changes. Adjusted EBITDA growth was modest at 4%, not keeping pace with the revenue growth. The cost of revenue increased by 22% year-over-year, slightly outpacing revenue growth. The company is in the early stages of developing Alliance Authentic and Endstate Authentic, which are not yet significant contributors to revenue. There is a cautious outlook on the gaming segment, with uncertainties around leadership changes at Microsoft affecting the market. Q: How successful was the Handmade by Robots initiative during Record Store Day, and can a single title like Project Hail Mary significantly impact your DVD business? A: Jeffrey Walker, CEO, explained that the Handmade by Robots initiative was a success, with limited releases selling out and generating high resale values. The encapsulated versions with NFC chips were particularly valuable. Regarding Project Hail Mary, Walker noted it is expected to be a major release, potentially impacting DVD sales significantly. Q: What products might be added to Alliance Authentic, and what are the expectations for the music and video game industries this year? A: Walker mentioned that Alliance Authentic currently includes vinyl, Funko Pops, and Handmade by Robots. Future additions could include DVD SteelBooks and video games. He expressed excitement about upcoming music releases and the anticipated success of Grand Theft Auto VI, which is expected to boost sales in both music and gaming. Q: Are there plans for more acquisitions like Handmade by Robots, and what categories are you considering? A: Walker stated that Alliance is actively exploring acquisition opportunities across various categories, not limited to collectibles. The company is open to acquiring businesses that can be accretive and create new sales opportunities. Q: Can you provide more insight into the strong CD sales and whether the growth in vinyl and CDs is due to Record Store Day or a structural shift? A: Walker noted that CD sales have been surprisingly strong, reflecting a broader trend similar to the resurgence of vinyl. The growth is attributed to a structural shift towards collecting, rather than being solely driven by Record Store Day. Q: How is Endstate Authentic developing, and will it expand into sports and music authentication? A: Walker indicated that Endstate Authentic is in active discussions with potential customers and is exploring various categories, including sports and music. The company expects to make significant progress in the next fiscal year. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in Alliance Entertainment Holding Corporation? Here are five stocks we like better. Alliance Entertainment posted strong fiscal Q3 results, with revenue up 21% year over year to $258 million and net income up 25% to $2.3 million. Management said the gains reflect continued strength in higher-margin, premium products. The company is leaning into collectibles and premium physical media rather than traditional distribution, with collectibles revenue up 48% and solid growth in vinyl, CDs and movie formats. Executives highlighted demand for authenticated, fan-focused products like Handmade by Robots and premium video editions. Alliance is also building out authentication and owned-brand initiatives such as Alliance Authentic and Endstate Authentic, though management described them as early-stage. The company expects more product launches and potential deal announcements in fiscal 2027 while continuing to pursue acquisitions. 3 Small-Cap Stocks With Big Growth Potential Alliance Entertainment (NASDAQ:AENT) reported higher fiscal third-quarter revenue and profit, with management saying the company is benefiting from a shift toward premium physical media, collectibles and authenticated products aimed at fans and collectors. On the company’s third-quarter fiscal 2026 earnings call, Chief Executive Officer Jeff Walker said net revenue rose 21% year over year to $258 million for the quarter ended March 31, 2026. Net income increased 25% to $2.3 million, or $0.05 per diluted share, compared with $1.9 million, or $0.04 per share, in the prior-year period. Adjusted EBITDA was $5.1 million, up from $4.9 million a year earlier. → Rocket Lab Just Hit a New All-Time High—Time to Buy or Let It Breathe? “The most important takeaway this quarter is that we are now seeing both sides of our model working together, sustained revenue growth and continued earnings expansion driven by the structural shift in our business,” Walker said. Walker said the company is positioning itself less as a traditional physical media distributor and more as a collectibles platform. “We are not in a declining physical media business. We are in the collectible business,” he said, arguing that consumers are buying vinyl, CDs and premium video formats because they want ownership of items connected to artists, franchises and brands. → Micron Investors Face a High-Stakes Moment After the Latest Rally Revenue growth was broad-based across music, video, gaming and collectibles, according to management. Walker said vinyl revenue increased 15% year over year to $99 million, CD revenue rose 90% to $39 million, and physical movie revenue grew 5% to $61 million. He also highlighted demand tied to Record Store Day, saying Alliance shipped more than 700,000 units to independent retailers for what he described as the largest Record Store Day ever. In video, Walker said demand has become more stable after years of category decline, supported by new releases and premium formats such as 4K Ultra HD and collectible editions such as Steelbooks. He also pointed to distribution agreements with Paramount, effective at the beginning of calendar 2025, and MGM Studios, added at the start of calendar 2026, as expanding the company’s access to major franchises. → How Bad Could Tesla’s Cybertruck Recall Be for Shares? Collectibles remained a major growth area in the quarter, with revenue increasing 48% year over year. Walker said growth was driven by higher average selling prices, expanded sourcing and a mix shift toward more premium and differentiated offerings. He said the company is emphasizing licensed, higher-value products rather than pursuing volume alone. Handmade by Robots, which Alliance has transitioned into an owned brand, was cited as a contributor to revenue and margins because it gives the company more control over product design, licensing and distribution. During the Q&A session, Maxim Group analyst Tom Forte asked about limited-release Handmade by Robots products tied to Ozzy Osbourne and Hello Kitty for Record Store Day. Walker said Alliance produced 2,000 units of each character, received orders for just over 6,000 units for each, and allocated shipments to stores. He said the products sold out in stores and that Alliance started a Record Store Day series for the line. Walker also said Alliance encapsulated 30 units of each character through Alliance Authentic with NFC chips. He said standard versions were appearing on eBay in the $75 range, while encapsulated versions were seen in the $400 to $500 range. Walker said Alliance advanced its authentication strategy during the quarter with the launch of Alliance Authentic and continued integration of Endstate Authentic. Alliance Authentic began with premium vinyl collectibles that are encapsulated, individually numbered and authenticated at the point of origin. Endstate Authentic provides NFC-enabled authentication and digital product identity, allowing items to be verified and tracked over time. Walker said the goal is to support ownership, authenticity and resale, extending Alliance’s role beyond initial distribution. In response to a question from Noble analyst Jacob Mutchler, Walker said Alliance Authentic currently includes vinyl, Funko Pops and Handmade by Robots products. He added that the company has cases for DVD Steelbooks and video games for PlayStation, Xbox and Nintendo Switch. Asked about the pacing of the opportunity, Walker described both Alliance Authentic and Endstate Authentic as being in an “extreme startup phase,” but said he expects fiscal 2027 to bring more key encapsulated titles and potential deal announcements. He said some discussions are under nondisclosure agreements. Chief Financial Officer Amanda Gnecco, who was introduced as presenting the financial results, said year-to-date net revenue for the nine months ended March 31, 2026, was $881 million, up 5% from $836 million in the prior-year period. Gross profit increased to $117.3 million from $96.9 million, while gross margin expanded 170 basis points to 13.3%. Net income for the nine-month period rose 78% to $16.6 million, or $0.32 per diluted share, compared with $9.3 million, or $0.18 per share, a year earlier. Adjusted EBITDA increased 47% to $35.7 million from $24.4 million. Gnecco said the results demonstrate operating leverage from shifting toward higher-value products and more efficient execution. She said Alliance ended the quarter with about $60 million in working capital and approximately $56 million of availability under its revolving credit facility. Inventory increased during the quarter, which she said was consistent with higher revenue and inbound product timing. During the question-and-answer portion of the call, Walker said upcoming releases are expected to support demand across categories. He pointed to recent music releases from Bruno Mars, Harry Styles and BTS as major titles in the reported quarter. He also said Grand Theft Auto VI is expected to be a “home run” for the fourth quarter and that Alliance buys directly from Take-Two. Walker added that a Grand Theft Auto soundtrack on vinyl is expected in November and includes more than 20 songs from A-list artists. On the video side, Walker said the MGM title Project Hail Mary is expected to be a strong release for Alliance, with a street date in August and expected high volume across DVD formats. Walker also said Alliance is actively evaluating acquisition opportunities, including licensed products and other collectibles categories. He said the company has “several NDAs out right now” and is looking for businesses that could be accretive and create new sales or vendor opportunities. Looking ahead, Walker said Alliance will focus on scaling core categories, expanding owned and controlled brands, building Alliance Authentic and Endstate Authentic, and maintaining discipline around profitability and return on capital. Alliance Entertainment (NASDAQ: AENT) is a distributor of physical media and related entertainment products, serving retailers, public libraries and online merchants. The company’s core business revolves around the wholesale distribution of music and video titles on CD, DVD and Blu-ray formats, as well as vinyl records, audiobooks, video games and select gift and novelty items. By maintaining a broad catalog of new and catalog titles, Alliance Entertainment enables brick-and-mortar and e-commerce channels to access an extensive range of products from major and independent labels. In addition to its product offerings, Alliance Entertainment provides supply-chain and logistics services designed to streamline inventory management and order fulfillment. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Alliance Entertainment Q3 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for May 2026.