Alliance Entertainment Reports First Quarter Fiscal 2027 Revenue Growth of 10% and GAAP Net Income Growth of 56%

Lower borrowing costs helped GAAP earnings grow faster than revenue, while higher operating expenses limited operating income growth.

Rhea-AI Summary

Alliance Entertainment (Nasdaq: AENT) reported fiscal first-quarter 2027 revenue of $278.8 million, up 10% from the prior-year quarter. For the quarter ended September 30, 2026, GAAP net income rose 56% to $7.6 million, and diluted earnings per share increased 50% to $0.15. Gross profit increased 13% to $42.1 million, with gross margin rising to 15.1% from 14.6%.

Physical movie revenue rose 20%, vinyl 14%, CDs 22% and collectibles 87%, while gaming revenue declined $18.4 million. Operating income edged up to $10.6 million from $10.5 million as higher expenses largely offset gross-profit growth. Interest expense fell 49% to $1.2 million following refinancing. Adjusted net income declined to $7.2 million from $7.3 million. Operating cash flow increased to $4.3 million from $2.7 million, while inventory reached $152.0 million, versus $126.6 million at June 30, 2026.

15 points · 0 major

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0 major · 9 points

Hollow bars mark forward-looking points. How the balance works

Positive

• Moderate pointRevenue rose 10% to $278.8 million in fiscal Q1 2027 versus the prior-year quarter.
• Moderate pointGAAP net income increased 56% to $7.6 million, with diluted EPS up 50% to $0.15.
• Moderate pointGross profit increased 13% to $42.1 million; margin expanded 50 basis points to 15.1%.
• Moderate pointOperating cash flow increased 58% to $4.3 million, compared with $2.7 million a year earlier.
• Minor pointPhysical movie revenue rose 20% to $101.1 million, supported by new releases and expanded retail availability.

10 minor points

• Minor pointVinyl revenue increased 14% to $86.7 million, with higher unit sales and average selling prices.
• Minor pointCD revenue increased 22% to $41.2 million, with higher unit sales and average selling prices.
• Minor pointCollectibles revenue increased 87% to $11.9 million, versus $6.4 million in the prior-year quarter.
• Minor pointDistribution and fulfillment fee revenue increased 18% to $5.7 million, versus $4.8 million a year earlier.
• Minor pointInterest expense decreased 49% to $1.2 million following the October 2025 refinancing.
• Minor pointOperating income rose to $10.6 million from $10.5 million in the prior-year quarter.
• Minor pointAdjusted EBITDA increased approximately 1% to $12.3 million, versus $12.2 million in the prior-year quarter.
• Minor pointWarrant remeasurement generated an $850,000 non-cash gain, versus a $1,462,000 loss in the prior-year quarter.
• Minor pointRevolving-credit availability was approximately $48.9 million at quarter-end; applicable credit facility covenants remained satisfied.
• Minor point. Forward-looking: it has not happened yet and may not happen.Warehouse automation investment and expanded artificial intelligence use continued, intended to reduce manual work.

Negative

• Moderate pointGaming revenue declined $18.4 million, reflecting lower product availability and absent prior-year Nintendo Switch 2 launch sales.
• Moderate pointDistribution and fulfillment expenses increased to $12.0 million from $9.9 million in the prior-year quarter.
• Moderate pointSelling, general and administrative expenses increased to $17.9 million from $15.1 million a year earlier.
• Moderate pointInventory increased to $152.0 million at September 30, 2026, from $126.6 million at June 30, 2026.
• Moderate pointRevolving-credit borrowings totaled approximately $70.8 million at September 30, 2026.
• Moderate point$33.4 million of additional collateral-supported borrowing capacity requires facility expansion, applicable conditions and lender approval.

3 minor points

• Minor pointDigital download revenue declined, partially offsetting growth in physical entertainment and collectibles.
• Minor pointAdjusted net income declined to $7.2 million from $7.3 million; adjusted diluted EPS remained $0.14.
• Minor pointHigher income tax expense partially offset the improvement in GAAP net income.

News Explained

In its first-quarter update, Alliance Entertainment said $33.4 million of collateral-supported capacity above its $120 million revolver could support a future expansion, subject to conditions and lender approval; this does not mean the facility has expanded.

Key Figures

Net revenue: $278.8 million; increased 10% Gross profit: $42.1 million; increased 13% Gross margin: 15.1%; increased 50 basis points +5 more

Net revenue

$278.8 million; increased 10%

First quarter fiscal 2027; compared with $254.0 million in the prior-year quarter

Gross profit

$42.1 million; increased 13%

First quarter fiscal 2027; compared with $37.2 million in the prior-year quarter

Gross margin

15.1%; increased 50 basis points

First quarter fiscal 2027; compared with 14.6% in the prior-year quarter

GAAP net income

$7.6 million; increased 56%

First quarter fiscal 2027; compared with $4.9 million in the prior-year quarter

Diluted EPS

$0.15; increased 50%

GAAP diluted earnings per share; compared with $0.10 in the prior-year quarter

Adjusted EBITDA

$12.3 million

First quarter fiscal 2027; compared with $12.2 million in the prior-year quarter

Interest expense

$1.2 million; decreased 49%

First quarter fiscal 2027; compared with $2.3 million in the prior-year quarter

Operating cash flow

$4.3 million; increased 58%

First quarter fiscal 2027; compared with $2.7 million in the prior-year quarter

Previous Earnings Reports

5 past events · Latest: May 14

Same Type 5 events

1. May 14

   earnings report

   24h Move

   -11.8%

   Q3 FY2026 revenue rose 21%, with net income of $2.3 million and Adjusted EBITDA of $5.1 million.

2. Feb 12

   earnings report

   24h Move

   -13.8%

   Q2 FY2026 reported $9.4 million net income, $18.5 million Adjusted EBITDA and gross-margin expansion.

3. Nov 12

   earnings report

   24h Move

   +0.3%

   Q1 FY2026 revenue rose 11%, gross margin reached 14.6%, and net income was $4.9 million.

4. Sep 10

   earnings report

   24h Move

   -15.1%

   FY2025 reported Adjusted EBITDA growth, higher net income and improved Q4 gross margin.

5. May 15

   earnings report

   24h Move

   +13.2%

   Q3 FY2025 net income improved, with revenue growth and higher physical movie and vinyl sales.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Key Terms

adjusted ebitda, diluted earnings per share, basis points, revolving credit facility, +1 more

5 terms

adjusted ebitda financial

"Adjusted EBITDA: Increased approximately 1% to $12.3 million"

Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.

diluted earnings per share financial

"GAAP diluted earnings per share increased 50% to $0.15 from $0.10."

Diluted earnings per share is a measure of a company's profit allocated to each share of stock, taking into account all possible shares that could be created through stock options, convertible bonds, or other securities. It shows the lowest possible earnings per share if all these potential shares were issued, helping investors understand the worst-case scenario for their ownership. This figure matters because it provides a more conservative view of a company's profitability per share.

basis points financial

"gross margin expanded 50 basis points to 15.1% from 14.6%."

Basis points are a way to measure small changes in interest rates or percentages, where one basis point equals 0.01%. For example, if a loan's interest rate increases by 50 basis points, it's gone up by 0.50%. They help people understand tiny differences in rates that can add up over time, making financial comparisons clearer.

revolving credit facility financial

"availability under its $120 million revolving credit facility"

A revolving credit facility is a type of loan that a business can borrow from whenever it needs money, up to a set limit. It’s like having a credit card for companies—allowing them to borrow, pay back, and borrow again as needed, providing flexibility for managing cash flow or funding short-term expenses.

warrant liabilities financial

"a favorable non-cash change in the fair value of warrant liabilities."

Warrant liabilities are the financial obligations a company records when it grants warrants—special rights allowing someone to buy shares at a set price in the future. If the warrants are expected to be exercised, they are treated as a liability because the company might need to deliver shares or cash later. This matters to investors because it affects the company’s reported financial health and the potential dilution of existing shares.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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GAAP diluted EPS increased 50% to $0.15 as net income reached $7.6 million

Gross profit increased 13% to $42.1 million; gross margin expanded to 15.1%

Physical movie revenue increased 20%; vinyl revenue rose 14% and CD revenue grew 22%

Collectibles revenue increased 87%

PLANTATION, Fla., Nov. 12, 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, today reported its financial and operational results for the first quarter of fiscal 2027, ended September 30, 2026.

First Quarter Fiscal 2027 Financial Highlights

• Net Revenues: Increased 10% to $278.8 million, compared with $254.0 million in the first quarter of fiscal 2026.
• Gross Profit and Margin: Gross profit increased 13% to $42.1 million from $37.2 million, while gross margin expanded 50 basis points to 15.1% from 14.6%.
• GAAP Net Income and EPS: Net income increased 56% to $7.6 million, compared with $4.9 million in the prior-year quarter. GAAP diluted earnings per share increased 50% to $0.15 from $0.10.
• Operating Income: Operating income was $10.6 million, compared with $10.5 million in the prior-year quarter.
• Adjusted EBITDA: Increased approximately 1% to $12.3 million, compared with $12.2 million in the prior-year quarter.
• Adjusted Net Income and Adjusted Diluted EPS: Adjusted net income was $7.2 million, compared with $7.3 million in the prior-year quarter, while adjusted diluted earnings per share remained unchanged at $0.14.
• Interest Expense: Decreased 49% to $1.2 million from $2.3 million, reflecting lower borrowing costs following the Company's October 2025 refinancing.
• Operating Cash Flow: Net cash provided by operating activities increased 58% to $4.3 million, compared with $2.7 million in the prior-year quarter.
• Liquidity: The Company ended the quarter with approximately $48.9 million of availability under its $120 million revolving credit facility, along with $33.4 million of additional collateral-supported borrowing capacity above the facility's current commitment limit. This excess collateral capacity could support a future expansion of the credit facility, subject to applicable conditions and lender approval.
  

“Fiscal 2027 is off to a strong start, with 10% revenue growth, higher gross margins and significant improvement in GAAP net income and earnings per share,” said Jeff Walker, Chief Executive Officer of Alliance Entertainment. “Physical music, movies and collectibles all grew, with collectibles revenue up 87%. For a long time, so much of the conversation was about streaming replacing physical formats. But what we've seen consistently is that fans who can listen to an album or watch a movie online still want something special they can own and collect. The entertainment industry is increasingly recognizing the value of these highly engaged consumers—the superfans—and the growing demand for physical products that we've been seeing for years.”

“We believe everybody is a superfan of something, and those fans want products that bring them closer to what they love,” Walker continued. “And when you offer a limited edition or an exclusive collectible, that adds another dimension, because now they have a unique product not everybody else has. This is right in our wheelhouse. We have the studio and label relationships, the retail reach and the fulfillment capabilities to get these products into fans’ hands. What’s exciting is that as more content owners look for ways to serve these fans, they need partners who understand both the products and how to bring them to market. That creates a lot of opportunity for Alliance.”

“First-quarter results reflect continued revenue growth and gross margin improvement, along with the benefits of our strengthened financing structure,” said Amanda Gnecco, Chief Financial Officer of Alliance Entertainment. “Gross profit increased approximately 13%, outpacing revenue growth, while interest expense declined nearly 49% following our refinancing with Bank of America. GAAP net income increased 56% to $7.6 million, benefiting from lower borrowing costs and a favorable non-cash change in the fair value of warrant liabilities.”

“We also made progress on our objective of improving cash generation,” Gnecco added. “Operating cash flow increased to $4.3 million from $2.7 million a year ago, despite continued investment in inventory to support customer demand and anticipated sales activity as we enter the holiday season. As we move through fiscal 2027, our priorities remain focused on profitable growth, working-capital efficiency, expense discipline and improving operating leverage. With lower borrowing costs and substantial availability under our revolving credit facility, we believe we have the financial flexibility to support our strategic initiatives while continuing to strengthen the business.”

Strategic & Operating Highlights

• Physical Movie Growth Supported by Major Studio Relationships: Physical movie revenue increased 20% to $101.1 million, compared with $84.0 million in the prior-year quarter. Growth benefited from new releases and expanded retail availability through the Company’s exclusive physical-media distribution relationships with Paramount and Amazon MGM Studios.
• Vinyl and CDs Delivered Double-Digit Growth: Vinyl revenue increased 14% to $86.7 million from $75.8 million, while CD revenue increased 22% to $41.2 million from $33.9 million. New releases, reissues and collectible editions supported physical music demand, with both formats benefiting from higher unit sales and average selling prices.
• Collectibles Revenue Increased 87%: Collectibles revenue increased to $11.9 million from $6.4 million, supported by expanded licensed merchandise offerings, broader sourcing initiatives and vendor relationships, and the Company’s owned Handmade by Robots™ brand. Collectibles represented 4.3% of quarterly revenue, compared with 2.5% in the prior-year period.
• Distribution and Fulfillment Revenue Increased 18%: Distribution and fulfillment fee revenue increased to $5.7 million from $4.8 million, reflecting higher demand for the Company’s distribution, fulfillment and value-added logistics services.
• Authentication and Digital Product Identity Development Continued: Alliance continued developing NFC-enabled authentication and digital product identity capabilities through Endstate Authentic and Alliance Authentic™. These initiatives are designed to support product verification, provenance, preservation and authenticated resale across premium physical entertainment and collectibles.
• Technology and Automation Initiatives Focused on Productivity: Alliance continued investing in warehouse automation and expanding its use of artificial intelligence to streamline workflows and improve financial and operational processes. These efforts are intended to reduce manual work and support more efficient operations as the business grows.

First Quarter Fiscal 2027 Financial Review

Net revenues for the first quarter of fiscal 2027 increased $24.9 million, or 10%, to $278.8 million from $254.0 million in the prior-year quarter. Revenue growth was driven primarily by higher sales of physical movies, vinyl records, CDs and collectibles, partially offset by declines in gaming and digital downloads.

Physical movie revenue increased $17.1 million, or 20%, to $101.1 million, supported by higher unit volumes and the Company's expanding relationships with major studios. Vinyl revenue increased $10.9 million, or 14%, to $86.7 million, while CD revenue increased $7.3 million, or 22%, to $41.2 million. Collectibles revenue increased $5.5 million, or 87%, to $11.9 million, reflecting continued expansion in licensed merchandise and proprietary products. These increases were partially offset by an $18.4 million decline in gaming revenue, primarily reflecting lower product availability and the absence of certain prior-year sales associated with the Nintendo Switch 2 launch.

Gross profit increased $5.0 million, or approximately 13%, to $42.1 million from $37.2 million in the prior-year quarter. Gross margin improved 50 basis points to 15.1% from 14.6%, reflecting stronger product margins and favorable contributions from the Company's evolving product mix.

Total operating expenses increased to $31.5 million from $26.6 million in the prior-year quarter, primarily reflecting higher selling, general and administrative expenses and distribution and fulfillment costs. Distribution and fulfillment expenses increased to $12.0 million from $9.9 million, driven primarily by higher warehouse payroll and operating costs associated with increased business activity, specialized product handling and fulfillment requirements. Selling, general and administrative expenses increased to $17.9 million from $15.1 million, reflecting higher employee-related expenses, professional-service costs and investments supporting the Company's strategic initiatives.

Operating income was $10.6 million, compared with $10.5 million in the prior-year quarter. The increase in gross profit was substantially offset by higher operating expenses as the Company continued supporting revenue growth and investing in its operational capabilities.

Interest expense decreased $1.1 million, or 49%, to $1.2 million from $2.3 million in the prior-year quarter. The decrease primarily reflected a reduction in the Company's average effective interest rate to 5.3% from 8.4% following the October 2025 refinancing of its revolving credit facility with Bank of America. Lower borrowing costs more than offset the impact of higher average borrowings during the quarter.

GAAP net income increased $2.7 million, or 56%, to $7.6 million from $4.9 million in the prior-year quarter. GAAP diluted earnings per share increased 50% to $0.15 from $0.10. The year-over-year improvement reflected lower interest expense and a favorable change in the fair value of warrant liabilities, partially offset by higher income tax expense. The Company recorded a non-cash gain of approximately $0.9 million related to warrant remeasurement during the quarter, compared with a non-cash loss of approximately $1.5 million in the prior-year period.

Adjusted EBITDA increased approximately 1% to $12.3 million from $12.2 million in the prior-year quarter. Adjusted net income was $7.2 million, while adjusted diluted earnings per share remained unchanged at $0.14. These non-GAAP measures exclude certain items that management does not consider representative of ongoing operating performance, including non-cash warrant remeasurement adjustments.

Net cash provided by operating activities increased to $4.3 million from $2.7 million in the prior-year quarter. Operating cash flow benefited from the Company's higher earnings and changes in working capital, including increased accounts payable, partially offset by higher inventory and receivables. Inventory increased to $152.0 million at September 30, 2026, from $126.6 million at June 30, 2026, reflecting investment to support sales growth and anticipated customer demand.

At September 30, 2026, the Company had approximately $70.8 million outstanding under its $120 million revolving credit facility, with approximately $49.2 million of availability. The Company remained in compliance with applicable credit facility covenants. Management continues to prioritize working-capital efficiency, inventory productivity, receivable collections and disciplined capital allocation while supporting growth across physical entertainment, collectibles, fulfillment and authentication technologies.

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:

Date:	Thursday, November 12, 2026
Time:	4:30 p.m. Eastern Time, 1:30 p.m. Pacific Time
Toll-free dial-in number:	1-844-825-9789
International dial-in number:	1-412-317-5180
Conference ID:	10213070

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=1781348&tp_key=9221210ff0 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 December 12, 2026, using the following information:

Toll-free replay number:	1-844-512-2921
International replay number:	1-412-317-6671
Replay ID:	10213070

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.

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 Gentry
RedChip Companies, Inc.
1-800-REDCHIP (733-2447)
1-407-644-4256
AENT@redchip.com

ALLIANCE ENTERTAINMENT HOLDING CORP.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
		Three Months Ended				Three Months Ended
($ in thousands except share and per share amounts)		September 30, 2026				September 30, 2025
Net Revenues		$	278,830			$	253,974
Cost of Revenues (excluding depreciation and amortization)			236,699				216,793
Operating Expenses
Distribution and Fulfillment Expense			12,025				9,920
Selling, General and Administrative Expense			17,944				15,078
Depreciation and Amortization			1,426				1,286
Transaction Costs			112				370
Gain on Disposal of Fixed Assets			-				(20	)
Total Operating Expenses			31,507				26,634
Operating Income			10,624				10,547
Other Expenses
Interest Expense			1,201				2,347
State tax benefit from prior year			(3	)			-
Change in Fair Value of Warrants			(850	)			1,462
Total Other Expenses			348				3,809
Income Before Income Tax Expense			10,276				6,738
Income Tax Expense			2,655				1,858
Net Income		$	7,621			$	4,880
Other Comprehensive Income
Foreign Currency Translation			-				-
Total Comprehensive Income		$	7,621			$	4,880
Net Income per Share – Basic and Diluted		$	0.15			$	0.10
Weighted Average Common Shares Outstanding – Basic			50,979,630				50,957,370
Weighted Average Common Shares Outstanding – Diluted			51,082,171				50,996,141

ALLIANCE ENTERTAINMENT HOLDING CORP.
UNAUDITED CONSOLIDATED BALANCE SHEETS
($ in thousands except per share amounts)		September 30, 2026				June 30, 2026
			(Unaudited)
Assets
Current Assets
Cash		$	649			$	814
Trade Receivables, Net of Allowance for Credit Losses of $1,011 and $811, respectively			119,547				111,038
Inventory, Net			152,019				126,599
Other Current Assets			8,857				9,843
Total Current Assets			281,072				248,294
Property and Equipment, Net			10,301				10,564
Operating Lease Right-of-Use Assets, Net			15,292				16,062
Goodwill			94,081				94,081
Intangibles, Net			17,499				18,457
Other Long-Term Assets			9,630				9,932
Deferred Tax Asset, Net			210				210
Total Assets		$	428,085			$	397,600
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts Payable		$	198,769			$	170,958
Accrued Expenses			9,101				8,361
Current Portion of Operating Lease Obligations			3,406				3,329
Current Portion of Finance Lease Obligations			1,133				1,937
Deferred Consideration			1,300				1,300
Total Current Liabilities			213,709				185,885
Revolving Credit Facility, Net			70,311				73,721
Operating Lease Obligations, Non-Current			13,368				14,217
Contingent Liability, Non-Current			5,500				5,500
Acquired Royalty Obligation (Endstate), Non-Current			165				165
Warrant Liability			588				1,496
Total Liabilities			303,641				280,984
Commitments and Contingencies (Note 13)
Stockholders’ Equity
Preferred Stock: Par Value $0.0001 per share, Authorized 1,000,000 shares, Issued and Outstanding and shares as of September 30, 2026, and June 30, 2026			-				-
Common Stock: Par Value $0.0001 per share, Authorized 550,000,000 shares at September 30, 2026, and at June 30, 2026; Issued and Outstanding 50,979,630 Shares as of September 30, 2026, and June 30, 2026, respectively			5				5
Paid In Capital			49,114				48,907
Accumulated Other Comprehensive Loss			(77	)			(77	)
Retained Earnings			75,402				67,781
Total Stockholders’ Equity			124,444				116,616
Total Liabilities and Stockholders’ Equity		$	428,085			$	397,600

ALLIANCE ENTERTAINMENT HOLDING CORP.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
		Three Months Ended				Three Months Ended
($ in thousands)		September 30, 2026				September 30, 2025
Cash Flows from Operating Activities:
Net Income		$	7,621			$	4,880
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:
Depreciation of Property and Equipment			468				442
Amortization of Intangible Assets			958				844
Amortization of Deferred Financing Costs (Included in Interest Expense)			32				351
Allowance for Credit Losses			344				79
Change in Fair Value of Warrants			(850	)			1,462
Non-cash lease expense			770				779
Stock-based Compensation Expense			149				25
Gain on Disposal of Fixed Assets			-				(20	)
Changes in Assets and Liabilities
Trade Receivables			(8,853	)			758
Inventory			(25,420	)			(18,880	)
Income Taxes Payable\Receivable			2,410				1,516
Operating Lease Obligations			(772	)			(742	)
Other Assets			1,001				(3,459	)
Accounts Payable			27,811				18,545
Accrued Expenses and Contingent Liability			(1,382	)			(3,860	)
Net Cash Provided By Operating Activities			4,287			$	2,720
Cash Flows from Investing Activities:
Capital Expenditures			(205	)			(345	)
Cash Inflow from Asset Disposal			-				26
Net Cash Used in Investing Activities			(205	)			(319	)
Cash Flows from Financing Activities:
Payments on Financing Leases			(804	)			(746	)
Payments on Revolving Credit Facility			(256,609	)			(234,317	)
Borrowings on Revolving Credit Facility			253,166				234,699
Deferred Financing Costs			-				(50	)
Net Cash Used In Financing Activities			(4,247	)			(414	)
Net Increase/(Decrease) Increase in Cash			(165	)			1,987
Net Effect of Currency Translation on Cash			-				-
Cash, Beginning of the Period			814				1,236
Cash, End of the Period		$	649			$	3,223
Supplemental disclosure for Cash Flow Information
Cash Paid for Interest		$	1,105			$	2,313
Cash Paid for Income Taxes		$	245			$	342

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, 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 periods presented:

		Three Months Ended				Three Months Ended
(in thousands, except share and per share data)		September 30, 2026				September 30, 2025
Net income		$	7,621			$	4,880
Equity-based compensation (1)			149				25
Acquisition and deal-related costs (2)			112				370
Amortization of acquisition-related intangible assets (3)			105				90
Amortization of deferred financing costs (4)			32				351
Change in fair value of warrants and contingent consideration (5)			(850	)			1,462
Litigation costs and settlements (6)			237				382
State Tax benefit from prior year (10)			(3	)			-
Income tax effect of adjustments (7)			(158	)			(305	)
Adjusted net income		$	7,245			$	7,255
Weighted-average shares outstanding—basic			50,979,630				50,957,370
Effect of dilutive securities			102,541				38,771
Weighted-average shares outstanding—diluted			51,082,171				50,996,141
Earnings per diluted share		$	0.15			$	0.10
Adjusted earnings per diluted share		$	0.14			$	0.14

($ in thousands)		Three Months Ended September 30, 2026				Three Months Ended September 30, 2025
Net income		$	7,621			$	4,880
Add back:
Interest expense, net			1,201				2,347
Income tax expense			2,655				1,858
Depreciation and amortization (8)			1,426				1,286
EBITDA			12,903				10,371
Adjustments:
Acquisition and deal-related costs (2)			112				370
Equity-based compensation (1)			149				25
Change in fair value of warrants and contingent consideration (5)			(850	)			1,462
State tax benefit from Prior Year (10)			(3	)			-
Gain on disposal of property and equipment (9)			-				(20	)
Adjusted EBITDA		$	12,311			$	12,208

(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 legal fees, settlement amounts and other costs associated with litigation matters that we do not consider indicative of our ongoing operating performance.
(7) 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.
(8) 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.
(9) Represents net gains and losses on the disposal of property and equipment.
(10) State Tax refund for abandoned property

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What were Alliance Entertainment's fiscal Q1 2027 revenue and earnings?

Alliance Entertainment reported $278.8 million in revenue and $7.6 million in GAAP net income for the quarter ended September 30, 2026. Revenue increased 10% and net income increased 56% from the prior-year quarter. GAAP diluted earnings per share rose 50% to $0.15 from $0.10.

Why did Alliance Entertainment's GAAP earnings grow faster than adjusted earnings in fiscal Q1 2027?

A favorable non-cash warrant remeasurement contributed to GAAP earnings growth but was excluded from adjusted results. The quarter recorded an $850,000 gain from changes in warrant fair value, compared with a $1,462,000 loss a year earlier. Adjusted net income was $7.2 million, versus $7.3 million in the prior-year quarter.

Can Alliance Entertainment access the additional $33.4 million of collateral-supported borrowing capacity?

The $33.4 million of additional collateral-supported capacity is above the revolving facility's current commitment limit and could support a future expansion, subject to applicable conditions and lender approval. It is distinct from availability under the existing $120 million facility.

What drove Alliance Entertainment's operating cash flow improvement in fiscal Q1 2027?

Higher earnings and working-capital changes, including increased accounts payable, supported operating cash flow, partially offset by higher inventory and receivables. The company said inventory investment supported sales growth and anticipated customer demand heading into the holiday season.