Alliance Entertainment Q1 FY2027 profit rises 56%
Collectibles revenue climbed 87%, while gaming revenue declined $18.4 million and operating cash flow rose to $4.3 million.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rhea-AI Filing Summary
Alliance Entertainment Holding Corp. (AENT) reported first-quarter fiscal 2027 net revenue of $278.8 million, up 10%, for the quarter ended September 30, 2026. GAAP net income rose 56% to $7.6 million and diluted EPS rose 50% to $0.15. Gross profit increased 13% to $42.1 million, with gross margin at 15.1%, versus 14.6%. Physical movie, vinyl, CD and collectibles revenue increased 20%, 14%, 22% and 87%, respectively; gaming revenue declined $18.4 million.
Operating cash flow rose to $4.3 million from $2.7 million, while interest expense fell 49% to $1.2 million from $2.3 million after the October 2025 refinancing. Net income included an approximately $0.9 million non-cash gain from warrant remeasurement, versus an approximately $1.5 million loss a year earlier. Adjusted EBITDA was $12.3 million, up 1%, and adjusted diluted EPS was $0.14 in both periods. Inventory was $152.0 million at September 30, 2026, versus $126.6 million at June 30, 2026. The company reported approximately $70.8 million outstanding under its $120 million revolving credit facility, with approximately $49.2 million available, and compliance with applicable covenants.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointRevenue grew 10% to $278.8 million year over year.
- Moderate pointGAAP net income increased 56% to $7.6 million.
- Moderate pointOperating cash flow rose to $4.3 million from $2.7 million.
Negative
- None.
Filing Explained
Alliance Entertainment reported $4.3 million in cash from operations for the September quarter.
8-K Event Classification
Key Figures
Key Terms
Adjusted EBITDA financial
warrant remeasurement financial
revolving credit facility financial
Earnings Snapshot
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What were AENT's first-quarter fiscal 2027 revenue and GAAP earnings?
Which product categories drove AENT's first-quarter revenue changes?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported):
| (Exact Name of Registrant as Specified in its Charter) |
| (State or Other Jurisdiction | (Commission | (IRS Employer | ||
| of Incorporation) | File Number) | Identification No.) |
(Address of Principal Executive Offices) (Zip Code)
(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e 4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On November 12, 2026, Alliance Entertainment Holding Corporation, a Delaware corporation (the “Company” or “Alliance”), issued a press release regarding Alliance’s financial results for the fiscal quarter ended September 30, 2026. A copy of the press release is attached hereto as Exhibit 99.1.
The information set forth in this Item 2.02, including the exhibit attached hereto, shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise be subject to the liabilities of that section, nor shall they be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act.
Item 7.01. Regulation FD Disclosure.
An updated version of an investor presentation of the Company is attached as Exhibit 99.2 to this Current Report on Form 8-K. The presentation will be accessible online through the Investor Relations section of the Company’s website, located at ir.aent.com, under the heading “Investor Presentation.” The information on the Company’s website is not a part of this Current Report on Form 8-K.
The information set forth in this Item 7.01, including the exhibit attached hereto, shall not be deemed to be filed for purposes of Section 18 of the Exchange Act, or otherwise be subject to the liabilities of that section, nor shall they be deemed to be incorporated by reference in any filing under the Securities Act or the Exchange Act.
Forward-Looking Statements
This Current Report on Form 8-K includes certain statements that are not historical facts but are forward-looking statements for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995. These statements are based on various assumptions, whether or not identified in this Current Report on Form 8-K, and on the current expectations of the Company’s management and are not predictions of actual performance. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. These forward-looking statements are subject to a number of risks and uncertainties, including those factors discussed in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on September 10, 2026 under the heading “Risk Factors,” and other documents of the Company filed, or to be filed, with the SEC, which are accessible through the Investor Relations section of the Company’s website at ir.aent.com. If the risks materialize or assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. The Company disclaims any obligation to update any forward-looking statements.
Item 9.01. Financial Statements and Exhibits.
| (d) | Exhibits. |
| Exhibit No. | Exhibit | |
| 99.1 | Press Release dated November 12, 2026. | |
| 99.2 | Investor Presentation. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Dated: November 12, 2026 | ALLIANCE ENTERTAINMENT HOLDING CORPORATION | |
| By: | /s/ Bruce Ogilvie | |
| Name: | Bruce Ogilvie | |
| Title: | Executive Chairman | |
Exhibit 99.1
Alliance Entertainment Reports First Quarter Fiscal 2027 Revenue Growth of 10% and GAAP Net Income Growth of 56%
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., November 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
Exhibit 99.2
Filing Exhibits & Attachments
46 documentsPress Releases
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