Revenue up 11% to $254M, driven by strength in physical media and collectibles

Adjusted EBITDA up 259% to $12.2M; Gross Margin expands 340 basis points to 14.6%

Net Income increased to $4.9M, or $0.10 per share, compared to $0.4M in Q1 FY25

AI Implementation delivering early productivity gains across sales and operations

Strengthened balance sheet, ending quarter with $53.2M in working capital; Interest Expense down 17% year-over-year

PLANTATION, Fla., Nov. 12, 2025 (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 music, video, video games, licensed merchandise, and exclusive collectibles to over 35,000 retail and e-commerce storefronts, reported its financial and operational results for its fiscal first quarter ended September 30, 2025.

First Quarter FY 2026 Highlights

   -- Revenue and Profit Growth: Net revenues rose 11% year-over-year to $254 
      million, reflecting continued strength across physical media, 
      collectibles, and direct-to-consumer channels. Gross profit increased 46% 
      to $37.2 million, with gross margin expanding 340 basis points to 14.6%. 
      Net income was $4.9 million, or $0.10 per diluted share, up from $0.4 
      million in the prior-year quarter. Adjusted EBITDA grew 259% to $12.2 
      million, demonstrating meaningful leverage from higher-margin content and 
      disciplined expense management. Adjusted EBITDA margin improved by 330 
      basis points to 4.8%. A reconciliation of non-GAAP financial measures to 
      the most comparable GAAP measure is provided at the end of this release. 
 
   -- AI-Driven Sales and Efficiency Gains: The Company is already realizing 
      tangible benefits from its newly deployed AI tools across sales and 
      operations. Integration of HubSpot Sales Hub and Microsoft Co-Pilot is 
      enhancing sales enablement, lead prioritization, and content automation, 
      streamlining workflows and improving conversion rates as Alliance enters 
      the holiday selling season. These early results validate management's 
      focus on technology-driven productivity and margin expansion. 
 
   -- Strong Performance in Physical Media: Physical movie sales increased 59% 
      year-over-year to $84 million, benefiting from the exclusive Paramount 
      Pictures distribution agreement and robust demand for premium 4K and 
      SteelBook formats. Vinyl sales rose 8% to $75.8 million, reflecting 
      healthy consumer interest in collector-grade releases. 
 
   -- Collectibles Growth and Brand Momentum: Collectibles revenue advanced 32% 
      to $6.4 million, driven by expanded retail placement for the Company's 
      owned brand Handmade by Robots$(TM)$ and strong sell-through of exclusive 
      licensed merchandise across major franchises. Recent launches under the 
      Master Replicas label further enhanced the portfolio with premium sci-fi 
      replicas from Star Trek, Dune, and Blade Runner. 
 
   -- Operational Discipline: Distribution and fulfillment expenses remained 
      consistent at 3.9% of net revenue, reflecting continued operational 
      efficiency from warehouse automation and centralized fulfillment 
      initiatives. 
 
   -- Strategic Investment in Growth Infrastructure: Selling, general, and 
      administrative (SG&A) expenses represented 5.9% of net revenue, compared 
      to 5.7% in the prior-year quarter, reflecting targeted investments in 
      technology, infrastructure, and personnel to support exclusive content 
      partnerships and long-term scalability. These investments strengthen 
      operational capabilities and position the Company for sustained growth 
      and efficiency gains. 
 
   -- Balance Sheet and Liquidity Strength: Alliance ended the quarter with 
      $3.2 million in cash and working capital of $53.2 million, reflecting 
      efficient management of inventory and payables. Inventory increased to 
      $121.7 million, supporting holiday-season demand and expanded content 
      partnerships, while accounts payable totaled $173.8 million. Interest 
      expense declined 17% year-over-year, driven by a lower average revolver 
      balance and improved rates. Subsequent to quarter-end, the Company 
      refinanced its asset-based lending agreement with a new $120 million 
      senior secured credit facility from Bank of America, enhancing liquidity 
      and financial flexibility. Availability increased to $61 million from $32 
      million a year ago. 

"Our first quarter results reflect a strong start to fiscal 2026 and demonstrate the continued resilience of Alliance's business model," commented Jeff Walker, Chief Executive Officer of Alliance Entertainment. "We delivered solid top-line growth and a significant improvement in profitability, driven by high-margin content, disciplined cost management, and growing demand across our omnichannel distribution and fulfillment platform.

"Physical media remains a powerful driver, led by our exclusive Paramount Pictures agreement and sustained interest in premium 4K and SteelBook formats. Our owned and licensed collectibles brands also continue to expand, with Handmade by Robots(TM) and Master Replicas performing ahead of expectations. At the same time, our Consumer Direct Fulfillment channel remains a cornerstone of our model--capital-light, scalable, and increasingly critical for retailers as they navigate hybrid physical and digital demand.

"We're also beginning to see tangible results from our AI initiative. By embedding tools such as HubSpot and Microsoft Co-Pilot into our workflows, we're improving sales enablement, speed to market, and customer responsiveness. These innovations are making our teams more productive and our operations more agile heading into the holiday season, which historically represents our strongest quarter of the year.

"With disciplined execution, exclusive content, and a more technologically enabled platform, Alliance is better positioned than ever to support our partners, capture share in growth categories, and deliver sustainable long-term value for our shareholders," concluded Walker.

Amanda Gnecco, Chief Financial Officer of Alliance Entertainment, added, "Our performance this quarter reflects more than numbers; it reflects momentum. We're building a stronger, smarter, and more scalable business, positioned for long-term value creation. The quarter continued the profitability trend we established last year, with significant margin expansion, higher earnings, and improved cash generation. Gross margin rose 340 basis points, Adjusted EBITDA grew nearly threefold, and net income reached $4.9 million compared to just $0.4 million in the prior-year period. These results reflect a more profitable mix of exclusive content, operating discipline, and efficiencies from automation and AI integration.

"For the trailing 12-months ended September 30, 2025, EBITDA improved to approximately $41.7 million, up from $23.3 million in the 12-months ended September 30, 2024, reflecting continued gains in profitability and operating leverage. Earnings per share in the 12-months ended September 30, 2025, rose to $0.38, up from $0.17 in the 12-months ended September 30, 2024, demonstrating the steady earnings progression and efficiency of our model.

"We also strengthened the balance sheet. Our working capital management remains disciplined, interest expense declined 17% year-over-year, and subsequent to quarter-end we refinanced our credit facility with a new $120 million senior secured revolver from Bank of America. This enhances liquidity and flexibility as we enter the peak holiday quarter, supporting both inventory readiness and future growth investments.

"Looking ahead, we remain focused on sustaining profitability and cash generation while scaling AI adoption to unlock further productivity gains across sales, operations, and fulfillment. Our platform is built for efficiency and scalability, and with strong liquidity and a growing base of exclusive content, we believe we are well positioned to drive continued earnings growth and long-term shareholder value," concluded Gnecco.

First Quarter FY 2026 Financial Results

   -- Net revenues for the fiscal first quarter ended September 30, 2025, were 
      $254 million, up 11% compared to $229 million in the same period of 
      fiscal 2025. 
 
   -- Gross profit for the fiscal first quarter ended September 30, 2025, was 
      $37.2 million, up 46% compared to $25.5 million in the same period of 
      fiscal 2025. 
 
   -- Gross margin for the fiscal first quarter ended September 30, 2025, was 
      14.6%, up 340 basis points from 11.2% in the same period of fiscal 2025. 
 
   -- Net income for the fiscal first quarter ended September 30, 2025, was 
      $4.9 million, or $0.10 per diluted share, compared to net income of $0.4 
      million, or $0.01 per diluted share for the same period of fiscal 2025. 
 
   -- Adjusted EBITDA for the fiscal first quarter ended September 30, 2025, 
      was $12.2 million, up 259% compared to Adjusted EBITDA of $3.4 million 
      for the same period of fiscal 2025. 

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.

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November 12, 2025 16:01 ET (21:01 GMT)