Adjusted EBITDA up 15% to $18.5M; Gross Margin expands 210 basis points to 12.8%
Net Income increased to $9.4M, or $0.18 per share, compared to $7.1M, or $0.14 per share, in Q2 FY25
Strengthened balance sheet, ending quarter with $74.1M in working capital
PLANTATION, Fla., Feb. 12, 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 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 second quarter ended December 31, 2025.
Second Quarter FY 2026 Highlights
-- Sustained Profitability and Margin Execution: Net income increased
year-over-year to approximately $9.4 million, or $0.18 per share, up from
$7.1 million, or $0.14 per share in Q2 FY25, reflecting continued
execution against the Company's established profitability baseline.
Adjusted EBITDA was approximately $18.5 million, an increase of $2.4
million year-over-year. Adjusted EBITDA margin was approximately 5%,
compared to 4.1% in Q2 FY25, a 200 basis point improvement over the
margin profile achieved in the trailing 12-months ended September 30,
2025. Gross margin expanded 210 basis points year-over-year to 12.8%,
driven by favorable mix and higher-value products. A reconciliation of
non-GAAP financial measures to the most comparable GAAP measure is
provided at the end of this release.
-- Launch of Authentication and Digital Product Identity Platform: On
December 31, 2025, the Company completed the acquisition of Endstate,
establishing Endstate Authentic, a dedicated NFC-enabled authentication
and digital product identity platform. The platform expands Alliance's
role beyond physical product distribution by enabling authenticated
ownership, provenance, and verified resale across premium physical goods,
supporting the full lifecycle of collectible products from initial sale
through secondary markets. Designed as a scalable, enterprise-grade
platform, Endstate Authentic is intended to support both Alliance's
internal initiatives and third-party brands, licensors, and ecosystem
partners, adding a technology-enabled layer that enhances trust,
differentiation, and long-term value creation across the collectibles and
premium goods market. Subsequent to quarter end, Alliance launched
Alliance Authentic$(TM)$, a premium vinyl collectibles platform that
represents the first commercial application of these capabilities within
the Company's portfolio.
-- Strength in Physical Media: Physical movie revenue increased 33%
year-over-year to $114 million, benefiting from sustained demand for
premium formats such as 4K Ultra HD and collectible SteelBook editions,
as well as the Company's exclusive distribution partnerships. Alliance
was named the exclusive physical media distribution partner for Amazon
MGM Studios in North America, effective January 1, 2026, further
strengthening its leadership in premium home entertainment and
collector-focused releases. Vinyl record sales increased 3%
year-over-year, supported by continued consumer demand for collectible
and limited-edition releases. Compact disc $(CD)$ sales increased
approximately 5% year-over-year, supported by higher unit volumes and the
Company's first full quarter as the exclusive distributor for Virgin
Music Group through its AMPED Distribution division.
-- Collectibles Growth and Portfolio Expansion: Collectibles revenue
increased 31% year-over-year, driven by higher average selling prices and
a continued shift toward premium, licensed products. Results benefited
from expanded sourcing activity, new vendor additions, and the continued
integration of the Company's owned brand, Handmade by Robots(TM).
-- Operational Discipline and Infrastructure Investment: Operating income
increased year-over-year to $17.3 million, up from $14.8 million in Q2
FY25, reflecting continued operating leverage and disciplined cost
management. Total operating expenses rose modestly, driven by targeted
investments in technology, personnel, and infrastructure to support
exclusive content partnerships and long-term scalability. Distribution
and fulfillment costs were 3.3% of net revenue, consistent with 3.2% in
Q2 FY25, supported by warehouse automation initiatives and ongoing
efficiencies from prior facility consolidation.
-- Balance Sheet and Liquidity Strength: The Company ended the quarter with
working capital of approximately $74.1 million, reflecting disciplined
management of inventory and payables. During the quarter, 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, with availability at quarter end of $35
million.
"Our second quarter results reflect continued execution against the profitability baseline we established last year," said Jeff Walker, Chief Executive Officer of Alliance Entertainment. "For the six months ended December 31, 2025, earnings per share increased to $0.28, up from $0.15 in the prior-year period, demonstrating the earnings leverage created by our structurally improved margin profile.
"Physical media continues to perform as a collectible category, supported by exclusive partnerships and strong consumer demand for premium formats," Walker added. "With the launch of Alliance Authentic(TM), we're extending that strategy into premium vinyl collectibles by introducing The Ultimate Vinyl Collectible(TM), enabling fans and collectors to Own a Piece of Vinyl History(TM) through authentic, certified, and individually numbered releases sourced directly from rights holders. This initiative builds on our strengths in physical media and reinforces our focus on high-value, enthusiast-driven products. With a structurally stronger margin profile and a growing pipeline of exclusive content, we believe Alliance is well positioned to deliver durable profitability and long-term value for our shareholders."
Amanda Gnecco, Chief Financial Officer of Alliance Entertainment, said, "Net income in the second quarter increased 33% year-over-year to $9.4 million, and adjusted EBITDA margin improved 92 basis points year-over-year to 5.0%, reflecting the durability of our cost structure and the benefits of our improving product mix.
"During the quarter, we strengthened our balance sheet by refinancing our credit facility with Bank of America, reducing borrowing costs by up to 250 basis points and extending the maturity to five years. We ended the quarter with just over $74 million in working capital and enhanced liquidity, providing greater financial flexibility to support premium inventory, exclusive partnerships, and strategic initiatives while maintaining disciplined capital management," continued Gnecco.
"As we look ahead, we're building on a much stronger foundation," Walker continued. "The acquisition of Endstate and the launch of Endstate Authentic mark an important step in expanding Alliance beyond distribution into authenticated collectibles, digital product identity, and recurring platform-driven revenue. This technology allows us to extend the value of physical products across their entire lifecycle--from initial sale through authenticated resale--while strengthening trust, provenance, and margins across our ecosystem. With the launch of Alliance Authentic(TM), we are also creating new opportunities in the collectible vinyl market by applying authentication, scarcity, and provenance to products we already source and distribute at scale.
"Separately, our new exclusive partnership with Amazon MGM Studios strengthens our leadership in premium physical home entertainment," Walker added. "By combining our scale, operational execution, and exclusive studio relationships, we continue to elevate physical movies as collectible formats for fans and enthusiasts. Together, these initiatives reflect a disciplined approach to growth that leverages our scale, exclusivity, and financial flexibility to create long-term shareholder value."
Second Quarter FY 2026 Financial Results
-- Net revenues for the fiscal second quarter ended December 31, 2025, were
$369 million, compared to $394 million in the same period of fiscal 2025.
-- Gross profit for the fiscal second quarter ended December 31, 2025, was
$47.1 million, compared to $42.3 million in the same period of fiscal
2025.
-- Gross margin for the fiscal second quarter ended December 31, 2025, was
12.8%, up 210 basis points from 10.7% in the same period of fiscal 2025.
-- Net income for the fiscal second quarter ended December 31, 2025, was
$9.4 million, or $0.18 per diluted share, compared to net income of $7.1
million, or $0.14 per diluted share for the same period of fiscal 2025.
-- Adjusted EBITDA for the fiscal second quarter ended December 31, 2025,
was $18.5 million, compared to Adjusted EBITDA of $16.1 million for the
same period of fiscal 2025.
Six-Months FY 2026 Financial Results
-- Net revenues for the six months ended December 31, 2025, were $623
million, compared to $623 million in the same period of fiscal 2025.
-- Gross profit for the six months ended December 31, 2025, was $84.3
million, compared to $67.8 million in the same period of fiscal 2025.
-- Gross margin for the six months ended December 31, 2025, was 13.5%, up
260 basis points from 10.9% in the same period of fiscal 2025.
-- Net income for the six months ended December 31, 2025, was $14.3 million,
or $0.28 per diluted share, compared to net income of $7.5 million, or
$0.15 per diluted share for the same period of fiscal 2025.
-- Adjusted EBITDA for the six months ended December 31, 2025, was $30.7
million, compared to Adjusted EBITDA of $19.5 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.
To access the call, please use the following information:
Date: Thursday, February 12, 2026 ------------------------------ ---------------------------------------------- Time: 4:30 p.m. Eastern Time, 1:30 p.m. Pacific Time ------------------------------ ---------------------------------------------- Toll-free dial-in number: 1-877-407-0784 ------------------------------ ---------------------------------------------- International dial-in number: 1-201-689-8560 ------------------------------ ---------------------------------------------- Conference ID: 13758224 ------------------------------ ----------------------------------------------
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=1749656&tp_key=d0dfe4e261 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 March 12, 2026, using the following information:
Toll-free replay number: 1-844-512-2921 ----------------------------- -------------- International replay number: 1-412-317-6671 ----------------------------- -------------- Replay ID: 13758224 ----------------------------- --------------
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(TM), a stylized vinyl figure line featuring licensed characters from leading entertainment franchises, and Alliance Authentic(TM), 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; our ability to continue as a going concern absent access to sources of liquidity; 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 Three
Months Months Six Months Six Months
Ended Ended Ended Ended
($ in thousands except
share and per share December December December December
amounts) 31, 2025 31, 2024 31, 2025 31, 2024
------------------------ ----------- ----------- ----------- -----------
Net Revenues $ 368,712 $ 393,672 $ 622,685 $ 622,662
Cost of Revenues
(excluding depreciation
and amortization) 321,616 351,382 538,409 554,837
Operating Expenses
Distribution and
Fulfillment Expense 12,121 12,419 22,041 21,437
Selling, General and
Administrative Expense 16,591 13,800 31,668 26,905
Depreciation and
Amortization 1,290 1,255 2,574 2,512
Transaction Costs 225 - 596 -
Restructuring Cost 2 19 2 69
Gain on Insurance Claims (408) - (408) -
Gain on Disposal of Fixed
Assets (4) - (24) (15)
---------- ---------- ---------- ----------
Total Operating
Expenses 29,817 27,493 56,449 50,908
---------- ---------- ---------- ----------
Operating Income 17,279 14,797 27,827 16,917
Other Expenses
Interest Expense, Net 3,454 2,827 5,801 5,666
Change in Fair Value of
Warrants 850 2,545 2,313 2,586
---------- ---------- ---------- ----------
Total Other Expenses 4,304 5,372 8,114 8,252
---------- ---------- ---------- ----------
Income Before Income
Tax Expense 12,975 9,425 19,713 8,665
Income Tax Expense 3,587 2,354 5,445 1,197
---------- ---------- ---------- ----------
Net Income 9,388 7,071 14,268 7,468
---------- ---------- ---------- ----------
Net Income per Share --
Basic and Diluted $ 0.18 $ 0.14 $ 0.28 $ 0.15
Weighted Average Common
Shares Outstanding -
Basic 50,957,370 50,957,370 50,957,370 50,957,370
Weighted Average Common
Shares Outstanding -
Diluted 51,010,519 50,965,970 51,010,519 50,965,970
ALLIANCE ENTERTAINMENT HOLDING CORP.
CONSOLIDATED BALANCE SHEETS
($ in thousands except per
share amounts) December 31, 2025 June 30, 2025
----------------------------- ------------------- ---------------
(Unaudited)
Assets
Current Assets
Cash $ 1,379 $ 1,236
Trade Receivables, Net of
Allowance for Credit
Losses of $1,833 and $867,
respectively 148,653 95,027
Inventory, Net 117,801 102,848
Other Current Assets 18,858 19,021
--------------- -----------
Total Current Assets 286,691 218,132
Property and Equipment, Net 11,108 11,291
Operating Lease Right-of-Use
Assets, Net 17,698 19,214
Goodwill 94,081 89,116
Intangibles, Net 20,037 18,475
Other Long-Term Assets 235 789
Deferred Tax Asset, Net 4,211 4,211
--------------- -----------
Total Assets $ 434,061 $ 361,228
=============== ===========
Liabilities and Stockholders'
Equity
Current Liabilities
Accounts Payable $ 188,266 $ 155,300
Accrued Expenses 15,287 9,548
Current Portion of
Operating Lease
Obligations 3,299 3,229
Current Portion of Finance
Lease Obligations 3,180 3,075
Deferred Consideration 1,000 -
Contingent Liability 1,577 1,577
--------------- -----------
Total Current Liabilities 212,609 172,729
Revolving Credit Facility, Net 84,547 55,268
Finance Lease Obligation, Non-
Current 320 1,931
Operating Lease Obligations,
Non-Current 15,877 17,432
Shareholder Loan
(subordinated), Non-Current - 10,000
Acquired Royalty Obligation
(Endstate), Non-Current 165 -
Warrant Liability 2,959 646
--------------- -----------
Total Liabilities 316,477 258,006
--------------- -----------
Commitments and Contingencies
(Note 13)
Stockholders' Equity
Preferred Stock: Par Value
$0.0001 per share, Authorized
1,000,000 shares, Issued and
Outstanding 0 shares as of
December 31, 2025, and June
30, 2025 - -
Common Stock: Par Value
$0.0001 per share, Authorized
550,000,000 shares at
December 31, 2025, and at
June 30, 2025; Issued and
Outstanding 50,957,370 Shares
as of December 31, 2025, and
June 30, 2025 5 5
Paid In Capital 48,664 48,570
Accumulated Other
Comprehensive Loss (76) (76)
Retained Earnings 68,991 54,723
--------------- -----------
Total Stockholders'
Equity 117,584 103,222
--------------- -----------
Total Liabilities and
Stockholders' Equity $ 434,061 $ 361,228
=============== ===========
ALLIANCE ENTERTAINMENT HOLDING CORP.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended Six Months Ended
($ in thousands) December 31, 2025 December 31, 2024
------------------------- ------------------- -------------------
Cash Flows from Operating
Activities:
Net Income $ 14,268 $ 7,468
Adjustments to
Reconcile Net Income
to
Net Cash (Used in)
Provided by Operating
Activities:
Depreciation of
Property and
Equipment 887 849
Amortization of
Intangible Assets 1,687 1,663
Amortization of
Deferred Financing
Costs (Included in
Interest Expense) 2,021 702
Allowance for Credit
Losses 1,114 575
Change in Fair Value
of Warrants 2,313 2,586
Deferred Income Taxes - (967)
Non-cash lease
expense 1,516 1,414
Stock-based
Compensation
Expense 94 -
Gain on Disposal of
Fixed Assets (24) (15)
Changes in Assets and
Liabilities
Trade Receivables (54,740) (55,255)
Inventory (14,953) 1,849
Income Taxes
Payable\Receivable 3,560 1,494
Operating Lease
Right-of-Use Assets - -
Operating Lease
Obligations (1,484) (649)
Other Assets 681 (2,319)
Accounts Payable 32,666 57,141
Accrued Expenses and
Contingent
Liability (3,422) (2,918)
--------------- ---------------
Net Cash (Used in)
Provided by
Operating
Activities (13,816) 13,618
--------------- ---------------
Cash Flows from Investing
Activities:
Capital Expenditures (712) (10)
Cash Paid for
Business
Acquisition/Asset
Purchase (1,150) (7,551)
Cash Inflow from
Asset Disposal 30 15
Investment in Captive
Stock 36 -
--------------- ---------------
Net Cash Used in
Investing
Activities (1,796) (7,546)
--------------- ---------------
Cash Flows from Financing
Activities:
Payments on Financing
Leases (1,506) (1,397)
Payments on Revolving
Credit Facility (578,323) (538,604)
Borrowings on
Revolving Credit
Facility 606,229 535,290
Proceeds from
Shareholder Note
(Subordinated),
Non-Current (10,000) -
Deferred Financing
Cost (646) -
--------------- ---------------
Net Cash Provided by
(Used in) Financing
Activities 15,752 (4,711)
--------------- ---------------
Net Increase in Cash 140 1,361
Cash, Beginning of the
Period 1,239 1,129
--------------- ---------------
Cash, End of the Period $ 1,379 $ 2,490
=============== ===============
Supplemental disclosure
for Cash Flow
Information
Cash Paid for Interest $ 5,785 $ 5,735
Cash Paid for Income Taxes $ 1,886 $ 795
Supplemental Disclosure
for Non-Cash Investing
and Financing Activities
Conversion of Warrants
from liability to Equity - 454
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