Executive Summary

Q4 FY2025 delivered revenue of $227.8M, diluted EPS of $0.11, and Adjusted EBITDA of $12.2M, with gross margin expanding 440 bps YoY to 15.8% . Against S&P Global consensus, AENT beat EPS (0.1245 vs 0.09) and missed revenue ($227.8M vs $236.2M); margin expansion and mix drove the EPS beat despite a modest top-line shortfall . Values marked with * are from S&P Global estimates/actuals.*
Full-year FY2025 EPS rose to $0.30 (vs $0.09), net income to $15.1M (+229% YoY), and Adjusted EBITDA to $36.5M (+51% YoY), driven by higher-margin mix, automation/warehouse consolidation, and cost discipline .
Strategic catalysts: Paramount Pictures exclusive license (effective Jan 1, 2025) bolstered physical movie sales; management expects benefits to continue into FY2026; Walmart named AENT its video category advisor in August—both reinforce AENT’s physical media leadership .
Liquidity: subsequent to quarter end, AENT entered a new Loan and Security Agreement with Bank of America (revolver secured by borrowing base), supporting growth and working capital flexibility .

What Went Well and What Went Wrong

What Went Well
- Significant profitability inflection: Q4 Adjusted EBITDA rose to $12.2M from $2.1M YoY; gross margin to 15.8% from 11.4% on mix and operational efficiency . CFO: “These gains were driven by a more profitable product mix, disciplined expense management, and meaningful leverage from our automation and warehouse consolidation efforts.”
- Strategic content/exclusivity: Paramount Pictures exclusive physical media license launched January 2025; management highlighted sustained contribution and room for expansion across channels .
- Retail influence and DTC scale: Walmart selected AENT as video category advisor (Aug 11), and DTC fulfillment reached 37% of FY gross revenue—supporting higher-margin, capital-light growth .
What Went Wrong
- Soft top line: Q4 revenue declined to $227.8M from $236.9M YoY; management emphasized mix/timing while prioritizing margins and cost control . In prior quarters, timing and product mix were noted as headwinds to topline growth .
- Coverage/estimates thin: only 1 EPS and 2 revenue estimates for Q4, which can amplify perceived “beats/misses” and reduce signal quality for traders and PMs.*
- Inventory balance increased YoY ($102.8M vs $97.4M), while working capital decreased ($45M vs $48M), requiring continued discipline as category growth and exclusive programs scale .

Financial Results

Quarterly performance and estimates comparison

Metric	Q4 2024	Q2 2025	Q3 2025	Q4 2025	Q4 2025 Consensus
Revenue ($USD Millions)	$236.9	$393.7	$213.0	$227.8	$236.188*
Gross Profit ($USD Millions)	$26.9	$42.3	$29.1	$36.0	—
Gross Margin %	11.4%	10.7%	13.6%	15.8%	—
Net Income ($USD Millions)	$2.5	$7.1	$1.9	$5.8	—
Diluted EPS ($USD)	$0.05	—	$0.04	$0.11	$0.09 (Primary EPS)*
Adjusted EBITDA ($USD Millions)	$2.1	$16.1	$4.9	$12.2	—

Values marked with * are from S&P Global. “Consensus” EPS shown is Primary EPS consensus. “Actual” EPS for S&P Global is provided below for beat/miss analysis. Values retrieved from S&P Global.*

Q4 FY2025 vs S&P Global consensus

Revenue: Actual $227.8M vs Consensus $236.2M → Miss by $8.4M (≈-3.6%) . Values retrieved from S&P Global.*
EPS (Primary): Actual 0.1245 vs Consensus 0.09 → Beat by $0.0345 (≈+38.3%). Values retrieved from S&P Global.*
- Note: Company-reported diluted EPS was $0.11 for Q4; SPGI’s “actual” EPS figure (0.1245) reflects its Primary EPS convention and may differ from diluted EPS presentation . Values retrieved from S&P Global.*

KPIs and mix (FY)

KPI	FY2024	FY2025
Net Revenues ($USD Billions)	$1.10	$1.06
Gross Profit ($USD Millions)	$128.9	$132.9
Gross Margin %	11.7%	12.5%
Net Income ($USD Millions)	$4.6	$15.1
Diluted EPS ($)	$0.09	$0.30
Adjusted EBITDA ($USD Millions)	$24.3	$36.5
Physical Movie Sales ($USD Millions)	—	$279 (+36% YoY)
Vinyl Sales ($USD Millions)	—	$337 (+2% YoY)
DTC Fulfillment Share of Gross Revenue	36%	37%
Inventory ($USD Millions)	$97.4	$102.8
Revolver Debt (Net) ($USD Millions)	$69.6	$55.3
Working Capital ($USD Millions)	$48	$45

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Company guidance (revenue, margins, EPS)	FY2026	None disclosed	No formal quantitative guidance; management stated Q4 margin profile (15.8% gross; >5% adj. EBITDA margin) represents a sustainable baseline into FY2026	Maintained qualitative outlook
Strategic catalysts	FY2026	—	Paramount license benefits expected to continue; Walmart category advisor designation commenced Aug 11	New/affirmed strategic drivers

No numeric guidance ranges were provided in Q4 materials. Management emphasized sustainability of margin improvements and ongoing growth drivers .

Earnings Call Themes & Trends

Topic	Q2 FY2025 (Q-2)	Q3 FY2025 (Q-1)	Q4 FY2025 (Current)	Trend
Paramount exclusive license	Launch Jan 1; core to exclusive strategy; expected to materially contribute	Continued strong contribution; exclusive portfolio ≈¼ of sales TTM	Full quarter impact; management expects continuation into FY2026 and upside from Skydance/Paramount content slate	Strengthening
DTC fulfillment	Capital-light DTC highlighted as growth driver	DTC ~40% of Q3 gross revenue; expanding retailer adoption	DTC 37% of FY gross revenue; scalable margin driver	Stable to positive
Automation/cost structure	AutoStore + Sure Sort X savings; MN warehouse exit; structural margin gains	Ongoing savings; >10% YoY reduction in distribution & fulfillment costs	~1% YoY reduction in distribution/fulfillment as % of revenue; margin expansion continued	Positive
AI initiatives	Not emphasized	Not emphasized	Company-wide AI program for sales and ops; 250+ employees on Copilot; HubSpot integration	Emerging
Tariffs/macro	Tariff dynamics discussed; manageable on collectibles; minimal on music/video	Similar: Handmade by Robots absorbs 30% tariff; limited demand impact	Minimal impact on music/video; manageable on collectibles; pass-throughs as needed	Stable
M&A pipeline	Evaluating accretive, capital-light opportunities	Robust pipeline; disciplined approach	Active conversations; emphasizing accretion/synergy	Stable
Category performance	Physical movies +23% YoY in H1; vinyl +10% in H1	Continued mix shift; collectible initiatives scaling	FY physical movie sales $279M (+36% YoY); vinyl $337M (+2% YoY)	Positive (movies), Modest (vinyl)

Management Commentary

CEO (Jeff Walker): “Fiscal 2025 marked another year of solid execution… As demand for physical media and pop culture products evolves, our ability to deliver exclusive content with efficiency and scale is more relevant than ever.”
On Paramount: “Under this partnership, Alliance… is now the exclusive U.S. and Canadian distributor of Paramount Pictures’ full physical media catalog… We are already seeing a meaningful contribution… and… significant room for growth.”
CFO (Amanda Gnecco): “We ended fiscal 2025 with strong financial momentum… These gains were driven by a more profitable product mix, disciplined expense management, and meaningful leverage from our automation and warehouse consolidation efforts.”
Margin outlook: “With the margin profile we delivered in Q4… we’re entering the new fiscal year with a performance baseline we believe is sustainable.”

Q&A Highlights

Paramount sustainability: Management expects continued growth across channels and potential upside from Skydance’s investment in content at Paramount; Q4 showed full-quarter impact post-ramp .
Walmart category advisor: Began Aug 11; AENT to lead video category planning and execution on Walmart’s behalf—validates AENT’s strategic role in physical media .
Tariffs: Minimal effect on music/video; collectibles (Handmade by Robots) absorb tariffs within margin structure; occasional pass-through to retail pricing with limited demand impact .
Capital allocation: Cash sweeps to revolver daily; focus on reinvesting in growth and strategic M&A rather than buybacks .
AI program: Broad rollout (Microsoft Copilot, HubSpot) aimed at sales enablement, forecasting, and operating efficiency over the next 12 months .

Estimates Context

Q4 FY2025 S&P Global consensus: Revenue $236.2M (2 ests) vs actual $227.8M (company), EPS 0.09 (1 est) vs SPGI actual 0.1245; AENT delivered an EPS beat and revenue miss. Values retrieved from S&P Global.*
Thin coverage (1–2 estimates) implies higher uncertainty in “beat/miss” magnitude and may lead to outsized stock reactions.*
Revisions direction: Management’s emphasis on sustainable margins and exclusive content support potential upward EPS revisions; revenue expectations could moderate given continued mix/timing prioritization .

Values marked with * are from S&P Global.

Key Takeaways for Investors

Structural margin step-up: Gross margin at 15.8% and Adjusted EBITDA >5% in Q4 reflect mix (Paramount, collectibles, DTC) and durable cost-out from automation; management signaled sustainability into FY2026—a key multiple-supporting narrative .
Content/exclusivity flywheel: Paramount exclusivity and Walmart category advisor role enhance bargaining power, placement, and pricing—drivers of margin resilience and revenue opportunity into FY2026 .
EPS > consensus despite revenue shortfall: Focus on mix/efficiency outweighed modest top-line pressure; traders should watch for estimate dispersion narrowing as coverage builds. Values retrieved from S&P Global.*
Liquidity de-risked post-quarter via new Bank of America borrowing-base revolver; combined with lower revolver balance YoY (-22%), this supports working capital and selective M&A .
Watch KPIs: DTC share (37% FY), physical movie momentum ($279M), and vinyl stability ($337M) for signals on mix and margin trajectory .
Risks: Inventory up YoY; tariff sensitivity in collectibles manageable but present; thin sell-side coverage increases volatility on headlines .
Near-term catalysts: Holiday slate and marquee releases (Paramount catalog; ongoing exclusives), further AI-enabled sales ops, and potential tuck-in M&A updates .

ALLIANCE ENTERTAINMENT HOLDING CORP (AENT)·Q4 2025 Earnings Summary