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Dolphin Entertainment, Inc. (DLPN)·Q2 2025 Earnings Summary

Executive Summary

  • Revenue of $14.1M grew 23% YoY and exceeded S&P Global consensus of $12.5M; adjusted operating income was positive at ~$0.63M with a 4.5% adjusted operating margin, driven by broad-based subsidiary strength . Revenue Consensus Mean: $12.5M*.
  • EPS was a loss of $0.13 vs consensus loss of $0.05, reflecting investment spend in women’s sports (Always Alpha) and affiliate marketing, higher operating expenses, and interest expense; net loss narrowed YoY to $1.4M . Primary EPS Consensus Mean: -$0.05*.
  • Management reiterated a path to margin expansion driven by tapering investment spend in 2026, lease expirations in NYC (2026) and LA (2027), and term loans rolling off by Sept-2028, freeing up cash flow; CEO purchased >1% of outstanding shares since April 2025, underscoring confidence .
  • Optionality: Youngblood selection for TIFF and IMAX follow-up ambition offer potential upside without capital deployment, alongside ventures like Staple Gin .

What Went Well and What Went Wrong

What Went Well

  • Broad-based revenue outperformance: Q2 revenue $14.1M (+23% YoY) from subsidiary strength alone, with adjusted operating income ~$0.63M and 4.5% margin; management emphasized no contribution from ventures/productions (e.g., Blue Angels) .
  • Strategic integration and new offerings: Launch of Tastemakers integrating The Digital Dept. and The Door to create a “new service category,” early traction with creators and cross-selling flywheel across agencies .
  • Shareholder-aligned actions and pipeline: CEO share purchases (>1% since April), Youngblood premiering at TIFF with co-selling via CAA and 42West; potential for IMAX follow-up in 2026 .

What Went Wrong

  • EPS miss: GAAP EPS of -$0.13 vs consensus -$0.05 amid higher OpEx and interest expense; net loss -$1.4M (vs -$1.6M YoY) signals ongoing profitability headwinds despite revenue beat . Primary EPS Consensus Mean: -$0.05*.
  • Elevated investment spend depresses near-term profitability: Women’s sports (Always Alpha) and affiliate marketing investments continue through 2H25, pressuring adjusted operating income despite positive Q2 .
  • Cost structure still heavy: Operating expenses were $14.1M; interest expense ~$0.56M; margin recovery relies on future lease expirations and debt run-off (multi-year timing) .

Financial Results

Revenue, EPS, Operating Metrics vs Prior Periods and Estimates

MetricQ2 2024Q1 2025Q2 2025
Revenue ($USD)$11,449,089 $12,169,711 $14,087,529
Revenue Consensus Mean ($USD)*$10,505,900*$10,000,000*$12,500,000*
EPS (Basic, $)-$0.08 -$0.21 -$0.13
Primary EPS Consensus Mean ($)*-$0.18*-$0.15*-$0.05*
Operating Loss ($USD)-$1,119,465 -$1,773,527 -$57,054
Adjusted Operating Income (Loss) ($USD)-$136,956 -$625,050 $627,905
Operating Expenses ($USD)$12,568,554 $13,943,238 $14,144,583
Interest Expense ($USD)$522,184 $560,088 $561,222
Weighted Avg Shares (Basic)19,446,310 11,162,026 11,168,572

Note: *Values retrieved from S&P Global.

Highlights vs estimates:

  • Revenue: $14.09M vs $12.50M consensus → bold beat*.
  • EPS: -$0.13 vs -$0.05 consensus → bold miss*.

Segment Breakdown (if disclosed)

SegmentQ2 2024Q1 2025Q2 2025
Entertainment Publicity & Marketing (EPM) revenue ex production ($USD)Not disclosed$12,100,000 Not disclosed

KPIs

KPIQ2 2024Q1 2025Q2 2025
Adjusted Operating Margin (%)Not disclosedNot disclosed4.5% (management)
Net Loss ($USD)-$1,624,458 -$2,329,062 -$1,413,918
D&A ($USD)$555,694 $591,552 $591,552
Non-recurring/non-cash in OpEx ($USD)$400,000 ~$600,000 ~$90,000

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted Operating Income/MarginFY 2025+No formal numeric guidanceManagement expects margin expansion as investments taper (2026), leases expire (NYC 2026, LA 2027), and term loans repaid (Sept-2028) Narrative path to margin growth; no numeric update
RevenueFY 2025No formal numeric guidanceNo formal numeric guidance in Q2 release/call Maintained: no formal guidance
OpEx/Investment cadence2H 2025 → 2026N/AInvestment phase continues in 2H25; expected to reduce in 2026 Clarified cadence (reduce in 2026)
Debt serviceThrough Sept-2028N/A~$2.2M/year principal+interest rolling off by Sept-2028 Structural tailwind (future)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024)Previous Mentions (Q1 2025)Current Period (Q2 2025)Trend
Women’s sports (Always Alpha)Launched; early build-out Expanding into soccer/basketball; JV with Deep Blue Continued investment; senior hires; revenue payback expected starting late 2025/2026 Building; investment taper expected 2026
Affiliate marketingNot highlightedNew division launched; > two dozen influencers Continued investment in teams through year; ROI expected in 2026 Scaling capability; ROI horizon
Ventures/Films (Youngblood)Principal photography underway In progress TIFF selection; no capital deployed; co-selling with CAA/42West Positive optionality
IMAX partnership follow-upN/AN/AActively negotiating potential follow-up in 2026 Potential 2026 catalyst
Cost structure/leases/debtN/AN/ALease expirations (NYC 2026, LA 2027); bank loans repaid Sept-2028; ~$2.2M/year debt service today Multi-year cash flow tailwind
SeasonalityN/AN/AQ1 weakest; Q4 strongest; influencer revenue skewed to fall Stable seasonality narrative
AI/technologyPartnership with Loti AI to protect digital identity Continued partnership Not a focal point this quarterBackground capability

Management Commentary

  • “Total revenue came in at a second quarter record $14,100,000… adjusted operating income… approximately $628,000… fueled solely by the strength of our subsidiary portfolio without benefiting from ventures or productions such as… Blue Angels.”
  • “We believe that we will free up significant free cash flow steadily over the next three years… investment phase… will greatly reduce [2026]… leases… expire [NYC 2026, LA 2027]… commercial bank loans… repaid in full in September 2028… approximately $2,200,000 per year in principal and interest.”
  • “This isn’t simply about collaboration. It’s about creating an entirely new service category… Our teams now work as one unit… crafting cohesive strategies that maximize both commercial opportunities and cultural relevance.”
  • “The feature film adaptation of Youngblood has been selected to premiere at the Toronto International Film Festival… hoping Lightning Strikes Twice… as it was at [TIFF] where we premiered the first footage of the Blue Angels… led to… sale… to Amazon.”
  • “My continued personal investment… purchase since just this April of an additional 1% of all common stock outstanding underscores my confidence…”

Q&A Highlights

  • Revenue upside breadth: Growth was broad across seven marketing subsidiaries; Special Projects had a strong quarter; core agencies drove the beat absent Blue Angels-like boosts .
  • Investment cadence: Adjusted OpInc (~$600k) was “depressed” by investment in women’s sports and affiliate marketing; investments continue into Q3/Q4 with expected payback starting 2026 .
  • Youngblood economics: Structured with Canadian content, Telefilm support, and bank financing; Dolphin deployed no capital; sale outcomes could yield $0.5–$1.0M to DLPN at modest sale, with higher upside if Blue Angels-like outcome .
  • Cost savings timeline: Lease exits in NYC (save “half a million a year or more”) and LA (likely more) plus ~$2.2M/year debt service wind-down by Sept-2028 could free >$3.25M cash annually in ~3 years if flat revenues .
  • Seasonality: Q1 typically weakest; Q4 strongest (awards + holiday influencer cycle); 2H tends to be better than 1H .
  • IMAX slate: Actively negotiating a follow-up to Blue Angels, potentially in 2026 .

Estimates Context

  • Revenue: Beat. Actual $14.09M vs $12.50M consensus for Q2 2025; prior quarter actual $12.17M vs $10.00M consensus; Q2 2024 actual $11.45M vs $10.51M consensus*. Actuals:
  • EPS: Miss. Actual -$0.13 vs -$0.05 consensus for Q2 2025; prior quarter -$0.21 vs -$0.15 consensus; Q2 2024 -$0.08 reported on a larger share base vs consensus -$0.18*. Actuals:
  • Number of estimates: 1 per period for revenue and EPS*, suggesting sparse coverage and potential volatility around consensus.

Note: *Values retrieved from S&P Global.

Key Takeaways for Investors

  • Bold revenue beat vs consensus and positive adjusted operating income signal improving core execution; however, GAAP EPS missed due to ongoing investment spend and interest expense .
  • Near-term profitability headwinds should ease as investment phases taper in 2026 and structural cost tailwinds (leases, debt service) kick in, offering a multi-year margin expansion path .
  • Optionality from Youngblood TIFF premiere and potential IMAX follow-up in 2026 provides asymmetric upside without capital at risk; monitor sale outcomes and announcements in 2H25 .
  • CEO’s continued insider purchases (>1% since April) and public undervaluation commentary are bullish sentiment indicators; watch for further insider activity and capital allocation updates .
  • Expect 2H seasonality benefits (Q4 strongest), especially in influencer marketing; Q3 may mirror Q2; Special Projects momentum may continue .
  • Estimates likely need upward revision on revenue given beats, while EPS forecasts should reflect investment-related OpEx and interest costs; sparse coverage (1 estimate) suggests potential for outsized stock moves on updates* .
  • Trading lens: Near-term catalyst stack includes TIFF (Youngblood), continued CEO buying, and subsidiary wins; medium-term thesis hinges on margin expansion from cost structure normalization and venture monetization.

Appendix: Additional Context

  • Q1 2025: Total revenue $12.2M (core EPM $12.1M ex production, +2% YoY), adjusted operating loss ~$0.63M; investments initiated in affiliate marketing and women’s sports .
  • Q3 2024: Revenue $12.7M (+24.5% YoY), adjusted operating income $0.5M; substantial non-cash charges (goodwill impairment $6.5M); ventures portfolio expanded (Staple Gin, Loti AI) .