Executive Summary

Q3 revenue rose 24.5% year over year to $12.68M; non‑GAAP adjusted operating income (AOI) turned positive to $0.49M, while GAAP net loss widened to $8.69M due to a $6.5M goodwill impairment and a $1.3M notes receivable write‑off .
Management reiterated FY 2024 targets: surpass ~$50M revenue and full‑year positive AOI; the release explicitly references “2024 estimated revenue guidance of $50.0M” and asserts a valuation disconnect (market cap ~0.25x FY24 revenue guidance as of Nov 13, 2024) .
Cash and cash equivalents were $6.6M at Sept 30, 2024 (down from $7.6M at year‑end); the company also received a $2.6M second cash installment tied to Blue Angels’ licensing in Q3 .
Capital actions and listing: DLPN effected a 1‑for‑2 reverse split on Oct 16, 2024 and subsequently regained Nasdaq $1.00 bid compliance on Nov 13, 2024—potential catalysts for trading/liquidity optics near term .
Street estimates: S&P Global consensus data was unavailable at time of query; therefore beats/misses vs. consensus cannot be determined (see Estimates Context).

What Went Well and What Went Wrong

What Went Well

Material top‑line growth and AOI inflection: Revenue up 24.5% YoY to $12.68M; AOI improved to $0.49M from $(0.82)M in Q3’23 as core operations strengthened despite non‑cash charges .
Ventures momentum and annuity tail: Blue Angels delivered a $2.6M Q3 cash installment; management expects institutional IMAX screenings starting Jan 2025 to provide multi‑year “annuity” revenue .
Strategic expansion vectors: Launch of Always Alpha (women’s sports management) and an AI brand‑safety partnership with Loti AI—both positioned as new revenue streams and cross‑sell opportunities across PR/influencer assets .

“During Q3, revenue increased by 24.5% year over year and we achieved $0.5 million in adjusted operating income... on track to deliver on our goals of surpassing $50 million in revenue and achieving adjusted operating income for full year 2024.” — CEO Bill O’Dowd

What Went Wrong

GAAP profitability impacted by non‑cash/non‑recurring items: Operating loss widened to $(8.15)M and net loss to $(8.69)M, driven by $6.5M goodwill impairment and a $1.3M notes receivable write‑off, plus ~$0.6M D&A .
Cash balance declined sequentially to $6.6M at Q3 end (from $9.8M at Q2 end, $7.6M at FY23 end), reflecting quarterly working capital dynamics and one‑time items .
Visibility on segment metrics remains limited: No quantified segment breakdown provided; reliance on narrative around PR/influencer/event units makes granular margin tracking by business line difficult .

Financial Results

Consolidated Summary (oldest → newest)

Metric	Q1 2024	Q2 2024	Q3 2024
Revenue ($USD Millions)	$15.20	$11.45	$12.68
Basic & Diluted EPS ($)	$(0.02)	$(0.08)	$(0.80)
Adjusted Operating Income ($USD Millions)	$1.00	$(0.14)	$0.49
Net Loss ($USD Millions)	$(0.30)	$(1.62)	$(8.69)
Adjusted Operating Income Margin (%)	6.6% (calc. from $1.00/$15.20)	-1.2% (calc. from -$0.14/$11.45)	3.9% (calc. from $0.49/$12.68)

Notes: Q3 GAAP EPS reflects pre-/post‑reverse split reporting periods; reverse split effective Oct 16, 2024 (after Q3 quarter end) .

Operating Expense and Cash KPIs

KPI	Q1 2024	Q2 2024	Q3 2024
Operating Expenses ($USD Millions)	$15.1	$12.6	$20.8
Goodwill Impairment ($USD Millions)	—	$0.19	$6.48
Notes Receivable Write‑Off ($USD Millions)	—	—	$1.27
Cash & Cash Equivalents ($USD Millions, end of period)	$7.5	$9.8	$6.6
Blue Angels Cash Installment ($USD Millions)	—	—	$2.6

Segment breakdown: Not disclosed quantitatively in the Q3 press release or call; management highlighted contributions from 42West, Shore Fire, The Door, Special Projects, and The Digital Dept., plus Elle Communications (acquired in July) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2024	“Exceed $50 million” (positioned for >$50M)	“Surpass $50 million”; press release references “2024 estimated revenue guidance of $50.0M”	Maintained
Adjusted Operating Income	FY 2024	Positive full‑year AOI	Positive full‑year AOI reiterated	Maintained

Dividends/other: No dividend guidance provided. Corporate actions include a 1‑for‑2 reverse split effective Oct 16, 2024 and regaining Nasdaq $1.00 minimum bid compliance on Nov 13, 2024 .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 2024)	Previous Mentions (Q2 2024)	Current Period (Q3 2024)	Trend
IMAX/Blue Angels annuity	Q1: $3.4M revenue recognized; institutional IMAX tail expected; 150–200 theaters over years	Q2: #1 on Prime Video Memorial Day; institutional roll‑out “later this year”	Q3: $2.6M cash installment; institutional screenings start Jan 2025; treated as annuity	Execution progress (cash realization; dated rollout)
Consumer products (Staple Gin)	Launch; 96‑point Double Gold; national e‑commerce; Southern Glazer’s distribution anticipated	Q2: Product/awards and distribution highlighted	Q3: Continued distribution expansion; awards reiterated	Scaling; early‑stage traction
Women’s sports (Always Alpha)	Teased sports vertical build	Q2: Plan to launch sports services (athlete mgmt)	Q3: Always Alpha launched with Allyson Felix; focus on talent mgmt, brand partnerships, content, ventures	Formal launch; pipeline building
AI/brand safety (Loti AI)	—	Exploring AI/tech ventures generally	Formal partnership for content protection; >450M images scanned daily; >95% takedown success; potential to evolve into a venture	New initiative; monetization optionality
Cross‑sell and PR/events momentum	Record Q1 campaign volume; awards season strength	Cannes/Tribeca/Upfronts; client renewals; influencer wins	TIFF/Venice/Comic‑Con dominance; 60 Emmy nominations; GRAMMY campaigns; event bookings at MoMA/Academy Museum	Broad‑based strength
Capital markets/listing	—	—	1‑for‑2 reverse split; Nasdaq compliance regained	Listing optics improved

Management Commentary

Strategy and valuation: “We see a stark mismatch between our current market cap and the intrinsic value of our assets... I am committed to further increasing my stake in Dolphin” .
FY24 outlook: “We are on track to exceed $50 million in revenue and [achieve] positive adjusted operating income for the full year 2024” .
Ventures pipeline: “We anticipate announcing our next major [IMAX] project soon” and see consumer product and live event slates ramping in 2025 .
Women’s sports: “Always Alpha... represents a compelling opportunity... timing aligns perfectly with the explosive growth we’re witnessing in women’s sports” .
AI initiative: “Our new collaboration with Loti AI... achieved removal in under a day with a success rate exceeding 95%... opens fresh revenue channels... launches [Dolphin] into the AI technology sphere” .

Q&A Highlights

Revenue drivers: Q3 YoY growth attributed to Special Projects and Elle Communications (impact PR) plus organic growth at 42West, Shore Fire, and The Door; cross‑selling momentum building .
Digital Dept seasonality: Q4 is “explosive” for influencer activations; expanding talent management in skincare/dermatology vertical and showrooms across NY/LA/Miami .
Blue Angels economics: $2.6M received in Q3 relates to earlier‑recognized revenue; >$3.4M cumulative cash vs. ~$2.25M cash investment already recouped; institutional theater rev‑share expected to run for years .
Loti AI economics: Paid client relationship; potential to expand into a venture in 2025 if pilot success scales across entertainment and into other verticals .
2025 priorities: Focus on organic growth, expanding Always Alpha, impact PR, consumer products (liquor/skin care), content pipeline, and launching live events .

Estimates Context

We attempted to retrieve S&P Global consensus for EPS, revenue, and EBITDA for recent quarters; data was unavailable at query time due to an SPGI rate limitation. As a result, we cannot assess beats/misses vs. Wall Street consensus for Q3 2024 at this time. If you’d like, we can re‑query later to incorporate consensus deltas (and any intra‑quarter revisions).

Key Takeaways for Investors

Non‑GAAP operating trend improving: AOI positive again in Q3 despite sizable non‑cash charges; FY24 AOI positive remains likely per management, with Q4 seasonality a tailwind .
Valuation/catalyst setup: Management emphasizes a valuation disconnect (market cap ~0.25x FY24 revenue guidance); recent reverse split and Nasdaq compliance restoration may broaden investor access and improve liquidity optics near term .
Durable annuity potential: Blue Angels’ institutional IMAX rollout starting January 2025 can create a recurring revenue tail; next IMAX co‑production announcement is a potential catalyst .
New growth vectors: Always Alpha and Loti AI open incremental revenue streams (sports talent mgmt, brand partnerships, content, AI brand safety) with strong cross‑sell leverage across PR/influencer assets .
Watch cash/working capital: Cash declined to $6.6M in Q3; monitor Q4 seasonality and cash conversion as the company navigates growth investments and one‑offs .
2025 narrative: Management plans multiple venture launches (consumer products, content, live events), with potential monetization “lottery tickets” that could be meaningful vs. current market cap if executed .

Appendix: Additional Source Highlights

Q3 press release metrics and non‑GAAP reconciliations, including AOI definition and Q3 reconciliation table .
Q2 press release for trend analysis, including revenue, operating loss, AOI reconciliation, balance sheet .
Q1 call for record revenue and AOI, Blue Angels revenue recognition and seasonality context .
Reverse split and Nasdaq bid compliance press releases for corporate actions .

Dolphin Entertainment, Inc. (DLPN)·Q3 2024 Earnings Summary