Falcon's Beyond Global, Inc. (FBYD)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 consolidated revenue was $1.708M, up 12.7% year over year from $1.516M, driven by shared services to Falcon’s Creative Group and a new attractions maintenance contract; diluted EPS was $(0.13), versus $1.27 in Q1 2024, as fair value gains on earnout liabilities that boosted prior-year EPS no longer recur following reclassification to equity .
• Underlying FCG revenue fell 58% year over year to $6.271M on timing/margin compression in long-term contracts (not consolidated), while PDP remained stable with the Company recognizing $0.474M of its 50% share of PDP income .
• Liquidity is constrained: cash was $1.108M, working capital deficiency was $(39.1)M, accrued expenses were $32.195M, and total debt was ~$41.0M; management disclosed substantial doubt about going concern absent additional financing or distributions and noted only $0.87M available on the revolver .
• Structural clean-up reduces P&L volatility: earnouts (stock-price based) and warrants were reclassified to equity in late 2024/Jan 2025, removing large periodic fair value swings seen in 2023–2024; FBYD also amended warrants to a mandatory share exchange in Oct 2028 .
• Strategic update: acquired OES assets/IP and a 106k sq ft facility to support attractions manufacturing; FCG contracted pipeline grew to $48.5M, up from $36.4M at 12/31/24, but near-term losses at FCG and higher interest expense weighed on consolidated results .

What Went Well and What Went Wrong

What Went Well

• FCG contracted pipeline increased to $48.5M as of March 31, 2025, indicating continued demand despite a weak quarter .
• PDP operations remained healthy; Company recognized $0.474M of share of PDP’s net income in Q1 2025, consistent with prior year .
• Capital structure simplification: earnouts and warrants reclassified to equity, removing further fair value volatility; stock dividend executed in Dec 2024, and warrant amendment set mandatory exchange in 2028 .
• Management tone on 2025 momentum: “we are energized by the momentum we’ve built and the exciting opportunities ahead…expand our global footprint…accelerate strategic partnerships” (Simon Philips, President) .

What Went Wrong

• FCG underlying revenue declined 58% YoY to $6.271M on timing/margin compression in certain long-term contracts; FCG recorded a standalone adjusted EBITDA loss of $(2.476)M versus $2.271M profit in Q1 2024 .
• Consolidated adjusted EBITDA loss widened to $(8.125)M vs $(4.514)M in Q1 2024, mainly from a $5.3M increase in share of loss from equity method investments and higher interest expense .
• Liquidity pressures and going-concern risk: working capital deficiency $(39.1)M, $10.4M of debt maturing within 12 months, cash $1.108M, and only $0.87M revolver availability; accrued transaction/professional fees totaled $22.6M within accrued expenses .

Financial Results

Summary vs prior quarters

Notes: Adjusted EBITDA margin and net income margin are derived from the cited revenue and adjusted EBITDA/net income figures.

Consolidated revenue mix (Q1 2025)

Underlying JV/affiliate revenues (non-consolidated)

KPIs and Balance Sheet/Liquidity

Guidance Changes

Earnings Call Themes & Trends

No Q1 2025 earnings call transcript was found after searching; themes below reflect Q3/Q4 press releases and the Q1 2025 10‑Q.

Management Commentary

• “2024 has been a transformative year…we aim to expand our global footprint, strengthen our IP‑driven experiences, and accelerate strategic partnerships” — Simon Philips, President .
• “Falcon’s performance in Q3 is a testament to the strength of our strategic initiatives…ongoing project work for Qiddiya…” — Simon Philips, President .
• “We continue to see positive momentum…significant steps to restructure and simplify capital and debt stack” — Joanne Merrill, CFO (Q3 2024) .
• Q1 2025 MD&A: Management disclosed substantial doubt about going concern and outlined reliance on debt/equity raises, distributions, and asset reviews to meet short‑term needs .

Q&A Highlights

No Q1 2025 earnings call transcript was found; therefore Q&A themes, guidance clarifications, and tone shifts cannot be assessed for this quarter.

Estimates Context

• Wall Street consensus EPS and revenue estimates for Q1 2025 were unavailable via S&P Global; we therefore benchmark results only to prior periods rather than to consensus. Values retrieved from S&P Global.
• Actual Q1 2025 revenue was $1.708M (S&P Global actual), consistent with the Company’s 10‑Q; consensus counts were not available. Values retrieved from S&P Global. *

Key Takeaways for Investors

• Liquidity risk is the central near-term driver: cash $1.108M, working capital deficit $(39.1)M, ~$41.0M debt, minimal revolver availability; financing actions and JV distributions are critical catalysts .
• Reported profitability is highly sensitive to non-cash items; reclassification of earnouts/warrants to equity removes a major source of P&L volatility going forward, making underlying operating trends more visible .
• FCG timing/margin dynamics pressured Q1; watch execution and contract phasing (e.g., Dragon Ball consultancy) and margin discipline given the pipeline expansion to $48.5M .
• PDP remains a stabilizer with consistent profitability contribution; monitor occupancy/rate performance and income distributions to FBYD .
• Interest expense rose with higher debt and rates; deleveraging or refinancing could improve cash flow and reduce drag on results .
• Strategic OES asset/IP acquisition and facility adds manufacturing capability for attractions; the monetization path (orders, backlog, margins) will be key for medium-term thesis .
• Legal overhang (Guggenheim) and unresolved transaction costs within accrued expenses ($22.6M) warrant caution; outcomes could affect liquidity trajectory .

Footnote: *Values retrieved from S&P Global.