IDW MEDIA HOLDINGS, INC. (IDWM)·Q3 2022 Earnings Summary

Executive Summary

• Revenue rose 14% year over year to $7.7M on delivery of Surfside Girls; net loss narrowed to $0.8M ($0.06 per share) from $0.9M ($0.09) in 3Q21, and improved from $2.3M ($0.17) in 2Q22 .
• Entertainment returned to growth with $1.2M revenue tied to delivery of 10 Surfside Girls episodes; Publishing declined 3% to $6.6M on tough comps (Last Ronin) and distributor transition to Penguin Random House .
• Balance sheet remained debt-free; cash was $10.3M and working capital $18.1M at July 31 (management also said “no debt”) .
• Management cited expected 4Q22 revenue contribution from Locke & Key Season 3 delivery; post-quarter, announced five series development deals and named Allan Grafman as CEO—potential catalysts for sentiment and pipeline visibility .

What Went Well and What Went Wrong

• What Went Well

  • Entertainment delivered revenue and swung to positive operating income ($48K) as Surfside Girls Season 1 was delivered; consolidated operating loss narrowed meaningfully YoY and sequentially .
  • Strategic pipeline advanced: five TV series development deals announced; first co-development deal (“Family Time”) initiated, strengthening cross-division IP leverage .
  • CEO underscored acceleration in original IP as the growth engine: “We are committed to sharpening our focus on acquiring and developing original IP content…beginning to see solid traction” .

• What Went Wrong

  • Publishing revenue fell 3% to $6.6M on a tough TMNT The Last Ronin comp, fewer titles, PRH distributor transition, and lower digital sales; IDWP posted a $0.6M operating loss vs. $0.1M income in 3Q21 .
  • Games revenue declined as the company only backfilled orders on previously created games, removing a prior tailwind (e.g., Batman game) .
  • Cash usage increased through the year as the company invested in originals; net cash used in operating activities was $6.5M for the nine months ended July 31, 2022 .

Financial Results

Consolidated results (oldest → newest):

Segment breakdown (oldest → newest):

KPIs and balance sheet:

Note: The 8‑K shows cash of $10.3M; CFO remarks referenced “$1.3 million” which appears to be a misspeak given the balance sheet disclosure .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• CEO Allan Grafman (strategy and outlook): “We are committed to sharpening our focus on acquiring and developing original IP content and we are beginning to see solid traction…We remain focused on driving strategic growth by partnering with creators to develop iconic characters and stories that will resonate across diverse media platforms.”
• CFO Brooke Feinstein (segment performance and balance sheet): “IDW Media Holdings third quarter consolidated revenue increased 14% to $7.7 million…Entertainment revenue increased to $1.2 million…Net loss in the third quarter was $837,000 or $0.06 per share…At July 31, we held $1.3 million in cash and cash equivalents and had no debt. Working capital totaled $18.1 million.” (Note: 8‑K shows $10.3M cash) .
• CEO (pipeline/cadence): “We expect to realize revenue and bottom-line contributions from the fourth quarter delivery of season 3 of Locke & Key…we’re encouraged by the rate at which we’re adding new entertainment properties to our roster.”

Q&A Highlights

• Option/development cadence: Recently announced shows are optioned; during the option period, scripts/presentations advance; production commitments may follow later (timing uncertain) .
• Monetization pathways for successful shows: Multiple avenues (prequels, sequels, spin‑offs, or moving to other platforms) discussed, though no specific commitments for Locke & Key were provided .
• Risk posture shift: Company moved away from large capital commitments; will control IP and partner, but not finance productions—seeking returns commensurate with risk .
• Economics of new deals: Most new deals are executive producer fee structures (~$0.5–$1.0M per project depending on genre/platform), versus legacy co‑studio or older Locke & Key‑style fees .
• Distribution and DTC: PRH now covers direct and non-direct markets; management is linking releases to DTC channels to capture demand increases when shows air .

Estimates Context

• Wall Street consensus for Q3 2022 via S&P Global: Not available (tool returned no CIQ mapping for IDWM); therefore, estimate comparisons (Revenue, EPS, etc.) are not provided. As a result, we cannot classify beats/misses versus consensus for this quarter.

Key Takeaways for Investors

• Revenue inflected positively YoY on delivery of Surfside Girls; Entertainment returned to profitability, helping narrow consolidated losses sequentially and YoY .
• Near-term catalyst: Expected Q4 revenue from Locke & Key Season 3 delivery should sustain sequential momentum and reduce “lumpiness” as the slate scales .
• Strategic moat: Originals-first model (>100 titles, ~40 additions/year) plus cross-media co-development increases IP monetization options while maintaining an asset-light risk posture .
• Publishing headwinds are transitory (prior-year comps, distributor transition, lower digital) and may normalize as new originals ramp and show-driven demand boosts sell-through .
• Liquidity remains adequate (cash $10.3M; no debt; WC $18.1M) to continue investing in IP pipeline, but operating cash burn underscores the importance of deliveries and deal flow .
• Watch for additional option-to-production conversions and economics (EP fee scale) as indicators of future entertainment revenue cadence and margin quality .
• Process note: The 8‑K cash balance disclosure ($10.3M) conflicts with a transcript remark ($1.3M); rely on the 8‑K balance sheet for financial accuracy .

Additional Sources and Cross-References

• 3Q22 8‑K earnings release and financials
• 3Q22 earnings call transcript (prepared remarks and Q&A)
• 2Q22 8‑K and call for prior-quarter context
• 1Q22 8‑K and call for trend analysis