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IDW MEDIA HOLDINGS, INC. (IDWM)·Q4 2022 Earnings Summary

Executive Summary

  • Q4 2022 delivered a sharp inflection: revenue rose 48% year over year to $10.5M and 36% sequentially, driven by delivery of Locke & Key Season 3; consolidated operating income was $0.3M and net income was $0.4M ($0.03 per share) .
  • Publishing softened on fewer title releases (IDWP revenue $5.7M vs $6.9M prior-year), while Entertainment surged (IDWE revenue $4.8M vs $0.2M prior-year) .
  • Balance sheet remained solid: cash $10.0M and working capital $18.5M at Oct 31, 2022; management reiterated a conservative, asset-light financing model and sufficient cash to execute 2023 strategy .
  • Management highlighted a stronger development slate (seven to ~10 development agreements/options) but clarified none are yet greenlit; near-term catalysts hinge on converting options to production and monetizing broader IP across media formats .
  • Wall Street consensus estimates via S&P Global were unavailable for IDWM this quarter; comparisons to estimates cannot be made.

What Went Well and What Went Wrong

What Went Well

  • Entertainment execution: delivery of Locke & Key Season 3 drove IDWE revenue to $4.8M and segment operating income to $2.8M in Q4 (vs. $(1.5)M in Q4’21), materially improving consolidated profitability .
  • Year-over-year improvement: consolidated revenue +11% for FY22, consolidated loss from operations narrowed to $(0.7)M from $(8.7)M; net loss narrowed to $(0.7)M from $(5.4)M .
  • Strategic pipeline momentum and optionality: Management emphasized a stronger development slate (“seven development agreements in place” and “about 10 entertainment projects”), diversified partner roster (Universal, 20th Century, Hulu, Warner Bros, Cartoon Network, Lionsgate) and cross-genre coverage .

What Went Wrong

  • Publishing pressure: IDWP revenue fell to $5.7M on fewer titles and tough comparison to TMNT The Last Ronin releases; IDWP posted a Q4 operating loss of $(1.6)M with higher SG&A share .
  • SG&A elevated by one-time severance: CFO quantified ~$0.7M non-recurring SG&A in Q4, inflating period expenses and masking underlying leverage .
  • Limited visibility on renewals/greenlights: Surfside Girls was not renewed “in its current form” and none of the ~10 projects were yet in production; near-term revenue cadence remains dependent on deliveries and timing .

Financial Results

MetricQ2 2022Q3 2022Q4 2022
Revenue ($USD Millions)$6.1 $7.7 $10.5
Income (Loss) from Operations ($USD Millions)$(2.244) $(0.768) $0.3
Net Income (Loss) ($USD Millions)$(2.253) $(0.837) $0.4
EPS (Basic & Diluted) ($USD)$(0.17) $(0.06) $0.03

Segment P&L Breakdown

Segment MetricQ2 2022Q3 2022Q4 2022
IDW Publishing Revenue ($USD Millions)$6.1 $6.6 $5.7
IDW Entertainment Revenue ($USD Millions)$0.0 $1.2 $4.8
IDW Publishing Operating (Loss) Income ($USD Millions)$(0.3) $(0.6) $(1.6)
IDW Entertainment Operating (Loss) Income ($USD Millions)$(1.7) $0.048 $2.8
Corporate Operating (Loss) ($USD Millions)$(0.3) $(0.2) $(0.9)

Key Balance Sheet KPIs

KPIQ2 2022Q3 2022Q4 2022
Cash and Cash Equivalents ($USD Millions)$13.7 $10.3 $10.0
Working Capital ($USD Millions)$19.0 $18.1 $18.5

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Entertainment Revenue Recognition (deliveries)2H FY22Expected revenue from Surfside Girls (Q3) and Locke & Key Season 3 (Q4) Confirmed recognition occurred: Surfside Girls in Q3; Locke & Key Season 3 in Q4 Maintained
Formal Financial Guidance (revenue/margins/EPS)FY22/FY23None providedNone providedMaintained

Note: Management does not provide formal quantitative revenue or margin guidance; commentary focuses on pipeline progress, asset-light financing, and expected delivery timing .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3)Current Period (Q4)Trend
Development slate and options vs productionFocus on originals, ~100+ titles, ~40 in development; announced five series development deals; asset-light model; expected deliveries for Surfside Girls and Locke & Key ~7–10 projects in development/optioned; none greenlit yet; clarified categorization (negotiations → options → production); push to convert to production for leverage Building pipeline, execution pending
Entertainment delivery cadenceExpected Surfside Girls (episodic + final delivery), Locke & Key S3 in 2H; cadence variable by delivery timing Confirmed Locke & Key S3 revenue recognized in Q4; no further L&K residual expected; exploring other opportunities Cadence normalizing with deliveries
Publishing strategy and distributionOriginals expansion, PRH distributor transition; DTC initiatives; cross-genre expansion Q4 IDWP revenue decline on fewer titles; intensifying DTC links and coupling shows to drive sales Mixed near term; strategic build continues
SG&A / one-time itemsAsset-light, operating efficiency; earlier game obsolescence effect; model shift benefits ~$0.7M CEO severance in Q4 SG&A Non-recurring headwind
Cash runway / capital deploymentCash $13.7M (Q2), $10.3M (Q3); invest advances in originals; asset-light reduces risk Cash $10.0M; sufficient to execute 2023 strategy; minimal capex; partnerships to avoid heavy cash outlays Stable; disciplined

Management Commentary

  • CEO on Q4 performance and pipeline: “We’re pleased to have closed out fiscal 2022 with strong fourth quarter performance… delivery of season three of Locke & Key drove significant revenue growth… seven development agreements in place… optimistic about potential entertainment projects” .
  • CEO on focus: “We have standardized how we talk about negotiations, options, and green light… what we really need… is put something into production… that is where the opportunity is” .
  • CFO on balance sheet and FY outlook: “At October 31, we held $10 million in cash and cash equivalents and had no debt. Working capital totaled $18.5 million… plan is to deploy capital judiciously and increase operating efficiencies” .

Q&A Highlights

  • Project statuses: None of the ~10 optioned projects are yet in production; Essex County is a small production with exec producer fees; pipeline spans major partners and all genres .
  • Surfside Girls renewal: Not renewed in its current live-action tween form; discussions ongoing for the IP’s future .
  • SG&A clarification: ~$0.7M non-recurring CEO severance recorded in Q4 SG&A .
  • Locke & Key revenue timing: Prior seasons’ revenue fully recognized in FY22; no residual expected; Entertainment exploring other opportunities .
  • Cash/capex: Cash sufficient to execute 2023 strategy; minimal capex expected, focus on partnering to conserve cash .
  • Mobile gaming and DTC: Early-stage conversations to test IP in mobile games with limited capital; expanding direct-to-consumer initiatives to monetize show-driven demand .

Estimates Context

  • Wall Street consensus estimates via S&P Global were unavailable for IDWM for Q4 2022 due to missing CIQ mapping; as a result, no EPS or revenue estimate comparisons can be provided this quarter.
  • Implication: Sell-side models likely sparse; near-term estimate updates will depend on visibility into new greenlights and publishing cadence.

Key Takeaways for Investors

  • Q4 confirms positive operating leverage when Entertainment delivers; sustained profitability depends on converting options to production and achieving a steadier delivery rhythm .
  • Publishing softness from fewer titles appears timing-related; watch 1H’23 title count and DTC execution to gauge rebound .
  • Asset-light financing reduces risk and improves margin quality; expect less revenue volatility once more projects are greenlit under the newer deal structures .
  • Cash and working capital are adequate to fund 2023 execution; capital discipline and partnership-heavy approach mitigate financing risk .
  • Near-term trading catalysts: announcements of greenlights/production starts, any Surfside Girls reimagining, additional partner deals, and publishing slate acceleration .
  • Medium-term thesis: IDW’s IP library and diversified partner base support monetization across TV, animation, podcasts, and potentially games; execution on pipeline conversion is the key swing factor .
  • Monitor SG&A normalization post-severance and segment mix (IDWE vs IDWP) to track margin trajectory and earnings durability .