Alliance Entertainment NASDAQ: AENT used a shareholder webinar to highlight its distribution scale, recent margin gains, and growth initiatives tied to exclusive studio relationships, owned brands, and product authentication technology.
Business overview and revenue mix
Executive Chairman Bruce Ogilvie described the company as “a large-scale physical media distribution platform” serving the “collectibles culture,” distributing movies, music, video games, toys, and collectibles from a Kentucky warehouse with “roughly over 340,000 SKUs” in stock. Ogilvie said Alliance ships about “50 million units a year” from an “873,000 sq ft facility” and delivers to “over 76 countries,” with peak daily volume of “261,000 units.”
Ogilvie said Alliance has delivered “over $1 billion in revenue” and has been “pretty consistent in that $1 billion year over year.” In the company’s last 12 months category mix, he cited vinyl at about 32% of revenue and said vinyl dollars grew from “$227 million to over $333 million,” with “16.3 million units shipped,” up 5%.
He also pointed to headwinds in gaming, with revenue declining from “291 to 181,” attributing the shift to “a change in the marketplace and Microsoft’s philosophy” moving toward subscriptions as well as the loss of a “large retro arcade company” that “went out of business.” Ogilvie said the company “protected that revenue by growing our video area,” describing the mix shift as swapping “low gross margin dollars” in gaming for “higher gross margin video dollars.”
Studio outsourcing deals and video growth
Ogilvie said Alliance has expanded through home entertainment outsourcing and licensing arrangements. He traced momentum to Disney outsourcing its home entertainment division, beginning in 2022, with Alliance distributing Disney’s “bottom 1,800 titles” starting in 2023. He said Paramount followed, outsourcing home entertainment with Alliance taking over “all of Paramount’s titles in 2025,” effective Jan. 1, 2025.
The “big news,” according to Ogilvie, is that Alliance “just got Amazon MGM Studios” and has “basically taken over their home entertainment department” for selling to major retailers. He said these studio arrangements carry higher gross margins than pure distribution work and can expand revenue by adding customers. As an example, he said taking over Paramount led to incremental sales to customers such as Amazon and Walmart for those products.
Asked about Warner Bros. catalog possibilities, Ogilvie and CEO Jeff Walker said they could not comment on outcomes they do not control. Walker added that Alliance is “doing a fantastic job with Paramount” and said early feedback from MGM has been positive.
Margins, earnings, and automation
Ogilvie emphasized profitability improvements. He cited earnings per share rising from “$0.09 per share” in FY 2024 to “$0.30 per share” in FY 2025, and “$0.43 per share” over the trailing 12 months. He also reported adjusted EBITDA margin expansion from 2.2% to 3.4% to 4.5%, and said the quarter ended Dec. 31, 2025 came in at “5.01%.”
For the quarter, Ogilvie reported EPS increasing from “$0.14 to $0.18,” net income from “$7.1 million–$9.4 million,” adjusted EBITDA from “$16.1 million to $18.5 million,” and gross margin improving from “10.7%–12.8%.” He noted quarterly revenue declined and said the market reacted negatively to the top-line pressure tied to gaming, which he attributed to external factors rather than execution.
On operations, Ogilvie highlighted investments in warehouse automation, including an AutoStore system. He said the company reduced vinyl picking headcount from 41 to 7, saving “anywhere from $3 million–$3.5 million a year,” and described broader “paperless pick” workflows and sortation equipment. He also said direct-to-consumer fulfillment represents 37% of revenue, supported by white-label drop shipping for major online retailers.
Owned brands: Handmade by Robots and Alliance Authentic
Management framed physical media as increasingly collectible-driven. Walker said consumers are choosing vinyl and CDs even though streaming makes ownership unnecessary, arguing that physical products are increasingly purchased “just because they want to collect something.” He pointed to major releases—citing artists including Taylor Swift, Bruno Mars, Harry Styles, and BTS—as evidence of ongoing demand for physical formats as collectibles.
Ogilvie outlined growth initiatives intended to raise gross profit, including Handmade by Robots, a collectible figurine line based on licensed IP. He said the company believes the brand could grow to “like $100 million a year business,” which he estimated could add “about $40 million a year of gross profit” if achieved. He also referenced Record Store Day as a demand driver for vinyl, calling the upcoming April event “going to be a monster for us.”
Walker also detailed Alliance Authentic, an encapsulated, numbered vinyl collectible concept designed to ensure mint condition and prevent counterfeits using NFC-based authentication. He said the company is not entering the grading business, but instead focuses on new, uncirculated items. Walker described a longer-term vision that could include blockchain-linked media such as videos of artists signing autographs and a marketplace where collectors can buy and sell authenticated items, with Alliance earning a transaction fee.
Acquisition strategy, Endstate purchase, and balance sheet points
On acquisitions, Walker said the company evaluates both consolidating deals in existing categories and new IP or capability additions. He said Alliance is active in conversations but passes on opportunities that do not fit return thresholds.
Ogilvie discussed the company’s acquisition of Endstate, describing it as a $2 million purchase price with potential earn-outs “up to $20 million paid over a 3-year period.” He said the technology helps combat counterfeiting and may have broader applications, including compliance-related product tracking in Europe beginning in 2027 under the EU Ecodesign for Sustainable Products Regulation.
On the balance sheet, Ogilvie addressed questions about cash and working capital. He said liquidity includes borrowing availability under an asset-based lending facility and cited “over $35 million worth of availability” in addition to cash on the balance sheet as of Dec. 31. He also explained higher receivables as a function of larger customers like Amazon and Walmart having “usually 90-day terms,” and said the company stopped using a receivables acceleration program after refinancing its borrowing costs from “SOFR + 9.5%” to “SOFR + 1.625.”
Separately, Ogilvie said Alliance is seeking to recover an estimated “$8.5 million” deposit related to a Diamond distribution matter, adding that the outcome depends on a judge’s ruling and is “coming to a conclusion here pretty soon.”
Looking ahead, Walker said the company is investing to scale newer, higher-margin initiatives and does not expect a major earnings impact in fiscal 2027, with more meaningful profitability contributions anticipated in fiscal 2028 and fiscal 2029.
About Alliance Entertainment NASDAQ: AENT
Alliance Entertainment NASDAQ: AENT is a distributor of physical media and related entertainment products, serving retailers, public libraries and online merchants. The company’s core business revolves around the wholesale distribution of music and video titles on CD, DVD and Blu-ray formats, as well as vinyl records, audiobooks, video games and select gift and novelty items. By maintaining a broad catalog of new and catalog titles, Alliance Entertainment enables brick-and-mortar and e-commerce channels to access an extensive range of products from major and independent labels.
In addition to its product offerings, Alliance Entertainment provides supply-chain and logistics services designed to streamline inventory management and order fulfillment.
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