Playboy, Inc. (PLBY) Earnings

Management highlights

- Overall Transformation Progress: The company completed its transformation into a focused, high-margin asset-led platform organized around four verticals, and Q1 2026 delivered tangible, visible progress across nearly all business areas. The company achieved its fifth consecutive quarter of positive adjusted EBITDA, with adjusted EBITDA of $5 million, up 111% YoY; excluding litigation expenses, adjusted EBITDA was $5.8 million. Net loss for the quarter was $4 million (3 cents per share), an improvement of $5.1 million from the $9 million (10 cents per share) net loss in Q1 2025. The company closed the UTG China transaction, used proceeds to pay down $15 million of debt, reducing gross debt to $144.9 million, with an expected additional $37 million in debt paydown from future UTG proceeds that will bring net debt below $100 million. Adjusted corporate operating expenses (excluding non-recurring items) fell $1.6 million YoY to $7.1 million, driven by personnel and occupancy savings. - Leadership and Brand Building: Two key senior hires were made to reinvigorate growth: David Miller joined as President of Media and Brand, overseeing the consumer platform, content, commerce and licensing alignment; Philip Picardi joined as Chief Brand Officer and Editor-in-Chief to rebuild the brand's editorial and cultural authority. The Spring 2026 issue featuring cover star Carol G generated over 3 billion media impressions, 40 million cross-platform video views, and tens of millions of dollars in earned media value, returning Playboy to the center of cultural conversation; two additional major celebrity covers are already scheduled for 2026. - Consumer Platform and New Revenue Initiatives: The company launched a preliminary digital and print subscription offering aligned with its long-stated funnel strategy (free content drives top-of-funnel audience, premium content and experiences sit behind the paywall). The second paid voting model search contest, a collaboration between Playboy and Honey Burdette, was launched; after two weeks of registration, it is on track to exceed 30,000 contestants (a significant improvement from the first contest), and paid voting has emerged as a high-profitability top-of-funnel channel that builds first-party user data. - Honey Burdette Operational Progress: The Honey Burdette loyalty program launched in October 2025 already has over 110,000 members. The Valentine's Day 2026 assortment delivered record average order values, and the early 2026 Addison Leopard launch is the brand's best-performing launch of the year to date. The company redesigned new store build-outs to cut capital costs by ~40%, significantly improving ROI, and plans to open 5 new stores in top-tier U.S. malls over the next 12 months. - Licensing Strategy: Management is proactively optimizing the global licensing business, non-renewing off-brand and misaligned licensees to make space for fewer, larger, higher-quality aligned partners, closing 5 new licensing deals across North America, EMEA, and APAC in the quarter. Progress continues on the new Playboy Club Miami development project.

Guidance

- Management did not provide explicit full-year 2026 financial guidance, but noted that Honey Burdette growth for the remainder of 2026 is expected to remain near current double-digit levels even against more challenging year-over-year comparisons, as easier online comparisons offset more difficult retail comps. - The new 2026 paid voting contest is on track to generate multiple seven figures in revenue, and annualized paid voting revenue could reach millions of dollars per year as the company scales the initiative. - Management expects that after clearing out underperforming/off-brand legacy licenses, the licensing segment has the potential to grow substantially larger than its current size, driven by aligned content strategy and new opportunities in high-priority categories and regions.

Segment performance

Playboy Inc. reported consolidated revenue of $30.2 million in Q1 2026, a 5% year-over-year increase from $28.9 million in Q1 2025. 1. Honey Burdette: Net revenue grew to $18.8 million, up 15.4% year-over-year, accounting for 62.3% of total consolidated revenue. It delivered its sixth consecutive quarter of double-digit brick-and-mortar comparable store sales growth and fourth consecutive quarter of combined brick-and-mortar and online comparable sales growth. Full-price sales rose 23% YoY, and four-wall adjusted EBITDA margins for U.S. stores reached approximately 40%, with U.S. stores delivering twice the sales productivity and three times the per-store profitability of non-U.S. locations. 2. Licensing: Net revenue was $10.9 million, slightly below the prior year quarter, representing 36.1% of total consolidated revenue. The decline is the result of the company allowing off-brand legacy licenses to expire as part of its repositioning strategy; this decrease was partially offset by 5 new licensing deals closed in the quarter. The ByBorg strategic partnership contributed $5 million in digital licensing revenue, matching the contractual minimum guarantee. Corporate and other unallocated revenue accounted for the remaining 1.6% of consolidated revenue.

Risks & headwinds

- All forward-looking statements are inherently subject to risks that could cause actual results to differ materially from management's expectations, with specific risks detailed in the company's SEC filings. - The ongoing capital raising process for Honey Burdette is still in progress, with no finalized outcome to share at this time. - The new subscription and paid voting initiatives are still in early testing stages, and final results may differ from early promising performance. - Enforcement of the company's litigation award against its former Chinese partner is still in the early stages, with no guarantee of full recovery.

Analyst Q&A

• Q: Can you share details on the ongoing Honey Burdette capital raise, and provide key underwriting metrics for the planned 5 new U.S. stores? How will Honey Burdette perform against harder year-over-year comps in the coming quarters? /

  A: Management reports strong third-party interest in the capital raise, but cannot share additional details as the process is ongoing. For new stores, management underwrites 40% four-wall margins, ~$1,500 in sales per square foot for 800 square foot stores, with total all-in build costs of ~$500,000 (down from ~$900,000 previously), plus pre-opening expenses and inventory. Growth is expected to remain near current levels for the rest of 2026, as easier online comps offset more challenging retail comparisons.

• Q: How many additional off-brand legacy licenses will expire, how long will the repositioning process take, and what untapped opportunities does this create? /

  A: The process of allowing non-aligned licenses to expire is proactive, focused on long-term brand health rather than just underperformance. The company intentionally paused new China deals during UTG negotiations to support UTG's operating plans. When the repositioning is complete, the licensing business can grow substantially larger than it is today, with new opportunities in categories tied to the relaunched Playmate franchise (color cosmetics, lingerie, swimwear) and untapped regional white space including South America.

• Q: What is the revenue and profit potential of the new paid voting contest initiative, and what strategic value does it provide beyond direct revenue? /

  A: Early results are very promising: the current contest is already on track to exceed the first contest's registrations, and is expected to generate multiple seven figures in revenue on its own. Annualized revenue could reach millions of dollars per year, with strong profitability. Critically, the initiative also drives top-of-funnel user growth and builds owned first-party data, which the company uses to market subscriptions and other offerings, aligning with its broader content and media growth strategy.

• Q: Can you update on the performance of the new Carol G issue and its halo effect on digital properties? What additional OpEx savings levers are still available to the company? /

  A: Early results from the Carol G issue are very encouraging: the print edition sold out online in one day, with strong newsstand sell-through, and the preliminary subscription offering saw stronger digital subscription uptake than prior initiatives. Two more high-profile celebrity covers are confirmed for 2026, and talent conversations are becoming easier as the brand rebuilds cultural momentum. The company continues to identify additional cost savings, particularly from integrating AI across its tech stack to reduce overall operating costs.

• Q: What is the current status of the UTG China business post-close? /

  A: The transition has gotten off to a strong start in its first eight weeks, with UTG successfully integrating existing partner relationships. UTG plans to invest in marketing the Playboy brand in China, and China is now in the strongest position it has been in for years. The company has also progressed to the enforcement stage of recovering its previously won litigation award against its former Chinese partner.