Dolphin Entertainment, Inc. Q2 FY2025 earnings call

• Total revenue reached a second quarter record of $14.1 million, up 23% YOY, with adjusted operating income of $628,000 vs. a loss of $137,000 in 2024. - Launched the Tastemakers division combining The Digital Department's talent management in the creator economy and The Door's lifestyle/hospitality PR prowess to create a new service category. - The feature film Youngblood selected to premiere at the Toronto International Film Festival. - Invested in Always Alpha (focused on women's sports) and Affiliate Marketing, with expectations of payoff in 2026 and beyond. - Expiring long-term leases in New York (ending 2026) and Los Angeles (ending 2027) to reduce overhead, and commercial bank loans to be repaid in September 2028, freeing up cash flow.

Total revenue for the second quarter was a record $14.1 million, representing a 23% year-over-year increase. Adjusted operating income was approximately $628,000, contrasting with an adjusted operating loss of $137,000 in the same period of 2024. Revenue growth was broad-based across subsidiaries, with no single segment driving the growth alone. The newly launched Tastemakers division exemplifies cross-selling initiatives within subsidiaries.

• Expect to free up significant free cash flow over the next 3 years due to lease expirations and loan repayment. - Tastemakers division serves as a blueprint for future integrated models in other verticals. - Hoping Youngblood premiere at Toronto leads to successful sale to a distributor or streaming service, similar to the Blue Angels success.

• Uncertainties associated with forward-looking statements and potential deviations from expectations. - Dependence on successful execution of investments in Always Alpha and Affiliate Marketing. - Uncertainty in the exact amount of lease expiration savings and timeline for loan repayment.

Q: Where did the revenue upside come from in the quarter?

A: It was broad-based across multiple subsidiaries; each operating subsidiary had steady growth, with no single reason or silver bullet.

Q: Can you talk about investments in Always Alpha and Affiliate Marketing?

A: Investments in women's sports (Always Alpha) and affiliate marketing are being made now, expecting payoff in 2026 and beyond. Brought in senior talent managers for women's sports, with revenue expected to start in Q4. Affiliate marketing investment will slow down after 6 months but expected to yield returns.

Q: Details on Youngblood production cost and accounting?

A: Produced with Canadian partners and Telefilm Canada, no capital put up by Dolphin. Co-selling with CAA, and the film's budget is an independent film range, with potential upside similar to Blue Angels.

Q: Seasonality and IMAX partnership?

A: Q1 is typically the worst quarter, Q4 the strongest. Actively negotiating a follow-up to Blue Angels with IMAX, and Youngblood's premiere is a step in restarting scripted film production.