Playboy, Inc. Q3 FY2025 earnings call

• Transformed Playboy into a high-margin, asset-light business, achieving third consecutive positive adjusted EBITDA and first positive net income since going public.
• Licensing revenue up 61% y/y, with six new licensing deals signed in Q3 and restructuring of China partnership.
• Worked with a third-party agency on brand positioning, focusing on content as the core of Playboy's return to an aspirational men's lifestyle brand.
• Three verticals for growth: licensing (cornerstone of profitability), media/experiential (driven by new content and monetized through subscriptions, etc.), and hospitality (progressing with Playboy Club in Miami).
• Honey Birdette focused on brand health, e-commerce growth, with plans to raise capital for flagship stores and expansion into new territories.

Revenue for the third quarter was $29 million. Net income was $500,000, and adjusted EBITDA was $4.1 million (inclusive of $2.5 million litigation expenses; excluding litigation expenses, adjusted EBITDA would have been $6.6 million). Licensing revenue saw a 61% year-over-year increase. Honey Birdette had comparable store sales growing 22% year over year, with gross margins expanding by 700 basis points from 54% to 61%.

• Continued focus on growth through licensing, media, and hospitality. Licensing growth expected to accelerate with content investment.
• Media and experiential business, including paid voting, has potential to be a multimillion-dollar annual business. The Great Playmate Search trial exceeded expectations.
• Hospitality in Miami is progressing but meaningful revenue not expected in 2026; 2026 to roll out new brand positioning across Playboy ecosystem.

• Litigation risks, including enforcing $81 million arbitration award in China and ongoing domestic litigation.
• Challenges in executing media, hospitality, and licensing initiatives, including potential operational hurdles.
• Dependence on successful execution of brand positioning and content strategies to drive growth.

Q: Details on Honey Birdette capital raising and expansion plans A: Capital for flagship stores, e-commerce expansion, and new territories; considering raising capital to avoid diverting resources from Playboy growth Q: Licensing growth drivers and 2026 potential A: Content investment, new deals signed, with revenue recognition lag; expected acceleration in 2026-2027 due to content-driven licensing opportunities Q: Paid voting metrics and confidence A: Over a million votes cast, over 130,000 unique users, annualized potential seen, with testing and fixing initial challenges Q: Honey Birdette store base rationalization A: Focus on underperforming stores, rationalizing the store base over a multiyear period Q: Viborg partnership and collaboration A: Testing collaboration with Viborg, positive results from tests, but patience needed as partnership is in early stages Q: Board accountability and alignment A: Management aligned with board and investors, priority on deleveraging the company to fuel growth Q: Enforcement of $81 million arbitration award A: Working with Chinese court to enforce award, confident in pursuing full recovery through legal means Q: Stock buyback A: Authorization not active, priority on deleveraging the company before considering buybacks Q: Paid voting revenue and engagement A: No exact revenue figures yet, focus on community engagement, potential multimillion-dollar revenue from paid voting moving forward