Alliance Entertainment (NASDAQ:AENT) Announces Quarterly Earnings Results

Alliance Entertainment (NASDAQ:AENT) released its quarterly earnings data on Thursday. The company reported $0.18 EPS for the quarter, missing the consensus estimate of $0.31 by ($0.13), Zacks reports. Alliance Entertainment had a net margin of 1.80% and a return on equity of 21.87%.

Here are the key takeaways from Alliance Entertainment’s conference call:

• Profitability and margin expansion: Alliance reported net income of $9.4M and Adjusted EBITDA of $18.5M in Q2, with gross margin up 210 bps to 12.8%, reflecting what management calls a durable, higher-quality earnings baseline.
• Shift to premium physical media and exclusives: Management attributes improved pricing and sell-through to a move toward premium formats (4K, Steelbooks) and exclusive studio deals, including Paramount and the new Amazon MGM agreement.
• Collectibles and authentication platform as growth drivers: Collectibles revenue grew ~31% YoY, and the NState/Alliance Authentic initiative (NFC-enabled authentication and digital identity) is being positioned as a platform to monetize primary sales, authenticated resale, and deepen licensor ties.
• Category volatility from gaming and arcade declines: Quarterly revenue fell to $369M (from $394M) largely due to a $34M decline in arcade sales and a $24M drop in gaming hardware, driven by supply constraints and transitions with partners like Arcade1Up/Basic Fun!.
• Stronger liquidity and lower borrowing costs: Alliance replaced its prior ABL with a $120M five-year senior secured revolver that lowers borrowing costs by up to 250 bps and is intended to support working capital for premium inventory and strategic initiatives.

Alliance Entertainment Price Performance

Shares of NASDAQ AENT traded down $0.49 during mid-day trading on Thursday, hitting $6.38. 458,401 shares of the company’s stock traded hands, compared to its average volume of 73,537. The company has a debt-to-equity ratio of 0.62, a current ratio of 1.28 and a quick ratio of 0.64. Alliance Entertainment has a 1 year low of $2.21 and a 1 year high of $8.80. The company’s 50-day moving average is $7.54 and its two-hundred day moving average is $6.62. The company has a market capitalization of $325.12 million, a P/E ratio of 16.36 and a beta of 0.46.

Institutional Investors Weigh In On Alliance Entertainment

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in AENT. XTX Topco Ltd purchased a new position in shares of Alliance Entertainment in the 2nd quarter worth approximately $59,000. Jacobs Levy Equity Management Inc. purchased a new position in Alliance Entertainment during the third quarter worth $193,000. Millennium Management LLC increased its position in Alliance Entertainment by 29.2% during the third quarter. Millennium Management LLC now owns 85,510 shares of the company’s stock valued at $582,000 after acquiring an additional 19,325 shares during the last quarter. Empowered Funds LLC raised its stake in shares of Alliance Entertainment by 9.2% in the first quarter. Empowered Funds LLC now owns 90,880 shares of the company’s stock valued at $304,000 after acquiring an additional 7,683 shares during the period. Finally, Bridgeway Capital Management LLC lifted its holdings in shares of Alliance Entertainment by 18.4% in the 2nd quarter. Bridgeway Capital Management LLC now owns 122,075 shares of the company’s stock worth $460,000 after acquiring an additional 18,995 shares during the last quarter. 0.27% of the stock is currently owned by hedge funds and other institutional investors.

Wall Street Analyst Weigh In

Separately, Weiss Ratings reissued a “hold (c)” rating on shares of Alliance Entertainment in a research note on Wednesday, January 21st. Two equities research analysts have rated the stock with a Buy rating and two have assigned a Hold rating to the company’s stock. Based on data from MarketBeat, the company has a consensus rating of “Moderate Buy” and a consensus price target of $10.67.

Alliance Entertainment Company Profile

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.