WildBrain (TSE:WILD) executives told investors the company’s fiscal 2026 second quarter reflected continued execution against its “Flywheel” strategy while it prepares for a major shift in its financial and operating profile tied to the announced sale of its 41% interest in Peanuts.
On the call, President and CEO Josh Scherba said WildBrain saw strong performance in owned intellectual property and its global licensing agency, WildBrain CPLG, alongside solid engagement across its digital platforms and positive reception for new premium content launches. He framed the Peanuts transaction—announced at a sale price of $630 million—as a “significant inflection point” that is expected to eliminate the company’s debt and leave “material cash proceeds” to invest in the business.
Peanuts stake sale: balance sheet reset and a new earnings mix
Chief Financial Officer Nick Gawne said the company is still aiming to close the transaction in calendar Q1, but did not provide more specific timing. In response to a question about proceeds, management said it continues to expect roughly CAD 40 million of cash proceeds after full repayment of debt and transaction fees.
Management also discussed capital allocation priorities following the transaction, emphasizing reinvestment in wholly owned franchises, digital monetization, and infrastructure modernization, along with cost discipline and the possibility of share buybacks “when appropriate.” In Q&A, Scherba said the company would have flexibility to consider acquisitions that fit its business model, and indicated that 2x leverage would “certainly be comfortable” if the right opportunity emerged.
Licensing momentum: Strawberry Shortcake, Teletubbies, and CPLG
Scherba highlighted momentum in Strawberry Shortcake and Teletubbies during the quarter. For Strawberry Shortcake, he pointed to an MGA Entertainment collaboration—L.O.L. Surprise! Strawberry Shortcake dolls—that sold out in 12 days. He also said WildBrain recently announced a refreshed CG version of the brand, with new original content slated to launch across WildBrain’s digital network this year, including a hybrid live-action/animated baking show and short-form animated episodes. According to Scherba, early fan response to the refreshed look has been encouraging.
He described Strawberry Shortcake’s growth as being led primarily by the U.S. market, with management expecting additional opportunities across regions and categories as the content roadmap expands. In Q&A, Scherba said Strawberry Shortcake is “essentially a U.S. property” today and cited prior commentary that retail sales were around $200 million in the trailing twelve months, adding WildBrain believes the opportunity could be “4x that” over time.
Teletubbies delivered what management called steady performance, with strength in collectibles and lifestyle categories. Scherba referenced the company’s collaboration with Pop Mart and said Teletubbies and CASETiFY received an award at the China Licensing Expo. He added that YouTube watch time for Teletubbies was up 11% year-over-year during the quarter, and that WildBrain is developing new content in partnership with a major Chinese platform. In Q&A, Scherba described China as Teletubbies’ leading territory, cited the brand at roughly $100 million in trailing twelve-month retail, and said the company sees significant upside given the franchise’s historical scale.
WildBrain CPLG also posted growth. Scherba said the licensing agency delivered a strong quarter across owned and third-party brands and territories, citing an expanded partnership with Dr. Seuss Enterprises for Cat in the Hat and How the Grinch Stole Christmas.
Content and digital engagement: premium wins and expanding distribution
WildBrain highlighted recent recognition for its content, including six Children’s and Family Emmy nominations, three Annie Award nominations, and five Kidscreen Award nominations. Scherba emphasized premium content momentum, pointing to the January launch of the live-action young adult figure skating series Finding Her Edge on Netflix, which he said reached the top 10 in 81 countries and was renewed for a second season within a week of its premiere.
He also discussed Season 2 of Yo Gabba GabbaLand! on Apple TV+ and said the franchise is gaining traction in consumer products licensing, with additional deals expected to be announced.
On the digital side, Scherba said engagement remained strong across YouTube, FAST, and social media. He noted the Teletubbies YouTube channel recorded its highest-ever quarterly watch time and said overall FAST viewership grew 46% in calendar 2025 to 24 billion minutes. WildBrain also launched new YouTube channels, including a Peanuts relaunch. Management acknowledged monetization continues to evolve across the digital ecosystem, but said WildBrain believes it is positioned to capture long-term value through a strengthened commercial engine and upgraded tools.
In advertising, Scherba said the company sees opportunity as spending shifts from linear kids networks to digital. He described WildBrain as a scaled, brand-safe option for advertisers targeting kids and families, and said its direct sales team is packaging YouTube and FAST inventory in a COPPA-compliant way.
Quarterly financial results: continuing operations growth and improved EBITDA
Gawne said that under IFRS, following the closure of WildBrain’s Canadian television broadcasting business and the announced Peanuts sale, both are reported as discontinued operations. He also detailed accounting impacts related to Peanuts consolidation that will no longer apply after the sale, while certain Peanuts-related service revenues will now be reflected in continuing operations.
- Revenue from continuing operations was CAD 72 million, up 11% year-over-year.
- Global licensing revenue was CAD 27 million, up 24%, driven by growth in both WildBrain franchises and the licensing agency.
- Content creation and audience engagement revenue was CAD 45 million, up 4%, driven by higher production revenue but offset by softer audience engagement revenue across distribution, YouTube, and FAST.
- Gross margin was 50%, up from 48%, reflecting a mix shift toward higher-margin licensing revenue.
- SG&A was CAD 21 million, up 8%, attributed to higher variable compensation and foreign exchange impacts; management said underlying SG&A was flat absent these items.
- Adjusted EBITDA was CAD 15 million, up 30%.
- Net loss was CAD 20 million, compared with a CAD 86 million net loss in the prior period.
For discontinued operations, Gawne reported revenue of CAD 132 million, up 83% year-over-year, and adjusted EBITDA of CAD 23 million, up 54%, driven by the timing of recognition of the Peanuts library renewal with Apple TV. Consolidated free cash flow was CAD 15 million, and leverage ended the quarter at 4.88x, which Gawne said was within covenant requirements. He reiterated that sale proceeds will be used to repay outstanding debt in full.
Guidance remains paused as WildBrain plans transformation investments
Management said it is maintaining a pause on fiscal 2026 guidance following the Peanuts transaction announcement, citing the early stage and timing of planned infrastructure and technology investments. Gawne said the company expects to learn more about the scale of transformation opportunities in coming months and anticipates resuming financial guidance for fiscal 2027.
In Q&A, Gawne characterized the planned technology and infrastructure spend as more of a “one-time opportunity to renovate the house,” rather than a recurring increase in the cost base. He also described seasonality, saying the business is typically weighted toward Q1 and Q2 because those are larger licensing periods, and that as licensing becomes a larger share of the business, it may become more first-half weighted from a revenue and EBITDA perspective.
Closing the call, Scherba said fiscal 2026 is a transition year, but argued that simplification efforts, a stronger balance sheet, and reallocation of capital should position WildBrain for improved profitability and sustainable EBITDA growth beyond the current year.
About WildBrain (TSE:WILD)
WildBrain Ltd is a children’s content and brands company, recognized globally for properties such as Peanuts, Strawberry Shortcake, Caillou, Inspector Gadget, and Degrassi franchise. The company owns the independent library of children’s content. It licenses its content to broadcasters and streaming services worldwide and generates royalties through its consumer products program. It operates through the following segments: the Content Business, CPLG, which manages copyrights, licensing, and brands for third parties and the Television segment.
