Alliance Entertainment Holding Corporation

and welcome to the Alliance Entertainment Fiscal 2025 Third Quarter Financial Results Conference Call. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. I will now pass the call over to Paul Kuntz, a member of Alliance Entertainment's IR team at Red Ship. Paul, please go ahead, sir.

Thank you. Before we begin the formal presentation, I would like to remind everyone that statements made on the call and webcast may include predictions, estimates, and other information that might be considered forward-looking. While these forward-looking statements represent the company's current judgment on what the future holds, they are subject to risks and uncertainties that could cause actual results to differ materially. You are cautioned not to place undue reliance on these forward-looking statements, which reflect the company's opinions only as in the date of this presentation. Please keep in mind that the company is not obligating itself to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events. Throughout today's discussion, management will attempt to present some important factors relating to a business that may affect predictions. You should also review the company's Form 10-K for a more complete discussion of these factors and other risks, particularly under the heading Risk Factors. During this conference call, management will discuss non-GAAP financial measures, including A discussion of adjusted EBITDA. Management believes non-GAAP disclosures enable investors to better understand Alliance Entertainment's core operating performance. Please refer to the investor presentation for reconciliation of each non-GAAP measure to the most directly comparable GAAP financial measure. A press release detailing these results crossed the wire this afternoon at 4.01 p.m. Eastern Time and is available in the investor relations section of Alliance Entertainment's website at aent.com. Your host today, Jeff Walker, Chief Executive Officer and Chief Financial Officer, and Amanda Nieko, Chief Accounting Officer, will present the results of operations for the fiscal 2025 third quarter ended March 31st, 2025. At this time, I will turn it all over to Alliance Entertainment CEO and CFO, Jeff Walker.

Thank you, Paul, and good afternoon, everyone. I'm pleased to welcome you to today's call. Alliance Entertainment is the premier distributor and fulfillment partner at the center of the growing collectibles ecosystem, with over 325,000 unique SKUs and fulfillment relationships across 35,000 retail storefronts and 200 online platforms. Alliance connects fans with entertainment and collectibles they love, spanning vinyl, DVDs, and Blu-rays, arcade systems, licensed toys, tabletop games, and more. Our business caters to collectors and physical media enthusiasts, a passionate and growing base of consumers who value tangible, high-quality products with emotional and cultural significance. For retailers, we make it simple to serve this demand both online and in-store. Importantly, our growth strategy is proven. Over the past two decades, we have completed 13 strategic acquisitions that have enabled us to expand into high-growth categories and enhanced our position as a trusted, efficient partner for the world's top entertainment brands. Ultimately, our competitive advantage comes down to three things. First, our exclusive products and licensing agreements give us a differentiated offering. In the trailing 12 months, our exclusive agreements accounted for nearly a quarter of our overall revenue, and our latest deal with Paramount, which went into effect on January 1, has further accelerated growth in this key segment. Second, our reach across both B2B and direct consumer channels allows us to serve the full spectrum of the market from global mass retailers to niche fan communities with scale, speed, and precision. And third, with powerful distribution infrastructure, a capital light operating model, and expanding access to sought-after IP, we are strategically positioned to gain further market share in the global collectibles and premium home entertainment market. We've aligned our strategy around where the market is and where it's heading, and that clarity is driving stronger margins, improved earnings, and long-term value creation. This slide offers a quick snapshot of our performance. Amanda will walk through the full Q3 and nine-month financials later in the call, but I want to briefly highlight a few key metrics that reflect the strength of our business model and the progress we're making. Revenue over the trailing 12 months was relatively consistent with recent years, but with a significantly improved profitability. Adjusted EBITDA rose to $26.4 million, with margins expanding to 2.5%, up from 2.2% in fiscal 2024. Earnings per share also jumped to 24 cents nearly triple the nine cents we delivered last year. These gains reflect disciplined execution, improved cost structure, and stronger operating leverage across our platforms. Strong working capital management, improved margin structure, and better alignment between inventory and demand have positioned us to generate more EBITDA dollars from every sales dollar. which is especially important in today's environment. We have also made important progress on our balance sheet. Over the past year, we reduced our revolver debt, improved our liquidity position, and strengthened inventory efficiency, all while continuing to grow our SKU count and support new product categories. That balance, expanding our portfolio while improving capital discipline, has been a key area of focus across the organization. Looking ahead, our capital position and operational flexibility gives us plenty of room to pursue new licensing opportunities, particularly from major movie studios looking to monetize physical media in more efficient ways. Alliance is well positioned to be that solution. The financial progress we're making is rooted in a clear market identity. Alliance is a collectibles company built for today's fans and tomorrow's demand. Pop culture is more than entertainment. It's community, nostalgia, storytelling, and self-expression. Collectibles are how fans participate in that culture. They do not just consume content They own a piece of it. Whether it's vinyl records, box sets, games, or character figurines, physical collectibles are gaining traction with both mainstream and niche audiences. And Alliance sits at the center of this movement, uniquely positioned with the products, relationships, scale, and fulfillment capabilities to drive growth in this dynamic space. We've been investing behind that conviction, expanding our licensing partnerships, acquiring emerging brands like Handmade by Robots, and winning new distribution rights with top franchises like Paramount. With our infrastructure, industry experience, and exclusive access to iconic IP, we are not just following the collectibles trend, we are leading it, and we believe the best is yet to come. With that, I'll now turn it over to Amanda to walk through our third quarter and year-to-date financial results in more detail.