Alliance Entertainment Holding Corporation

Greetings and welcome to Alliance Entertainment's fourth quarter and fiscal year 2025 financial results conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the full presentation. As a reminder, this conference is being recorded. I will now pass the call over to Paul Koontz, a member of Alliance Entertainment's IR team at Red Chip. Paul?

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, or 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 under reliance on these forward-looking statements, which reflect the company's opinions only as of 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 the 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 Amanda Netko, Chief Financial Officer, will present the results of operations for the fourth quarter in fiscal year 2025 and to June 30th, 2025. At this time, I will turn the call over to Alliance Entertainment CEO, 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 340,000 SKUs in stock and fulfillment relationships across 35,000 retail storefronts and 200 online platforms, we connect fans to the entertainment properties and pop culture products they collect, from vinyl, CDs, DVDs, Blu-ray, and collectible steelbooks to video games, licensed toys, tabletop games, and stylized vinyl figurines. Our business is built to serve collectors, enthusiasts, and retailers alike. We simplify how physical media and collectibles are sold, stocked, and shipped, delivering speed, scale, and accuracy across B2B and DTC channels. We've built category leadership in film, music, and collectibles over the past two decades through a series of 15 acquisitions that formed the foundation for our Capital Light Omnichannel Fulfillment Network. We believe Alliance is uniquely positioned at the intersection of retail, content, and fandom. 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 Q4 and fiscal year financials later in the call, but I wanted to briefly highlight a few key metrics that reflect the strength of our business model and the progress we're making. In fiscal 2025, we delivered $15.1 million in net income, a 229% increase from the prior year. Adjusted EBITDA grew 51%. to $36.5 million, with gross margin improving from 11.7% to 12.5% year-over-year. Our earnings per share rose to 30 cents, more than tripling the 9 cents we delivered in fiscal 2024. These results reflect a more profitable product mix, continued automation benefits, and disciplined expense management across the business. We also made significant progress on the balance sheet. We reduced revolver debt by 22 percent, improved inventory alignment, and ended the year with $26.8 million in cash flow from operating activities. Our Capital Light model, combined with improving working capital efficiency, has enabled us to unlock stronger profitability without sacrificing growth or flexibility. In Q4 alone, we delivered $5.8 million in net income and earnings per share of 11 cents, up from just 5 cents in the prior year. Growth margin expanded to 15.8 percent and adjusted EBITDA margin exceeded 5 percent up from 0.9% the prior year, both demonstrating the strength of our product mix, cost structure, and operating discipline. We believe these margins are sustainable going forward, and we expect them to hold as we scale into fiscal 2026 and beyond. This momentum is already carrying into the new fiscal year. Consumer demand remains strong. As we head into the holiday season, we have a highly anticipated release from Taylor Swift on October 3rd that will be a great start to what should be a very strong second quarter fiscal year 2026. Taken together, our infrastructure, exclusive content partnerships, and financial discipline provide a strong foundation for continued scale and profitability. As retailers and licensors seek efficient omni-channel solutions, Alliance is increasingly the partner they trust to meet that demand. We've built a differentiated platform, not just to participate in the collectibles and physical media market, but to lead it. And with the momentum we're carrying into fiscal 2026, we are just getting started. With that, I'll now turn it over to Amanda to walk through our fourth quarter and fiscal year financial results in more detail.