Dolphin Entertainment, Inc.

Greetings. Welcome to the Dolphin Entertainment third quarter 2024 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, James Carbonara with Hayden IR. You may begin.

Thank you, operator. Good afternoon, and thank you for joining us once again for Dolphin Entertainment's third quarter 2024 earnings call. Before we begin, I'd like to remind everyone that during the course of this conference call, management may make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and beliefs and involve risks and uncertainties that could differ materially from actual events. Please refer to the cautionary text regarding forward-looking statements contained in the earnings release published earlier today, as well as the most recent SEC filings and reports. During the call today, management will also discuss non-GAAP financial measures, including adjusted operating income or loss. The company believes that these will provide helpful information for investors. Reconciliations to the most comparable GAAP measures are provided in the earnings release. Now I would like to turn the call over to Bill O'Dowd, Chief Executive Officer of Dolphin. Bill, please go ahead.

Thanks, James, and welcome, everyone. I'll start by reviewing some of the key financial and operating highlights from our third quarter of 2024, and then Myrta will provide a more detailed financial overview before we open it up for Q&A. So starting with the financials, we are pleased to report strong financial results for the quarter with significant quarter-over-quarter and year-over-year growth. in both revenue and adjusted operating income. Q3 revenue grew 24.5% year-over-year to $12.7 million, driven by strong performance across all operating segments. Adjusted operating income improved greatly, reaching $492,000 compared to an $850,000 adjusted operating loss in Q3 2023. Year-to-date revenues through nine months has increased 26.6% to $39.4 million, leading to $1.4 million of adjusted operating income, a significant improvement from the $2.7 million adjusted operating loss in the same period of last year. The company remains on track to exceed $50 million in revenue and achieve positive adjusted operating income for the full year 2024, marketing a key milestone. I'll now turn to updates from our subsidiaries. Starting with 42 West, we've maintained our dominant position in entertainment PR. Our team delivered exceptional results in major industry events, including a substantial presence at the Toronto International Film Festival and managing the Venice Film Festival premiere of Tim Burton's highly anticipated Beetlejuice, Beetlejuice. At San Diego Comic-Con, we represented an unprecedented 13 major entertainment clients, cementing our position as the go-to agency for tentpole properties. Our clients received 60 primetime Emmy nominations, and we've expanded our footprint to the anime and gaming space, representing industry leaders like Crunchyroll and Toho at Anime Expo. As discussed on our Q2 call, but completed in Q3, Dolphin acquired L Communications, a leading PR agency focused on social and environmental impact, with offices in Los Angeles and New York. Now operating in conjunction with 42 West, Elle brings 16 years of expertise in impact PR and deepens our capabilities in the $1.1 trillion impact investing industry. The team has already integrated seamlessly with our existing PR firms and agencies, strengthening our ability to serve clients who want to leverage their influence for positive change. Turning to Surefire Media, the team had a landmark quarter in music, We're particularly proud of our work with Dave Matthews Band, Kool and the Gang, and MC5, all of whom were inducted into the Rock and Roll Hall of Fame. This achievement underscores our ability to support artists across their entire career journey. And even though it's a Q4 event that we'll talk more about on our 10K earnings call in March, I'd be remiss if I didn't highlight the press release we put out on Tuesday of this week, sharing that Shorefire clients earned 26 nominations for the 2025 Grammys. including one for Jacob Collier for Album of the Year. And in breaking news, I was just told that we signed a new client that has two Grammy nominations himself, bringing Shorefire's total to 28 Grammy nomination campaigns to handle this year. Simply phenomenal, as always. Go Matt Hanks. The Door continues to demonstrate excellence in hospitality and lifestyle PR. A highlight was securing a prestigious three-star review from the New York Times for Bungalow. I've been there and it is fantastic. And our innovative work with Newman's own on their pay what you want pizza program, which shows our ability to drive meaningful consumer engagement. The digital department, our influencer marketing agency, has shown remarkable growth, securing 137 new talent signings this year. We successfully expanded our brand edit influencer showroom to New York Fashion Week in September, which marked an important milestone in our fashion and lifestyle vertical. And I know our team has one coming up during Art Basel, which is very exciting, as that one will also mark a first time the showroom comes to Miami. At Special Projects, our celebrity booking agency, we maintained our longstanding partnership with Wall Street Journal Magazine's Innovator Awards at the Museum of Modern Art last month. And our work with the Academy Museum's annual gala helped honor industry luminaries while raising over $11 million for the Motion Picture Academy. That team is especially busy with three major events this week alone, for example, including the store opening for LVMH happening tonight in Manhattan. These results reflect our team's expertise, creativity, and ability to deliver impact across multiple sectors. Turning to Dolphin Ventures, our division that secures ownership stakes in promising businesses or products, primarily in content creation consumer products, and live experiences, we're open to various opportunities that these three sectors remain our focus as they best align with where our marketing expertise increases the likelihood of success. And starting with content creation, our IMAX partnership maintains strong momentum with a $2.6 million Q3 payment from licensing the streaming rights to the Blue Angels. The film's success has exceeded our expectations. leading to planned expansion into prestigious institutional theaters across the country starting in January. And as a reminder, we expect the film to play those theaters for years to come, providing an annuity for both Dolphin and IMAX. With this powerful foundation and fall development season underway, we anticipate announcing our next major project in partnership with IMAX soon. Also, we expect to be able to announce shortly additional distribution partnerships for Staple Gin, our first celebrity-partnered spirits venture developed with culinary icon Rachel Ray. Crafted in New York's Catskills region, the gin has earned double gold and 96 points at the New York International Spirits Competition. Staple Gin is now available at restaurants and retail outlets throughout New York State through Southern Glazers Wine and Spirits, a fellow Miami-based company, and the nation's largest distributor with $26 billion in revenue, last year in operations in 44 states. With those updates on the venture's front, I'll turn to two headlines from the month of October. First, we announced the launch of Always Alpha, a groundbreaking initiative that marks our strategic entry into the women's sports management space. We believe that Always Alpha is the first ever comprehensive management firm dedicated exclusively to women's sports. This venture is led by an extraordinary team, starting with Allison Felix, the most accomplished U.S. track and field athlete in history. That's a pretty good start. alongside her brother and business partner, Wes Felix, and distinguished sports executive, Cosette Chaput. The timing of this launch aligns perfectly with the explosive growth we're witnessing in women's sports. Our research and market analysis indicate this is a significantly undervalued sector with immense growth potential. Always Alpha represents more than just a new revenue stream. It's a strategic advancement that we believe will be a major growth driver for our company in the years ahead. What sets Always Alpha apart is its holistic approach to talent management. We're not just representing athletes. We're building a platform that supports women who are simultaneously competing at the highest levels, serving as brand ambassadors, building businesses, and driving social change. This, of course, aligns perfectly with Dolphin's existing expertise in celebrity management, brand development, influencer marketing, and impact PR. The synergies with our current operations are substantial. Our entertainment marketing infrastructure, which has delivered remarkable success this year, thousands of influencer campaigns through the digital department alone is immediately complimentary. Also, the market leading position of our entertainment PR firms driving 24 Oscar nominations, 60 Emmy nominations, and 28 Grammy nominations for our clients creates a broad platform to increase awareness through pop culture events. providing an immediate competitive advantage for Always Alpha's roster. We're seeing strong early interest from both potential clients and brand partners. The unique positioning of Always Alpha in the market has already attracted attention from major advertisers who are increasingly focused on authentic engagement in the women's sports space. From a financial perspective, Always Alpha represents a compelling opportunity. The women's sports market has demonstrated remarkable momentum, especially probably anybody is aware, listening in to this call, with viewership, sponsorship revenue, and media rights valuations all showing strong upward trajectories for women's sports. Looking ahead, we expect Always Alpha to contribute to our revenue mix through several channels. First, we'll make talent management fees, similar to our influencer division, from a growing roster of elite athletes, broadcasters, and coaches, starting with Allison herself. Secondly, we'll have brand partnership revenues, including strategic consulting for brands entering the women's sports space. Third, we anticipate being able to develop content and have other production opportunities. And fourth and finally, we know that there will be potential opportunities to create exciting ventures together. With Always Alpha, we believe we're positioning Dolphin at the forefront of what we expect to be one of the most dynamic sectors in sports and entertainment for years and years to come. Now turning to our newest alliance formed at the end of October with Lodi AI, a breakthrough move that reshapes how we safeguard our clients' digital presence. You know, it's probably not news to anyone that in today's day and age where digital manipulation has become increasingly sophisticated, we've taken decisive action. Our new collaboration with Lodi AI equips our full network. spanning our entertainment marketing powerhouses like Surefire, 42S, The Door, the Digital Department, and our newest company we just spoke about, Always Alpha, with state-of-the-art digital protection tools. Why did we partner with Lodi? Well, the numbers tell a compelling story. Lodi's technology sweeps through nearly half a billion digital assets daily, monitoring major social networks, web platforms, and inappropriate content sites. When unauthorized content appears, their system achieves removal in under a day with a success rate exceeding 95%. Simply put, we just were not aware of anything else in the market with that level of reach and success. And with our celebrity clients, they're frequently targets. So this move accomplishes several key objectives for the Dolphin companies. It strengthens our core service by offering, excuse me, it strengthens our core service offering by adding robust digital protection. It opens fresh revenue channels through enhanced security services. And most importantly, it launches Dolphin into the AI technology sphere, setting the stage for future innovations and opportunities in entertainment and marketing. What excites us most is the collaborative nature of this partnership. We're not just implementing existing solutions, we're actively developing next generation tools tailored to our clients' evolving needs. We think of it as building tomorrow's digital safety net while addressing today's challenges. Like always, Alpha, the timing couldn't be better. As deepfakes, digital impersonation, and under-authorized content become more sophisticated, our clients need more than traditional PR and marketing support to manage their public persona. They need comprehensive digital protection, and we're now uniquely positioned to provide it. Also, this partnership isn't just about defense. It's about innovation. While AI technology is still evolving, we know it has the potential to revolutionize a wide variety of aspects in entertainment and marketing. Through this alliance, we're positioning Dolphin as a responsible leader in entertainment for the ethical use of AI at the intersection of creativity and technology, ready to shape the future of digital content and protection. Now, usually after our Ventures updates, I would conclude and pass it over to Mirta, but first I want to reiterate what we stated in our recent shareholder letter and also in my presentation at the LD Micro Conference a couple of weeks ago, that we believe that our current market cap starkly undervalues the true strength and prospects of our unique portfolio. Let's just look again at what has been accomplished so far in just the past 12 months. We achieved record revenues in Q4 of last year and then broke that record again in Q1. Our IMAX co-production Blue Angels was a standout hit. with the full recoupment of our production investment and well over $1 million in ROI already achieved and received with a long revenue tail ahead. Also in May, we successfully launched Rachel Ray's award-winning StapleGen. In July, we acquired the profitable L Communications to add impact PR to our capabilities. And as we just highlighted, most recently in October, we announced the launch of AlwaysAlpha, Our management firm exclusively focused on the rapidly growing multibillion-dollar women's sports market, all in the last 12 months. Now, these milestones, along with the consistently stellar work by our industry-leading entertainment marketing companies, position Dolphin for continued success. As noted at the top of the call, through nine months, our revenue is up over 26% year over year. We anticipate our revenue this year to exceed $50 million. And with over 39 million in revenues through the first nine months, and with Q4 typically being our strongest quarter, we believe it would be very difficult for us to not hit this goal. Thus, we are trading at approximately one quarter of one times the expected revenue of the current year. We also anticipate achieving positive adjusted operating income for full year 2024. And again, after reporting positive adjusted operating income of 1.4 million through the first nine months, And with Q4 historically being our best quarter, we believe it would be very difficult for us to not hit this goal. That's an understatement. More than 20% of year-over-year growth, excuse me, more than 25% year-over-year revenue growth, while achieving positive adjusted operating income, we believe these results set us apart from many of our micro-cap peers. Looking ahead, we see immense potential in influencer marketing, women's sports, and innovative ventures like Staple Gin and the new Lodi AI partnership we just discussed. In my view, our current market cap starkly undervalues the true strength and prospects of our unique portfolio. Furthermore, we believe there's a significant discrepancy between our present market capitalization and the fundamental worth of our assets. I believe we are significantly undervalued. And as CEO, I'm putting my money where my mouth is by actively increasing my personal stake in DLPN with $100,000 of open market purchases in the past year alone. And I plan to buy more here before the end of the year. I'm confident the market will soon better appreciate Dolphin's robust financial health and exciting growth catalysts on the horizon as we continue to create long-term value for shareholders. And with that in mind, one last tease before I turn it over to Mirta. I want to share the announcement of the upcoming launch of our new shareholder rewards program in partnership with Ticker, the same company that works with Starbucks and Whirlpool and others. We're set to debut in January of 2025, and this New Shareholder Rewards Program will offer our shareholders exclusive access to DLPM client products, invitations to unique events, and other perks to celebrate our community's support and connection to Dolphin's dynamic ventures. Stay tuned for more details as we get closer to January. It's our way of saying thank you to those who are part of our Dolphin journey. So thank you for your continued support of Dolphin Entertainment. I'll now turn it over to Mirta to walk through the financials, and then we'll open it up for Q&A.