Dolphin Entertainment, Inc.

And welcome to the Dolphin Entertainment second quarter 2025 earnings call. At this time, all participants are on a listen-only mode, and 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. And please note, this conference is being recorded. I'll now turn the conference over to your host, Mr. James Carbonara of Hayden IR. Sir, the floor is yours.

Thank you, Operator. Good afternoon. 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 cautionary text forward-looking statements contained in the earnings release published 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 gap 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. As usual, I'll start by reviewing some of the key financial and operating highlights from our second quarter. And then Myrta will provide a more detailed financial overview before we open it up for Q&A. And I am definitely going to steal Myrta's thunder because starting with the financials, well, as we just saw in the earnings release we put out, total revenue came in at a second quarter record, $14.1 million, which represents an increase of 23% year over year. On the bottom line, we reported... adjusted operating income, again, the measure, how we measure ourselves, of approximately $628,000 as opposed or as compared, excuse me, to an adjusted operating loss of $137,000 from the same period in 2024. Obviously, we are extremely pleased with those two results. I would like to point out also that these results were fueled solely by the strength of our subsidiary portfolio without benefiting from the contributions of ventures or productions such as the impact of 2024's documentary, Blue Angels. Also, we believe our growth to a 4.5% adjusted operating income margin this quarter is just the beginning. We believe that we will free up significant free cash flows steadily over the next three years for three reasons, in addition, of course, to our subsidiaries continuing to grow. First, next year in 2026, we believe the investment phase in Always Alpha and affiliate marketing will greatly reduce. Those results we just talked about come with those investments being made here in the second quarter. Second, our expensive long-term leases in both New York and Los Angeles will expire. New York by the end of next year, 2026, and Los Angeles by the end of the following year, 2027, thereby significantly reducing our overhead costs. And third, our commercial bank loans will be repaid in full in September of 2028. These term loans used to fund our acquisition strategy and complete our marketing supergroup currently represent approximately $2.2 million per year in principal and interest. We will no longer need to pay that after September of 2028. Thus, even without the revenue and profit growth we expect to experience in the coming quarters and years, we expect to free up significant free cash flow throughout the next three years, which we believe provides us a clear path to improving our margins. Beyond this core trajectory, we believe our films, such as Youngblood, and our venture portfolio, including Staple Gin, offer tremendous optionality, especially when comparing potential upside in success against our current market capitalization. More to come on these two topics later in my prepared remarks. But first, let's turn our attention to this morning's news. As you saw in the announcement, We've taken another significant step in expanding our integrated services model with the creation of our tastemakers division. I want to spend a few minutes discussing why this matters strategically and how it exemplifies our broader growth strategy. I'll address what makes this offering compelling. bringing together the exceptional capabilities of two of our subsidiaries, the digital department's talent management expertise in the creator economy and the Doors' unmatched lifestyle and hospitality PR prowess. But this isn't simply about collaboration. It's about creating an entirely new service category that doesn't exist elsewhere in the market. Think about the traditional landscape. Creators and lifestyle icons typically engage separate firms for representation and publicity, often leading to disconnected strategies and missed opportunities. We've eliminated that friction. Our teams now work as one unit from the outset, crafting cohesive strategies that maximize both commercial opportunities and cultural relevance. Let me put it even more simply. The Doors PR campaigns keep these talent top of mind for both brand managers and the public at large, while the digital department monetizes that cultural cachet for the talent through brand partnerships and endorsements. This creates a virtuous flywheel for the talent. More visibility through PR and earned media leads to the ability to capitalize on greater endorsement potential. Long-time listeners remember how excited we were for the acquisitions of BeSocial and Socialite, the two influencer marketing companies we purchased in 2022. 2020 and 2022 respectively, and that we merged to create the digital department in late 2023. These were highly strategic acquisitions to marry with our industry-leading PR firms in a combination we called the equivalent of peanut butter and jelly. Well, how has Tastemakers been received even in these very early days? The initial response has been remarkable. We've already assembled a great roster of creators spanning culinary, wellness, and lifestyle sectors like Josh Scherer from Mythical Kitchen, my personal favorite culinary influencer. He's just a great guy. Janine D'Onofrio, who's built Love & Lemons into a powerhouse brand, and Jessica Bui, who's transformed home design content. These creators understand how to connect with modern audiences and drive engagement across platforms. And all of these icons, personalities, and creators are excited by the prospect of increased exposure through PR leading to additional money and endorsement opportunities through influencer marketing. What excites me most is how this initiative demonstrates the multiplier effect of our ecosystem. These creators aren't just getting management and PR. They're gaining access to our entire suite of capabilities. When one of our talent wants to launch her next product line, we have the infrastructure. When another one needs production support for his next series, we're ready. This is precisely the kind of value creation we've been discussing with you throughout the years. Now that we've reached horizontal scale across the supergroup, we're innovating within our existing portfolio to generate new revenue streams and deepen client relationships. Every creator we sign opens doors to brand partnerships, content opportunities, and cross-pollinization across our other divisions. Looking ahead, Tastemakers represents a blueprint for future initiatives. We're actively exploring similar integrated models and other verticals where our agency's combined expertise can create differentiated offerings. The market is clearly moving towards comprehensive solutions, and we're positioning ourselves at the forefront of that evolution. Moving along, each of Dolphin's subsidiaries brings something unique to the table, but together they create something far greater than the sum of their parts. We believe this collective strength is what makes Dolphin a leader across the pop culture landscape. Furthermore, these cross-selling initiatives help fuel organic growth within our companies, And as we do so, we believe that our adjusted operating income margin will continue to grow. I should point out, is this a good point to mention 23% year-over-year revenue growth and positive adjusted operating income of over $600,000? Probably it's a good point to insert that again. Anyway, back to the prepared remarks. This is the first half of the better mousetrap that we believe we are building. Those who have followed our story from the very beginning know that our idea to create this unique collection of best-in-class entertainment marketing companies was so that we could create a solid foundation of revenue and profit from our core activities and then have the upside of transformational optionality represented by productions and ventures that we can own or co-own and wherein our form of marketing will give us a greater likelihood of success. In other words, we believe that our core business will provide both stability and continuous growth to the top and bottom line, as we just saw here in Q2, and that our ventures into content, consumer products, and live events will provide us with tremendous upside, disproportionate to our core business. With that said, we shared exciting news on our latest production venture yesterday. The feature film adaptation of Youngblood has been selected to premiere at the Toronto International Film Festival next month. This is a tremendous honor, and we hope it will provide a springboard for us to successfully sell the project to a theatrical distributor or streaming service. We are also hoping lightning strikes twice, as it was at the Toronto Film Festival where we premiered the first footage of The Blue Angels, which led to our highly successful sale of the streaming rights for that movie to Amazon. Fingers crossed we will enjoy the same level of success this year. I'll certainly be able to provide updates on our next earnings call. Toronto, for those who don't know, is always the week after Labor Day. To conclude, I'd like to highlight how our achievements from the launch of Tastemakers to leading global sales for Youngblood exemplify the strength and innovation of our diversified portfolio. Additionally, my continued personal investment in Dolphin, including the purchase since just this April of an additional 1% of all common stock outstanding, underscores my confidence in the exceptional value we are building for shareholders. Thank you for your time and attention today. And with that, I'll turn it over to Myrta for a deeper dive into the financials.