Playboy, Inc.

Greetings and welcome to the Playboy second quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the follow-up presentation. If anyone should require operator assistance, please press star zero on your telephone keypad as a reminder this conference is being recorded. It is now my pleasure to introduce Rob Fink with FNK.io. Thank you.

Thank you, operator, and good afternoon, everyone, and welcome to Playboy's second quarter earnings call. Hosting today's call is Ben Cohen, Playboy's chief executive officer. Before turning the call over to Ben, I'd like to remind everyone that the information discussed today is qualified in its entirety by the Form 8K and Form 10Q filed today by Playboy, which may be accessed on the SBC's website and Playboy's website. Today's call is also being webcast and a replay will be posted to the company's investor relations website. Please note that statements made during this call, including financial projections or other statements that are not historical in nature may constitute forward-looking statements. Such statements are made on the basis of Playboy's views and assumptions regarding future events and business performance at the time they are made, and we do not undertake any obligation to update these statements. Forward-looking statements are subject to risks, which could cause the company's actual results to differ from its historical results and forecasts, including those risks set forth in the company's filing with the FCC, and you should refer to and carefully consider those for more information. This cautionary statement applies to all forward-looking statements made during this call, and we ask you not to place undue reliance on any forward-looking statements. During the call, the company may refer to non-GAAP financial measures. Such non-GAAP measures are not prepared in accordance with generally accepted accounting principles, but a reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures is available in the earnings release that Playboy filed with 8K earlier today, and it's also in its Form 10Q, which was also filed today. With all that said, I'd now like to turn the call over to Ben. Ben, the call is yours.

Thank you, Rob. We have made significant progress in our evolution to a licensing-focused, asset-light business. The second quarter results are proof of just how far we've come. We delivered a significant financial improvement in the quarter, but we also laid an important groundwork for the next leg of growth as we continue to sharpen our focus around the Playboy brand. Revenue climbed 13% year-over-year, with licensing revenue surging 105%, And our adjusted EBITDA was $3.5 million, a $6.4 million positive swing compared to a loss of $2.9 million in last year's second quarter. Our net loss included $1.9 million in impairment charges related to the sublease of our Los Angeles office and $2.1 million related to a one-time settlement of present and future licensing agent commissions. Excluding those charges, our net loss would have been approximately 3.7 million, and our earnings per share would have been negative 4 cents. Additionally, the quarter's results included 1.3 million in incremental legal expenses related to litigation with two former licensees that we terminated for contractual breaches. Excluding those costs, adjusted EBITDA would have been approximately 4.8 million, a positive swing of more than $7.7 million year over year. We are now in a strong financial position with over $30 million in cash on hand as of today and a clear plan to continue reducing debt and lowering our cost of capital. This strength gives us the flexibility to invest confidently in the next stage of Playboy's growth. That next stage centers on returning to the roots that made Playboy an icon as an aspirational men's lifestyle brand Working with one of the top brand agencies in the world, we're focused on bringing the brand to life through compelling content and unforgettable experiences. The Playboy magazine is back, not as our core revenue engine, but as a powerful driver of brand relevance. Earlier this year, we relaunched the magazine, and our next issue is scheduled to be released in November. The landmark issue will feature 12 playmates in one edition, a first in our history, And they'll also start in our 2026 calendar. Both of those are available for presale on our website today. We're reintroducing the Playmate of the Month and have launched the Great Playmate Search, a global paid voting contest that's already exceeded our expectations. These contests will run quarterly, delivering fresh content, fan engagement, sponsorship opportunities, and meaningful revenue. Experiences are another pillar of our growth. We're planning to relocate our corporate headquarters to Miami Beach, a vibrant city that has become the hub of our content creation and event strategy. We're also developing a new Playboy Club concept there in partnership with a leading hospitality company, blending a luxury dining experience with an exclusive private club designed to be as iconic as the original Playboy Mansion. We believe experiences will become another significant revenue driver for us in the future, as we expand this concept to major markets around the world. Our licensing business is thriving, with new agreements in gaming, beauty and grooming, energy drinks, and fashion. Our partnership with Byborg remains a cornerstone, guaranteeing $300 million in minimum royalties over 15 years for our digital business. And our honey-for-debt business and brand continues to improve. Q2 revenues rose 14%, with gross margins expanding and brand perception strengthening. thanks to new collections, higher full-price sell-through, and a refreshed customer experience online and in-store. Put simply, Playboy is stronger, nimbler, and better positioned than it was a year ago. Looking ahead, I am confident that we have the right strategy, the right team, and the right momentum to keep building on this success. With that, operator, I will open it up to Q&A.