Playboy, Inc.

Good afternoon. Thank you for standing by. Welcome to Playboy Inc.' 's first quarter 2026 earnings conference call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions. This conference is being recorded today, May 11, 2026, and the earnings press release and Form 10Q, from which information may be referenced during this call. were issued after the market closed today. On our call today are Playboy Inc's Chief Executive Officer, Ben Cohn, and Chief Financial Officer and Chief Operating Officer, Mark Crossman. I would like to remind you that the information discussed today is qualified in its entirety by the Form 8K and Form 10Q filed today by Playboy Inc, which may be accessed on SEC's website and on Playboy Inc's website. Please note that statements made during this call, financial projections and other statements that are not historical in nature may constitute forward-looking statements. Such statements are made on the basis of Playboy Inc.' '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 them. Forward-looking statements are subject to risks which could cause the company's actual results to differ from its historical results and forecast, including those risks set forth in the SEC filings, 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. Do not place undue reliance on any forward-looking statements. In addition, throughout today's call, the company may refer to adjusted EBITDA, a non-GAAP financial measure, which it believes provides helpful information to investors about the performance of the business on an ongoing basis. A reconciliation of adjusted EBITDA to its most directly comparable GAAP financial measure is included in today's earnings release, which is available on the Playboy Inc. Investor Relations website. At this time, I would like to turn the call over to Playboy's Chief Executive Officer, Ben Cohn. Ben, the floor is yours.

Thank you, operator, and thank you to everyone for joining us today. Welcome to our first quarter 2026 earnings conference call. When we spoke in March, I told you 2025 was the year we largely completed Playboy's transformation into a focused, high-margin, asset-led platform focused on four verticals, licensing, meeting and experiences, hospitality, and honey for debt. I want to use my time this afternoon to walk you through what that platform produced in Q1, 2026, because that was the quarter where that strategy showed up as visible, tangible progress across almost every part of the business, as well as why we're excited about meaningful growth going forward. Headline first. and then we'll get into the substance. Consolidated revenue grew to approximately 30.2 million, up from 28.9 million a year ago. Adjusted EBITDA was approximately $5 million, up 111% compared to the prior year, marking our fifth consecutive quarter of positive adjusted EBITDA. Excluding litigation expenses, adjusted EBITDA would have been approximately $5.8 million. We closed the UTG China transaction, pay down $15 million of debt, reducing our gross debt to $145 million, and plan to further delever by almost $37 million more from future UTG payments, which will bring our net debt well below $100 million. Honey for Debt grew top-line double digits with full-price sales accelerating, gross product margin expanding, and adjusted EBITDA margins continuing to improve. Given the operational improvements and part of our larger business plan, we have also started terminating or non-renewing licensees that do not fit with that plan so that we may bring on fewer and bigger licensees that better fit the Playboy brand. During Q1, we made key hires to reinvigorate our growth. David Miller joined as president of media and brand, and Philip Picardi joined as chief brand officer and editor-in-chief. David has taken direct ownership of the consumer-facing platform, the website, the media and experiences business, and the day-to-day alignment between content, commerce, and licensing. Philip is reshaping the editorial voice of Playboy. Journalism, photography, and cultural authority at a level the brand has not operated at in a long time. The clearest proof point is Philip's first issue, the Spring 2026 magazine. Our cover star was Carol G, one of the most followed artists in the world with more than 70 million Instagram followers. We generated more than 3 billion media impressions, over 40 million video views across social platforms, and the earned media value was in the tens of millions of dollars. The issue puts Playboy back at the center of culture, speaking to the value the magazine brings to the company. This is not a one-off. We have two other major celebrity covers lined up following Carol G., and our editorial calendar for the balance of 2026 continues to get stronger by the day. When artists of this caliber and the photographers, stylists, and writers who work with them actively want to be on the cover of Playboy, that tells you the brand's health is real. Practically, it is the engine that pulls audience onto our platform and the value into our licensing conversations. Under David's leadership, we launched a preliminary subscription offering for both digital and print content. Executing on the architecture we have been describing to investors for more than a year. Free content drives top of funnel audience, premium content, and member experiences sit behind the paywall. We will continue to add utility, event access, exclusive drops, community features as we scale Playboy.com through the balance of 2026. Building upon our first paid voting contest, the Great Playmate Search, which drove more than 1.7 million votes from over 17,000 contestants, we recently launched our next model, Search Contest, a collaboration between Playboy and Honey Burdette. This is the second paid voting contest we have taken to market. It is a brand collaboration between our two largest assets and the winner becomes the face of a global advertising campaign and is featured in the Playboy quarterly magazine with a $100,000 prize. It is also a revenue and audience engine. Every vote is a paid engagement. Registration runs through June 8th and voting closes July 31st. Two weeks into the contest registration, We are on track to exceed 30,000 contestants, a significant improvement from our last contest. Paid voting has the potential to become a real revenue lever for us. We will continue to layer it into additional programs throughout the year. Now that UTG has closed and their balance sheet is in a good place, we are proactively optimizing our rest of the world licensing business, not renewing off-brand licensees and creating new white space as we align our content strategy with our licensing business under David's leadership. This continues the strategy we have been describing. Fewer, bigger, high-quality partners focus on a consistent global brand. With Q1, Honey Burdette has now delivered six consecutive quarters of double-digit brick-and-mortar comparable store sales growth and four consecutive quarters of combined brick-and-mortar and online comparable store sales growth. Valentine's Day 2026 was Honey Burdette's best yet. The multi-piece full-price set strategy is working. Our Valentine's assortment all drove record average order values, or AOV, weeks. Our Honey Burnett Club loyalty program, which we launched in mid-October, has now crossed 110,000 members. And in early Q2, the Addison Leopard launch has already set the tone, our best-performing launch of 2026 so far. The U.S., now Honey Burnett's largest market, led the quarter. Retail and online both expanded, and the U.S. store base was nearly unanimously positive on a like-for-like basis. The U.S. economics are clearer. U.S. stores are meaningfully more productive and profitable than their counterparts in any other region, with four-wall adjusted EBITDA margins at approximately 40%. With that profile in mind, we have redesigned the future of HoneyBreadX stores, reducing our future build-out costs by almost 40%, which will significantly increase our ROI. We have received great interest from third parties in our capital-based efforts at HoneyBreadX and we intend to open five new HoneyBreadette stores in top-tier U.S. malls over the next 12 months. These are the highest return investments available to us anywhere in the HoneyBreadette portfolio, and they clearly fit with our existing capital plan. So when I look at Q1 2026, I see a quarter of not only execution against our four pillars, licensing, media, and experiences, hospitality, and how many of that, but also the groundwork laid for substantial growth in the future. It starts with bringing in the right leaders, putting Playboy back in the cultural conversation with Karol G on the cover and two more major names lined up behind her, launching a new subscription offering, building momentum with a new paid voting contest, closing the UTG transaction, as well as five other new licensing deals. creating a clear path to further de-lever the company, continuing to make progress on a new Playboy Club of Miami, and further growing the Honey Burdette business 15% year over year. Every one of those is a decision, not a headlight, and taken together, they give us real compounding momentum as we move forward. With that, I'll hand the call over to Mark to walk through the financial details.

Thank you, Ben. Consolidated revenue in the first quarter grew to $30.2 million compared to $28.9 million in the first quarter of 2025, an increase of $1.4 million or 5% year-over-year. Year-over-year increases led by strong Honey Burdette performance. Honey Burdette net revenue grew to $18.8 million, up 15.4% year-over-year. Retail delivered double-digit comp store growth across every region. With Q1, Honey Burdette has now delivered six consecutive quarters of double-digit brick-and-mortar comparable store sales growth and four consecutive quarters of consolidated brick-and-mortar and online comparable store sales growth. Full-price sales through drove the quarter. Full-price sales were up 23% year-over-year. EBITDA margins at Honey Burdette continued to improve. I'd like to spend a moment on the U.S. specifically because that is where we see the most attractive incremental return on capital. Our U.S. stores are running at approximately twice the sales productivity of the rest of our portfolio of stores and approximately three times the per-store profitability. Four-wall margins in the U.S. were approximately 40% in a quarter. With those economics in mind, we intend to open five new Honey Burdette stores and top-tier U.S. malls over the next 12 months. The capital cost is modest. The payback is fast. and we already have the playbook, the supply chain, and the brand recognition in place to execute. Licensing revenue is $10.9 million in the first quarter, slightly below the prior year quarter. The year-over-year decrease in licensing net revenues is consistent with repositioning our brand and licensing strategy for fewer and bigger deals. Accordingly, we let a number of off-brand legacy licenses expire, which is partially offset by five new licensing deals in the quarter spanning apparel, sleepwear, direct-to-retail, and headwear across North America, EMEA, and APAC. In addition, we did not sign any new deals in China during our UTG negotiations. Our ByBorg strategic partnership contributed $5 million of digital licensing revenue in the quarter, consistent with the contractual minimum guarantee. Corporate operating expenses on an adjusted basis, excluding stock-based compensation, transaction expenses, and other items we normalized for adjusted EBITDA, were approximately $7.1 million, a reduction of approximately $1.6 million versus the prior year quarter. Within that total, corporate operating expenses, excluding brand investment, were approximately $6.2 million, with personnel and occupancy savings driving the year-over-year reductions. The remaining approximately $900,000 represents direct investment in the Playboy brand, the magazine, editorial, and the consumer platform. We view that spend as an investment, not overhead. Net loss for the quarter was $4 million, or 3 cents per share, which included $3.5 million of transaction expenses related to the UTG deal, compared to a net loss of $9 million, or 10 cents per share, in the first quarter of 2025. an improvement of approximately $5.1 million year-over-year. Adjusted EBITDA for the first quarter was $5 million, an increase of $2.6 million versus the prior year quarter. This represents our fifth consecutive quarter of positive adjusted EBITDA. Excluding litigation expenses, adjusted EBITDA would have been $5.8 million. On the balance sheet, we ended the quarter with approximately $34.7 million in total cash, including restricted cash. Total debt was $144.9 million, down from $159.9 million at year end 2025, reflecting the $15 million pay down from the initial UTG proceeds following the close of that transaction on March 20th. That concludes our prepared comments.