Playboy, Inc.

Good afternoon. Thank you for standing by. Welcome to Playboy, Inc.'s third 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 opened for questions. This conference is being recorded today, Thursday, November 5th, 2026, and the earnings press release and form 10-Q, from which information may be referenced during this conference call, were issued after the market closed today. On our call today are Playboy, Inc.'s Chief Executive Officer, Ben Kohn, and Chief Financial Officer and Chief Operating Officer, Marc Crossman. I would like to remind you that the information discussed today is qualified in its entirety by the Form 8-K and Form 10-Q filed today by Playboy, Inc., which may be accessed on the 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 risk, which could cause the company's actual results to differ from its historical results and forecasts. 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 and other adjusted financial measures which are not GAAP financial measures. which it believes provide helpful information to investors about the performance of the business on an ongoing basis. A reconciliation of adjusted EBITDA and other adjusted financial measures to their most directly comparable GAAP financial measures are included in the company's SEC filings which are 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 Kohn. Ben, the floor is yours.

Thank you, Operator, and good afternoon, everyone. A few years ago, we laid out an asset-light strategy focused on containers for marketing engine for the brand and three revenue verticals for Playboy plus Honey Burdette. I am pleased to report that the business plan is working, and we have exciting updates for you on each of our verticals. Our run of high-profile covers continues. Cara Delevingne for summer and Charlie XCX for fall. And our winner issue is close behind with two more big names that will grace the cover. are three consecutive latest covers that have generated more than 20 billion press impressions across press and social. The third quarter marked our seventh consecutive quarter of positive adjusted EBITDA, and the foundation we laid for revenue growth is starting to take hold. Revenue grew 9% to 31.7 million, operating income nearly tripled to 4 million, and net income was 1.9 million, or two cents per share. prepared with a half a million dollars or less than a cent per share a year ago. Adjusted EBITDA was 7.9 million, nearly double the 4.1 million we reported a year ago, our strongest quarter since we began this transformation. Our net income margin expanded from approximately 2% to 6% and adjusted EBITDA margin expanded from 14% to 25%. On a trailing 12 month basis, Adjusted EBITDA is now approximately $27 million and approximately $30 million excluding litigation expenses. Before I touch on each of the verticals that contributed to our third quarter, I want to discuss a recent development regarding the relaunch of our hospitality vertical in Miami Beach. For 30 years, Playboy was a place you could walk into, the clubs and, of course, the Playboy Mansion. So we are pleased to announce that we have signed an agreement to acquire the property that is currently the Freehand Hotel in Miami Beach and to develop it into a private members club. The property covers approximately an acre of land with five buildings around the central courtyard and the pool. We have committed to using approximately $5 million of cash from our balance sheet, which we expect to get back from the sale of memberships in the future. the new club will be a foundational piece of our hospitality strategy. We continue to pursue our asset light business model and strategy in which Playboy brand serves as the foundation for licensing, media, and hospitality. Given the potential licensing revenue and profit share opportunity, we felt it is a better use of our cash in the short term than the share repurchase we were contemplating. We have also signed a term sheet with two proven partners, Think Hospitality for the operation of the club, and Infinity Collective for the development of the real estate, both of which will be investing alongside of us. Now on to licensing. First, China. When we brought in UTG as our partner and operator in China earlier this year, we told you there would be a transition period. A couple of quarters where the revenue growth paused while UTG took over the business. We said that UTG needed time to get its footing. and the third quarter is the first concrete proof of what this partnership can do. UTG signed three new agreements with a combined contract value of roughly $15 million and China licensing revenue grew nearly 40% year over year. Based on their pipeline of new deals, we expect that business to keep growing from here. Second, in the rest of the world, the strategy of fewer, bigger and better partners is producing the partnerships we said it would. We signed a new five-year agreement with our largest apparel licensee with minimum guarantees increasing 10x, setting us up for the next phase of growth. Our supreme collaboration did more than a million dollars of sales in its first 24 hours and has been extended into 2027. Ainsworth's Playboy slot machine launched at GTE last month, and Ainsworth has called it the most successful product launch in its history. Our Von Dutch collaboration launches in December. The team continues to build the pipeline, and we expect the rest of the world licensing business to return to growth in 2027. Better partners mean bigger minimum guarantees and longer, more durable contracts. Across the segment, we now have $324 million of contracted, not yet recognized revenue. On to media. Paying subscriptions on Playboy.com have grown every month since its relaunch, and that pace has accelerated through the third quarter. We are testing our way into paid acquisition, and with our new CRM in place, every new member and every voter becomes someone we can market directly to. Paid voting continues to grow as well. Our Playboy and Honey Burdette model search drew roughly 48,000 contestants and more than 200,000 paying voters. about three times the contestants of the prior contest. And its revenue surpassed a million dollars, more than double the prior contest. It's important to note that based on the deal structure, we only recognized our net profit, not the revenue. Our next contest, The Great Playmate Search, has just launched. It is first and foremost a top of the funnel engine for our audience. On sponsorships, I will be candid, it has taken longer than we expected. Rand's had to see what Playboy is today before they would commit. And the run of covers has done a great deal to change that. Our first sponsorship campaign, a six-figure deal that is now signed, and the production is now in the works. And we have several more active discussions. Lastly, Honey for Debt. Revenue grew 12% in the quarter, and operating income increased by nearly a million dollars, and adjusted operating income roughly doubled. The Playboy by Honey Burdette CoLab was one of the best-selling collections in its history. Moving forward, Honey Burdette is expanding its product lines to include swim and activewear, and based on the success of the Playboy collaboration, has three new Playboy collections planned for next year. With that, Marc, I'll turn it over to you.

Thank you, Ben. Consolidated revenue for the third quarter was $31.7 million, up 9% from $29 million a year ago. Growth was led by Honey Burdette and China Licensing. Our new media and experiences revenue also contributed at a meaningful scale for the first time. Licensing revenue was $12.6 million, up 5% from $12 million in the year prior quarter. China licensing revenue grew nearly 40% year over year, driven by three new agreements UTG signed during the quarter. The growth came from three sources. First, the expansion of an existing contract. Second, the replacement of a licensee. in an existing category with a much stronger partner, and third, a new category. That breadth is why we expect China to continue to grow. In the rest of the world, licensing revenue was flat year over year, excluding two one-time licensee audit settlements of more than half a million dollars in the prior quarter. After quarter end, we signed a new five-year agreement with our largest licensee in apparel. As Ben mentioned, the minimum guarantee is 10 times higher than before. That changes the timing of the revenue we record. We recognize the minimum guarantee evenly through the year. Ruralties above the minimum are only recognized once the partner's sales have earned out the full guarantee. With a much larger guarantee, revenues above the minimum guarantee happen later in each contract year. The revenue from this partner will be lighter in the early quarters of each contract year and heavier in the later quarters. Only the timing within the year changes. licensing gross margin remained at 96% and the segment generated $10.9 million of operating income in quarter. That is an operating margin of 86%. Revenue in our corporate segment grew to half a million dollars from $100,000 a year ago. This segment now captures our median experiences businesses. The growth was driven by paid voting and sales of our summer and fall magazine issues. As Ben noted, we recognize only net profit from voting, not the gross revenue of more than $1 million. Honey Burdette net revenue was $18.4 million, up 12% from $16.4 million a year ago. Total comparable sales grew 11% on top of a 3% comp in the third quarter of 2025. The mix underneath that number is the important part. Store comps grew 9% on top of a 22% comp a year ago, so our retail fleet kept growing against a very demanding comparison. Online comps were down 10% a year ago. This quarter, online flipped a positive 13% comp against a negative 10% comp a year ago. Comps were led by the U.S. Both the retail and online channels got a lift in September from our Playboy Honey Burdette collaboration. It was one of the most successful collection launches in Honey Burdette's history. It's important to note that we delivered total revenue growth on a smaller footprint. We ended the quarter with 48 stores compared with 51 a year ago. We have two more closures planned, and then we expect the rationalization of our store base complete. Gross margin expanded to 63% from 61%, driven by full price selling and higher average selling prices. Henry Burdett's operating income increased by nearly $1 million, and adjusted operating income roughly doubled to $2.4 million from $1.2 million a year ago. Selling and administrative expenses were $21.2 million, up 700,000 or 4% from $20.4 million a year ago. In corporate, the increase reflects a $1.1 million of higher non-cash stock-based compensation and our investment in the media team behind our new revenue lines. We also increased marketing to support HoneyBurnett's growth. Those increases were partially offset by lower litigation-related legal expense in our licensing segment. Operating income was $4 million compared with $1.4 million a year ago. That is nearly a threefold increase, and our operating margin expanded from 5% to 13%. Net income was $1.9 million or two cents per share compared with half a million dollars in the third quarter of 2025. Net income margin expanded from approximately 2% to 6% year over year. Adjusted EBITDA was $7.9 million, nearly double the $4.1 million in the prior year quarter. that is an adjusted EBITDA margin of 25%. We ended the quarter with $34.9 million of total cash, including restricted cash. That compares with $37.1 million at the end of the second quarter. The decline reflects the $3 million second installment of our share repurchase, which we paid in August. Excluding that payment, cash would have increased modestly. Total debt was $144.9 million unchanged from the end of the second quarter, and down from $159.9 million at the year end 2025. Net of the $29.7 million of unrestricted cash, net debt was approximately $115 million. That is roughly 3.8 times trailing 12 months adjusted EBITDA excluding litigation. We've earmarked another $37 million to pay down debt by January of 2028, at which point total debt will decline to approximately $108 million. Based on today's cash, net debt would be approximately $85 million. That concludes my prepared remarks. Let me turn the call back to Ben.