[Executive Summary & Financial Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Financial%20Highlights) Dolphin reported strong Q2 2025 financial results, with revenue growth, improved profitability, and strategic investments highlighted by the CEO [CEO Commentary & Strategic Focus](index=1&type=section&id=CEO%20Commentary%20%26%20Strategic%20Focus) Dolphin's CEO highlighted strong Q2 performance, strategic investments in future growth, and anticipated profit margin expansion - Dolphin's Q2 revenue grew by **23% year-over-year**, reaching **$14.1 million**, exceeding expectations and demonstrating strong financial performance[2](index=2&type=chunk)[3](index=3&type=chunk) - The company strategically invested in future growth engines like women's sports and affiliate marketing, anticipating long-term returns after initial investment phases[3](index=3&type=chunk) - CEO Bill O'Dowd purchased approximately **1% of outstanding shares** since April 2025, demonstrating confidence in the company's value[2](index=2&type=chunk)[5](index=5&type=chunk) - Adjusted operating margins are expected to grow as Always Alpha and affiliate marketing investments decrease, real estate commitments expire, and bank loans are repaid[4](index=4&type=chunk) [Q2 2025 Financial Performance Overview](index=2&type=section&id=Q2%202025%20Financial%20Performance%20Overview) Dolphin's Q2 2025 saw revenue grow 23%, operating loss significantly narrow, and adjusted operating income turn profitable Q2 2025 Key Financial Metrics (Compared to Q2 2024) | Metric | Q2 2025 | Q2 2024 | Change | | :--------------------- | :--------------- | :--------------- | :--------------------- | | Total Revenue | $14.1 million | $11.4 million | +23% | | Operating Loss | $(57,000) | $(1.1) million | Significantly narrowed | | Adjusted Operating Income (Loss) | $0.6 million | $(0.1) million | Shifted to profit | | Net Loss | $(1.4) million | $(1.6) million | Reduced | | Net Loss Per Share (Basic) | $(0.13) | $(0.17) | Improved | | Net Loss Per Share (Diluted) | $(0.13) | $(0.17) | Improved | - Q2 2025 operating expenses were **$14.1 million**, including **$0.6 million** in depreciation and amortization and approximately **$0.1 million** in non-recurring or non-cash expenses, an increase from **$12.6 million** in Q2 2024[7](index=7&type=chunk) [Operational Highlights & Business Updates](index=3&type=section&id=Operational%20Highlights%20%26%20Business%20Updates) Dolphin's subsidiaries achieved significant Q2 2025 milestones, including new partnerships, industry awards, platform launches, and expanded marketing [Subsidiary & Division Achievements](index=3&type=section&id=Subsidiary%20%26%20Division%20Achievements) Dolphin's subsidiaries achieved Q2 2025 milestones, including new partnerships, Emmy nominations, platform launches, and diverse marketing support - Dolphin established a company-wide partnership with The Lumistella Company, leveraging its agency alliance for integrated marketing, media, and brand strategy for Elf on the Shelf® Santaverse™ and new IP extensions[13](index=13&type=chunk) - Dolphin demonstrated leadership in fan public relations at San Diego Comic-Con 2025, executing campaigns for top talent and brands like Amazon Studios, Funko, and Crunchyroll[13](index=13&type=chunk) - Dolphin's clients received **15 nominations** for the 77th Primetime Emmy Awards[13](index=13&type=chunk) - The Door and The Digital Dept. jointly launched Dolphin Tastemakers, combining talent management and media outreach to build impactful multi-dimensional brands for top talent like Rachael Ray, Josh Scherer, and Jeanine Donofrio[13](index=13&type=chunk) [42West](index=3&type=section&id=42West) 42West clients garnered significant industry recognition, including multiple Emmy nominations and high-profile fashion collaborations - 42West clients received **15 nominations** for the 77th Primetime Emmy Awards[13](index=13&type=chunk) - At the Met Gala, 42West client Christian Siriano designed custom looks for Lizzo, Bebe Rexha, and Alex Newell[13](index=13&type=chunk) [The Door / The Digital Dept. / DISRPT Agency](index=3&type=section&id=The%20Door%20%2F%20The%20Digital%20Dept.%20%2F%20DISRPT%20Agency) These agencies launched Dolphin Tastemakers, secured major client partnerships, and expanded influencer marketing, solidifying cultural influence - The Door and The Digital Dept. jointly launched Dolphin Tastemakers, empowering top talent and digital-native creators by combining talent management and media outreach[13](index=13&type=chunk)[17](index=17&type=chunk) - DISRPT Agency announced its 2025 client roster, including CultureCon and Edison Chen x Bad Bunny for adidas Originals, reinforcing its leadership in cultural influence[13](index=13&type=chunk) - The Digital Dept. debuted the BRANDEdit experience at CMA Fest 2025 and hosted its highest-grossing BRANDEdit influencer experience in Los Angeles to date[17](index=17&type=chunk) [Shore Fire Media](index=5&type=section&id=Shore%20Fire%20Media) Shore Fire Media secured PR for the Miles Davis Estate and supported high-profile music festivals and artists - Shore Fire Media was appointed as the public relations agency for the Miles Davis Estate ahead of its 2026 centennial celebration[17](index=17&type=chunk) - Shore Fire Media was selected to support several high-profile music festivals and concert series, including Summerfest and Montreux Jazz Festival Miami[17](index=17&type=chunk) - Long-term client Cyndi Lauper was inducted into the Rock & Roll Hall of Fame[17](index=17&type=chunk) [Special Projects](index=6&type=section&id=Special%20Projects) Special Projects curated star-studded lineups for major events like the Academy Museum Gala and Peabody Awards ceremony - Special Projects secured a star-studded lineup for the 2025 Academy Museum Gala, featuring Bruce Springsteen, Penélope Cruz, Walter Salles, and Bowen Yang[21](index=21&type=chunk) - Special Projects managed bookings for the 2025 Peabody Awards ceremony, successfully securing host Roy Wood, Jr. and several notable presenters and performers[21](index=21&type=chunk) [Always Alpha](index=6&type=section&id=Always%20Alpha) Always Alpha strengthened its women's sports management team with key hires and elevated women's sports profile at Cannes Lions - Malea Hotson and Tracy Hughes joined Always Alpha, bringing decades of expertise to the women's sports management team to drive innovation and growth in the sector[21](index=21&type=chunk) - Always Alpha elevated the profile of women's sports at the 2025 Cannes Lions International Festival of Creativity through high-profile events and panel discussions[21](index=21&type=chunk) [Youngblood (Film Adaptation)](index=6&type=section&id=Youngblood%20%28Film%20Adaptation%29) Dolphin's film adaptation, *Youngblood*, is set to premiere at the 2025 Toronto International Film Festival - Dolphin announced its film adaptation, *Youngblood*, has been selected to premiere at the 2025 Toronto International Film Festival[20](index=20&type=chunk) [Company Information](index=7&type=section&id=Company%20Information) Dolphin (NASDAQ:DLPN) provided a business overview, announced Q2 earnings call details, and included standard forward-looking statements [About Dolphin & Business Divisions](index=7&type=section&id=About%20Dolphin%20%26%20Business%20Divisions) Founded in 1996, Dolphin (NASDAQ:DLPN) evolved into three dynamic divisions, with Dolphin Marketing recognized as a top agency - Dolphin, founded by Bill O'Dowd in 1996, began as an Emmy-nominated television, digital, and film content production company[23](index=23&type=chunk) - The company now comprises three core divisions: Dolphin Entertainment (content production), Dolphin Marketing (PR, influencer marketing, brand strategy), and Dolphin Ventures (accelerating innovative ideas and products)[23](index=23&type=chunk)[24](index=24&type=chunk)[25](index=25&type=chunk)[26](index=26&type=chunk) - The Dolphin Marketing division was named a Top Agency of 2025 by Observer[25](index=25&type=chunk) [Conference Call & Investor Relations](index=7&type=section&id=Conference%20Call%20%26%20Investor%20Relations) Dolphin scheduled an August 13, 2025 webcast and conference call to discuss Q2 2025 results, with participation and replay details provided - The company will host a Q2 2025 earnings conference call and webcast on Wednesday, August 13, 2025, at **4:30 PM ET**[22](index=22&type=chunk) - Toll-free, international dial-in numbers, participant access codes, webcast links, and replay information are provided[22](index=22&type=chunk) [Forward-Looking Statements & Disclaimer](index=7&type=section&id=Forward-Looking%20Statements%20%26%20Disclaimer) This press release contains forward-looking statements on Dolphin's stock offerings and financial results, subject to risks and no update obligation - This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act, concerning stock offerings and anticipated financial and operational results[27](index=27&type=chunk) - Forward-looking statements involve unpredictable risks and uncertainties, where actual results may differ materially from those discussed[27](index=27&type=chunk)[28](index=28&type=chunk) - Dolphin Entertainment assumes no obligation to update any forward-looking statements unless required by applicable law[28](index=28&type=chunk) [Financial Statements](index=9&type=section&id=Financial%20Statements) Dolphin's Q2 2025 financial statements show revenue growth, narrowed operating losses, and a GAAP to non-GAAP adjusted operating income reconciliation [Condensed Consolidated Balance Sheets](index=9&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, Dolphin's total assets slightly increased to **$58.61 million**, with growing current assets but decreasing shareholder equity Condensed Consolidated Balance Sheets Key Data | Metric | June 30, 2025 ($) | December 31, 2024 ($) | | :--------------------- | :--------------- | :--------------- | | Cash and Cash Equivalents | 8,697,360 | 8,203,842 | | Total Current Assets | 22,156,949 | 20,067,099 | | Total Assets | 58,611,434 | 58,437,279 | | Total Current Liabilities | 29,131,730 | 26,514,137 | | Total Liabilities | 50,709,023 | 46,791,888 | | Total Stockholders' Equity | 7,902,411 | 11,645,391 | [Condensed Consolidated Statements of Operations](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Dolphin's Q2 2025 revenue grew **23%** to **$14.09 million**, with narrowed operating and net losses, despite increased year-to-date losses Condensed Consolidated Statements of Operations Key Data | Metric | Q2 2025 ($) | Q2 2024 ($) | H1 2025 ($) | H1 2024 ($) | | :--------------------- | :--------------- | :--------------- | :--------------- | :--------------- | | Revenue | 14,087,529 | 11,449,089 | 26,257,240 | 26,684,981 | | Total Expenses | 14,144,583 | 12,568,554 | 28,087,820 | 27,639,907 | | Operating Loss | (57,054) | (1,119,465) | (1,830,580) | (954,926) | | Net Loss | (1,413,918) | (1,624,458) | (3,742,980) | (1,951,226) | | Basic Loss Per Share | (0.13) | (0.17) | (0.33) | (0.20) | | Diluted Loss Per Share | (0.13) | (0.17) | (0.34) | (0.20) | [Reconciliation of Non-GAAP Measures](index=12&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures) Dolphin's Q2 2025 GAAP operating loss of **$57,000** adjusted to non-GAAP operating income of **$627,905**, reflecting core business profitability Reconciliation of GAAP Operating Loss to Non-GAAP Adjusted Operating Income (Loss) | Metric | Q2 2025 ($) | Q2 2024 ($) | H1 2025 ($) | H1 2024 ($) | | :--------------------------------- | :--------------- | :--------------- | :--------------- | :--------------- | | Operating Loss (GAAP) | (57,054) | (1,119,465) | (1,830,580) | (954,926) | | **Adjustments:** | | | | | | Depreciation and Amortization | 591,552 | 555,694 | 1,183,104 | 1,108,797 | | Bad Debt Expense | 93,407 | 82,959 | 149,161 | 286,980 | | Acquisition Costs | — | — | 416,171 | — | | Goodwill Impairment | — | 190,565 | — | 190,565 | | Stock-Based Compensation | — | 153,291 | — | 259,052 | | **Adjusted Operating Income (Loss) (Non-GAAP)** | 627,905 | (136,956) | (82,144) | 890,468 |

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $12.2 million, down from $15.2 million in Q1 2024, primarily due to a one-time contribution of $3.4 million from the Blue Angels documentary in the previous year [3][15] - Excluding the one-time revenue, core entertainment, publicity, and marketing revenue grew by 2% year over year [3][15] - Adjusted operating loss for Q1 2025 was approximately $600,000, comparable to the previous year's adjusted operating income of $1 million when excluding the Blue Angels revenue [4][16] - Net loss for Q1 2025 was $2.3 million, compared to a net loss of $300,000 in Q1 2024 [16][17] Business Line Data and Key Metrics Changes - The women's sports management firm, Always Alpha, is expected to double its roster of represented athletes and sportscasters by the end of 2025, with plans to expand into women's soccer and basketball [5][7] - The Digital Department launched a dedicated affiliate marketing division, aiming to triple the number of influencers on its roster by the end of the year [8][30] Market Data and Key Metrics Changes - The affiliate marketing sector is estimated to be over $17 billion globally, and the company aims to capture a significant share of this market through its new division [8][30] - The company has a backlog of affiliate influencers eager to work with them, indicating strong demand for their services [29][30] Company Strategy and Development Direction - The company is focusing on strategic investments in women's sports and affiliate marketing to broaden its addressable market and create sustainable growth opportunities [13][54] - The management emphasized the importance of increasing the frequency of film productions and expanding ventures as key priorities for 2025 [53][54] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of the LA wildfires on Q1 performance but expressed confidence in returning to normal operations in Q2 and beyond [57][58] - The company remains optimistic about achieving stronger growth in 2025, with no loss of confidence in its business outlook [57][58] Other Important Information - The company was named Agency of the Year by Observer's 2025 PR Power List, highlighting its strategic success and talent depth [12] - The film "Youngblood" is expected to premiere in February 2026, coinciding with the Winter Olympics, which presents a marketing opportunity [49][50] Q&A Session Summary Question: Growth strategy for Always Alpha and revenue potential - Management discussed the need for more managers to support the growth of Always Alpha and the expected timeline for revenue recognition from new talent [19][20][23] Question: Affiliate marketing strategy and influencer recruitment - Management explained the process of recruiting affiliate influencers and the expected quicker revenue turnaround compared to traditional brand representation [28][29][30] Question: Financial outlook and priorities for 2025 - Management reiterated the focus on growing Always Alpha and the affiliate division, alongside increasing film production frequency as top priorities for the year [53][56]

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $12.2 million, down from $15.2 million in Q1 2024, primarily due to a one-time contribution of $3.4 million from the Blue Angels documentary in the previous year [4][16] - Excluding the one-time revenue, core entertainment, publicity, and marketing segment revenue grew by 2% year-over-year to $12.1 million, indicating underlying business strength despite challenges [4][16] - Adjusted operating loss for Q1 2025 was approximately $600,000, comparable to the previous year's adjusted operating income of $1 million when excluding the film revenue [5][17] - Net loss for Q1 2025 was $2.3 million, compared to a net loss of $300,000 in Q1 2024 [17][18] Business Line Data and Key Metrics Changes - The women's sports management firm, Always Alpha, is expected to double its roster of represented athletes and sportscasters by the end of 2025, with plans to expand into women's soccer and basketball [6][8] - The Digital Department launched a dedicated affiliate marketing division, aiming to triple the number of influencers on its roster by the end of the year [9][30] - The core entertainment, publicity, and marketing segment demonstrated resilience with a 2% revenue increase despite external challenges [16][60] Market Data and Key Metrics Changes - The affiliate marketing sector is estimated to be over $17 billion globally, and the company aims to capture a significant share of this market through its new division [9][30] - The company is positioned as a comprehensive agency in the women's sports space, enhancing its competitive edge in a rapidly growing market [6][34] Company Strategy and Development Direction - The company is focusing on strategic investments in women's sports and affiliate marketing to broaden its addressable market and create sustainable growth opportunities [14][54] - Plans to increase the frequency of film productions and expand ventures are also part of the growth strategy, with a focus on long-term success [55][66] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of the LA wildfires on Q1 performance but expressed confidence in returning to normal operations in Q2 and beyond [58][60] - The company remains optimistic about achieving stronger growth in 2025, with no loss of confidence in its business trajectory [58][61] Other Important Information - The company was named Agency of the Year by Observer's 2025 PR Power List, validating its strategy and talent depth [13] - The film "Youngblood" is targeting a February 2026 release, coinciding with the Winter Olympics, which is expected to enhance its marketability [50][51] Q&A Session Summary Question: Growth strategy for Always Alpha and revenue potential - Management discussed the need for more managers to support the growth of Always Alpha and the expected timeline for revenue recognition from new talent [20][22][26] Question: Affiliate marketing growth and strategy - Management explained the strategy for expanding the affiliate marketing division, emphasizing the potential for quick revenue generation and the importance of training affiliate managers [29][30][32] Question: Financial outlook and impact of past events - Management reiterated confidence in the company's growth trajectory despite past challenges, highlighting the resilience shown in Q1 revenue performance [57][60]

Revenue Performance - For the three months ended March 31, 2025, total revenue was $12,169,711, a decrease of approximately $3,066,181 compared to $15,235,892 for the same period in 2024[142]. - Revenue from the entertainment publicity and marketing segment increased to $12,077,678, representing 99.2% of total revenue, compared to 78.0% in the prior year[137]. - Revenue from content production decreased to $92,033, down approximately $3,329,108 from $3,421,141 in the previous year, primarily due to the revenue from The Blue Angels documentary[143]. Expense Analysis - Total expenses for the three months ended March 31, 2025, were $13,943,238, a decrease of approximately $1,128,114 from $15,071,352 in 2024[144]. - Direct costs decreased significantly to $344,414, down approximately $1,974,813 from $2,319,227 in the prior year, attributed to the amortization of production costs for The Blue Angels[144]. - Payroll and benefits expenses increased to $10,304,233, an increase of approximately $729,982 compared to $9,574,251 in the previous year, mainly due to the inclusion of Elle's payroll expenses[145]. - Selling, general and administrative expenses decreased to $1,772,444, down approximately $204,546 from $1,976,990 in the prior year, primarily due to reduced office rent expenses[146]. - Legal and professional fees decreased by $133 thousand for the three months ended March 31, 2025, primarily due to cost savings from bringing financial reporting in-house[149]. - Depreciation and amortization increased by $38 thousand for the three months ended March 31, 2025, compared to the same period in 2024[148]. Net Loss and Cash Flow - Net loss was approximately $2.3 million or ($0.21) per share for the three months ended March 31, 2025, compared to a net loss of approximately $0.3 million or ($0.04) per share for the same period in 2024[155]. - Cash used in operating activities was $1.7 million for the three months ended March 31, 2025, an increase of $0.5 million from the prior year[158]. - Cash flows provided by financing activities for the three months ended March 31, 2025 were $586 thousand, primarily from proceeds of convertible notes payable[160]. Debt and Financing - Total debt amounted to $23.0 million as of March 31, 2025, an increase of $597.1 thousand from December 31, 2024[161]. - The company issued six convertible notes payable during the three months ended March 31, 2025, receiving proceeds of $775,000[165]. - The company recorded a gain in fair value of $20 thousand for the convertible note payable at fair value for the three months ended March 31, 2025[171]. - The Socialyte Promissory Note, amounting to $3 million, matured on September 30, 2023, with no interest payments made during the three months ended March 31, 2025[176]. - As of March 31, 2025, the aggregate principal balance of DE LLC Notes was $2,242,873, with accrued interest of $434,066[180]. - The company issued three nonconvertible promissory notes totaling $983,112 to Mr. Donald Scott Mock, with accrued interest of $114,995 as of March 31, 2025[181]. - Interest expense related to DE LLC Notes and Mock Notes was $79,882 for the three months ended March 31, 2025, compared to $46,121 for the same period in 2024[182]. - The BankUnited Loan Agreement includes a $5,800,000 secured term loan, a $750,000 revolving line of credit, and a $400,000 commercial card[183]. - The Second Bank United Loan Agreement for $2.0 million was established to finance the acquisition of Elle Communications, LLC, maturing in December 2027[184]. - The First BKU Term Loan has an interest rate of 8.10% and a 5-year amortization schedule, while the Second BKU Term Loan has a 7.10% interest rate with a 3-year amortization[185]. - As of March 31, 2025, current liabilities were $1,708,051 and noncurrent liabilities were $4,349,537 related to the First and Second BKU Term Loans[187]. - The BankUnited Credit Facility requires a minimum debt service coverage ratio of 1.25:1.00 and a maximum funded debt/EBITDA ratio of 3.00:1.00[189]. - Amortization of debt origination costs under the Bank United Credit Facility amounted to approximately $7,012 for the three months ended March 31, 2025[188]. - The company recorded interest expense of $7,550 related to the BKU Line of Credit for the three months ended March 31, 2025[186]. Strategic Initiatives - The company has established an acquisition strategy to identify and acquire complementary businesses to enhance profits and cash flow, although no active negotiations are currently in place[127]. - The company plans to enter into Venture investments during 2025, focusing on developing internally owned assets in entertainment content, live events, and consumer products[128]. - Acquisition costs for the three months ended March 31, 2025, were $416,171, related to payments to Special Projects Sellers, with no acquisition costs recorded in the prior year[147].

Financial Performance - Total revenue for the year ended December 31, 2024, was $51.7 million, an increase of 20% compared to $43 million in 2023[4] - Adjusted operating income for 2024 was $0.9 million, a turnaround from an adjusted operating loss of $2.4 million in 2023, representing an increase of approximately $3.3 million[5] - Net loss for 2024 was $12.6 million, significantly reduced from a net loss of $24.4 million in 2023[7] - Loss per share for 2024 was $1.22 based on 10,306,904 weighted average shares outstanding, compared to $3.39 per share in 2023 based on 7,206,577 shares[8] - Revenues increased to $51.68 million in 2024, up 19.8% from $43.12 million in 2023[30] - Net loss narrowed to $12.60 million in 2024 compared to a net loss of $24.40 million in 2023, representing a 48.5% improvement[30] - Adjusted income from operations improved to $922,613 in 2024 from a loss of $2.42 million in 2023[35] - Basic loss per share improved to $(1.22) in 2024 from $(3.39) in 2023, indicating a significant reduction in loss per share[30] Operating Expenses - Operating expenses for 2024 were $62.2 million, down from $63.2 million in 2023, despite nonrecurring expenses including a $6.7 million impairment of goodwill[6] - Total expenses decreased slightly to $62.17 million in 2024 from $63.23 million in 2023, reflecting a reduction of 1.7%[30] Cash and Assets - Cash and cash equivalents rose to $8.20 million in 2024 from $6.43 million in 2023, an increase of 27.5%[28] - Total assets decreased to $58.44 million in 2024 from $66.25 million in 2023, a decline of 11.6%[28] - Total liabilities increased slightly to $46.79 million in 2024 from $46.30 million in 2023, an increase of 1.0%[28] - Employee receivable increased to $1.01 million in 2024 from $796,085 in 2023, a rise of 26.8%[28] - Goodwill decreased to $21.51 million in 2024 from $25.22 million in 2023, a reduction of 14.7%[28] Strategic Initiatives - The company launched "The Pod," a new shareholder loyalty program offering perks such as gift cards and access to events[22] - Dolphin was named '2025 Agency of the Year' by Observer's PR Power List, highlighting its industry recognition[3] - The company is focusing on sustainable growth and profitability through investments in growth initiatives and opportunistic hiring[2] - Dolphin achieved milestones with 137 new talent signings in 2024, indicating expansion in its talent management division[17] - The company plans to expand its digital identity protection services through a partnership with Loti AI[11]

Financial Data and Key Metrics Changes - The company achieved a 20% year-over-year revenue growth, reaching just under $52 million for fiscal year 2024, marking a significant milestone by crossing the $50 million threshold [7][39] - Adjusted operating income for 2024 was approximately $900,000, a turnaround from an adjusted operating loss of $2.4 million in 2023 [43] - The net loss for 2024 was $12.6 million, improved from a net loss of $24.4 million in 2023 [46] Business Line Data and Key Metrics Changes - The launch of Always Alpha, a women's sports management firm, began in Q4 2024, with early revenue generation reported in Q1 2025 [8][50] - The digital department expanded with a new affiliate marketing division, tapping into a $17 billion market, which is expected to enhance revenue streams significantly [19][24] Market Data and Key Metrics Changes - The company was recognized as the Agency of the Year on the 2025 Observer PR power list, highlighting its cultural reach and effectiveness in marketing [10][12] - The affiliate marketing sector is identified as a rapidly growing area within influencer marketing, which is the fastest-growing segment of marketing overall [54] Company Strategy and Development Direction - The company is focused on leveraging its unique collection of marketing companies to create long-term value, particularly through investments in women's sports and digital marketing [12][38] - Strategic investments in staffing and new business lines are aimed at building a comprehensive roster in women's sports and enhancing digital marketing capabilities [50][55] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, citing the positive adjusted operating income as a significant milestone [8][39] - The company believes it is well-positioned to capitalize on opportunities in 2025 and beyond, despite current stock trading below previous revenue levels [41][38] Other Important Information - The company has made significant progress in reducing operating expenses, with total operating expenses for 2024 at approximately $62.2 million, down from $63.2 million in 2023 [44] - Cash and cash equivalents increased to $9.1 million as of December 31, 2024, compared to $7.6 million in 2023 [46] Q&A Session Summary Question: Can you quantify the investments made for growth in Q4? - Management indicated that investments were primarily in staffing for the launch of Always Alpha, with early revenue already being generated in Q1 [50] Question: Will the new businesses contribute significantly to revenue in 2025? - Management believes that the affiliate marketing segment could represent 25% or more of revenue in the coming years, with potential for further growth [57] Question: How did the recent events in LA impact the company? - Management confirmed that while there were some operational impacts in Q1 due to evacuations, the business returned to normal by the time of the Oscars [66][68] Question: What are the plans for the Disrupt agency and its impact? - The Disrupt agency is expected to enhance the company's diversity and client roster, contributing positively to future growth [72] Question: What is the expected timeline for the Youngblood movie? - The film is anticipated to premiere at the Toronto Film Festival in September, with hopes for a theatrical or streaming release shortly thereafter [82]

Financial Data and Key Metrics Changes - The company achieved a 20% year-over-year revenue growth, reaching just under $52 million for fiscal year 2024, marking a significant milestone by crossing the $50 million threshold [7][39] - Positive adjusted operating income was achieved for the full year of 2024, amounting to approximately $900,000, a turnaround from an adjusted operating loss of $2.4 million in 2023 [43][39] - The net loss for 2024 was $12.6 million, a reduction from a net loss of $24.4 million in 2023, indicating improved financial health [46][43] Business Line Data and Key Metrics Changes - The launch of Always Alpha, a women's sports management firm, began in Q4 2024, with early revenue generation reported in Q1 2025 [8][50] - The digital department expanded with a new affiliate marketing division, tapping into a $17 billion market, which is expected to enhance revenue streams significantly [19][24] Market Data and Key Metrics Changes - The company was recognized as the Agency of the Year on the 2025 Observer PR power list, highlighting its cultural reach and effectiveness in marketing [10][38] - The affiliate marketing sector is identified as a rapidly growing area, with the potential to contribute significantly to overall revenue [19][58] Company Strategy and Development Direction - The company is focused on leveraging its unique collection of marketing companies to create long-term value, particularly through investments in women's sports and digital marketing [12][38] - Strategic investments were made in staffing and expanding service offerings, particularly in the digital department and women's sports management [50][54] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, emphasizing the potential for revenue generation from new initiatives and the overall market environment [39][38] - The company believes its stock is undervalued, with significant upside potential as it continues to grow and expand its service offerings [41][39] Other Important Information - The company reported cash and cash equivalents of $9.1 million as of December 31, 2024, an increase from $7.6 million in 2023, indicating improved liquidity [46][43] - The digital department's new affiliate marketing division is expected to enhance revenue generation capabilities and diversify income streams [19][24] Q&A Session Summary Question: Can you quantify the investments made for growth in Q4? - Management indicated that investments were primarily in staffing for the launch of Always Alpha and the expansion of the digital department, with early revenue already being generated [50][51] Question: Will the new businesses contribute significantly to revenue in 2025? - Management believes that the affiliate marketing services could potentially account for 25% or more of revenue in the coming years, given the growth rate of the digital department [56][58] Question: How did the recent events in LA impact the company? - Management confirmed that while there were some operational impacts in Q1 due to evacuations, the business returned to normal by the time of major events like the Oscars [66][68] Question: What are the plans for the Disrupt agency and its impact? - The Disrupt agency is expected to enhance the company's diversity and client offerings, contributing positively to the overall growth strategy [70][72] Question: What is the outlook for the Youngblood film project? - Management expressed optimism about the Youngblood project, highlighting its potential for success and plans for a premiere at the Toronto Film Festival [76][82] Question: How is the Staple Gin venture performing? - Management reported positive performance and plans for expansion into more states, indicating a strong outlook for the venture [84][85]

Revenue Performance - Total revenue for the year ended December 31, 2024, was $51,684,984, an increase of approximately $8,561,909 or 19.9% compared to $43,123,075 in 2023[144] - Revenue from the entertainment publicity and marketing segment increased by approximately $5.2 million, or 12.1%, from $43,067,557 in 2023 to $48,263,843 in 2024[144] - The content production segment generated revenue of $3,421,141 in 2024, compared to only $55,518 in 2023, marking a significant increase[141] - The entertainment publicity and marketing segment accounted for 93.4% of total revenue in 2024, down from 99.9% in 2023[141] - Revenues from content production increased by approximately $3.4 million for the year ended December 31, 2024, primarily due to the release of The Blue Angels documentary film[147] - The company recorded revenue of $3,421,141 related to the Amazon Agreement for the distribution rights of The Blue Angels documentary during the year ended December 31, 2024[215] Expenses and Financial Performance - Total expenses for the year ended December 31, 2024, were $62.2 million, a decrease of approximately $1.1 million compared to $63.2 million in 2023[148] - Direct costs increased by $2.3 million for the year ended December 31, 2024, attributed to $1.8 million of capitalized production costs for The Blue Angels and increased subsidiary revenues[148] - Payroll and benefits expenses rose by approximately $3.1 million for the year ended December 31, 2024, mainly due to a full year of Special Projects payroll and new hires[149] - Impairment of goodwill was $6.7 million for the year ended December 31, 2024, down from $9.5 million in 2023[153] - Net loss for the year ended December 31, 2024, was approximately $12.6 million or $1.22 per share, compared to a net loss of $24.4 million or $3.39 per share in 2023[167] Cash Flow and Investments - Net cash used in operating activities was approximately $0.2 million for the year ended December 31, 2024, a significant improvement from $5.0 million in 2023[169] - Cash and cash equivalents at the end of the period increased to $9.1 million as of December 31, 2024, compared to $7.6 million at the end of 2023[169] - Net cash used in investing activities for the year ended December 31, 2024 was $2.5 million, a decrease from $4.5 million in 2023[171] Debt and Financing - Total debt increased to $22.4 million as of December 31, 2024, up from $19.3 million in 2023, reflecting a $3.1 million increase[172] - The current portion of debt rose to $5.4 million from $4.9 million, primarily due to a $0.6 million increase in the current portion of the Bank United Credit Facility[173] - Interest expense related to convertible notes payable was $510,250 for the year ended December 31, 2024, down from $543,472 in 2023[186] - The principal balance of convertible promissory notes was $5.1 million as of December 31, 2024, recorded as noncurrent liabilities[185] - The company entered into a BankUnited Loan Agreement on September 29, 2023, consisting of a $5,800,000 secured term loan, a $750,000 revolving line of credit, and a $400,000 commercial card[204] - A second BankUnited Loan Agreement for $2.0 million was established on December 6, 2024, to finance the acquisition of Elle Communications, LLC, maturing in December 2027[205] Acquisitions and Strategic Initiatives - The acquisition of Elle Communications on July 15, 2024, involved a total consideration of approximately $4.7 million, including $1.9 million in cash and 961,000 shares of common stock[130] - The company has established an acquisition strategy to identify and acquire complementary businesses to enhance profits and cash flow[127] - The company plans to enter into Venture investments during 2025, focusing on entertainment content, live events, and consumer products[128] Goodwill and Impairment - The company recorded a goodwill impairment of $6.5 million in Q3 2024 due to a decline in stock price and adjusted revenue projections[220] - The company recognized an impairment of $341,417 for trademarks and trade names during the year ended December 31, 2023, due to rebranding efforts[225] Accounting and Market Risk - The company evaluates convertible debt agreements to determine if they contain both liability and equity components, classifying them as compound financial instruments[230] - Fair values of convertible debt are estimated using pricing models such as the Monte Carlo Simulation, which involves significant judgment and is subject to error risk[231] - Recent accounting pronouncements are discussed in Note 2 of the consolidated financial statements included in the Annual Report on Form 10-K[232] - Quantitative and qualitative disclosures about market risk are not required for smaller reporting companies[233]

Financial Data and Key Metrics Changes - Q3 2024 revenue increased by 24.5% year-over-year to $12.7 million, with year-to-date revenues up 26.6% to $39.4 million [7][35] - Adjusted operating income improved to $492,000 in Q3 2024 from an adjusted operating loss of $850,000 in Q3 2023, with year-to-date adjusted operating income at $1.4 million compared to a loss of $2.7 million in the same period last year [7][41] - The company expects to exceed $50 million in revenue for the full year 2024 and achieve positive adjusted operating income [7][35] Business Line Data and Key Metrics Changes - 42West maintained its dominant position in entertainment PR, achieving significant results at major industry events and expanding into anime and gaming [8][10] - Shore Fire Media had a landmark quarter in music, with clients receiving 26 nominations for the 2025 GRAMMYs [12][13] - The Digital Department secured 137 new talent signings and expanded its BRANDEdit Influencer Showroom to New York Fashion Week [14][15] Market Data and Key Metrics Changes - The women's sports market is identified as significantly undervalued with immense growth potential, leading to the launch of Always Alpha, a management firm dedicated to women's sports [20][21] - The partnership with Loti AI aims to enhance digital protection for clients, addressing the growing need for safeguarding digital presence [27][28] Company Strategy and Development Direction - The company is focusing on cross-selling opportunities across its various business lines and expanding its impact PR division [46][66] - Always Alpha is expected to be a major growth driver, leveraging existing expertise in celebrity management and brand development [22][24] - The partnership with Loti AI positions the company as a leader in ethical AI use in entertainment and marketing [31][63] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving revenue growth and positive adjusted operating income, highlighting the strong performance across all business segments [35][36] - The company anticipates 2025 to be a pivotal year with multiple new ventures and continued growth in influencer marketing and women's sports [68][69] Other Important Information - The company plans to launch a shareholder rewards program in January 2025, offering exclusive access to client products and events [39] - The acquisition of Elle Communications is expected to enhance capabilities in the impact investing industry [10][11] Q&A Session Summary Question: What were the main factors contributing to the revenue growth this quarter? - Management attributed the 24.5% year-over-year revenue growth to multiple factors, including strong performance from special projects and organic growth from legacy PR firms [44][46] Question: Can you highlight new business in the Digital Department? - Management noted strong growth in the talent management division and successful expansions into new markets, with Q4 expected to be particularly strong [47][50] Question: How much revenue was recognized from the Blue Angels content licensing agreement? - The company received over $3.4 million from the Blue Angels project, with $2.6 million recognized as revenue in Q3 2024 [52] Question: What are the priorities for 2025? - Management indicated a focus on organic growth, expanding Always Alpha, and developing new ventures similar to Staple Gin [65][68]

Revenue Growth - For the nine months ended September 30, 2024, total revenue increased to $39,367,418, up from $31,100,867 for the same period in 2023, representing a growth of approximately 26.6%[150] - Revenue from the entertainment publicity and marketing segment for the three months ended September 30, 2024, was $12,682,437, an increase of approximately $2.5 million compared to $10,184,511 in the same period of 2023[150] - Revenue from content production for the nine months ended September 30, 2024, was $3,421,141, attributed to the release of "The Blue Angels" documentary film[151] - The entertainment publicity and marketing segment accounted for 91.3% of total revenue for the nine months ended September 30, 2024, while content production contributed 8.7%[141] - The increase in revenue for the nine months ended September 30, 2024, was primarily driven by growth in 42West and the inclusion of $3.2 million from Special Projects and Elle, which were not present in 2023[150] Acquisitions and Investments - The company completed the acquisition of Special Projects in 2023 and Elle Communications, LLC in July 2024, aiming to enhance its entertainment publicity and marketing services[125] - The company has established an acquisition strategy to identify and acquire complementary businesses in the entertainment sector to create synergistic opportunities[125] - The company plans to enter into additional investments in 2024 under its "Ventures" strategy, focusing on entertainment content, live events, and consumer products[126] Expenses and Profitability - The company’s expenses include direct costs related to film production, payroll and benefits, and legal and professional fees, impacting overall profitability[144][145] - Total expenses for the three months ended September 30, 2024, were $20.8 million, an increase from $12.3 million in the same period of 2023, while for the nine months, expenses rose to $48.5 million from $43.2 million[152] - Direct costs increased by $69.0 thousand for the three months and $2.2 million for the nine months ended September 30, 2024, attributed to increased subsidiary revenues and $1.8 million of capitalized production costs being amortized[152] - Payroll and benefits expenses rose by approximately $1.2 million for the three months and $2.2 million for the nine months ended September 30, 2024, primarily due to the inclusion of Special Projects and Elle payroll expenses[153] - Selling, general, and administrative expenses decreased by approximately $0.3 million for the three months and $0.4 million for the nine months ended September 30, 2024, mainly due to reduced office rent and improved collections[154] - Acquisition costs related to the acquisition of Elle were $0.1 million for the three months and $0.2 million for the nine months ended September 30, 2024[155] Net Loss and Cash Flow - Net loss for the three months ended September 30, 2024, was approximately $8.7 million or ($0.80) per share, compared to a net loss of $3.9 million or ($0.55) per share for the same period in 2023[169] - Net cash used in operating activities was $1.0 million for the nine months ended September 30, 2024, a change of $3.9 million from $4.9 million used in the same period of 2023[172] - Cash flows used in investing activities for the nine months ended September 30, 2024, were $2.5 million, primarily related to notes receivable and the acquisition of Elle[173] - Cash flows provided by financing activities for the nine months ended September 30, 2024, were $2.5 million, mainly from related party loans and an equity line of credit[174] Debt and Financing - Total debt increased to $20.7 million as of September 30, 2024, up from $19.3 million as of December 31, 2023, primarily due to an increase in related party nonconvertible promissory notes[176] - The company expects to meet its debt obligations of approximately $4.9 million over the next twelve months with its current cash position and operational cash generation[177] - The company has outstanding unsecured nonconvertible promissory notes totaling $3,880,000 as of September 30, 2024, with interest rates at 10% per annum[189] - The company entered into a loan agreement with BankUnited, which includes a $5.8 million secured term loan and a $750,000 secured revolving line of credit[200] - As of September 30, 2024, the principal balance under the BKU Term Loan was $4,755,384, down from $5,482,614 as of December 31, 2023[204] - Interest expense related to convertible notes payable was $382,750 for the nine months ended September 30, 2024, compared to $414,880 for the same period in 2023[183] Impairment and Legal Matters - Impairment of goodwill was $6.5 million for the three months and $6.7 million for the nine months ended September 30, 2024, due to declines in market capitalization and lack of positive market response[158] - The company has filed a lawsuit against the seller of Socialyte regarding the Socialyte Purchase Agreement, which may impact future cash flows[193] Forward-Looking Statements and Risks - The company emphasizes that forward-looking statements are based on assumptions and assessments of historical trends and current conditions[210] - Risks that could lead to actual results differing from forward-looking statements are detailed in the Annual Report on Form 10-K for the fiscal year ended December 31, 2023[212] - The company does not guarantee future performance and acknowledges that many risks are outside of its control[211]