10-Q · May 14, 2026
Alliance Entertainment Holding Corporation reported a robust increase in net revenues, totaling $258.2 million for the three months ended March 31, 2026, marking a 21.2% rise compared to the same quarter last year.…
Earnings analysis · 10-K
AENT earnings analysis
Filed September 10, 2026 · Our reading of the company's report
The latest report
Alliance delivered solid top-line growth and improved gross margin in FY2026, led by physical media, exclusive studio relationships and collectibles. However, earnings per diluted share declined to $0.26 from $0.30,…
Read full summary
Alliance delivered solid top-line growth and improved gross margin in FY2026, led by physical media, exclusive studio relationships and collectibles. However, earnings per diluted share declined to $0.26 from $0.30, operating margin fell to 2.4%, and operating cash flow turned negative as inventory and receivables absorbed cash. The refinancing lowered interest costs and extended maturity, but the company remains financially sensitive given $74.3 million of revolver borrowings, only $0.8 million of cash, and substantial customer and product-cycle concentration.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $0.26
- Segment
- One reportable segment: distribution of pre-recorded music, video movies, video games, related accessories and merchandising; FY2026 revenue $1.149 billion.
What stood out
-
Revenue growth with gross-margin expansion
Net revenue increased 8%, from $1.063 billion in FY2025 to $1.149 billion in FY2026. Gross margin improved 80 basis points to 13.3%, supported by stronger physical movie and collectibles margins, product mix and lower wholesale freight costs.
-
Broad multi-channel distribution moat
The company operates across wholesale, direct-to-consumer and e-commerce channels, sells in more than 75 countries, and maintains in-stock inventory of more than 340,000 SKUs. Its DTC platform represented approximately 34% of FY2026 gross revenue, while wholesale grew faster than DTC.
-
Physical media offset gaming weakness
Physical media was the primary growth engine: vinyl revenue increased 13% to $383 million, CDs increased 25% to $156 million, and physical movie revenue increased 22% to $339 million. These gains more than offset gaming revenue declining 27% to $187 million.
-
Exclusive content relationships expanding
Alliance added an exclusive physical-media distribution agreement with Amazon MGM Studios in January 2026, following its Paramount agreement entered in January 2025. Management states it has exclusive distribution rights for nearly 200 film studios, music labels and other content providers.
-
Technology-led collectibles roadmap
The Endstate acquisition was completed on December 31, 2025, for total consideration of $7.95 million, including $5.5 million of contingent consideration. The transaction provides NFC-enabled authentication technology for the planned Alliance Authentic authenticated collectibles marketplace.
-
Refinancing reduced cash interest burden
The company refinanced with a $120 million Bank of America revolving facility maturing October 1, 2030. Interest expense declined 28% to $7.6 million as the average effective interest rate fell from 9.2% to 6.1%, despite the average revolver balance increasing from $77.5 million to $78.8 million.
What to watch
-
Growth is consuming working capital
Operating cash flow reversed from $26.8 million provided in FY2025 to $1.7 million used in FY2026. Inventory increased $23.8 million and trade receivables increased $17.5 million, while cash on hand was only $0.8 million at June 30, 2026.
-
Vendor insolvency pressured profitability
The company recorded a new $7.8 million non-cash loss after Tastemakers ceased operations and could not repay a historical rebate receivable. Total operating expenses rose 22% and operating margin declined from 2.8% to 2.4%.
-
Leverage and covenant sensitivity
The company had $74.3 million outstanding and approximately $45.7 million of availability under its $120 million secured revolver at June 30, 2026. The facility requires a trailing-twelve-month fixed-charge coverage ratio of at least 1.0 to 1.0 and is secured by substantially all company and subsidiary assets.
-
Gaming normalization remains a headwind
Gaming revenue fell $68 million, or 27%, to $187 million as the prior year benefited from Nintendo Switch 2 hardware demand; average selling price declined 24.6% and unit volume declined 2.6%. A weaker hardware-release cycle could continue to pressure mix and sales.
-
Tariff exposure could re-emerge
The company continues to face tariff and trade-policy uncertainty. Although FY2026 exposure was not material and estimated IEEPA tariff refunds were approximately $0.2 million, new or higher tariffs could increase cost of sales, reduce gross margin and disrupt supply chains.
-
Greater customer concentration
Customer concentration increased materially for one customer: the largest customer represented 20.8% of FY2026 revenue versus 14.5% in FY2025 and 29.3% of year-end receivables. Loss of, or reduced purchases by, a major customer could materially affect revenue and liquidity.
Management's outlook
The 10-K provides no quantitative FY2027 revenue or EPS guidance; annual outlook was deferred to the earnings press release or call.
Earlier filings 4
10-Q · February 12, 2026
Alliance reported net revenues of $368,712,000 in Q2 FY2026 (quarter ended December 31, 2025), down from $393,672,000 a year earlier but up sequentially versus the prior quarter. Gross margin expanded to 12.8% and…
10-Q · November 12, 2025
Alliance reported net revenues of $253,974,000 for the three months ended September 30, 2025, up $24,984,000 (≈10.9%) versus the prior-year quarter and drove margin expansion: gross profit increased to $37,181,000 and…
10-K · September 10, 2025
Alliance Entertainment positions itself as a scaled, multi-channel distributor of physical media and collectibles built on three pillars: Service, Selection and Technology, and is pushing into higher-margin collectibles…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.