TOON earnings analysis
What we found in TOON's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Kartoon Studios’ Q2 revenue declined 43.7% year over year to $5.8 million, while its operating loss widened to $3.4 million from $3.2 million, implying an operating margin of approximately negative 58.6%. The $39.2 million settlement receipt improved near-term liquidity but was explicitly non-recurring and non-operating. High customer concentration, continuing operating losses, and newly highlighted tariff and COPPA exposures outweigh the litigation settlement and favorable trial verdict.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue Fell 44% Year Over Year
- Second-quarter revenue was $5.8 million, down $4.5 million, or 43.7%, from $10.3 million in the prior-year period.
- $39.2M Settlement Receipt Boosted Liquidity
- The company received $39.2 million in cash during June 2026 from the court-approved settlement, equal to 50% of the approximately $78.5 million aggregate settlement amount.
- Non-Settling Defendants Won Trial Verdict
- The securities litigation trial against the two non-settling defendants concluded with a jury verdict in their favor and no damages awarded.
- No Material Control Weakness Identified
- Management concluded that disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2026, and reported no material change in internal control over financial reporting during the quarter.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Operating Losses Persist Despite Settlement Cash
- The company incurred a $3.4 million net loss from operations on $5.8 million of revenue in the quarter, compared with a $3.2 million operating loss on $10.3 million of revenue in the prior-year period. Management stated that the $39.2 million settlement receipt was non-recurring and non-operating.
- Revenue and Receivables Highly Concentrated
- Three customers each represented more than 10% of consolidated revenue and together accounted for 74.2% of quarterly revenue; the same three customers represented 69.6% of total accounts receivable at June 30, 2026.
- Tariff and COPPA Compliance Exposure
- The company added risks from evolving trade restrictions affecting its Canadian and Asian production operations, including tariffs imposed on goods from approximately 60 trading partners in July 2026. It also stated that COPPA amendments became fully enforceable on April 22, 2026, potentially increasing compliance costs or constraining advertising revenue.
What they reported.
What the company itself reported, taken out of the document.
- Operating margin
- -58.6%
What they said about what is next.
No quantitative forward guidance was provided in the filing; outlook was not specified.
The filing reads worse than the one before it.
What came before.
- 10-Q · May 15, 2026
- TOON reported a 24% decline in revenue to $7.2 million in Q4 2026 compared to $9.5 million in the same period last year, largely driven by a 38% drop in production services. The company recorded an EPS of -0.08,…
- 10-K · March 31, 2026
- Kartoon Studios positions itself as a global children’s content and brand-management company emphasizing owned IP, production services (Mainframe Studios), distribution (Kartoon Channel!, Ameba TV, Channel Frederator)…
- 10-Q · August 14, 2025
- Kartoon Studios reported quarterly revenue of $10.279 million (Q2 2025), up $1.895 million or ~22.6% versus Q2 2024 ($8.384M) and up $0.775 million versus Q1 2025 ($9.504M). Operating loss narrowed to $(3.215) million…
- 10-Q · May 15, 2025
- Kartoon Studios reported quarterly revenue of $9,504,000 (up $3,426,000 or 56.4% YoY) and a net loss of $6,591,000, or $(0.14) per share, for the three months ended March 31, 2025. Production Services drove the revenue…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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