0001493152-26-006391
SEC filingAlliance Entertainment Holding Corporation (AENT) reported solid financial results for the second quarter of fiscal year 2026, with net revenues reaching $368.7 million. The company demonstrated strong operational efficiency, achieving an operating income of $17.3 million and a net income of $9.4 million for the period ending December 31, 2025. Gross profit stood at $47.1 million, resulting in a gross margin of 12.8%. Despite profitability, the company faced liquidity challenges, reporting negative operating cash flow of $13.8 million, primarily driven by significant increases in trade receivables ($54.7 million) and inventory ($15.0 million). The balance sheet reflects total assets of $434.1 million against total liabilities of $316.5 million, yielding stockholders’ equity of $117.6 million. The company maintains a working capital position of $74.1 million. No prior period comparative figures were provided in the current data, limiting period-over-period performance analysis.
For the fiscal second quarter ending December 31, 2025, Alliance Entertainment Holding Corporation generated net revenues of $368.7 million. The cost of revenues (excluding depreciation and amortization) was $321.6 million, resulting in a gross profit of $47.1 million. Total operating expenses amounted to $29.8 million, which included distribution and fulfillment costs of $12.1 million and selling, general, and administrative expenses of $16.6 million. Consequently, the company reported an operating income of $17.3 million. After accounting for interest expense of $3.5 million and other non-operating items, the pre-tax income was $13.0 million. A tax expense of $3.6 million resulted in a final net income of $9.4 million. The effective tax rate for the period was approximately 27.7%.
The filing did not provide a breakdown of revenue by specific business segments, geographic regions, or product categories. Consequently, a detailed analysis of revenue drivers or segment performance cannot be determined from the provided data. The revenue figure of $368.7 million represents the consolidated top-line performance for the quarter. Without comparative prior period data, growth trends or seasonal fluctuations cannot be assessed. Investors should refer to the MD&A section of the full filing for potential narrative explanations regarding revenue sources and market conditions impacting the entertainment distribution sector.
The company achieved a gross margin of 12.8% ($47.1M / $368.7M) and an operating margin of 4.7% ($17.3M / $368.7M). Operating expenses were well-controlled relative to revenue, with SG&A representing 4.5% of revenue. Interest expenses of $3.5 million and a change in fair value of warrants ($850K) impacted the bottom line, creating a gap between operating income and net income. The net profit margin stood at 2.5%. Depreciation and amortization charges totaled $1.3 million on the income statement, while cash flow adjustments showed higher non-cash charges of $2.6 million related to depreciation and amortization.
The company reported negative operating cash flow of $13.8 million, a significant divergence from net income. This was primarily driven by substantial working capital outflows: trade receivables increased by $54.7 million and inventory grew by $15.0 million, suggesting a potential timing mismatch in collections or a strategic inventory build-up. Accounts payable increased by $32.7 million, partially offsetting the asset growth. Free cash flow was approximately -$14.5 million (Operating Cash Flow -$13.8M minus CapEx $712K). On the balance sheet, cash stood at $1.4 million. Total debt included $84.5 million on the revolving credit facility and $10.0 million in subordinated shareholder loans. The current ratio is 1.35 ($286.7M / $212.6M).
The provided XBRL data and document content do not contain forward-looking statements, management guidance, or strategic priorities regarding future operations. No specific risk factors were detailed in the extracted financial data. The significant working capital usage warrants monitoring in future filings to determine if it relates to seasonal demand patterns or structural changes in the business cycle.