Alliance 2026 Q1 Earnings Record Net Income Surges 1129.2%

Alliance Entertainment (AENT) reported fiscal 2026 Q1 earnings on Nov 12, 2025, with revenue rising 10.9% to $253.97 million and net income hitting a four-year high of $4.88 million. The results exceeded expectations, driven by strong performance in physical media and collectibles, while the company maintained guidance for 4.8% adjusted EBITDA margins.

Revenue

Physical media sales, including exclusive Paramount Pictures distribution and premium 4K/SteelBook formats, fueled the 11% year-over-year revenue growth to $254 million. Collectibles revenue surged 32% to $6.4 million, propelled by Handmade by Robots’ expanded retail placements and new product launches. Vinyl sales and movie titles also contributed significantly, with vinyl revenue reaching $75.8 million and movie sales at $84 million.

Earnings/Net Income

Alliance’s net income soared to $4.88 million in Q1 2026, a 1129.2% increase from $397,000 in the prior-year period. Earnings per share (EPS) jumped 900% to $0.10, reflecting improved gross margins (14.6%) and cost discipline. The 1129.2% surge in net income highlights Alliance’s improved profitability and operational efficiency.

Price Action

The stock price edged down 1.78% on the latest trading day but gained 3.43% month-to-date.

Post-Earnings Price Action Review

A strategy of buying Alliance shares post-earnings drops and holding for 30 days showed mixed results over three years. While the approach yielded a 5.2% total return and 7.3% annualized return, it faced volatility, including a 15.2% drawdown in Q2 2024. Reversion opportunities, like a 10.1% rebound in Q3 2023, offset some risks, but the strategy exposed investors to significant swings.

CEO Commentary

CEO Jeffrey Walker emphasized 11% revenue growth and 259% adjusted EBITDA increase ($12.2 million), driven by AI tools and automation. He highlighted Handmade by Robots’ scalability and new collectible launches, while outlining strategic priorities: expanding AI adoption (HubSpot, Microsoft Co-Pilot), securing premium content partnerships, and pursuing M&A in collectibles and e-commerce.

Guidance

Alliance reaffirmed 4.8% adjusted EBITDA margins for fiscal 2026, supported by automation, higher-value content, and disciplined cost management. The company also secured a $120 million credit facility, boosting liquidity to $61 million and reducing borrowing costs by 250 bps.

Additional News

Alliance added two independent directors, Dmitry Kozko and Sheila Bangalore, to bolster AI and governance expertise. The company signed a distribution agreement with Virgin Music Group, expanding its exclusive content portfolio. Additionally, it secured a $120 million senior secured revolver with Bank of America, enhancing liquidity for inventory and growth initiatives.