Dolphin Entertainment Q3 2026 Earnings Call Transcript

Dolphin Entertainment (NASDAQ:DLPN) reported third-quarter financial results on Tuesday. The transcript from the company’s third-quarter earnings call has been provided below.

This transcript is brought to you by Benzinga APIs. For real-time access to our entire catalog, please visit https://www.benzinga.com/apis/ for a consultation.

View the webcast at https://www.webcaster5.com/Webcast/Page/2225/54781

Summary

Dolphin Entertainment reported its highest quarterly revenue ever at $16 million, marking an 8.3% increase from the previous year, with a notable 9.7% organic growth excluding the Always Alpha spin-out.

The company achieved a net income of $200,000, reversing a net loss of $400,000 from the same period last year, while adjusted EBITDA increased by 42.9% to $1.6 million.

Dolphin Entertainment’s strategic focus on cross-selling services among its agencies is driving significant growth, with plans to leverage this further in the future.

Operational highlights included successes from 42West at the Toronto International Film Festival and impressive growth in the Digital Department’s influencer marketing roster.

The future outlook remains positive, with expectations of improved operating results and significant free cash flow savings from expiring leases and a maturing bank loan.

CEO Bill O’Dowd emphasized continued strategic initiatives, including the development of Gravitour Studios’ first feature film and exploring further ventures with Dealmaker.

Full Transcript

OPERATOR

Good afternoon and welcome to the Dolphin Entertainment third quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode, and we will open the floor for your questions after the presentation. If you wish to join the queue to ask a question at any time, you can press star 1. Should you wish to remove yourself from the queue, press star 2. It is now my pleasure to turn over the floor to your host, James Carbonaro. The floor is yours.

James Carbonaro (Investor Relations)

Thank you, operator, and once again good afternoon and welcome everyone. Before we begin, I’d like to remind everyone that during the course of this conference call, management may make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and beliefs and involve risks and uncertainties that could cause actual results to differ materially.

Please refer to the forward-looking statements contained in the earnings release published today, as well as the most recent SEC filings and reports. During the call, management will also discuss non-GAAP financial measures, including adjusted EBITDA and adjusted EPS. Reconciliations to the most comparable GAAP measures are provided in the earnings release. Now I would like to turn the call over to Bill O’Dowd, Chief Executive Officer of Dolphin. Bill, please proceed.

William ODowd IV (Chief Executive Officer)

Thanks, James, and welcome, everyone. As always, I’ll walk through the highlights, then Mirta will take you through the financials before we open it up for questions. Starting off, I’ll highlight that we had a very, very strong quarter. Third quarter revenue was $16 million, the highest quarterly revenue in Dolphin’s history. This is even higher than last year’s Q4 or Q1 in 2024 when we reported $3.4 million of revenue from our Blue Angels documentary with IMAX. Excitingly, this is all organic growth and actually would have been 9.7% growth year over year, excluding Always Alpha, which we spun out in November of 2025.

And when we spoke in August, we said to expect a real step up in profitability in the third quarter. That’s exactly what happened. Net income was $200,000 or $0.02 per share compared to a net loss of $400,000 a year ago. Adjusted EBITDA was up almost 43% year over year to $1.6 million or $0.12 per basic share versus $1.1 million a year ago. We believe that our large non-cash amortization expenses often obscure our cash flow results, which is why we prefer to measure ourselves using adjusted EBITDA versus net income.

We built Dolphin to grow steadily and to grow profits faster than revenue, and this quarter shows it. Revenue grew more than 8%, well ahead of growth in our core operating costs. We expect continued improved operating results in the quarters ahead, especially as we get stronger each quarter in cross-selling services between our various agencies. We expect to continue to be able to leverage our horizontal scale across the major sectors of entertainment and our vertical scale in the various disciplines of earned media.

Then there are the free cash flow drivers that don’t require any growth. The largest of our New York and Los Angeles leases expire in the second half of next year, from which we expect to save more than $1 million a year. Our primary bank term loan matures in September of 2028, which frees up roughly $2.2 million a year in principal and interest. And with approximately $127 million of NOLs, almost all of those savings should flow to the bottom line.

On an operational basis, our agencies had a busy quarter. A few highlights: the Digital Department, our influencer marketing agency, has grown its roster to more than 380 creators—I think it actually may be over 400 now—from about 250 a year ago, grown its team by 45%, and started teams in Dallas and Boston. We expect the Digital Department to be a strong organic growth driver for us for years to come in both revenues and profits. 42West brought 16 titles to the Toronto International Film Festival, including the People’s Choice documentary winner Darlene Love: I Know Where I’ve Been.

Also, a special shout-out to the movie marketing teams at 42West that had a huge weekend. Godzilla Minus One was the number one film at the box office, reaching $31 million, which makes it the largest opening weekend in history for a non-English-language live-action film. Incredible, and all done with a marketing budget that is a fraction of the normal size. Congrats to everyone at 42West that worked on that title as well as Ramayana this weekend, the blockbuster from India that is the highest-budgeted movie of all time from India, a country with a deep cinematic history.

Shore Fire client Angelique Kidjo became the first African musician to receive a star on the Hollywood Walk of Fame, and Shore Fire is supporting both the John Coltrane and Miles Davis centennials. The estates business of Shore Fire is really doing well and we anticipate continued growth in that vertical next year. Also, it’s that time of year again when Grammy nominations come out this coming weekend, and Shore Fire always gets more than their fair share.

I’m sure we’ll have another great announcement to make next week on that topic. Moving along, The Door was named U.S. agency for Kewpie, the extremely popular Japanese condiment, which is a nice win to add to our expanding roster of Asian clients across all of our agencies—oh, reminding us of Godzilla and Ramayana from a few seconds ago. Also, The Door’s Disrupt division ran CultureCon for the fifth straight year, and Disrupt is on a great streak of adding influential clients to its roster. To finish a roundup of our PR agencies, L was named agency for The Longest Table, a really great concept to bring communities together.

And last but not least, Special Projects was, as usual, all over New York Fashion Week and at Academy Museum Gala week with partners like Moncler, Chanel, Fendi, and Cartier. To say they are busy is definitely an understatement. At Gravitour Studios, our studio for creator-led films that we announced at Cannes Lions in June, we set Kristen Brancaccio to direct our first feature, Crush Party. Kristen directed Issa Rae’s vertical series Screen Time, which now has more than 580 million views. This is the most-watched English-language microdrama on TikTok. Again, 580 million views. Kristen is exactly the kind of creator-native filmmaker we built Gravitour to support. Casting is now underway, and once our principal cast is locked, we’ll set a start date.

We anticipate filming in the first half of next year, and I’ll be at the American Film Market later this week meeting with theatrical distributors and co-financing partners along with the head of Dolphin Films, Emerson Davis. We also expect 2027 to be a big year for our ventures. We’ve identified our next two ventures and expect at least one to be in market in the first quarter of 2027. We also anticipate two more during the year, for a total of four in 2027. We believe that the majority of our ventures going forward will utilize our strategic partnership with Dealmaker. You may recall that we announced this partnership in February and deliberately took our time, spending the first several months evaluating deals together to find the ones where their platform and our marketing fit best.

That work has paid off. While the timing of announcing these ventures is frequently out of our control, as mentioned just a second ago, we expect at least one to be in market in the first quarter of next year. We’ll keep you updated before we speak again in March. So that’s the story. We believe we are building a core business that grows steadily and is getting more profitable, with a clear path to significantly better free cash flow and ventures on top that give us real upside. Finally, I’ve continued buying our stock every week under my 10b5-1 plan since August of 2024, one month after making our last acquisition, and including shares bought outside of the 10b5-1 plan, I have bought more than 520,000 shares of common stock and currently own over 5% of the common shares outstanding.

With that, I’ll turn the call over to Mirta Negrini, our Chief Financial Officer.

Mirta Negrini (Chief Financial Officer)

Thank you, Bill, and good afternoon, everyone. I will now review our 2026 third quarter financial results. Total revenue for the three months ended September 30, 2026 was a record $16 million, an increase of 8.3% from $14.8 million in the same quarter of the prior year. If we exclude Always Alpha from the 2025 numbers, revenue increased by 9%. For the nine months ended September 30, 2026, total revenue was $43.3 million, an increase of 5.4% from $41.1 million for the same period of prior year, or a 6.5% increase if we exclude Always Alpha from the 2025 numbers. Income from operations was approximately $800,000 for the third quarter of 2026, an increase of 167% from $300,000 for the same period in 2025. Operating expenses for Q3 2026 were $15.2 million compared to $14.5 million in Q3 2025.

Legal and professional fees were $1 million and included approximately $400,000 of litigation-related fees. Depreciation and amortization was $500,000. Net income for Q3 2026 was $200,000 compared to a net loss of $400,000 in Q3 2025. Basic and diluted earnings per share for Q3 2026 was $0.02 based on approximately 13.0 million and 13.1 million weighted average shares outstanding, respectively, compared to basic and diluted loss per share of $0.03 in Q3 2025 based on approximately 11.8 million weighted average shares outstanding.

Turning to adjusted EBITDA, after adding back non-cash and other one-time items, our adjusted EBITDA for the third quarter of 2026 was approximately $1.6 million, an increase of 42.9% from approximately $1.1 million in the third quarter of 2025. For the nine months ended September 30, 2026, adjusted EBITDA was approximately $1.4 million, an increase of 24.2% from approximately $1.1 million in the same period of prior year. Adjusted EBITDA basic earnings per share for Q3 2026 was $0.12 based on approximately 13.0 million weighted average shares outstanding, and fully diluted earnings per share was $0.08 based on approximately 20.9 million weighted average shares outstanding. This compares to $0.09 basic earnings per share based on approximately 12.7 million weighted average shares and $0.07 fully diluted earnings per share based on approximately 19.5 million weighted average shares outstanding for Q3 of 2025.

Our cash and cash equivalents as of September 30, 2026 were $8.1 million, compared to $7.7 million as of June 30, 2026 and $8.8 million as of December 31, 2025. With that, I’ll turn it back to the operator to open the floor for questions. Operator, would you please poll for questions?

OPERATOR

Thank you. The floor is now open for questions. If you wish to join the queue to ask a question at this time, please press star 1. We do ask if listening on speakerphone today that you please pick up your handset while asking your question to provide optimal sound quality. Once again, please press star 1 on your phone at this time to join the queue to ask a question. Please hold a moment while we poll for questions. Our first questioner is Derek Greenberg with Maxim.

Derek Greenberg (Analyst)

Hey guys, congrats on the quarter. I wanted to start off just with asking about the Gravitour Studios, the film you have coming out. You talked a little bit about it in your prepared remarks. I was wondering maybe if you could just provide a little more color on that upcoming release—if you expect that to be potentially released in ’27—and just how you think about potential budgeting and your expectation going.

William ODowd IV (Chief Executive Officer)

Sure, sure. And thanks, Derek. It’s always fun to do earnings calls when you have these results, right. With respect to Crush Party, in terms of a release date for it, we’re probably aiming more for Q1 of 2028 for it to come out because it’s set around Valentine’s Day, as the name may or may not imply for a thriller, right. And so we’d like to film it in the first half of next year and have it readied for a Q1 release in 2028. Budget on it should be in the $1.5 million range.

It’s a low-budget film, as Obsession was or other comparable films in terms of scope were in the past year. And yeah, we’re excited for it. We think we’ve got the right director for sure with Kristen.

Derek Greenberg (Analyst)

Great. That’s super exciting. And then just on that budget, could you remind us how much—maybe just with the structure you have through the joint venture—how much you’d be contributing versus partners?

William ODowd IV (Chief Executive Officer)

Yeah. We will look into, in some of the meetings I’m taking this week, whether—there are scenarios where we would put up none of the budget and partner with certain studio distributors, or put up half the budget, similar to our IMAX deal that we did with Blue Angels. And we’ll weigh which ownership structure—you know, there are trade-offs of how much back-end profit you get to participate in, depending on which deal you take. And we’ll just make a decision based on that.

Derek Greenberg (Analyst)

That’s really helpful. And then on Dealmaker, it sounds like there’s good progress there. Just in terms of thinking about that target for next year—you mentioned you already have two identified—the other two, is that something further along in the pipeline or just additional opportunities maybe that can roll in? And then in terms of marketing those ventures, is there kind of a rough framework of the deal sizing you’re looking to raise at launch, or any other way we could think about the potential deals to be announced?

William ODowd IV (Chief Executive Officer)

Yeah. Well, let’s see. First on the number of ventures, I think one of them that we were hoping we’d be able to be in market by the end of this year is rolling into Q1, we think. So that’s how we’re giving visibility to when we think—or how we believe—we’ve identified one that should be in market in Q1. But we know the first two, which is exciting for us as we sit here today. The confidence in having two more before the end of next year is because, of course, we’re constantly evaluating ventures.

There are two more already that we like quite a bit that, if our diligence comes back positive over the next several weeks, then we feel we may already know by the time we get back on the 10-K call in March what our year’s already shaped up to be. We also are seeing our pipeline development accelerate as we just launched this partnership in February, spent 90 days plus just actually sharing information back and forth on deals that we each like—Dealmaker from the fundraising capability side, Dolphin from the ability to have our marketing make a difference to the success of the company after it’s funded—and the partnership’s only strengthening. We’re getting more clarity on what each of us are good at, and the deal flow is just increasing.

So we’re very excited for that. And Dealmaker just makes a great partner.

Derek Greenberg (Analyst)

Yeah, great. And then for the businesses you have currently, could you just talk more about the cross-selling you have between divisions and how that’s been?

William ODowd IV (Chief Executive Officer)

Sorry—absolutely. I was just laughing because it’s doing so well for us this year, and I’d be happy to brag a little bit about the team that’s really across all the agencies. We call this community—it’s led by Marilyn Laverty and the team that she’s assembled. Andre Evanson out of our Nashville office does a great job coordinating these calls. And I believe that we’re talking about seven figures of cross-selling, which—it’s a meaningful impact to both our top and bottom line.

In previous years we’ve talked about how PR and influencer marketing are really the peanut butter and jelly of earned media these days. It’s very hard to imagine doing an earned media campaign without one or the other. And our companies are working very well together. But it’s more than just combining one of our PR firms with the Digital Department on the influencer side. Our PR firms are working together. We’re sharing clients; we’re co-representing clients.

You know, not to get ahead of a couple of press releases we’ll have in the weeks ahead—some very exciting clients from Japan that may actually utilize the services of a 42West and The Door, or Shore Fire and The Door. We’re also co-repping clients in the U.S.—I’m thinking of some between Shore Fire and The Door again, including a location in Los Angeles where we’re going to hold our LA office holiday party this year. So I really am grateful to the work that our senior leadership has been doing to really cross-sell services and want to work together. That’s that spirit of collaboration, that culture that I think the leaders at each company have really fostered, both within their own agency but across agency. We just had one of my three favorite weeks of the year when we get all of our senior leaders together in one city—happened to be in Los Angeles in October.

You know, to see 25 of our leaders in the same room across all the companies and the buzz and excitement that comes from that, it’s just invigorating. And so that cross-selling is what drives you to, apples to apples, 9.7% year-over-year organic growth on the marketing agency side, and we expect it to continue. And you can see—just talking numbers for a second—on our core business, we put a line in there that said we built Dolphin to have our profits grow faster than our revenue. Of course. Well, you can see it through nine months, right? I mean, we’re tracking well ahead in revenue, but our adjusted EBITDA is tracking over 24% year over year.

And last year was a big jump from the year before. So we’re excited about what we’re doing, and it’s really a function of the cross-selling—the whole idea of putting this group together.

Derek Greenberg (Analyst)

That’s great to hear. I really appreciate the color on that. And then, so it sounds like you’re expecting the same kind of seasonality we saw last year in terms of 4Q versus 3Q and just how results typically strengthen each quarter of the year. Is that the right way to think about it?

William ODowd IV (Chief Executive Officer)

Yeah, it is. You know, I wish we had better answers for Q1. It gets better every year—Q1 over the previous year’s Q1—but, you know, it’s always going to be our worst quarter. And just given the seasonality of especially the influencer business, but, you know, others of our agencies, Q1 is definitely the worst quarter of the year. Q2 gets better, Q3 gets better, and then Q4 is typically our best quarter. You know, this year’s Q3 was so strong. I mean, you see it, Derek, in the expectations you set with the coverage at Maxim. I mean, basically, if I had a tagline for this call, our Q3 acted like a Q4. You know, we did record revenue and we had really, really strong adjusted EBITDA. But we do—yes, we expect to get better each quarter of every year. And Q4, as I sit here today, is looking, you know, strong. So we’re hopeful that that trend will continue.

Derek Greenberg (Analyst)

That’s great. And then I wanted to ask about—you called out litigation expenses, it’s around $400,000. I was wondering just how long do you expect maybe litigation expenses to be elevated for? Is that something you see coming off in the next couple of quarters, or do you think that’s kind of like ordinary course of business that we should kind of consistently factor in?

William ODowd IV (Chief Executive Officer)

Well, it’s driven by one matter and it’s very difficult to predict when the matter will be over. We’re very confident in our position and we really like our chances to prevail, should it go to trial, and we’ll just have to see how it plays out. No one likes to be in the situation we’re in, where we felt like we had no choice but to bring the lawsuit that we brought. But, you know, we’re in it now and we’ve waited so long for, you know, a successful outcome that we’ll just ride it out as long as we need to, and we’re prepared to do it, and we’ll just see how it plays out in the quarters ahead.

Derek Greenberg (Analyst)

Yeah, that makes sense. Last one for me, just on the newer initiatives—you’d already touched on the two big ones with Dealmaker and Gravitour—but I was wondering also the Copper Books partnership you have, just how that’s progressing, if you’re seeing interest in the pipeline, or any other comments to share on that in particular.

William ODowd IV (Chief Executive Officer)

Yeah, I’m sorry, I missed which area you were asking about, Derek.

Derek Greenberg (Analyst)

Oh yeah, the Copper Books—Simon & Schuster distribution.

William ODowd IV (Chief Executive Officer)

Yeah, that is moving along. We expect to have a nice announcement in Q1 related to books in general with Dolphin. Each of our companies do represent authors, as I think I mentioned on a previous earnings call, and have really strong expertise in marketing books in their area or even just generally. So it was a natural extension for us. It’s also really a business development tool. Our Copper Books partnership is tremendous. We really, as I mentioned on previous calls, are a fan of the founder Ali Trowbridge—just a lovely person and high-ethical businesswoman.

So that’s always nice to be involved with someone like that in our business. I’m just a little hesitant to say much more because I know, you know, we’re excited about something we expect to be able to announce in Q1 and maybe be able to talk a little bit more about it in our 10-K call.

Derek Greenberg (Analyst)

Got it. Sounds good. Well, thanks again for taking my questions and congrats once more on the quarter.

William ODowd IV (Chief Executive Officer)

Thank you. Yeah, thank you.

OPERATOR

With no remaining questions in the queue, I turn the call back over to your hosts for any closing remarks.

William ODowd IV (Chief Executive Officer)

Thank you. And I know we have a large number on the call today. It’s exciting to have a good quarter, any one of the four quarters. It’s particularly great to have a great Q3, since it’s our longest stretch before we get to speak to everyone again at the end of March, four and a half months from now. I’m feeling very bullish about the collaboration—that theme we hit with some of Derek’s questions about the cross-selling of the services and the ways that the companies are working together.

We built a group of elite marketing companies. They’re all very, very good in their own verticals, but when they come together and cross-sell their services and co-rep clients, they can really move the needle, and that growth is just going to continue and it gives us a solid foundation for what we want to have happen over the next couple of years. And as I mentioned too, since I won’t be speaking for a while: by the time we speak again, it’s hard to believe we’re going to be closer to only a year and a half left on our acquisition loan that we took out to keep buying up to this group. The free cash flow that that will free up for us, along with the leases—which will be within six months of expiring by the time we speak again—will just be incredible. And that, of course—that total of what we expect at $3 million of free cash flow a year—involves zero growth, zero cross-selling, just the renegotiation of leases in New York and LA, as well as just paying off the bank loan.

So we’re excited. We’re getting very, very close to the end of the journey of paying for all the acquisitions, and we’re seeing what these acquisitions can do when they work together. So, shout-out to those of the Dolphins that are on this call—congrats again to 42West for a great weekend at the box office, and anticipating a shout-out to Shore Fire for a great Grammy nominations weekend this coming weekend. And we’ll talk to everybody again in March.

OPERATOR

Thank you. This does conclude today’s conference call. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company’s SEC filings and official press releases. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.