GNUS - Earnings call transcript Q2 2022

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Operator

Ladies and gentlemen. Thank you for standing by. Welcome to the Genius Brands International Second Quarter 2022 Business Update Call. At this time, all participants are in a listen-only mode. I would now like to turn the call over to David Waldman, Investor Relations. ahead. go please David,

David Waldman

afternoon, Financial welcome Conference Results Good Second Call. Genius Quarter XXXX and everyone you. to and Brands' Thank Investor Update

Chairman morning. CEO of On is The company Chief us with press WOW!. Officer; and release a Heyward, this Financial Hirsch, the Denton, CEO; Michael this and issued Bob call Andy afternoon

the at gnusbrands.com. If you copy, a website received you can company's have not view it on

this may, will, belief predict, intent, similar as such Words estimate, intend to or call anticipate, the expressions Brands' believe, turn statements CEO, to or continue, Andy current laws. remind the you project, or would I federal plan, I statements might, should, that Before forward-looking expectations Genius regarding expect, like certain of are statements constitute within forecast, call Heyward, meaning over the securities statements. forward-looking

the a and date whether the as on not. with company's to based While be disclaims information statements events or us the obligation annual Factors new section reported. Company except could not are believes various those which subsequent statements The alter actual Form set upon the otherwise, to of required or by are as forward-looking are XX-K uncertainties, risk forth expressly current statements risks differ the any recent of results information, on and forward-looking the factors this Securities Company reliance Risk report law. Thus, and most update to assumptions, Commission, on filings company's result Exchange in future subject materially from including estimates reasonable, should undue and statements are these of any available call. based forward-looking and These such placed on

the questions go have over company to Brands prepared turn number Andy the in of that CEO, Genius to ahead now remarks, anticipation their field will call. I'd the Andy. Heyward. Following call Please investors like submitted the of

Andy Heyward

David you, and Thank good morning, everyone.

record revenues significant positive We and now we more we which growth in-house of flow, and very sustained now with those line for profitability. $XX continue Genius recurring currently expect developed, top was acquired growth quarter second assets Brands. to cash to million, lead being strong experienced The The accelerate. and will believe and

with gone last over with this New quarter, York, a we've and in a Jersey, company Munich of from Los employees offices XXX company to XXX New London. employees, Toronto, Vancouver, During of to We've Kartoon catalog license animated XXX children's Channel! children's animated episodes from under to now grown over episodes our or have the over system. owned Angeles, programs and X,XXX XX,XXX controlled episodes

XXX $XXX to significant Kartoon committed XX going over a US Channel! seen from years streaming from three to via last content at well the in the half-hour Europe, the as We've and satellite, episodes terrestrial, XX million next producing being gone company year and We footprint Asia. have distribution this contracts just production Africa, Latin robust forward as our and episodes a America in producing with and of East, over beyond. time now of over grown territories Middle pipeline worldwide with cable for

the and television additional Disney and with Kartoon licensed are and growing an the on based revenues food licensed Chef children. WOW! Secret of acquisition $XXX and designed to but seen show and approximately animated on on worldwide generates deal partner terrestrial feature children's now Puck transformational healthy Company XX-year Channel! broadcasters productions during food separate series and products Netflix, opportunity this in HBO for programs are to with experiences Marvel products Lee Media, conversations Walt from world-renowned million YouTube, from Walt a healthy satellite we with partnered Paramount+, additionally quarter, for the license completed and now We material philanthropist opportunities. signed our Wolfgang Puck's films, Puck Disney worldwide in Studios Also Amazon, we Our kitchen and not and chef and worldwide. Unlimited only the on similar in to Peacock, are and series and Company an Academy. Disney to use parks Wolfgang restaurateur Stan Max Wolfgang the create theme we entitled see

we the addition, are In of report revenues pleased in history to the highest company. the

tenfold which confident accelerating revenues same continued be QX Our last revenue forthcoming. will million, precursor increase We growth year. nearly earnings, is $XX.X believe is which and we of quarter are the the a a over to

enjoy non-exclusive levels growing, key likeness Lee and to Disney television Lee share ships and for royalty attractions the Walt to next venues Brands we market Our parks the in the Disney be consumer Marvel cruise and to Genius will merchandise cash. for create and to to products the from. signed Walt exclusive and The of license all parks and deal to and units years, which entertainment the are license income Stan theme sold Studios Meanwhile, movies of high the increasing businesses name continues Stan maintain and margin. other XX theme company of

fee, a of the Disney agreement, theme received duration of to parks come expect we Stan that the agreement. of million park Genius the royalties from XX-year result and and creation Walt theme sale of revenues Lee the for generated company merchandise will Disney's will experiences this license the $X.X While from that a the bulk in be get as

and news Stan in this year. universe Lee XX birthday announcing our benefits Lee XXXth the Stan consider the rights we December We Stan on be additional merchandise Lee we to Stan extremely ongoing and separately. driving and of anticipate sales content brand, own also to and Lee's enriched exposure significant valuable programs We be own control the retail upcoming prior from of will

friend that on a a the for many this Stan years, can Lee responsible was and personal as we of close behalf. share Stan's brand his desire of steward privilege a I As act his it's to believe

significant as viewership, financial advertisers, most have on Also future quarter, Channel!, great our during company, well children, Kartoon will in past flagship streaming downloads, to in strides quarter, continues of the to the distribution business, experience monthly the a During and impact continued our growth. of platform for our the segments revenues. growth which importantly we make many as

including is Channel! Amazon COX and Amazon TV, carried Android States, Samsung Kartoon Fire, iOS, now the aggressively in LG Kartoon every Smart Prime, best the TVs, platform. revenues will Apple TV; important increasingly We and best Roku, investing most Channel! TV, a in earnings Tubi, United come. distribution virtually content, driver Smart the and and Mobile, user the believe the TVs, being overall robust platform Kartoon key most major are Pluto of for Brands' on be experience. Channel! secure attractive the to to Android Apple Comcast, YouTube We years Genius tentpole features,

the In free Channel! app see streaming a Brands Channel! in fact, major quarter, sign advertiser Cindy Channel! families of in month, the up all you'll as the flying proven if product out with have new industry now to there viewer carried you as commercial-free build both advertising, Advertising well. the us at Apple now Kartoon viewing rankings Kartoon second team, continue on be and subscription oversees premier advertisers with growth Kidaverse. now Google supported a a destination happen established we our product, competitors our by sales. Concurrent kids continued we firmly as ahead by is $X.XX revenues their joined solid and Channel! and for who launched stores. sales regularly and to placing trajectory, JetBlue, Kartoon have Kartoon invested leader, led the quarter during Genius ad a Kelly, to a premium as

is as become Max. We our it component stream future Netflix, of such as HBO revenue to expect critical for Disney+ subscription a content providers, growth all and

our of we we now acquired subscription statistics January the Prime, in seen their acquisition with competitors several have We're building Amazon well as as and Genius subscriber both the have Ameba network are group. management technology and growing. whereas However, superb subscription declines, on the distribution Channel in

refer of kids, worldwide. Having Channel the Kidaverse Stan to content, positive, channel of will a as pay continue capture is which believe for market prepared fee. ad-supported who and we of kids the product strategy we subscription subscription want ad-free for monthly Kartoon and we and music free currency parents, based KidaBucks, podcasts, capture features, Kidaverse, Channel characters, as first-of-its-kind now on kids Kartoon their its those, Messies, popular immersive including many and collectible games, a for have as and without service enriched a our goggles, a have premium those commercials combination us to safe, channels grounded emojis, to childsafe we commercial-free universe, and our channel which to as to more. be Lee including who enriched Kidaverse kids, and a refer roll essence with digital a messaging, Kidaverse VR share the to As Channel! enables for always digital as The NFTs metaversal children to cards out a offering service, Kartoon well children's breakthrough avatars, channel an prefer containing free, grow programming for to features are subscription-based

Okay.

territory. platform rolling talk Europe, Worldwide, a as only was Worldwide X,XXX-titled is moment. of not leadership over in Your Let's an being of virtually distribution premier across Robinson, Exchange. rebranded has America. this the a now Director investment catalog Channels strategic Frankfurt Entertainment, children's entertainment every made on Paul global system Middle also company company and Asia, trading The animation, in of channel out German XX Family for Channel! previously major in Africa, the the Disney Under East, YFE worldwide markets existing and the but who Managing now Latin Kartoon a

growth around various carriage witnessed discussion more important markets than Kartoon in We now are We XX to continue additional this continuously currently distribution in pending. content, in as and will add stages group portfolio. world We've of and with believe also we of a Channel! deals the countries partners markets, Amazon new such attractive in on Prime. viewership our trend as of platform

channel from animation business an dramatically platform is more makes harness largest the as already of branded that Lee so intrinsic shelves expect top-performing Scooby-Doo, values others to the forever. program there to value consumer leagues. league proven including In of which like views itself Frederator The farm component consumer content of migrate Genius system one produced top-performing revenues not overall of live grows Separate acquire each continue the with is infrastructure unlocking owned Flintstones, product platform we and channel grows from billion and Kartoon see a exclusively Channel, this Brands' of as to on Superhero and of always and now and per it Kartoon rollout grow The addition time. tremendous the still gaming the Your of a Most the like needs the timeless children's be Frederator Strong is Kartoon programs more and the on Channel! share our with Entertainment value. over Ameba, we be Rainbow will company Pig, the over Tom and company PAW strategy It's part desirable profits. has increase a regularly Frederator from combination which Family In Yu-Gi-Oh are portfolio distributed our distribution WOW!, at Kartoon to and Genius' but world. as and and Channel! of Shorts, only Frederator Channel! the products for of a catalogs The Roadblocks biggest YouTube however, animation Kidaverse producers. animation integrated positive will Kindergarten, that currently the generates channel world children as as and Patrol profitable most enough over Genius catalogs store bringing Minecraft-based the an the One we in timeless channel Frederator of Frederator's can't X,XXX well market more to distribution around time. to want Stan around and producers, to that see later the the is Decades animation maximize to largest in service, look value we acquired part content on and provides fully asset the I Peppa can't overstated. on world content. YouTube now up content YouTube up Rangers Channel! as importance to of value. well consumed, shows as and only The acquisition the Jerry, & X as kind new big Kidaverse of value emphasize month. the importantly, WOW!. astonishing of the you point is

Brands. and Now, call Michael into possibly you're Hirsch, turn integration over the Michael important to I in WOW! Genius of the to the the want acquisition of the CEO to company discuss history up. most of event WOW!

Michael Hirsch

strong expected Thank into provide has and Networks Genius Indeed you, continuing Brands financial Frederator contracted going bookings pace. continues transaction was year with Unlimited banner immediate Andy. a along WOW! to The accelerated XXXX significant integration and well. Media the as consisted Studios The increasing of had benefits revenues has been result see into of revenues extremely a at Studio and family of WOW! beyond. Mainframe and and to an

budgets with make The operates We profit a cash are currently Genius our episodes million. overall increase company XXX of Genius in a working producing the production $XXX of contribution to at to see expect significant with and margins animated we over on and basis content excess a to bottom-line.

Takes world and as It profitable Octonauts: an ecosystem titles Beyond of Brands Cocomelon, now result end-to-end Two, children produced in today; many one the the including combination, Genius [indiscernible]. number as and has well has a As Barbie: the animation Above that series

of our own elsewhere. YouTube, now Netflix, are content currently are production many shows hire, While for and in doing work also Sony, original have these we for and

a Xth. Zenko millions and represents of series launched tremendous fans. just on show's will on new Team on will high-quality a views continue the and with animation a show's and Netflix and series -- a children's DreamWorks shareholder Kartoon is with September brought Genius transformational to to of PuppyCat as well Brands licensing been Netflix execute as as Bee for of launch major upon classes Our will resulting the X are for Denton, which are discuss to And CFO significant production the children's platforms value animated in a Frederator developing its holds other about turn Netflix Channel! first Go its success on success company's on and platform is had event for economies organization. very addition and and -- enthusiastic There would with the for and captive synergies market I It for transaction platform has excited broadens as basis. season as PuppyCat our financial approach asset broadcaster from social have products that for powerful and Animation programming. Twitter Bee this now establish enduring itself extraordinarily as a our support consumer few the trailer to we new Genius company entertainment second migrating to Brands value to the commercial in-house brands Bob drive Bob? producer, the expected proven the to what This like The on it scale, to children's increased of global through to Brands show strategy Tier eventually Genius combination. over foremost licenser more future appeal. cost call a results drive quarter. the the then on

Bob Denton

Michael. Thanks,

for The which XX, million and earlier, quarter January for acquisition Ameba history increase of last and subsidiaries, three a attributable $XX.X expenses from year. direct acquisition Genius to in mentioned primarily WOW! of million June are the $X.X addition per quarter quarter. As compensation increase increase the June the quarter were This the ended noted the These net compared XXX% of costs or ended WOW! and loss the including onetime share administrative in the expense Andy XXXX. revenues XXXX. an quarter $XX.X general and million months with per total inclusion an the in increased XXXX increase at beginning three the related fees in is the to months XX, million in to increases June in company, XX, associated was and primarily the revenues June Expenses of largest WOW! increase operating of the for ended expenses of XXXX $X.XX for $X.XX to is the an incentive of increase $X.X to administrative $XX.X due expense, quarterly professional or in charge its ended XX, the directly the the share or non-cash for Brands general due an million above. same expenses

Turning to balance sheet. the

of had of million, million million. million total including of assets we marketable $XXX.X of capital June cash cash, equivalents and $XXX.X $XX.X current and equity $XXX.X of XX, working securities As XXXX stockholders'

closely increase balances and for the important company indicator are and integrate and as becoming our goal combined the our we managing of assets We most which we earnings build the businesses consider positive. cash cash our with increasing

content, and enduring Our expansion creating our ultimately a animation the is We back and now creating for acquisition of yield to continue to distribution our value the and in I and long-term comments. final turn that the top-tier shareholders. will investments children's for catalog are the best and Andy like would our smartest of over system. believe Kartoon that it call Channel! it deployment of indications global Andy? capital the some most our to commitment

Andy Heyward

Thank you, Bob.

all entertainment your the in First Genius and participating I want thank industry. we've of children's powerhouse the transformed for a support into within years the to over as our call investors today for

are market building and timeless point key assets all signs across to We continuing growing momentum accelerating. that units, share increasing and

in more We since launch two over said records. this Kartoon year XXX% all are $XX million the at top-line to revenue broke Channel! now beginning as the of and of than quarter growth I

sustainable grow profitability. make decisions asset to reach and to our base continue and will We growing

that are program shows license progress, very a we least it. yet am they the keeping is series how Garage but excited series you consumer because I has world. which think extraordinary in of has we the programs. also strong throughout Shaq’s positive but the O'Neal we to it and to again The to our and but from storytelling personally Garage huge we humor will encourage look Shaquille for pilot costar series and proud upcoming Last hands-on not most be come responsible and anticipate come. a effective hygiene. Gronkowski. the products hours. programs entertainment, Shaq's very it. to Rob now informed to particularly peek And and see Channel! episode those distribution kids products a from diverse effective that committed positive and As extremely best about up is the best alongside everyone embrace vehicle-based I continue he's the are building the only see will build children a performer as enjoy speaking initiatives forward say will Shaq lasting of it will with we value programs on everyone his substantial immediately. to in XX for I It's also But sneak on not Kartoon go been

we Now company. the questions the answer that take have previously you opportunity want David were to to I this submitted questions? think to

David Waldman

Yeah. Thank Andy. you,

In press you questions in interested like those Sorry. submit We'd to now. announcement address suggested parties we release, our advance. conference for call their questions

them of where our so best were possible. Some duplicative, reconcile we to those did

please Investor respond call free up to If have to as Relations sure follow as feel questions the be and further you quickly we'll after with possible.

investors Our the first question from is following.

company's the to you profitable? what turn expect revenue Given do growth point at

Andy Heyward

We're to and to significant Genius not distribution we're our become sustained In reliable from the expect And long-term invest global the question. prepared continue force dominant to acquisition system. right in and wisely must formal profitable of turn flow. in to and path earnings that, a now. to do we and future animation generate generate cost kid’s our the the grow, guidance for global shareholders. synergies continuing expect to But building catalog build-out and not from meantime, to We're value order we we carefully maximize quite is our entertainment. WOW! do expenses managing significant to Good cash as distant give in the

David Waldman

Thank you Andy.

of managing are Our growth company XXX next rapid how you to question over people? now the is, a

Andy Heyward

question. Good

Jaffa the being of to serve member, of Tony agreed and distinguished our will Entertainment focus Spielberg's, ABC stay graciously with all targets. on company to many governance Tony and only greenlight President We're help their Our indeed and experience already experience. Board Bob ensure ABC Denton of hit Broadcast units and help protocols we Chairman and priority. wisdom President Thomopoulos the a now and but from on as top United have Tony very of good pieces Pictures, to will now He's Board Directors. Amblin instituted growth also Genius He's Group, Vice Steven working working and our lead a career of remains brings Brands committee with the and ensure Chairman Mike has to disciplines. of Artists the earnings of targets been Television. his not unifying of they fortunate coming

David Waldman

Andy. plans The the next what back you buy to Great. are stock? is Thank question company's

Andy Heyward

I not one. to options evaluate and point, of the that the say buyback that importance but up have will to given this and undertaken capital, our a which is the preserving volatility would we've all of continue market in we

David Waldman

Okay. Thank you.

Our energy Brands rates, next by question, is inflation? affected Genius interest or

Andy Heyward

really consumer. an energy Good question. Well, we're not

We You energy to automated don't use build creative use energy. cartoons.

could I a little would interest Interest minimal exposure user. supplier not be energy if to said So a we I whimsical, be say to be rates. have could an we rates,

company not a production of while in that's borrowing the now. based cash lot have for us. have We effective we do right really And some

David Waldman

you. Thank Great.

Our next or does through its otherwise? to have exposure productions China Genius question,

Andy Heyward

Good China. on stroke platform of content That's of to only our in we're enjoy our series the kindergarten partner, knowledge their of relations, robust best platform. children's the And the because kid's question. to broadcast American most being good Youku We now my Alibaba with Chinese Alibaba. supplier super

our and is the sell studios to our to paid same where bulk and cash programs from production favorable At are remains we've commercial nation from China migrated of much time, Chinese Philippines in minimal exposure high. US currently more production the for quality animation because we to pricing the China [ph] our dollars. We is Indonesia pressures

David Waldman

Thank you.

sets think other apart update you can and productions? Shaq’s question, from Garage you an next Our it provide on what

Andy Heyward

little a quarter the in Shaq’s episodes of plan bit to about for begin earlier, the is Garage but year. this it fourth talked current delivering I've

many Baby The than The the excited cool and to a to that a very be their for PAW We're you cool. stories to with I'm are are It's not episodes. It's aspirational Rob show love ever the have now more recorded XX% scripts Shaquille We're cool. you like within voices. is if a It about fun, do also and XX imagine. written, both on going it hours of Shaq. can The Channel!. a show appear cars very consider of will Shark, show the first more Patrol you're to of cars. music All be Gronkowski episode. say only. will on about Baby only of that a Shaq. sneak up in Baby segment It's Kartoon called going going peek now we

David Waldman

Great.

Our Genius next question is given the if measures? is growing importance any of ESG, steps environmental including what taking

Andy Heyward

Okay.

has for to take a tell depict So can our industry how protect leadership corporate entertainment environmental children. the we as role environment stories management positive best on decided steps citizens, the as our to in we

our Our number Chief Environmental Officer, adding been friendly saving light the of has Officer of -- specific to for to having company now These has Chief carpooling kids the role Michael LED from learn initiatives in the and additional energy saving given and lessons incentives, us a responsibility from. in place and overall. a leader a in environmentally range put responsibility Riley lights Diversity social more shows make environmental company to

electronic We coming have shortly. an all-company day recycling

the has the see. reduce sustainability concrete well well website impact more taken clients environmentally social We steps for as channels. to of forth the shareholders responsibility environmental reduction because embrace We children program company-wide as starting company we And as on and believe promoting our will the tell, that in it and our reuse we steps in stories our spite stepping We of and as conservation our a all of are this our but continue understand on These the We friendly. it. have recycle. to to and responsibility, importance and have that toxin programs to on company commitments of broadcast today all make grow on flourish not we've issues.

Next David. question,

David Waldman

and the you and to on toys expect strategy products Can shelves? the when can we you. other talk Thank Great. about see merchandising

Andy Heyward

as very characters which business any merchandise some several will don't currently very and unpredictable. Puck, kids of fire, there our our with we but have We a million significant it's example, future. have version, of a a to Lee and announcement Stan you coming We drive $XXX will that. in a shortly The fraction on near of brands excited for Lee, that expect merchandise kids Many be would Disney can which of have merchandise the which earlier, existing year Wolfgang believe big appear good is if sampling. Stan they're know this be to be business. theme But forward very of catch value pre-sold forthcoming experiences schedule. experience. I very will every year will about very, parks important be the their an park we Stan hits. The in associated that and having shots. market and said part them enthusiastic are businesses will on look is very believe I their a Marvel

Garage because an reboot products which PAW same with a we brands and play has the Pixar's has fronts. ongoing think believe Hot successful going Wheels, different including stages, in Rainbow Cars Rangers, we we It staple Patrol. natural to it. is of new on Shaq’s very toy many some master in like licensee with have a and variety activities a Llama has We different are

has is and us debut and of merchandising on we products which a PuppyCat well. of YouTube are now and However, creative them. a special month Netflix first next number developed was incubated large Bee in is premise Mainframe, the out one very and audience significant as think on and for will have There of coming to differentiated. the which become potential Frederator we

David Waldman

support, the further That We look Andy. questions. providing forward to everybody's we does Thank updates. appreciate you Great. conclude and Thank you.

Operator

call. Thank conclude today's you, and ladies does This conference gentlemen.

at your your participation. and for this time a disconnect phone wonderful Thank lines have you may You day.

Kartoon Studios (TOON) 19 Aug 222022 Q2 Earnings call transcript