IDW - Earnings call transcript Q2 2022 | IDW Media Holdings, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good evening, and welcome to the IDW Media Holdings Second Quarter Fiscal 2022 Earnings Call.

During management's prepared remarks, all participants will be in a listen-only mode. [Operator Instructions] After the prepared remarks, you are invited to participate in the Q&A. [Operator Instructions] I will now turn the call over to John Nesbett of IMS Investor Relations.

John Nesbett

Thank you, operator. to second Media ended quarter XXXX. welcome call investor April and the for and day, the Holdings IDW conference XX, Good six months me Chief Ezra Feinstein, With Financial call and Chief Officer; Brooke Rosensaft, Officer. the on Executive are by to statement. call safe harbor I would the reading like begin within On this estimate, believe, words statements not Reform Private are anticipate, plan, intend, that statements and the purely but similar including, forward-looking the facts, call we meaning to limited use all target Securities expressions of not Act those are of historical the in which expect, Litigation XXXX.

forward-looking our expressed annual factors, not subsequent limited differ reports statements our risk materially the While under fiscal due implied financial condition of of Form XX, these XX-K may and the including, discussion but results of on the XX-Q. heading statements October represent ended important report or analysis quarterly what in for results may year numerous on and in those Form the XXXX factors happen from results management to, by and judgment actual future, these described operations current to

whether otherwise. We a information, and no disclaim call any are result to the or forward-looking on this future under of update events new expressly statements obligation, obligation, as

I Please call Now will over Ezra. the Rosensaft. go ahead, turn to Ezra

Ezra Rosensaft

and quarter CFO, happy today questions. results our and the Brooke Feinstein, year you fiscal At remarks strategy details my John, will then review remarks, will your to call April will the take of provide around My to closed thank us. our second you, execution for of Thank everyone on our be XXXX, financial joining the conclusion XX. and which during

elephant property to at new Strategically, results. where we portfolio When look in and and tremendous the de-risked on you no financing the balance utilizing] intellectual expanding the models we entertainment to our revenue enhanced room on IDW's came in is execute made entertainment sheet our as we quarter, IP, the asset-light drive of quarter [through This expected. side. progress model continue

expect in quarter. not though, any the did Importantly, we

As the to we model, new on revenue continue will side of the fluctuate. IDW scale entertainment business

this in of fiscal strong QX, QX see and revenue months already no in XXXX, we the Surfside occur first In QX. entertainment meaningful have QX, in expect Girls and Season We Key seen from revenue revenue X. Locke and to very & six

Rather, currently the on evaluate So trailing on the business we our a it scales. at as don't making business basis, of XX-month we basis. entertainment the are we progress on a side look quarter-to-quarter particularly

publication for Shadow in is that library our a laser the of including visionary more and perspective, the from original industry, we Comic for for potential work authors it. performing for most business novel the of Heebie is Sophie, take by Recently, of Chibis early name best we a original my more innovative talented talented content. Attack entertainment Eisner readers and with content are continue original for received graphic for material word best best and partnering international titles well end, nominations tremendous Industry we U.S. with Taken attracting Will just XX and IDW from that edition The the Van Awards, but Ballad The on of don't and and focused remain to few. Chibi-Usagi: create for our runway as creators To creators. growth and to expanding amongst

various across quality over in titles of and second the can the a I to XXX creative to our year. new XX publisher July, stages and our original those original access IP our original to pipeline of us the stress the nine to and a an enough authors and also comic we add in each economic goal comics books slate innovative graphic novels Along new in as providing to is as our engine business as relationships, we targeting relationships key published a scheduled build library and have driver very including Adult, We graphic importance at are with strong leveraging XX reputation independent Young development titles new to leverage existing Drama cultivate as platform. Middle announced new Grade, and large during they that titles horror, attract. Tweens, we audiences of we and our as will of be Comedy. will continue our sci-fi pipeline, lines genres quarter, through creators, and also transition titles, to Currently, the audiences we novels own thriller on our genres which renowned library are well XXXX. us, our believe as of with Currently, nicely

As Season IDW strong Entertainment. Key & I Entertainment first quarter from XXXX measurable the second in our during already fiscal X, delivery mentioned revenues recording to no related quarter, we segment recognized revenue of Locke after the

projects, of expect revenue Entertainment more deliver entertainment further we roster our we our consistent to from expand As a segment. cadence greenlit

from Key recognize during of both the Season ahead, the expect and XXXX, fiscal of Looking Season X second Surfside appearing Girls, X Apple, of revenue Netflix delivery of we and on half to respectively. Locke &

of this lot So year. move forward a the to look fiscal as to through we balance

and to when converting know we from on will animation and opportunities into exploring benefit and concurrent our to entertainment film this business of and exploring be both and potential our busy This an titles into for our proven for of energized exciting publishing we increased as from our company. a properties. cycle and co-development can increased exposure are time goal see opportunity, Entertainment is has with progress drive Likewise, with visibility vehicles are promising creating Publishing been We experience entertainment, kid-focused the are partners publishing between side which the are the leverage original segments. we IP we our that sales, content. original virtuous we podcast expansion We media the for of narrative by work content the for making can international

of and our of positioned we are we the we XXXX, can accelerate now balance we to well strategy, sheet, first the remainder Feinstein believe call which through over which capitalize flexibility fiscal our As and months to a our Brooke provide solid turn the XXXX. on to Go financials the the content refocused of strength second move will go CFO, quarter of our from Brooke. six for our I our growth. foundation ahead, over pipeline

Brooke Feinstein

I'll results XX% $X.X of episodes for and as the second of to a quarter title the comparing I'll non-direct driven million the XXXX prior year V in XXXX an by to The Faction second ended well direct year Thank primarily Except of on compared quarter related million today $X.X of first to strong the $X.X $X second quarter the The months the from comparing April fiscal as They direct-to-consumer $XX.X Sonic you, million second quarter six focus to tax our Earp And revenue market months Media Ezra. XXXX XXXX. in compared XXth My of and to quarter due million of of of six months will $X.X episodes slightly and revenue revenue revenue be indicate remarks period, no measurable Wars same XXXX. be six quarter as increase October primarily decreased million in second Hedgehog Entertainment no three publishing of fiscal delivery the the otherwise, in totaling credits quarter XX, to related IDW delivered the Wynonna the from XXXX. I first for XXXX. in Anniversary year-ago. generated where the first to second Publishing million in XXX,XXX consolidated revenue Us and to to second fiscal XXXX. to Enemy. increases Holdings sales fiscal months compared six improved Called and fiscal of XXX,XXX the

of was first revenue from six included first increases fulfillment of to in an For of decreased XXXX. six in Entertainment million The six fiscal other months $X of in to delivery XXXX revenue the fiscal revenue. six $X.X decreased for $XX.X six for of first $X.X campaign Adventures to XXXX driven publishing of million publishing from Publishing the of first market million Batman XXXX non-direct XXXX. million $XX.X games months for consolidated Revenues X $XX.X of driven million & for Wars. XXXX months months Season the $X.X first the direct-to-consumer the first of primarily for license and full revenue months million from fiscal increased $XX.X Locke fiscal months the million the and XXXX. increase Key the the by revenue in by six of revenue games received in increase both French-Canadian in first fiscal six V and months the million

an from fiscal six IDW million to months quarter of business compared compared loss $X.XX compared prior $X.X in to a of quarter was operations in share million or fiscal first of from in from loss XXXX. second $XXX,XXX loss income million from income six net income million was period, loss or to loss of a first $X.X to in quarter. the first months six to operations compared operations of from XXXX the increase six losses from months year $X.X loss from was driven $X.X the XXXX. the $X.X of first $X.X fiscal months XXXX Entertainment fiscal six prior an $XXX,XXX $XXX,XXX the months income Consolidated from per compared per consolidated of $XXX,XXX the of first fiscal a an Publishing's was share months compared compared of year-ago loss six from operations operations in the for loss $X.XX quarter was in same loss primarily first income our the a on the million for in $X.X the the loss was $X.X in of of in the second fiscal was Publishing's quarter IDW in IDW months of in diluted compared operations operations million Net of of loss operating XXXX side of second first to million XXXX. was entertainment net quarter six second Net operations XXXX. by from operations of $X.X year of to million second Entertainment's the of period. IDW $XXX,XXX operating to in diluted XXX,XXX loss of in operations XXX,XXX operations million. a the $XXX,XXX the from of Our XXXX. XXXX

million Turning current and sheet. we April now in Working debt. XX, less balance $XX.X cash equivalent totaled assets, current liabilities, At and million. $XX capital, cash to no held our had

mentioned and shows films of of to reflect in particularly to related revenue delivery Entertainment As this our timing earlier, quarter-to-quarter, how quarter's our recognition vary continues revenues Ezra segment. the

more consistent become roster predictable As to a of expect over we continue time. revenue and to grow projects, we entertainment generation

remains sheet the Entertainment balance cash to sides a Our solid on of our and debt, business. IP building and providing to expand no flexibility our library the continue position both strong with our projects Publishing

shift to continue that generate to our well positioned we That we consistent our feed focus original remarks. revenues forward. to IP As segment believe content, prioritize concludes library high-margin and going my are to Entertainment grow our we

I and Ezra take be questions. will Now happy to your

Operator

you. Thank

[Todd session. will the Street question-and-answer Instructions] first from proceed Washington Higgins] with Please now Partners. begin The [Operator your question. We question with comes

Unidentified Analyst

guys. taking question. Thanks Hey for my

in and give half So about year? should we on the of about entertainment it think back around can we any how should how the be more you color pipeline thinking the

Ezra Rosensaft

question. Hi, the asking It’s question. Excellent Todd. Ezra. Thanks for

has and and date slate, that date, have will been Girls. & for that development we Key be not announced our publishing So Locke has we & have Girls seen airing. Key yet Surfside Apple announced our air announced pipeline has Surfside been a feeds Locke

in have can't publishing We continue the buyers. to on on which those the of not we bit yet publicly also because announced development and a deals the been space slate work quite by announce

and don't guidance our So while about. publicly publicly cannot we investor talk what discuss presentation motion, recommend to Other the lot than we everyone website. a there's in would give review I on future

Unidentified Analyst

Thank Thanks. That's helpful. Got it. you. All right.

Operator

with Sheldon] Please your Partners. The proceed question [Mo RMR with comes question. from next Capital

Unidentified Analyst

me, pipeline before more and had in-store. Hey, same gentleman what just actually you have Ezra. on question I guys the the a

that, off revenue the just terms of in rest going of the expected year. So is for of the

that's Girls as So we coming then to this in X year have for & be Surfside Season Locke Key, and well. supposed

Ezra Rosensaft

delivery, everyone recognizing Girls. typical what takes other Locke is from start We Correct. of industry to have and announced go shows anticipate Surfside and Key time Season X for No been month-ish. right, to the & XX knows, revenue in adoption

not at While some to what forth, discussion are on and and things in so so is at I'm moment. liberty the in disclose motion

question. your else Season & yes; Locke for nothing squarely Surfside to X, would just anticipated there be entertainment So Key answer yes. Season Girls X,

Unidentified Analyst

Thank Got it. you.

Operator

with with Edward your The Please question. next proceed Reilly EF from Hutton. comes question

Edward Reilly

Hey, on previous two questions. the Ezra. just piggyback Yes, to

if or the wondering of Just this with shows the dates in was delivery more release you're line to be less expecting year?

Ezra Rosensaft

Excellent question, Eddie.

know So air entertainment this accounting Brooke, recognized is I'll dates actually in up our line as over don't and turn on to delivery we how books. accounting, in and

to the and has Let I little Apple where air over me fully. been. it has Key go that And a Brooke & that announced to Girls ahead. turn especially, Locke add Surfside if would not just for more been date answer Brooke,

Brooke Feinstein

Sure.

like So being we is which delivery Key, same the aired, so we're try of going far going to have with everything, be to & when and one, that time full is it Locke yes. – it's actually ensure as

be revenue, there's each different then remainder but off remainder the final streams have based would would regards episodic backend of And delivery in delivery know episode. of full possibly, everything each Now there's the which we Surfside – together, on be the on is to of which fees Girls, so I budget.

one’s that little spread over bit So time. a more

Edward Reilly

Got Okay. you.

reiterate for Girls, basically, just delivery. that So you Surfside receive to

can about sum more end lump talk You episode of and the season? then at the per revenue recognize delivery

Brooke Feinstein

at possible And later backend yes. a a time, Yes. then

Edward Reilly

the asked perfect. was quarter. to know mostly looks this a through that margin, then Great. game. to higher it Okay. Batman I wondering last last quarter, would quarter? I gross was I That's than year. margin And question it gross you know I what the again, similar was be But attributable increased attribute last

Brooke Feinstein

Yes.

prior had a the of also year, write-off or of XXX,XXX we so. about obsolescence in games So

the gross So increases that with margin assisted also here.

Edward Reilly

the Okay. kind general had content. wanted budget, environment at some looking for demand try I Netflix And of Great. to for just slashed then news, believe. I a their and get feel

to maybe ago? right you the now comment wanted so environment versus on general year for Just or guys a content

Ezra Rosensaft

Great question. Right.

be really really on So what's our also and terms – we of but don't a so at in say international, happening be buyer regular down broadband certainly them. made buyers overall to about whether down the all basis, business, need the to of for big comes media a looking plus And Comcast always that we we speak supply there's demand we and on us, but the the with there, have about keep with and buyers niche always they really world forth, of That's question XX that's smaller by on what everyone. and speak we’re and for an players. will you're enough landscape. your something on. it or regular every is content, the eye on talking is eight the a players, comment so we have to true and major the one to basis, meetings. cable They matters could on and players I they so of They or Disneys of know could major which

billions okay, has and say because some that many. in-house, I IDW, the buyers. meaningful because it's need there with meaningful they their seen right? people they'll which And, other even some Disney the have out yes, and and I'm the are aren't will There while way, lot largest, Netflix are pay attention everyone be sure buyers to plays, don't we soon. So people spend external Game build everyone that okay. Every in are about children's who they to going content and articles Netflix from that'll up such players coming the of be watch Squid also but also business is and so won't X, to so Season not says, pure is while algorithm largest but served supplementing that's the they They and content, a on. that's is one their as spending it would

pipeline, we a all development rights. very originals across on feel publishing the position are have and I media in renewed that on our and strong So our given slate push everything focus the we

and sales there be the appetite have the buyers who the in money we So successful there. is and voracious hope demand that to to our

got selling great to we're make after. shows. So we where That's good on

Edward Reilly

it. Appreciate Thanks, Great. Ezra.

Ezra Rosensaft

you. Thank

Operator

proceed [John Lee, comes next Private Investor]. from your The question. question Please with

Unidentified Analyst

for taking question. Thanks my

I have two So questions.

business should focused with tourist the business. one strategy? titles over the has first more original should long-term and discontinuing publishing the the expect So the by What margins operating become the is, investors game

Ezra Rosensaft

Thanks, John.

question. talk So to about. that would understand And the goes pull into need don't a very we segments apart interesting fully little to to And bit that want guidance I two that. future

a net on and so which fluctuate them are little predictable the So business, and the and over of and see do improving gross they improving. well, can is there's margin and which the we're the side margins we more time you as publishing

are XX% So XX%-ish the plus. margins are in margins and gross net

the meant model stream about On company take the differed and fee available, we – are historically, that look what where it's the investor recognized this today loan not for alluded Apple fee high very is content from the and and overall what spoken had from the our a also in presentation Netflix. based TV, all Netflix just and entertainment and revenue. you But to our revenue the spoke for margin the sale and side, for production a receiving was very we we or the to, gross as therefore would quite company from gross well, an bit content to we recognize a full and because that not see on Brooke publicly if a done margin it financing we've different

million, for would would balance if which way some costs, your hit see So company a example simple by sheet. giant the is show the you sold $XX

And That's than is of fee. margin can million. to gross once a see of very $XX make Key the for of, fees, a service publicly would to margin you Locke million. So more you recognize company we gross up you & all we're something what if see costs giant $X million as paying is let's the XX% because $X received it production different tune

So goes loans. carefully And back that's the longer looking longer the de-risked it no takes has out company no balance at sheet where model. business to the debt,

it's We we not of I risk away have we're that the games, answer from cash, and a to And we're And because our we question. impacts long free out. also, everything know gotten taking margins. that debt have piece do your minimizes is which it. a

think publishing, and to Locke revenue great on it originals, Key about example. not in may is you have margin, right the terms they margin away an be drives So and of, & that excellent

of you think most As would books, imagine, Twilight.

You're not on it profitable. you profit gross unless a sure going very would up the a side, be that do very pure don't the there's to and therefore, tremendous model well at profit. of because deals forward, on and it about can The There's sales a ramps eventually But making but to and initially, that. revenue past does going EBITDA you're where the comes filings therefore gross do scenario the is not is When it we and it's margin, we different entertainment going plenty. and originals only. margin past, public margin all be the based on be will look entertainment the to

Unidentified Analyst

second broad Great. like question is question. of kind a And general Okay. my

published a a So revenue shelf does IDW series when becomes show? earn top

Ezra Rosensaft

you could And it sorry, question. more I'm hear whole one repeat time?

Unidentified Analyst

Oh, sorry.

for like series when Essex becomes a top So a So earn published show? County? example, does shelf IDW like revenue

Ezra Rosensaft

rights. historical the deals of have all shows some did didn't and media So or

for I without Brooke about question. into historical push me ones it a going to traffic. shows, moment lot to forward, yes, but talk it getting push let that goes some to great of with individual say a generally Brooke a it's because the because me would Let of Certainly,

Brooke Feinstein

Right.

were lost. that So one know somewhat for example, this actually the rights I

the hold rights, from We and revenue wouldn't as all intercompany we just options which, for They some it, are the publishing going be will the to new right. go and to that but stuff. from partial long get now with case, structuring originals, but the That we doing eliminated. renewing the be that would would contracts fees be entertainment, as all

Ezra Rosensaft

strikes said business. to just And a at to your is reiterate Brooke which the the very what of important question, heart one John,

that we or like all the media strategy. do, everything we after For author exceptional unless right, it's director, go rights, that's

the our have slate. publishing development pipeline feeds We that

after we rights, are or segment hope certainly on media lot familiar is feeds this So near about platforms television, sources in the new that entertainment, all and future. and we're platforms call Publishing in all a also which allude with, we ever books podcast talking that untapped other the go the to revenue while presentation, to

Unidentified Analyst

Thanks. Okay.

Operator

from Please question next comes your North Capital. question. The First proceed with Sue] [Devin with

Unidentified Analyst

a max, taking back I it kind Girls. two & just cash flow for maybe two Locke Thanks and of right rest Okay. the perspective, Surfside each million year? burn the minus quarter, burn from just ones, publishing cash then in Key my had for envelope with quick to of questions. $X maybe the of assume Is

Ezra Rosensaft

great question. a That's

outs, speaking. So the remember and generally flow cash burn, there's so ins

have we the is incoming two Surfside SG&A the of outgoing development on So One we the from Key the points. have Locke other on Girls, is and and business. the & and general

your don't was So guidance. million. you threw that I $X number give out

So million to Brooke of or the I'm elaborate the hesitant $X per to detail a million I little Are to of bit want for rest saying quarter lot bit clarify, $X a you more. into year? just get then and a

Unidentified Analyst

total. Just

Ezra Rosensaft

Okay.

great So question. let – excellent question, yes, me

Let and to to I that. on if Brooke me have see CFO add front some want anything the add information

Brooke Feinstein

Sure.

won't right in cash the to in actually being years advances there's now three four that being inflows and P&L of even. and So lots see there is originals. we invest There's in cash put or out used for money

I the even periods say now think over inflows cash somewhat can't we exactly, approximation some Girls, that but of from Surfside some accurate, So time. shows it's like for

hoping some kind to positive entertainment of but into once inflow money get yes, of that and the let's side feeds originals being of and the things. we back get of cash kind that the not So say approximately from

Ezra Rosensaft

million, not hundreds capitalized that are media just clarity Generally add would in million of companies sheet, speaking, companies balance should But able I like, thousand use Yes. ones large a don't to in right, well than obvious other necessary to sustain with want have. burn really it estimate. burn careful a thousand, be the say sake let's wouldn’t not is cash, we develop very investing because which are super more we to it's by for $X dollars that. to should property. We we who of titles but more good fit than media a of on than cash sort wouldn't

So careful but means selective of just monetizable in, quality, that in in ultimately will goes in to we're to many very and which decide top And and something that not hopefully come entertainment. publishing, starting that process be entertainment what with through to we submissions pitch the sell. print rigorous and decide

business sheet. it the a strikes question balance great heart money receive and the of we how it's So monitor the of we at the how reinvest we because

Unidentified Analyst

Great. so Thank you it. Got much.

Operator

you. Thank

no As session will closing question-and-answer back for now are there conference Rosensaft to this call. our and hand more concludes I questions, remarks. call Mr. the

Ezra Rosensaft

next Be Have forward summer. look with speaking joining stay Everyone, for thank We quarter. great a you, today. us at operator. healthy. to well, our you you Thank and safe

Operator

you a today's your and concludes may Thank and This for disconnect time. participation you lines this at have your wonderful conference day.

IDW Media (IDWM) 15 Jun 222022 Q2 Earnings call transcript