In This Article:
Release Date: February 12, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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WildBrain Ltd (WLDBF) reported a strong quarter with significant growth in global licensing, particularly for its core franchises like Peanuts, Strawberry Shortcake, and Teletubbies.
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The company achieved a solid increase in free cash flow, highlighting the quality of its growth strategy.
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WildBrain Ltd (WLDBF) successfully refinanced its debt, extending maturity and improving financial stability.
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The company has streamlined operations by reducing the size of its senior management team and focusing on core competencies, leading to better performance.
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WildBrain Ltd (WLDBF) has expanded its social media strategy, effectively connecting brands with new demographics such as Gen Z, which has contributed to increased brand engagement.
Negative Points
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Content creation and audience engagement revenue decreased by 20% year over year, impacted by the timing of content distribution deals and live action production.
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The company reported a net loss for continuing operations due to non-cash, unrealized foreign exchange losses and impairments on investments in film and television.
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WildBrain Ltd (WLDBF) faces potential exposure to tariffs on imports from China, which could impact licensees who manufacture in China.
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The macroeconomic environment remains dynamic, with currency fluctuations and potential US tariffs contributing to an evolving operating landscape.
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Despite strong growth in licensing, the company acknowledges that building a thriving licensing business is a long-term endeavor, requiring sustained effort and investment.
Q & A Highlights
Q: With the asset sales, are there other opportunities you see for incremental asset sales, or are we standing pat now with the portfolio as it is? A: (Josh Sherba, CEO) We are committed to lowering our leverage to 4 times, and non-core asset sales are a tool to achieve that. We will continue to explore opportunities, but our focus on core franchises and growing our licensing business, which is less capital intensive, is leading to a more cash-generative business.
Q: As content production comes back online, do we expect growth year on year in the back half of the year on the content production side? A: (Josh Sherba, CEO) Yes, we do. We have started production on a live-action series and a feature film for Apple TV Plus, which will drive our growth profile in the second half of the year.
Q: Can you unpack the global licensing growth, particularly in promotional and consumables channels? A: (Josh Sherba, CEO) We are seeing geographic strength in North America, AIPAC, and Latin America. The increases are across all categories, with royalties coming in higher than forecasted. The 75th anniversary of Peanuts will drive further growth with meaningful retail activations and a feature film for Apple TV Plus.