Playboy, Inc. (PLBY) Earnings Call Transcript & Summary

Good afternoon. Thank you for standing by. Welcome to Playboy Inc.'s Second Quarter 2026 Earnings Conference Call. [Operator Instructions] This conference is being recorded today, Monday, August 10, 2026, and the earnings press release and Form 10-Q for which information may be referenced during this conference call were issued after the market closed today. On our call today are Playboy Inc.'s Chief Executive Officer, Ben Kohn; and Chief Financial Officer and Chief Operating Officer, Marc Crossman. I'd like to remind you that the information discussed today is qualified in its entirety by the Form 8-K and Form 10-Q filed today by Playboy Inc., which may be accessed on the SEC's website and on Playboy Inc.'s website. Please note that statements made during this call, financial projections and other statements that are not historical in nature may constitute forward-looking statements. Such statements are made on the basis of Playboy Inc.'s reviews and assumptions regarding future events and business performance at the time they are made, and we do not undertake any obligation to update them. Forward-looking statements are subject to risks, which could cause the company's actual results to differ from its historical results and forecasts, including those risks set forth in the SEC filings, and you should refer to and carefully consider those for more information. This cautionary statement applies to all forward-looking statements made during this call. Do not place undue reliance on any forward-looking statements. In addition, throughout today's call, the company may refer to adjusted EBITDA, a non-GAAP financial measure, which it believes provides helpful information to investors about the performance of the business on an ongoing basis. Reconciliation of adjusted EBITDA to its most directly comparable GAAP financial measure is included in today's earnings release, which is available on Playboy Inc. Investor Relations website. At this time, I would like to turn the call over to Playboy Chief Executive Officer, Ben Kohn. Ben, the floor is yours.

Thank you, operator, and good afternoon, everyone. I appreciate you joining us. Two years ago, we articulated a clear strategy: make the Playboy brand culturally relevant, build a profitable asset-light business model with significant growth potential around 3 verticals: licensing, media and experiences and hospitality, alongside Honey Birdette, all while deleveraging the balance sheet. Two years on, we are executing and the balance sheet is dramatically stronger. The second quarter is the clearest evidence yet that the strategy is working. We are culturally relevant, we are profitable, and we have set the stage for significant growth, testing, measuring what actually converts, leaning into what works and being fiscally responsible with every dollar. Let me take the pieces one at a time. Starting with the results, because they are the truest test of any strategy. Revenue grew to approximately $31.2 million, up roughly 11% year-over-year. Adjusted EBITDA was approximately $7 million, including more than $700,000 of litigation expenses, nearly double a year ago, and our sixth consecutive quarter of positive adjusted EBITDA. Adjusted EBITDA on a trailing 12-month basis is now $23.2 million and would have been approximately $28 million, excluding litigation expenses. Just as important, we swung to positive operating income of roughly $3 million compared with an operating loss a year ago, and we reached essentially breakeven at the bottom line, a swing of nearly $8 million from the net loss we reported in the same quarter last year. And it is turning into cash. We generated positive operating cash flow in the quarter. And with the UTG transaction and the deal cost that came with it now behind us, that cash flow is beginning to reflect the ongoing business we have built rather than the 2 years of transactions and repositioning it took to get there. The headline is that the trajectory for growth is unmistakable. That turnaround is what lets us be aggressive about creating value. We have taken total debt down from the peak of $218 million to roughly $145 million today, and we have a clear path to $108 million of gross debt by January of 2028 as the remaining $36.7 million of UTG proceeds are applied. We ended the quarter with approximately $37.1 million in total cash, including restricted cash, bringing our net debt down to $108 million and with our trailing 12-month adjusted EBITDA of $28 million, excluding litigation expenses, bringing us to just under 4 turns of leverage. And we expect we will be under 3 turns of leverage once we have received the remaining UTG proceeds, a very manageable place moving forward. This quarter, we added a lever that we have not used at this scale before: a meaningful share repurchase. And here is why it matters. The shares we are buying back are essentially the same block we issued last year to convert debt into equity at a conversion price of roughly $1.75 a share. We agreed to repurchase approximately 16.6 million of them, nearly 15% of the total shares outstanding for the company at a fixed price of $1.05, below where we issued them and below where the stock trades today. And we are doing it in installments, backstopped by significant long-term stockholders, so it never competes with the cash we need to run and de-lever the business. We were also added to the Russell 2000 and the Russell 3000 in late June, which should broaden our ownership over time. Retiring debt over time and shrinking the share count at a discount are 2 of the most direct ways we can reward the shareholders who stay with us. Now the brand itself. We said we could put Playboy back at the center of culture and the proof is on the newsstands and in our feed. Our spring issue with Karol G sold out at newsstands and generated more than 5 billion media impressions and over 70 million video views around its launch. Our summer issue arrived with Cara Delevingne on the cover, 2 consecutive covers with talent that candidly would not have taken our calls a couple of years ago. And we already have 2 more major covers lined up for the back half of the year. Across our own platforms, we generated more than 1 billion engagements and views in the quarter, and we are leaning hard into the franchises our audience tell us they want most: the Playboy Interview, 20 Questions, and above all, more content built around our Playmates, where features like Miss June are crossing 1 million organic views on their own. Our editorial voice is the sharpest it has been in years. Our audience is growing at home and abroad, and our content calendar for the back half is the strongest we have had in a long time. Talent, press, and partners want to be associated with Playboy again, and that pull is the raw material for everything else we do. We also said that attention is worth little unless we own it and can monetize it directly. And this is a quarter that stopped being a slide and became a business we are actively building and testing in real time. Our site drew roughly 2 million unique visitors in the quarter, and the subscription we launched on playboy.com, live for its first full quarter, is converting. We are turning that traffic into paying memberships, and July was our strongest month yet. We are testing different price points, different content, and different conversion funnels, and we are being disciplined about it. As we continue to refine this, we will begin to spend to grow faster, and the early signs are exactly what we hope for: an anonymous audience becoming a known, addressable one that we can market to directly. Here is why we are investing behind this. We are building the media and experiences business over time into a high-margin, recurring, asset-light business, a meaningful driver of top-line growth with several revenue streams today generated from the same audience: subscriptions, sponsorships, paid voting and more. On the sponsorship side, we already have sponsors lined up for our short-form video content across social and editorial. And that revenue will begin to show in our third quarter results. And each piece feeds next. The magazine and our platforms create relevance. Relevance builds an audience we own. That audience subscribes, pays to vote, and attracts sponsors. And the scale and data behind the audience make our brand more valuable to every licensing partner we sit across from. That is what we mean when we call this a platform, not a slogan, but a set of businesses that compound one another. Paid voting is another proof point. Our first contest drew roughly 17,000 contestants. Our second, the model search we ran with Honey Birdette, drew nearly 50,000 and generated about 2.5x the revenue of the first. Because voting closed just after the quarter ended, none of those economics are in today's numbers. We will land -- those will land in the third quarter, and we are funneling that engaged audience straight into our digital subscription. Exactly the self-reinforcing cycle we are building. This is not a promotion. It is a franchise. We have 1 more major contest planned before year-end, our Great Playmate Search, and we hope to deliver even stronger results from what is a more compelling offer. We find by what we have learned each time. And the economics do not stop at voting. The Honey Birdette collaboration tied to the contest launches in September, adding a product revenue stream on top. On licensing, we said we would trade a long tail of small deals for fewer, bigger, better partners. In this quarter, that discipline is showing up in the quality of our partnerships. To lead that effort, we brought in Krystle Bach as our Vice President of Global Licensing and Partnerships. She joins us from Authentic Brands Group and brings a track record across Coach, Victoria's Secret, and Juicy Couture. The clearest example of this strategy is in apparel. We dramatically scaled back our largest apparel licensee, a major t-shirt and hoodie partner, and that decision opened the category for Missguided, one of our strongest partners to expand. Because we pulled back that other licensee, Missguided can invest behind the market without the two cannibalizing each other. We are now working with them to grow it into additional categories. Our Supreme collaboration, which sold out, was another standout. In China, our new partner, UTG, is off to a good start transitioning the business to an owner-operator strategy. Because of this transition, the small new deals that we historically signed were largely absent in the first and second quarters, a modest reduction of a couple hundred thousand dollars a quarter while the transition sets in. And across the segment, more than $320 million of contracted, not yet recognized, future licensing revenue gives this business both durability and runway. And Honey Birdette is doing exactly what we said it would. It grew double digits again with every region comping up. And this quarter's double-digit retail comp came on top of the double-digit comp a year ago. The engine is full-price selling and tight product discipline, carrying the right assortment in the right quantities, relying on markdowns far less than we used to. Our mid-year sale is an event we run every year. The difference now is that pent-up demand and full-price discipline lets us run shallower discounts and control the promotional narrative, rather than the ad hoc discounting we leaned on when comps were declining. Paired with a loyalty program that keeps deepening how often our best customers come back, June was the brand's strongest month ever. This is not a brand searching for a model. It is a brand compounding on one. Two more markers of where we are headed. In hospitality, we continue to make progress on our first new flagship Playboy Club in Miami, a franchise we intend to grow without risking our own capital. And we strengthened our board, adding Jennifer Cabalquinto, former Chief Financial Officer of 2K and the Golden State Warriors, as an independent director, adding public company financial and operating depth as we scale. And with that, let me turn it over to Marc to take you through the numbers.

Thank you, Ben. Consolidated revenue in the second quarter grew to $31.2 million compared to $28.1 million in the second quarter of 2025, an increase of approximately $3.1 million, or 10.9% year-over-year. The increase was led by continued double-digit growth at Honey Birdette, with licensing also returning to year-over-year growth. Honey Birdette net revenue grew to $19.5 million, up 18% year-over-year from $16.5 million in the prior year quarter. On a like-for-like basis, total comparable stores grew 15%, with retail comps up 13% and online up 16%, and every region positive. For the second quarter, Honey Birdette has now delivered its seventh consecutive quarter of double-digit brick-and-mortar comparable sales stores growth and its fifth consecutive quarter of combined brick-and-mortar and online comparable store sales growth. Full-price selling continued to drive the mix, and product margin increased year-over-year, led by full-price sales and higher average selling prices. Licensing revenue was $11.2 million in the second quarter, up approximately 2% from $10.9 million in the prior year quarter, and would have been higher but for a modest step down of a couple hundred thousand dollars a quarter in China as our JV partner transitions the business. Growth in our rest of world business was led by our Supreme collaboration, which sold out, and by our Missguided partnership, which has been successful enough that we are now working to expand it into additional categories. Our Byborg strategic partnership contributed $5 million of digital licensing revenue in the quarter, consistent with the contractual minimum guarantee. Total selling and administrative expenses were $19.8 million in the quarter, down $2.6 million, or 12%, from $22.4 million in the prior year quarter. Put simply, we grew revenue 11% while reducing total operating costs, all while continuing to invest in content and media and experiences. As Ben noted, we view that brand spend as investment, not overhead. And this quarter, it began to show a return. Operating income was $3 million in the quarter compared with an operating loss of $5.9 million a year ago, a swing of nearly $9 million driven by higher revenue on lower cost base I just walked through. Below the operating line, net income was approximately $200,000, or break-even on a per-share basis, compared with a net loss of $7.7 million, or $0.08 per share, in the second quarter of 2025. Weighted average shares outstanding were 114.7 million. Adjusted EBITDA for the second quarter was $7 million, an increase of $3.5 million versus adjusted EBITDA of $3.5 million in the prior year quarter, effectively doubling for an adjusted EBITDA margin of 22%. This represents our sixth consecutive quarter of positive adjusted EBITDA. Turning to cash flow. We generated positive operating cash flow of approximately $2 million in the quarter. With the UTG transaction executed and its one-time costs now behind us, this figure reflects the ongoing operations of the business, a clean baseline for our cash generation going forward. On the balance sheet, we ended the quarter with $37.1 million in total cash, including restricted cash. Total debt was $144.9 million at quarter end, consistent with the end of the first quarter and down from $159.9 million at year end 2025, reflecting the $15 million pay down from the initial UTG proceeds earlier this year. Let me put the share repurchase in numbers. The block we agreed to repurchase is essentially the same stock we issued last year to convert debt into equity at a conversion price of roughly $1.75 per share. We're buying back approximately 16.6 million shares, nearly 15% of shares outstanding, at a fixed price of $1.05, or roughly $17 million in total, below where we issued it and below where the stock trades today. The repurchase is paid in installments. We paid $2 million on the effective date, and we plan on paying the next installment of $3 million on or before August 31 with cash from our balance sheet. Beyond the repurchase, nearly $37 million of forthcoming UTG proceeds remain earmarked for further debt reduction, which would bring our net debt well below $100 million. Between the shares we are retiring and the debt we intend to pay down, we are using a stronger balance sheet and a more profitable business to compound value on a per-share basis. That concludes my prepared remarks. Let me turn the call back to Ben.

Thank you, Marc. I'll keep my closing brief because the financial results speak for themselves. None of this work is finished. Now that we have established a solid, profitable base, we are focusing on growth. We have a media platform still in its early stages, a subscription business we are testing and refining, a licensing pipeline to convert, a Playboy Club to open, and debt still to retire. But we have shown you this quarter that when we set out to do something, it shows up in the results. That we will build the newer businesses with the same discipline: test, lean into what works, and stay fiscally responsible. That is the standard we hold ourselves to and it is how we intend to keep creating value for our fellow shareholders. With that, operator, let us open the line for questions.

[Operator Instructions] Our first question is from JP Wollam with ROTH Capital Partners.

A couple for you here. So maybe if we could start in terms of the licensing business, and it sounds like there's some nice movement with Missguided and kind of opening up the runway there for them. But as we think about all the different areas, I guess, are there anywhere else that you are thinking in the near term is sort of ripe for further licensee consolidation? And there are some big opportunities to hand it over to other partners like Missguided that are showing some early signs. And just as you think about, kind of, the next 12 months and, sort of, the P&L, like, are the biggest kind of growth engines and maybe changes there going to come from some more of this licensing consolidation? Or is it really going to be sort of the other media business that's driving some growth there?

Hey JP, it's Ben. Look, we're very happy with where the licensing business is, and especially the pipeline that we have moving forward. The P&L growth is going to come from two things, right? Obviously, as we've talked about historically, we have a lot of white space, both from a geographical perspective and a category perspective, starting to get some real traction on the gaming side right now. And so that doesn't compete with existing licensees. There are certain markets that over time, and again, it's sort of a puzzle you're putting together because you have contractual obligations that you have to meet, both from the category perspective and the timing perspective. And that is coupled with a larger strategy, specifically bringing in like Krystle and the new team that we are bringing in to help us with that, that will just happen over time. We also want to be very sensitive that we are not taking down revenue or EBITDA from licensing business. We want to make sure that we're doing it in a very fiscally responsible way. As far as growth moving forward for the business, we think over time, the media and experiences business can be as large as the licensing business with a very similar profile. We are starting to see traction. I look at, for example, Miss July, and I look at that conversion funnel from social media posts to paying subscribers on our website or members. And we're starting to get better at that. We just brought in Radhika, who joined us two weeks ago, to really lead that effort on the digital side, and we're continuing to hire more people now that we've actually proven it out, right? So again, we have limited resources, we want to be really fiscally responsible. We tested something, we're seeing that it's worked, and now we're going to build a team to actually accelerate that growth moving forward. So I think growth will come from licensing. Again, licensing is more of a step function. I think on the digital side, it's a recurring revenue base, right? We're bringing people in. We bill them next year. And there's a lot of upside to that. And then on top of that, we've signed our first sponsorship deals for content. Paid voting was up roughly 2.5x from a revenue perspective versus the first contest. We have another one. And so it's multiple different revenue streams coming off, really, the same investment, which is the content side of it, which we have to do from a brand perspective, irrespective.

Great. That makes a lot of sense. Switching over maybe on Honey Birdette, I don't think you had touched on it. You provided some good detail on just, kind of, some of the strength there. But I know we've talked in the past about deploying capital for some additional units. So could you just share any updates there? How are you thinking about timing? I think maybe around 5 units was kind of what you guys were thinking in the past, but could you just provide us any update in terms of additional brick-and-mortar at Honey Birdette?

Yes, look, the business is doing great. The product is speaking to the consumer. We are actively looking for other brick-and-mortars, but there's multiple different ways to grow, including e-commerce, which doesn't require the CapEx that brick-and-mortar does. In an ideal world, we would open 5 more stores. We just want to make sure that those stores maintain the same margin profile that our existing stores do in the United States. Rents are expensive right now. And so we're being very, very selective in where we go, making sure it's the right market, coupled with the right economics. We don't want to open a store to have to decrease our margin profile moving forward. So, in the interim, we will focus on e-commerce, and the business continues to perform really well.

Great. And then just the last one for me, a little bit more in terms of the capital allocation question. Marc provided the update in terms of the second payment of the share repurchase for August, but as we think about, kind of, the remaining, I think that would put it at about $5 million of the $17 million. So just as we think about, kind of, that remaining $12 million, how aggressive do you want to be with that entire repurchase versus sort of balancing where debt sits today and understanding that the repurchase is kind of backstopped by some of your strong partners. But how aggressive or, sort of, how optimistic, I guess, are you that you will take down the, sort of, entirety of that share repurchase?