Dolphin Entertainment, Inc. (NASDAQ: DLPN Q4 2024 Earnings Call Transcript from March 27, 2025
Dolphin Entertainment, Inc. falls short of earnings forecasts. The reported earnings per share (EPS) came in at -$0.15, below the expected -$0.1.
Operator: Good day, everyone. Welcome to the Dolphin Entertainment, Inc. Fourth Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. After management's prepared remarks, there will be a question and answer session. I would now like to turn the call over to your host, James Carbonara, Investor Relations. The floor is yours.
James Carbonara: Thank you, operator. Good afternoon, and thank you for joining us once again for Dolphin Entertainment, Inc.'s full year 2024 earnings call. 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 differ materially from actual events. Please refer to the cautionary text forward-looking statements contained in the earnings release published earlier today as well as the most recent SEC filings and reports. During the call today, management will also discuss non-GAAP financial measures, including adjusted operating income or loss.
The firm thinks this data will be beneficial for investors. The reconciliations to the closest GAAP metrics can be found in the earnings statement. Let me now hand over the discussion to Bill O'Dowd, CEO of Dolphin Entertainment, Inc., who will take it from here. Go ahead, Bill.
Bill O'Dowd: Thank you, James, and welcome all. Just like before, I’ll begin by going over the main financial and operational highlights from our fiscal year 2024; after this, Mirta Sanchez Negrini will offer a thorough breakdown of the finances prior to opening it up for questions. To kick things off with the numbers: In 2024, we saw robust financial success, marking a 20 percent increase in yearly revenues reaching nearly $52 million. Reaching the mark above $50 million signifies an important achievement internally, holding both practical and emotional significance. Moreover, arguably most crucially, we recorded positive adjusted operating income throughout the entire fiscal and calendar year 2024. As I’ve mentioned multiple times during past earning discussions, adjusted operating income serves as our benchmark because it lets us concentrate on core business outcomes while excluding non-recurring cash costs and expenses tied to historical mergers and acquisitions.
We consider achieving positive adjusted operating income a major achievement for Dolphin Entertainment, Inc. During Q4, we strategically invested in growth through initiatives like launching Always Alpha and expanding our digital division. These ventures excite us greatly because they have the potential to drive substantial revenues and profits for Dolphin Entertainment, Inc. over time. Furthermore, we think that these near-term investments enhance our capabilities and distinct market presence. However, before discussing these drivers of growth at Dolphin Entertainment, Inc., I should mention—though this part won’t be deleted—that last month, Dolphin Entertainment, Inc. received recognition as Agency of the Year from the 2025 Observer PR Power List.
Year after year, we’ve celebrated each member’s achievements on this influential ranking. Imagine our delight when, for the inaugural year with our full ensemble as part of Dolphin Entertainment, Inc., our collective public relations firms were crowned Agency of the Year nationwide. Talk about making an impact! From a marketing perspective, our extensive influence resonates well with our clientele. We often emphasize this broad outreach through regular press updates. To illustrate, just during the initial three months, our contributions from events like the Sundance Film Festival, Grammys, Super Bowl, Academy Awards, Toy Fair, and SXSW made headlines. As leaders in these pivotal sectors within American culture—sports and entertainment—we spearhead numerous high-profile client initiatives and branding efforts across all platforms.
Here’s a simplified version using typical Wall Street terminology: A key aspect of the investment strategy for Dolphin Entertainment, Inc., revolves around leveraging and generating revenue from an exclusive group of marketing firms known for their extensive cultural influence. To achieve this, one must initially develop such a distinctive set of marketing entities. Throughout the last eight years, we've successfully accomplished this task. Our distinctiveness was quickly acknowledged when we were named Marketing Agency of the Year in 2025. Much like teams gearing up for March Madness, after briefly celebrating our achievements over the past eight years, we're now concentrating on future expansion prospects. Allow me to outline some of them right away. Firstly, Always Alpha—just as a refresher, Always Alpha kicked off operations at the beginning of Q4 back in October.
This marks the debut of the very first sports management company dedicated exclusively to women’s athletics. Founded by Alison Felix—who holds the title of being America’s top-decorated track and field star—alongside her sibling Wes Felix and the remarkable leader Cozette Chapet, Always Alpha has garnered backing from Dolphin Entertainment, Inc. Their mission revolves around revamping traditional management practices and supporting female athletes, commentators, and mentors across various facets of life. In an exciting development earlier this year, in February, we proudly announced a pioneering collaboration with Deep Blue Sports and Entertainment. Notably, Deep Blue, initiated approximately one year prior through the vision of founder Laura Currancy, stands as the premier ad and branding service provider tailored specifically for women’s sports. This strategic alliance creates what we consider to be the biggest entity within this domain, fundamentally transforming the landscape of women’s sports via full-spectrum talent and brand management solutions.
We're excited about boosting women’s sports even more through this groundbreaking partnership. Recently, at the beginning of the month, we honored women in athletics as well as International Women's Day by sounding the NASDAQ close-out gong. This occasion, organized jointly by Dolphin Entertainment, Inc., and Always Alpha, included notable figures such as Alison Felix, Cozette Chapet, alongside Laura Carrenzi and leading Always Alpha representatives including Kayla Jeter and Keira Dixon. Here, I wish to express my gratitude once again to Nasdaq for providing an incredible platform where everyone had a great time; it helped spotlight Always Alpha's dedication to uplifting female athletes and fostering growth within women's sports. Additionally, this event underscored Dolphin Entertainment, Inc.’s role in championing women throughout their various divisions.
In celebration of International Women’s Day, we’re delighted to announce that over 75% of Dolphin Entertainment, Inc.’s workforce comprises women. Each of our eight fully owned subsidiaries boasts at least one woman serving as their chief executive officer. Additionally, I want to mention again during the ceremony how much we value our cherished Chief Financial Officer, Mirta Sanchez Negrini, who is also a woman. We take great pride in having such a robust lineup of female leaders within Dolphin Entertainment, Inc. Shifting focus to another area of strength—our digital department—it continues under the dual leadership of Co-Chief Executives Allie Grant and Sarah Boyd. This month marks the launch of an innovative new unit focused specifically on affiliate marketing. Given that the affiliate marketing sector was recently estimated by Forbes to be worth around $17 billion, this strategic addition equips us with opportunities to capitalize on a swiftly expanding marketplace. It also signifies the final significant service line added for the digital department within the realm of influencer marketing.
Affiliate marketing enables influencers to earn commissions from brands by driving sales via exclusive links posted mainly on their social media profiles or websites. This newly established unit within our digital department provides extensive assistance to creators, encompassing product selection, content enhancement, creation of appealing visual materials, and newsletter development for audience engagement. We aim to assist creators in transforming their content into tangible outcomes and establishing steady long-term income sources. Naturally, the digital department receives its customary commission based on the revenues generated by the represented creators.
Heading up this division is Kate Steele, an acclaimed specialist in affiliate marketing, bringing extensive knowledge and a successful history. Kate has crafted cutting-edge affiliate tactics on prominent platforms like LTK, the Amazon influencer program, Collective Voice, and ShopMy—essentially covering the main players in the field. Among her high-achieving clientele have been individuals such as Leanne Benjamin, Trina Bowman, Amy Hubner, and Stephanie Slater. Her proficiency guarantees that both content creators and companies can maximize their affiliate endeavors, transforming each chance into substantial earnings. This initiative marks a significant and well-calculated move for the digital team. Firstly, as highlighted earlier, it positions our agency among only a select group nationwide capable of providing comprehensive support across all four key areas within influencer marketing.
In summary, these four revenue streams at TDD involve managing talent for brand campaigns—that’s point one. Point two entails handling talent for affiliate marketing initiatives. The third involves assisting brands in developing and running their own influencer marketing efforts. Lastly, we organize and run influencer events like our sponsored shows and showroom activations. This structure enables us to support content creators through their primary income sources via social media: acting as brand representatives and engaging in affiliate marketing. Launching this division is considered a significant achievement within our digital team, and we look forward to sharing major updates from this sector over the course of the year. For clarity, despite various speculations, we haven’t inked a contract with James Carbonara to become an influencer.
Let’s now examine our projects. Our first venture, the IMAX film "The Blue Angels," made a return to IMAX cinemas in January, drawing viewers into an awe-inspiring 3D experience filled with spectacular imagery and engaging narrative. Going forward, Dolphin Entertainment, Inc., will continue benefiting from revenue generated through IMAX museums and various institutions over many years. Additionally, “Blue Angels” has earned recognition as it was honored with the Motion Picture Sound Editors Golden Reel Award for exceptional work in sound editing within feature documentaries. This film truly stands out; should you not have seen it yet, we highly suggest watching it—especially the 3D edition playing at your nearby IMAX museum. Returning briefly to Dolphin Entertainment, Inc.’s origins in filmmaking—in collaboration with Aircraft Pictures and Photon Films—we’ve wrapped up main shooting activities for the upcoming big-screen rendition of the iconic 1986 cult sport-drama, "Youngblood."
Directed by acclaimed filmmaker Hubert Davis—who happens to be the offspring of a Harlem Globetrotter—this film showcases his affinity for tall individuals, much like myself. The narrative revamps the tale of ice hockey wunderkind Dean Youngblood for contemporary viewers. Filmed in Toronto, Canada, the production stars Ashton James alongside Blair Underwood among an inclusive ensemble. Supported financially by organizations such as Telefilm Canada along with others, this endeavor underscores Dolphin Entertainment, Inc.’s prowess and standing in crafting premium scripted material tailored towards younger audiences and family-oriented crowds. As far as scheduling goes, we plan to debut "Youngblood" at one of several autumn film events. Our preference leans toward showcasing it during the Toronto International Film Festival in early September due to practical considerations; launching a Canadian-shot hockey flick right where it was filmed seems fitting indeed.
And we would hope to be able to announce a sale to a theatrical studio or streaming service partner shortly thereafter. Now the consumer products our interest in Rachael Ray's staple gin had a big win partnering with FreshDirect to launch exclusive holiday recipes blending delicious dishes with seamless ingredient delivery across New York, New Jersey, and Connecticut. The collaboration featured recipes like Negroni cranberry sauce, dirty martini shrimp and linguine, and lemon blueberry cheesecake with lemon gin sauce, all incorporating Staple Gin. We hope to have more announcements like this in the coming weeks, ideally for when we speak again on our Q1 earnings call. Lastly, in a space we are keeping a close eye on, as we announced this morning, Dolphin Entertainment, Inc.
partner, Lodi.ai, expanded its advanced digital identity protection services making its powerful AI-driven reputation management tools accessible to everyone. Previously exclusive to high-profile celebrities, this technology now offers free and premium membership options for individuals, influencers, and professionals, to monitor and remove unauthorized content. With a reported 95% success rate and content takedowns within 17 hours, Lodi.ai addresses deepfakes, impersonations, and content misuse providing unparalleled protection in this digital age. And this expansion underscores Lodi.ai and Dolphin Entertainment, Inc.'s commitment to safeguarding digital identities for all users in an increasingly AI-driven world. And, of course, as you can imagine, those issues are very prevalent with our celebrity clients.
Amid these exciting achievements and strategic initiatives, I would like to close by highlighting again that we have also made significant progress on strengthening our financial position. To summarize, we generated 20% year-over-year revenue growth to $51.7 million, demonstrating strong financial performance. We achieved full-year positive adjusted operating income for 2024, a significant milestone in the company's progress. And we launched major initiatives across subsidiaries, including the new affiliate marketing division here in Q1 of the digital department, and the continued investment in growth at Always Alpha in women's sports management. We believe we have built a powerful foundation for long-term value creation and are exceptionally well-positioned to capitalize on opportunities in 2025 and beyond.
Given the recognition as the 2025 Agency of the Year by the Observer, it’s clear we’re heading in the right direction. I’m immensely proud of our team and profoundly thankful for the continuous backing of our stakeholders. Looking ahead, we firmly believe that greater things await Dolphin Entertainment, Inc., and we feel strongly that our company's stock remains significantly underestimated. Last year, our earnings climbed from slightly above $43 million in 2023 to barely beneath $52 million in 2024. Additionally, after moving from an adjusted operating loss exceeding $2 million in 2023 to a gain of almost $1 million in 2024, this represents an improvement of over $3 million in adjusted operating income. Despite these accomplishments, our current valuation still sits lower than what was achieved in the previous quarter based on revenue figures.
In this case, our current revenues are lower than those recorded during any of last year’s quarters. Personally speaking, to emphasize my conviction that our shared stocks are significantly underpriced, I bought $100,000 worth of Dolphin Entertainment, Inc. common stock in the latter part of last year. Following suit, I've initiated a 10b5-1 plan with an initial investment totaling $250,000 aimed at acquiring additional shares. My intention here is to demonstrate faith in the company's prospects and acknowledge the substantial growth potential inherent in our equity value. Now, let me hand things off to Mirta Sanchez Negrini who will guide us through the financial details before opening the floor for questions. Over to you, Mirta.
Mirta Sanchez Negrini: Thank you, Bill, and good afternoon. I'll now review our 2024 financial results in more detail. Total revenue for the year ended December 31, 2024, was approximately $52 million, an increase of 20% over the same period in 2023. Adjusted operating income was approximately $900,000 for the year ended December 31, 2024, as compared to an adjusted operating loss of $2.4 million for the same period in 2023. Operating loss for the year ended December 31, 2024, was approximately $10.5 million as compared to an operating loss of $20.1 million for the year ended December 31, 2023. Operating expenses for the year ended December 31, 2024, were approximately $62.2 million, including depreciation and amortization of $2.4 million and nonrecurring expenses of impairments of goodwill of $6.7 million, $1.3 million to write off notes receivable, and $164,000 of acquisition-related costs.
For the fiscal year ending December 31, 2023, the operational expenditures amounted to roughly $63.2 million. These included depreciation and amortization totaling $2.3 million as well as one-time charges from impairments of goodwill amounting to $9.5 million. Additionally, there were asset write-offs valued at $4.1 million related to notes receivables, an impairment charge on intangible assets worth $300,000, and transactional costs linked with acquisitions summing up to $116,000. In contrast, during the period concluding on December 31, 2024, the company reported a net deficit of $12.6 million. The financial statement reflected depreciation and amortization expenses of $2.4 million along with interest payments equating to $2.1 million. There were also exceptional losses due to impairments of goodwill recorded at $6.7 million, additional asset write-downs associated with promissory notes reaching $1.3 million, plus further acquisition-related fees totalling $164,000. Comparatively speaking, this stands against a previous annual shortfall of $24.4 million posted by the end of December 31, 2023. That figure encompassed depreciation and amortization expenses adding up to $2.3 million, alongside financing cost outlays for interests set at $2.1 million. It should be noted that these figures incorporated significant non-recurring deductions pertaining to devaluation of long-term business resources which stood at $9.5 million. Further reductions came through writing down overdue loans ($4.1 million), depreciations affecting immaterial properties and rights ($300,000) together with integration expenses tied directly after mergers or takeovers quantified at $116,000.
The loss per share amounted to $1.22 for the fiscal year ending December 31, 2024, calculated from 10,306,904 weighted average shares outstanding. For the previous year, which concluded on December 31, 2023, the loss per share stood at $3.39 based on 7,206,577 weighted average shares outstanding. As of December 31, 2024, cash and cash equivalents totaled $9.1 million, an increase from $7.6 million reported as of December 31, 2023. Overall, 2024 represented substantial financial advancement with increased revenues, lower operational costs, and enhanced adjusted operating income. Moving into 2025, we aim to sustain this positive trajectory. To continue our discussion, I will hand over to the operator who can field your questions.
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