The following is a summary of the WildBrain Ltd. (WLDBF) Q2 2024 Earnings Call Transcript:

Financial Performance:

• WildBrain reported Q2 consolidated revenue of $126 million, a decrease of 10% due to reduced output in the Studio business.

• Content creation and audience engagement revenue was down 21% to $57 million.

• YouTube network saw a double-digit increase in revenue and profitability.

• Global licensing revenue was up 6% to $61 million with profits increasing significantly.

• The gross margin improved by over 300 basis points.

• Net income for the quarter was $5 million, achieved through reduced SG&A, lower share-based compensation, and a reduction in the fair value of embedded derivatives.

• Adjusted EBITDA was down 3% YoY to $25 million.

• Free cash flow for the quarter was $5 million and leverage ended at 4.4x.

Business Progress:

• As part of their 360-degree strategy, WildBrain is realigning its business focusing on content creation, audience engagement, and global licensing.

• Despite industry setbacks, WildBrain is anticipating 15% to 20% EBITDA growth for fiscal 2024 excluding television and content.

• Positive viewing trends, increased views and new viewers for Peanuts contributed to their growth in North America this quarter.

• The company's focus is routed towards larger, high-profile projects that attract a wider audience.

• WildBrain is actively engaged in noncore asset sales to reduce leverage and simplify its structure and operation.

• There is a strong focus on gaming platforms like Minecraft and Roblox due to high engagement levels.

• Despite the challenges, the company is confident in returning to growth in fiscal 2025 with over 60% of the revenue already greenlit.

• The company has adjusted its guidance for the fiscal year based on the slower-than-anticipated normalization of the content greenlighting and production cycle.

• The company is focused on controlling the cost base, making great capital allocation decisions, and seizing opportunities that will move the needle to deliver sustainable growth over the long term.

More details: WildBrain Ltd. IR

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