Alliance Entertainment Holding Corporation (NASDAQ:AENT) stock rose after the company reported significant growth in its revenue and adjusted profit. The report was released on September 10 and includes the financial and operational results for the fiscal year ending June 30, 2026.
Financial Results and Revenue Growth
The company's net revenue reached $1.15 billion, reflecting an 8% increase from the previous year. Gross profit increased by 15% to $152.3 million, and the gross profit margin improved from 12.5% to 13.3%, indicating an 80 basis point improvement.
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Jeff Walker, the company's CEO, stated that the physical entertainment market is transforming towards premium formats, collectible products, and specialized distributions, and these changes are directly related to the capabilities the company has built over the past three decades.
Increase in Adjusted EBITDA and Net Income
Adjusted EBITDA increased to $41.5 million, which is 14% higher than last year, while adjusted net income rose by 24% to $23.4 million. Additionally, adjusted earnings per share increased by 24% to $0.46.
Throughout the fiscal year, Alliance Entertainment experienced strong growth in key segments of physical entertainment. Vinyl revenue reached $383 million, up 13%, and CD revenue also increased by 25% to $156 million. Revenue from physical movies rose by 22% to $339 million, driven by increased unit volumes and the company's expanding studio relationships.
Despite the growth in adjusted results, the company's GAAP profitability declined in fiscal year 2026. GAAP net income fell to $13.1 million, and GAAP operating income dropped to $27.2 million. These results were partially impacted by a non-cash charge of $7.8 million.
Despite these challenges, analysts remain optimistic about the company's future, and as of September 11, AENT stock had a consensus buy rating and a 12-month price target of $8.50, indicating an upside potential of approximately 32.40% from the current stock price.
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