Kartoon Studios Inc.

Total revenue for Q2 2022 was $22.1 million, up $19.7 million or 843% from $2.3 million in the same quarter last year. Net loss attributable to Genius Brands was $13.3 million, or $0.04 per share, versus a $7.4 million loss, or $0.02 per share, in Q2 2021. Management said the growth was primarily driven by the addition of Ameba in January and the WOW! acquisition at the start of the quarter. On the balance sheet, the company ended the quarter with $105.2 million in cash, cash equivalents and marketable securities, $150.3 million in current assets, $63.6 million in working capital, and $143.1 million in total stockholders’ equity. No formal forward guidance was given; Andy Heyward said they are not prepared to give formal guidance, but expect profitability in the not distant future, with significant cash flow and cost synergies from WOW! over time.

Andy Heyward framed the quarter as a transformational step, emphasizing record revenue, rapid expansion in employees and content, and broader distribution for Kartoon Channel! He repeatedly pointed to the combined platform of WOW!, Frederator, Ameba, and Your Family Entertainment as the basis for a larger global children’s media business with recurring cash flow. His tone was highly optimistic, but he also said the company must keep investing wisely and did not provide formal earnings guidance.

Bob Denton emphasized the hard numbers: $22.1 million in quarterly revenue, up $19.7 million year over year, with the increase mainly from Ameba and WOW!. He said expenses rose due to direct operating costs, G&A, one-time professional fees tied to the WOW! acquisition, incentive compensation, and the inclusion of WOW! overhead. He highlighted the company’s liquidity and balance-sheet strength, noting $105.2 million in cash, cash equivalents and marketable securities, $63.6 million of working capital, and $143.1 million of stockholders’ equity, while saying cash management remains the key focus as they aim to become cash positive.

Investors asked when profitability might arrive, and management said there is no formal guidance, but they expect profitability in the not distant future and significant cash flow as the catalog and distribution system scale. On buybacks, management said they have not done one because of market volatility and the importance of preserving capital, though they continue to evaluate options. They also addressed inflation and interest rates by saying exposure is minimal, and said China exposure is limited, with production shifting from Chinese studios to Indonesia and the Philippines.