Greetings, and welcome to Alliance Entertainment's Fiscal Year 2026 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow formal presentation. As a reminder, this conference is being recorded. I would now like to turn the call over to Paul Kuntz, a member of Alliance Entertainment's IR team at RedChip. Paul.
Thank you. Before we begin the formal presentation, I would like to remind everyone that statements made on the call and webcast may include predictions, estimates, or other information that might be considered forward-looking. While those forward-looking statements represent the company's current judgment on what the future holds, they are subject to risks and uncertainties that could cause actual results to differ materially. You are cautioned not to place undue reliance on these forward-looking statements, which reflect the company's opinions only as of the date of this presentation. Please keep in mind that the company is not obligating itself to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events. Throughout today's discussion, management will attempt to present some important factors relating to the business that may affect predictions.
You should also review the company's Form 10-K, filed today, September 10th, 2026, for a more complete discussion of these factors and other risks, particularly under the heading Risk Factors. During this conference call, management will discuss non-GAAP financial measures, including a discussion of adjusted EBITDA, adjusted net income, and adjusted earnings per share. Management believes non-GAAP disclosures enable investors to better understand Alliance Entertainment's core operating performance. Please refer to the investor presentation or today's earnings press release for reconciliation of each non-GAAP measure to the most directly comparable GAAP financial measure. Your hosts today, Jeff Walker, Chief Executive Officer, and Amanda Gnecco, Chief Financial Officer, will present the results of operations for the fiscal year ended June 30th, 2026. Bruce Ogilvie, Executive Chairman, is also on the line and will participate during the Q&A session.
Before I turn the call over, I'd like to congratulate Jeff on being named Billboard's Executive of the Week last week, recognizing Alliance's role in helping drive the continued growth of physical music. With that, Jeff, the call is yours.
Thank you, Paul, and good afternoon, everyone. We appreciate you joining us. Fiscal 2026 was a year of acceleration for Alliance, both financially and strategically. We grew the business, expanded margins, strengthened our position across physical entertainment and collectibles, and continued building new capabilities that can drive the next phase of growth. Revenue increased 8% to $1.15 billion, gross margin expanded 80 basis points to 13.3%, and adjusted EBITDA increased 14% to $41.5 million. We also finished the year with strong momentum as fourth quarter revenue increased 18% year-over-year to $268.1 million. We saw broad-based growth across physical music, home entertainment, collectibles, and fulfillment, while continuing to shift the business toward premium products, exclusive content, and higher-valued services. Several changes occurring across the entertainment industry are also increasing the value of the distribution and fulfillment infrastructure we have built over the past three decades.
Physical entertainment is becoming more specialized and increasingly centered around ownership, fandom, and premium products. Consumers have virtually unlimited digital access to music and entertainment, yet they continue to purchase vinyl records, CDs, 4K Ultra HD titles, SteelBooks, and other physical products. Those purchases are increasingly about owning something connected to an artist, movie, franchise, or community that matters to them. The latest industry data shows how strong that demand remains. The RIAA's 2026 mid-year report showed U.S. physical music revenue increasing nearly 26% in the first half of calendar 2026, including 17.7% growth in vinyl revenue and 58.6% growth in CD revenue. In home entertainment, DEG reported that consumer spending on 4K Ultra HD increased 12% in calendar 2025, even as the broader physical video market declined. We saw those same trends in our own results.
For fiscal 2026, vinyl revenue increased 13% to $383 million, CD revenue increased 25% to $156 million, and physical movie revenue increased 22% to $339 million. In home entertainment, that growth also reflects the expanding role Alliance is playing with major studios. Over the last two years, we have added significant relationships with Paramount and Amazon MGM Studios. Paramount became an exclusive physical media distribution partner for us in the U.S. and Canada beginning in calendar 2025, and we added Amazon MGM at the beginning of calendar 2026. These relationships are important not only for the products they bring to our portfolio, but for what they say about Alliance's position in the market. As studios and labels increasingly consolidate and outsource physical media operations, content owners need partners that can coordinate manufacturing, inventory, retail execution, distribution, and e-commerce fulfillment efficiently at scale.
That is exactly what Alliance has spent more than three decades building. We support more than 340,000 in-stock SKUs across more than 35,000 retail and e-commerce storefronts, with capabilities spanning wholesale distribution, drop ship fulfillment, inventory management, and direct-to-consumer execution. That infrastructure is becoming increasingly valuable as more content owners look to scaled specialists to manage these functions. Fiscal 2026 also demonstrated that our growth is becoming broader across categories. In addition to the strength in music and movies, collectibles revenue increased 45% to $32 million, and distribution and fulfillment fee revenue increased 26% to $18.6 million. Collectibles, in particular, remain an important area of opportunity and growth. We are increasingly moving towards licensed, premium, and differentiated products with higher average selling prices and better margin characteristics.
Because we already have relationships with entertainment licensors, major retailers, and e-commerce platforms, we can use infrastructure that already exists to expand into adjacent fan and collector categories without having to recreate the distribution platform. Handmade by Robots is one example of that strategy. Owning the brand gives us greater participation in product development, licensing, and economics, rather than serving solely as the distributor of a third-party product. We see opportunities to apply that approach selectively as we continue developing our collectibles portfolio. Our fulfillment business is another extension of the same infrastructure. As retailers expand online assortments, they increasingly need partners that can efficiently manage large catalogs and fulfill products directly to consumers. Our breadth of inventory and drop ship capabilities allow retailers to offer substantially more selection without carrying every product in their own stores or distribution centers.
We also continue investing in automation to increase the scalability of that platform. During fiscal 2026, we ordered 5,000 additional totes for our AutoStore system, bringing total capacity to 57,000 totes. These investments are helping us create higher throughput while maintaining labor efficiency, which is important as we continue growing fulfillment volumes. We are bringing the same focus on automation to sales and marketing. We implemented HubSpot in January 2026 to give our teams better visibility, automate workflows, and strengthen customer engagement. We are also rebuilding our Webb-AMP B2B platform with AI-enabled capabilities designed to help retail buyers discover products more efficiently, improve purchasing accuracy, and make our sales organization more productive. The new Webb-AMP platform is scheduled to launch in first quarter 2027. Across the organization, we are using AI-assisted tools to reduce manual work and costs, improve decision-making, and increase productivity.
We are also extending our participation beyond the initial sale of physical products. Following our acquisition of Endstate Authentic at the beginning of the calendar year, we continued developing NFC-enabled authentication and digital product identity capabilities through Endstate Authentic and Alliance Authentic. We are already expanding Alliance Authentic beyond music. We have launched preserved and encapsulated Handmade by Robots and select Funko collectibles on the platform, and we are preparing to bring the same treatment to premium video SteelBooks. By combining preservation, authentication, and premium presentation, we believe we can transform products fans already value into what Alliance Authentic is designed to deliver, the ultimate collectible. Because these are products we already source, distribute, and fulfill, we have an opportunity to extend that model across categories at scale. As we enter fiscal 2027, several growth sectors are coming together.
We intend to build on the exceptional momentum in physical music, capture a full year of Amazon MGM, accelerate our higher-margin collectibles business and own brands, and expand Alliance Authentic and Endstate Authentic into additional product categories. We also expect continued growth in fulfillment while using automation and AI from warehouse operations to sales and marketing, to the Webb-AMP redevelopment to make the business more productive. Our objective is to pair growth in these higher-value areas with better operating leverage and stronger cash conversion. We believe the changes taking place across physical entertainment are creating attractive opportunities for scaled, specialized operators. Alliance has spent decades building the infrastructure, relationships, and capabilities required to operate in that environment. Fiscal 2026 provided meaningful evidence that those assets are becoming increasingly valuable.
With that, I will turn the call over to Amanda to discuss our fiscal 2026 financial performance in more detail.
Thanks, Jeff. I will walk through our fiscal 2026 financial results, beginning with revenue and gross margin, then covering operating expenses, profitability, cash flow, and our balance sheet. Net revenue for fiscal year 2026 increased 8% to $1.15 billion, compared to $1.06 billion in fiscal year 2025. Gross profit increased 15% to $152.3 million from $132.9 million, and gross margin expanded 80 basis points to 13.3% from 12.5%. The improvement in gross margin reflected stronger margins in physical movies and collectibles, increased contribution from premium and exclusive content, favorable product mix, returns activity, and lower wholesale freight cost as a percentage of sales. Gross profit grew faster than revenue during the year, reflecting improvement in the economics of our business as our mix continues to evolve. Turning to operating expenses, selling, general, and administrative expenses increased to $66 million from $56 million in fiscal year 2025.
The increase primarily reflected higher payroll and employee-related costs to support the larger business, as well as increased consulting and professional service costs associated with strategic initiatives and public company operations. As we enter fiscal year 2027, expense discipline and converting gross profit growth into stronger operating leverage are important priorities. Fiscal 2026 also included a $7.8 million non-cash write-off of a historical vendor rebate receivable associated with Tastemakers following the counterparty's cessation of operations. We do not consider this charge representative of our ongoing operating performance. Including that charge, GAAP operating income was $27.2 million, compared with $30.1 million in fiscal year 2025. Net income was $13.1 million, compared to $15.1 million in the prior year. On a non-GAAP basis, adjusted EBITDA increased 14% to $41.5 million, up from $36.5 million last year.
Adjusted net income increased 24% to $23.4 million, and adjusted diluted earnings per share increased 24% to $0.46 per share, up from $0.37 in fiscal year 2025. Turning to interest expense, we saw substantial benefit from the refinancing of our credit facility. Interest expense declined 28% to $7.6 million from $10.6 million, and our average effective interest rate improved to 6.1% from 9.2%. This improved our borrowing economics and provides a stronger financing platform as we manage the working capital requirements of our business. Moving to cash flow, net cash used in operating activities was $1.7 million in fiscal year 2026, compared with $26.8 million of cash provided by operating activities in fiscal year 2025. The year-over-year change was primarily driven by higher working capital requirements, including increased inventory and receivables. Both balances grew faster than revenue during the year, contributing to the decline in operating cash flow.
In fiscal year 2027, our objective is to convert a greater share of earnings into operating cash flow by moderating working capital growth relative to revenue, improving inventory productivity, and strengthening receivable collections. As a result, working capital increased to $62.4 million at June 30, 2026, compared with $45.4 million a year earlier. As Jeff noted, improving cash conversion is a key priority in fiscal year 2027. Our focus is on disciplined inventory management, receivable collections, and working capital efficiency while continuing to support attractive growth opportunities across the business. At year-end, $74.3 million was outstanding under our $120 million revolving credit facility, leaving $45.7 million of availability. The facility also provides, subject to certain conditions and lender consent, up to $50 million of additional borrowing capacity, providing further potential financial flexibility as the business grows.
During fiscal year 2026, we also repaid $10 million of related party borrowings, further simplifying our financing structure. Our capital allocation priorities remain straightforward. First, we will fund working capital required to support attractive organic growth. Second, we will invest selectively in initiatives designed to increase both growth and productivity, including automation and AI, our Webb-AMP B2B redevelopment, Endstate and Alliance Authentic, and the continued expansion of Handmade By Robots. Third, we are focused on improving cash conversion and balance sheet efficiency. Finally, we will continue to evaluate acquisitions selectively where the strategic fit and expected return justify the use of capital. With that, I'll turn it back to Jeff.
Thank you, Amanda. Before we open the call for questions, I want to close with a few recent examples that bring our strategy to life and explain why I am so excited about where Alliance is going. In July, I had the opportunity to spend time with Sir Richard Branson on Necker Island and present him with an Alliance Authentic preserved copy of the Sex Pistols' "Never Mind the Bollocks, Here's the Sex Pistols." Because that album is so closely connected to the history of Virgin Records, it was a particularly meaningful moment for myself and Richard. We were taking an iconic physical record, one with real cultural and personal significance, and showing how preservation, authentication, and digital identity can help protect its condition, provenance, and story over time.
For someone who has spent his entire career in physical entertainment, it was a remarkable illustration of what Alliance Authentic can become. Later that month, we brought the strategy directly to collectors at San Diego Comic-Con. Alliance Authentic joined Handmade By Robots inside the Lucasfilm Pavilion, where we presented preserved music and licensed collectibles to one of the most engaged fan communities in the world. We also secured an additional 5,000 units of the previously sold-out Project Hail Mary Amazon exclusive limited edition collector's SteelBook. These units sold out again on the same day they were made available. Our studio and label relationships give us access to some of the most important products and franchises in entertainment. Handmade By Robots gives us an owned brand through which we can participate directly in product design, licensing, exclusivity, and go-to-market execution. Alliance Authentic adds preservation, authentication, and digital product identity.
Our distribution and fulfillment network gives us the ability to bring those products to retailers and consumers at scale. When those capabilities come together, we are doing more than moving units through a distribution network. We can help shape the product, create scarcity and differentiation, build a direct relationship with the collector, protect the product's identity, and participate more fully in the value created around it. We are focused on turning moments like these into repeatable commercial capabilities across licensed products, premium limited editions, direct collector engagement, and authentication services, with additional opportunities across the life cycle of the product. The response we saw this summer strengthened our conviction that collectors want products with meaning, quality, scarcity, authenticity, and a story. Alliance is increasingly positioned to help content owners and licensors create those products and bring them to market.
We are also seeing extraordinary excitement around a major entertainment release heading into fiscal 2027. Grand Theft Auto VI is a great example. Rockstar's extended look debuted on Netflix in late August and generated enormous level of consumer engagement, highlighting just how significant this release has become as a cultural event. We buy directly from Take-Two and expect to participate across the launch, including the game itself and related products. We are also excited to participate in the excitement around GTA VI through music. A GTA VI vinyl release featuring major recording artists is expected through Atlantic Records, and given the level of interest around the franchise, we believe it could be among our strongest-selling album releases of the holiday season. It is a great example of how a major entertainment event can create demand across several parts of Alliance at once: gaming, hardware, accessories, and physical music.
Opportunities like these are why we are so excited about fiscal 2027. We have momentum in our core business, new growth platforms in collectibles and authentication, and new tools in AI and automation that can make Alliance more productive as we scale. Alliance has spent more than three decades building relationships, infrastructure, and capabilities across physical entertainment. Today, that foundation is supporting a much broader opportunity: premium formats, exclusive products, own brands, authentication, fulfillment, and direct collector engagement. We believe Alliance is increasingly positioned not just to participate in the evolution of physical entertainment but to help shape it. I want to thank our employees across Alliance for their hard work and contributions. I would also like to thank our customers, content and licensing partners, collectors and shareholders for their continued support. Operator, we are ready to open the line for questions.
Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment , please, while we poll for questions. Thank you. Our first question is from Thomas Forte with Maxim Group.
Great. Bruce, Jeff , and Amanda Gnecco, congratulations on a very strong fiscal year. I have three questions. Jeff, they get progressively harder. I will go one at a time. The easiest one first. I do not think you were very affected by tariffs, meaning that most of your music efforts and your movie efforts were not subject to tariffs. I think you had some small tariffs on Handmade by Robots. But we have been hearing a lot about tariff refunds in the June quarter, and I am just curious if you were able to secure any.
Hey, Tom. Good to hear from you. Yes, we definitely secured some credits back, and we have received the majority of the credits that we are waiting for to come back.
Good. All right, and then my second question is, it is very interesting and impressive to see the very strong growth in CDs. I know it is way too early to talk about when you looked at the 19 years you have seen a recovery in vinyl, but I would appreciate it if you could compare or contrast what you are seeing in CDs. Why do you think CDs are doing so well, and how it is similar to and different from trends in vinyl?
Yeah. I think first off, there is a big push for people that are fans to collect products of their favorite artists. I will say in CDs in particular, I recall maybe about 18 months ago, we were at a music trade show, and we were talking with the labels about CDs and what we were seeing as the growth of it. And one of the big topics was that everybody had kind of forgot about CDs a little bit, and the in-stock percentages and the fill percentages and things like that were not that great. And there was a lot of conversation about, we have got to make sure that all the classic albums, the top albums, need to be in stock and available and so forth there. And so that is really happened over the last year, which is definitely helping the sales here.
Consumers were coming in, buying CDs, and you have independent music stores and so forth going, "Hey, sales are going up. Maybe we build back up our section a little bit. "Now you're seeing more selection at the store and on the store shelves, and all of that continues to enhance it. One of the things in the decline that was a big challenge is there's no product on the store shelf. As it kept declining, declining, there was fewer and fewer and fewer places to buy it. It also goes the other way. So you see vinyl, more stores, bigger selections in more different retailers as well. That's been helping support the sales of vinyl. Now you're seeing that trend happening on CDs.
I do expect it to continue with what we're seeing because the consumer demand is there. The retailers, the wholesalers, and the labels are all producing product, making sure product is available, and the whole combination needs to work together.
All right, great. Then third and final for me. I know that you're excited, with good reason, for Grand Theft Auto VI, but I feel like if you looked at your performance in your fiscal fourth quarter and just your fiscal year, and you looked at your gaming versus kind of the rest of the portfolio, that the gaming didn't do as well. So when you step back, how do you look at your efforts in gaming, and how do you consider, from a portfolio standpoint, when to emphasize or de-emphasize different categories of physical media?
I think we're emphasizing and de-emphasizing based on the trends that we're seeing, Tom, on that. This Grand Theft one in particular is a historic game. It's going to change the gaming industry here, as well as there's a lot of other aspects revolving around this particular game. So it will be a huge fourth quarter. It's going to be, you could say, a Grand Theft Auto Christmas. That's what's coming for everybody on the retail side. It's a big thing happening there.
Okay. Thank you for taking my questions.
Thank you, Tom.
Our next question is from Michael Kupinski with Noble Capital Markets.
Thank you for taking the questions, and I offer my congratulations on a great year. A couple of questions here. Your physical movie revenue obviously increased strongly, 22%, due to Paramount and Amazon MGM, as you mentioned. Now that they are on the platform, I was wondering how much incremental revenue opportunity remains from those relationships as we cycle into fiscal 2027? I was wondering, maybe you can just give us some update on maybe some discussions you might have with other major studios or content owners that would consolidate your distribution with you.
Hey, Michael. Good to hear from you. With respect to Paramount and MGM, one of the things that we're seeing, we're seeing pretty strong sales numbers on both of those, as well as we've been very much focusing on adding new catalog products to their collections. There was a lot of great content that both Paramount and MGM did not have released previously, or it was released in one format but maybe not released in a 4K format or in a SteelBook format. So those type of items are stuff that we're expanding the catalog. In particular with Paramount right now in this second half here of 2026, we've got significantly more new releases. They're not new movies; they're releases of existing movies that are really going to help bolster our catalog position there with Paramount. So we're pretty excited about that side of it, from that perspective.
With respect to the other studios, I really can't comment too much. We're in a lot of different conversations, obviously, on that side, as you've seen in the past, and each one of them has a different situation and different conversation. We still do believe that Alliance is a great opportunity for a studio to license product to us, because at the end of the day, we have really a huge, substantial sales channel with all of our e-commerce capabilities, our store capabilities, and fulfillment side of it to help maximize the sales of those studios. So I think that's where we're at on that right now.
Got you, Jeff. Thanks. On your proprietary products, I was just wondering if you can maybe give us a little color. How much of the growth is coming from proprietary products like Handmade by Robots versus third-party licensed merchandise?
Yeah. The majority of our growth is coming from our third-party products right now. We are pretty heavily investing in Handmade by Robots, Alliance Authentic, as well as Endstate. Those are all opportunities for Alliance that have very significantly strong margin profiles in those three categories. We have quite a bit of investment dollars into those right now, from building our teams on that side as well as working to market and generate new business in all three of those categories. So you're going to continue to see that investment that we're making right now on those three categories in particular. On our current sales level, to your specific question, it's really the third-party ones that are really significantly growing.
Got you. Your fulfillment fee revenue increased a strong 26%, and you said that you added 5,000 totes onto your AutoStore capacity. I was just wondering if you can just tell us how much additional revenue can the existing infrastructure and AutoStore capacity accommodate before another meaningful CapEx investment is required?
We still have capacity currently, and we are always looking at how we maximize our capacity there. I do not think we have a pressing need right now for a huge CapEx investment. If we go down the CapEx side, it will be more towards automation rather than the size of the building, per se. We are looking at new opportunities to make the warehouse more efficient through different automation, different product than the AutoStore, but same type of result where we use some technology there to really help reduce our overall costs on that aspect. We still do have capacity, but as different things pick up one area and move around, we definitely are maneuvering with that in our warehouse operations.
I will also say that we have also really run the business where we get the sales and we get the opportunity, and then we invest in the systems to make that happen. We are not really a company that likes to go build a bunch of stuff and hope that the sales and opportunities show up. We are pretty prudent about that. We get the capacity up there and the volume up there, and then we look at, okay, how do we solve this capacity challenge? So, we are pretty prudent on our capital expenditures.
Yeah. It seemed like your SG&A expense increased a fairly strong 18%. I was just wondering, it sounds like a lot of that was to support future growth. I was just wondering, how should we look at SG&A leverage as we go into fiscal 2027?
I think there is a lot in there to support the growth, especially in some of the new categories that I was just mentioning there. We do have some AI projects in the works. Those could help us be a little more efficient with some of our SG&A expenses as well there. We are pretty heavy on that side right now. I am a CEO that is very pro-AI and technology, so we have got a lot of our leadership team working on a lot of different AI solutions that can help us, not only grow sales, which is number one priority, but help with operational expenses as well. We are going to continue to see some improvements in that, a lot directly from those AI initiatives.
Jeff, if I can squeeze one more in about Alliance Authentic, I was just wondering, are there specific commercial milestones that we should look for on Alliance Authentic and Endstate?
We have our own commercial milestones. I think really the biggest thing that we are looking at, first and foremost, is the number of collectors that we have in the ecosystem. So what that means is how many people have one of the collectible items we have, whether it is vinyl or a Handmade by Robots or a Funko encapsulated. We are also right about ready to launch SteelBook encapsulated as well. The bigger that we grow, that ecosystem of our collectors really helps us with the second phase of that, which is the peer-to-peer marketplace, using the NFC chips there and developing that. So when people have their collectibles, if they want to sell it basically or buy them, we have a good marketplace and ecosystem for that. We are investing quite a bit to develop that whole component there.
It is operational today, and we are working on building more people with the collectible products. The last part is, we do have Comic-Con New York coming up, and we did a lot with Alliance Authentic in the San Diego Comic-Con and got a lot of collectors into the ecosystem through the Comic-Con there as well.
Got you. Thank you. That is all I have. Good luck on 2027.
Thank you, Mike.
Thank you. Our next question is from David Heiserman with ThinkEquity.
Oh, thank you very much. Thank you, Jeff. Thank you, Amanda. One of my questions was specifically about the development of the secondary market, a peer-to-peer marketplace, so that you would control the entire distribution, delivery, and chain of custody provenance for all your collectibles. My second question: as an Eagles fan, I love seeing the Eagles player up there on your super exciting brand. The Endstate Authentic is, could you describe what the horizon would be for that going forward? Is that something that would be on every sports team around the world in every event, especially with an NFL
Well, I—
Game in Australia tonight?
The Endstate Authentic, the technology that we have, is great. There is a huge amount of opportunities across all sorts of different collectible platforms. It is based on an NFC digital chip, and we have our own proprietary software with that. But it has really become an authentication aspect. That chip has its own digital codes to it that cannot be replicated, and so forth. When you put that product, that chip, into an encapsulated product, it could go into any items that are graded or authenticated. You think of cards and collectibles and things like that that people grade and authenticate. Chips like that are very valuable in those particular areas.
It can also go into products when products are originally manufactured and made, putting a chip in there, and that you then can prove the authentication and the aspect that it is not a fake one of it or something that has been knocked off. You are going to continue to see, not just with Endstate, across the board, a significant movement into these NFC chips into a lot of different products. You see them even in high-end fashion products right now. They are starting to put them in some of the high-end fashion bags and different things like that as well. It is really valuable for the authentication of the product. We are in the forefront of that, and we are focused heavily on collectibles and those types of things with the NFC technology. Myself and Bennett, who heads up Endstate.
Endstate, we're in a lot of different conversations right now of getting our Endstate technology integrated into a lot of good opportunities. I don't really want to speak on specifics about them right now because we're working under NDAs on a lot of those, but there is some great opportunity there with that technology.
No doubt. Thank you very much.
Yeah.
Thank you. I would now like to pass the floor over to Paul Kuntz for any webcast questions.
Thank you. We actually covered a few of these already, but we do have some. I just want to let our attendees know we are running past 45 minutes now, so if we don't get to any of your questions and you've left contact information, we will reach out after we wrap up. One of the questions we have, Jeff Walker, what are you seeing in the DVD demand going forward?
Yeah. On the DVD side, my personal opinion on DVD is we have been seeing a decline on DVD for more than the last decade, a significant decline on that. I personally have a belief that we are very close to the bottom of the decline. We are definitely seeing much slower rates of decline. With that, I am seeing a lot of social media conversation on DVD, similar to what we are seeing on CD and vinyl, that consumers want to have their favorite movie at home in their collection. On the video side, we all know how complicated it is trying to find the movie you want to watch and what platform it is on and whether it is on a platform or not. The DVD side is definitely ripe for a turnaround there.
One of the challenges we have is not very many retailers stock DVD, and we are in the right position to try to help that right now going forward. I am optimistic that whether it is 2027 or 2028, we are going to see the bottom of DVD, and we are going to start to see it increasing similar to what we are seeing in vinyl and CD. People want to collect their favorite movies. They want to have them at their house. It is the same situation there. I am pretty optimistic about that, and the trends that we are seeing seem to be going in that direction.
Great. Thank you. Our next question: did you learn anything from the reaction at San Diego Comic-Con that could influence the products Alliance develops or brings to market next?
Comic-Con is a fantastic convention for people that have not been there before. They have the New York Comic-Con coming up in just about a month from now. The fan base at Comic-Con is fantastic. They are focused on all their favorite products and IP and characters, and it is a fantastic thing to watch there as well as, just like there is a shift to physical product and collectability, there is also a human shift to go to events and spend time at an event and have experiences and do all of that. The people pay a lot of money to go to Comic-Con, and they go there because it is part of their life and part of their experience.
You're seeing not just Comic-Cons, but anime shows, vinyl record shows, collector shows, trading card shows, all that kind of stuff being very robust right now as it's an experience for people, and it feeds their fandom and what they're collecting. When we look at our products in there, we're definitely focused on what we can do as far as providing Comic-Con exclusives of Handmade by Robots. Same thing with Alliance Authentic. We had some great Star Wars collectibles on vinyl that were encapsulated, some Japanese pressings of the vinyl records that we sold there at Comic-Con. We are looking at more that we can do with movies and so forth, with exclusives in those types of shows. It's really a culmination of all this different IP and fandom there, and it's where the collectors that we are trying to develop, where they're coming through.
Those people also, as you all can realize, are fairly heavy on social media and posting and developing that stuff. When we're there with a strong presence, that rolls out into a lot of social media going forward there. We are, as you can tell; we're also investing in shows like that to build our brands as well. There is cost to do that, but we are definitely seeing a win in that side by focusing on those Comic-Cons and other collector shows.
Great. Thank you, Jeff Walker. We had another question. On the new Webb-AMP platform, what will a retail buyer actually be able to do differently once the AI-enabled version goes live?
Just for everybody's info, Webb-AMP is our web platform for our B2B. We have almost 2,000 independent retailers and so forth. They use that website to place orders, to look up product, to search for products. It's a pretty robust website. It does; a significant amount of our sales come through there. The enhancement—we're rebuilding the entire back end of it as well as new enhancements. It's all been AI-enabled coming from the back end. The core part of it is completed, and we're now working on different functionality on the front end, and we're planning to launch this in January of 2027 after the holiday season. It includes significant speed improvements, obviously, in the platform, as well as search capabilities.
When I talk about search capabilities, it goes not only searching for a basic product, kind of a linear search, but it will also help if you are looking for something Star Wars-related; it will bring up the movies, the music, the collectibles, all things revolving around that. Or if you wanted to go into some other category, it can cross-search across all the different products. One of the things that is important for us is being able to communicate to our buying customers all the different things that Alliance stocks and all these different categories. That will really help the buyers at the retail locations find stuff when something is hot and selling or they are going to have an in-store appearance or a listening party for a new release on a music title, what other products from that artist are available, and so forth.
We expect it to dramatically help our sales in that side. It will be a big improvement for Alliance, and the way it is turning out right now, it is going to be one of the top. It will be the top B2B platform within our industry, for sure.
Great. Thank you, Jeff. As we are coming close to the full hour here, this will be, I guess, the last question we do. Beyond GTA VI, are there other major releases or franchises coming up that could create opportunities across several Alliance categories at the same time?
Oh. Yes, there is lots on that product side. We have actually put together our own product council here with music, movies, and collectible all together because we have and gaming. We have teams from each of those, and we get together and look at what is coming out in the future and what the combined opportunities and things are. Some of this definitely revolves around movies, and I will give you one piece of information that is coming. The new James Bond movie is. It is an Amazon MGM movie. They are working on that movie right now. It is looking like we are kind of hearing maybe theaters the end of 2027. That will go into DVD for us through Amazon MGM into 2028. Then we are looking at, okay, what other collectibles revolving around James Bond? What are the music soundtracks and things revolving around that?
You can imagine when they put out a big movie like that has such a history to it, what that looks like in late 2027 and 2028, revolving around everything James Bond. We are trying to coordinate all of our different configurations to plan ahead for something like that. One other one that is coming up that was communicated by Sony is the new Beatles movie that is coming out in April of 2028. There are multiple movies that The Beatles are putting out, and you guys can all imagine the combination that we have from music and the movie side and the collectible side trying to revolve around The Beatles coming up in 2028 and what that does for us.
Those are two examples, but you can see how there is such a correlation between all these platforms and these configurations all together and what those opportunities can present for us when we put our four teams of gaming and collectibles and music and video all together to try to strategize on how we have the best combination of product offering for those big initiatives that are happening. Very exciting opportunities there.
Yes, very exciting. Jeff, if you have any final comments you would like to leave before we wrap up?
Well, I am super excited on where we are going. I know you guys see our collectible sales increase over the last year. They have really ramped up even more recently. People told me to get out of the music industry a long time ago, and those people are. I am kind of telling them, "I told you so," now that we are seeing vinyl and CD resurgence like it is. We are definitely in the right place at the right time, and we have got a fantastic team of people at Alliance Entertainment, and there is a lot of great business conversations happening every day. That is what we are all focused on here, and we are making some stuff happen, as you can see.
Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you again for your participation.