All right. Next up, we have the one and only Bill O'Dowd from Dolphin Entertainment.
She's very enthusiastic. That was impressive. Well, pleasure to meet you all, and thank you all for coming in here today. I know it's a long day, and appreciate you making the time at 3:00 on an afternoon. I thought I'd just talk you through a few slides about why I'm buying from my own company and see if it's of interest to you as well. I am doing it as if you have a working understanding of Dolphin, but of course, we have a Q&A that happy to answer any questions about our company. I won't go through the whole history of Dolphin or anything besides those beautiful forward-looking statements, where we are today. The five takeaways I hope for this conversation, we'll go through a slide on each, is just why am I buying? We have organic growth.
We have free cash flow catalysts in the short term. We don't need to raise any additional capital. The last equity we drew down was May of 2024. I'm buying, so that's always hopefully a good sign. We have ventures upside, which we'll talk about at the end, with no capital outlay from Dolphin. Okay. First, DLPN is well-positioned to benefit from organic growth in the markets we serve, especially influencer marketing. If you're not familiar with our story, again, I'll be brief. We up-listed to NASDAQ nine years ago as an acquisition story that we're going to buy entertainment marketing companies to build both horizontal and vertical scale. We bought PR firms in each major area of entertainment, and we bought vertical scale, married those PR firms with influencer marketing and celebrity booking, event marketing.
Influencer marketing, if you have any exposure or interest in the marketing field, has been and continues to be the driver of growth in marketing. It is not your father's marketing industry or Mad Men anymore. It is very much influencer marketing, and we think we're extremely well-positioned. We bought two influencer marketing companies and merged them to create what we think is the best in the industry, a company called The Digital Dept. When you have these different companies, you can cross-sell. Today, you tend to package PR and influencer marketing, earned media, right? If all the marketing's broken into paid and earned, we think we built a powerhouse in earned media with our PR firms and our influencer marketing. Then, of course, you have economies of scale. We own Hollywood's most well-known PR firm for film and TV called 42West.
We have the world's largest music PR firm in Shore Fire Media. We have a very large culinary and hospitality PR firm in The Door. We have a nonprofit impact PR firm called Elle Communications. That is how we're growing our revenue year-over-year, as you can see. Last year, we were named agency of the year in the country. That is any industry, not just entertainment. Those are many of our senior leaders. You can see we're also heavily female-led. All of our subsidiaries have a female CEO, and they just built beautiful companies. Our results are only improving, but we have some very near-term, short-term, excuse me, yeah, near-term free cash flow catalysts. As I mentioned, we're growing both revenue and profit anyway. But then we have spent money to protect an investment we made.
One of the acquisitions where we felt like the books were not sold to us exactly accurately, and so we're in one piece of litigation that we have invested in that we expect a resolution in the spring next year. We have a trial date for that. We also have leases that expire. When you buy a lot of companies, you get a lot of leases. So we have three active leases in New York and two in Los Angeles. The largest in each market expire 12 months from now in New York and L.A. We'll be saving over $1 million a year just on consolidating our leases. Then, of course, we'll see on the next slide even more cash flow savings. Then as we make continued profit from our subsidiaries and whatnot, we have a lot of NOLs.
We're going to be saving a lot of cash, and there's a lot of value to those NOLs, of course, far in excess of our current market cap. We don't need to raise any capital. That is probably a nice thing to say at this market, right, or this conference. Sometimes we feel like our cash flow's obscured a little bit because when you acquire marketing companies, you're not acquiring companies with physical assets. So you take a heavy amortization hit. You have to put pretty much over 90% of your acquisition prices either in goodwill or in intangible assets. As you amortize the intangible assets, you're taking non-cash expenses every single quarter. Those will expire. We're in the final mostly three to four years of those.
But we've, in previous years, have had to take over $600,000, almost $700,000 a quarter of non-cash expenses, which just obviously obscure how we're really doing on an operating basis, we feel. Which is why we think EBITDA is a much more valuable way to recognize how we're doing. Also, we paid for the acquisitions, typically half cash, half stock, and we borrowed some of the cash. That acquisition loan, which I think hit a peak of almost $8 million, has less than $3.5 million remaining. It matures September 29, 2028. So we just passed under the two-year mark, and that'll save us $2.2 million of cash a year, married to the lease savings of over $1 million a year. You can see if our company doesn't continue to grow at all, we have an improvement of free cash flow by over $3 million two years from now.
What do we plan to do with that? Corporate stock buyback is certainly on the table. Can't announce. Nothing's for certain, but we're pointing to that date as something that would be exciting, especially since, as I said, I've been buying in the market now. We'll talk about that on this slide. So as I was just saying how we have management alignment on our stock price, each one of our CEOs has a significant stake in the company. They all have committed to stay with us for a long period of time. I started buying. When we finished the acquisition strategy, I was blocked, as you can imagine, for several years from buying from the company because I had material non-public information about what our next acquisition was going to be. We bought one company a year for nine straight years. I was freed up.
Felt like coming out of jail. So I bought $100,000 of stock in the fall of 2024 while we put in place a 10b5-1 plan. By the end of that year, you have to do the 90-day hold, as you all know. I started buying $5,000 a week the first week of April of last year. So we're now over 18 months later. I've bought over 500,000 shares of our stock, anywhere from $1 to $1.70, I think. That's added up to a little over 4% of all shares outstanding. I plan to keep buying for the next couple of years. We'll see how high all these shares that I'll be buying before then the company would start a buyback. So why am I invested this heavily in the stock? It is because of everything I was just saying.
Lastly, the point of putting the group together, so we're trying a different presentation this year than what we did in the past. In the past, I assumed everybody in the room had never heard of our company, and we talked about what our strategy was, which companies we bought each year, and then took you through 20 minutes of who we are. This year, I'm just saying, why am I buying for the last 18 months, and what do we see, and what are our financial results related to that? I'm going to go back now and say, okay, let's assume for a minute you bought the most well-known marketing companies in entertainment in each of these verticals, and you married the PR with the influencer marketing and the celebrity booking. What would you do with it?
That was the question I asked at the same conference in December of 2016, before we had bought the first company, and before we uplisted to NASDAQ. The answer is, why did you do it? First of all, if it was just to work together, you kind of stay private. You can kind of just work together. The point of putting the group together was so that we would then take ownership stakes in some of the things that we're marketing. That would monetize the scale and the reach of the group in a way that just simply providing services does not. We call that ventures, and imagine if you owned a piece of a music festival or a food festival or a consumer product that entertainment tends to influence. That's the point of the group.
So with the group done, we announced a deal in February, a strategic partnership with DealMaker, and if you're familiar with them, then hopefully this is one of those wow moments because DealMaker and Reg. I'll go to this slide. The number one problem for launching anything or even having an existing brand that you can't get traction is you don't have funds, and the second problem is you don't have the money to market it. DealMaker's kind of the market leader in Reg CF and Reg A deals. You can see this was actually three months ago, so now they're over $2.8 billion raised. I believe, if I'm not mistaken, they were 39% of the market share in 2025. I've told that they're over half the market share in the first six months of this year.
We're very excited for it because it gives us the access to the capital to launch the pipeline that we have for consumer products, for live events, and for content plays using our companies to market. Plus, it gives these ventures the cash to pay us. So we're actually getting equity stakes in consumer products or whatever I just mentioned and getting paid cash. We're not trading services for equity. We're getting paid our full rate, and we take ownership stakes in these ventures. Like what? Glad you asked. First one up is a liquor with Rachael Ray. Rachael's one of our signature celebrity chef clients. I'm sure many of you know who she is. We launched a gin with her called Staple Gin, where she wrote the recipe for the gin. Something fun I did not know is that gin is the only liquor with a recipe.
Why we launched with a chef instead of a Tom Cruise or Bruce Springsteen or one of our musician clients or one of our actor clients like that. So that's a good example. We own an equity stake in the gin, and we get paid to market it. So that's the Dolphin story. The timer's not working, but I think I did that in 10 minutes or less. So I thought I'd open it up for questions and just hear if there are any, what you have to say about Dolphin. Many of you in here seem to have gray hair like I do, so I'll ask you the question. Do you have a lot of examples of management that have bought their own stock back for 18 straight months? So we believe we're putting our money where our mouth is.
You have 12 minutes for questions.
Woo-hoo. 13 minutes, sorry. I didn't do it in 10. Yes, ma'am.
I imagine you're doing a Reg A, unless you have a wholly owned subsidiary, in which case maybe you're doing a CF. What are you doing with DealMaker? They're my friends. I'm on their website somewhere buried in there.
Oh, nice. I think they're great.
Yeah.
Rebecca Kacaba and all that. What we are using DealMaker for is when we see an opportunity. Let's say it was Rachael's gin. That was financed separately. The thing about consumer products, the worst part is if they're successful. What do I mean by that? We're doing these ventures to then take the equity stake and then flip. We're not trying to sell the company for $2 million or $3 million. It would only be a venture if we think Dolphin's shares in success is $10 million or more. If you sell a liquor, pick any one that you all may have heard of. Casamigos is a famous one that came out of entertainment and sold for $1 billion. Ryan Reynolds with his gin that sold for $660 million. He came into an existing gin called Aviation.
They've been in the market, I think, eight years or so. He attached himself to it, and then they flipped it three years later. If you launch a gin and with The Door, our culinary PR firm, when you have a number one agency in the country, who are your clients? Your clients in the entertainment space often tend to be those personalities we just talked about. Also on the business development side, one of our clients is Southern Glazer's. If you're in the liquor business, you know them as the 800-pound gorilla, right? If you can marry a new product with Southern's distribution, you give yourself a better chance of success. That's what we're looking for. We're looking for ventures where our marketing or our relationships just give us a better chance.
There's no guarantee that gin will work, but it's a lot better chance that that gin will work with Rachael Ray fronting it and Southern distributing it, right? How does a consumer product like that or a makeup line is another good example of a category that entertainment influences, or fashion. How do those products. Let's stick with makeup or liquor. You launch it for $500,00 , great, no problem, we can fund. You expand with a $2 million raise, which is where Staple is, fine, no problem. What happens when you want to go to all the Northeast and you need $5 million- $10 million? Or a national raise and you want $20 million, right? Let's say you got five of these in market and they're all working with your marketing.
You can see where I either needed to make a partnership with a private equity or VC fund or the DealMaker deal. Because in success, we might have three of these things that all need $10 million in a year, and we can do it raising it online from the fan base of Rachael Ray. That makes all the sense in the world. That was the reason why we went looking and James Carbonara from Hayden IR, our IR rep, was the one who was kind enough to introduce us to DealMaker, and I just think they're fabulous. From their standpoint, I think what they would say about Dolphin is we bring them types of deals that are entertainment-related, athlete-related, or influencer-related, where there's already a built-in fan base.
It is much easier to raise money online when the product is much easier to understand and you have somebody fronting it that people know. Did that answer the question?
Yeah. Cool.
Yeah. Yeah, we are big fans of theirs, too. Yes, sir.
Just an industry update question in the growth of influencer marketing. Is that still cannibalizing the ad firms and PR firms, or how do you guys work that together, or who is losing in that equation?
I would say where the money pools, and of course, the advertising pie tends to grow each year anyway, but as influencer takes a bigger share, it is pulling out of paid ads. If you really want to go into the history of influencer, when it started about 10 or 11 years ago, when it was still called the Facebook, influencer was put under earned media because you did not pay the influencers. You sent them free product. Now, that still happens. That is called organic, right? Organic influencer campaigns, but that is why it was put there. Today, it is a misnomer. It really is.
So much of it is paid because you are paying the influencers. We have an entire brand division where we will run campaigns for Crocs, Keurig, Dr Pepper, Molson Coors, and they will say, "Hey, we have $3 million to spend to launch this new soda back to school.
Can you help us design an influencer campaign on that?" We get paid a percentage of the spend, right? Whether they use our roster of influencers or not, we are almost casting. Now we have 400 influencers that we manage, and we take a percentage of their income for the deals we bring them. That influencer marketing today, when I spoke at LD Micro maybe five years ago, I do not know if there was a single person in the room that even heard of it or understood it. I just had a very nice meeting earlier today where a very nice gentleman said, "I really just do not know what influencer marketing is."
Not a problem. If you are under the age of 40 and/or in certain product categories, I do not know a world today in which you can launch or market an established product without using influencer marketing.
It just does not happen. It is also broadened tremendously. I think what helped bring influencer marketing, at least some awareness of it, to investor conferences was when the Supreme Court allowed college athletes to get paid. They did not when I played. You can guess which sport I played. Nor was I probably good enough to get paid. But because I was able to say, "Well, how do those athletes get paid?" Until the last year, when you can just pay them straight up. They were paid as influencers. The NIL laws are influencer marketing. Today, we have a gentleman on our roster that, I kid you not, lives in Minnesota, he is a janitor, and he will make almost $1 million with us this year. So the niche marketing has come to influencer.
Eight, nine years ago, seven years ago, it would be attractive female promoting SKIMS or wellness products coming off a reality TV show. That still exists. But today you have influencers. Our highest-paid influencer in our company history is a grandmother from Connecticut that bakes. She had a year where she did between $5 million and $10 million. So influencer marketing today is just. I cannot describe the rocket ship that it is. Our PR firms are the very best in the industry with those signature clients I mentioned. Our influencer marketing agency is well on its way. It is just too native, it is too new an industry to say here is the clear winner, but we think we are. If you have that power of geotargeting, demographic targeting with influencer marketing, imagine how that helps if you own 15%-20% of a product. Yes, sir.
A year ago, you were here, and you were very excited about the opportunities with colleges and the influencer market. I wonder how that's been progressing.
Pretty well. We have quite a few college-age influencers. At the risk of, I do not know if you have heard of someone named. We do not rep her. Her name's Alix Earle. But I teach at the University of Miami. I am from Miami. I have taught at the University of Miami Film School for 30 years, one course a year. She was an undergrad at the University of Miami, and she blew up. She became the influencer of the year maybe three, four years ago. Three years ago now. Multimillion-dollar campaigns, multiple of them a year. So many times the influencers are some of the ones that break into being very, very, very big, let's call it, $10 million or more of revenue to them.
An influencer marketing agency typically makes 20% of whatever the talent makes, to give you a sense. Often are college students at first. Sometimes.
Not contracts with the colleges as much as we saw an opportunity, and still do, with NIL. So we could work with a University of Miami or pick an SEC school and run brand campaigns to them or take their athletes. We think there is a market for athletes at the college level. Well, we know there is, right? Now you are seeing, if anybody is a sports fan, you are seeing kids stay in college rather than get drafted because they make more money as an influencer in college. You sit there and say, "No, they are making more money as a college athlete." They are making money as an influencer in college, getting brand campaigns than they would after being drafted if they are not a top 10 pick. Yeah. We are starting to see it filter back into the high school level, too.
I went to Columbus High School in Miami. Last year was a great year for us. We had Fernando Mendoza as the Heisman Trophy winner and Cameron Boozer at Duke, a basketball player. Both came from my high school. The amount of money these kids make at the high school level. I have three minutes left.
You are right about the influencer and the opportunities are huge, and they are making a lot of money. When I look at your stock, it is a bargain. I mean, $12 million, we are exposed to hundreds of millions of dollars. What makes it not to be so attractive to the S&P investors? Is it the percentage that you take from the influencers? Is it the fact that maybe you do not own some of the influencers in terms of like, "Hey, let us take 30%. I want to help you go big from $100,000 per year to $1 million, and I want to take more of that." What is it? Is it too competitive out there for you to take more from each of those influencers?
If I knew why our stock was low, I would be a gazillionaire. All I can do is keep buying myself, right? And feel a little guilty about it. It is hard to believe I just bought 4% of the company back, buying $5,000 a week. We are trading at 0.25 our revenue.
I see that.
It's kind of humorous. With that said, I don't think taking more of a percentage from the influencers would. I don't think the reason our stock is low is because Wall Street thinks we should take more. By the way, we're just taking market rate. All of our competitors take 20% as well. I think our challenge is that Wall Street doesn't understand our story.
We're either too complex, what does marketing mean in entertainment, and influencers mean what? Or we have to be patient and just keep reporting quarter after quarter. What's nice, I wish LD Micro was still in December and not October because we do have seasonality to our business. We are weighted to the second half of the year because even though our PR firms are pretty steady throughout the year, mostly, they still lean to the second half of the year. But influencer marketing is very much a second-half-of-the-year business. Why? Because so many brands pay influencers for back-to-school campaigns or really holiday campaigns. You pound influencer marketing as you get into October, November to influence holiday purchases. So our Q3 is going to look very good. We report in three weeks. If you're interested, please check our results.
When you do Q4, that's our best quarter every single year.
Well, I'm excited that you will see our Q3 results. How about that?
Q4. Yes, last question, I think.
Have you ever provided target operating margins or target EBITDA margins, and what's the time frame for those?
We haven't announced those. I do think we think we can be building towards 15% target in the next two to three years, and see how close we can get to that for EBITDA. Yeah, cover all the overhead plus that. We feel pretty confident. Well, thank you for your time. Appreciate it very much, and thank you.