Playboy, Inc. Q1 FY2026 Earnings Call

Good afternoon. Thank you for standing by. Welcome to Playboy Inc.'s First Quarter 2026 Earnings Conference Call. This conference is being recorded today, May 11, 2026, and the earnings press release and Form 10-Q from which information may be referenced during this call were issued after the market closed today. On our call today are Playboy Inc.'s Chief Executive Officer, Ben Kohn; and Chief Financial Officer and Chief Operating Officer, Marc Crossman. I would like to remind you that the information discussed today is qualified in its entirety by the Form 8-K and Form 10-Q filed today by Playboy Inc., which may be accessed on the SEC's website and on Playboy Inc.'s website. Please note that statements made during this call, financial projections and other statements that are not historical in nature may constitute forward-looking statements. Such statements are made on the basis of Playboy Inc.'s views and assumptions regarding future events and business performance at the time they are made, and we do not undertake any obligation to update them. Forward-looking statements are subject to risks, which could cause the company's actual results to differ from its historical results and forecast, including those risks set forth in the SEC filings, and you should refer to and carefully consider those for more information. This cautionary statement applies to all forward-looking statements made during this call. Do not place undue reliance on any forward-looking statements. In addition, throughout today's call, the company may refer to adjusted EBITDA, a non-GAAP financial measure, which it believes provides helpful information to investors about the performance of the business on an ongoing basis. A reconciliation of adjusted EBITDA to its most directly comparable GAAP financial measure is included in today's earnings release, which is available on the Playboy Inc. Investor Relations website. At this time, I would like to turn the call over to Playboy's Chief Executive Officer, Ben Kohn. Ben, the floor is yours.

Thank you, operator, and thank you to everyone for joining us today. Welcome to our first quarter 2026 earnings conference call. When we spoke in March, I told you 2025 was the year we largely completed Playboy's transformation into a focused, high-margin asset-light platform focused on four verticals: licensing, media and experiences, hospitality and Honey Birdette. I want to use my time this afternoon to walk you through what that platform produced in Q1 2026 because that was the quarter where that strategy showed up as visible, tangible progress across almost every part of the business as well as why we're excited about meaningful growth going forward. Headline first, and then we'll get into the substance. Consolidated revenue grew to approximately $30.2 million, up from $28.9 million a year ago. Adjusted EBITDA was approximately $5 million, up 111% compared to the prior year, marking our fifth consecutive quarter of positive adjusted EBITDA. Excluding litigation expenses, adjusted EBITDA would have been approximately $5.8 million. We closed the UTG China transaction, paid down $15 million of debt, reducing our gross debt to $145 million and plan to further delever by almost $37 million more from future UTG payments, which will bring our net debt well below $100 million. Honey Birdette grew top line double digits with full-price sales accelerating, gross product margin expanding and adjusted EBITDA margins continuing to improve. Given the operational improvements and as part of our larger business plan, we have also started terminating or nonrenewing licensees that do not fit with that plan so that we may bring on fewer and bigger licensees that better fit the Playboy brand. During Q1, we made key hires to reinvigorate our growth. David Miller joined as President of Media and Brand and Phillip Picardi joined as Chief Brand Officer and Editor-in-Chief. David has taken direct ownership of the consumer-facing platform, the website, the Media and Experiences business and the day-to-day alignment between content, commerce and licensing. Phillip is reshaping the editorial voice of Playboy, journalism, photography and cultural authority at a level the brand has not operated at in a long time. The clearest proof point is Phillip's first issue, the Spring 2026 magazine. Our cover star was Karol G, one of the most followed artists in the world with more than 70 million Instagram followers. We generated more than 3 billion media impressions, over 40 million video views across social platforms and the earned media value was in the tens of millions of dollars. The issue puts Playboy back at the center of culture, speaking to the value the magazine brings to the company. This is not a one-off. We have two other major celebrity covers lined up following Karol G and the editorial calendar for the balance of 2026 continues to get stronger by the day. When artists of this caliber and the photographers, stylists and writers who work with them actively want to be on the cover of Playboy, that tells you the brand health is real. And practically, it is the engine that pulls audience onto our platform and the value into our licensing conversations. Under David's leadership, we launched a preliminary subscription offering for both digital and print content, executing on the architecture we have been describing to investors for more than a year. Free content drives top-of-funnel audience; premium content and member experiences sit behind the paywall. We will continue to add utility, event access, exclusive drops and community features as we scale playboy.com through the balance of 2026. Building upon our first paid voting contest, the Great Playmate Search, which drove more than 1.7 million votes from over 17,000 contestants, we recently launched our next model search contest, a collaboration between Playboy and Honey Birdette. This is the second paid voting contest we have taken to market. It is a brand collaboration between our two largest assets, and the winner becomes the face of a global advertising campaign and is featured in the Playboy quarterly magazine with a $100,000 prize. It is also a revenue and audience engine. Every vote is a paid engagement; registration runs through June 8 and voting closes July 31. Two weeks into the contest registration, we are on track to exceed 30,000 contestants, a significant improvement from our last contest. Paid voting has the potential to become a real revenue lever for us. We will continue to layer it into additional programs throughout the year. Now that UTG has closed and our balance sheet is in a good place, we are proactively optimizing our Rest of World licensing business, not renewing off-brand licensees and creating new white space as we align our content strategy with our licensing business under David's leadership. This continues the strategy we have been describing: fewer, bigger, high-quality partners focused on a consistent global brand. With Q1, Honey Birdette has now delivered six consecutive quarters of double-digit brick-and-mortar comparable store sales growth and four consecutive quarters of combined brick-and-mortar and online comparable store sales growth. Valentine's Day 2026 was Honey Birdette's best yet. The multi-piece full-price strategy is working. Our Valentine's assortment all drove record average order values or AOV weeks. Our Honey Birdette Club loyalty program, which we launched in mid-October, has now crossed 110,000 members. And in early Q2, the Addison Leopard launch has already set the tone; our best-performing launch of 2026 so far. The U.S., now Honey Birdette's largest market, led the quarter. Retail and online both expanded and the U.S. store base was nearly unanimously positive on a like-for-like basis. The U.S. economics are clear. U.S. stores are meaningfully more productive and profitable than their counterparts in any other region with four-wall adjusted EBITDA margins at approximately 40%. With that profile in mind, we have redesigned the future of the Honey Birdette stores, reducing our future build-out costs by almost 40%, which will significantly increase our ROI. We have received great interest from third parties in our capital raise efforts at Honey Birdette, and we intend to open five new Honey Birdette stores in top-tier U.S. malls over the next 12 months. These are the highest return investments available to us anywhere in the Honey Birdette portfolio, and they clearly fit with our existing capital plan. So when I look at Q1 2026, I see a quarter of not only execution against our four pillars—licensing, media and experiences, hospitality and Honey Birdette—but also the groundwork laid for substantial growth in the future. It starts with bringing in the right leaders, putting Playboy back in the cultural conversation with Karol G on the cover and two more major names lined up behind her, launching a new subscription offering, building momentum with a new paid voting contest, closing the UTG transaction as well as five other new licensing deals, creating a clear path to further delever the company, continuing to make progress on the new Playboy Club in Miami and further growing the Honey Birdette business 15% year-over-year. Every one of those is a decision, not a headline. And taken together, they give us real compounding momentum as we move forward. With that, I'll hand the call over to Marc to walk through the financial details.

Thank you, Ben. Consolidated revenue in the first quarter grew to $30.2 million compared to $28.9 million in the first quarter of 2025, an increase of $1.4 million or 5% year-over-year. The year-over-year increase was led by strong Honey Birdette performance. Honey Birdette net revenue grew to $18.8 million, up 15.4% year-over-year. Retail delivered double-digit comp store growth across every region. With Q1, Honey Birdette has now delivered six consecutive quarters of double-digit brick-and-mortar comparable store sales growth and four consecutive quarters of consolidated brick-and-mortar and online comparable store sales growth. Full-price sell-through drove the quarter. Full-price sales were up 23% year-over-year. EBITDA margins at Honey Birdette continue to improve. I'd like to spend a moment on the U.S. specifically because that is where we see the most attractive incremental return on capital. Our U.S. stores are running at approximately twice the sales productivity of the rest of our portfolio of stores and approximately three times the per-store profitability. Four-wall margins in the U.S. were approximately 40% in the quarter. With those economics in mind, we intend to open five new Honey Birdette stores in top-tier U.S. malls over the next 12 months. And the capital cost is modest, the payback is fast, and we already have the playbook, the supply chain and the brand recognition in place to execute. Licensing revenue was $10.9 million in the first quarter, slightly below the prior year quarter. The year-over-year decrease in licensing net revenues is consistent with repositioning our brand and licensing strategy for fewer and bigger deals. Accordingly, we let a number of off-brand legacy licenses expire, which was partially offset by five new licensing deals in the quarter, spanning apparel, sleepwear, direct-to-retail and headwear across North America, EMEA and APAC. And in addition, we did not sign any new deals in China during our UTG negotiations. Our Byborg strategic partnership contributed $5 million of digital licensing revenue in the quarter, consistent with the contractual minimum guarantee. Corporate operating expenses on an adjusted basis, excluding stock-based compensation, transaction expenses and other items we normalize for adjusted EBITDA were approximately $7.1 million, a reduction of approximately $1.6 million versus the prior year quarter. Within that total, corporate operating expenses, excluding brand investment, were approximately $6.2 million, with personnel and occupancy savings driving the year-over-year reduction. The remaining approximately $900,000 represents direct investment in the Playboy brand, the magazine, editorial and the consumer platform. We view that spend as an investment, not overhead. Net loss for the quarter was $4 million or $0.03 per share, which included $3.5 million of transaction expenses related to the UTG deal compared to a net loss of $9 million or $0.10 per share in the first quarter of 2025, an improvement of approximately $5.1 million year-over-year. Adjusted EBITDA for the first quarter was $5 million, an increase of $2.6 million versus the prior year quarter. This represents our fifth consecutive quarter of positive adjusted EBITDA. Excluding litigation expenses, adjusted EBITDA would have been $5.8 million. On the balance sheet, we ended the quarter with approximately $34.7 million in total cash, including restricted cash. Total debt was $144.9 million, down from $159.9 million at year-end 2025, reflecting the $15 million paydown from the initial UTG proceeds following the close of that transaction on March 20. That concludes our prepared comments. With that, operator, let's open the line for questions.

The first question we have is from George Kelly of ROTH Capital Partners.

First one for you. Ben, you mentioned in your prepared remarks about capital raise efforts at Honey Birdette. I was wondering if you could give any more detail on that process.

George, thanks for the question. Look, we've had a lot of interest. It's a great brand. The business is performing well. And irrespective of the capital raise and based on the new store designs where we've reduced our build-out costs substantially, we're going to be opening five new stores, but I would say things are looking good on the capital raise, and we'll see what happens in the future. I can't really speak more to that, just given that it's an ongoing process.

Okay. Fair enough. And then with respect to the stores that you're opening, can you just walk us through the four-wall economics, the build cost, the kind of the AUV and margin, just the key aspects of the four-wall that you're underwriting as you plan new stores?

Yes. So we said that our four-wall margin was about 40%. In terms of productivity, we're seeing about $1,500 a square foot on average in our U.S. stores. And then in terms of build-out, we think we're at about $500,000 all in, and that's before tenant improvements (TIs). We'll probably have $30,000 to $40,000 of preopening expenses and about $35,000 of inventory. George, that's substantially down from what used to be about $900,000 to open the store. And so from an ROI perspective, especially with what we're seeing for full-price items in the U.S., it's a good use of capital, and there's a ton of growth left in that brand.

And remind me of the on-average square footage per store?

About 800 square feet.

800 square feet.

800 square feet, sorry.

Okay. Great. And then just one last Honey Birdette question, and then I wanted to ask about one other topic. Your year-over-year compares get harder starting in Q2 for Honey Birdette. Aside from store growth, do you think you can maintain, I don't know, high single-digit, low double-digit growth, just given the more challenging compares? Or how should we think about growth for the remaining quarters of 2026?

Yes, we don't want to give guidance. I don't think it'll be too far off of where we are right now going forward. Yes, retail is a little bit more difficult comp, but online is obviously a lower comp that's getting better.

Okay. Okay. Fair enough. And then last question for me, just with respect to UTG. I know it's early days there; the deal didn't close that long ago. But can you just update us on the status of that business and how far along it is and what the kind of plan is in the near term? And just any kind of update on UTG post-close? And that's all I had.

Sure. UTG is off to a good start. As you said, we're only about eight weeks into it. They've been working with our existing partners, making sure there's a smooth transition. I think we feel comfortable with where they're going to come out for the year from a revenue perspective. It's important to note also, George, that when you look at Q1 for us and really going back to late in Q4, we stopped signing new deals in China. That was because part of what UTG wanted to do was free up categories for themselves as well because they are an operator. We feel good. I think it's a good relationship. We've known them for a long time, and we're excited about their plans and the investment they're going to make into the brand and the marketing of the brand. I think China is in the best place it's been in years. We're actually making progress also on our recovery of the litigation award that we won last year. So we finally got through the Chinese courts, and they're helping us begin the enforcement action against our former partner.

The next question we have is from Alex Fuhrman of Lucid Capital Markets.

Ben, you talked about letting some licensees kind of run off as they expire. How many more could there be? And how long do you think it's going to take just if you let all of the underperforming licensees naturally expire? How long would it take to get through that process? And could you just help us to size up what is ultimately the opportunity here? Are there big categories, big regions that you really haven't been taking advantage of that you think you could unlock if you cleared out some of these underperforming legacy relationships?

Sure. I don't want to say they're underperforming; I think these are proactive decisions we're making based on the improvement of the company. When we had balance sheet issues, which I think we have largely solved at this point, we took a lot of deals on the licensing side, some of them small, but stacking a lot of nickels shows real revenue. We're taking a much more deliberate approach to long-term brand health. Some of the deals are just off brand. We're looking for fewer and bigger partners that should allow us in the future to be much more efficient operating the business. It's hard to give precise timing because licensing is a step function, but licensing has the potential to be substantially larger than it is today. That will come down to what we're doing on the editorial side of the business as well. We are one brand, Playboy. We have to make sure that what we do on the editorial side aligns with what we do on the licensing side, especially in the Western Hemisphere, and that's what we're focused on. Part of that was China; we didn't do new deals in China and some deals expired there because of UTG. Part of that is proactively in the U.S. as a couple of deals came up and we decided not to renew them as we have a larger strategy for U.S. licensing moving forward. There are a lot of categories that we are targeting right now, but that will tie directly to what we're doing on the content side. For example, as we relaunched the Playmate franchise, there's a lot of opportunity for products around Playmates. Think about color cosmetics, lingerie, swim as we move to Miami—there are some opportunities we're excited about. And in the rest of the world, putting Karol G on the cover opens white space in South America. This is deliberate: you start with content, that opens the doors for us and then you start to build around it.

That makes sense, Ben. And then you mentioned paid voting—some pretty big early numbers there. Can you talk about how profitable that business is and how big that could get for you?

We're only a couple of weeks into this new contest, which is a collaboration between Playboy and Honey Birdette. Honey Birdette has designed a capsule collection of Playboy lingerie, and we're excited to see how that performs. We have already surpassed, I think, the 17,000 contestants that we had registered in the last contest, and we still have about a month to go in registration. We think paid voting could be millions and millions of dollars a year. Let's see how this contest does, but the early economics of the first one, even with the technical issues we had and that we have now resolved with a new partner, were very promising on an annualized basis; that was multiple seven figures. If we do this one right and get up to 30,000-plus contestants, this contest alone should be multiple seven figures from a revenue perspective. The profitability is great. But more importantly, it's the top of the funnel. From the last contest in the fall, we had 500,000 users register at playboy.com. We own that data moving forward, and that allows us to market membership or subscription and other offerings to those users. So not only is paid voting extremely profitable for us, but it's an unbelievable top-of-funnel. The women sign up to win the cash prize and to become the face of the Honey Birdette Playboy lingerie line; they go out to social, they ask their fans to vote for them, their fans vote at Playboy, and we own that data moving forward. It serves multiple purposes as part of our larger content, media and experiences strategy. We're excited to see how the Playboy Honey Birdette line performs as well.

The next question we have is from James Heaney of Jefferies.

Ben, can we get an update on the success that you're seeing with the magazine? You've obviously generated a lot of hype with Karol G. We'd be keen to hear about that release and how it's driving halo effects and traffic into your digital properties as well.

Thanks, James. Karol G is a huge name and we have two other huge names lined up behind her for the balance of this year. The conversations we're having with talent are getting easier and easier. We launched a very preliminary membership or subscription with the Karol G cover. We have a lot of learnings from it, but we're very pleased with the initial results in terms of subscribers. Interestingly, in some earlier efforts we saw more people subscribe for print; this one we're actually seeing a lot of people subscribe for digital. The print magazine sold out within the first day online; we left some on the table there. Sell-through at newsstand was very strong as well. That's all part of the top of the funnel—getting those names to drive traffic that we then drive into a paywall situation moving forward. It's still really early and we have a lot of learnings, but we're encouraged by the early results. We're seeing the same thing with Playmates—launching Playmates monthly on social and getting them to drive to their galleries behind the playboy.com paywall is showing very positive results. Everything with us is now about testing and iterating. We'll continue to put resources behind things that are working and won't put resources behind things that aren't working. Early signs with Phillip and David on board are very promising for future growth in media.

Yes, that's great. And maybe just one for Marc. I was hoping you could talk about some of the OpEx levers that you continue to see in the business. You've done a great job taking out OpEx over the last year, particularly, I think, sales and marketing was strong. But interested where you see potential for additional cost savings going forward.

Thank you for the question. I think we have a lot of room in the tech space with our tech stack. We're integrating AI throughout the company and finding that helps overall to bring costs down. In addition to that, there are probably a few other things we can do that we probably shouldn't be talking about in detail on the call. But yes, there are still levers there, and we'll continue to pull them.

Ladies and gentlemen, we have reached the end of the question-and-answer session. I would like to turn the call back to Ben Kohn for closing remarks.

Thank you, operator, and thank you to everyone for joining us today. Q1 was a quarter of visible execution across all four pillars: revenue growth, our fifth consecutive quarter of positive adjusted EBITDA, the closing of the UTG transaction and continued double-digit growth at Honey Birdette. As we move through the balance of 2026, we remain focused on disciplined capital allocation, putting Playboy back at the center of culture and further delevering the balance sheet. We appreciate your continued support and look forward to updating you on our progress in the months to come. If you have any further questions, please feel free to reach out to our investor relations firm, MZ Group, who would be happy to answer them. Thank you, and we look forward to talking to you on the Q2 call.

That concludes today's conference. Thank you for joining us. You may now disconnect your lines.