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what it is
Alliance moves music, movies, games, and collectibles from studios and labels to stores, websites, and your doorstep.
how it gets paid
Last fiscal year Alliance made about $1.06B in revenue. music was the main engine at about $0.38B, or 36% of sales.
why growth slowed
Revenue fell 3.4% last year. Gross margins in the low-to-mid-teens mattered most because this company lives on thin spreads.
what just happened
Latest reported quarter (Q1 FY2026): revenue about $254M and diluted EPS about $0.10, with gross margin near 14.6%.
At a glance
C++ balance sheet — some cracks in the foundation
28.1x trailing p/e — priced about right
12.7% return on capital — nothing to write home about
$0.30 fy2025 eps est
~$1.06B fy2025 revenue
xvary composite: 45/100 — below average
What they do
Alliance moves music, movies, games, and collectibles from studios and labels to stores, websites, and your doorstep.
Alliance wins by being the boring pipe that still matters. It connects labels, studios, game publishers, and collectibles vendors across wholesale and direct sales, and it already supports on the order of $1.06B in annual revenue. If you want physical entertainment products at scale, you need inventory, vendor ties, and fulfillment that do not break during peak demand.
How they make money
$1.06B
annual revenue (FY2025) · their business grew -3.4% last year
music
$0.38B
4.0%
movies
$0.23B
8.0%
gaming
$0.18B
+6.0%
collectibles
$0.16B
+12.0%
e-commerce and fulfillment services
$0.10B
+5.0%
Q1 FY2026 (quarter ended Sept 30, 2025): Alliance Entertainment results (Nov 12, 2025) · globenewswire.com
The products that matter
core distribution engine
Physical Media Distribution
~$1.06B FY2025 net revenue
Nearly all sales are wholesale and direct distribution of physical entertainment products on thin consolidated gross margins (low-to-mid-teens). Segment rows above are illustrative — reconcile to the 10-K segment tables.
the core business
digital authentication platform
Endstate
closed dec 31, 2025
the acquisition closed on Dec 31, 2025. right now you are paying 28.1x trailing earnings for the chance this becomes more than a side bet. here's the thing: until the revenue mix moves, the market still sees a distributor.
transition bet
collectibles and adjacent product flow
Merchandise mix
inside the ~$1.06B base
the filings in this snapshot do not break out a richer segment mix. that matters, because without more detail you are still underwriting the company mostly on consolidated margin and revenue, not on a cleaner growth bucket.
data still thin
Key numbers
$1.06B
annual revenue (FY2025)
You are buying a company with north of a billion dollars of sales for a market value of about $345M. That gap is the whole setup.
3.6%
operating margin
Operating margin means profit after running the business. Plain English: this is a thin-margin machine, so execution has to stay clean.
12.7%
return on capital
Return on capital means profit earned on the money tied up in the business. So what: Alliance is not elite, but it is not dead money either.
$84M
long-term debt
Debt is manageable relative to ~$1.06B of sales, but it still limits room for mistakes when margins are only 3.6%.
Financial health
C++
strength
- balance sheet grade C++ — below average — limited financial resources
- risk rank 4 — safer than 20% of stocks
- price stability 5 / 100
- long-term debt $84M (20% of capital)
C++ — below average. watch for debt servicing and cash burn.
Total return vs. market
Return history isn't available for AENT right now.
source: institutional data · return history unavailable
What just happened
beat estimates
Latest reported quarter (Q1 FY2026): revenue about $254M and diluted EPS about $0.10, with margins expanding versus the prior-year quarter.
Revenue rose about 11% vs. prior year and diluted EPS improved sharply versus the weak year-ago quarter. Gross margin reached about 14.6%, up roughly 340 basis points (about 3.4 percentage points). So what: mix and execution pushed more profit out of each sales dollar.
$254M
revenue
$0.10
diluted eps
14.6%
gross margin
the number that mattered
Gross margin near 14.6% mattered most because this company lives on thin spreads, and a roughly 340-basis-point increase is the difference between noise and real earnings power.
source: company Q1 FY2026 earnings release (Nov 2025) · aligns with page date
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What could go wrong
the main risk is not abstract. 96.4% of revenue still comes from physical media, and gross margins stay in the low-to-mid-teens. when the base business is that concentrated and that thin, small misses stop being small.
high
physical media margin compression
about $1.02B of the ~$1.06B revenue base still comes from Physical Media Wholesale. at thin gross margins, weaker mix or pricing pressure does real damage fast.
this is the core earnings risk. the company does not have a wide margin buffer to absorb mistakes.
med
Endstate stays too small to matter
Digital & Other is only 3.6% of revenue today. if Endstate does not push that mix higher, the market stops paying for a transition and goes back to valuing a basic distributor.
no mix shift, no story. that is the quiet part of the bull case.
med
thin financial cushion
the balance sheet is graded C++, long-term debt is $84M, and price stability is 5 / 100. if operating results wobble, you do not have a lot of financial or market forgiveness.
you get business-model risk and stock volatility at the same time. that combination is why the composite score sits at 45 / 100.
with 96.4% of revenue tied to physical media and thin gross margins, this company needs execution more than narrative.
source: institutional data · regulatory filings · risk analysis
Pay attention to
the key metric
gross margin near 14.6% or better
one quarter at about 14.6% gross margin (Q1 FY2026) is useful. if the company holds that level or better again, you have the start of evidence that the margin improvement was not a one-off.
mix shift
Digital & Other above 3.6% of sales
this is the cleanest transition test on the page. if the digital bucket does not move up from 3.6%, the Endstate story stays theoretical.
next checkpoint
Q3 2026 earnings
watch whether revenue still trends below last year and whether EBITDA keeps improving. better margins with shrinking sales buys time. better margins with stable sales changes the conversation.
kill criteria
margin reversal plus weak mix
what would change our mind: if the recent gross-margin expansion reverses and Digital & Other still sits near 3.6% of revenue, this looks less like a transition and more like a temporary bounce.
Analyst rankings
coverage status
thin
in human-speak, there is not enough Wall Street coverage here to outsource the thinking.
source: institutional data
Institutional activity
institutional ownership data for AENT is being compiled.
source: institutional data
Price targets
3-5 year target range
n/a
n/a
$8
current price
n/a
target midpoint · n/a from current
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