The revenue beat and strong year-to-date earnings trajectory are clear positives, but the lack of formal guidance and gross margin compression warrant caution. Monitor the upcoming conference call for any commentary on forward trends, particularly around tariff exposure and the sustainability of CD/collectibles growth. The stock may gap up on the revenue surprise, but the tiny analyst coverage and no guidance limit follow-through conviction.
Price Chart
Executive Summary
Alliance Entertainment reported Q3 FY2026 revenue of $258.2M (+21.2% YoY) and EPS of $0.05, a 25% net income increase to $2.3M. The massive EPS beat vs $0.01 consensus (1,700% surprise) is largely a mechanical artifact of a tiny base and low analyst coverage (2 analysts). The quarter showed broad-based growth across physical media and collectibles, but gross margin compressed 80bps to 12.8% and no formal guidance was provided. The stock's reaction will hinge on the revenue beat and strong year-to-date earnings expansion (+78% net income, +47% Adjusted EBITDA), tempered by margin pressure and the lack of forward guidance.
Key Financial Metrics
Key Facts
- Q3 FY2026 revenue $258.2M vs consensus $226.1M (beat by 14.2%)
- EPS $0.05 vs consensus $0.01 (1,700% beat, but on tiny base with only 2 analysts)
- Net income $2.3M, +25% YoY; year-to-date net income $16.6M, +78% YoY
- Adjusted EBITDA $5.1M in Q3 (+4.1% YoY); year-to-date $35.7M (+47% YoY)
- Gross margin 12.8% vs 13.6% in prior year (80bps compression)
- Vinyl sales +15% YoY to $99M; CD sales +90% YoY to $39M; collectibles +48% YoY to $8M
- Operating expenses improved to 11.5% of revenue vs 12.0% prior year
- Working capital $60M; $56M availability on revolver; no formal guidance provided
Financial Impact
Revenue beat of $32.1M (+14.2%) vs consensus; EPS beat of $0.04 on $0.01 estimate
Risk Factors
- Gross margin compression of 80bps YoY to 12.8% despite revenue growth
- No formal guidance provided, limiting forward visibility
- Low analyst coverage (2 analysts) makes consensus estimates less reliable
- Tariff and macroeconomic uncertainty could impact physical media demand
- High inventory ($126.7M) vs prior year ($102.8M) increases obsolescence risk
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 1 press release from GlobeNewswire.
| Document | Accession Number |
|---|---|
| PRESS-RELEASE Data (Synthetic) | press-3295308 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 16, 2026 10d ago | 8-K | $4.53 | awaiting T+60 | — | $4.89 (+7.84%) |
Sep 24, 2026 4w ago | DEF 14A | $4.88 | awaiting T+60 | — | $4.89 (+0.10%) |
Sep 10, 2026 6w ago | Press Release | $6.42 | awaiting T+60 | — | $4.89 (−23.91%) |
May 14, 2026 23w ago | Press Release | $6.70 $5.57 | ▼ −16.87% | ▼ −21.38% | $4.89 (−27.09%) |
US Market Status
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