Dolphin Entertainment (NASDAQ:DLPN) reported higher first-quarter revenue and a narrower adjusted EBITDA loss, with management emphasizing the company’s seasonal business pattern and several potential catalysts aimed at improving cash flow over the next two years.
Chief Executive Officer Bill O’Dowd said the first quarter is historically Dolphin’s lightest period, with revenue typically building through the year and peaking in the fourth quarter. Against that backdrop, he said management was “pleased” with the company’s start to 2026.
Adjusted EBITDA loss improves despite seasonal softness
Management focused much of the call on profitability and cash flow potential. Negrini said adjusted EBITDA loss was approximately $467,000 in the quarter, improving 25% from an adjusted EBITDA loss of $625,000 in the same period last year.
O’Dowd said the adjusted EBITDA calculation adds back one-time and non-recurring items, as well as non-cash amortization costs tied to intangible assets from prior acquisitions. He said the improvement reflected greater efficiency in the company’s core business.
Operating expenses were $14.9 million in the first quarter, up from $13.9 million a year earlier. Negrini said the latest quarter included $900,000 in legal and professional fees and a one-time direct cost of $700,000 related to a distribution guarantee for “Youngblood.” The year-earlier period included approximately $400,000 in acquisition costs. Depreciation and amortization expenses were roughly $500,000 in the 2026 first quarter and $600,000 in the 2025 first quarter.
O’Dowd noted that full-year 2025 adjusted EBITDA was positive at $2.9 million, which he said illustrated the seasonality of Dolphin’s business. He added that the company hopes to exceed that adjusted EBITDA result in 2026.
Management highlights cash flow outlook
O’Dowd said Dolphin has completed much of the infrastructure buildout associated with prior acquisitions and growth investments. He said the company operates with low capital expenditure requirements and expects incremental revenue to flow disproportionately to the bottom line.
He also pointed to approximately $127 million in federal and state net operating loss carryforwards, saying those NOLs allow the company to pay very little in cash taxes. As a result, he said EBITDA growth should translate more directly into free cash flow.
Two contractual items were also cited as future cash flow drivers. O’Dowd said Dolphin expects to realize about $1 million in annualized lease savings when large legacy leases in New York and Los Angeles expire before the end of 2027. He also said the company’s bank debt matures in roughly two and a half years, and paying it off would save nearly $2.2 million annually in principal and interest. Combined, he said the items represent more than $3 million in annual cash flow savings expected to flow almost entirely to the bottom line.
DealMaker and publishing partnerships viewed as catalysts
O’Dowd said Dolphin is making progress with its DealMaker partnership and is targeting having its first deal in the market later this year. In response to a question from Maxim Group analyst Derek Greenberg, O’Dowd said Dolphin and DealMaker held a vetting call in late April to review potential source deals and identify which could be ready for market.
O’Dowd said he believes each DealMaker transaction could generate six figures per year for Dolphin in marketing revenue, and that the partnership could eventually support multiple deals per year. He said the company plans to start with one deal before attempting to run more than one at a time, adding that the initiative could become “a real driver” in 2027.
The company also discussed a newly announced publishing imprint venture with Copper Books and Simon & Schuster. O’Dowd said the arrangement allows Dolphin to offer premium book publishing services to clients, including potential children’s books, cookbooks or novels. He said Dolphin will not contribute capital and will receive 15% of revenue. In the Q&A, he clarified that the 15% applies to the author’s keep and to any consulting fees required to bring a book to market.
O’Dowd described publishing as a natural extension for Dolphin’s entertainment-focused marketing agencies, noting that several of the company’s units have experience promoting books, clients with books and book launch events.
Youngblood, AI marketing and M&A discussed
Asked about “Youngblood,” O’Dowd said Dolphin recognized $450,000 of revenue in the quarter from U.S. sales of the film. After its theatrical release, the movie entered pay-per-view through a sub-distribution deal with Universal. O’Dowd said Dolphin was told the first month was “looking good,” with a few hundred thousand dollars in sales, and expects a full report within 30 days. He said the company hopes to use those results to support a favorable streaming deal.
O’Dowd said Dolphin typically expects to receive roughly 40% to 50% of pay-per-view revenue in a sub-distribution arrangement such as the Universal deal, after the sub-distributor’s fee, though he said that amount can be offset by marketing costs from the first month or two of revenue.
Management also addressed Dolphin Intelligence, the company’s AI-related marketing initiative. O’Dowd said the effort is led by Mark Anderson and has drawn interest from clients. He said Dolphin has signed its first two clients for an audit that examines whether clients appear in AI search results in their relevant areas and, if not, why not.
On mergers and acquisitions, O’Dowd said there is no acquisition currently in the pipeline. While he did not rule out future deals, he said Dolphin is more focused on organic growth, the DealMaker partnership and ventures that could create disproportionate upside compared with incremental acquisitions.
O’Dowd closed the call by saying the company expects to return to its regular quarterly update schedule and may have additional developments to discuss in 90 days, particularly related to DealMaker and future cash savings from lease expirations and debt repayment.
About Dolphin Entertainment (NASDAQ:DLPN)
Dolphin Entertainment, Inc, together with its subsidiaries, operates as an independent entertainment marketing and production company in the United States. The company operates in two segments, Entertainment Publicity, and Marketing and Content Production. The Entertainment Publicity and Marketing segment provides diversified marketing services, including public relations, entertainment and hospitality content marketing, strategic communications, strategic marketing consulting, social media and influencer marketing, digital marketing, creative branding, talent publicity, and entertainment marketing services, as well as produces promotional video content.
