| Metric | Value ($ M) | Q1 FY26 | Q2 FY25 |
|---|---|---|---|
| Revenue | 5.82 | 19.6% | 43.4% |
| Total Income | 5.82 | 19.6% | 43.4% |
| Expenditure | 9.23 | 31.6% | |
| PBT | 27.52 | ||
| Net Profit | 26.99 | 523.7% | 538.1% |
| OPM | -58.58% | 19.86pp | 27.30pp |
| NPM | 100.00% | 187.94pp | 159.96pp |
| EPS | 0.41 | 510.0% | 415.4% |
Kartoon Studios Reports Q2 2026 Financial Results and Accelerates Strategic Transformation
14 Aug 2026 · 14 Aug, 6:47 pm
Summary
Kartoon Studios reported second quarter 2026 financial results, highlighting a significant strengthening of its balance sheet with approximately $40.5 million in cash and no long-term debt, bolstered by litigation settlement proceeds. The company is undergoing a strategic transformation focused on owning and commercializing high-value intellectual property, evidenced by the sale of the Frederator network business and a new distribution partnership with Amazon Prime for its Hundred Acre Wood franchise. While revenue for the quarter declined to $5.8 million from $10.3 million year-over-year due to legacy operating models, total expenses were reduced by 32% to $9.2 million, showcasing cost discipline. The reported net income of $27.0 million was significantly impacted by a non-recurring gain from litigation settlements.
Key Highlights
- 1
Kartoon Studios ended the second quarter with approximately $40.5 million in cash and marketable securities and no long-term debt, significantly strengthening the Company’s financial position.
- 2
An additional $39.2 million remains in escrow, to be distributed to the Company after legal fees are determined and paid.
- 3
The Company disclosed an agreement with Amazon Prime for its Hundred Acre Wood franchise, launching on February 18, 2027, featuring promotional support and integrated streaming and merchandising opportunities.
- 4
In July, Kartoon Studios completed the sale of the Frederator channel network business while retaining key intellectual property assets like Castlevania and Bee and Puppycat.
- 5
Revenue for the second quarter of 2026 was $5.8 million, compared with $10.3 million in the prior-year period, reflecting lower production services revenue.
- 6
Total expenses decreased 32% to $9.2 million, demonstrating continued cost discipline and progress in aligning the operating structure with a more focused strategy.
- 7
Net income was $27.0 million for the second quarter of 2026, compared with a net loss of $(6.3) million in the prior-year period, primarily driven by a non-recurring gain from litigation settlements.
Management Comments
Andy Heyward
We are building a fundamentally different Kartoon Studios. Over the last several months, we have strengthened our balance sheet, streamlined our operations, sharpened our strategic focus, and assembled the IP building blocks for our next phase of growth. With more than $40 million in cash, no long-term debt, a partnership with Amazon Prime, and ownership of valuable intellectual property including Hundred Acre Wood and the Stan Lee Universe, and another $39.2 million minus legal fees yet to be distributed to Company, we believe we are uniquely positioned to create meaningful long-term shareholder value through the development of what we believe will be enduring global franchises. This is not simply a turnaround—it is a strategic transformation. We are transforming Kartoon Studios from a company that historically generated much of its revenue by creating and producing valuable content for others, e.g. Barbie, Cocomelon, and other high-profile IP, we are now focused on producing that high profile IP for ourselves and our shareholders. Specifically that means owning, building and monetizing valuable intellectual property franchises across streaming, consumer products, publishing, gaming, licensing and other platforms. Our goal is to own more of the intellectual property we create, participate more fully in the economics generated across multiple platforms, and transform our creative assets into sustainable, high-margin revenue streams. We believe the actions we have taken this year position us to pursue that objective from a position of strength, and we specifically are looking forward to a rollout of Hundred Acre Wood this year to lead, followed by properties from the great Stan Lee, which the Company has developed.
Brian Parisi
While our reported second quarter results largely reflect the Company’s legacy operating model, the strategic actions we have taken over the past several months are designed to reshape Kartoon Studios into a more focused and financially disciplined organization. Despite a decline in revenue, during the period, we reduced total expenses by 32%, demonstrating continued cost discipline and progress in aligning our operating structure with our long-term strategic objectives. Combined with our strong cash position and no long-term debt on our balance sheet, we believe Kartoon Studios is well positioned to execute its transformation strategy, as our two flagship brands, Hundred Acre Wood and Stan Lee Universe, are finally coming into the marketplace in 2027.
Informational and educational content only. Not investment advice.