Playboy, Inc. (PLBY) Earnings

Management highlights

### Strategic & Balance Sheet Progress - The two-year strategy to build a culturally relevant, profitable asset-light business across three verticals (licensing, media & experiences, hospitality) and deleverage the balance sheet is delivering on targets. Q2 2026 marked the sixth consecutive quarter of positive adjusted EBITDA. - Total gross debt reduced from a peak of $218 million to ~$145 million as of quarter-end, with a clear path to $108 million gross debt by January 2028 after applying remaining UTG transaction proceeds. Net debt ended the quarter at $108 million, with ~4x net leverage (excluding litigation expenses) expected to fall below 3x after receipt of remaining UTG proceeds. - The company approved a 16.6 million share repurchase (nearly 15% of total outstanding shares) at $1.05 per share ($17 million total), a discount to the prior $1.75 per share conversion price for debt-to-equity shares issued in 2025. The repurchase is structured in installments backstopped by major long-term shareholders to avoid competing with operating and deleveraging cash needs. Playboy was added to the Russell 2000 and Russell 3000 indexes in June 2026, expected to broaden shareholder base over time. ### Brand & Media & Experiences Updates - Playboy's cultural relevance has rebounded: the spring issue with Carol G sold out at newsstands, generated 5 billion media impressions and 70 million+ launch video views, followed by a summer issue with Cara Delevingne, with two additional major covers lined up for H2 2026. The brand generated over 1 billion cross-platform engagements and views in Q2, with key franchise content (Playboy interviews, Playmate features) hitting 1 million+ organic views per feature. - The new direct-to-consumer digital membership subscription on Playboy.com had its first full quarter of operation, with strong conversion, and July 2026 was the strongest month to date for new paying memberships. Multiple revenue streams are being built from the owned audience, including subscriptions, sponsorships (first deals signed, revenue to hit in Q3), and paid voting contests. - Paid voting contests have scaled rapidly: the second Honey Burdette model search drew nearly 50,000 contestants, 2.5x the revenue of the first contest, with revenue set to record in Q3 2026, and engaged contest audiences are funneled directly to digital subscriptions, creating a self-reinforcing growth cycle. A third major contest, the Great Playmate Search, is scheduled for late 2026. ### Licensing & Honey Burdette Updates - Licensing strategy shifted from a long tail of small deals to fewer, larger, higher-quality partnerships. A new Global Licensing VP with experience at Authentic Brands Group was hired to lead this effort. The company scaled back a large low-margin apparel licensee, allowing strong existing partner Missguided to expand the apparel category without cannibalization, with expansion into additional categories in progress. The Supreme collaboration sold out, delivering strong outperformance. - Chinese licensing business is transitioning to new partner UTG under an owner-operator model, with a small temporary reduction in new deal revenue during the transition. The segment has $320 million in contracted unrecognized future licensing revenue, providing long-term durability and growth runway. - Honey Burdette delivered its second consecutive quarter of double-digit comp growth, driven by full-price selling and disciplined inventory assortment strategy that reduced reliance on markdowns. June 2026 was the brand's strongest month ever, supported by a deepening customer loyalty program. ### Operational & Governance Updates - Progress continues on the first flagship new Playboy Club in Miami, structured as a capital-light franchise with no material corporate capital at risk. The board added a new independent director with public company CFO experience from 2K and the Golden State Warriors to add operating and financial depth as the business scales.

Guidance

Management did not issue formal quantified full-year or quarterly guidance, but provided the following forward-looking statements: - Management expects to reach $108 million in gross debt by January 2028 after applying the remaining $36.7 million in UTG transaction proceeds. - Management expects net leverage to fall below 3x after receiving the remaining UTG proceeds, creating a very manageable balance sheet for future growth. - Over the long term, management expects the Media & Experiences business to grow to match or exceed the size of the current Licensing business, with comparable high profit margins. Near-term growth will be balanced with ongoing fiscal discipline, with incremental hiring and investment only rolled out after product-market fit is validated through testing. - Hospitality expansion for the Playboy Club franchise will proceed on a capital-light basis, with no material corporate capital risk, and further updates on the Miami flagship will be provided as milestones are met.

Segment performance

Playboy, Inc. reported consolidated Q2 2026 revenue of $31.2 million, a 11% year-over-year increase from $28.1 million in Q2 2025. There are three core operating segments plus the Honey Burdette retail business: 1. Honey Burdette: Net revenue of $19.5 million, up 18% year-over-year, representing 62.5% of total consolidated revenue. It delivered its seventh consecutive quarter of double-digit brick-and-mortar comparable sales growth, with 15% total comparable store growth (13% retail comps, 16% online comps, all regions positive). Full-price selling drove improved product margins driven by higher average selling prices. 2. Licensing: Revenue of $11.2 million, up ~2% year-over-year from $10.9 million, representing 35.9% of total consolidated revenue. Revenue would have been higher without a $200,000+ step-down from Chinese business transition to new JV partner UTG. ByBorg contributed $5 million in digital licensing revenue in line with contractual minimums. 3. Media & Experiences: This early-stage segment did not report standalone revenue in Q2 2026, with initial monetization (subscriptions, paid voting, sponsorships) expected to begin showing in Q3 2026 results. On a consolidated level, adjusted EBITDA was $7 million, up 100% year-over-year from $3.5 million, for a 22% adjusted EBITDA margin. Operating income swung to a positive $3 million from a $5.9 million operating loss a year prior, and net income hit ~$200,000 (break-even per share) versus a $7.7 million net loss in Q2 2025.

Risks & headwinds

- The licensing segment's ongoing consolidation of smaller lower-quality partnerships is constrained by existing contractual obligations, requiring gradual changes to avoid near-term revenue disruption. - New Honey Burdette brick-and-mortar expansion is limited by elevated current retail rents, and management will only open new locations that meet existing target margin profiles, which may slow store growth in the near term. - Early-stage Media & Experiences digital subscription growth is still in testing and refinement, with no guarantee of sustained conversion or revenue growth even after initial positive early results. - All forward-looking statements, including growth and deleveraging targets, are subject to risks that could cause actual results to differ materially, as detailed in the company's SEC filings.

Analyst Q&A

• Q: What are near-term opportunities for licensing consolidation, and where will P&L growth come from over the next 12 months? /

  A: Management notes that licensing has strong geographic and category white space, with early traction in gaming that does not compete with existing partners. Contractual obligations require gradual consolidation to avoid near-term revenue losses, and the new licensing leadership team will execute this strategy steadily. Growth will come from both licensing (step-function growth from larger partnerships) and Media & Experiences, which management expects to eventually reach the same revenue size as licensing with similar margins. The digital subscription business has validated its conversion funnel, so the company is now hiring a dedicated team to accelerate growth, with multiple revenue streams (subscriptions, sponsorships, paid voting) leveraging the same core content investment.

• Q: What is the update on plans for new Honey Burdette brick-and-mortar store openings? /

  A: Honey Burdette's business is performing very well, and the target remains opening five new stores. However, management is being highly selective due to elevated current retail rents, only opening new locations that meet the existing margin profile of current stores to avoid pressuring overall margins. In the interim, e-commerce growth (which requires no incremental capex) will be the near-term focus for Honey Burdette expansion.

• Q: What are capital allocation plans for the remaining $12 million of the $17 million total share repurchase, and how does this balance with debt reduction goals? /

  A: Management's current plan is to complete the full 16.6 million share repurchase, which maximizes per-share value for remaining shareholders. The balance sheet is already in a strong position: after the remaining $36.7 million in UTG proceeds are applied to debt reduction, gross debt will fall to $108 million, resulting in a low net debt position that supports both debt reduction and the repurchase. The repurchase is also backstopped by the company's largest long-term shareholders if internal cash is constrained.

• Q: What drove Honey Burdette's recent accelerated growth, and is this growth sustainable? /

  A: The primary driver of reacceleration is a strong turnaround in the online channel across all markets, especially the U.S. While retail comps become more challenging after multiple years of double-digit growth, there is substantial remaining room for sustained online growth, which will continue to drive segment expansion.

• Q: What is the strategic purpose of recent key leadership hires across business units, and will there be more organizational changes? /

  A: After completing the company restructuring and validating the core business strategy, management is now adding experienced talent to scale validated growth areas. Hires across digital, licensing, and brand are targeted at growing the Media & Experiences business to match the size and profitability of the licensing segment over time. Management will continue adding talent gradually, maintaining fiscal discipline by only adding headcount once growth traction justifies the incremental cost. A hospitality lead will likely be added for the capital-light Playboy Club franchise as the Miami project progresses.