WildBrain (TSX:WILD) reported fourth-quarter financial results on Thursday. The transcript from the company’s fourth-quarter earnings call has been provided below.
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Summary
WildBrain reported a 1% year-over-year revenue increase to $58 million for Q1 2027, driven by growth in Strawberry Shortcake and Teletubbies franchises, despite facing a headwind from Paramount.
The company is executing a $30 million investment program focused on franchise development, Media Solutions, technology modernization, and production infrastructure to support long-term growth.
WildBrain reaffirmed its fiscal 2027 guidance, expecting revenue between $270 million and $295 million and adjusted EBITDA of $28 million to $32 million, with plans to double EBITDA by fiscal 2029.
Strong performance was noted in WildBrain Network’s FAST segment, with significant contributions from Pokémon and Teletubbies, and a 7% revenue growth year-over-year.
Management highlighted the strategic partnership with 88 Pictures to enhance CG animation capabilities and the integration of Personality AI to offer innovative consumer engagement experiences.
Full Transcript
OPERATOR (Conference Operator)
Thank you for standing by. This is the conference operator. Welcome to WildBrain’s Fiscal 2027 First Quarter Earnings Conference Call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star, then one, on your telephone keypad. Should you need assistance during the conference call, you may reach an operator by pressing star, then zero.
I would now like to turn the conference over to Kathleen Prasad, VP of Investor Relations. Please go ahead.
Kathleen Prasad (VP of Investor Relations)
Thank you, everyone, for joining us today for WildBrain’s first quarter 2027 earnings call. Joining me today are Josh Erba, our President and CEO, and Nick Gahn, our CFO. Before we begin, please note the matters discussed on this call include forward-looking statements under applicable securities laws which reflect WildBrain’s current expectations of future events. Such statements are based on a number of factors and assumptions that management believes are reasonable at the time they were made and information currently available. Many of these factors and assumptions are subject to risks and uncertainties beyond WildBrain’s control, which could cause actual results and events to differ materially from those that are disclosed or implied by such forward-looking statements.
Such risks and uncertainties include, but are not limited to, changes in general economic, business, and political conditions. WildBrain undertakes no obligation to update such forward-looking information, whether as a result of new information, future events, or otherwise, except as expressly required by applicable law. Please note, all currency numbers are in Canadian dollars unless otherwise stated. After our remarks, we will open the call for questions. I’ll now turn the call over to our President and CEO, Josh Shirpa.
Josh Scherba (President and Chief Executive Officer)
Thanks for joining us today. Fiscal 2027 is about executing against the strategy we outlined at year end following the major portfolio and balance sheet actions completed in fiscal 2026. WildBrain is now focused on three operating platforms: franchise and global licensing, content, and the WildBrain Network. In the first quarter, our focus was on advancing the go-forward business while beginning the targeted investment program we discussed last quarter.
Following our fourth quarter call, we heard a consistent message from investors: there is strong interest in gaining further insight into our approximately $30 million planned investment program. Today we will provide additional detail on the composition and strategic priorities of the program, the return objectives for each investment area, and how these investments support our longer-term growth and free cash flow ambitions. We will also provide additional perspective on the operating drivers across each business and the milestones we will use to evaluate our progress.
Our first quarter results reflected continued momentum in Strawberry Shortcake and Teletubbies, growth in FAST, and progress in expanding our direct advertising relationships. These gains were partly offset by the Paramount change discussed last quarter and the timing of content production activity, which affected year-over-year comparisons. Importantly, the first quarter is not indicative of the earnings profile we expect for the full year. Our licensing and advertising businesses are seasonally weighted toward the second quarter, while contracted content production activity varies with the timing of productions.
These factors support our confidence in our fiscal 2027 guidance, and we remain focused on executing against our plan. Nick will discuss the quarterly financial results, our outlook, and the financial implications of our investment program. Before that, I’ll review our operating performance and progress across each of the three business platforms. So, starting with franchise and global licensing, we continue to see positive momentum across our own brand portfolio, led by Strawberry Shortcake and Teletubbies. Combined, revenue from these two brands grew double digits year over year, reflecting continued growth across our own brands. WildBrain CPLG’s reported results were affected by the Paramount headwind discussed last quarter. Excluding Paramount, CPLG revenue increased 9% year over year, supported by growth across our third-party brands portfolio.
We expect the Paramount headwind to continue through fiscal 2027. Our focus is on offsetting this impact by expanding CPLG’s third-party partner portfolio and converting its licensing pipeline into new revenue opportunities. Recent engagement at Brand Licensing Europe, China Licensing Expo, and this week’s North American Licensing Summit reinforces our confidence in the pipeline, although the timing of new partner wins and subsequent revenue recognition will vary.
Strawberry Shortcake continues to benefit from our integrated approach to franchise development, bringing together content, consumer products, and marketing to strengthen engagement and expand commercial opportunities. Earlier this month, we launched Strawberry Shortcake’s Bakeshop, a new animated series on the WildBrain Network that draws inspiration from the brand’s original look while introducing Strawberry and her friends to a new generation of fans.
The launch attracted mainstream media attention, including two exclusive earned features on People.com. The series also reached 500,000 views on YouTube within its first 14 days, achieving our initial 28-day target two weeks ahead of schedule. This demonstrates how we are using content to build brand awareness and support long-term consumer products growth as Strawberry Shortcake approaches its 50th anniversary in 2028. Teletubbies also continue to demonstrate strong brand engagement across Asia through digital campaigns, retail partnerships, and live experiences. Recent TikTok Live campaigns generated more than 500 million impressions in Japan over just six days, helping increase awareness and support our broader licensing programs. We recently launched the first-ever Teletubbies pop-up in Taiwan, featuring approximately 200 products, and partnered with the luxury hotel Aman in Shanghai on a Teletubbies-themed afternoon tea experience.
These activations demonstrate the brand’s versatility and expand its commercial reach as Teletubbies approaches its 30th anniversary in 2027. Overall, we remain focused on building long-term value of our own brands while strengthening CPLG’s position as a global licensing platform to support sustainable revenue and earnings growth. We are also making progress integrating Personality AI into our franchise and global licensing platform. At Brand Licensing Europe, discussions with brand owners indicated significant interest in kidstape AI-enabled experiences and their potential to create new consumer engagement and commercial opportunities. This reinforces our view that safety-by-design AI will become an integral part of our licensing capabilities, enabling us to offer partners new ways to engage consumers and deepen fandom through authorized and official AI characters, thereby unlocking additional commercial opportunities.
We believe Personality AI represents an important differentiator for WildBrain, strengthening our offering to both owned and third-party brands through gold-standard COPPA-compliant AI experiences. This positions us to address growing demand for safe interactive character experiences for kids. Our near-term focus is on integrating the technology, developing commercial use cases, and converting partner interest into revenue opportunities. So, turning to content, we continue to make progress against our production pipeline in the first quarter, including increased live-action activity. We expect contracted production activity to ramp through the balance of the year, supporting our confidence in the full-year outlook. We are also advancing projects in development and pursuing new production opportunities with global broadcasters and streaming platforms. An important development was our recently announced strategic partnership with 88 Pictures, which combines the creative expertise of WildBrain and House of Cool with 88 Pictures’ established CG production capabilities.
This partnership strengthens our ability to deliver premium CG animation with greater flexibility and scalability while maintaining creative leadership and core production functions in Canada. It also represents an important step in evolving our production model to better serve our partners and support long-term growth. Content also remains an integral part of our broader franchise strategy. Our ability to develop and produce high-quality content for owned brands, including Strawberry Shortcake and Teletubbies, helps deepen audience engagement and supports the continued expansion of our global licensing programs.
Turning to WildBrain Network, we saw strong growth in FAST during the first quarter, driven primarily by the continued success of Pokémon across our channel network. Pokémon demonstrates the strength of our platform and why leading content owners choose to partner with us. We combine global distribution, established platform relationships, and deep audience expertise to build reach, engage audiences, and create valuable advertising inventory. As streaming becomes increasingly fragmented, these capabilities position us to aggregate audiences and monetize content at scale.
YouTube continues to play an important role in building audiences and increasing awareness of our brands. Teletubbies is a strong example, with rolling annual views on YouTube growing 104% from May 2025 to October 2026, making it one of the fastest growing among the preschool franchises we track. This reflects our ability to activate established IP across digital platforms, deepen audience engagement, and support the broader growth of our own brands.
Alongside FAST, we continue to expand and diversify our direct advertising business through WildBrain Media Solutions. While year-over-year growth was tempered by lower spending from certain toy advertisers that were large contributors in the prior year, we generated revenue from 10 new clients spending on our network for the first time. Our pipeline for the balance of the year is also becoming more diversified by advertiser category, extending beyond our traditional strength in toy and entertainment.
During the first quarter, we delivered three campaigns with advertisers outside those traditional categories. We are also seeing a healthy level of activity from studios and streaming services, with a significant number of RFPs and several promising opportunities in the pipeline. We are making progress broadening our agency relationships as well. During the quarter, we worked with 15 agencies compared with nine in the prior-year period. This included a new relationship with a leading toy-focused agency in the UK, which delivered 14 campaigns during the quarter. We view that relationship as a useful blueprint for securing more strategic upfront commitments from agencies and holding companies. We’re also encouraged by what we’re seeing from the Media Solutions team.
We’ve started to build out the sales team to capture the market opportunity, and a number of those new sellers are now in place and ramping. Looking across the next few quarters, pipeline activity is approximately 85% higher than it was at the same point last year. While timing and conversion can vary, we see that as an encouraging early indicator of the opportunity we’re building. Importantly, establishing a new agency relationship can create opportunities across multiple clients, campaigns, and categories rather than a single media buy.
Our top agencies represented a smaller share of Media Solutions revenue than in the prior-year period, demonstrating progress in reducing concentration and building a broader, more resilient revenue base. Together with the continued growth of FAST, these initiatives are expanding the ways we monetize audiences beyond YouTube. They also advance our strategy of building a scaled, premium network that brings together high-quality kids and family content, broad audience reach, and direct access to advertisers. Advertising is inherently campaign driven, which can create variability from quarter to quarter that will remain a feature of the business, particularly as we develop new client relationships and individual campaigns move between periods.
Our focus is on converting initial campaigns into repeat business, deepening our agency relationships, expanding the premium inventory available to advertisers, and driving sustained growth in the underlying business. There is a fire alarm happening in the building, but I’m going to carry on and hopefully you can hear me. I’m confident there’s not a fire, so before I turn it over to Nick, I want to reinforce that we remain confident in our fiscal 2027 plan. We are seeing continued momentum across our own franchises and FAST business while expanding our licensing pipeline and direct advertising relationships. At the same time, we have begun deploying our targeted investments to support growth and create a more scalable operating platform.
With that, I’ll turn it over to Nick to review our first quarter financial results, outlook, and investment program. Thanks, Nick. As we close, I want to step back and reflect on the progress we have made over the past 12 months. I am proud of the work across WildBrain as we continue a broad-based transformation of the business and build a more focused, asset-light model. While the strength of the underlying business is not always fully visible in any single quarter, the operating indicators reinforce our confidence.
Strawberry Shortcake now has approximately 11 million followers across its social accounts and the brand generated 1.2 billion FAST and AVOD minutes watched in the first quarter, an increase of 25% year over year. Teletubbies has more than 7 million followers globally and its FAST and AVOD watch time increased approximately 10% in the quarter across the network. FAST and AVOD watch time reached more than 10 billion minutes, up 60% year over year.
These are meaningful audience signals that support our ability to grow engagement, expand licensing opportunities and strengthen advertising monetization over time. We are also broadening the business around those audiences. We generated revenue from 10 new direct advertising clients during the quarter while our licensing teams are building new opportunities across brands, categories and markets. This progress gives us greater confidence in the underlying growth drivers of the business, even as individual quarters may be affected by the timing of content deliveries, licensing activity and advertising campaigns.
Fiscal 2027 is an important year of execution. Our focus is on converting this audience momentum, commercial activity and our targeted investments into measurable revenue growth, improved profitability and stronger free cash flow generation over time. With our own franchises, global licensing capabilities, content expertise and growing advertising platform, we believe WildBrain has a strong foundation for long-term value creation. We look forward to updating you on our progress.
Thank you for continued interest and support. Operator, we are now ready to take questions.
OPERATOR (Conference Operator)
To join the question queue, you may press star then 1 on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star. First question comes from Jim Casey. Go ahead. Go ahead, Kathleen. Sorry.
Kathleen Prasad (VP of Investor Relations)
I was just going to say while we’re compiling the Q&A, we apologize for any disruptions that you may have had during that call during the fire alarm. Just as a reminder, we do publish the transcript on our IR website if there was anything that’s unclear to hear during the call. Thank you, and open it up to Tim Casey of BMO.
Tim Casey (Analyst at BMO Capital Markets)
Good morning. Can you just help us understand a little bit of the trajectory of the guidance you’ve given, the bump in EBITDA through ’29? I guess there’s two parts to the question. Are you guiding us that notionally you will exit ’29 with the $60 million EBITDA kind of range, or that you will generate that in ’29? And two, could you unpack a bit the sort of bridge to that in that how much of that is spending in ’27 on cost that goes away and notionally how much of that is growth, you know, from operating leverage and other things?
Because I’ll have to review the transcript. But you did, you did talk a lot about costs in ’27 that are right on the EBITDA line. So, you know, presumably there’s kind of a, there’s a lift and then the growth kicks in going forward, if you understand the premise of the question. Thanks.
Nick (Chief Financial Officer)
I’ll tell you. So from a guidance perspective, we’re guiding to posting 60 million of EBITDA, or we’re guiding to posting a kind of double from the midpoint, approximately double from the midpoint of ’27 actually in FY’29 rather than exiting. So what we’re guiding to is what we are expected to achieve in fiscal ’29.
Josh Scherba (President and Chief Executive Officer)
And in terms of the business drivers, Tim, really we’re on a great trajectory with our own franchises and Teletubbies and Strawberry, and we’re investing for future growth this year through various marketing activities and content investments. And really that’s expanding our presence in additional markets and bringing that demand forward. So yeah, we’re spending ahead of it, but we expect that growth on those two keys to accelerate in ’28 and ’29.
And also the other area we refer to as a business driver is our Media Solutions business. We see that as a significant area of opportunity. Back at the peak of kids’ linear networks between Cartoon Network and Nickelodeon, they generated somewhere around $2 billion a year in U.S. advertising revenue. And since those ratings have declined by 90 to 95%, it’s fair to say those ad dollars have gone as well. And we think our network provides a tremendous opportunity for advertisers to get back in front of those audiences.
And so we’re bullish on growth for Media Solutions. And so back to the spend. You know, we’ve referenced spending $3 million this year, which is a direct hit on EBITDA. And that’s adding salespeople who take six to 12 months to ramp up but are now in place, and we’re seeing that they’re making progress. There’s also an education process that’s happening out there of bringing agencies and advertisers along to understand the value that our network provides. So we’ve been investing in marketing activities like attending the Cannes Lions Festival and other sort of marketing activities to really get the awareness out for what we’re doing.
So we expect spend this year and we will have the ongoing spend of salespeople, but it will be off a larger revenue base. So those are kind of to speak to the key revenue drivers. And then back to Nick on cost.
Nick (Chief Financial Officer)
Yes, as we outlined the cost, the way to think about those costs is they’re our way of accelerating to a new kind of revenue and cost base. So we’ll be spending the money in fiscal ’27. Those costs don’t fall away, but the revenue that we generate off that cost base is higher. So the cost as a percentage of revenue is lower, gross margin increases, and because of our kind of investments in scalability of our operating base, SG&A growth is measured and therefore that growth in gross margin kind of flows through to EBITDA.
Tim Casey (Analyst at BMO Capital Markets)
Nick, can you outline the spending on EBITDA by group? Again, it was tough to hear when you went through that. Sorry. So there’s 3 million in Media Solutions.
Nick (Chief Financial Officer)
Yes, 3 million in Media Solutions. So there’s two ways to look at it. So $6 million within adjusted EBITDA and around about 3 million of that is Media Solutions. And we talk about our KPI being Media Solutions revenue. You know, the way a user of the accounts can see that is that we disclose SG&A growth within the network. And then the second point is around about 3 million in franchise marketing—franchise marketing costs with an additional investment in content and AI capabilities for our franchises.
The 3 million in franchise marketing costs sits within EBITDA, and, you know, we’ll be able to kind of—we measure the KPI of that based on owned brand revenue, and it will show through in the statements within distribution, marketing and other costs within our Franchise Global Licensing segment. And then the content investment through the cash flow statement and will flow through adjusted EBITDA via content amortization, but that’s a smaller number.
Tim Casey (Analyst at BMO Capital Markets)
Thank you.
OPERATOR (Conference Operator)
The next question comes from Sarah McCune with RBC. Please go ahead.
Sarah McCune (Analyst at RBC Capital Markets)
Thank you and good morning, this is Sarah on for Drew. Just two quick questions for me. First, on adjusted EBITDA, with the guidance reaffirmed and the release noting activity weighted towards the second quarter, can you walk us through the quarterly cadence or just any additional color on the confidence in the ramp? And second, given ongoing macro pressures on consumer spending, are you seeing any incremental impacts to traction within CPLG or any bifurcations across your various geographies?
Thank you.
Josh Scherba (President and Chief Executive Officer)
Thanks, Sarah. So we’re not getting into quarterly guidance, but what we have noted is that licensing and advertising revenue are weighted towards second quarter. So to give you an indication, and as we’ve talked about, Q1 was generally in line with our expectations. So we remain confident on the year. And remind me the second part of the question.
Sarah McCune (Analyst at RBC Capital Markets)
Yeah, sorry, just are you seeing any incremental impacts to traction within CPLG or any bifurcations across geographies? Thank you.
Josh Scherba (President and Chief Executive Officer)
No, no, we’re really not. I mean, you know, we have a global footprint, so obviously markets vary. But, you know, we had three really important kind of touch points for us over the last six weeks between Brand Licensing Expo, China Licensing Expo, and as well as our summit that we just had in LA, and the feedback we had was extremely positive. I was at the one in Europe and there was a real buzz in the market. So the macro pressures, we hear about consumer spending, we’re aware of it, but it’s not coming through in any of the demand we’re seeing from our licensees or from retailers.
Sarah McCune (Analyst at RBC Capital Markets)
Thank you.
OPERATOR (Conference Operator)
This concludes the question-and-answer session and today’s conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.
Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company’s SEC filings and official press releases. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.
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