Alliance Entertainment revenue reaches $1.15 billion as physical formats grow

Alliance Entertainment grew annual sales and kept more of each revenue dollar as gross profit as vinyl, CDs and physical movies posted gains. The physical entertainment distributor reported fiscal 2026 net revenue of $1.149 billion, up 8%, and a gross margin of 13.3%, up from 12.5%. Non-GAAP adjusted EBITDA rose 14% to $41.5 million, although GAAP net income declined.

What the year looked like

Alliance Entertainment Holding Corporation (Nasdaq: AENT) released the results on September 10 for its fiscal year ended June 30, 2026. Revenue increased from $1.063 billion a year earlier, while gross profit rose faster than sales: up 15% to $152.3 million from $132.9 million. The 80-basis-point margin improvement meant the company retained a larger share of sales after the costs reflected in gross profit.

That improvement did not carry through to higher GAAP earnings. Operating income fell to $27.2 million from $30.1 million, and net income declined to $13.1 million from $15.1 million. Fiscal 2026 included a $7.8 million non-cash write-off of a historical vendor rebate receivable, removing an amount previously recorded as owed to the company. GAAP diluted earnings were $0.26 per share.

The company's adjusted measures showed a different direction. Non-GAAP adjusted EBITDA increased to $41.5 million from $36.5 million. Non-GAAP adjusted net income rose 24% to $23.4 million, and non-GAAP adjusted diluted earnings per share increased 24% to $0.46 from $0.37. Those measures reflect adjustments to reported results and are not interchangeable with GAAP earnings.

Where growth showed up

Vinyl generated $383 million in revenue, up 13%, making it a substantial part of Alliance's annual sales. CDs grew faster, with revenue rising 25% to $156 million. Physical movie revenue increased 22%. Together, the category results show that the year's growth extended beyond records to other physical entertainment formats.

Alliance cited its relationships with Paramount and Amazon MGM Studios as reinforcing its role as a scaled physical entertainment distribution partner. The category growth provides evidence of stronger sales; it does not establish the economics of individual studio relationships.

A smaller interest bill

Interest expense fell 28% to $7.6 million from $10.6 million. Alliance attributed the reduction to a lower average effective interest rate following its refinancing. That lowered a financing cost alongside the improvement in gross profit.

At fiscal year-end, the company had $45.7 million available under its $120 million revolving credit facility. That figure describes available borrowing capacity, rather than cash on hand.

What the results leave open

The annual figures show growth across several physical formats and a wider gross margin. They do not establish how much of that improvement will persist into the next fiscal year, or how much each category contributed to operating profit. The next results will help show whether sales growth and stronger gross profitability translate into higher GAAP earnings.

How this was reported

The figures come from Alliance's September 10 earnings release, Exhibit 99.1 to its Form 8-K, accession 0001493152-26-042245. The earnings information was furnished to the SEC rather than filed for purposes of Section 18 liability. The 8-K also includes an updated investor presentation under Item 7.01; that presentation is not audited financial statements.