Kartoon Studios (AMEX: TOON) Releases 2023 Financial Report With $44.1 Million In Revenue

April 10, 2024 at 08:45 AM EDT

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By Faith Ashmore, Benzinga

Kartoon Studios (AMEX: TOON), a global company specializing in creating, producing, distributing, marketing and licensing entertainment brands, has announced its 2023 financial results to shareholders. With a diverse portfolio of original animated content, including popular shows such as Stan Lee's Superhero Kindergarten, Shaq's Garage, Rainbow Rangers and Llama Llama, Kartoon Studios has established itself as a prominent player in the children’s media industry.

For the quarter that ended on December 31, 2023, Kartoon Studios recorded revenue of $8.8 million, contributing to the annual revenue of $44.1 million. As of December 31, 2023, Kartoon Studios had assets totaling $57.1 million, working capital amounting to $11.5 million and a total stockholders' equity of $53.3 million.

The company’s streaming platform Kartoon Channel! was key to 2023’s results. Notably, the company reached a break-even point for operating income in the fourth quarter of last year. In comparison, it took Netflix (NASDAQ: NFLX) six years to break even. The paid subscriber base for Kartoon Channel! grew by 19% in 2023 compared to the previous year.

The company’s production arm, Mainframe Studios, also experienced growth in 2023, having seemingly recovered with ease after industry-wide strikes by actors and writers last year.

With a growing sales pipeline and newly greenlit projects, the company projects that Mainframe Studios willl generate more than $40 million in revenue.

Implementing Cost Savings

The company’s new Chief Financial Officer, Brian Parisi, commented, "Kartoon Studios remains steadfast in its commitment to maximizing our operational efficiency and implementing stringent cost management practices, all with the goal of achieving sustained, long-term, profitable growth. We are actively pursuing a detailed plan aimed at lowering operational costs throughout the organization while growing revenue alongside the recovery of the overall industry.”

“Our efforts are bearing fruit, as evidenced by the decline in our loss from operations in Q4 2023, net of impairment, by 39% from Q4 2022 and 48% from Q3 2023. In my first five months at the company, we have already identified more than $3.5 million of additional annual cost savings across the business, which we believe will further reduce our loss from operations and pave the way to achieve our goal of sustainable and growing profitability, as our key brands begin to grow and flourish,” he said.

Kartoon Studios reports that its kids and family media agency, Beacon Media Group, has also defied industry trends by driving 16% quarterly growth compared to Q4 2022, achieving its highest quarterly revenue since 2021.

“Under the leadership of Cindy Kelly, President of Beacon Media Group, the company has broadened its horizons by welcoming six new advertisers and pushing the boundaries with innovative marketing campaigns. Cindy has been instrumental not only in driving business growth amidst a challenging market but also in forging valuable synergies between Beacon Media, Kartoon Channel!, and our Mainframe Studios subsidiary in Canada. Her efforts have positioned Beacon Media Group as a leader in the kids and family media and marketing space, and today represents more toy companies than any other media agency,” Andy Heyward, Chairman & CEO of Kartoon Studios, added.

Going into 2024, the company has stated that it will be further focusing on the Stan Lee brand and implementing AI across the organization, with significant initiatives underway. These initiatives aim to propel the Stan Lee brand further and enhance operational efficiency through the use of AI technology.

The CEO is confident about the prospects of the company, sharing “Kartoon Channel! has evolved into a leading destination for children's entertainment, offering thousands of episodes of meticulously curated, safe and family-friendly content. We believe our streaming services, bolstered by strong market reach, and the high quality of our service—as evidenced by our consistent 4.9 out of 5 stars rating on the Apple app store, are poised to be a significant driver of Kartoon Studios' growth strategy moving forward. We continue to be the highest ranked streaming service in the Apple app store, amongst our key competitors, including Netflix Kids, Disney+ MAX, Cartoon Network, and Nickelodeon.”

Featured photo by Glenn Carstens-Peters on Unsplash.

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