Kartoon Studios (TOON) investor relations material

Executive summary

• Net income for Q2 2026 was $27.0M, driven by a $39.2M non-recurring litigation settlement; excluding this, operations would have posted a net loss.

• Total revenue for Q2 2026 was $5.8M, down 43% year-over-year, with declines across all major revenue streams.

• Accelerated strategic transformation to focus on ownership and commercialization of high-value intellectual property for children, including the sale of Frederator Networks and retention of key IP assets.

• Strengthened financial position with $40.5M in cash and marketable securities and no long-term debt after litigation settlements.

• Announced major distribution partnership with Amazon Prime for Hundred Acre Wood, launching February 2027.

Financial highlights

• Q2 2026 revenue: $5.8M (down 43% YoY); six-month revenue: $13.1M (down 34% YoY).

• Net income for Q2 2026: $27.0M (vs. net loss of $6.3M in Q2 2025), driven by a $39.2M litigation settlement.

• Operating loss for Q2 2026: $3.4M (vs. $3.2M loss YoY); six-month operating loss: $6.2M (vs. $6.3M loss YoY).

• Cash and marketable securities totaled $40.5M as of June 30, 2026.

• Total expenses decreased 32% to $9.2M, reflecting cost discipline and operational streamlining.

Outlook and guidance

• Management expects to fund upcoming production costs, including the launch of "Hundred Acre Wood's: Winnie and Friends," through existing liquidity and production facilities.

• Strategic focus on developing and monetizing owned IP franchises, especially Hundred Acre Wood and Stan Lee Universe.

• Management expects transformation to yield higher-margin, sustainable revenue streams and long-term shareholder value.

• Anticipates launch of flagship franchises in 2027, with Hundred Acre Wood as cornerstone.

• Sufficient liquidity is expected for at least the next 12 months.