Playboy (PLBY) Q2 FY26 earnings call: guidance and Q&A

Playboy has successfully executed its strategy over the past two years, shifting to an asset-light model focused on licensing, media, experiences, hospitality, and Honey Birdette. This has resulted in a dramatically stronger balance sheet, with total debt reduced from a peak of $218 million to approximately $145 million, and net debt at $108 million. The company expects to be under 3 turns of leverage after receiving remaining UTG proceeds, reflecting a very manageable position moving forward.

The Playboy brand has regained cultural relevance, evidenced by sold-out magazine issues with high-profile talent like Karol G and Cara Delevingne, generating 5 billion media impressions and 70 million video views. The company's own platforms generated over 1 billion engagements and views, with a focus on content like the Playboy Interview and Playmates. A new subscription model on playboy.com, live for its first full quarter, is converting traffic into paying memberships, with July being the strongest month yet, indicating a successful shift from an anonymous to an addressable audience.

Playboy is actively building and testing monetization strategies for its media platform. Paid voting contests, such as the model search with Honey Birdette, drew nearly 50,000 contestants and generated approximately 2.5x the revenue of the first contest, with economics landing in Q3. Sponsorship deals for short-form video content are also lined up, with revenue expected in Q3. These initiatives create a self-reinforcing cycle where content drives audience, which in turn drives subscriptions, voting, and sponsorships, compounding one another.

The company is focused on fewer, bigger, better licensing partners, exemplified by scaling back a large apparel licensee to allow Missguided to expand into additional categories. The Supreme collaboration was a standout success. In China, the transition to an owner-operator strategy with UTG is underway, leading to a modest temporary reduction of a couple hundred thousand dollars per quarter in new small deals but positioning for future growth. The licensing business has over $320 million of contracted, not yet recognized, future revenue, providing durability and runway.

Honey Birdette delivered its seventh consecutive quarter of double-digit brick-and-mortar comparable sales growth and fifth consecutive quarter of combined brick-and-mortar and online comparable sales growth, with net revenue up 18% to $19.5 million. This growth is driven by full-price selling, tight product discipline, and a loyalty program, allowing for shallower discounts during sales events. The online business, particularly in the U.S., is reigniting growth, and June was the brand's strongest month ever.

Playboy is strategically investing in talent to drive growth, bringing in leaders like Krystle Bach as VP of Global Licensing and Partnerships and Radhika to lead digital efforts. The company aims for the media and experiences business to become as large and profitable as the licensing business over time^⏳. Progress is also being made on the first new flagship Playboy Club in Miami, structured as a licensing deal to avoid capital risk, and Jennifer Cabalquinto was added to the board for public company financial and operating depth.