Kartoon Studios Reports Strong Business Results with 8.2% Sequential Revenue Growth for Q4 2024, Marking Third Consecutive Quarterly Increase

Operating Expenses Decreased by 57.4% in 2024; Operating Loss Improved by 76.5% in 2024

Kartoon Channel Continues Growth in Viewers, Platforms, Revenue, and Profitability While Continuing to Lead All Streamers in Viewer Rankings in Apple App Store

The Company's Family and Kids' Ad Unit, Beacon Media Group, Achieved Profitability in 2024 with High-Efficiency Ads and Data-Driven Strategies, Poised for Continuing Growth in 2025

Upcoming Animated Series, Hundred Acre Wood's Winnie and Friends, and Stan Lee Universe's The Excelsiors, Poised for Broad Launches in 2025 and 2026

BEVERLY HILLS, Calif., March 31, 2025 (GLOBE NEWSWIRE) -- Kartoon Studios (NYSE American: TOON) today provided a business update for the fourth quarter of 2024, highlighting continued momentum in revenue growth across all units, substantial improvements in cost efficiency and noteworthy progress toward profitability expected in 2025.

Key Financial Highlights for Q4 2024:

   -- Total Revenue: Third consecutive quarter of revenue growth; Total revenue 
      increased by 8.2% compared to Q3 2024 and 7.0% compared to Q4 2023, 
      driven by consistent growth across all divisions. 
 
   -- Production Services Revenue: Surged by 44.7% in Q4 2024 compared to Q4 
      2023, reflecting strong demand for premium animation content at Mainframe 
      animation production subsidiary. 
 
   -- Total Operating Expenses: Decreased by 66.0% in Q4 2024 compared to Q4 
      2023 and by 57.4% for the full year 2024 compared to 2023. This decrease 
      in operating expenses reflects the effectiveness of continuing 
      operational efficiency initiatives. 
 
   -- General & Administrative (G&A) Expenses: Decreased by 39.2% in Q4 2024 
      compared to Q4 2023 and by 28.6% for the full year 2024 compared to 2023. 
 
   -- Loss from Operations: Improved by 88.0% in Q4 2024 compared to Q4 2023 
      and by 76.5% for the full year 2024 compared to 2023, continuing the path 
      towards profitability in 2025. 

"In 2024, Kartoon Studios made significant progress across all core business segments and towards overall profitability in 2025 and beyond," said Andy Heyward, CEO of Kartoon Studios. "Virtually all of our operating units have reached profitability, including tentpole children's broadcaster, Kartoon Channel, tentpole family and kids advertising unit, Beacon Media, and Frederator Networks."

Mainframe Studios, Kartoon Studios' largest revenue-generating unit, achieved a 44.7% revenue increase in Q4 2024 compared to Q4 2023, driven by strong demand for high-quality animation and a surge in contracted projects, across a wide breadth of clients, including Disney, Netflix, Sony Kids, PBS, Australian Broadcasting Company $(ABC.AU)$, Canadian Broadcasting Company $(CBC.AU)$, Mattel, and Spin Master Toys among others. Over 90% of its 2025 revenue target is already contracted, with a backlog of orders into 2026 expected to surpass 2025 levels. Mainframe Studios produces hit shows like Barbie, Coco Melon, Super Kitties, and Unicorn Academy and has consistently delivered highly successful children's programs. As global demand for high-quality animation continues to grow, Mainframe's ability to provide feature-film quality animation positions it as a cornerstone of Kartoon Studios' long-term growth strategy, and profitability in 2025.

Kartoon Channel! and Frederator Networks (Toon Media Networks) delivered strong results and profit in 2024, significantly building upon 2023 through higher subscription revenues, distribution expansion, increasing advertising revenue, and high-performance diverse content offerings now including Peppa Pig, Super Mario Brothers, Shaq's Garage, Yu Gi Oh, Gummy Bears, Rainbow Rangers, Roblox Rumble, and Minecraft: Journey to the End.

Kartoon Channel! remains the #1 ranked streamer in the Apple app store, rated by users, besting YouTube Kids, Netflix, Disney+, and others, and continues to grow each quarter based on its unrelenting focus on children's safety. Kartoon Channel is now available in the US as well as 61 international markets, reaching more than 1.5 billion viewers worldwide across FAST Channels, VOD, and Smart TV, on platforms including Samsung+, Amazon Prime, Amazon Fire, Android, Tubi, Pluto, Roku, Google, Apple TV, Apple iOs, Comcast cable, Cox cable, and Star TV among others. Its emphasis on exclusive series, localized content, and ad-supported models drove substantial revenue growth. Meanwhile, the Company's Frederator Networks, also turned profitable in 2024 and is now one of the largest global animation networks, generating billions of views across YouTube and viral hits on TikTok and other platforms. Its 2,000 exclusive creators and portfolio of original animated series on YouTube were instrumental in driving ad revenues. By focusing on short-form social media content to broaden reach and merchandising, Frederator's originals attracted a loyal and engaged audience. Looking ahead to 2025, the network plans to expand its e-commerce capabilities on YouTube and social media by offering branded merchandise and digital collectibles, unlocking new revenue streams, and further enhancing profitability.

Mr. Heyward continued: "The expansion of Kartoon Channel! and Frederator Networks has executed a global content strategy that resonates with audiences worldwide, built on safety for children. As we enter new markets in Asia, Europe, and Latin America in 2025, we are now present in over 61 territories and have built significant pipelines for our content for the future. We are confident that our international growth strategy, always promoting safe and positive content, will strengthen revenue streams and solidify our position as a leader in children's entertainment for years to come."

Meanwhile, creative development is focused on Kartoon Studios' upcoming worldwide launch of the animated properties, Hundred Acre Wood's Winnie and Friends, based on the A.A. Milne classic children's property, Winnie-the-Pooh, and Stan Lee Universe's upcoming The Excelsiors, the largest group of Stan Lee superheroes ever introduced. Under the Executive Producer oversights respectively of Linda Woolverton (Beauty and the Beast, Lion King, Maleficent), as well as Michael Uslan (Batman), the Company is expecting strong performance from these pedigreed properties for years to come and the proven creative teams leading them. Kartoon Studios Licensing and Merchandising with both Hundred Acre Wood's Winnie and Friends and Stan Lee's The Excelsiors is set to unlock substantial new revenue streams. The combination of beloved legacy brands and innovative new content look positions Kartoon Studios to capitalize on the continuing global demand for high-quality, safe, family-friendly entertainment.

"We have invested heavily in infrastructure, technology, and key creators with a proven track record of making large and highly profitable hits. We are confident we can begin seeing that investment's harvest now. It is worth noting that our CFO, Brian Parisi, was recognized recently as CFO of the Year by the Los Angeles Daily Business Journal. Also worth noting is that our family and kids' ad unit, Beacon Media Group, achieved profitability in 2024 through high-efficiency ads and data-driven strategies and is poised for continued growth in 2025. Our commitment remains clear: to execute our vision for Kartoon Studios' safe and positive content for children and families while delivering lasting growth and value for our shareholders," concluded Mr. Heyward.

Brian Parisi, Kartoon Studios' Chief Financial Officer, commented, "Our financial performance in 2024 reflects the success of our disciplined approach to cost efficiencies. Significant reductions in operating expenses and G&A costs and improved efficiency across our divisions have substantially strengthened our bottom line and positioned us for profitable growth.

"We remain focused on maintaining financial discipline while strategically investing in our most profitable areas, including premium content production, data-driven advertising, and licensing and merchandising. With a leaner expense structure, no long-term debt, and a robust pipeline of contracted revenue, we are well-positioned to capitalize on growth opportunities in 2025 and beyond. We aim to drive sustained revenue growth, expand profitability, and create long-term value for our shareholders."

Kartoon Studios reported revenue of $9.4 million and $32.6 million for the three months and year ended December 31, 2024, respectively. As of that date, the Company had current assets of $34.7 million, and total stockholders' equity of $36.5 million. The Company had no Long-Term Debt as of December 31, 2024.

Complete details of Kartoon Studios' financial results for the fourth quarter and full year ended December 31, 2024, are available in the Company's Annual Report on Form 10-K, which has been filed with the Securities & Exchange Commission and is available on the Company's website.

About Kartoon Channel!

Kartoon Studios' Kartoon Channel! is a family entertainment destination that delivers 1000s of episodes of carefully curated and safe family-friendly content. The channel features original content, including Stan Lee's Superhero Kindergarten, starring Arnold Schwarzenegger, Rainbow Rangers, and Shaq's Garage, starring Shaquille O'Neal and Rob "Gronk" Gronkowski. Kartoon Channel! also delivers animated classics for little kids, such as Peppa Pig Shorts, Mother Goose Club, Barney and Friends, Om Nom Stories, as well as content for bigger kids, like Angry Birds, Talking Tom & Friends and Yu-Gi-Oh!. Kartoon Channel! also offers STEM-based content through its Kartoon Classroom, including Baby Genius and more, as well as a Spanish language collection, KC En Espanol.

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