v3.25.2
Segment Reporting
6 Months Ended
Jun. 30, 2025
Segment Reporting [Abstract]  
Segment Reporting

Note 21: Segment Reporting

 

ASC Topic 280 Segment Reporting establishes standards for companies to report in their financial statement information about operating segments, products, services, geographic areas, and major customers. Operating segments are defined as components of an enterprise that engage in business activities from which it may recognize revenues and incur expenses, and for which separate financial information is available that is regularly evaluated by the Company’s chief operating decision maker, or group, in deciding how to allocate resources and assess performance.

 

The Company’s chief operating decision maker (“CODM”) uses revenue and net income (loss) to evaluate the profitability and performance of each operating segment. The CODM does not evaluate the operating segments using asset information and it is therefore not disclosed. Segment operating expenses include operating expenses directly attributable to the segment as well as certain shared corporate administration services and other costs which are allocated to the reportable segments, such as legal expenses, human resources expenses, accounting expenses, insurance expenses, and corporate facilities expenses. Segment operating expenses exclude certain non-recurring items and other costs, such as interest expense, interest income, share-based compensation expense, and taxes. The Company’s CODM evaluates the performance of each reportable segment based on segment operating income (loss) because it provides insight to operational leverage and other operational metrics for each segment.

 

The Company has identified two operating segments based on the nature of the products and services offered:

 

Content Production and Distribution segment includes the operations of Kartoon Studios, Inc, Mainframe Studios, and Frederator Studios. These entities are aggregated due to their similar economic characteristics, nature of products and services, production processes, customer types, and distribution methods. This segment is focused on the creation, production, and distribution of animated and live-action content, as well as licensing and royalty revenue from intellectual property.

 

Media Advisory and Advertising Services segment includes The Beacon Media Group and The Beacon Communications Group. These entities provide media advisory and advertising services and marketing services.

 

The CEO (CODM) reviews revenue and net operating results, as allocated based on the nature of the business activity.

 

The following table presents the revenue and net earnings within the Company's two operating segments (in thousands):

                    
   Three Months Ended June 30,   Six Months Ended June 30, 
   2025   2024   2025   2024 
Total Revenues:                    
Content Production and Distribution  $9,437   $7,518   $18,074   $12,710 
Media Advisory and Advertising Services   842    866    1,709    1,752 
Total Revenues  $10,279   $8,384   $19,783   $14,462 
                     
Net Loss:                    
Content Production and Distribution  $(5,505)  $(5,696)  $(11,531)  $(12,435)
Media Advisory and Advertising Services   (658)   (177)   (1,158)   (483)
Total Net Loss Attributable to Kartoon Studios, Inc.  $(6,163)  $(5,873)  $(12,689)  $(12,918)

 

Geographic Information

 

The following table provides information about disaggregated revenue by geographic area (in thousands):

                    
   Three Months Ended June 30,   Six Months Ended June 30, 
   2025   2024   2025   2024 
Total Revenues:                    
United States  $4,889   $4,304   $9,615   $7,485 
Canada   3,734    1,808    6,761    1,948 
United Kingdom   1,618    2,240    3,330    4,799 
Other   38    32    77    230 
Total Revenues  $10,279   $8,384   $19,783   $14,462 

 

Additional considerations include the use of segment-level budgets and forecasts created by Mainframe Studios, Frederator and Kartoon Studios at the entity level. The additional financial information prepared by the segment managers is discussed at length in meetings with the CODM. The Company determines that the revenue information reviewed by the CODM, combined with the financial information discussed with the segment managers is sufficiently detailed to allow the CODM to assess each component’s performance and make resource allocation decisions. Kartoon Studios, Frederator and Mainframe Studios are separate entities, although according to ASC 280-10-50-11 all criteria are met in order to present result in aggregation.

 

When evaluating the Company’s performance and making key decisions regarding resource allocation, the CODM reviews several metrics included in net income or loss, which also include the following:

               
   Three Months Ended June 30, 2025 
   Content Production and Distribution   Media Advisory and Advertising   Total 
             
Revenue  $9,437   $842   $10,279 
                
Less Operating Expenses:               
Selling, Marketing and Direct Operating Costs   7,212    70    7,282 
General and Administrative Expenses   4,176    1,252    5,428 
Other Expenses       8    8 
Segment results:  $(1,951)  $(488)  $(2,439)
                
Reconciliation of net (loss) income:               
Depreciation Expense  $685   $43   $728 
Interest Expense   165        165 
Stock Based Compensation   48        48 
Tax provision            
Other   2,760    127    2,887 
Net Loss Attributable to Non-Controlling Interests   (104)       (104)
                
Net Loss Attributable to Kartoon Studios, Inc.  $(5,505)  $(658)  $(6,163)

 

   Six Months Ended June 30, 2025 
   Content Production and Distribution   Media Advisory and Advertising   Total 
             
Revenue  $18,074   $1,709   $19,783 
                
Less Operating Expenses:               
Selling, Marketing and Direct Operating Costs   14,002    148    14,150 
General and Administrative Expenses   7,849    2,520    10,369 
Other Expenses       8    8 
Segment results:  $(3,777)  $(967)  $(4,744)
                
Reconciliation of net (loss) income:               
Depreciation Expense  $1,324   $90   $1,414 
Interest Expense   293        293 
Stock Based Compensation   136        136 
Tax Provision            
Other   6,170    101    6,271 
Net Loss Attributable to Non-Controlling Interests   (169)       (169)
                
Net Loss Attributable to Kartoon Studios, Inc.  $(11,531)  $(1,158)  $(12,689)

 

   Three Months Ended June 30, 2024 
   Content Production and Distribution   Media Advisory and Advertising   Total 
             
Revenue  $7,518   $866   $8,384 
                
Less Operating Expenses:               
Selling, Marketing and Direct Operating Costs   6,061    75    6,136 
General and Administrative Expenses   4,736    1,193    5,929 
Other Expenses            
Segment results:  $(3,279)  $(402)  $(3,681)
                
Reconciliation of net (loss) income:               
Depreciation Expense  $765   $51   $816 
Interest Expense   246        246 
Stock Based Compensation   164        164 
Tax provision            
Other   1,292    (276)   1,016 
Net Loss Attributable to Non-Controlling Interests   (50)       (50)
                
Net Loss Attributable to Kartoon Studios, Inc.  $(5,696)  $(177)  $(5,873)

 

   Six Months Ended June 30, 2024 
   Content Production and Distribution   Media Advisory and Advertising   Total 
             
Revenue  $12,710   $1,752   $14,462 
                
Less Operating Expenses:               
Selling, Marketing and Direct Operating Costs   10,818    88    10,906 
General and Administrative Expenses   9,861    2,477    12,338 
Other Expenses       5    5 
Segment results:  $(7,969)  $(818)  $(8,787)
                
Reconciliation of net (loss) income:               
Depreciation Expense  $1,673   $105   $1,778 
Interest Expense   446    3    449 
Stock Based Compensation            
Tax provision   390        390 
Other   2,026    (443)   1,583 
Net Loss Attributable to Non-Controlling Interests   (69)       (69)
                
Net Loss Attributable to Kartoon Studios, Inc.  $(12,435)  $(483)  $(12,918)

 

All other segment items included in net income or loss are reported on the consolidated statements of operations and described within their respective disclosures.