v3.26.1
Segment Information
 12 Months Ended
Jun. 30, 2026
Segment Reporting [Abstract]  
Segment Information

Note 10: Segment Information

 

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires enhanced disclosures about a public entity’s reportable segments, including significant segment expense categories and expanded interim reporting requirements. The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods beginning after December 15, 2024. Early adoption is permitted. The Company adopted ASU 2023-07 for the fiscal year ended June 30, 2025.

 

Management performed an assessment of the Company’s operating segments in accordance with ASC 280-10-50-1 through 50-9. Based on this evaluation, the Company determined that it operates as a single operating segment, which is also its sole reportable segment. Segment revenue is derived from the sale of distribution of pre-recorded music, video movies, video games and related accessories, and merchandising. This conclusion is consistent with prior periods.

 

 

The Company’s Chief Executive Officer and Chairman are the Chief Operating Decision Makers (“CODM”) and review financial performance and make resource allocation decisions at the consolidated entity level. The CODM utilizes net income, prepared in accordance with U.S. GAAP, to evaluate financial performance, monitor variances against budget and forecast, and guide strategic decisions. Segment assets are reported as consolidated assets on the Company’s balance sheet.

 

Significant expense categories regularly reviewed by the CODM include:

 

  ● Cost of Revenues (excluding depreciation and Amortization)
  ● Distribution and Fulfillment Expense
  ● Sales and Marketing

 

Other Segment Items:

 

Other segment items include expenses that are part of segment profit or loss but are not classified as significant segment expenses. These include:

 

  ● General and Administrative Expense
  ● Technology Expense
  ● Interest Expense
  ● Income Tax Expense

 

The following table presents segment revenue, net income, and the significant segment expenses for the Company’s single reportable segment for the fiscal years ended June 30, 2026, and 2025 (in thousands):

 

Reconciliation to Consolidated Net Income:

   2026   2025 
   Fiscal Year ended June 30 
   2026   2025 
Net Revenues  $1,148,986   $1,063,457 
Cost of Revenues (excluding depreciation and Amortization)   996,662    930,605 
Distribution and Fulfillment Expense   44,960    40,375 
Sales and Marketing   35,393    26,919 
Other Segment items*   58,913    50,480 
Net income   13,058    15,078 

 

* Other segment items include interest expense, income tax expense, general and administrative expenses, and technology expenses, which are reported separately on the consolidated statements of income and comprehensive income.