Posted on August 16, 2021 by Brad Steveson
Dolphin Entertainment (DLPN), a tiny microcap entertainment company, has quietly or maybe not so quietly been setting itself up for this quarter for a long time. Dolphin just reported their Q2 2021 earnings and surprised even my expectation. Some of the operating highlights as follows:
All good numbers of course, but should we be excited about that? I think so for a few reasons. 1st, this quarterly result beat my expectations by about $1.2m and included no Dolphin 2.0 revenues. This was 100% the result of organic revenue growth in their core business. That’s exciting because I truly believe Dolphin 2.0 has the potential to be an exponentially greater revenue generator than Dolphin 1.0 initiatives over the next year or two and ongoing after that. 2nd this organic 1.0 revenue growth has been achieved without any meaningful revenue from movies, music or live events, all big revenue generators for Dolphin in the past. So they are essentially producing this growth with one arm tied behind their back. Finally THIS IS THE FIRST CASH FLOW POSITIVE QUARTER in many quarters or possibly ever and the first time that Dolphin has a positive working capital number on the balance sheet in over 4 years. These are all good signs of the momentum this company has going right now.
Dolphin also reaffirmed on the call that they have two more Dolphin 2.0 initiatives selected (aside from the previously announced NFT’s) and should be ready to discuss those by end of this quarter. As a reminder Dolphin’s goal is to roll out 2 consumer products, 2 content and 2 equity Dolphin 2.0 initiatives by end of this year. So we still have 5 to go including the two I just mentioned.
So what’s in store for the remainder of this year? I have what I believe to be a conservative estimate for Q3 and Q4 and a full year EBITDA / share number of around 43c. Then if you assume the company is able to add approximately 6.3m in 2.0 revenue (strictly a guess right now) for the remainder of this year you could get into the 60c+ area and growing into next year. I do have a forecast for 2022 also, but will share that at a later time and just say for now that the eps number is bigger than 2021.
So hopefully you can see why I say Dolphin has just posted a quarter that I would consider to be it’s coming out party!
Disclosure: I am long DLPN and may buy or sell shares at any time.
If you want to catch up on the Dolphin story, Breakout Investors has been covering this company for some time now. You can read my previous article on DLPN here
You can catch up with a couple of podcasts where we discuss DLPN here
You can watch and/or listen to our exclusive interview with Dolphin CEO Bill O’Dowd here
Finally, you can join me in my breakout room and discuss DLPN in real time. It is free to join and the link is here: