IDW held a brief earnings call yesterday, following release of its annual report, which is quite lengthy for those who like to dig into such things. The news was mostly positive in terms of slowing losses. Revenue was essentially flat – $26.4 million in 2024 as opposed to $26.7 million in 2023. However operating expenses were cut by more than $4 million, resulting in a net loss of $1,395,000, down from 2023’s loss of $4,928,000. Belt tightening works. (ICv2 has more analysis here.)
CEO Davidi Jonas spoke on the call taking a few questions from investors, including the reports’s forward looking statement that Diamond’s bankruptcy might affect IDW as “the collectability of certain receivables sold by the Company’s distributor are in question and the dollar amount of the receivable in question cannot be estimated at this time and has stated that substantial doubt exists about the Company’s ability to continue as a going concern.”
On the call Jonas responded to “some some chatter and confusion in terms of Diamond” but clarified that “IDW management does not feel that IDW is a substantial risk as a going concern. We expect in the coming days that we will be restating our financials, removing that language, and we have worked with our auditors and provided additional information and additional clarity, so that they share our opinion that IDW is not at substantial risk regarding a continuing as a going concern.”
The auditor who prepared the report had noted that it’s not clear yet whether IDW will be on the hook for the money Diamond owes PRH – more than $9 million from sales to companies that Diamond acted as a wholesaler for.
Although as of June 2022 the Company no longer distributes directly through Diamond, Diamond remains a client of our distributor, Penguin Random House (“PRH”). PRH is a creditor of Diamond, including related to IDW products distributed by PRH through Diamond. PRH paid IDW for IDW products ordered by Diamond, and, as a result of Diamond’s bankruptcy, PRH may not be able to collect all or any of the corresponding amounts owed to PRH by Diamond. PRH has informally indicated to IDW that their understanding of the relevant terms of the contract between IDW and PRH provides that the significant majority of such uncollected amounts will be debited by PRH from future payments from PRH to IDW. IDW has not received any formal written communication, or definitive claim from PRH. IDW cannot at this time assess the likelihood that PRH will seek to debit any amounts against future payments to IDW, the amount of any such potential debit or the timing of any such debits. IDW is also making its own assessment of the relevant contractual language and the rights and obligations of the parties in respect of the current situation. In light of the foregoing as of the date of this report, we are unable to determine the potential impact, however it may have a significant negative impact on our future financial results and cash position. The Company will work to minimize any impact to the extent possible.
● The Kill Lock with Amazon Content Services
● Dungeon with Spooky Pictures/Vertigo Entertainment
● Brutal Nature with leading Mexico-based animation studio Anima Studios
● The Delicacy with Warners Bros. Television Studios
At one point Jonas was asked to give an overview of the general media landscape, which he wisely recognized as a potentially perilous opportunity. He went go on to say that “I do think that the media landscape is has evolved substantially, almost day by day, but certainly in the last five years. And I do think that presents opportunities for IDW at the same time that there are tailwinds, there are also potential headwinds. The comic industry has been a great place to tell new stories. It’s a bit avant garde, if you will.” He noted that more than half of all content consumed currently is short form video and “I haven’t seen any companies that have a successful pay for play, short form subscription model. But those are things that could open up. We have looked at short form video as a space, that we we feel that there are gaps in that market, and that we as storytellers, and the company that engages storytellers and facilitates a space where storytellers can transmit their message. There’s an opportunity for us there.
“At the same time our core focus is to continue to achieve excellence as a comic and graphic novel publisher, but at the same time to open minded and opportunistic.”
No one asked about tariffs, as those had been put on hold just before the call.
(Jonas’s quotes have been edited for clarity.)
