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Segment Reporting
 9 Months Ended
Sep. 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:

 

The 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.

 

The 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 September 30,   Nine Months Ended September 30, 
   2025   2024   2025   2024 
Total Revenues:                    
Content Production and Distribution  $8,965   $7,283   $27,039   $19,993 
Media Advisory and Advertising Services   912    1,425    2,621    3,177 
Total Revenues  $9,877   $8,708   $29,660   $23,170 
                     
Net Loss:                    
Content Production and Distribution  $(6,201)  $(2,395)  $(17,732)  $(14,830)
Media Advisory and Advertising Services   (369)   338    (1,527)   (145)
Total Net Loss Attributable to Kartoon Studios, Inc.  $(6,570)  $(2,057)  $(19,259)  $(14,975)

 

Geographic Information

 

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

                    
   Three Months Ended September 30,   Nine Months Ended September 30, 
   2025   2024   2025   2024 
Total Revenues:                    
United States  $4,123   $5,005   $13,738   $12,490 
Canada   3,626    1,615    10,387    3,563 
United Kingdom   2,091    1,909    5,421    6,708 
Other   37    179    114    409 
Total Revenues  $9,877   $8,708   $29,660   $23,170 

 

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 September 30, 2025 
   Content Production and Distribution   Media Advisory and Advertising   Total 
             
Revenue  $8,965   $912   $9,877 
                
Less Operating Expenses:               
Selling, Marketing and Direct Operating Costs   7,030    101    7,131 
General and Administrative Expenses   3,716    1,153    4,869 
Other Expenses   –    –    – 
Segment results  $(1,781)  $(342)  $(2,123)
                
Reconciliation of net (loss) income:               
Depreciation Expense  $688   $43   $731 
Interest Expense   157    –    157 
Stock Based Compensation   42    –    42 
Tax provision   –    –    – 
Other   3,478    (16)   3,462 
Net Loss Attributable to Non-Controlling Interests   55    –    55 
                
Net Loss Attributable to Kartoon Studios, Inc.  $(6,201)  $(369)  $(6,570)

 

                
   Nine Months Ended September 30, 2025 
   Content Production and Distribution   Media Advisory and Advertising   Total 
             
Revenue  $27,039   $2,621   $29,660 
                
Less Operating Expenses:               
Selling, Marketing and Direct Operating Costs   21,032    249    21,281 
General and Administrative Expenses   11,566    3,671    15,237 
Other Expenses   –    8    8 
Segment results  $(5,559)  $(1,307)  $(6,866)
                
Reconciliation of net (loss) income:               
Depreciation Expense  $2,012   $134   $2,146 
Interest Expense   450    –    450 
Stock Based Compensation   178    –    178 
Tax Provision   –    –    – 
Other   9,647    86    9,733 
Net Loss Attributable to Non-Controlling Interests   (114)   –    (114)
                
Net Loss Attributable to Kartoon Studios, Inc.  $(17,732)  $(1,527)  $(19,259)

 

                
   Three Months Ended September 30, 2024 
   Content Production and Distribution   Media Advisory and Advertising   Total 
             
Revenue  $7,283   $1,425   $8,708 
                
Less Operating Expenses:               
Selling, Marketing and Direct Operating Costs   5,941    115    6,056 
General and Administrative Expenses   3,131    1,104    4,235 
Other Expenses   –    –    – 
Segment results  $(1,789)  $206   $(1,583)
                
Reconciliation of net (loss) income:               
Depreciation Expense  $761   $48   $809 
Interest Expense   176    –    176 
Stock Based Compensation   155    –    155 
Tax provision   –    –    – 
Other   (422)   (180)   (602)
Net Loss Attributable to Non-Controlling Interests   (64)   –    (64)
                
Net Loss Attributable to Kartoon Studios, Inc.  $(2,395)  $338   $(2,057)

 

                
   Nine Months Ended September 30, 2024 
   Content Production and Distribution   Media Advisory and Advertising   Total 
             
Revenue  $19,993   $3,177   $23,170 
                
Less Operating Expenses:               
Selling, Marketing and Direct Operating Costs   16,760    202    16,962 
General and Administrative Expenses   12,991    3,582    16,573 
Other Expenses   –    5    5 
Segment results  $(9,758)  $(612)  $(10,370)
                
Reconciliation of net (loss) income:               
Depreciation Expense  $2,434   $153   $2,587 
Interest Expense   623    2    625 
Stock Based Compensation   –    –    – 
Tax provision   545    –    545 
Other   1,603    (622)   981 
Net Loss Attributable to Non-Controlling Interests   (133)   –    (133)
                
Net Loss Attributable to Kartoon Studios, Inc.  $(14,830)  $(145)  $(14,975)

 

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