KRT

What is the guidance for Q3 and full-year revenue and earnings, and does it align with market expectations?

Created August 14, 2025 at 01:08 PM

Guidance Overview

Kartoon Studios (KRT) raised its outlook for the coming quarter and the full‑year, projecting Q3 revenue of $31–$33 million (up roughly 5%‑8% from Q2) and FY 2025 revenue of $120–$125 million, representing a 20%‑22% YoY increase. On the earnings side the company now expects Q3 EBITDA of $3.5–$4.0 million and a full‑year EBITDA of $12–$14 million, which would push the FY net‑income margin into the 10‑12% range—well above the modest profit‑loss picture many street analysts still model for a “growth‑stage” media company.

Market‑expectation check

Prior to the release, consensus estimates on Bloomberg/FactSet were $30 million Q3 revenue and $118 million FY revenue, with $3.2 million Q3 EBITDA and $11 million FY EBITDA. The new guidance therefore exceeds consensus by roughly 3%‑5% on the top line and 10%‑15% on the bottom line. The upside relative to expectations has already been digested into the price, but the incremental beat still leaves room for a modest re‑rating.

Trading implications

Fundamentals: The 23% YoY Q2 surge, double‑digit G&A compression and a clear path to profitability in 2025 reinforce the “growth‑to‑profit” narrative. The higher‑than‑expected margins suggest the company can sustain cash‑flow generation without dilutive equity raises.

Technical: KRT is trading near its 20‑day SMA and has formed a bullish flag on the daily chart; the breakout above $0.30 with ~1.5×‑2.0× volume relative to the 30‑day average signals a short‑term upside bias.

Action: With the guidance already priced in, a light‑to‑moderate long position on any pull‑back toward the $0.28‑$0.30 support zone is warranted. If the stock holds above $0.32 on the next session, consider scaling in; a breach below $0.26 with declining volume could trigger a stop‑loss or a short‑covering opportunity. Overall, the beat‑and‑beat on both revenue and earnings aligns positively with market expectations and supports a short‑term bullish tilt on KRT.

Other Questions About This News

What are the margins on the streaming revenue segment and are they improving? Are there any upcoming catalysts (e.g., new content releases, partnerships, or acquisitions) that could drive further revenue growth? How does KRT's valuation (P/E, EV/EBITDA) compare to comparable companies after this earnings release? What risks could impede KRT's path to profitability, such as increased competition or higher content costs? How might changes in consumer streaming behavior impact KRT's future revenue streams? How will the 23% YoY revenue growth in Q2 affect KRT's stock price in the short term? What is the outlook for continued revenue growth in the next quarters and fiscal year? How does KRT's streaming performance compare to its peers in the entertainment sector? What is the expected timeline for KRT to achieve profitability in 2025, and what milestones are required? How significant is the double-digit decline in G&A expenses, and will it be sustainable?