WildBrain (TSX: WILD) reported fourth-quarter revenue from continuing operations of $55 million, a 29% decline year over year. The Canadian media company also announced the full repayment of corporate debt following the sale of its interest in Peanuts and exit from Canadian television broadcasting.

Full-year fiscal 2026 revenue stood at $246 million, down 10% from $274 million in fiscal 2025. The net loss narrowed to $75 million from $122 million in the prior year. Adjusted EBITDA for the quarter was negative $4 million, compared with positive $8 million in Q4FY25, impacted by discrete items including receivable provisions and franchise marketing investments.

Segment Performance and Strategic Shift

The company reorganized into three core segments: Franchise and Global Licensing, Content, and WildBrain Network. Franchise and Global Licensing revenue for the full year grew 27% to approximately $88 million, driven by owned brand royalties. However, Q4 segment revenue fell 16% to $16 million due to lower agency revenue at WildBrain CPLG and provisions for uncollectible trade receivables.

Content revenue declined 40% in Q4 to $29 million, reflecting lower production activity and the absence of a significant content delivery recognized in the prior-year quarter. For the full year, Content revenue was $115 million, down 27%. The WildBrain Network saw Q4 revenue rise 6% to approximately $12 million, supported by higher direct advertising revenue.

What the Numbers Show

A divergence exists between top-line contraction and margin expansion in fiscal 2026. While total revenue fell 10%, gross margin improved by approximately 500 basis points to 45%. This shift reflects a strategic pivot toward higher-margin owned brand licensing revenue, which offset the decline in lower-margin production and distribution activities. Additionally, the WildBrain Network's direct advertising revenue grew over 20% in Q4, indicating successful monetization efforts despite overall platform advertising headwinds.

Fiscal 2027 Outlook and Investment Plan

WildBrain guided for fiscal 2027 revenue between $270 million and $295 million, representing approximately 15% growth at the midpoint. Adjusted EBITDA is expected to reach $28 million to $32 million, implying 44% growth at the midpoint. The company plans a $30 million investment program across content, technology, and infrastructure, which will weigh on near-term free cash flow.

Management expects Adjusted EBITDA to double from fiscal 2027 levels by the end of fiscal 2029. The company ended fiscal 2026 with $89 million in cash and cash equivalents. Recent developments include the acquisition of Personality AI to enhance interactive character experiences and the launch of new Strawberry Shortcake programming.