PLBY Group at 37th Annual ROTH Conference: Strategic Shift to Asset-Light Model

On Tuesday, 18 March 2025, PLBY Group (NASDAQ: PLBY) presented at the 37th Annual ROTH Conference, outlining a strategic pivot to an asset-light model focused on brand licensing and partnerships. CEO Ben Kohn discussed the challenges faced since going public in 2021 and the company’s renewed focus on leveraging the iconic Playboy brand. While the transition aims to boost profitability, it also highlights past operational missteps.

Key Takeaways

• PLBY Group is transitioning to an asset-light model, prioritizing brand licensing and partnerships.
• The BYBORG partnership is expected to generate a minimum of $20 million in annual profitability.
• The company plans to relaunch Playboy magazine with four issues per year by 2026.
• PLBY is reducing corporate overhead, targeting $20 million in expenses and a headcount of 35 employees.
• Expansion opportunities are being explored in China, gaming, and hospitality sectors.

Financial Results

• BYBORG Deal: Expected to bring $20 million in annual profitability with a 25% profit share for PLBY. Initial investment by BYBORG is $22 million, with a potential additional investment of $25 million at $1.50 per share.
• Core Licensing Business: Generates $25-30 million in revenue with approximately 70% margin.
• China Business: Revenue decreased from $40 million pre-COVID to approximately $14 million, with a historical gross margin of 80%.
• Honey Birdette: Currently a 10% margin business, with a 60% gross margin in the fourth quarter.
• Corporate Expenses: Targeting $20 million in expenses.

Operational Updates

• BYBORG Transition: Transition services are being provided for the first six months, with Playboy TV and Playboy Plus transitioning by the end of the month, and the Playboy Club by June 30.
• Magazine Relaunch: Plans to publish four issues per year by 2026.
• Licensing Partners: Currently 104 partners, with 65 generating less than $500,000 in aggregate.
• Staffing: Corporate headcount reduction to 35 employees.

Future Outlook

• Licensing Growth: Focus on fewer, more impactful partnerships and scaling down overhead.
• Honey Birdette: Potential for increased margins and monetization at the right time.
• China Business: Anticipates revenue growth with economic improvements.
• Corporate Expenses: Further reductions by subletting real estate.
• CAA Relationship: Potential renegotiation in 2027 to expand global coverage.

Q&A Highlights

• Honey Birdette Strategy: Emphasis on reducing sale days and inventory buys, with an increase in full-price sales.
• AI Girlfriends: Marketing consideration through BYBORG’s jasmine.ai.
• Magazine Events: Exploring live events tied to magazine issues and potential long-term opportunities in crypto or coin space.

For more detailed insights, readers are encouraged to refer to the full transcript below.

Full transcript - 37th Annual ROTH Conference:

George Kelly, Analyst, Roth: I’m George Kelly with Roth, excited to have Ben Kona with me today, CEO of PLBY. So it’s been a couple years since we were last on the stage, I think. So thanks for doing it.

Ben Kohn, CEO, PLBY: Thank you for having me. Appreciate it.

George Kelly, Analyst, Roth: So we have twenty five minutes. I’ll stop a few times and take questions. So if you have them, please shout them out. But maybe if we could start with, it’s been a, the last, call it, eighteen months, two years has been a real kind of transition in your business and a transition in your priorities and and emphasis. And so if you could take us through, just catch everyone up sort of in, you know, high level what’s happened and how your priority set has changed.

Sure.

Ben Kohn, CEO, PLBY: So we have one of the greatest brands in the world and one of the most recognized brands in the world in Playboy. It’s a company that sells product in over 100 countries and generates billions of dollars consumer spend. We went public in ’twenty one and we thought we could operate. And so the business historically have been a licensing business where we would partner with people that are actually good operators and we would do what we were good at which was building the brand and marketing the brand. And we decided we would operate ourselves.

We screwed it up. We have now reversed and gone back to an asset light model. We are focused on partnering with the best operators out there, leveraging this massive global brand, locking in our downside. We’ve got in the business this year to free cash flow positive, and we have significant upside not only in existing deals, but in business development. And so my priorities moving forward are focused on the brand.

We launched the magazine last month. We’ll be doing another issue later this year and then bringing out four issues thereafter. The magazine, there’s on the business model behind it except for brand marketing expense. And so I’m focused right now on making sure that the brand stays extremely relevant, working with the right celebrities and influencers, and then leveraging that into new revenue streams. And there are significant revenue streams that we can generate off the back of the magazine.

Again, not selling subscriptions, but things like voting for your favorite playmate, fan voting, paid fan voting, sponsorships, etcetera, and then developing new licensing opportunities. So now that we have the business free cash flow positive, how do we take that baseline and continually improve or increase that baseline every year while maintaining significant upside. A great example of that is the BIBORG deal we did at the end of last year.

George Kelly, Analyst, Roth: Okay. And I want to talk more about BIBORG. I want to get into the business segments. But before we do that, maybe how do you assess the general health of the brand? And I understand some of it’s anecdotal, kind of hard to have like a real time measure of brand health.

But you recently launched a magazine. How would you talk or relaunch the magazine? How would you talk about, like, has was that well received? Did it get a lot of attention? And maybe how else do you just kind of status check the brand and its relevance?

Ben Kohn, CEO, PLBY: Yeah. Look, so without spending hundreds of thousands, if not millions of dollars going to do surveys, we look at the number of partners that want to come to us. We look at consumer spend. So what are consumer spending through our licensing partners buying our products? And both of those are on the uptrend.

The the magazine is so unique in that I can go work with a Lori Harvey or a Kylie Jenner like we’ve done, and it doesn’t cost me a dollar. Right? So I can take the editorial angle, and it allows me to punch way above my weight for what I otherwise would be able to afford. But if I look at the celebrities, I look at the next magazine and who we potentially might have for the cover, it’s one of the biggest, you know, stars out there today. And so the fact that they wanna work with us speaks to what the brand means and the relevancy of the brand.

And so I would say the brand is as strong today as it’s ever been. I have two teenage daughters. I can tell you how many kids within their schools wear Playboy. And it speaks to how this brand over seventy plus years has transcended generations.

George Kelly, Analyst, Roth: And the frequency the the magazine is gonna be a quarterly thing.

Ben Kohn, CEO, PLBY: Once we ramp up so we’re doing this in a very capital light way. We’re not doing it like we used to, where I would employ 20 plus people to produce a magazine because there’s not a business model around that. We’re not taking paper stock like we used to. All of this is being outsourced and laid off to third parties. This year, we’ll probably produce one more magazine.

We’ll have a great event or party tied to that. And then as we move into ’26 as we’re ramping up, we plan to do four a year. Each issue will have the Playboy Interview, the Playboy Advisor. It will have three Playmates in it. And then looking to take those franchises, right?

A magazine is a compilation of many franchises, the Playboy Interview, the Playboy Advisor, etcetera. How do we take those to multimedia formats, podcasts, video series, television shows? You look at the Dallas Cowboy Cheerleader Show. I look at our Playmate franchise and say, why can’t we do that? And so that’s what we’re focused on is is is making sure that this content is in the right format for audiences to consume.

George Kelly, Analyst, Roth: And are there any metrics? I know it hasn’t been that long, but anything you could share about how widely this first relaunch issue has been viewed or

Ben Kohn, CEO, PLBY: Yeah. Look, we produced very few copies, couple thousand. We had a phenomenal sell through and we had a lot of digital downloads. But more importantly, it’s the press impressions and the other things that it generates and that was substantial. So it was well, you know, if a magazine cost us moving forward $500,000 to $600,000 per issue, what we generate in earned media is multiples and multiples of that.

George Kelly, Analyst, Roth: Yep. Understood. And then still on the brand, one last question on on

Ben Kohn, CEO, PLBY: that

George Kelly, Analyst, Roth: topic. The historically, you’ve given sort of global brand spend behind all the different partnerships and things. What just ballpark is that currently?

Ben Kohn, CEO, PLBY: You know, it’s so hard after COVID to look at it, but I would say that consumers are spell spending in excess of a billion dollars buying Playboy products and services around the globe.

George Kelly, Analyst, Roth: Okay. Okay. And then let’s talk about your business as it stands right now with we look at it as you have three different largely three different business segments. You mentioned BYBORG. Can you tell us more about that deal and who why you selected them as as a digital partner?

Ben Kohn, CEO, PLBY: Sure. So let me just educate everyone on what we have left at Playboy. So Playboy is an asset light business today. We’re only focused on licensing and partnering with great operators out there to exploit our brand in their respective fields. Licensing has two components to it.

BYBORG, which was our legacy adult property, so Playboy TV, Playboy Plus, and our creator platform, our version of OnlyFans, but with different rules behind it. We licensed to one of the best adult operators out there, which is a company called BYBORG. ByBorg has 70,000,000 daily customers on their other platforms, and they generate hundreds of millions of dollars a year in profitability. So we went out, we took about eighteen months meeting them. A deal came together in the fourth quarter of last year, late third quarter, fourth quarter of last year.

We took a business that was generating $22,000,000 of revenue, mostly declining because our linear television business, there’s nothing we can do to buck the trends of MSOs or the cable companies. It was basically breakeven, and we turned that into $20,000,000 a year of minimum profitability. So BIBORG is paying us to operate and license those sites $20,000,000 a year against 25% of the profits of that business. So we maintain significant upside should they execute like they think they’re going to. There’s also other things within that contract like AI girlfriends.

So you could think about it virtual or AI playmate, and they’ve already developed that technology. So look forward to what their product roadmap is moving forward. The second part of our business is the rest of the world licensing, and that’s broken into two components, our China business and then rest of the world. About 80% of that business today is clothing or consumer products. There’s significant upside in categories that we used to license that we aren’t actively pursuing today, like the gaming sector.

We had a Playboy Club in Las Vegas. We had a Playboy Club in London. Those were generating on a combined basis about $6,000,000 a year in licensing revenue. So there’s those huge opportunities. And then the third part of our business is what I would say is our last asset intensive business left, which is a lingerie business we bought in twenty one, twenty twenty one called Honeybird App.

It’s a great brand. We’ve been focused on improving the profitability that last year, that business generated about $6,000,000 of cash force. This year, that business should increase at the right time. We’re not the right owner of that business. And so when I look at our balance sheet today and we’ve done a good job delevering the company and have a clear path to doing that going forward, I still own this asset that I could sell.

And I would hope at some point that would pay off all of my remaining debt at the company. Okay.

George Kelly, Analyst, Roth: You covered a lot there. Let’s talk BIBORG. So the deal was finalized in the fourth quarter of last year. You mentioned $20,000,000 of minimum annual amount and then there’s upside to that, the 25% of net income. Give us a sense of scale.

Your I mean, your brand, we just talked all about big, huge global brand. Others that are doing something similar online, I guess, how much opportunity is there? How big is this market? And what is the product roadmap? What are you comfortable sharing as far as what’s byboard gonna do over the next twelve to twenty four months?

Ben Kohn, CEO, PLBY: Sure. So, look, the marketplace is massive, right? You’re talking about billions and billions of dollars of consumer spend. If you look at OnlyFans, you’re talking about consumer spending in excess of $6,000,000,000 interacting with their favorite creators, right? The market is actually much bigger than that.

And so with our brand and and buy board, I think made the investment and licensed it because of what Playboy represents from a brand perspective. And so first and foremost, all the conversations we’ve had about that with them is about elevating the Playboy brand. You know, right now in the next six months, they are focused on transitioning the businesses that they’ve licensed from us. So Playboy Plus, which was our legacy gallery site, Playboy TV and play in the Playboy Club, which was our version of only fans are a greater platform, transitioning it to them. You know, they’re a company that has over a thousand employees.

They are one of the best operators out there. And so there’s low hanging fruit that they’ve already identified that they can improve those existing businesses with. They’ve also already developed something called AI Girlfriends. It’s jasmine.ai. And I think there’s a youth case for putting Playboy behind that from a marketing perspective.

So you could have Playboy Girlfriends or Playboy, AI Girlfriends. Outside of that, I don’t want to get ahead of them on what their product roadmap is. But But I would say, you know, first and foremost, they are a technology company. They’ve developed phenomenal technology. They have great processes.

And, you know, I would expect that over time, what we’re generating from them could be multiples versus what we’re generating today.

George Kelly, Analyst, Roth: Okay. Okay. And still on Viborg, how do you with under that relationship, how do you maintain control of the brand still?

Ben Kohn, CEO, PLBY: So we do not sell the brand. Right? We license the brand for to them for use in certain cases, just like we do with any other licensing partner. With ByBORG, because there’s content behind it, we have certain content guidelines that we have maintained for decades that they have to adhere to. To the extent they violate that, and again, they are a 16% shareholder in the parent company.

They wrote a $22,000,000 check-in the fall, and we’re out to shareholders right now seeking additional approval of $25,000,000 investment. That vote closes tomorrow night, so we’ll see if that’s successful. I don’t know yet. But if it is, Buyborg will become a 29% shareholder in the company, a 29.9% shareholder in the company. But we have strict guidelines in all of our licensing contracts, no matter whether it’s content or consumer products as to what people can do with our brand.

George Kelly, Analyst, Roth: And at what price are is this next tranche that, the vote still outstanding?

Ben Kohn, CEO, PLBY: So it would be the same price as the first tranche, which is a dollar 50 a share.

George Kelly, Analyst, Roth: And the stock right now is a buck 10, roughly.

Ben Kohn, CEO, PLBY: I haven’t looked at it today, but I’ll take your word out.

George Kelly, Analyst, Roth: Okay. Okay. So that’s the buy board business. Then let’s talk licensing, you did briefly. Where do you see the I guess the two part question there is what’s the stability of that revenue stream?

Roughly $25,000,000 has been the kind of current run rate. That’s made up of what and how long are these deals? How do you feel about that revenue stream? And then the second part of the question is, where do you see the most opportunity for future growth?

Ben Kohn, CEO, PLBY: So the core licensing stream is actually very stable. So if you look at our total licensing business, including BIBORG, about 86% of all the revenue we generate is actually in the form of minimum guarantees. The other 14% or if you look at the rest of the business called 70% is in the form of minimum guarantees. The other 30% is made up of new business. A lot of that is already locked in because those are contracts that we would have signed last year are overages that we’ve already discounted back from proven partners.

So example, you had PSD underwear here yesterday, which is a great underwear business. The minimum guarantee that we generate from them is like 10% of what they’ve actually paid us on a historical basis based on sales. And so those are the types of other revenue streams we have. And so when we’re doing our forecasting, you know, we’re looking at the historical trends of what partners have earned and then discounting that back moving forward. You know, as far as upside, there’s a ton of upside.

Our China business pre COVID, and China’s obviously gone through a really tough time, after COVID, the economy there. We were generating $40,000,000 of revenue in China on a pure licensing basis, called an 80% gross margin on a historical basis. Post COVID this year, that numbers can be around $14,000,000 we can get back to that 40,000,000, but we can’t do it by ourselves. Right? The macro climate in China needs to improve, and that’s gonna take a long time to happen.

But that upside is there. The rest of the world today, you know, call it 13 to $14,000,000 that’s so small compared to what it can become. So categories that we’re focused on, you know, continuing to build out the clothing category. Gaming is a huge opportunity. We have a number of opportunities on the table right now.

Hospitality is another area that we’re focused on. You know, there was a day when we had a lot of Playboy clubs. We have beer gardens and a few other things in India, but there’s a huge opportunity to expand that. And then there’s ancillary revenue streams around bringing back the magazine. You know, a byproduct of what we built on the on the club platform or a creator platform is Playmate voting.

And so we actually tested that a few years ago when we were looking for a face of Playboy lingerie that generated over a million dollars in fan voting against who would become the next face of Playboy Lingerie. When you think about doing that from a Playmate perspective and doing that 12 times a year or four times a year in voting, but 12 Playmates a year, that number can be substantial. Again, we’re not building that technology. We’re renting it or partnering with someone that has that technology. But who better to engage their fan base than the creators themselves?

George Kelly, Analyst, Roth: And and with the growth, that you’re talking about, should this be a kind of gradual consistent build to revenue? Or is it gonna look like all of a sudden, I mean, not that there’s gonna be another buy board size deal, but is this gonna be a real step up and then it’s gonna kind of flat line for a while?

Ben Kohn, CEO, PLBY: So licensing grows in step function. It’s not a linear growth, right? If I go sign a $20,000,000 licensing deal like ByBorg, and again, not saying there’s another one out there like that right now, but that’s a step function versus linear. I think the biggest thing for us moving forward is, say, we have a hundred and four licensing partners, give or take. There’s 65 of them that generate less than 500,000 in aggregate against the brand.

That’s not a good model for us, right? And so now that we have solved our balance sheet issues and we’re free cash flow positive, the question is finding the right partner that we can actually build real businesses with. So we talked about PSD a few minutes ago. That’s a great partner. Right?

That’s a company that’s paying us a small minimum guarantee, but has killed it from an overage. So I think they were making they paid us $500,000 2 years ago and $800,000 last year. That’s a good business for us. And so we wanna find better partners and the right partners in the right geographies where I can actually continue to scale down my corporate overhead, but have fewer and better partners that we can build real businesses with around the world.

George Kelly, Analyst, Roth: Okay. And then your go to market in the licensed business, you’ve historically worked with CAA. Is that an important I think that deal is through 2027. Correct me if I’m wrong.

Ben Kohn, CEO, PLBY: It is.

George Kelly, Analyst, Roth: How important of a partner are they? Or, is it something that you could broaden to cover more parts of the globe? Is it important, I guess, to have someone that’s kind of representing the brand and outselling?

Ben Kohn, CEO, PLBY: Yes. So again, we want to do all of this in the capital light model. We’re going to be down to roughly 35 employees when we’re done with the restructuring. The buybork deal will take us the first six months of this year. So the first two quarters are going to be a little bit muddy because we have transition costs.

But once we get through that, our goal is to not hire more people, right? Hiring people in California is actually a horrible thing. And so we’re here to leverage agencies. I don’t want to negotiate before the negotiation starts with CAA. Are they the best everywhere in the world?

No. They used to have a lot of boots on the ground all over the world. They don’t have as many offices as they used to have. There are better regional agencies that I think could deliver a lot more growth than CAA is. But if we can leverage third parties like CAA, like other licensing agents out there, so I don’t have to hire boots on the ground, it’s a more efficient model for us than actually hiring people.

And so we’ll see what happens in the renegotiation, and whether we stay with them on a global basis or we decide to whack that up based on geographies.

George Kelly, Analyst, Roth: Okay. Any questions from the group? Let’s talk Honey Burdett. So you mentioned it’s your last owned and operated business. It’s been through a transformation too over the last twelve to eighteen months, much more profitable now.

What else maybe talk about how much is left for you to improve? And also, what’s the medium term goal? And and you’ve talked about potentially monetizing before. I don’t know if that’s still under consideration. I think it is.

But what do you need to do to to sort of bring it to that level?

Ben Kohn, CEO, PLBY: Yeah. Look, Honeybird is an Australian lingerie business we bought in 2021, and our timing couldn’t have been worse. We bought in August of twenty twenty one right after we went public, and Australia decided to go on a three month lockdown for COVID right afterwards. And so we closed all of our stores basically for an extended period of time. And unfortunately, in the retail sector, when you close your stores, you have all of this inventory.

Honey Burdett model was a drop basically every week, so we got stuck with a ton of inventory. And so we ended up having to go on sale much more than we ever wanted to, which has a bad impact on brand health. And so over the last year and a half with Mark Crossman joining us as our CFO, but a background in consumer products and retail, we have started to dwindle down or whittle down the number of days we’re on sale. At the same time, we’ve also cut back our inventory buys. And so we’re in a position now where we’re actually seeing full price items increase.

Right? So our sales are up on full price items, but that’s offset by not being able to go as deep or as many days on sale during the course of the year. And what we saw in the fourth quarter is actually was our gross margin expanded from 51% to 60%. So it’s working. You know, at the right time, there’s there’s still low hanging fruit there.

They’re still underpenetrated from an e commerce perspective. The Australian market where the majority of our stores are have been hit hard because of interest rates or mortgage rates. It’s mostly a floating rate environment there. But at the right time, I think there’s a lot of interested parties that could buy that business from us, and we are not the right long term owner of that business.

George Kelly, Analyst, Roth: Okay. Okay. I’ll pause again. Any questions?

Ben Kohn, CEO, PLBY: Happy to take them if there are.

George Kelly, Analyst, Roth: Okay. And then maybe if if we could go we just went through the three main business segments. Can you just talk about the margin profile of each BYBORG, the license core license business and then Honey Burdett?

Ben Kohn, CEO, PLBY: Sure. So BYBORG is really easy. It’s basically 100% margin. We have no cost against it. There was no agency involved.

It was a deal we did as a senior team. And so again, that was a business that in ’twenty four did roughly $22,000,000 of revenue for us. Basically, breakeven, we turned that into $20,000,000 of pure profit this year. The rest of the licensing business, call it another $25,000,000 to $30,000,000 is roughly a 70% margin business. We have our agency fees that differs per region.

China is a little bit different than the rest of the world, which is CAA. We pay CAA today, Creative Artists Agency, fifteen percent. And then we have legal costs against that. In China, the only thing different between that and sort of free cash flow is there’s a 10.7% withholding tax taking money out of China. And so it’s a great margin business, and on a combined basis, it’s phenomenal.

Right? You’re you’re at 9090%, basically. On the Honey Burdett side, you know, the simplest way to think about it, and we got hit really hard in the fourth quarter with foreign currency with the strength of the U. S. Dollar.

But Honey Burdett on a net basis is about a 10% margin business moving forward.

George Kelly, Analyst, Roth: And there’s an opportunity to take it where Honey Bridette, could it be a teens margin?

Ben Kohn, CEO, PLBY: It could. It was before. The biggest issue we’ve had in Honey Bridette since we bought it outside of the COVID lockdowns that really hurt the business. When we bought the business, it was about 60% brick and mortar, 40% e com. That business is now flipped to 60% e com, forty % brick and mortar.

The challenge is sales haven’t grown, right? And so our stores that used to do about a thirty percent four wall EBITDA margin are doing that anymore. And so if we can get store sales back to where they were, then that business could easily be in the teens, if not higher, from an EBITDA margin perspective moving forward.

George Kelly, Analyst, Roth: Okay. And then another question on, back to your license, sort of growth, commentary that you were giving. Yeah. Is are there is it somewhat challenging to secure big new license deals given the CAA relationship? Does that kind of complicated at all?

Ben Kohn, CEO, PLBY: No. So CAA is our licensing agent. Their fiduciary responsibility to us is to go find the best licensing deals they can bring to us. There are certain categories they don’t have. So they don’t have digital.

They don’t have gaming. They don’t have some of the hospitality stuff that’s on us to go find that. The deals are bringing to us, there’s a lot of deals out there.

George Kelly, Analyst, Roth: I guess that so you have your own sort of area you can explain. That’s that was a better

Ben Kohn, CEO, PLBY: We deal with it obviously, our we have a partnership with the division of Li and Fung for Mainland China. And so that’s outside of the CA deal as well. China again, we used to generate $40,000,000 a year in revenue in China. So think about it as like 32% gross margin coming out of there. That business stays $14,000,000 We need the China economy to improve.

It’s not good. So I think we’re sort of at the low point of the baseline today. The question is how do we build off of that moving forward?

George Kelly, Analyst, Roth: Okay. So then back to your segment margin profile. Oh, is there a question? Yeah, go ahead.

Ben Kohn, CEO, PLBY: So I think there we’re better off relying upon our partners. I think there’s a lot more money we can extract from our existing partners, just bringing them into what we’re doing from a corporate perspective. Right? And so our view is every issue of the magazines can have some sort of live event. One thing I can tell you no matter what’s happened over the seventy years of this company is if you ask someone do they wanna go to a Playboy party, the answer is 100% yes.

Right? So this year, we did Art Basel in December. I don’t know how many thousand people were lined up outside to get in. We had the same thing at Super Bowl. There’s actually a real business opportunity there long term, I think, around membership.

There might be even something to do in the crypto or the coin space long term, but we have to first prove the utility around that. So conversation we actually had yesterday with someone here was the existing licensing partner. How do we integrate more into what you’re doing with, you know, Playboy casting calls, etcetera? I think there’s a huge opportunity for sponsorship and bringing our existing partners in on these events versus going out and finding new partners.

George Kelly, Analyst, Roth: Any other questions?

Ben Kohn, CEO, PLBY: Yeah. How many we will be down we published a new investor deck yesterday on the website, so we’ll be down to 35 corporate employees once we’re done with this transition. So we’re gonna be extremely efficient, and I don’t think we need anything more than that to run this business moving forward.

George Kelly, Analyst, Roth: And when is that transition complete?

Ben Kohn, CEO, PLBY: So right now, the agreement with BIBORG provides that we provide transition services for the first six months of the year. It comes in two phases. So Playboy TV and Playboy Plus will be transitioned hopefully by the end of this month to them. And then the Playboy Club, which is our greater platform by June 30. And so with that, so we’ve gone from, I think, last year, roughly 104 employees down to 35.

As you start to shed operating assets and license that out, there is corporate expense that goes with that as well. And then what’s left of it, I would think on a cash basis, excluding stock based comp, we’ll be down on a corporate basis to about $20,000,000 There’s opportunities to go lower than that, but that’s going to take subletting our real estate because we have 46,000 feet of real estate. Obviously, with 35 employees, you don’t need that. The good news is we have people in the building that want the space. And so it’s just a question of getting the right deals done to continue to dwindle down our corporate expense.

I think there was a question back there. Yeah. So the Playboy Club, which was our creator platform. So there’s two different types of Playboy Clubs. There’s actually the physical locations, and then there’s the digital Playboy Club.

That is now outsourced to BY Borg in a licensed deal. So it’s up to them to decide what they want to do with it. I think there’s a huge opportunity leveraging the Playboy brand with that. We could take we took it about as far as we could take it, right? So again, it was a business that was basically breakeven.

We’ve turned it into $20,000,000 a year moving forward of basically free cash flow. But that business requires real infrastructure, right? There’s fraud, there’s credit card processing, there’s age gating now in 21 states in The United States, not alone, the international territories alone. They have thousands of people that do that. We just didn’t have the balance sheet to be able to invest in that.

So This presentation has now finished. Please check back shortly for the archive. You you you you you you you you you you you Uh-huh. Uh-huh. Uh-huh.

Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh.

Uh-huh. Uh-huh. Uh-huh. Uh-huh. Uh-huh.

Uh-huh. Uh-huh. Uh-huh.

George Kelly, Analyst, Roth: I’m George Kelly with Roth. Excited to have Ben Cohen with me today, CEO of PLBY. So it’s been a couple of years since we were last on the stage, I think. So thanks for doing it. Thank you for having me.

Appreciate it. So we have twenty five minutes. I’ll stop a few times and take questions. So if you have them, please shout them out. But, maybe if we could start with, it’s been a, the last, call it, eighteen months, two years has been a real kind of transition in your business and a transition in your priorities and and emphasis.

And so if you could take us through, just catch everyone up sort of in, high level what’s happened and how your priority set has changed. Sure.

Ben Kohn, CEO, PLBY: So we have one of the greatest brands in the world and one of the most recognized brands in the world in Playboy. It’s a company that sells product in over 100 countries and generates billions of dollars of consumer spend. We went public in ’twenty one and we thought we could operate. And so the business historically had been a licensing business where we would partner with people that are actually good operators and we would do what we were good at which was building the brand and marketing the brand. And we decided we would operate ourselves.

We screwed it up. We have now reversed and gone back to an asset light model. We are focused on partnering with the best operators out there, leveraging this massive global brand, locking in our downside. We’ve got in the business this year to free cash flow positive, and we have significant upside not only in existing deals, but in business development. And so my priorities moving forward are focused on the brand.

We launched the magazine last month. We’ll be doing another issue later this year and then bringing out four issues thereafter. The magazine, there’s on the business model behind it except for brand marketing expense. And so I’m focused right now on making sure that the brand stays extremely relevant, working with the right celebrities and influencers, and then leveraging that into new revenue streams. And there are significant revenue streams that we can generate off the back of the magazine again, not selling subscriptions, but things like voting for your favorite playmate fan voting, paid fan voting, sponsorships, etcetera, and then developing new licensing opportunities.

So now that we have the business free cash flow positive, how do we take that baseline and continually improve or increase that baseline every year while maintaining significant upside. A great example of that is the BIBORG deal we did at the end of last year.

George Kelly, Analyst, Roth: Okay. And I want to talk more about BIBORG. I want to get into the business segments. But before we do that, maybe how do you assess the general health of the brand? And I understand some of it’s anecdotal, kind of hard to have like a real time measure of brand health.

But you recently launched the magazine. How would you talk or relaunched the magazine? How would you talk about, like, has was that well received? Did it get a lot of attention? And maybe how else do you just kind of status check the brand and its relevance?

Ben Kohn, CEO, PLBY: Yeah. Look, so without spending hundreds of thousands, if not millions of dollars going to do surveys, we look at the number of partners that want to come to us. We look at consumer spend. So what are consumer spending through our licensing partners buying our products? And both of those are on the uptrend.

The the magazine is so unique in that I can go work with a Lori Harvey or a Kylie Jenner like we’ve done, and it doesn’t cost me a dollar. Right? So I can take the editorial angle, and it allows me to punch way above my weight for what I otherwise would be able to afford. But if I look at the celebrities, I look at the next magazine and who we potentially might have for the cover, it’s one of the biggest, you know, stars out there today. And so the fact that they wanna work with us speaks to what the brand means and the relevancy of the brand.

And so I would say the brand is as strong today as it’s ever been. I have two teenage daughters. I can tell you how many kids within their schools wear Playboy. And it speaks to how this brand over seventy plus years has transcended generations.

George Kelly, Analyst, Roth: And the frequency the the magazine is gonna be a quarterly thing.

Ben Kohn, CEO, PLBY: Once we ramp up, so we’re doing this in a very capital light way. We’re not doing it like we used to, where I would employ 20 plus people to produce a magazine because there’s not a business model around that. We’re not taking paper stock like we used to. All of this is being outsourced and laid off to third parties. This year, we’ll probably produce one more magazine.

We’ll have a great event or party tied to that. And then as we move into ’twenty six, as we’re ramping up, we plan to do four a year. Each issue will have the Playboy Interview, the Playboy Advisor. It will have three Playmates in it. And then looking to take those franchises, right?

A magazine is a compilation of many franchises, the Playboy Interview, the Playboy Advisor, etcetera. How do we take those to multimedia formats, podcasts, video series, television shows? You look at the Dallas Cowboy Cheerleader Show. I look at our Playmate franchise and say, why can’t we do that? And so that’s what we’re focused on is is is making sure that this content is in the right format for audiences to consume.

George Kelly, Analyst, Roth: And are there any metrics? I know it hasn’t been that long, but anything you could share about how widely this first relaunch issue, has been viewed or

Ben Kohn, CEO, PLBY: Yeah. Look, we produced very few copies, couple thousand. We had phenomenal sell through, and we had a lot of digital downloads. But more importantly, it’s the press impressions and the other things that it generates, and that was substantial. So it was well, if a magazine costs us moving forward $500,000 to $600,000 per issue, what we generate in earned media is multiples and multiples of that.

George Kelly, Analyst, Roth: Yep. Understood. And then still on the brand, one last question on on that topic. That historically, you’ve given sort of global brand spend behind all the different partnerships and things. What just ballpark is that currently?

Ben Kohn, CEO, PLBY: You know, it’s so hard after COVID to look at it, but I would say that consumers are spell spending in excess of a billion dollars buying Playboy products and services around the globe.

George Kelly, Analyst, Roth: Okay. Okay. And then let’s talk, about your business as it stands right now with we look at it as you have three different largely three different business segments. You mentioned BYBORG. Can you tell us more about that deal and who why you selected them as as a digital partner?

Ben Kohn, CEO, PLBY: Sure. So let me just educate everyone on what we have left at Playboy. So Playboy is an asset light business today. We’re only focused on licensing and partnering with great operators out there to exploit our brand in their respective fields. Licensing has two components to it.

BY Borg, which was our legacy adult property, so Playboy TV, Playboy Plus, and our creator platform, our version of OnlyFans, but with different rules behind it. We licensed to one of the best adult operators out there, which is a company called BY Borg. Buyborg has 70,000,000 daily customers on their other platforms, and they generate hundreds of millions of dollars a year in profitability. So we went out. We took about eighteen months meeting them.

A deal came together in the fourth quarter of last year, late third quarter, fourth quarter of last year. We took a business that was generating $22,000,000 of revenue, mostly declining because our linear television business, there’s nothing we can do to buck the trends of MSOs or the cable companies. It was basically breakeven and we turned that into $20,000,000 a year of minimum profitability. So BYBORG is paying us to operate and license those sites $20,000,000 a year against 25% of the profits of that business. So we maintain significant upside should they execute like they think they’re going to.

There’s also other things within that contract like AI girlfriends. So you could think about a virtual or AI Playmate, and they’ve already developed that technology. So look forward to what their product roadmap is moving forward. The second part of our business is the rest of the world licensing, and that’s broken into two components, our China business and then rest of the world. About 80% of that business today is clothing or consumer products.

There’s significant upside in categories that we used to license that we aren’t actively pursuing today like the gaming sector. We had a Playboy Club in Las Vegas. We had a Playboy Club in London. Those were generating on a combined basis about $6,000,000 a year in licensing revenue. So there’s those huge opportunities.

And then the third part of our business is what I would say is our last asset intensive business left, which is a lingerie business we bought in twenty one, twenty twenty one called Honeybirdette. It’s a great brand. We’ve been focused on improving the profitability that last year that business generated about $6,000,000 of cash force. This year that business should increase at the right time. We’re not the right owner of that business.

And so when I look at our balance sheet today and we’ve done a good job delevering the company and have a clear path to do not going forward, I still own this asset that I could sell. And I would hope at some point that would pay off all of my remaining debt at the company.

George Kelly, Analyst, Roth: Okay. You covered a lot there. Let’s talk BIBORG. So the deal was finalized in the fourth quarter of last year. You mentioned $20,000,000 of minimum annual amount and then there’s upside to that the 25% of net income.

Give us a sense of scale. Your brand, we just talked all about big huge global brand, others that are doing something similar online. I guess, how much opportunity is there? How big is this market? And what is the product roadmap?

What are you comfortable sharing as far as what’s BIPORT gonna do over the next twelve to twenty four months?

Ben Kohn, CEO, PLBY: Sure. So look, the marketplace is massive, right? You’re talking about billions and billions of dollars of consumer spend. If you look at OnlyFans, you’re talking about consumer spending in excess of $6,000,000,000 interacting with their favorite creators, right? The market is actually much bigger than that.

And so with our brand and and buy board, I think made the investment and licensed it because of what Playboy represents from a brand perspective. And so first and foremost, all the conversations we’ve had about that with them is about elevating the Playboy brand. You know, right now, in the next six months, they are focused on transitioning the businesses that they’ve licensed from us. So Playboy Plus, which was our legacy gallery site, Playboy TV and play in the Playboy Club, which was our version of only fans are a greater platform, transitioning it to them. You know, they’re a company that has over a thousand employees.

They are one of the best operators out there. And so there’s low hanging fruit that they’ve already identified that they can improve those existing businesses with. They’ve also already developed something called AI Girlfriends. It’s jasmine.ai. And I think there’s a youth case for putting Playboy behind that from a marketing perspective.

So you could have Playboy Girlfriends or Playboy, AI Girlfriends. Outside of that, I don’t want to get ahead of them on what their product roadmap is. But But I would say, you know, first and foremost, they are a technology company. They’ve developed phenomenal technology. They have great processes.

And, you know, I would expect that over time, what we’re generating from them could be multiples versus what we’re generating today. Okay.

George Kelly, Analyst, Roth: Okay. And still on Viborg, how do you with under that relationship, how do you maintain control of the brand still?

Ben Kohn, CEO, PLBY: So we do not sell the brand. Right? We license the brand for to them for use in certain cases, just like we do with any other licensing partner. With ByBORG, because there’s content behind it, we have certain content guidelines that we have maintained for decades that they have to adhere to to the extent they violate that. And again, they are a 16% shareholder in the parent company.

They wrote a 22,000,000 check-in the fall, and we’re out to shareholders right now, seeking additional approval of $25,000,000 investment. That vote closes tomorrow night, so we’ll see if that’s successful. I don’t know yet. But if it is, Buyborg will become a 29% shareholder in the company, a 29.9% shareholder in the company. But we have strict guidelines in all of our licensing contracts, no matter whether it’s content or consumer products, as to what people can do with our brand.

George Kelly, Analyst, Roth: And at what price are is this next tranche that, the vote still outstanding?

Ben Kohn, CEO, PLBY: So it would be the same price as the first tranche, which is a dollar 50 a share.

George Kelly, Analyst, Roth: And the stock right now is a buck 10, roughly.

Ben Kohn, CEO, PLBY: I haven’t looked at it today, but I’ll take your word out.

George Kelly, Analyst, Roth: Okay. Okay. So that’s the buy board business. Then let’s talk licensing, you did briefly. Where do you see the I guess the two part question there is what’s the stability of that revenue stream?

Roughly $25,000,000 has been the kind of current run rate. That’s made up of what and how long are these deals? How do you feel about that revenue stream? And then the second part of the question is, where do you see the most opportunity for future growth?

Ben Kohn, CEO, PLBY: So the core licensing stream is actually very stable. So if you look at our total licensing business, including BIBORG, about 86% of all the revenue we generate is actually in the form of minimum guarantees. The other 14% or if you look at the rest of the business called 70% is in the form of minimum guarantees. The other 30 is made up of new business. A lot of that is already locked in because those are contracts that we would have signed last year are overages that we’ve already discounted back from proven partners.

So example, you had PSD underwear here yesterday, which is a great underwear business. The minimum guarantee that we generate from them is like 10% of what they’ve actually paid us on a historical basis based on sales. And so those are the types of other revenue streams we have. And so when we’re doing our forecasting, you know, we’re looking at the historical trends of what partners have earned and then discounting that back moving forward. You know, as far as upside, there’s a ton of upside.

Our China business pre COVID, and China’s obviously gone through a really tough time, after COVID, the economy there. We were generating 40,000,000 of revenue in China on a pure licensing basis, called an 80% gross margin on a historical basis. Post COVID this year, that numbers can be around $14,000,000 we can get back to that 40,000,000, but we can’t do it by ourselves. Right? The macro climate in China needs to improve, and that’s gonna take a long time to happen.

But that upside is there. The rest of the world today, you know, call it 13 to $14,000,000 that’s so small compared to what it can become. So categories that we’re focused on, you know, continuing to build out the clothing category. Gaming is a huge opportunity. We have a number of opportunities on the table right now.

Hospitality is another area that we’re focused on. You know, there was a day when we had a lot of Playboy clubs. We have beer gardens and a few other things in India, but there’s a huge opportunity to expand that. And then there’s ancillary revenue streams around bringing back the magazine. You know, a byproduct of what we built on the on the club platform or a creator platform is Playmate voting.

And so we actually tested that a few years ago when we were looking for a face of Playboy lingerie that generated over a million dollars in fan voting against who would become the next face of Playboy Lingerie. When you think about doing that from a Playmate perspective and doing that 12 times a year or four times a year in voting, but 12 Playmates a year, that number can be substantial. Again, we’re not building that technology. We’re renting it or partnering with someone that has that technology. But who better to engage their fan base than the creators themselves?

George Kelly, Analyst, Roth: And and with the growth, that you’re talking about, should this be a kind of gradual consistent build to revenue? Or is it gonna look like all of a sudden, I mean, not that there’s gonna be another buy board size deal, but is this gonna be a real step up and then it’s gonna kind of flat line for a while?

Ben Kohn, CEO, PLBY: So licensing grows in step function. It’s not a linear growth, right? If I go sign a $20,000,000 licensing deal like Buyborgan, again, not saying there’s another one out there like that right now, but that’s a step function versus linear. I think the biggest thing for us moving forward is say we have 104 licensing partners, give or take. There’s 65 of them that generate less than 500,000 in aggregate against the brand.

That’s not a good model for us, right? And so now that we have solved our balance sheet issues and we’re free cash flow positive, the question is finding the right partner that we can actually build real businesses with. So we talked about PSD a few minutes ago. That’s a great partner. Right?

That’s a company that’s paying us a small minimum guarantee, but has killed it from an overage. So I think they were making they paid us $500,000 2 years ago and $800,000 last year. That’s a good business for us. And so we wanna find better partners and the right partners in the right geographies where I can actually continue to scale down my corporate overhead, but have fewer and better partners that we can build real businesses with around the world.

George Kelly, Analyst, Roth: Okay. And then your go to market in the licensed business, you’ve historically worked with CAA. Is that an important I think that deal is through 2027. Correct me if I’m wrong.

Ben Kohn, CEO, PLBY: It is.

George Kelly, Analyst, Roth: How important of a partner are they? Or, is it something that you could broaden to cover more parts of the globe? Is it important, I guess, to have someone that’s kind of representing the brand and outselling?

Ben Kohn, CEO, PLBY: Yes. So again, we want to do all of this in the capital light model. We’re going to be down to roughly 35 employees when we’re done with the restructuring. The buy board deal will take us the first six months of this year. So the first two quarters are going to be a little bit muddy because we have transition costs.

But once we get through that, our goal is to not hire more people, right? Hiring people in California is actually a horrible thing. And so we’re here in leverage agencies. I don’t want to negotiate before the negotiation starts with CAA. Are they the best everywhere in the world?

No. They used to have a lot of boots on the ground all over the world. They don’t have as many offices as they used to have. There are better regional agencies that I think could deliver a lot more growth than CAA is. But if we can leverage third parties like CAA, like other licensing agents out there, so I don’t have to hire boots on the ground, it’s a more efficient model for us than actually hiring people.

And so, you know, we’ll see what happens in the renegotiation, and whether we stay with them on a global basis or we decide to whack that up based on geographies.

George Kelly, Analyst, Roth: Okay. Any questions from the group? Let’s talk Honey Burdett. So you mentioned it’s your last owned and operated business. It’s been through a transformation too over the last twelve to eighteen months, much more profitable now.

What else? Maybe talk about how much is left for you to improve and also, what’s the medium term goal? And you’ve talked about potentially monetizing before. I don’t know if that’s still under consideration. I think it is.

But what do you need to do to sort of bring it to that level?

Ben Kohn, CEO, PLBY: Yeah. Look, Honeybird is an Australian lingerie business we bought in 2021, and our timing couldn’t have been worse. We bought in August of twenty twenty one right after we went public, and Australia decided to go on a three month lockdown for COVID right afterwards. And so we closed all of our stores basically for an extended period of time. And unfortunately, in the retail sector, when you close your stores and you have all of this inventory, Honey Burdett model was a drop basically every week, so we got stuck with a ton of inventory.

And so we ended up having to go on sale much more than we ever wanted to, which has a bad impact on brand health. And so over the last year and a half with Mark Crossman joining us as our CFO, but a background in consumer products and retail, we have started to dwindle down or whittle down the number of days we’re on sale. At the same time, we’ve also cut back our inventory buys. And so we’re in a position now where we’re actually seeing full price items increase, right? So our sales are up on full price items, but that’s offset by not being able to go as deep or as many days on sale during the course of the year.

And what we saw in the fourth quarter is actually was our gross margin expanded from 51% to 60%. So it’s working. You know, at the right time, there’s there’s still low hanging fruit there. They’re still underpenetrated from an ecommerce perspective. The Australian market where the majority of our stores are have been hit hard because of interest rates or mortgage rates.

It’s mostly a floating rate environment there. But at the right time, I think there’s a lot of interested parties that could buy that business from us, and we are not the right long term owner of that business.

George Kelly, Analyst, Roth: Okay. Okay. I’ll pause again. Any questions?

Ben Kohn, CEO, PLBY: Happy to take them if there are.

George Kelly, Analyst, Roth: Okay. And then maybe if if we could go we just went through the three main business segments. Can you just talk about the margin profile of each BYBORG, the license core license business and then Honey Burdett?

Ben Kohn, CEO, PLBY: Sure. So BYBORG is really easy. It’s basically 100% margin. We have no cost against it. There was no agency involved.

It was a deal we did as a senior team. And so again, that was a business that in ’twenty four did roughly $22,000,000 of revenue for us. Basically, breakeven, we turned that into $20,000,000 of pure profit this year. The rest of the licensing business, call it another $25,000,000 to $30,000,000 is roughly a 70% margin business. We have our agency fees that differs per region.

China is a little bit different than the rest of the world, which is CAA. We pay CAA today, Creative Artists Agency, fifteen percent. And then we have legal costs against that. In China, the only thing different between that and sort of free cash flow is there’s a 10.7% withholding tax taking money out of China. And so it’s a great margin business and on a combined basis, it’s phenomenal.

Right? You’re at 90% basically. On the Honeybird outside, the simplest way to think about it and we got hit really hard in the fourth quarter with foreign currency with the strength of the U. S. Dollar.

But Honey Burdett on a net basis is about a 10% margin business moving forward.

George Kelly, Analyst, Roth: And there’s an opportunity to take it where Honey Burdett, could it be a teens margin?

Ben Kohn, CEO, PLBY: It could. It was before. The biggest issue we’ve had in Honey Burdett since we bought it outside of the COVID lockdowns that really hurt the business. When we bought the business, it was about 60% brick and mortar, 40% e com. That business is now flipped to 60% e com, forty % brick and mortar.

The challenge is sales haven’t grown, right? And so our stores that used to do about a thirty percent four wall EBITDA

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.