Falcon's Beyond Global, Inc. (FBYD)
SIC breadcrumb: Services > Amusement And Recreation Services > SIC 7990 Services-Miscellaneous Amusement & Recreation
SEC company page: https://www.sec.gov/edgar/browse/?CIK=1937987. Latest filing source: 0001193125-26-131874.
Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
|---|---|---|---|---|
| Revenue | 14,896,000 | USD | 2025 | 2026-03-30 |
| Net income | 6,312,000 | USD | 2025 | 2026-03-30 |
| Assets | 66,702,000 | USD | 2025 | 2026-03-30 |
Financials
Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-03-30. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001937987.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | 15,950,000 | 18,244,000 | 14,896,000 | |
| Net income | -17,428,000 | -430,930,000 | 149,481,000 | 6,312,000 |
| Operating income | -17,341,000 | -57,158,000 | -15,867,000 | -13,408,000 |
| Diluted EPS | -5.59 | 1.41 | 0.03 | |
| Operating cash flow | -19,290,000 | -23,422,000 | -12,552,000 | -24,603,000 |
| Capital expenditures | 320,000 | 308,000 | 11,000 | 153,000 |
| Assets | 112,270,000 | 63,359,000 | 61,231,000 | 66,702,000 |
| Liabilities | 43,906,000 | 552,353,000 | 81,328,000 | 42,881,000 |
| Stockholders' equity | 68,364,000 | -57,105,000 | -8,965,000 | 11,926,000 |
| Cash and cash equivalents | 8,366,000 | 672,000 | 825,000 | 1,868,000 |
| Free cash flow | -19,610,000 | -23,730,000 | -12,563,000 | -24,756,000 |
Ratios
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net margin | -109.27% | 42.37% | ||
| Operating margin | -108.72% | -90.01% | ||
| Return on equity | -25.49% | 52.93% | ||
| Return on assets | -15.52% | 9.46% | ||
| Liabilities / equity | 0.64 | 3.60 | ||
| Current ratio | 1.01 | 0.01 | 0.09 | 0.36 |
Financial Charts
Quarterly
Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-14. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001937987.json.
| Quarter | End Date | Revenue | Net Income | Diluted EPS | Method |
|---|---|---|---|---|---|
| 2024-Q1 | 2024-03-31 | 114,024,000 | 1.53 | reported discrete quarter | |
| 2024-Q2 | 2024-03-31 | 114,024,000 | reported discrete quarter | ||
| 2024-Q2 | 2024-06-30 | 0.01 | reported discrete quarter | ||
| 2024-Q3 | 2024-06-30 | 8,028,000 | reported discrete quarter | ||
| 2024-Q3 | 2024-09-30 | 0.46 | reported discrete quarter | ||
| 2024-Q4 | 2024-12-31 | -11,872,000 | derived Q4 = FY annual - nine-month YTD | ||
| 2025-Q1 | 2025-03-31 | -8,092,000 | -0.13 | reported discrete quarter | |
| 2025-Q2 | 2025-03-31 | -8,092,000 | reported discrete quarter | ||
| 2025-Q2 | 2025-06-30 | 0.30 | reported discrete quarter | ||
| 2025-Q3 | 2025-06-30 | 25,112,000 | reported discrete quarter | ||
| 2025-Q3 | 2025-09-30 | -0.13 | reported discrete quarter | ||
| 2025-Q4 | 2025-12-31 | -296,000 | derived Q4 = FY annual - nine-month YTD | ||
| 2026-Q1 | 2026-03-31 | 5,376,000 | 6,121,000 | 0.05 | reported discrete quarter |
Quarterly Charts
Macro Cross-References
- CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
- UNRATE - Unemployment Rate
- FEDFUNDS - Federal Funds Effective Rate
- CES0500000003 - Average Hourly Earnings of All Employees, Total Private
- DFEDTARU - Federal Funds Target Range - Upper Limit
- DFEDTARL - Federal Funds Target Range - Lower Limit
- DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
- DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
- DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
- DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
- T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
- CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
- CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
- CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
- CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
- PCEPI - Personal Consumption Expenditures: Chain-type Price Index
- PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
- PPIACO - Producer Price Index by Commodity: All Commodities
- T10YIE - 10-Year Breakeven Inflation Rate
- U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
- PAYEMS - All Employees, Total Nonfarm
- CIVPART - Labor Force Participation Rate
- EMRATIO - Employment-Population Ratio
- UNEMPLOY - Unemployed
- CE16OV - Employment Level
- ICSA - Initial Claims
- JTSJOL - Job Openings: Total Nonfarm
- JTSQUR - Quits: Total Nonfarm
- GDPC1 - Real Gross Domestic Product
- A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
- INDPRO - Industrial Production: Total Index
- TCU - Capacity Utilization: Total Index
- HOUST - New Privately-Owned Housing Units Started: Total Units
- PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
- RSAFS - Advance Retail Sales: Retail Trade
- PCE - Personal Consumption Expenditures
- DSPIC96 - Real Disposable Personal Income
- PSAVERT - Personal Saving Rate
- M2SL - M2
- BOPGSTB - U.S. International Trade in Goods and Services: Balance
- MSPUS - Median Sales Price of Houses Sold for the United States
- HSN1F - New One Family Houses Sold: United States
- RHORUSQ156N - Homeownership Rate in the United States
- TTLCONS - Total Construction Spending: Total Construction in the United States
- RRVRUSQ156N - Rental Vacancy Rate in the United States
- TOTALSL - Total Consumer Credit Owned and Securitized
- REVOLSL - Revolving Consumer Credit Owned and Securitized
- DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
- GDP - Gross Domestic Product
- GPDI - Gross Private Domestic Investment
- GCE - Government Consumption Expenditures and Gross Investment
- PCEC - Personal Consumption Expenditures
- NETEXP - Net Exports of Goods and Services
- GFDEBTN - Federal Debt: Total Public Debt
- GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
- FYFSD - Federal Surplus or Deficit
- FGRECPT - Federal Government Current Receipts
- FGEXPND - Federal Government: Current Expenditures
- MANEMP - All Employees, Manufacturing
- USCONS - All Employees, Construction
- USTRADE - All Employees, Retail Trade
- USFIRE - All Employees, Financial Activities
- USGOVT - All Employees, Government
- AWHAETP - Average Weekly Hours of All Employees, Total Private
- DGORDER - Manufacturers' New Orders: Durable Goods
- NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
- BUSINV - Total Business Inventories
- EXPGS - Exports of Goods and Services
- IMPGS - Imports of Goods and Services
- IR - Import Price Index (End Use): All Commodities
- PPIFIS - Producer Price Index by Commodity: Final Demand
Latest quarter (10-Q)
Latest 10-Q source: 0001193125-26-224203.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of our financial condition and results of operations is provided to supplement our unaudited condensed consolidated financial statements and the accompanying notes as of and for the three months ended March 31, 2026, and 2025, included elsewhere in this Quarterly Report. We intend for this discussion to provide the reader with information to assist in understanding our unaudited condensed consolidated financial statements and the accompanying notes, the changes in those financial statements and the accompanying notes from period to period along with the primary factors that accounted for those changes. Certain information contained in this management’s discussion and analysis includes forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors. Please see “Cautionary Note Regarding Forward-Looking Statements,” in this Quarterly Report.
Overview of Business
We are a visionary entertainment and technology enterprise at the forefront of the global experience economy. We design, develop, engineer, deliver, and commercialize immersive physical and digital experiences for leading brands, developers, and destination operators worldwide, as well as for our own portfolio of entertainment and technology concepts. Our business is built on an integrated experience platform that brings together creative development, proprietary technologies, advanced engineering, IP, and operational execution to enable the repeatable creation, deployment, and scaling of entertainment experiences across multiple formats and locations globally. We operate through three complementary business divisions: Falcon’s Creative Group (“FCG”), Falcon’s Beyond Brands (“FBB”), and Falcon’s Beyond Destinations (“FBD”), each of which serves a distinct role within our operating model and participates in different stages of value creation within the experience economy. These divisions are conducted through five operating segments. FCG provides creative and advisory services including destination strategy, master planning, experiential and attraction design, digital media, interactive software, IP development, and creative guardianship for entertainment and hospitality destinations. FBB, consisting of Falcon's Attractions and FBB-Other, encompasses a broad portfolio of intellectual property, proprietary technologies, and operating businesses that design, engineer, commercialize, and deploy entertainment systems, products, content, and experiences across physical and digital environments. FBD, consisting of Producciones de Parques, S.L. ("PDP"), a joint venture between Falcon’s and Meliá Hotels International, S.A. (“Meliá”), and Destinations Operations, develops, owns, operates, and expands entertainment venues, hospitality experiences, and branded destination concepts across a variety of location‑based formats, utilizing proprietary and third‑party intellectual property.
Falcon’s Beyond Global, Inc., a Delaware corporation (“Pubco”, “FBG”, or the “Company”), entered into an Amended and Restated Agreement and Plan of Merger, dated as of September 1, 2023 (the “Merger Agreement”), by and among Pubco, FAST Acquisition Corp. II, a Delaware corporation (“FAST II”), Falcon’s Beyond Global, LLC, a Delaware limited liability company (“Falcon’s Opco”), and Palm Merger Sub, LLC, a Delaware limited liability company and a wholly-owned subsidiary of Pubco (“Merger Sub”).
On October 5, 2023 FAST II merged with and into Pubco (the “SPAC Merger”), with Pubco surviving as the sole owner of Merger Sub, followed by a contribution by Pubco of all of its cash (except for cash required to pay certain transaction expenses) to Merger Sub to effectuate the “UP-C” structure; and on October 6, 2023 Merger Sub merged with and into Falcon’s Opco (the “Acquisition Merger,” and collectively with the SPAC Merger, the “Business Combination”), with Falcon’s Opco as the surviving entity of such merger.
Our unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). All amounts are shown in thousands of U.S. dollars unless otherwise stated.
The following reflects our results of operations for the three months ended March 31, 2026 and 2025.
Liquidity and Going Concern
We have continued to invest in initiatives focused primarily on expanding its Falcon's Beyond Brands division, including product development, talent acquisition, and selective strategic investments. These activities have contributed to continued operating losses and negative cash flows from operations. Accordingly, we performed an evaluation of its ability to continue as a going concern through at least twelve months from the date of the issuance of these interim unaudited condensed consolidated financial statements.
Our development plans and associated working capital needs have been funded by a combination of debt and equity investments from its stockholders and the sale of non-core assets. We expect to continue utilizing a mix of these funding sources, including access to capital markets, additional financing arrangements, potential monetization of non-core investments, and expected distributions from PDP associated with the return of required withholding taxes from the sale of the Sol Tenerife Hotel in 2025 to support its ongoing growth strategy and working capital requirements. As of March 31, 2026, we have a working capital deficiency of $12.9 million, including short-term debt obligations of $9.3 million. We are actively evaluating refinancing and other alternatives with respect to these obligations.
We assess our ability to meet obligations over the next twelve months based on current liquidity, assuming continued execution of our operating plan and financing and capital initiatives. While we believe these assumptions are reasonable, we have incurred recurring
20
operating losses and negative cash flows from operations. These conditions, together with our ongoing capital needs to support its growth initiatives and working capital requirements, raise substantial doubt about our ability to continue as a going concern. We continue to take active steps to strengthen its capital position and improve liquidity, including pursuing additional financing and evaluating strategic alternatives. While management believes these actions may enhance our financial flexibility, they do not change the conclusion that substantial doubt exists about our ability to continue as a going concern. There can be no assurance that additional capital or financing, if obtained, will provide sufficient funding for the next twelve months from the date of this Quarterly Report on Form 10-Q. This Quarterly Report on Form 10-Q does not reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the possible inability of us to continue as a going concern.
Results of Operations
The following comparisons are historical results and are not indicative of future results, which could differ materially from the historical financial information presented. The following table summarizes our results of operations for the following periods:
Three months ended
March 31,
2026
March 31,
2025
Change
$
Revenue
$
5,376
$
1,708
$
3,668
Expenses:
Project design and build expense
945
106
839
Cost of product sales
1,129
—
1,129
Selling, general and administrative expense
7,736
6,298
1,438
Transaction expense (credit)
(11,057
)
1,521
(12,578
)
Research and development
—
118
(118
)
Depreciation and amortization expense
134
4
130
Income (loss) from operations
6,489
(6,339
)
12,828
Share of gain (loss) from equity method investments
(216
)
(4,063
)
3,847
Interest expense
(174
)
(1,332
)
1,158
Interest income
6
3
3
Change in fair value of warrant liabilities
—
2,886
(2,886
)
Foreign exchange transaction gain (loss)
16
752
(736
)
Net income (loss) before taxes
$
6,121
$
(8,093
)
$
14,214
Income tax (expense) benefit
—
1
(1
)
Net income (loss)
$
6,121
$
(8,092
)
$
14,213
Revenue
Three months ended
March 31,
2026
March 31,
2025
Change
$
Revenue transferred over time:
Shared services
$
1,936
$
1,622
$
314
Attraction services
1,738
86
1,652
$
3,674
$
1,708
$
1,966
Revenue transferred at a point in time:
Product sales
1,702
—
1,702
$
5,376
$
1,708
$
3,668
Revenue increased for the three months ended March 31, 2026, compared to the same period in 2025, primarily driven by new attractions contracts.
Project design and build expense
Project design and build expense increased for the three months ended March 31, 2026, compared to the same period in 2025, primarily driven by new attractions service contracts.
21
Cost of product sales
Cost of product sales increased for the three months ended March 31, 2026, compared to the same period in 2025, primarily driven by new attractions product sales.
Selling, general and administrative expense
Selling, general and administrative expense increased for the three months ended March 31, 2026, compared to the same period in 2025, primarily driven by an increase in payroll, payroll taxes, and benefits, professional fees, occupancy costs and marketing to support the continued expansion of the attraction services business.
Transaction expense (credit)
We recognized a transaction credit of $11.1 million for the three months ended March 31, 2026 for the reversal of accrued transaction expenses related to the Business Combination. See "Note 7 – Commitments and contingencies" in our unaudited condensed consolidated financial statements for additional discussion. We incurred $1.5 million of transaction expense for the three months ended March 31, 2025 related to a proposed underwritten offering of our Class A common stock that was not completed.
Research and development expense
We incurred $0.1 million of research and development expense for the three months ended March 31, 2025 related to the development of a location based entertainment experience which was subsequently terminated in 2025 with no impact to the statement of operations for the corresponding period.
Depreciation and amortization expense
Depreciation and amortization expense increased for the three months ended March 31, 2026, compared to the same period in 2025, primarily driven by the May 2025 acquisition of Oceaneering Engineering Services ("OES").
Share of gain (loss) from equity method investments
Three months ended
March 31,
2026
March 31,
2025
Change
$
Share of PDP net gain (loss)
$
(423
)
$
474
$
(897
)
Share of Karnival net gain (loss)
25
34
(9
)
Share of FCG net gain (loss)
182
(4,571
)
4,753
$
(216
)
$
(4,063
)
$
3,847
Share of loss from equity method investments increased for the three months ended March 31, 2026, compared to the same period in 2025, primarily driven by:
•
PDP: Share of net loss from PDP increased for the three months ended March 31, 2026, compared to the same period in 2025, primarily driven by the sale of the Sol Tenerife Hotel in the second quarter of 2025. Following the prior-year sale of the Sol Tenerife Hotel, which operated year-round and generated peak occupancy during the winter season, current-period results reflect the loss of its full-year contribution and the seasonal nature of the remaining property, which was closed for most of the first quarter. Accordingly, current-period results reflect expected seasonal fluctuations.
•
Karnival: Share of net gain from Karnival decreased for the three months ended March 31, 2026, compared to the same period in 2025, prim
[Excerpt truncated for page length; source filing is linked above.]
Latest 10-K MD&A
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of financial condition and results of operations of the Company is provided to supplement the audited consolidated financial statements and the accompanying notes of the Company as of and for the years ended December 31, 2025, and 2024, included elsewhere in this Annual Report. We intend for this discussion to provide the reader with information to assist in understanding the Company’s audited consolidated financial statements and the accompanying notes, the changes in those financial statements and the accompanying notes from period to period along with the primary factors that accounted for those changes. Certain information contained in this management’s discussion and analysis includes forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors. Please see “Cautionary Statement Regarding Forward-Looking Statements and Risk Factor Summary,” in this Annual Report.
Overview of Business
The Company is a visionary entertainment and technology enterprise at the forefront of the global experience economy. We design, develop, engineer, deliver, and commercialize immersive physical and digital experiences for leading brands, developers, and destination operators worldwide, as well as for our own portfolio of entertainment and technology concepts. Our business is built on an integrated experience platform that brings together creative development, proprietary technologies, advanced engineering, IP, and operational execution to enable the repeatable creation, deployment, and scaling of entertainment experiences across multiple formats and locations globally. We operate through three complementary business divisions: Falcon’s Creative Group, Falcon’s Beyond Brands, and Falcon’s Beyond Destinations, each of which serves a distinct role within the Company’s operating model and participates in different stages of value creation within the experience economy. These divisions are conducted through five and four operating segments as of December 31, 2025 and 2024, respectively. FCG provides creative and advisory services including destination strategy, master planning, experiential and attraction design, digital media, interactive software, IP development, and creative guardianship for entertainment and hospitality destinations. FBB, consisting of Falcon's Attractions and FBB, encompasses a broad portfolio of intellectual property, proprietary technologies, and operating businesses that design, engineer, commercialize, and deploy entertainment systems, products, content, and experiences across physical and digital environments. FBD, consisting of PDP, a joint venture between Falcon’s and Meliá, and Destinations Operations, develops, owns, operates, and expands entertainment venues, hospitality experiences, and branded destination concepts across a variety of location‑based formats, utilizing proprietary and third‑party intellectual property.
Our consolidated financial statements have been prepared in accordance with U.S. GAAP. All amounts are shown in thousands of U.S. dollars unless otherwise stated.
The following reflects our results of operations for the years ended December 31, 2025 and 2024.
Recent Developments
Acquisition of OES
In February 2025, the Company hired a team of 29 employees that had previously worked for OES. The employees were hired under customary terms and conditions for newly hired employees and no benefits or obligations from OES were paid or assumed associated with these employees. On May 9, 2025, the Company purchased certain tangible assets and a portfolio of intellectual property, including patented technologies, proprietary engineering and manufacturing processes, from Oceaneering Entertainment Systems (“OES”), a division of Oceaneering International Inc. (“OII”) for $1.6 million cash consideration, the ("OES Acquisition"). The acquisition was completed to expand our attractions services business and was integrated to form Falcon's Attractions segment. The Company also assumed a lease for a 103,000+ square-foot facility to be utilized by the Company for research, development, manufacturing, and integration of attraction sales and services. The Company had an option to acquire vehicle inventory and lifting assets on or before July 23, 2025, for an additional $7.5 million (the "Option”), or pay $0.5 million additional consideration for the May 9th acquisition, if the Company chose not to exercise the option. The Company did not exercise the Option and paid the additional consideration of $0.5 million in January 2026.
Tenerife Sale
PDP is an unconsolidated joint venture with Meliá for the development and operation of hotel resorts and theme parks. The Company has 50% voting rights and shares 50% of profits and losses in this joint venture. At December 31, 2025, PDP operates one hotel resort and theme park located in Mallorca, Spain. PDP operated a second hotel located in Tenerife in the Canary Islands until the sale on May 30, 2025, when PDP sold all of the shares of Tertian XXI, S.L., ("Tertian") a wholly-owned subsidiary of PDP, which owned the real estate assets comprising of the resort hotel in Tenerife ("Tenerife Sale").
The Company received $27.0 million in a cash dividend distribution from PDP as a result of the transaction. PDP recognized a pre tax gain on sale of $60.0 million. The Company recognized its 50% share of the gain of $30.0 million in share of gain from equity method investments included in the consolidated statements of operations and comprehensive income.
55
Liquidity and Going Concern
The Company has been engaged in expanding its operations through its equity method investments, developing new product offerings, acquiring businesses, raising capital and recruiting personnel. The Company has incurred a loss from operations, and negative cash flows from operating activities, as it has invested in the integration and growth of the Falcon's Beyond Brands division and the newly acquired OES business. Accordingly, the Company performed an evaluation of its ability to continue as a going concern through at least twelve months from the date of the issuance of these consolidated financial statements.
During 2025, the Company issued $32.5 million of shares of a newly created series of preferred stock designated as “11% Series B Cumulative Convertible Preferred Stock” (the “Series B Preferred Stock”) for $11.8 million in cash and the exchange of $20.5 million of outstanding debt. The $11.8 million in cash was utilized for the expansion of the attractions division.
The Company’s development plans, and investments have been funded by the sale of non-core assets from its equity method investments and a combination of debt and equity investments from its stockholders. During 2025, PDP sold all of the shares of Tertian XXI, S.L., a wholly-owned subsidiary of PDP, which owned the real estate assets comprising the resort hotel at Tenerife. The Company received $27.0 million in a cash dividend distribution from PDP as a result of the transaction, which was used to fund ongoing operations. See "Note 6 - Investments and advances to equity method investments."
The Company is reliant upon its stockholders, and third parties for obtaining additional financing through debt or equity raises, and from distributions from the liquidation of non-core equity method investments and assets, to fund its working capital needs, contractual commitments, and expansion plans. As of December 31, 2025, the Company continues to carry material accrued expenses and accounts payable in relation to its external advisors fees for the 2023 Business Combination. As of December 31, 2025, the Company has a working capital deficiency of $18.1 million including $0.6 million debt that matured on May 16, 2025 and debt coming due of $2.6 million.
The Company does not currently have sufficient cash or liquidity to pay all liabilities that are owed or are maturing in the next twelve months from the financial statement issuance date and fund ongoing operations and therefore concluded that substantial doubt exists about its ability to continue as a going concern. There can be no assurance that additional capital or financing raises, or liquidation of non-core assets and investments, if completed, will provide the necessary funding for the next twelve months from the date of this Annual Report on Form 10-K. This Annual Report on Form 10-K does not reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the possible inability of the Company to continue as a going concern.
Factors that May Influence Future Results of Operations
Our financial results of operations may not be comparable from period to period due to several factors. Key factors affecting the results of operations are summarized below.
Strategic Investment
Our financial results are impacted by the Strategic Investment in FCG. As of July 27, 2023, the date the Company ceased to have a controlling financial interest, FCG was deconsolidated and accounted for as an equity method investment. Until the five-year anniversary of the Strategic Investment, (i) FCG may not make any distributions (except for tax distributions) to any of its members and (ii) FCG will reinvest all of its available cash to support the growth and capacity of FCG and its subsidiaries for any projects, products and purchase orders submitted by QIC to FCG and its subsidiaries. These limitations in the use of available cash restrict FCG’s ability to distribute cash to Falcon’s Opco and, in turn, Falcon’s Opco’s ability to distribute cash to the Company, which could have an adverse impact on the Company’s liquidity and ability to repay its outstanding loans.
Equity Method Investments
Our financial results are impacted by our 50% ownership of the equity interests in two of our unconsolidated joint ventures, PDP and Karnival and our 75% ownership of FCG, all of which are recognized as equity method investments.
We have recognized $17.2 million and $(3.1) million Share of gain (loss) from equity method investments, including impairment of the PDP joint venture of $(5.3) million and the Karnival joint venture of $(3.0) million in 2025, for the years ended December 31, 2025 and 2024, respectively.
The Company has a 50% interest in Karnival, a joint venture established with Raging Power Limited. The purpose of the joint venture was to hold ownership interests in entities developing and operating amusement centers located in the People’s Republic of China. In October 2025, the Company and its joint venture partners agreed to terminate this project and windup the joint venture due to protracted delays in the underlying location development schedule. The results of operations for Karnival are immaterial for the years ended December 31, 2025, and 2024.
56
The carrying value of our investments and advances as of December 31, 2025, was comprised of approximately $17.8 million for FCG, $28.6 million for PDP and $4.2 million for Karnival.
The carrying value of our investments and advances as of December 31, 2024, was comprised of approximately $25.0 million for FCG, $24.4 million for PDP and $7.1 million for Karnival.
Timing of Current Projects and Future Geographic and Product Expansion
Our financial results and liquidity needs vary from quarter-to-quarter or year-to-year depending on the timing of:
•
our signing of agreements with and related disbursement from our clients
•
FCG’s signing of agreements with and related disbursements from QIC
•
completion of our current projects
•
our contributions to, and distributions from our existing and new joint ventures
•
FBB’s strategic partnerships or alliances.
Further, our success depends substantially on our ability to accurately predict and adapt to changing consumer tastes and preferences. Consumer tastes and preferences impact and will impact, among other items, revenues from affiliate fees, licensing fees and royalties, critical and commercial success of our planned entertainment offerings, theme park admissions, hotel room charges or sales of our other consumer products and services.
Risks Associated with Future Results of Operations
For additional information on the risks associated with future results of operations, please see Item 1A. Risk Factors of this Annual Report.
Components of Our Results of Operations
In our FCG segment, FCG generates revenue from creative and advisory services including destination strategy, master planning, experiential and attraction design, digital media, interactive software, IP development, and creative guardianship for entertainment and hospitality destinations. The Falcon's Attractions segment generates revenue from the design, engineering, manufacturing, and sales of proprietary and customized ride systems, attraction hardware, and related technologies. The other FBB segment activity may generate revenue through licensing arrangements, partnerships, and brand extensions across consumer products, digital platforms, and experiential formats. In our Destinations Operations segment, revenues may be generated through the management of resorts and theme parks and incentive fees. PDP revenue may be derived from a combination of management fees, licensing fees, revenue-sharing arrangements, or equity participation.
Project design and build expense
Our Project design and build expenses primarily include project related direct wages, freelance labor and software costs.
Cost of product sales
Our Cost of product sales includes hardware costs.
Selling, general and administrative expense
Our Selling, general and administrative expenses include payroll, payroll taxes and benefits for non-project related employee salaries, taxes, and benefits as well as technology infrastructure, marketing, occupancy, finance and accounting, legal, human resources, and corporate overhead expenses.
Transaction (credit) expenses
Transaction (credit) expenses include credits from transaction expense settlement and expenses for professional services directly related to business combinations and capital raise initiatives.
57
Research and development expense
Much of our intellectual property has been developed and tested in-house. We have established a team to develop the full slate of software, hardware and systems that power our products, integrating product management, engineering, analytics, data science, and design. Research and development expenses primarily consist of internal labor involved in research and development activities primarily related to the development of new FBB products across a broad range of sectors (e.g., physical theme parks, ride systems, media content and consumer merchandise), as well as development of the new asset-efficient strategy in our FBD business. Research and development expenses are expensed in the period incurred. We expect expenses to increase in future periods as we continue to invest in research and development activities to achieve our operational and commercial goals. See “Item 1. Business – Intellectual Property Research and Development” for more information.
Depreciation and amortization expense
We incurred depreciation expenses for property and equipment utilized in the operation of our businesses. We incurred amortization expense for finite-lived intangible assets, comprising of developed technology, trade names and trademarks, OES trade name and software rights, and right-of-use assets for our finance lease.
Share of gain (loss) from equity method investments
Our Share of gain (loss) from equity method investments represents our proportional share of net earnings or losses of our unconsolidated joint ventures.
Our parks and resorts, which operated within our unconsolidated joint ventures, generated revenue through the sales of hotel rooms, park admissions, food and beverage, merchandise, and ancillary services, and the principal costs of parks and resorts were employee wages and benefits, advertising, maintenance, utilities, and insurance. Factors that have affected these costs have included fixed operating costs, competitive wage pressures, food, beverage and merchandise costs, costs for construction, repairs and maintenance and inflationary pressures.
FCG generates revenues from master planning, attraction design, experiential entertainment, content production, interactives, and software. The principal costs of these services are project design and build expense, employee wages and benefits, research and development, sales and marketing, depreciation and amortization, software costs, legal fees, consultant fees, and occupancy costs.
The Company monitors the equity method investments for impairment and records reductions in their carrying value if the carrying amount of an investment exceeds its fair value. An impairment charge is recorded when such impairment is deemed to be other-than-temporary. To determine whether an impairment is other-than-temporary, we consider our ability and intent to hold the investment until the carrying amount is fully recovered. There were $8.3 million and $0 in impairment losses recognized for investments in equity method investments during the year ended December 31, 2025 and 2024, respectively. See "Note 6 – Investments and advances to unconsolidated joint ventures" in the Company’s audited consolidated financial statements.
Interest expense
Our Interest expense consists of the interest on our debt instruments generated by related party and third-party loans and lines of credit used primarily to fund working capital and operations. See "Note 11 – Long-term debt and borrowing arrangements" in the Company’s audited consolidated financial statements for a description of our indebtedness and “Liquidity and Capital Resources” below.
Change in fair value of warrant liabilities
Prior to January 14, 2025, the warrants were classified as a liability and measured at fair value, with changes in fair value included in the consolidated statements of operations and comprehensive income. The warrant agreement was amended effective January 14, 2025. The amendment provides for the mandatory exchange of the warrants for shares of Class A Common Stock at an exchange ratio of 0.25 shares of Class A Common Stock per warrant, on October 6, 2028. The warrants will not be exercisable and the holders of the warrants will have no further rights except to receive shares of Class A Common Stock on October 6, 2028.
The remaining warrants meet the requirements for equity classification after the amendment. The Company adjusted the fair value of the warrants a final time on January 14, 2025, immediately prior to the amendment effective date. The total adjusted liability balance was reclassified into equity on January 14, 2025. After the reclassification to equity, the warrants do not require subsequent fair value measurement.
58
Change in fair value of earnout liabilities
At the closing of the Business Combination, pursuant to the Merger Agreement, certain holders were entitled to receive up to a total of 1,937,500 and 75,562,500 contingent earnout shares in the form of Class A Common Stock and Class B Common Stock, respectively. The earnout shares were deposited into escrow and are to be earned, released and delivered upon satisfaction of, or forfeited and canceled up on the failure of certain milestones. Prior to September 30, 2024, the earnout shares were classified as a liability and measured at fair value, with changes in fair value included in the results of operations.
On September 30, 2024, earnout participants agreed to forfeit all remaining earnout shares held in escrow, which were to be released and earned based on meeting EBITDA and revenue targets. An aggregate of 437,500 shares of Class A common stock and 17,062,500 shares of Class B common stock and an equal number of Falcon’s Opco units were forfeited in connection with the earnout shares forfeiture.
The forfeiture is treated as a modification of the original earnout agreement. The remaining earnout shares which are to be released and earned based on the Company’s stock price meet the requirements for equity classification after the modification. The Company adjusted the fair value of the earnout shares a final time on September 30, 2024, immediately prior to the modification. The total adjusted liability balance, including the amount associated with the forfeited earnout shares, was reclassified into equity as of September 30, 2024.
Prior to reclassification into equity, the fair value of the earnout liability was $250.1 million as of September 30, 2024. For the year ended December 31, 2024, the Company recognized $172.3 million of gain related to the change in fair value of earnout liabilities included in the consolidated statements of operations and comprehensive income. After the reclassification to equity, the earnout shares will not require subsequent fair value measurement.
Foreign exchange transaction gain (loss)
Our Foreign exchange transaction gain (loss) include our transactional gains and losses on the settlement or re-measurement of our non-functional currency denominated assets and liabilities. Since we conduct business in jurisdictions outside of the United States, we generate realized and unrealized transactional foreign exchange gains and losses from the remeasurement of U.S. dollar denominated cash and debt balances held by Fun Stuff, our Euro functional currency subsidiary, and the settlement of vendor balances denominated in non-functional currencies. As the U.S. dollar strengthens against the Euro, we record realized and unrealized foreign exchange losses; as the U.S. dollar weakens against the Euro, we record realized and unrealized foreign exchange gains.
Gain on bargain purchase of OES Acquisition
Gain on bargain purchase is the excess of the fair value of the identifiable assets acquired and liabilities assumed in the OES Acquisition over the purchase price.
Income tax
The Company is treated as a corporation for U.S. federal and state income tax purposes and is subject to U.S. federal and state income taxes, in addition to local and foreign income taxes, with respect to its allocable share of taxable income generated by Falcon’s Opco. Falcon’s Opco is organized as a limited liability company taxed as a partnership. The consolidated financial statements of Falcon’s Opco do not include a provision for federal or state income tax expense or benefit as our taxable income or loss is included in the tax returns of Falcon’s Opco’s members. Our foreign subsidiaries and unconsolidated joint ventures are subject to tax in their local jurisdiction and we record a provision for income tax expense or benefit where applicable.
59
Results of Operations
The following comparisons are historical results and are not indicative of future results, which could differ materially from the historical financial information presented.
The following table summarizes our results of operations for the following periods:
Year ended
December 31,
2025
December 31,
2024
Change
$
Revenue
$
14,896
$
6,745
$
8,151
Expenses:
Project design and build expense
2,373
—
2,373
Cost of product sales
1,579
—
1,579
Selling, general and administrative expense
25,496
22,408
3,088
Transaction (credit) expenses
(1,692
)
7
(1,699
)
Credit loss expense
—
12
(12
)
Research and development
199
179
20
Depreciation and amortization expense
349
6
343
Loss from operations
(13,408
)
(15,867
)
2,459
Share of gain (loss) from equity method investments
16,959
(3,121
)
20,080
Interest expense
(3,384
)
(1,898
)
(1,486
)
Interest income
12
12
—
Change in fair value of warrant liabilities
2,886
(836
)
3,722
Change in fair value of earnout liabilities
—
172,270
(172,270
)
Foreign exchange transaction gain (loss)
2,147
(1,077
)
3,224
Gain on bargain purchase of OES Acquisition
1,098
—
1,098
Net income before taxes
$
6,310
$
149,483
$
(143,173
)
Income tax benefit (expense)
2
(2
)
4
Net income
$
6,312
$
149,481
$
(143,169
)
Revenue
Year ended
December 31,
2025
December 31,
2024
Change
$
Revenue transferred over time:
Shared services
$
6,539
$
6,249
$
290
Destinations operations services
609
495
114
Attraction services
4,907
1
4,906
$
12,055
$
6,745
$
5,310
Revenue transferred at a point in time:
Product sales
2,841
—
2,841
$
14,896
$
6,745
$
8,151
Revenue increased for the year ended December 31, 2025, compared to the same period in 2024, primarily driven by new attractions contracts.
Project design and build expense
Project design and build expense increased for the year ended December 31, 2025, compared to the same period in 2024, primarily driven by new attractions service contracts.
Cost of product sales
Cost of product sales increased for the year ended December 31, 2025, compared to the same period in 2024, primarily driven by new attractions sales.
60
Selling, general and administrative expense
Selling, general and administrative expense increased for the year ended December 31, 2025, compared to the same period in 2024, primarily driven by a $7.1 million increase in payroll, payroll taxes, and benefits, professional fees, occupancy costs and marketing to support the expansion of the attraction services business and $1.2 million increase in general and administrative expenses. The increase was partially offset by a $2.3 million decrease in payroll, payroll taxes and benefits, $2.3 million decrease in audit and professional services fees and by a $0.6 million credit in full settlement of a claim against a third party network service provider to recover expenses related to a network intrusion.
Transaction (credit) expenses
The Company recognized a transaction credit of $3.6 million for the year ended December 31, 2025 as a result of a transaction expense settlement. The transaction credit was partially offset by $1.9 million transaction expenses for the year ended December 31, 2025 related to a proposed underwritten offering of the Company's Class A common stock during the first quarter in 2025 that was not completed.
Research and Development
Research and development increased for the year ended December 31, 2025, compared to the same periods in 2024, primarily driven by the development of a location based entertainment experience.
Depreciation and amortization expense
Depreciation and amortization expense increased for the year ended December 31, 2025, compared to the same period in 2024, primarily driven by the OES Acquisition. See “Note 3 – Business combination” in the Company's audited consolidated financial statements.
Share of gain (loss) from equity method investments
Year ended
December 31,
2025
December 31,
2024
Change
$
Share of PDP net income (excluding gain on sale from Tenerife)
$
2,363
$
2,979
$
(616
)
Share of PDP net income from gain on sale of Tenerife
30,019
—
30,019
Impairment of PDP
(5,332
)
—
(5,332
)
Share of Karnival net income
98
289
(191
)
Impairment of Karnival
(3,005
)
—
(3,005
)
Share of FCG net loss
(7,184
)
(6,389
)
(795
)
$
16,959
$
(3,121
)
$
20,080
Share of gain (loss) gain from equity method investments increased for the year ended December 31, 2025, compared to the same period in 2024 was primarily driven by:
•
PDP: Share of net income from PDP increased for the year ended December 31, 2025, compared to the same period in 2024. On May 30, 2025, PDP sold all the shares of Tertian XXI, S.L., ("Tertian") a wholly-owned subsidiary of PDP, which owned the real estate assets comprising the resort hotel at Tenerife, the ("Tenerife Sale"). The Company received $27.0 million in a cash dividend distribution from PDP as a result of the transaction. PDP recognized a pre tax gain on sale of $60.0 million. The Company recognized its 50% share of the gain of $30.0 million within the share of gain (loss) from equity method investments.
The fair value of the Company’s remaining investment in PDP, which operates one hotel resort and theme park located in Mallorca, Spain, was determined to be below the recorded value. As of June 30, 2025, the Company recognized an other-than-temporary impairment charge of $5.3 million, which is recorded in share of gain (loss) from equity method investments.
The Company recognized its 50% share of PDP’s net income. See “Note 6 – Investments and advances to equity method investments” in the Company's audited consolidated financial statements.
•
Karnival: Share of net loss from Karnival increased for the year ended December 31, 2025, compared to the same period in 2024, primarily driven by an impairment in the carrying value of the investment. The fair value of the Company’s investment in Karnival was determined to be $4.2 million. During October 2025, the Company and its joint venture partner agreed to terminate this project and windup the joint venture due to protracted delays in the underlying location development schedule. As a result the Company recognized an other-than-temporary impairment charge of $3.0 million, which is recorded in share of gain (loss) from equity method investments in the consolidated statement of operations and comprehensive income.
61
•
FCG: The Company recognizes 100% of net loss, 9% preferred return to QIC and amortization of the basis difference on deconsolidation of FCG. FCG's net loss was impacted by adjustments for accretion of preference dividend and fees, and amortization of basis difference as follows:
Year ended
December 31,
2025
December 31,
2024
Change
$
Share of FCG net loss
$
(791
)
$
(540
)
$
(251
)
Preferred unit dividend accretion
(3,091
)
(2,546
)
(545
)
Basis difference amortization
(3,302
)
(3,303
)
1
$
(7,184
)
$
(6,389
)
$
(795
)
Interest expense
Interest expense increased for the year ended December 31, 2025, compared to the same period in 2024, primarily driven by the increase in interest rates on both short and long-term debt.
Change in fair value of warrant liability
Gain due to change in fair value of warrant liabilities increased for the year ended December 31, 2025, compared to the same period in 2024, primarily driven by the decrease in the market value of the warrants through January 14, 2025. As of January 14, 2025, all warrants have been reclassified to equity and will not require subsequent fair value measurement. See "Note 15 – Stock warrants" in the Company’s audited consolidated financial statements.
Change in fair value of earnout liability
As of December 31, 2025, all EBITDA and revenue based earnout shares have been earned or forfeited. The remaining earnout shares based on Company stock price targets were reclassified to equity and do not require subsequent fair value measurement. As a result, there was no change in fair value of earnout liabilities incurred for the year ended December 31, 2025.
Gain due to change in fair value of earnout liability for the year ended December 31, 2024, was primarily driven by a decrease in the market price of the Company’s stock between December 31, 2023 and December 31, 2024.
Foreign exchange transaction gain (loss)
Foreign exchange transaction gain increased the year ended December 31, 2025, compared to the same period in 2024. The change is primarily attributable to the foreign exchange gain on U.S. denominated intercompany party debt with a Spanish subsidiary as the U.S. dollar weakened against the Euro during the year ended December 31, 2025, and strengthened against the Euro during the year ended December 31, 2024.
Gain on bargain purchase of OES Acquisition
The fair value of the identifiable assets acquired and liabilities assumed in the OES Acquisition exceeded the fair value of the purchase price. Therefore, the Company recognized $1.1 million gain on bargain purchase of OES Acquisition for the year ended December 31, 2025. See “Note 3 – Business combination" in the Company’s audited consolidated financial statements.
62
Segment Reporting
The following table presents selected information about our segments' results:
Year ended
December 31,
2025
December 31,
2024
Change
$
Revenues:
Falcon’s Creative Group
$
38,703
$
53,159
$
(14,456
)
Destinations Operations
609
495
114
Falcon’s Attractions
7,748
—
7,748
Falcon's Beyond Brands-other
—
1
(1
)
Falcon’s Creative Group deconsolidation
(38,703
)
(53,159
)
14,456
Unallocated corporate revenue
6,539
6,249
290
Total revenue
14,896
6,745
8,151
Segment (loss) income from operations:
—
Falcon’s Creative Group
1,289
1,207
82
Destinations Operations
(771
)
(1,364
)
593
PDP
2,363
2,981
(618
)
Falcon’s Attractions
(3,260
)
—
(3,260
)
Falcon's Beyond Brands-other
(742
)
(2,958
)
2,216
Total segment loss from operations
(1,121
)
(134
)
(987
)
Unallocated corporate overhead
(9,880
)
(11,233
)
1,353
Elimination FCG segment loss from operations
(1,289
)
(1,207
)
(82
)
Share of loss from FCG
(7,184
)
(6,389
)
(795
)
Transaction credit (expenses)
1,692
(7
)
1,699
Credit loss expense
—
(12
)
12
Depreciation and amortization expense
(349
)
(6
)
(343
)
Share of equity method investee's gain on Tenerife Sale
30,019
—
30,019
Impairment of PDP
(5,332
)
—
(5,332
)
Impairment of Karnival
(3,005
)
—
(3,005
)
Interest expense
(3,384
)
(1,898
)
(1,486
)
Interest income
12
12
—
Change in fair value of warrant liabilities
2,886
(836
)
3,722
Change in fair value of earnout liabilities
—
172,270
(172,270
)
Foreign exchange transaction gain (loss)
2,147
(1,077
)
3,224
Gain on bargain purchase of OES Acquisition
1,098
—
1,098
Net income before taxes
$
6,310
$
149,483
$
(143,173
)
Income tax benefit
2
(2
)
4
Net income
$
6,312
$
149,481
$
(143,169
)
•
FCG segment income increased for the year ended December 31, 2025, compared to the same period in 2024, primarily as a result of a increase in margins on certain current long-term contracts. FCG's net loss was adjusted for accretion of preference dividend and fees, and amortization of basis difference as follows:
Year ended
December 31,
2025
December 31,
2024
Change
$
Share of FCG net loss
$
(791
)
$
(540
)
$
(251
)
Preferred unit dividend accretion
(3,091
)
(2,546
)
(545
)
Basis difference amortization
(3,302
)
(3,303
)
1
$
(7,184
)
$
(6,389
)
$
(795
)
FCG revenues decreased for the year ended December 31, 2025, compared to the same period in 2024, as a result of the timing of certain contract performance obligations.
FCG project design and build expense decreased for the year ended December 31, 2025, compared to the same period in 2024, primarily driven by the decrease in project revenues partially and by an increase in project gross margins on certain design projects.
63
•
Destinations Operations segment loss from operations decreased for the year ended December 31, 2025, compared to the same period in 2024, primarily driven by decreased shared services allocations.
•
PDP's share segment income increased for the year ended December 31, 2025, compared to the same period in 2024, as a result of the Tenerife Sale partially offset by the impairment of PDP. See “Note 6 – Investments and advances to equity method investments” in the Company’s audited consolidated financial statements.
•
Falcon's Attractions designs, engineers, manufactures, and sells proprietary and customized ride systems, attraction hardware, and related technologies for theme parks, location‑based entertainment venues, and destination developments worldwide. This business leverages the Company’s experience in attraction design and engineering and enables Falcon’s Beyond to participate directly in the downstream delivery of physical experiences originally conceived through its creative services platform. Revenue in this segment is primarily generated through system sales, engineering services, fabrication, integration, installation, and aftermarket support typically under project‑specific contractual arrangements.
•
FBB-other segment loss from operations decreased for the year ended December 31, 2025 compared to the same period in 2024, primarily driven by a decrease in sales, marketing and development spending as the Company focused on the integration and expansion of Falcon's Attractions.
Reportable segment measures of profit and loss are earnings before interest, foreign exchange gains and losses, unallocated corporate expenses, impairments and depreciation and amortization expense. Results of operating segments include costs directly attributable to the segment including project costs, payroll and payroll-related expenses and overhead directly related to the business segment operations. Unallocated corporate overhead costs include costs related to accounting, audit, and corporate legal expenses. Unallocated corporate overhead costs are presented as a reconciling item between total loss from reportable segments and the Company’s consolidated financial results. For more information about our Segment Reporting, see "Note 22 – Segment information" in the Company’s audited consolidated financial statements.
Non-GAAP Financial Measures
We prepare our consolidated financial statements in accordance with U.S. GAAP. In addition to disclosing financial results prepared in accordance with U.S. GAAP, we disclose information regarding Adjusted EBITDA which is a non-GAAP measure. We define Adjusted EBITDA as net income, determined in accordance with U.S. GAAP, for the period presented, before net interest and expense, income tax expense, depreciation and amortization, transaction (credit) expenses related to the Business Combination, credit loss expense related to the closure of the Sierra Parima Katmandu Park, share of equity method investee’s gain on Tenerife Sale, impairment of PDP, impairment of Karnival, change in fair value of warrant liabilities, change in fair value of earnout liabilities and gain on bargain purchase of OES Acquisition.
We believe that Adjusted EBITDA is useful to investors as it eliminates the non-cash depreciation and amortization expense that results from our capital investments and intangible assets recognized in any business combination and improves comparability by eliminating the interest expense associated with our debt facilities, and eliminating the change in fair value of warrant and earnout liabilities, which may not be comparable with other companies based on our structure.
Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our results as reported under U.S. GAAP. Some of these limitations are (i) it does not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments, (ii) it does not reflect changes in, or cash requirements for, our working capital needs, (iii) it does not reflect interest expense, or the cash requirements necessary to service interest or principal payments, on our debt, (iv) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements, (v) it does not adjust for all non-cash income or expense items that are reflected in our statements of cash flows, and (vi) other companies in our industry may calculate these measures differently than we do, limiting their usefulness as comparative measures.
64
The following table sets forth reconciliations of net income under U.S. GAAP to Adjusted EBITDA for the following periods:
Year ended
December 31,
2025
December 31,
2024
Change
$
Net income
$
6,312
$
149,481
$
(143,169
)
Interest expense
3,384
1,898
1,486
Interest income
(12
)
(12
)
—
Income tax benefit
(2
)
2
(4
)
Depreciation and amortization expense
349
6
343
EBITDA
10,031
151,375
(141,344
)
Transaction (credit) expenses
(1,692
)
7
(1,699
)
Credit loss expense related to the closure of the Sierra Parima Katmandu Park
—
12
(12
)
Share of equity method investee's gain on Tenerife Sale
(30,019
)
—
(30,019
)
Impairment of PDP
5,332
—
5,332
Impairment of Karnival
3,005
—
3,005
Change in fair value of warrant liabilities
(2,886
)
836
(3,722
)
Change in fair value of earnout liabilities
—
(172,270
)
172,270
Gain on bargain purchase of OES Acquisition
(1,098
)
—
(1,098
)
Adjusted EBITDA
$
(17,327
)
$
(20,040
)
$
2,713
Adjusted EBITDA loss decreased for the year ended December 31, 2025 compared to the same period in 2024, primarily driven by a $1.1 million decrease in losses from operations related to decreases in general and administrative expenses partially offset by increases in losses from operations from the integration of the OES acquisition. Adjusted EBITDA was also impacted by an increase of $3.2 million in foreign exchange transaction gain, partially offset by a $1.6 million increase in share of loss from equity method investment
FCG prepares standalone consolidated financial statements in accordance with U.S. GAAP. In addition to disclosing FCG's standalone financial results prepared in accordance with U.S. GAAP, we disclose information regarding FCG's standalone Adjusted EBITDA which is a non-GAAP measure. FCG defines Adjusted EBITDA as net loss, determined in accordance with U.S. GAAP, for the period presented, before net interest and expense, income tax (expense) benefit and depreciation and amortization.
FCG believes that Adjusted EBITDA is useful to investors as it eliminates the non-cash depreciation and amortization expense that results from FCG's capital investments and intangible assets recognized in any business combination and improves comparability by eliminating the interest expense associated with our debt facilities, which may not be comparable with other companies based on our structure.
Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of FCG's standalone results as reported under U.S. GAAP. Some of these limitations are (i) it does not reflect FCG's cash expenditures, or future requirements for capital expenditures or contractual commitments, (ii) it does not reflect changes in, or cash requirements for, FCG's working capital needs, (iii) it does not reflect interest expense, or the cash requirements necessary to service interest or principal payments, on FCG's debt, (iv) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements, (v) it does not adjust for all non-cash income or expense items that are reflected in FCG's statements of cash flows, and (vi) other companies in our industry may calculate these measures differently than FCG does, limiting their usefulness as comparative measures.
The following table sets forth reconciliations of net loss for FCG under U.S. GAAP to Adjusted EBITDA for the following periods:
Year ended
December 31,
2025
December 31,
2024
Change
$
Net loss
$
(791
)
$
(540
)
$
(251
)
Interest expense
599
574
25
Interest income
(31
)
(35
)
4
Income tax expense (benefit)
46
(207
)
253
Depreciation and amortization expense
1,353
1,344
9
EBITDA and Adjusted EBITDA
$
1,176
$
1,136
$
40
Adjusted EBITDA remained consistent for year ended December 31, 2025, compared to the same period in 2024, primarily driven by a decrease in revenues of $14.5 million; offset by a decrease in project design and build expenses of $13.0 million and a decrease in
65
selling, general and administrative expense of $1.6 million. As of December 31, 2025, the contracted pipeline for FCG was $41.6 million.
Liquidity and Capital Resources
Sources and Uses of Liquidity
Liquidity describes the ability of a company to generate sufficient cash flows to meet the cash requirements of its business operations. Our primary short-term cash requirements are to fund working capital, short-term debt, acquisitions, contractual obligations and other commitments. Our medium-term to long-term cash requirements are to service and repay debt and to invest in facilities, equipment, technologies, location-based entertainment, media production and research and development for growth initiatives. Our principal sources of liquidity are funds from borrowings, equity contributions from our existing investors, distributions from equity method investees and cash on hand.
During 2025, the Company issued $32.5 million of Series B Preferred Stock for $11.8 million in cash and the exchange of $20.7 million of outstanding debt and accrued interest.
As of December 31, 2025, our total indebtedness was approximately $15.6 million. We had approximately $1.9 million of cash and $15.5 million available for borrowing under our lines of credit. On November 10, 2025, we entered into a new $15.0 million line of credit agreement and amended our existing line of credit agreement to reduce the borrowing capacity to $5.5 million. Collectively, these agreements increasing cash available for borrowing by $5.5 million.
We anticipate managing our operations to ensure that our existing cash on hand and unused capacity on our existing lines of credit, along with distributions from equity method investees, additional debt and equity capital raises, and reviewing our portfolio of assets to provide additional liquidity over the next twelve months to meet our short-term needs. Currently, we do not have sufficient cash from operations and unused capacity to settle our outstanding liabilities and meet the needs of our next twelve months of our operations.
For the year ended December 31, 2025, we have operational losses and negative cash flows from operating activities that raise substantial doubt about our ability to continue as a going concern. As of December 31, 2025, we have $16.4 million of accrued expenses and other current liabilities, which include $14.4 million of transaction and other related professional fees, $0.8 million of accrued payroll and related expenses, $0.5 million accrued interest and approximately $0.7 million of other accrued expenses and current liabilities. The transaction expenses are actively being negotiated, and actual settlement may vary from the amounts recorded.
Our capital requirements will depend on many factors, including the timing and extent of spending to support our research and development efforts, investments in technology, the expansion of sales and marketing activities, and market adoption of new and enhanced products and features. In addition, we expect to incur additional costs as a result of operating as a public company. We expect our capital expenditures and working capital requirements to increase materially in the near future. Our ability to generate cash in the future depends on our financial results which are subject to general economic, financial, competitive, legislative and regulatory factors that may be outside of our control. Our future access to, and the availability of credit on acceptable terms and conditions, is impacted by many factors, including capital market liquidity and overall economic conditions. In the event that additional financing is required from outside sources, we cannot be sure that any additional financing will be available to us on acceptable terms if at all. If we are unable to raise additional capital when desired, our business, operating results, and financial condition could be adversely affected. See the section of our Annual Report titled “Risk Factors – We will require additional capital, which additional financing may result in restrictions on our operations or substantial dilution to our stockholders, to support the growth of our business, and this capital might not be available on acceptable terms, if at all.”
Contractual and Other Obligations
Tax Receivable Agreement
In connection with the closing of the Business Combination, the Company entered into the Tax Receivable Agreement with Falcon’s Opco, the TRA holder representative, certain members of Falcon’s Opco (the “TRA Holders”) and other persons from time-to-time party thereto. Pursuant to the Tax Receivable Agreement, among other things, the Company is required to pay to each TRA Holder 85% of certain tax benefits, if any, that it realizes (or in certain cases is deemed to realize) as a result of the increases in tax basis resulting from any exchange of new Falcon’s Opco units for Class A Common Stock or cash in the future and certain other tax benefits arising from payments under the Tax Receivable Agreement. In certain cases, the Company’s obligations under the Tax Receivable Agreement may accelerate and become due and payable, based on certain assumptions, upon a change in control and certain other termination events, as defined in the Tax Receivable Agreement. On October 24, 2024, the Company and Exchange TRA Holders entered into an
66
Amendment to the Tax Receivable Agreement to clarify the rights of a TRA Holder that transfers units but does not assign the transferee its rights under the TRA Agreement with respect to such transferred units.
Transaction costs
Transaction costs related to the Business Combination of $16.2 million are not yet settled as of December 31, 2025 and the Company is actively negotiating to settle them over the next 24 months. These transaction costs are recorded in accrued expenses. Negotiations regarding the terms of the costs yet to be settled are still ongoing and may change materially from these amounts accrued.
As previously disclosed in the Company’s Annual Report, on March 27, 2024, a lawsuit was filed against the Company by Guggenheim Securities, LLC (“Guggenheim”) in which Guggenheim alleges that the Company owes certain fees and expenses of $11.1 million for services allegedly performed by Guggenheim in connection with the Business Combination consummated on October 6, 2023 (the “Guggenheim Complaint”). The Company has denied all liability in response to the Guggenheim Complaint. In addition, the Company filed counterclaims against Guggenheim. Guggenheim denied all liability as to those amended counterclaims. On June 30, 2025, Guggenheim filed a Notice of Issue and Certificate of Readiness for trial, and on October 27, 2025 Guggenheim moved for summary judgment on its claims, which the Company opposed; on the same day, the Company moved for partial summary judgment on its claims which Guggenheim opposed. Pursuant to the Company’s accounting approach to transaction expenses related to the Business Combination, prior to the Company’s receipt of the Guggenheim Complaint, the Company accrued $11.1 million as of December 31, 2025 and 2024, with respect to the alleged amended engagement agreement with Guggenheim. The $11.1 million associated with the Guggenheim Complaint is included in the $16.2 million transaction costs related to the Business Combination.
Related Party Loans
On September 8, 2025, the Company exchanged $20.5 million of debt and accrued interest with Infinite Acquisitions for the issuance of $20.5 million of shares of Series B Preferred Stock. The Company has two financing agreements with Infinite Acquisitions with a total outstanding balance of $5.0 million as of December 31, 2025.
The Company has two financing agreement with Katmandu Ventures, LLC (“Katmandu Ventures”) with a total outstanding balance of $1.1 million as of December 31, 2025. The $0.6 million loan was due on May 16, 2025 and we are in negotiations to amend the loan.
The Company has a financing agreement with Cecil and Marty Magpuri with an outstanding balance of $0.2 million as of December 31, 2025.
See "Note 11 — Long-term debt and borrowing arrangements," "Note 23 — Related party transactions" and "Note 13 — Equity" in the Company’s audited financial statements.
Cash Flows
The following table summarizes our cash flows for the period presented:
Year ended
December 31,
2025
December 31,
2024
Change
$
Cash used in operating activities
$
(24,603
)
$
(12,552
)
$
(12,051
)
Cash provided by (used) in investing activities
24,189
(9
)
24,198
Cash provided by financing activities
3,707
12,853
(9,146
)
Cash Flows from Operating Activities
Our cash flows used in operating activities are primarily driven by transaction, legal and professional fees associated with public company compliance costs, operating costs of our Falcon's Attraction services business and corporate overhead activities.
Cash used in operating activities increased for the year ended December 31, 2025, compared to the same period in 2024, due to the settlement of accounts payable and accrued obligations associated with our corporate overhead and compliance costs, and the investment in working capital for the growth of the Falcon's Attractions business following the OES Acquisition.
67
Cash Flows from Investing Activities
Net cash provided by investing activities increased for year ended December 31, 2025, compared to the same period in 2024, primarily related to a $27.0 million dividend distribution from PDP, partially offset by $1.0 million advance to affiliate and $1.6 million cash paid for the OES Acquisition.
Cash Flows from Financing Activities
Net cash provided by financing activities decreased for the year ended December 31, 2025, compared to the same period in 2024. The Company received $11.8 million in proceeds from the issuance Series B Preferred Stock and made net repayments of $6.9 million of debt in the year ended December 31, 2025.
We do not have any off-balance sheet arrangements that have, or are reasonably likely to have, a material current or future effect on our financial condition, changes in financial condition, revenues, expenses, results of operations, liquidity, capital expenditures or capital resources.
Critical Accounting Estimates and Policies
The discussion under “Company’s Management’s Discussion and Analysis of Financial Condition and Results of Operations” is based upon our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses as well as the disclosure of contingent assets and liabilities. We regularly review our estimates and assumptions. These estimates and assumptions, which are based upon historical experience and on various other factors believed to be reasonable under the circumstances, form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Reported amounts and disclosures may have been different had management used different estimates and assumptions or if different conditions had occurred in the periods presented. Below is a discussion of the policies that we believe may involve a high degree of judgment and complexity.
We believe that the accounting policies disclosed below include estimates and assumptions critical to our business and their application could have a material impact on our consolidated financial statements. In addition to these critical policies, our significant accounting policies are included within "Note 2 – Summary of significant accounting policies" in our audited consolidated financial statements.
Business Combinations
The Company utilizes the acquisition method of accounting under ASC 805, Business Combinations ("ASC 805"), for all transactions and events in which it obtains control over one or more other businesses (even if less than 100% ownership is acquired), to recognize the fair value of all assets and liabilities assumed and to establish the acquisition date fair value as of the measurement date.
While the Company uses its best estimates and assumptions as part of the purchase price allocation process to accurately value assets acquired and liabilities assumed as of the acquisition date, the estimates and assumptions are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company records adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill or bargain purchase to the extent we identify adjustments to the preliminary fair values. For changes in the valuation of intangible assets between the preliminary and final purchase price allocation, the related amortization is adjusted in the period it occurs. Subsequent to the measurement period, any adjustment to assets acquired or liabilities assumed is included in operating results in the period in which the adjustment is determined. Transaction expenses that are incurred in connection with a business combination, other than costs associated with the issuance of debt or equity securities, are expensed as incurred.
Contingent consideration is classified as a liability or as equity on the basis of the definitions of a financial liability and an equity instrument; contingent consideration payable in cash is classified as a liability. The Company recognizes the fair value of any contingent consideration that is transferred to the seller in a business combination on the date at which control of the acquiree is obtained. Contingent consideration payments related to acquisitions are measured at fair value each reporting period using Level 3 unobservable inputs (as defined in the Fair value measurement policy included in the Company’s audited consolidated financial statements). When reported, any changes in the fair value of these contingent consideration payments are included in contingent earnout expense on the consolidated statements of operations and comprehensive income.
68
Revenue recognition
Shared services
After the deconsolidation of FCG, the Company continues to provide corporate shared services support to FCG. The Company recognizes revenue related to these services in the amount the Company has a right to invoice. The Company uses the right to invoice practical expedient, as the Company’s right to payment corresponds directly with the value to FCG of the Company’s performance to date.
Destinations Operations services
The principal sources of revenues for the Destinations Operations segment are resort and theme park management and incentive fees. Resort and theme park management and incentive fees are based on a percentage of revenues and profits, respectively earned by the theme parks during the corresponding period.
Attraction services
The Company's Falcon's attractions segment provides attraction maintenance services to its customers on a time and material basis. The Company recognizes revenue related to these services using the right to invoice practical expedient.
Product sales
The Company recognizes revenue at the point in time when control transfers to the customer, thus satisfying the performance obligation.
Investments and advances to equity method investments
The Company uses the equity method to account for investments in corporate joint ventures when we have the ability to exercise significant influence over the operating decisions of the joint venture. Such investments are initially recorded at cost and subsequently adjusted for our proportionate share of the net earnings or loss of the investee, which is reported in share of gain from equity method investments in the consolidated statements of operations and comprehensive income. The dividends received, if any, from these joint ventures reduce the carrying amount of our investment.
Partial impairment of Investment in PDP
The Tenerife sale represents a significant change in circumstances that could impact the fair value of the Company’s remaining investment in PDP. Accordingly, the Company performed an impairment evaluation of its equity method investment in PDP to determine whether the remaining carrying amount of the investment exceeds its fair value.
The Company evaluated its remaining equity investment in PDP for impairment as of June 30, 2025 and determined that it was other-than-temporarily impaired. The Company estimated the fair value of its investment in PDP using the direct capitalization method of the income approach. The Company used the property's estimated net operating income, yearly growth rate, capital expenditure reserves and a capitalization rate as the primary significant unobservable inputs (Level 3). The estimated fair value is based upon assumptions that Management believes are reasonable, and the impact of variations in these estimates or the underlying assumptions could be material. The fair value of the Company’s investment in PDP was determined to be $27.1 million. For the year ended December 31, 2025, the Company recognized an other-than-temporary impairment charge of $5.3 million, which is recorded in share of gain from equity method investments in the consolidated statements of operations and comprehensive income.
Partial impairment of Investment in Karnival
The winding up process of the joint venture represents a significant change in circumstances that could impact the fair value of the Company’s remaining investment in Karnival. Accordingly, the Company performed an impairment evaluation of its equity method investment in Karnival to determine whether the remaining carrying amount of the investment exceeds its fair value.
The Company evaluated its remaining equity investment in Karnival for impairment as of September 30, 2025 and determined that it was other-than-temporarily impaired. The Company estimated the fair value of its investment in Karnival using the liquidation value of cash and cash equivalents less estimated costs to liquidate valuation inputs (Level 2). The estimated fair value is based upon assumptions that Management believes are reasonable, and the impact of variations in these estimates or the underlying assumptions could be material. The fair value of the Company’s investment in Karnival was determined to be $4.2 million. For the year ended December 31, 2025, the Company recognized an other-than-temporary impairment charge of $3.0 million, which is recorded in share of (loss) gain from equity method investments in the consolidated statements of operations and comprehensive income.
69
Warrant Liabilities
The Company accounts for warrants assumed in connection with the Business Combination (see "Note 1 – Description of business and basis of presentation") in accordance with the guidance contained in ASC 815, Derivatives and Hedging (“ASC 815”), under which the warrants that do not meet the criteria for equity treatment are recorded as liabilities. Prior to January 14, 2025, the Company classified the warrants as liabilities at their fair value and adjusted the warrants to fair value at the end of each reporting period. The Company remeasured the fair value of the warrants based on the quoted market price of the warrants. The liability was subject to re-measurement at each Balance Sheet date until exercised, and any change in fair value is recognized in the consolidated statements of operations and comprehensive income.
The Warrant agreement was amended effective January 14, 2025. The amendment provides for the mandatory exchange of the Warrants for shares of Class A Common Stock at an exchange ratio of 0.25 shares of Class A Common Stock per Warrant, on October 6, 2028. The Warrants will not be exercisable and the holders of the Warrants will have no further rights except to receive shares of Class A Common Stock on October 6, 2028.
New and Recently Adopted Accounting Pronouncements
See "Note 2 – Summary of significant accounting policies" to our audited consolidated financial statements for more information about recent accounting pronouncements, the timing of their adoption and our assessment, to the extent we made one, of their potential impact on our financial condition and results of operations.
JOBS Act Accounting Election
The Company is an “emerging growth company” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a registration statement under the Securities Act declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards.
Section 107 of the JOBS Act allows emerging growth companies to take advantage of the extended transition period for complying with new or revised accounting standards. Under Section 107, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. Any decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable. The Company has elected to use the extended transition period available under the JOBS Act, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s consolidated financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
The Company will remain an emerging growth company until the earlier of: (1) the last day of the fiscal year (a) following the fifth anniversary of the effectiveness of the Company’s registration statement on Form S-4 in connection with the Business Combination, (b) in which the Company has total annual revenue of at least $1,235,000,000, or (c) in which the Company is deemed to be a large accelerated filer, which means the market value of its common equity that is held by non-affiliates exceeds $700.0 million as of the end of the prior fiscal year’s second fiscal quarter; and (2) the date on which the Company has issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.
Smaller Reporting Company
Additionally, the Company is a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K. Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. The Company will remain a smaller reporting company until the last day of the fiscal year in which (i) the market value of the shares of Class A Common Stock held by non-affiliates exceeds $250.0 million as of the prior June 30, and (ii) the Company’s annual revenue exceeds $100.0 million during such completed fiscal year and the market value of the shares of Class A Common Stock held by non-affiliates exceeds $700.0 million as of the prior June 30. To the extent the Company takes advantage of such reduced disclosure obligations, it may also make comparison of the Company’s financial statements with other public companies difficult or impossible.