Playboy rallies 15% as 2Q results indicate licensing model starting to pay off

Playboy, publisher of the once-popular magazine of the same name, surged more than 15% on the Nasdaq on Tuesday, its market capitalization rising to $162.9 million. A strategic pivot toward licensing and lingerie sales has helped the company return to profitability.

Shares of Playboy, which has long struggled with losses, gained more than 15% on Tuesday. The company returned to profitability in the second quarter, reporting net income of around $200,000 versus a net loss of $7.7 million in the same period of 2025. Adjusted EBITDA doubled year over year to $7 million. It has now been positive for six consecutive quarters, Playboy CEO Ben Kohn said. The second-quarter top line rose 11% year over year to $31.2 million.

The company attributed the improvement to its new strategy, which includes actively promoting the brand and cutting costs, according to the earnings call, as reported by Investing.com.

Playboy was down around 2.4% in premarket trading on Wednesday as of this writing.

Playboy has evolved from a print-focused media empire into what is essentially a licensing company with a growing lingerie retail arm, notes Seeking Alpha. It now makes money by selling other companies the right to use its brand and Rabbit Head logo.

For example, Playboy has an agreement licensing its brand to Thailand’s Thai Nippon Rubber Industry Public for the manufacture of condoms and lubricants, as well as an agreement with Sunny Cusco covering the production and sale of apparel. In February, Playboy struck a $122 million deal to sell half of its China business to local operator United Trademark Group as part of an effort to expand in the Asian market.

The primary driver of the second-quarter revenue growth, however, was the continued strong performance of lingerie brand Honey Birdette, the company said. Playboy acquired the brand in 2021 for $330 million.

Playboy was founded by Hugh Hefner in 1953. The company initially published a magazine, aimed at a sophisticated male audience, before expanding into video and branded merchandise.

Playboy went public in 1971 and reached a peak market capitalization of $671 million in 1999. Its fortunes subsequently declined as the company lost advertising revenue and the magazine became unprofitable. Hefner and his partners took the company private in 2011, and his family exited the business in 2018, the year after the founder’s death.

Playboy returned to the stock market through a SPAC deal in 2021. The business struggled again, however: revenue declined and, in 2024, was lower than the company’s debt. In October 2024, Playboy founder’s son Cooper Hefner sought to buy the Playboy brand and split up the business, but the board rejected the proposal, saying it was not in shareholders’ best interests.

Playboy shares have fallen around 28% year to date. Nevertheless, two Wall Street analysts have “buy” calls on the stock versus one “hold” rating. The average target price is $2.83 per share, implying the stock has the potential to more than double from its Tuesday closing price.