Falcon's Beyond Global, Inc.

Falcon's Beyond Global, Inc. operates as a visionary entertainment and technology enterprise focused on designing, developing, engineering, delivering, and commercializing immersive physical and digital experiences globally ¹. The company's business model is built on an integrated experience platform that combines creative development, proprietary technologies, advanced engineering, intellectual property (IP), and operational execution to enable repeatable creation, deployment, and scaling of entertainment experiences across various formats and locations ¹. The company generates revenue through a mix of project-based services, system sales, and potential future licensing arrangements, serving leading brands, developers, and destination operators worldwide, as well as its own portfolio of entertainment and technology concepts ¹.

The company operates through three complementary business divisions: Falcon's Creative Group (FCG), Falcon's Beyond Brands (FBB), and Falcon's Beyond Destinations (FBD) ¹. 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 ¹. 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 ¹. FBD 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 ¹. FCG and Producciones de Parques, S.L. (PDP) are currently accounted for as equity method investments and represent a substantial portion of the Company’s operations ¹.

For the year ended December 31, 2025, total revenue was $14.896 million ², an increase from $6.745 million in the prior year ². Services revenue, including shared services, destinations operations services, and attraction services, totaled $12.055 million ³, while product sales contributed $2.841 million ³. Gross profit, calculated as total revenue less project design and build expense and cost of product sales, was $10.944 million ². Operating expenses amounted to $28.304 million ⁴, leading to a loss from operations of $13.408 million ⁵. The company reported a net income of $6.312 million ⁶ for the year ended December 31, 2025, a significant decrease from $149.481 million in the prior year ⁶. Diluted EPS was $0.03 ⁷ for 2025, down from $1.41 ⁷ in 2024. Cash and cash equivalents stood at $1.868 million ⁸ as of December 31, 2025, with total liabilities of $42.881 million ⁹. The company had a working capital deficiency of $18.1 million ¹⁰ as of December 31, 2025.

Comparing 2025 to 2024, total revenue increased by $8.151 million ². Services revenue grew by $5.310 million ³, primarily driven by new attractions contracts ¹¹. Product sales, which were $0 in 2024, contributed $2.841 million ³ in 2025. Project design and build expense increased by $2.373 million ², and cost of product sales increased by $1.579 million ², both driven by new attractions service and sales contracts ¹², ¹³. Selling, general and administrative expenses increased by $3.088 million ² to $25.496 million ², mainly due to 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, partially offset by a $2.3 million decrease in payroll, payroll taxes and benefits, a $2.3 million decrease in audit and professional services fees, and a $0.6 million credit from a network intrusion claim settlement ¹⁴. Share of gain (loss) from equity method investments increased by $20.080 million ² to a gain of $16.959 million ², primarily due to a $30.0 million gain from the Tenerife Sale by PDP, partially offset by impairment charges of $5.332 million ² for PDP and $3.005 million ² for Karnival ¹⁵. Interest expense increased by $1.486 million ² to $3.384 million ² due to higher interest rates on short and long-term debt ¹⁶. The change in fair value of warrant liabilities resulted in a gain of $2.886 million ² in 2025, compared to a loss of $836 thousand ² in 2024, driven by a decrease in market value of warrants through January 14, 2025, when they were reclassified to equity ¹⁷. The change in fair value of earnout liabilities was $0 ² in 2025, compared to a gain of $172.270 million ² in 2024, as all earnout shares were reclassified to equity ¹⁸. Foreign exchange transaction gain increased by $3.224 million ² to a gain of $2.147 million ², mainly due to the weakening of the U.S. dollar against the Euro ¹⁹. A gain on bargain purchase of OES Acquisition of $1.098 million ² was recognized in 2025 ²⁰.

During 2025 and early 2026, the company undertook several strategic and operational actions. FBB completed the asset purchase and operational integration of Oceaneering Entertainment Systems (OES) on May 15, 2025 ²¹, acquiring proprietary technologies, patents, engineering, and manufacturing expertise, and a 106,000+ square foot facility ²¹. This acquisition enhances the company's ability to deliver end-to-end solutions for attraction and show systems ²¹. In May 2025, the joint venture PDP completed the disposition of the Sol Tenerife Hotel, generating aggregate consideration of €71 million, from which PDP distributed approximately $27 million ²² to the company ²³. In October 2025, the company and Raging Power Limited agreed to terminate the Karnival joint venture due to protracted delays ²⁴. The company also mutually agreed to terminate its licensing agreement with The Hershey Company in 2025 ²⁵. On December 12, 2025, the first stock-price-based earnout trigger was met, resulting in 15,000,000 ²⁶ earnout shares and units being earned, released, and delivered ²⁷. On September 8, 2025, the company entered into a Debt Exchange Agreement with Infinite Acquisitions, exchanging approximately $20.5 million ²⁸ of indebtedness for 4,092,326 ²⁹ shares of Series B Preferred Stock ³⁰.

The company's financial results and liquidity needs are expected to vary from quarter-to-quarter or year-to-year, influenced by the timing of client agreements and disbursements, completion of current projects, contributions to and distributions from existing and new joint ventures, and FBB's strategic partnerships or alliances ³¹. The company's success is also substantially dependent on its ability to accurately predict and adapt to changing consumer tastes and preferences, which impact revenues from affiliate fees, licensing fees and royalties, theme park admissions, hotel room charges, and sales of other consumer products and services ³².

A major growth area for the company is the continued expansion of FCG and FBB, coupled with a more asset-efficient operating approach within FBD ³³. FCG has expanded its engagement in the Kingdom of Saudi Arabia, securing a concept refinement engagement with QIC in October 2025 ³⁴ and completing creative guardian services for Aquarabia Qiddiya City in February 2026 ³⁵. FCG is also providing design, technology, and construction-related services for the first-ever Dragon Ball theme park at Qiddiya City ³⁶ and content and hardware consulting services for 3D Gaming Arenas in Qiddiya's Gaming & Esports District ³⁷. In August 2025, FCG was appointed as Creative and Content Advisor for The Mukaab in Riyadh, positioning Falcon's in a "Lead Creative Role" ³⁸. These engagements reflect QIC's ongoing activation of FCG's creative services and the depth of the relationship ³⁹.

Another significant growth area is the expansion of FBB through Falcon's Attractions, which designs, engineers, manufactures, and sells proprietary and customized ride systems, attraction hardware, and related technologies ⁴⁰. The acquisition of Oceaneering Entertainment Systems (OES) on May 15, 2025, significantly enhanced FBB's capabilities in this area, providing proprietary technologies, patents, engineering, and manufacturing expertise, and a 106,000+ square foot facility for research, development, testing, and integration ⁴¹. This acquisition is expected to enhance the company's ability to deliver end-to-end solutions through engineering, production, and installation ⁴¹. FBB also serves as the steward of the company's IP portfolio, including 142 ⁴² issued and 64 ⁴² pending patents, and aims to support the development, licensing, and commercialization of proprietary and third-party IP and original entertainment franchises ⁴³.

Operationally, the company expects its costs to increase over time, and losses may continue, as it plans to invest additional funds in expanding its business and sales and marketing activities ⁴⁴. Additional general and administrative expenses are also anticipated as a result of operating as a public company ⁴⁵. The company is implementing measures to improve its internal control over financial reporting and remediate identified material weaknesses, including designing and implementing systems and controls for effective and timely review of period-end close procedures and accounting review processes, engaging a third-party global consulting firm, and hiring additional qualified accounting and financial reporting personnel ⁴⁶.

For capital allocation, 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 ⁴⁷. During 2025, the company issued $32.5 million ⁴⁸ of Series B Preferred Stock for $11.8 million ⁴⁹ in cash and the exchange of $20.7 million ⁵⁰ of outstanding debt ⁵¹. The $11.8 million ⁵² in cash was utilized for the expansion of the attractions division ⁵³. The company received a $27.0 million ⁵⁴ cash dividend distribution from PDP in 2025, which was used to fund ongoing operations ⁵⁵. The company had approximately $1.9 million ⁵⁶ of cash and $15.5 million ⁵⁷ available for borrowing under its lines of credit as of December 31, 2025 ⁵⁸. On November 10, 2025, a new $15.0 million ⁵⁹ line of credit agreement was entered into, and an existing line of credit was amended to reduce borrowing capacity to $5.5 million ⁶⁰, collectively increasing cash available for borrowing by $5.5 million ⁶¹. The company's Series B Preferred Stock has an annual cumulative dividend rate of 11% ⁶² of the $5.00 ⁶³ per share liquidation preference, accruing quarterly, with accrued dividends paid in Series B Preferred Stock prior to January 1, 2027, and in cash thereafter ⁶⁴. The Board currently intends to retain all earnings for business operations and does not anticipate declaring cash dividends on common stock in the foreseeable future ⁶⁵.

The company faces structural headwinds and execution risks, particularly regarding its liquidity resources, which raise substantial doubt about its ability to continue as a going concern ⁶⁶. As of December 31, 2025, the company had a working capital deficiency of $18.1 million ⁶⁷, including $0.6 million ⁶⁸ of debt that matured on May 16, 2025, and $2.6 million ⁶⁹ of debt coming due in the next 12 months ⁷⁰. The company does not currently have sufficient cash or liquidity to pay all liabilities that are owed or maturing in the next twelve months and fund ongoing operations ⁷¹. The company is reliant on stockholders and third parties for additional financing through debt or equity raises, and from distributions from the liquidation of non-core equity method investments and assets ⁷². The FBD business is in transition, and the repositioning and rebranding of FBD projects are subject to timing, budgeting, and other risks ⁷³. The growth plans for FCG and FBB may take longer than anticipated or may not be successful ⁷⁴. A significant portion of FCG's revenue is derived from two large clients, QIC and NMDC, and any loss or decrease in services to these clients could harm FCG's and the company's results of operations ⁷⁵. The company is also subject to contractual restrictions with QIC, including consent, priority, and preemptive rights, which may affect its ability to access public markets and expand its business ⁷⁶.

Geographic, regulatory, and macro factors also pose constraints. The company operates in international regions that experience varying degrees of social, political, military, and economic instability, which could adversely affect operations, supply chain, workforce, or the ability of customers and partners to conduct business ⁷⁷. A significant portion of FCG's planned theme park projects are concentrated in the Kingdom of Saudi Arabia, exposing the company to risks related to complying with Saudi Arabian laws and regulations, protecting intellectual property rights, and geopolitical instability ⁷⁸. Changes in foreign trade policies and tariff structures could increase costs, delay development timelines, disrupt supply chains, or limit market access ⁷⁹. Exchange rate fluctuations, particularly if the Saudi Riyal's peg to the U.S. dollar changes, could negatively affect financial results ⁸⁰.

The most material risks include the company's current liquidity resources raising substantial doubt about its ability to continue as a going concern, with a working capital deficiency of $18.1 million ¹⁰ as of December 31, 2025, and $0.6 million ⁶⁸ of debt matured on May 16, 2025, and $2.6 million ⁶⁹ of debt due in the next 12 months ⁷⁰. The company is highly reliant on additional capital or financing raises, or liquidation of non-core assets, to fund operations ⁷². Operational risks include the FBD business being in transition, with repositioning and rebranding of projects subject to timing and budgeting risks, and the potential for growth plans in FCG and FBB to take longer or be unsuccessful ⁷³, ⁷⁴. Customer concentration is a significant risk, as 60% ⁸¹ and 39% ⁸¹ of FCG's revenue for the year ended December 31, 2025, came from QIC and NMDC, respectively, with agreements that can be terminated with short notice ⁸². Contractual restrictions with QIC, including consent, priority, and preemptive rights, may limit the company's ability to access public markets and expand ⁷⁶. Geopolitical risks are material, particularly from operating in the Kingdom of Saudi Arabia, where a significant portion of FCG's projects are concentrated, exposing the company to changes in laws, intellectual property enforcement challenges, and regional instability ⁷⁸. Cybersecurity threats are evolving, and despite measures taken, the risk of unauthorized access, data compromise, and business disruption remains, as evidenced by a May 2023 network intrusion that incurred $0.3 million ⁸³ in one-time costs ⁸⁴. The company has also identified material weaknesses in its internal controls over financial reporting related to risk assessment, control activities, monitoring, control environment, and information and communication ⁸⁵.

Management's message to shareholders emphasizes a strategic and operational alignment of the business portfolio, focusing on the continued growth of FCG and FBB, alongside a more asset-efficient operating approach within FBD ³³. They highlight the expansion of FCG's engagements in the Kingdom of Saudi Arabia, including a concept refinement engagement with QIC in October 2025 ³⁴ and creative guardian services for Aquarabia Qiddiya City completed in February 2026 ³⁵, as well as design and technology services for the Dragon Ball theme park ³⁶ and advisory for The Mukaab ³⁸. Management also points to the May 15, 2025, acquisition of Oceaneering Entertainment Systems (OES) as a key development, enhancing FBB's capabilities in attraction systems design and manufacturing ⁴¹. Despite these strategic initiatives, management explicitly states that the company incurred a loss from operations of $13.4 million ⁵ and negative cash flows from operating activities of $26.0 million ⁸⁶ for the year ended December 31, 2025, leading to the conclusion that substantial doubt exists about its ability to continue as a going concern ⁶⁶. They acknowledge a working capital deficiency of $18.1 million ¹⁰ as of December 31, 2025, and the need for additional capital or financing raises, or distributions from the liquidation of non-core equity method investments and assets, to fund working capital needs, contractual commitments, and expansion plans ⁷².