Falcon's Beyond Global Reports $149.5 Million Net Loss for 2024, Revenue Declines to $6.7 Million

Falcon's Beyond Global, Inc. reported a net loss of $149.5 million for the year ended December 31, 2024, compared to a net loss of $430.9 million for the year ended December 31, 2023. Revenue decreased by $11.5 million to $6.7 million in 2024, primarily due to the deconsolidation of Falcon's Creative Group (FCG) on July 27, 2023, and a decrease in digital media services following the closure of the Katmandu Park DR in March 2024. The company's operating loss was $15.9 million in 2024, down from $57.2 million in 2023. Significant changes in the fair value of earnout liabilities and warrant liabilities also impacted the year-over-year comparison.

The company's financial performance was significantly affected by the deconsolidation of FCG, which had previously generated the majority of the company's revenue. Following a $30 million strategic investment from Qiddiya Investment Company (QIC) in July 2023, FCG was deconsolidated, and its results are now reported as part of the "Share of loss from equity method investments." The company also implemented an asset-efficient strategy in its Falcon's Beyond Destinations (FBD) division, resulting in the closure of the Katmandu Park DR and a reduction in capital expenditures. In its Falcon's Beyond Brands (FBB) division, the company secured a licensing agreement with The Hershey Company to develop Hershey-branded location-based entertainment experiences.

Strategic developments during the year included the aforementioned QIC investment in FCG, leading to the deconsolidation and a consultancy services agreement with QIC for up to $83.1 million in potential contract value. FCG also expanded its operations, moving to a larger building in Orlando to accommodate its growing workforce of approximately 210 employees. The company also established a long-term incentive plan for Falcon's Opco and its subsidiaries. In the FBD division, the company is pursuing an asset-efficient strategy, partnering with developers like Raging Power Limited to develop themed attractions in Hong Kong and China.

Operational developments included the closure of the Katmandu Park DR in March 2024 due to financial, operational, and infrastructure challenges, resulting in a fixed asset impairment of $46.7 million for Sierra Parima. The company also announced a non-binding letter of intent to potentially dispose of certain non-core assets for approximately $30 million in proceeds. A stock dividend of 0.2 shares of Class A Common Stock per share was declared, and earnout shares were forfeited, resulting in a reclassification of a significant liability into equity. The company also amended its warrant agreement, mandating an exchange of warrants for Class A Common Stock in 2028.

The company's 10-K filing highlights substantial doubt about its ability to continue as a going concern due to recurring net losses, negative cash flows, and a working capital deficiency. The company acknowledges the need for additional capital to fund operations and meet obligations, stating that such capital may not be available on acceptable terms. The company's outlook is contingent upon securing additional financing, successfully implementing its strategic initiatives, and achieving revenue growth across its three business divisions.