FNKO

Funko delivered a positive second quarter, with management attributing the results to broad-based growth across geographies and product categories. CEO Josh Simon emphasized the impact of the company’s 'make culture pop' strategy, which is now transitioning from concept to tangible execution. Notably, core collectibles experienced robust demand, and the European market stood out with nearly 20% sales growth. Management also highlighted the improved efficiency in SKU management, particularly within Loungefly, as a key contributor to the company’s operational improvement. CFO Yves Le Pendeven cited both higher SKU productivity and improved gross margin performance, underscoring a disciplined focus on cost structure and inventory health. Is now the time to buy FNKO? Find out in our full research report (it’s free). Revenue: $207.7 million vs analyst estimates of $200.2 million (7.4% year-on-year growth, 3.7% beat) Adjusted EPS: $0.26 vs analyst estimates of -$0.19 (significant beat) Adjusted EBITDA: $40.9 million vs analyst estimates of $7.60 million (19.7% margin, significant beat) EBITDA guidance for the full year is $105 million at the midpoint, above analyst estimates of $77.6 million Operating Margin: 10.7%, up from -18% in the same quarter last year Market Capitalization: $331.5 million While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Eric Christian Wold (Texas Capital): Asked about wholesale order demand for Q3 and the holiday season. CFO Yves Le Pendeven replied that order visibility has normalized, with healthy inventory and strong point-of-sale trends indicating solid underlying demand. Eric Christian Wold (Texas Capital): Inquired about shelf space allocation among major retail partners. CEO Josh Simon highlighted incremental displays at Smith’s and Walmart, and noted branded activations with Sony and Disney are boosting in-store visibility. Keegan Tierney Cox (DA Davidson): Asked which franchises drove strongest demand and the outlook for the second half. Simon responded that momentum is broad-based, with anime, gaming, and key film releases like Spider-Man: Brand New Day and Avengers: Doomsday expected to sustain growth. Keegan Tierney Cox (DA Davidson): Questioned assumptions behind guidance and risks from rising input costs. Le Pendeven said upside depends on continued sell-through and consumer resilience, while tariffs and freight costs could create downside pressure. Stephen Laszczyk (Goldman Sachs): Queried the revenue potential of new formats like Pop! Mystery and Bitty Pop! Simon emphasized platform potential across IPs and regions, with initial consumer response and licensor support encouraging but too early to quantify full impact. In upcoming quarters, the StockStory team will be watching (1) how quickly new formats like Pop! Mystery gain traction and drive repeat sales, (2) whether ongoing retail expansion—including experiential activations and shelf space gains—translates to broader market penetration, and (3) the resilience of core collectibles and Loungefly productivity improvements. Developments regarding tariffs and input costs will also be critical signposts for margin sustainability. Funko currently trades at $6.00, up from $5.28 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free for active Edge members). WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses. But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.

Image source: The Motley Fool. Thursday, Aug. 6, 2026 at 4:30 p.m. ET Executive - Josh Simon Executive - Yves Le Pendeven Chief Product Officer - Husnal Shah Executive - Nik Rupp Executive - Andrew David Oddie Andre: Hi, everyone. I am here with Josh and Yves, and we are here at San Diego Comic-Con. Like the perfect place to have this discussion about Funko and his business because so much of Funko is here and has been here for the past 20 years. Josh Simon: Yeah. I mean, I often think there would not be the Funko that exists today without Comic Con. So it is a massive highlight of the year for us. We are excited you were able to join us and Yeah. Excited to take a little bit of a walk around in a bit here. Andre: Well, I have been your booth several times, several years. Now it makes sense to come together like this. But before we get to nitty gritty, that is something I want to talk about because you have been here for 20 years. The booth has grown. The product has grown. The fandom has grown. Just what is that general feeling? Does this feel like a celebration when you come to San Diego every year? Josh Simon: It does. I mean, the you will see the folks who work in our booth are largely fans from all over the world. They were, like, taking time off of work and out of their lives to come in, hang out here and help interact. And it is also a great way for just these community of fans from all across the country and the world to come in, celebrate Funko, experience the brand, buy some incredibly coveted limited edition products. I mean, it is flattering and humbling and wild to see the lines, at our booth for people who are here to get the exclusive product you can only get here at Comic Con. Andre: Absolutely. Well, it is obviously great to see this fandom that happens here. I have seen those exclusive get off those shelves. So I know some finances happen here as well. So let's get into that. How has this quarter been for Funko? Yves Le Pendeven: Yep. Numbers have been great, and it is really a reflection of our make culture pop strategy gaining traction. So we are really pleased to report sales were up 7% in the quarter, and that is building on the growth from Q1. So for the first half of the year, we were up 6%. And the good news is it was not really 1 product or region or IP. It was really broad based. Right? So in The US, we were up 3%. In Europe, we were up 19%. And then from a product perspective, our core collectibles were up 9%. And although Loungefly was down 2%, it was an improving trend from what we saw in Q1, and, we are really pleased with the better, SKU productivity. Andre: Very nice. I am going to say that increase in The US about 0.045 That might just be me. Just so you know. So, yeah. But, no, that is great to hear. So, Josh, what are some highlights of this quarter with Funko? Josh Simon: Well, I mean, Yves mentioned the momentum that we are seeing, and I think a big part of that is we have talked a lot about the make culture pop strategy, and I think we are really seeing that go from strategy to execution and take form. it is really about culture sensing and creating demand across the entertainment and pop culture landscape. Creativity, giving it form and products, and then commerce putting it in fans' hands all over the world. Yeah. You know, on the culture side, it is really about how we get faster at sensing what is happening and then turning that into products. The last 2 quick things I will mention is creativity on the product side. We are gonna take a walk around in a little bit and you are gonna get to see our brand new Pop! Mystery platform. And, you know, that is really about taking what people love about pop and just turning it into a broader experience, you know, and a new product format. And so excited to show you how that is about to materialize. You know, it is great to sort of see that make culture pop strategy coming together and really moving from idea to execution in the quarter. Andre: Yeah. And it is interesting because it seems like you obviously, there are some franchises you are ready and prepared for, like Avengers: Doomsday, for example, or something like that. But then you have these ones you got to kind of predict the popularity. And then you have an obsession like last year with K-Pop Demon Hunters where it is boom, this explosion out of nowhere, how do we jump on that as fast as possible? So is that a constant turning strategy between predicting versus following up? Josh Simon: Or And I think because we cannot predict those things, what we really have to do is build this repeatable offense. So having sort of upstream teams in place that are really ready very quickly to make the licensing deals. The capacity internally to design the products and manufacture them and get them to shelves, and then those retail relationships either with wholesale partners or our own D2C channel to get those out to consumers quickly. Yeah. And I think the magic for us is that we have really sort of honed that engine of, you know, sensing demand turning it into products, and getting into our fans' hands in a really repeatable way. And we are starting to see that happen more and more. Andre: You only have to do that with movies, television, sports, anime. Only. Josh Simon: Exactly. A video game. Exactly. Andre: Exactly. Josh Simon: Culture in general. Yeah. Andre: And maybe, the raccoon that is taking the world historical right now. Josh Simon: Well, should we go take a look at I think we should. I am very excited to see what you have here. On the show for you. Great. Andre: Let's go check it out after you. Alright. Let's check out what is over here. Josh Simon: So this is, Husnal, our chief product officer. Andre: Hi, Husnal. Nice to meet you. Pleasure. Josh Simon: Alright. Andre: So, obviously, got some great products here, but there is special 1 here this Oh, yes. Top mystery. Can you tell us about that? Husnal Shah: Yes. At San Diego Comic-Con over here, we are launching our Pop! Mystery line. Andre: Hey! Yes. Husnal Shah: And I see this is the Flora pack right here? Andre: This is the flora pack. Okay. Husnal Shah: So tell us about flora. Flora is a plant line that we started off as a, you know, a regular standard crop, and now we have made it into a mystery collection. Piece. And it is absolutely fabulous. I love that. And it seems here that you can get 1 of 6 possible ones in common So each drug has 6 commons with their credit card, and then we have the Chase as well as the global 1-of-1 Chase, which is which is what differentiates us from the market and is extremely exciting. Andre: Did you say 1-of-1? Husnal Shah: 1 of 1 of these out there. 1 of these, and imagine if you are a fan with the 1. Andre: Oh my gosh. Yes. that is wow. Husnal Shah: Well, got to see which 1 is inside. Right? Andre: Open it. Husnal Shah: Okay. Andre: What if this is the worldwide chase? I mean, wow. What if Alright. Let's open this 1. Husnal Shah: You got it. Let's see. Andre: Oh, it is pretty. I like that. Oh, is that tula on the way? Oh, the tula is so cute. Cute. Not the 1-on-1, but it is 1-on-1, but I still like it. Look. Husnal Shah: I think is great, and we are obviously revealing this here at Comic Con, but there is other sort of licensing partners. This, as you mentioned, is original IP that we have created. Yeah. And then, of course, we are also launching with some of the biggest IP in the world. Oh. Per chain. it is with 1 Piece. As well as with the Warner Brothers with the models line. Andre: Speaking of Warner Brothers horror, 1 Piece and Flora, they have a little bit of an activation going over here. Right? Husnal Shah: And we are giving away the in that activation, so you might want to go check it out. Andre: I think I do want to check it out. Let's go do it. Let's see what this is here. Oh, got a knock. Give it a knock. Yeah. Let's Flora. Flora. Flora. Oh. Oh. Hey! Nik Rupp: Hi, Andre. This is Nick. Andre: How are you doing? How are you, Brad? Nice to meet you. Can I come in? Oh my gosh. Wow. This is beautiful. Nik Rupp: Welcome to the Pop! Flora greenhouse. Andre: Tell me about what it is like to create experiences for people at San Diego Comic Con when it comes to Funko. Obviously, Getting the pops, but you are giving a more immersive experience to them, right? Nik Rupp: 100%. You know, this is such a special opportunity to be at San Diego Comic-Con. We really consider this sort of our World Cup, our Super Bowl all in 1. Andre: Yeah. Nik Rupp: It just provides us an amazing opportunity to be on the ground with our fans as part of the launch of Pop! Mystery we created these mystery game rooms This is the Pop! Flora Greenhouse. And we really wanted to bring our own IP and our fandom to life. This is not just a banner ad. This is not a shelf display. This is a greenhouse that you can stand into, experience this world yourself. Andre: I really like that because it almost, like, brings more into the fandom when you are able to some kind of experience along with the product. 100%. Now let's see some more stuff here. Alright. Nik Rupp: Thank you for stopping by. Yes. This is really cool. We also have a 1 Piece 1 here and a WBR and K-Pop Demon Hunters. Andre: Thanks again, Nick. That was really cool. Nik Rupp: Good. Good. Andre: Yeah. Josh Simon: Alright. Andre: Let's take a look around this way. Josh Simon: Okay. Andre: You know, obviously, we talked about this earlier, but you know, selling a lot of exclusive products that you can only get here. Josh Simon: Yes. Obviously, kind of massive lines people, which is, like, super humbling. And look, I think what you experience in saw over in the mystery room is sort of our first step into doing something that is more experiential. Yes. And then 1 of, like, the most compelling experiences that, you know, we have become known for both online and soon rolling out into some wholesale partners is the Pop! Yourself experience. I have been able to do that at Funko Hollywood. You can do it at the Hollywood store. A couple stores we will announce soon where you will be able to start doing it as well. You can do it at, the Inner Miami Stadium with the football club there. Andre: Okay. Josh Simon: And then, of course, here celebrating the upcoming launch of Spider-Man: Brand New Day, we have a great Pop! Yourself experience as well for folks here at Comic Con. Andre: You tell me I can pop myself a Spider Man right now? Josh Simon: You sure can. A limited edition. You can only you can only get it here. Okay. Obviously, it is sort of a version of our kiosk experience. Where you can pick your body type, your skin tone, your hair, you know, your clothes, and like I said, some very specific Spidey outfits, that you can only get here at Comic Con. Andre: Alright. You want to give it a try? Josh Simon: I have to pop myself here. Andre: Yep. Okay. Let me start building. You said this is an exclusive Spider-Man: Brand New Day Pop! Right? Josh Simon: Exclusive only here to Comic Con. Andre: Alright. Let me pick my body type here. Nice. Okay. Let's go with some skin tone. Love that. Josh Simon: Yeah. Andre: I get to really customize it here. Your lashes. Yes. Josh Simon: Your hair. Lots of different hairstyles. Andre: Oh, there we go. This looks like me. I like that. I like that. Very nice. Okay. Do the glasses. Glad you have some glasses options. Josh Simon: it is your trademark. Yeah. Andre: There we go. Okay. Yes. Josh Simon: And then some exclusive accessories as well. Andre: We got a VIP badge. Perfect for Spider Man going to Comic Con. Josh Simon: Alright. You can hold the mask in his Yep. Andre: And then we also got some web shooting here. Alright. Let me go with that mask. And then I can pick another 1, right? Josh Simon: Yeah. Yeah. Andre: Let's definitely do the webs. Very nice. what is really cool, I see you have a little hulk here. Is that also exclusive to here? Josh Simon: It comes with a Bitty Pop! Hulk. Andre: Oh, that is awesome. Alright. So I get a Bitty Pop Hulk with my Spider Man outfit here. Alright. Gotta package that pop. Top. There you go. Look at that 1. Wow. it is me in the Spider Man outfit. there is the web shooting. there is the mask. there is the exclusive Hulk Bitty Pop! in there. Oh, that is great. And that is a really cool experience to come here if you are excited for Spider-Man: Brand New Day, you are excited for Pop! Yourself, and you get to have this experience right here at San Diego Comic-Con. Josh Simon: And, obviously, the ability to create these sort of geo specific experiences is something that we will start to roll out, and test later this year with some retail partners. Andre: Oh. Josh Simon: So you can imagine something like this starting to kind of pop up in other parts of the world and really create something unique and specific to a location. Andre: Oh, that is really great. Because I was thinking you could do this at the Funko stores, now you are saying there might be other stores and places around the world to do this too? Josh Simon: Yeah. Andre: Alright. Stay tuned for that. Josh Simon: Alright. Andre: Let's go. Let's check out the next part of the booth here. Alright. Alright. Josh Simon: Let's go by the, the Mondo booth. Andre: Oh, yes. Josh Simon: Do not know. As you know, like, Mondo is sort of our premium collector toy line. Yes. These guys are amazing artists. I have got I have got some fair figures in my home right now. Okay. Great. And we are going to kind of cut through crowds here. Hey! How's it going, man? Good to see you. Yeah. Yeah. Okay. Analyst: I am a huge Ninja Turtles fan, so I am very excited about what is going on here. Yes. Andrew David Oddie: This is the TMNT Mondoverse where our partnership with Paramount has given us permission and access to create our own what if scenario sequel story to the nineties film. We are bringing in all the characters and whimsy and wildness of the comics, video games, and cartoons. Into this real world, gritty, like a man in a suit vibe that the movies have. Paramount has given us the blessing to reimagine all of the character history. So for example, we are introducing new versions of the punk frogs. As kid brothers that Mikey finds in the sewers. Nice. And that is the kind of story expansion that we are able to do with our Mondoverse, our Sam Monks. I was curious about that because you have Funko and Mondo under the same roof, but, obviously, you are doing, like, different types of products. Have you seen this interesting transition in any of way of from Funko to Mondo as far as, like, getting figures more detailed? Or Oh, well, it is just it is like we have the artist in house to do all the technique. Right? Right. What we get from Funko is the support, the credibility, and the doors being blasted open for us. To get licenses and access and relationships that we otherwise might not be able to get. Yes. So it is really an amazing pairing that creates another, like, collectible through line. So you might have been collecting Funko Pops for a long time, and you have a beautiful collection of them, and you are just like, I am a turtles guy. I got all the turtles pops. But I also want a realistic 6 scale. Yeah. So you can stay in house at Funko through Mondo have, like, a really diverse collection. Oh, thank you for stopping by, man. We are so proud of it. cannot wait to show you guys more. Analyst: This is awesome, man. Oh my gosh. it is so much nostalgia here too, man. Real Ghostbusters match the universe. Street Sharks. Yes. Alright. Josh Simon: 1 more. 1 more stop. 1 more stop on this tour. We have seen the booths. We have seen the fans having a wonderful time buying the pops and enjoying the experiences. Andre: This feels like a good out to go on in San Diego. Josh Simon: It does. And we are we are in the big, you know, pop mystery box. I think the mystery is gonna be where we end up. After this after this box closes. But for now, should we go and take some investment questions? I think we should. Thank you so much, bro. Yeah. You ruined the mystery. Oh, I just remembered. They told me that 1 exclusive IP is coming up soon. it is going to be Well, that was fast. Andre: 1 minute, we are dodging crowds at Comic Con, and next we are here in the Funko office. And somehow, Josh, you made it all the way to London. Josh Simon: I am. I am across the pond, some time with our EMEA team and partners, but it is a late night, but, you know, excited to be reunited with you here live. Andre: Absolutely. The magic mystery box can do multiple locations apparently with multiple drop offs. So now that we shared all the fun stuff at Comic Con, Yves, can you tell us a little bit more about the financials? Yves Le Pendeven: Sure. I would be happy to. So like I mentioned earlier, sales were up 7% in Q2 and 6% in the first half. In addition to that, we reported a gross margin of 6.6% compared to 32.1% last year. And to be clear, our Q2 gross margin benefited from the recognition of a $25 million credit that was related to the expected tariff refunds and release of accrued tariffs. So just for the sake of comparison, to our guidance range, of 42% to 44%, our gross margin normalized for that $25 million credit was 44.4%, which was still a record high for Funko. SG and A expenses improved as a percentage of sales by over 400 basis points compared to last year, And finally, adjusted EBITDA was $40.9 million compared to negative adjusted EBITDA of $16.5 million last year. Again, excluding that tariff related benefit, we delivered adjusted EBITDA of $15 million well above our guidance range. I would also like to highlight that in the quarter, we executed a sale of our IEEPA tariff claims, a total of $22 million for proceeds of $19 million, and we use that to pay down debt by a total of $15 million. Making more progress on deleveraging our balance sheet. Andre: Sounds like great results. And what about the outlook? Yves Le Pendeven: Yeah. So for the outlook, we are reiterating our net sales guidance. Of flat to up 3%, and we are raising our adjusted EBITDA guidance to $100 million to $110 million, and that raise is driven by again, that $25 million tariff credit from Q2 as well as $5 million from improved profitability. Andre: that is great. Thank you, Yves. Now, Josh, what can investors expect in the second half of the year from Funko? Josh Simon: I mean, look, I think the results that Yves just talked about this quarter really highlight the model that we are building. You know, sensing demand earlier, creating more repeatable ways, sort of take that demand and you know, create products that can scale selectively through the right retail channels around the world. Look, I think in the second half, our consolidated sales will reflect you know, more of a normalized year over year shipment comparison. And, you know, I think we will continue to be prudent just sort of given some of the broader consumer environment that is out there. And I also, just to kind of double back on 1 of the things you have mentioned earlier about lounge fly and the SKU reductions that we have discussed, Now we have made some meaningful progress in that area. I definitely would not declare the work there finished. We have an exciting plans, but still, you know, ways to go. The encouraging signal in Q2 was that, as Yves said, sales were down 2% with approximately 50% fewer SKUs. So really seeing that in increased productivity. For the remainder of the year, importantly, you know, I think the headlines that we definitely expect the core collectibles to continue growing in the second half. You know, when you step back from it, the core is growing. Loungefly is becoming healthier, our underlying earnings power is improving, and Q2 is really a strong and early proof point that, you know, everything we have talked about out of the make culture pop strategy, is underway, and our focus is now just about consistent execution. Andre: Nice. And what are you excited for the rest of the year, particularly in terms of how the way the company is evolving? Josh Simon: Well, I mean, there is a lot to choose from, that I am super excited about. I guess, a couple of things that I would highlight. First, overall, is just speed. You know, I have talked about this a lot. How do we make sure that we are part of these really great cultural or entertainment moments while they are happening? And, you know, really, the key to speed is being able to sort of sense demand earlier and respond quickly, and hopefully, in some cases, with even less inventory exposure. So 1 thing I have mentioned a couple times, but excited to kind of more formally announce now. We, you know, formalized a partnership with HP on the additive manufacturing front. This is part of our hyperstrike strategy, which means we are able to create products in a matter of weeks instead of, you know, months or sometimes years that go into the traditional manufacturing process. We have already sort of launched our first product with this partnership at Fanatics Fest a couple of weeks ago. We did a really awesome mashup between WWE and the Garbage Pail Kids The products sold out at Fanatics Fest. They are selling for multiples more than what we originally sold them for on eBay. So, you know, we are really excited to work with HP on that front. By the way, our normal QuickStrike offerings from a speed standpoint has also, you know, continue to be off and running. We had preorders for heated rivalry, off campus, and obsession. So a lot of, like, surprise hits out there that we have been able to get after pretty quickly. Including a preorder when the Knicks won the NBA championships. The night that they won, we went live with a championship 5 pack. And so we are really kind of building that repeatable speed capability. The second thing I will mention is we actually are announcing today that we are hiring a new chief commercial officer. it is a role that we have had open for a little bit now. Kristen Hamilton. She joins us most recently from Crunchyroll where she was senior vice president, head of global ecommerce and direct to consumer. Obviously, excited about her, you know, commercial experience there and her experience in the anime world, which is obviously a huge fandom for us. Before Crunchyroll, she spent about 15 years at Hasbro across a ton of different leadership roles, globally, ecommerce, consumer product strategy, transformation, brand management, and marketing. She's done a ton there. She officially starts on August 24, and so I guess that is another big exciting thing for me in the second half of the year. Andre: Alright. Well, the second half is looking promising. Nice. So we are gonna take some questions from some analysts. Right now. First 1 is from Eric Christian Wold at Texas Capital. Eric Christian Wold: How would you characterize the level of wholesale order demand in the third quarter of 26 into the upcoming holiday season. Yves Le Pendeven: Sure. So I will take that 1. I think what we are seeing this year, you know, we continue to have about 3 or 4 months visibility with our wholesale customers placing orders. I would say compared to last year, we are seeing a return of a little bit more normalized seasonality, like Josh mentioned. Last year, Q2 was pretty disrupted post Liberate Liberation Day announcement. And then there was an element of kind of catching up With people's orders in Q3 and into Q4. This year, obviously, we are kind of shipping orders as our customers want them. We are seeing great POS trends. In our wholesale channel globally. Our POS sales were up 6%. Year over year. So, again, always looking for that balance between sell in and sell through. Which we saw in Q2. So, you know, by all the metrics that we gauge, the business is healthy, inventory in the channel is healthy, and we see that there is a good demand from our wholesale partners and from our end customers as well. Andre: Okay. Eric Christian Wold: Another question, what are you seeing from your major retail partners around shelf space allocation in recent quarters and into the holiday season and what categories are likely to see the most benefit from those gains. Josh Simon: Let's see. Well, look. I think I will I will start off just kind of by the fact that I am here in Europe and have been spending some time with our European retailers. You know, we have secured extra diorama displays in about 350 stores across Smith's, which is you know, 1 of the most, like, preeminent toy retailers in Europe and certainly even, I would say, in the world. HMV, Gift Universe, a bunch of independent retailers, And, look, those are sort of, like, fully designed kind of built out displays that are really a showcase of our product out of the packaging. On shelves. We are also seeing increased some end-cap displays at Smith's for Bitty Pop! You know, if you walk around the city right now, we have pretty high profile windows. At Hamleys is another iconic toy retailer that sort of is a Disney and Funko collaboration that is really giving us a lot of high visibility in, like, prime tourist destinations. And, actually, right now, even we have another partnership across Sony, Disney, with HMV. On a big Spider Man activation at HMV Oxford Street. So, you know, look, we things like Bitty Pop! have continued to lead incremental shelf space for us. Things like Spider Man have led to incremental placement, you know, with, like, pallet trains at, you know, at Walmart. So I think, you know, alongside these big entertainment releases and alongside our, you know, new and growing product lines, we are seeing it generate incremental shelf space for us at retail. Andre: Nice. Look forward to seeing people post some photos with photo ops with all those displays there. Alright. Well, now we have some questions from Keegan Tierney Cox at DA Davidson. Keegan Tierney Cox: In regards to the strong entertainment slate we have had this year, which franchises or categories are generating the strongest demand? Any highlights this quarter And what properties are you most excited for in the second half of the year? Josh Simon: Well, thanks. Thank you, Keegan, for the question. Look. I mean, look, for us, obviously, a strong content slate always helps. And, you know, we knew going into this year, at least suspected that there would be some big, you know, some big hits, and I think you are really seeing that in box office attendance and box office records overall. But we have a pretty-- I will first, I will just say, like, broad based across fandoms. We have seen momentum for us across anime, gaming, obviously, theatrical, sports, and some of our own programs. I will remind everyone in this quarter, I think our top 10 franchises and programs represented about 32% of Q2 sales. So our business is not necessarily dependent on, like, any 1 property. But they obviously help. So, you know, Mando, Grogu was great for us. Toy Story 5, which was a massive hit for Disney, also doing really well for us. You saw our Spider-Man: Brand New Day activation at Comic Con. That has, you know, has recently proven to be huge for us, and we are really glad that we made a bet on that film early on. Then, you know, could not be more excited for Avengers: Doomsday and what the Russo brothers and Marvel and Disney are gonna kinda bring to screens at the end of the year. But look beyond that, 1 Piece and Pokemon and in sort of the anime and gaming space continue to be huge. Sports delivered. I mentioned I mean, the excitement around the Knicks was somewhat, you know, unprecedented for us in this sort of certainly, in the world of NBA championships compared to past seasons. The excitement around the World Cup, I think, was, you know, was palpable and reflected in some, you know, some strong sales for us. And then, look, I have to just sort of mention it again on the QuickStrike front, but you know, you have movies like Obsession. Which, you know, kind of came from out of nowhere as a surprise. And know, was a major record setting box office. And so we were able to, you know, very quickly go on presale for, you know, for that film. Along with things like heated rivalry and off campus I will even say a personal favorite of mine in this past quarter, a great line of products celebrating the Spice Girls And I am not just saying that because I am over in The UK right now. I would have said that if I were in as well. But across Loungefly and Funko, you know, a dream come true, honestly, to be to be able to collaborate with those folks. So a pretty broad representation of franchises, Keegan. Andre: Alright. Save me a male b Funko Pop. I need that. So alright. Keegan Tierney Cox: And put and takes on the guidance. What are the assumptions that you get to the high and low ends of your guidance? Have you seen any impact from higher input costs like freight? Yves Le Pendeven: Sure, so I would start by, you know, to the upside, especially on sales. I mentioned our order book visibility in Q3, so we feel good about that. Obviously, then the holiday period in Q4, we have a bit less visibility too, but we are excited about the content slate. You know, I think, obviously, any upside would depend on continued sell through performance, We are hoping the consumer stays resilient through the holiday period. You know, to the downside, we have I would call out tariffs Obviously, we factored in the latest announced tariffs that are in effect of 10% to 12%. But for everyone who is following the news that there can continue to be surprises on that front. So again, chose to be prudent within our gross margin guidance in particular. And then as far as, you know, freight costs or raw materials costs, We are cautiously optimistic, but any kind of, you know, higher oil prices and things like that could negatively impact us as well. Andre: Understood. Alright. Here's some questions from Stephen Laszczyk at Goldman Sachs. Stephen Laszczyk: So Funko noted that point of sale tailwinds from the first quarter entertainment slate carried into early second quarter. This positive trend continued through the remainder of the quarter And what gives management confidence that these trends are sustainable through 2026? Yves Le Pendeven: Sure. I mean, I will start with the trends that we saw in Q2. So, I mentioned in the wholesale channel, 6% growth in units year over year POS sales. For the year to date, it is 9% growth. And, again, for the year to date in The US, up mid single digit. In Europe, slightly over 20%. POS growth. So it is a really strong trend. We are loving to see that momentum. I believe, you know, based on the content slate and some of the products that we have coming up in the lineup that we, should see that trends continue. And that is kind of what we factored into our guidance. Andre: Okay. Stephen Laszczyk: Now to what extent does management expect new formats like Bitty Pop!, Top Mystery, and the sports related launches to be revenue contributors in 2026? And what does management view as the key growth levers for Funko in 2026 and beyond outside of the core pop products. Josh Simon: Well, I will I will jump in. I mean, I think first on pop mystery, it is it is a little bit too early to, you know, to sort of size that 1 responsibly. But what I think is most important about it, and I think kind of signals a lot of what we have been talking about as part of our strategy, is that just sort of the platform potential of it. So, you know, if you think about pop mystery just as another dimension and a part of the core pop product, it can send it can really extend across, like, any entertainment franchise, sports. We are doing it with our own IP that you saw sort of down at Comic Con with the Flora line. It can go in, you know, multiple channels, markets you know, around the world, I would say, sort of that blind box craze is showing no signs of slowing down. And for us, I think it is a unique way that kind of, you know, encourages what our fans have always loved, that, like, thrill of the chase discovery, and then that sort of motivation for, you know, repeat participation. Like, they wanna try and seek out that, you know, that 1 specific item that they love. So you know, we will keep a close eye on sort of the initial launch and judge, you know, sell through and reorders consumer behavior and scale based on that. But I would say from a licensor standpoint, we have, like, a pretty exciting and awesome lineup of pop mystery products going all the way through next year. So I am feeling encouraged about that 1. And then, you know, you mentioned sort of a--you know, Steven, in your question, sort of Bitty Pop! is just sort of another example that you know, I mentioned we are, you know, we are seeing incremental placement now at Smith's around Europe. Another extension of what people love about pop and what makes it iconic, but it is sort of it is becoming its own platform appealing to a slightly different consumer, getting us incremental placement. We will continue to look at new ways to dimensionalize pop. We have we have a few different ideas that are in development that we will roll out end of this year and early next year. And then, look, honestly, there is about, I would say, half a dozen totally brand new formats that we have in development that will start to roll out early next year and beyond. And the idea with all of those is you know, trying to establish new platforms for our fans to engage sort of capitalizing on what we know best around sort of, you know, culture and our licensor relationships, and being part of these iconic, you know, entertainment and cultural moments. But in new and exciting ways that I think, hopefully, will, you know, will set the stage for hopefully the next, you know, pop franchise to come. Andre: Alright. Well, we will look forward to all of that. I definitely look forward to seeing who gets a 1 of 1 worldwide chase out there with these mystery pops. Alright. Well, that is all the time we have for questions for today. Yves and Josh, thank you so much. For all your information about the success as well as how you handle certain challenges. So, Josh, are there any thoughts before we let everyone go today? Josh Simon: Yes. Well, first of all, thank you for, you know, for being with us down at Comic Con and in the office there in Burbank. And, look, I for me, I would just say the financial highlights that this quarter shows us is really early evidence that the make culture pop strategy is beginning to take hold. And it is really becoming a more deliberate and, you know, disciplined growth engine for us. Ultimately, you know, we are I think we are getting better at sensing, you know, where fan demand is coming from. You know, moving faster to turn those signals into distinctive products and in repeatable ways and building platforms like I was just talking about. And then scaling them through, you know, channels all over the world. So, look, this quarter, I think, was an early proof point not the end of the work. But I think, you know, the SKU productivity and certainly that record underlying gross margin gives us confidence that we are on the right track. And so and look, other than that, I just wanna say thank you to our shareholders for your continued confidence. Most importantly, thank you to our fans for showing up in the way that you always do. I loved, you know, sort of the energy and everyone who made their way down Comic Con this year. I love talking with everyone and hearing their ideas. it is just an awesome reminder of, you know, why we do this. And we are certainly excited for the rest of the year. So I will just say again, Andre, thanks to everyone for joining us, and we will see you all next quarter. Before you buy stock in Funko, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Funko wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $400,209!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,375,393!* Now, it’s worth noting Stock Advisor’s total average return is 964% — a market-crushing outperformance compared to 215% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 13, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Funko (FNKO) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Performance was driven by the 'Make Culture Pop' strategy, shifting from conceptual planning to repeatable execution across sensing, creativity, and commerce. Revenue growth was broad-based across regions, with notable strength in Europe (up 19%) and core collectibles (up 9%) offsetting a slight decline in Loungefly. Operational efficiency improved through significant SKU rationalization in the Loungefly segment, which saw a 50% reduction in SKUs while maintaining nearly flat sales. Management attributed record normalized gross margins of 44.4% to improved SKU productivity and disciplined inventory management. The company is prioritizing speed-to-market via a new partnership with HP for additive manufacturing, reducing production timelines from months to weeks. Strategic positioning is being bolstered by the Mondoverse initiative, leveraging premium artistry to capture higher-end collector segments through existing IP relationships. Management raised adjusted EBITDA guidance to $100M-$110M, reflecting a $25M tariff credit and $5M in underlying profitability improvements. The second half of the year assumes a return to normalized shipment seasonality and a prudent outlook regarding the broader consumer environment. Growth strategy centers on 'Pop! Mystery' and 'Pop! Yourself' as scalable platforms to drive repeat participation and location-specific retail experiences. Future expansion relies on approximately half a dozen new product formats currently in development for rollout in early 2025. Guidance remains sensitive to potential new tariff announcements and fluctuations in freight or raw material costs, such as oil prices. Reported gross margin of 6.6% included a $25 million one-time credit related to expected tariff refunds and release of accrued tariffs. The company executed a $22 million sale of tariff claims for $19 million in proceeds, specifically to pay down $15 million in debt. Management highlighted the appointment of a new Chief Commercial Officer, Kristen Hamilton, to lead global e-commerce and DTC transformation starting August 24. Tariff risks remain a primary headwind, with current guidance factoring in known 10% to 12% rates but acknowledging potential for further regulatory surprises. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management reported 3-4 months of visibility with wholesale partners and a return to normalized seasonality compared to the disrupted prior year. Point-of-sale (POS) trends remain healthy, with global wholesale POS sales up 6% year-over-year. Funko is securing incremental space through high-profile diorama displays in 350 European stores and pallet trains at Walmart. Bitty Pop! and major entertainment releases like Spider-Man are the primary drivers for gaining additional end-cap and window placements. Pop! Mystery is viewed as a high-potential platform that encourages 'thrill of the chase' behavior across all existing IP and original IP like 'Flora'. Management is developing new platforms to 'dimensionalize' the brand, aiming to establish the next major franchise through new engagement formats. Upside to guidance depends on continued resilient consumer sell-through during the Q4 holiday period. Management is 'cautiously optimistic' about freight and raw material costs but remains wary of oil price volatility.

Interested in Funko, Inc.? Here are five stocks we like better. Funko’s second-quarter sales rose 7% year over year, with particularly strong growth in Europe and core collectibles, while Loungefly declined modestly but showed improvement. First-half sales increased 6%. Profitability improved significantly: adjusted EBITDA reached $40.9 million versus a $16.5 million loss a year earlier, helped by a tariff-related benefit. Funko raised its full-year adjusted EBITDA outlook to $100 million–$110 million while maintaining its flat-to-3% sales-growth forecast. Funko is expanding its faster product-development strategy through an HP additive-manufacturing partnership, new Pop! Mystery formats and additional retail placements, while remaining cautious about tariffs, freight costs and holiday demand. Why eBay Stock Is the Steady Performer You Can't Ignore Funko (NASDAQ:FNKO) reported higher second-quarter sales, improved profitability and a raised adjusted EBITDA outlook as the collectible-products company said its “Make Culture POP!” strategy is gaining traction across regions, product categories and fan communities. Speaking during a presentation tied to San Diego Comic-Con, Chief Financial Officer Yves LePendeven said second-quarter sales increased 7% year over year, following growth in the first quarter. First-half sales rose 6%. → 3 Drone Stocks That Should Soar After the Summer Slump Build Bear Workshop Stock Awakens From Hibernation Growth was broad-based rather than concentrated in one product, region or intellectual property, LePendeven said. U.S. sales increased 3%, while European sales rose 19%. Core collectibles sales grew 9%. Loungefly sales declined 2%, but LePendeven said the result represented an improving trend from the first quarter and reflected better SKU productivity. Funko reported a gross margin of 56.6% in the second quarter, compared with 32.1% a year earlier. However, LePendeven said the reported figure included a $25 million credit related to expected tariff refunds and the release of accrued tariffs. → Meta’s Earnings Drop Shows Wall Street Wants More Than Ad Growth Time to Ring the Register on Funko Stock Excluding the tariff-related credit, gross margin was 44.4%, which LePendeven described as a record high for the company and above its prior guidance range of 42% to 44%. SG&A expenses improved by more than 400 basis points as a percentage of sales from the prior year. Adjusted EBITDA was $40.9 million, compared with negative adjusted EBITDA of $16.5 million a year earlier. Excluding the tariff-related benefit, adjusted EBITDA was $15 million, above the company’s guidance range. During the quarter, Funko also sold its IEEPA tariff claims with a face value of $22 million for $19 million in proceeds. The company used the funds to reduce debt by $15 million, LePendeven said. → Jersey Mike's Serves Fresh Gains After IPO Stumble Funko reiterated its full-year net sales outlook of flat to up 3% and raised its adjusted EBITDA guidance to between $100 million and $110 million. LePendeven said the increased EBITDA outlook reflects the $25 million tariff credit recognized in the second quarter and $5 million of improved profitability. Chief Executive Officer Josh Simon said Funko’s strategy is focused on identifying cultural and entertainment demand earlier, converting those signals into products and distributing them through wholesale and direct-to-consumer channels. “The magic for us is that we’ve really sort of honed that engine of sensing demand, turning it into products, and getting into our fans’ hands in a really repeatable way,” Simon said. Simon said the company has established teams and processes to secure licenses, design products, manufacture them and move them through retail channels more quickly when unexpected entertainment properties gain popularity. He said the strategy is designed to help Funko respond to demand across movies, television, sports, anime and video games. The company also announced a formal partnership with HP focused on additive manufacturing under Funko’s Hyper Strike strategy. Simon said the partnership could enable Funko to develop products in weeks rather than the months or years associated with traditional manufacturing processes. Funko’s first product under the partnership was a WWE and Garbage Pail Kids mashup sold at Fanatics Fest, Simon said. The product sold out at the event. He also cited quick preorders tied to Heated Rivalry, Off Campus and Obsession, as well as a championship five-pack launched after the Knicks won the NBA championship. At Comic-Con, Funko launched Pop! Mystery, a blind-box collection format that includes common figures, rare versions and a global one-of-one chase item. Chief Product Officer Husnal Shah said the initial Flora collection expands an original Funko plant-themed Pop! line into the mystery format. Funko said it is also launching Pop! Mystery collections based on One Piece and Warner Bros. horror properties. Simon said the format could become a platform that extends across entertainment franchises, sports and Funko-owned intellectual property, though he said it is too early to estimate its revenue contribution. Simon said Funko is seeing continued incremental shelf placement for Bitty Pop!, another extension of its core Pop! brand. The company is also developing roughly half a dozen additional formats that it expects to begin introducing in early 2027 and beyond. Funko highlighted its Pop! Yourself customization offering, including a Comic-Con-exclusive Spider-Man: Brand New Day experience. Simon said the company plans to test more location-specific versions of Pop! Yourself with retail partners later in the year. He added that Funko expects to announce additional stores where the experience will be available. LePendeven said the company has visibility of roughly three to four months on orders from wholesale customers and is seeing a return to more normalized seasonal ordering patterns compared with last year. Global wholesale point-of-sale sales increased 6% year over year in the second quarter, while year-to-date POS sales rose 9%, according to Simon. In the U.S., year-to-date POS sales were up in the mid-single digits, while European POS sales rose slightly more than 20%, Simon said. He added that Funko has secured additional retail displays in about 350 stores across retailers including Smyths, HMV, Gift Universe and independent stores. The company also cited increased Bitty Pop! displays at Smyths and Spider-Man-related placements at Walmart. Simon said Funko’s top 10 franchises and programs represented about 32% of second-quarter sales, underscoring the breadth of its portfolio. He cited demand for The Mandalorian & Grogu, Toy Story 5, Spider-Man, One Piece, Pokémon and sports products, while expressing enthusiasm for Avengers: Doomsday. The company also named Kristen Hamilton as its new chief commercial officer. Hamilton, who starts Aug. 24, most recently served as senior vice president and head of global e-commerce and direct-to-consumer at Crunchyroll. Simon said she previously spent about 15 years at Hasbro in leadership roles spanning e-commerce, consumer product strategy, transformation, brand management and marketing. For the second half, Simon said Funko expects core collectibles to continue growing, while Loungefly becomes healthier through improved productivity. He said the company remains cautious about the broader consumer environment and cited tariffs, freight costs, raw-material costs and holiday sell-through as factors that could affect results. Funko, Inc is a pop culture consumer products company best known for its stylized vinyl figures, apparel, accessories and other licensed collectible goods. The company's signature product line, Funko Pop!, features bobblehead-style figurines that showcase characters from a wide array of entertainment franchises, including film, television, gaming, sports and music. In addition to vinyl figurines, Funko's portfolio encompasses plush toys, action figures, stationery, home goods and novelty items, all leveraging licensing agreements with major global brands. Founded in 1998 by Mike Becker in Washington state, Funko initially focused on creating nostalgic bobbleheads before expanding its product offerings under current leadership. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Funko Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

This article first appeared on GuruFocus. Release Date: August 06, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Net sales increased 7% in Q2 and 6% in the first half, with broad-based growth across regions and product lines. Gross margin reached a record 44.4% (normalized for tariff credit), up from 32.1% last year. Adjusted EBITDA improved significantly to $40.9 million (or $15 million excluding tariff benefit), beating guidance. Core collectibles grew 9%, and Loungefly sales improved with 50% fewer SKUs, showing better productivity. New initiatives like Pop Mystery, Bitty Pop, and the HP partnership for rapid manufacturing are expanding growth platforms. Point-of-sale trends are strong, with wholesale POS up 6% in Q2 and 9% year-to-date, and Europe POS up over 20%. The company raised its adjusted EBITDA guidance to $100-$110 million, reflecting improved profitability. Debt reduction progress was made, using $19 million in proceeds from tariff claims to pay down $15 million in debt. Strong entertainment slate (e.g., Spider-Man, Avengers Doomsday) and new retail placements are expected to drive second-half growth. New Chief Commercial Officer with experience at Crunchyroll and Hasbro will strengthen commercial and anime strategies. Loungefly sales declined 2% in Q2, though the trend improved from Q1. Gross margin guidance of 42-44% is below the normalized Q2 level, indicating potential pressure ahead. Tariffs remain a downside risk, with management noting potential surprises that could impact margins. The company has limited visibility into Q4 holiday demand, creating uncertainty for the full-year outlook. Freight and raw material costs could rise if oil prices increase, posing a risk to profitability. The company is being prudent with guidance due to a broader consumer environment that remains uncertain. Pop Mystery is too early to size, and its revenue contribution is not yet clear. The company is still working on Loungefly SKU reductions, indicating ongoing challenges in that segment. The sale of tariff claims for $19 million (vs. $22 million face value) resulted in a slight loss. The business remains dependent on a strong entertainment slate, which can be unpredictable. Warning! GuruFocus has detected 5 Warning Signs with FNKO. Is FNKO fairly valued? Test your thesis with our free DCF calculator. Q: How would you characterize the level of wholesale order demand in the third quarter of 2026 into the upcoming holiday season? A: Eve (CFO): We continue to have about 3 or 4 months visibility with our wholesale customers placing orders. Compared to last year, we're seeing a return to more normalized seasonality. Our POS sales in the wholesale channel were up 6% year over year, and inventory in the channel is healthy, indicating good demand from partners and customers. Q: What are the assumptions that get you to the high and low ends of your guidance, and have you seen any impact from higher input costs like freight? A: Eve (CFO): To the upside, we have good order book visibility in Q3 and are excited about the holiday content slate, with upside depending on continued sell-through and consumer resilience. To the downside, we factored in the latest announced tariffs of 10-12%, but there can be surprises. We are cautiously optimistic on freight and raw material costs, though higher oil prices could negatively impact us. Q: Funko noted that point of sale tailwinds from the 1st quarter entertainment slate carried into early second quarter, but did this positive trend continue through the remainder of the quarter, and what gives management confidence that these trends are sustainable through 2026? A: Eve (CFO): The trends continued strongly through Q2. In the wholesale channel, we saw 6% growth in units year over year in POS sales, and for the year-to-date, it's 9% growth. The US is up mid single-digit and Europe is up slightly over 20% in POS. Based on the content slate and upcoming products, we believe these trends will continue, and we've factored that into our guidance. Q: To what extent does management expect new formats like Bitty Pop Mystery and the sports-related launches to be revenue contributors in 2026, and what does management view as the key growth levers for Funko in 2026 and beyond, outside of the core pop products? A: Josh (CEO): It's too early to size Pop Mystery responsibly, but its platform potential is key. It extends across any entertainment franchise, sports, and our own IP, capitalizing on the blind box craze. We have an exciting lineup of Pop Mystery products through next year. Bitty Pop is another example, seeing incremental placement at retailers like Smiths. We have about half a dozen totally brand new formats in development that will roll out early next year, aiming to establish new platforms for fan engagement. Q: What are you seeing from your major retail partners around shelf space allocation in recent quarters and into the holiday season, and what categories are likely to see the most benefit from those gains? A: Josh (CEO): We've secured extra diorama displays in about 350 stores across Smiths in Europe, as well as increased NCAP displays for Bitty Pop. We have high-profile windows at Hamley's and a big Spider-Man activation at HMV Oxford Street. Products like Bitty Pop and Spider-Man have led to incremental shelf space, including pallet trains at Walmart, driven by big entertainment releases and new product lines. Q: In regards to the strong entertainment slate we have had this year, which franchises or categories are generating the strongest demand, and what properties are you most excited for in the second half of the year? A: Josh (CEO): We have broad momentum across anime, gaming, theatrical, and sports. Our top 10 franchises represented about 32% of Q2 sales. Mando Grogu, Toy Story 5, and Spider-Man: Brand New Day have been huge. We're excited for Avengers Doomsday, and One Piece and Pokemon continue to be strong. Sports delivered with the Knicks championship and World Cup. On the quick strike front, movies like Obsession and Heated Rivalry were successful, along with a personal favorite, the Spice Girls line. Q: How is this quarter been for Funko, and what are some highlights? A: Eve (CFO) & Josh (CEO): Sales were up 7% in Q2 and 6% in the first half, with broad-based growth across the US (up 3%) and Europe (up 19%). Core collectibles were up 9%, and Loungefly was down 2%, an improving trend. Gross margin was 56.6%, benefiting from a $25 million tariff credit; normalized gross margin was a record 44.4%. Adjusted EBITDA was $40.9 million, or $15 million excluding the tariff benefit, well above guidance. We also paid down $15 million of debt. Q: What can investors expect in the second half of the year from Funko? A: Josh (CEO): We expect normalized year-over-year shipment comparisons and will continue to be prudent given the consumer environment. We've made progress on Loungefly skew reductions but aren't finished. The headline is that we expect core collectibles to continue growing in the second half. The core is growing, Loungefly is becoming healthier, and our underlying earnings power is improving, with Q2 serving as an early proof point of our "Make Culture Pop" strategy. Q: What are you excited for for the rest of the year, particularly in terms of how the company is evolving? A: Josh (CEO): I'm excited about speed. We've formalized a partnership with HP on additive manufacturing, allowing us to create products in weeks instead of months. Our first product, a WWE and Garbage Pail Kids mashup, sold out at Fanatics Fest. We're also announcing the hiring of a new Chief Commercial Officer, Kristin Hamilton, from Crunchyroll, who brings extensive experience in e-commerce and anime, starting August 24th. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

--Q2 Net Sales Grew 7%; Core Collectibles Sales Increased 9%; Record Gross Margin;Adjusted EBITDA Well Above Expectation; Debt Reduced by $15M -- EVERETT, Wash., August 06, 2026--(BUSINESS WIRE)--Funko, Inc. (Nasdaq: FNKO), a leading pop culture lifestyle brand, today reported its consolidated financial results for the second quarter ended June 30, 2026. Second Quarter Financial Results Summary: 2026 vs 2025 Net sales increased 7% to $207.7 million, compared with $193.5 million Gross profit was $117.6 million, equal to gross margin of 56.6%, compared with $62.0 million, equal to gross margin of 32.1% SG&A expenses were $79.7 million compared with $82.3 million, and improved 413 basis points as a percentage of sales to 38.4% from 42.5% Net income was $15.4 million, or $0.27 per diluted share, compared with a net loss of $40.5 million, or $0.74 per diluted share Adjusted net income* was $15.0 million, or $0.26 per diluted share*, compared with an adjusted net loss* of $26.7 million, or $0.48 per diluted share* Adjusted EBITDA* was $40.9 million, compared with negative Adjusted EBITDA* of $16.5 million Gross margin, net income, adjusted net income* and adjusted EBITDA* for the second quarter of 2026 each included a pre-tax benefit of $25.4 million related to the recognition of expected tariff refunds and the release of accrued tariffs "Q2 was a strong quarter for Funko. We delivered 7% sales growth, above the high end of our guidance range. Core Collectibles grew 9%, and gross margin reached a record high for the second consecutive quarter. Together with continued SG&A discipline, that performance drove adjusted EBITDA well above our guidance range. These results are evidence that Make Culture Pop! is becoming a more deliberate and disciplined growth engine. We are getting better at identifying where fan demand is forming, moving faster to turn those signals into distinctive and repeatable products, and scaling them through the channels with the strongest economics. That progress showed up in broad-based POS momentum across theatrical, anime, gaming and sports, as well as rapid-response releases around live cultural moments and the launch of POP! Mystery. At the same time, we are improving the quality of the business through tighter assortments, better SKU productivity, continued cost discipline, and concentrating our resources behind the products, fandoms and channels with the greatest demand and return potential." Second Quarter 2026 Net Sales by Category and Geography The tables below show the breakdown of net sales on a brand category and geographical basis (in thousands): Balance Sheet Highlights - At June 30, 2026 vs December 31, 2025 Total cash and cash equivalents were $40.7 million at June 30, 2026 compared with $42.1 million at December 31, 2025 Inventories were $88.8 million at June 30, 2026 up from $83.1 million at December 31, 2025 Total debt was $201.1 million at June 30, 2026 versus $225.3 million at December 31, 2025. Total debt includes the amount outstanding under the company's term loan facility, net of unamortized discounts, revolving line of credit and the company's equipment finance loan. In Q2, the company executed a participation sale of $22.1 million in tariff claims for $19.2 million. Half of the proceeds from the sale were used to pay down the company’s term loan. Outlook for 2026 The company updated its 2026 full-year outlook to reflect its strong second quarter performance, expected continued growth in Core Collectibles, and its decision to rationalize Loungefly’s SKU count and concentrate the assortment behind products with stronger demand and return potential. The company also provided 2026 third-quarter guidance. Webcast Conference Call The company will host a webcast at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time) today, August 6, 2026, to further discuss its second quarter results and business update. A live webcast, presentation materials and a replay of the event will be available on the Investor Relations section on the company’s website at investor.funko.com, as well as the Funko YouTube Channel at youtube.com/@FunkoIR. The replay of the webcast will be available for one year. Use of Non-GAAP Financial Measures This release contains references to non-GAAP financial measures, including adjusted net income (loss), per share amounts, adjusted EBITDA, adjusted EBITDA margin and adjusted net income (loss) margin, which are financial measures that are not prepared in conformity with United States generally accepted accounting principles (U.S. GAAP). Management uses these measures internally for evaluating its operating performance, for planning purposes, including the preparation of our annual operating budget and financial projections, to assess incentive compensation for our employees, and to evaluate our capacity to expand our business. The company's management believes that the presentation of non-GAAP financial measures provides useful supplementary information regarding operational performance because it enhances an investor's overall understanding of the financial results for the company's core business. Additionally, it provides a basis for the comparison of the financial results for the company's core business between current, past and future periods as they remove the impact of items not directly resulting from our core operations. The company also believes that including adjusted EBITDA and the other non-GAAP financial measures presented in this release is appropriate to provide additional information to investors and help to compare against other companies in our industry. Non-GAAP financial measures have limitations as analytical tools and should be considered only as a supplement to, and not as a substitute for or as a superior measure to, financial measures prepared in accordance with U.S. GAAP. We caution investors that amounts presented in accordance with our definitions of adjusted net income (loss), including per share amounts, adjusted EBITDA and adjusted EBITDA margin may not be comparable to similar measures disclosed by our competitors, because not all companies and analysts calculate these measures in the same manner. Detailed reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the financial tables following this release. A reconciliation of adjusted EBITDA outlook to the corresponding GAAP measure on a forward-looking basis cannot be provided without unreasonable efforts, as we are unable to provide reconciling information with respect to certain items. However, for the third quarter of 2026 the company expects equity-based compensation of approximately $4 million, depreciation and amortization of approximately $15 million and interest expense of approximately $5 million. For the full year 2026, the company expects equity-based compensation of approximately $13 million, depreciation and amortization of approximately $60 million and interest expense of approximately $20 million, each of which is a reconciling item to net income. See "Use of Non-GAAP Financial Measures" and the attached reconciliations for more information. About Funko Headquartered in Everett, Washington, Funko is a leading pop culture and collectibles brand. Funko designs, sources and distributes licensed pop culture products across multiple categories, including vinyl figures, action toys, plush, apparel, housewares and accessories for consumers who seek tangible ways to connect with their favorite pop culture brands and characters. Learn more at Funko.com, Loungefly.com and MondoShop.com, and follow us on TikTok, X, and Instagram. Forward-Looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including statements regarding our strategic plans, growth strategies, expectations in sales trends and anticipated financial results, including without limitation, our full year and third quarter 2026 guidance. These forward-looking statements are based on management’s current expectations. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the following: impacts from economic downturns; changes in the retail industry and markets for our consumer products; risks associated with our international operations, including risk related to tariffs and trade restrictions; risks relating to our indebtedness, including our ability to comply with financial and negative covenants under our Credit Agreement, as amended; our ability to execute our business strategy; our ability to manage our inventories and growth; our ability to identify or complete any strategic alternative transaction; our dependence on content development and creation by third parties; our ability to obtain, maintain and protect our intellectual property rights or those of our licensors; fluctuations in our gross margin and seasonal impacts; our dependence on vendors and outsourcers; risks relating to government regulation; risks relating to litigation, including products liability claims and securities class action litigation; risk resulting from our e-commerce business and social media presence; our ability to successfully operate our information systems and implement new technology; our ability to secure additional financing on favorable terms or at all; the influence of our significant stockholder, TCG, and the possibility that TCG’s interests may conflict with the interests of our other stockholders; risks relating to our organizational structure; including the Tax Receivable Agreement ("TRA") which confers certain benefits upon the parties to the TRA ("TRA Parties") that will not benefit Class A common stockholders to the same extent as it will benefit the TRA Parties; and volatility in the price of our Class A common stock. These and other important factors discussed under the caption "Risk Factors" in our quarterly report on Form 10-Q for the quarter ended June 30, 2026 and our other filings with the Securities and Exchange Commission could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management’s estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release. The following tables reconcile the Non-GAAP Financial Measures to the most directly comparable U.S. GAAP financial performance measure, which is net income (loss), for the periods presented: View source version on businesswire.com: https://www.businesswire.com/news/home/20260806035034/en/ Contacts Investor Relations: [email protected] Media: [email protected]

Funko, Inc. (NASDAQ:FNKO) investors will be delighted, with the company turning in some strong numbers with its latest results. Results overall were credible, with revenues arriving 6.4% better than analyst forecasts at US$201m. Higher revenues also resulted in lower statutory losses, which were US$0.33 per share, some 6.4% smaller than the analysts expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. Following last week's earnings report, Funko's two analysts are forecasting 2026 revenues to be US$927.8m, approximately in line with the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 52% to US$0.50. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$925.1m and losses of US$0.47 per share in 2026. Overall it looks as though the analysts were a bit mixed on the latest consensus updates. Although revenue forecasts held steady, the consensus also made a pronounced increase to its losses per share forecasts. See our latest analysis for Funko Although the analysts are now forecasting higher losses, the average price target rose 44% to 4.5, which could indicate that these losses are expected to be "one-off", or are not anticipated to have a longer-term impact on the business. Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. From these estimates it looks as though the analysts expect the years of declining revenue to come to an end, given the flat forecast out to 2026. That would be a definite improvement, given that the past five years have seen revenue shrink 0.8% annually. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 4.1% annually. So it's pretty clear that, although revenues are improving, Funko is still expected to grow slower than the industry. The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Funko. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time. Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2028, which can be seen for free on our platform here. However, before you get too enthused, we've discovered 1 warning sign for Funko that you should be aware of. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Image source: The Motley Fool. May 7, 2026 at 4:30 p.m. ET Chief Executive Officer — Josh Simon Chief Financial Officer — Yves Le Pendeven President, Loungefly — Jessica Kong Need a quote from a Motley Fool analyst? Email [email protected] Josh Simon: Great business question. You nailed it at the top. The Q1 was really strong. I think it was the example of our Make Culture Pop! strategy kind of starting to really manifest itself in the market. We ended Q4 with some momentum, and we saw that continue into the year. Overall, our sales were up 5% in the quarter. And if you look at just the Core Collectibles business, we're up 17%. Yves Le Pendeven: And if I can jump into, it's obviously pleased about the sales growth, but we also reported our highest gross margin ever at 44%, and that drove an adjusted EBITDA of $11 million, which was way better than we expected. Top Pops: Wow, that's great. Now let's talk about what's new on the product side. Josh, you've talked about Funko being at the center of culture. What did that look like this quarter? Josh Simon: So I go back to the Make Culture Pop! strategy, culture, creativity and commerce. So on the culture side, we want to be part of all of these sort of fan entertainment moments, pop culture moments that are going on around the world while they're happening. Some awesome examples of that in Q1. The big movers were KPop Demon Hunters, the final season of Stranger Things, One Piece, which is always really strong for us. But we're also starting to see some really other great dimensions of the business with Mando, Grogu coming out, our Star Wars business is really showing some nice growth. And then I'll even just use a more recent example of Michael Jackson. This is one of my favorites, the smooth criminal vibe that's sort of iconic leaning look that always mesmerized me, growing up, like how did you do it? But great to be part of that moment with the Michael Biopic out right now. Then from a creativity standpoint, it's really about how are we taking those moments and turning them into products and frankly, adding some more newness and dimension to our product line. I think Bitty Pop! is a great example of that. We saw strength in the quarter coming off of Q4 rolling out into Walmart. From a seasonal basis, I'll give a great example, which is this sort of Bitty Bouquet for your Valentine's Day lover. You can -- if the sort of bouquet stand and you can sort of swap out whatever Bitty Pop! you're interested in there, which I think is a great evolution of a moment that we can play on with Bitty Pop!. I'll point out sort of something in the world of Demon Slayer, which is obviously a great IP for us, kind of like a Sumi-Ink paint deco to the Pop!, which just helps to bring some freshness and newness to the fans of Demon Slayer. And then from a commerce standpoint, it's really about how do we bring these products to life for fans. I think we like to say, turning shelves into stages, some really fun experiences that I think are examples of that from the quarter. I went a few weeks ago to WrestleMania 42 in Las Vegas. Awesome weekend. Those guys always do a great job. We came to life at the WWE Fan Expo at the Las Vegas Convention Center with a Pop! Yourself experience, so you could customize yourself in exclusive WWE gear that you could only get there. We built the Pop! on site. We also launched a limited edition WWE covers on our D2C site as part of the WrestleMania weekend, which was awesome. I think it's selling for 3 to 4x on eBay right now, which is cool to see. And then also in the world of sports, I had the chance also to go to Miami. We have a brand-new shop in shop that opened at the new Inter Miami Stadium. I was able to attend the second game in that stadium. Also an awesome Pop! Yourself experience there, an exclusive Messi Pop!, which you can only get at the stadium. And then actually, we really rounded out with some incredible Loungefly product as well. I think Yves there in his bag of tricks. There's a great example of some of the Loungefly products that we're selling in the stadium there for Inter Miami. Jessica Kong: Yes, that's right, Josh. So this is our Iconic Me backpack for Inter Miami, along with one of the many bag charms that are available. So a super fun collection. Josh Simon: I love that colorway brings back memories. I grew up in Florida. So it reminds me of the Miami Vice in the '80s, and we get to live out our sort of like Crockett and Tubbs duo here. So it's a good one. Top Pops: Now speaking of Loungefly, Jessica, is there anything else new that you have? Jessica Kong: Well, you know what, I'm so glad you asked. So Loungefly has a really strong base, right? We have an exceptionally loyal fan base. We have high brand equity and best of the best product placement in all of the Disney parks, right? We also have really great relationships with key retailers like BoxLunch and Hot Topic. And we're also getting in premium. And so I can show you here our very first Swarovski collection that launched last year, this is a piece that was part of the collection, selling at $400, which is well above the average $80 to $90 price point that we normally hit. And this sold out within hours, right? So super excited to do more of these going forward. That being said, this year is really an important business reset for us, right? So we cut our SKUs back by 50% and so sales will be down as planned this year. But that's really in order for us to improve SKU productivity and overall profitability in general. And we're already seeing the results of that. So super encouraged by that. So with that, we're doubling down on wearable storytelling. So that means, one, expanding the styles that we do beyond the iconic mini backpack. And so with that, here is, Heihei from Moana, She's a figural, she was actually our #1 SKU last year, which is great, and we'll continue to do more of these going forward. We also are doubling down on accessories, bag charms and pins are categories that are driving double-digit growth for us. And so thank you, Yves. This is Mickey and Minnie new figural bag charms that are launching later this year. And look, they hold hands. And then third, we are also expanding our reach with Gen Z. And so we'll be launching a new diffusion line that is much more everyday functional at a much more affordable price point. Top Pops: This is all really great. Also welcome to the team. Thank you. But now I've got to ask. Is there any other changes you made to the management team? Josh Simon: Yes. We just had a brand-new Head of Marketing and Brand starts a couple of weeks ago, Nik Rupp comes to us previously from Nike. Awesome to have him on board. And I mentioned this last quarter, Andy Oddie, who's been with Funko for a long time, industry expert in many different ways, moved into a new role as our Chief International Officer, so really giving some dedicated focus to growing the business in Latin America and Asia. He and I, about a month ago, spent a couple of weeks touring the region. We met with our distributors. We spent time with our licensors and some retail partners in Korea and Japan and a few other locations. And I came away really encouraged. I think from an IP standpoint, we already work with some of the biggest partners in the region, like I'll use the sort of Zootopia from Disney as an example. This year, that was the highest grossing import movie ever in the history of China. It did about $630 million in box office there. And obviously, we have a long-standing relationship with Disney. One piece is another example of something in the anime world, and obviously, we're into anime more broadly and really popular in the region. So I think there's a lot of potential. It's going to take some time to build the foundation, the plans and kind of see us really supercharge that growth, but I definitely came away really encouraged about the opportunity in the region and also Andy helping to lead the charge for us there. Top Pops: Yves, anything you want to add about the broader economic environment and what the rest of the outlook is for the year? Yves Le Pendeven: Yes. So obviously, we're pleased with Q1. It was a strong start to the year. We expect that momentum to continue in Q2. So today, we issued guidance for Q2, we think sales will be up low single digits to mid-single digits. And adjusted EBITDA between $5 million and $10 million. And then as we look to the second half of the year, it's a little bit too soon to say, but there are some favorable things going on, the current tariff rates that are in effect are a little bit lower than we planned. So that's great news, and we hope that continues. On the flip side, we're watching the news about oil prices pretty closely. We have not been negatively impacted yet, but it's a little bit too soon to say. So with that in mind, we're just reiterating our original guidance for the year, which was sales flat to up 3% and then adjusted EBITDA between $70 million and $80 million. Top Pops: Thanks so much. And now, Josh, I've got to ask. Is there anything that you're excited about coming up later this year? Josh Simon: I think is there anything I'm not excited about. There's a lot this year. I mean I mentioned in the last quarter too, it's an awesome film slate this year, just sort of from beginning to end of the year, Mando, Grogu, soon Toy Story, Avengers Doomsday at the end of the year, which is awesome. We actually just spent some time across the street from our offices here in Burbank with the Head of DC Studios last week and I think super excited for Supergirl. So a big year for movies, TV shows. Sports is obviously also huge this year because of the World Cup. And so we have the French, English and U.S. national teams. We also have a great relationship with a lot of athletes. I mentioned Messi earlier, who's playing for Argentina, Yamal for Spain, Haaland, Man City is playing for Norway and a few others. And then we even have the mascots. Can you name any of the three mascots. The three mascots that represent U.S., Canada and Mexico who are hosting the game. So covering it from all dimensions. And then look, the other thing I had mentioned, we talk a lot about the importance of speed, getting products to market faster. We just had an awesome execution of that with WrestleMania, a surprise appearance from IShowSpeed, one of the biggest creators in the world. I think he has like 50 million followers each on YouTube, Instagram and TikTok, right as he was walking out to the ring, we dropped an IShowSpeed Pop! on our site and also on fanatics.com. And so you can expect a lot more of us, both in that creator space and coming to market much faster kind of in the moment for our fans throughout the year. Top Pops: This is all really super exciting. And now, let's turn to a couple of questions that we have from a few analysts as well as some fans maybe even watching right now. First one we have here is coming in from Stephen Laszczyk, Goldman Sachs, he asks what gives you confidence that the improving POS trends you saw in Q4 will continue in 2026? Yves Le Pendeven: Actually, we had a great continuation of the Q4 trend. So I'm happy to report POS globally was up 6% in Q1. In the wholesale channel, it was actually up 12%. And then by territory, that was up 6% in the U.S. and up 28% in Europe. And you can see that's very much aligned to the sell-in. So it's a very healthy trend, sell-in, sell-through, and we're pleased with that trend. Top Pops: Great. Now actually another question from Stephen. What level of upside could we see from potential refunds and tariffs? Yves Le Pendeven: So we've shared that we've paid approximately $20 million in our IEEPA tariffs we're taking all the steps that we need to obtain a refund and kind of following the instructions there. A little bit uncertain on the timing. There is also a market to monetize tariff claims, and we're kind of exploring all of our options at this point. So more to come on that. Top Pops: Okay. Next question we have here is coming in from Keegan Cox at D.A. Davidson. He asked, can you talk about gross margin drivers for Q1 and Q2? Yves Le Pendeven: Sure. Again, highest gross margin we've ever reported. And it's not because of some kind of accounting adjustment or anything like that. It's really the result of so many things that we've been working on for the past 6 months to a year. So reducing the amount of discounting and promotional activity that we've been doing. We've also got renewed licensing agreements with our major partners. And then just channel and sales mix all contributed to that 44% gross margin. And then our guidance, 42% to 44%. We expect that the trend should be able to hold for the rest of the year. Top Pops: Okay. Perfect. Next up, we're going to get into some fan questions here. And the first one is coming in from [ TheBearsCollection142 ], they ask, what future Funko are you excited for? Josh Simon: I guess, like, for me, there's a few. So coming up at San Diego Comic-Con this year, I'm just going to tease that we'll be launching and rolling out our Pop! Mystery lineup. And so that's kind of taking the -- a brand new lineup of people's favorite 4-inch pop vinyl figures, but putting them into more of a blind box mystery format. We're starting off with some really fun lines of WB Horror, our own lineup on the Pop! Flora line. We have some really big IP coming into the future that I'm just going to tease right now. And there's also some really, I think, unique and compelling chase elements to it. So that's one I'm particularly excited for. The other one I'd say is we've continued to see some traction in the world of like BookTok and Romantasy. And so I would just say like, we -- if you can imagine like the biggest titles in that world for those of you who indulge as I do, we have those coming, and we'll be announcing some of that soon. But I think that's just like a brand-new category of fandom for us that I'm excited about. Top Pops: I'll be honest, I'm pretty excited to make some videos on those, too. Next one, we actually coming in is from [ FuntoCollect ], and they ask with Pop! from the Fox and the Hound, Oliver and Company, and Atlantis already out, are you looking to keep expanding into older Disney films? Josh Simon: Does Freaky Friday count? That would be a personal favorite. But I mean maybe on the -- we work with Disney a lot, obviously. So there's we are constantly coming up with fun ways to bring some of their characters to life. I think definitely something we think about a lot on the Loungefly front as well. . Jessica Kong: Yes, for sure. Our fans love Disney Classic, right? That's something that is core to our portfolio, and we'll always continue to develop into that. Top Pops: Cool. So good. This next year is actually kind of a joint question. There was two people that asked, it's [ Wasatch Pop and Chad Beaton ]. They are asking the possibility of retail footprint expansions. Josh Simon: Well, obviously, you're here in the Hollywood store today. I think the next step that we really think about from a retail and a retail experiential standpoint is what we could do with our partners in that space. And so we're currently working on kind of, I think, I'll say, revitalizing and reconceiving our space with FAO Schwarz to New York. We're in the early stages there, but I think that's an incredible sort of global flagship shopping destination. I think they do experiential retail better than anyone. They've been incredible partners so there's some newness we're bringing there. We are working on expanding how we think about that pop yourself kiosk experience and how that could come to life with some retail partners. So we'll be testing that later this year with some partners. We haven't quite announced yet, but we will be rolling that out. And then we'll continue to experiment here in this store. We have a lot of space, and I think we'll introduce and refine some concepts that in success, I can imagine us rolling out into more places around the world. Top Pops: Sounds pretty good. Yes. Now this next one that we've got here is coming in from [ Noah MTV ], and he asked, what's your favorite comic book character you'd like to see become a Pop!? Josh Simon: I mean, look, we do a lot in that space, and I think that kind of goes back to the core DNA of the company. I would say across the team, we're all really excited about DC's Absolute Universe sort of how I would -- I think it's super unique. It's a fresh take on that world. The books have been great, chart topping. I think that's an area that I think we're continue to really explore -- continue to explore. Top Pops: I'll be honest, I'm excited about those. So now that you've mentioned it, it's pretty cool. Yes. But that pretty much wraps up the questions. I don't know if you have any final words? Josh Simon: I have -- well, a couple of things. First of all, just back to thanking you for being here. And World Cup, we are kicking off a bespoke Pop! Yourself experience. So right now with Pop! Yourself, you can actually get yourself popped in a U.S. World Cup kits. And then next week, we're launching some additional accessories. So it's not out yet, but we did do a version of Top Pops for you here, you can accessorize yourself with the World Cup trophy. So that's a little thank you for being here today and a little token of gratitude for your first earnings call. Top Pops: That is exactly what I want. Thank you. Josh Simon: No, we appreciate it. And then I'll mention a lot of the information we talked about today, some additional investor materials and the presentation is available on our Investor Relations website, along with this for anyone who wants to watch it over and over again as I'm sure many, many people out in the world will, I encourage it. Top Pops: Yes. Perfect. Well, thank you so much. Josh Simon: Thank you. Jessica Kong: Thank you. Before you buy stock in Funko, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Funko wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $475,926!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,296,608!* Now, it’s worth noting Stock Advisor’s total average return is 981% — a market-crushing outperformance compared to 205% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of May 8, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Funko (FNKO) Q1 2026 Earnings Call Transcript was originally published by The Motley Fool

--Q1 Sales and Profitability Significantly Above Expectations; Net Sales Grew 5%, Gross Margin Highest Ever Reported by Company-- EVERETT, Wash., May 07, 2026--(BUSINESS WIRE)--Funko, Inc. (Nasdaq: FNKO), a leading pop culture lifestyle brand, today reported its consolidated financial results for the first quarter ended March 31, 2026. First Quarter Financial Results Summary: 2026 vs 2025 Net sales were $200.9 million compared with $190.7 million Gross profit was $88.8 million, equal to gross margin of 44.2%, compared with $76.9 million, equal to gross margin of 40.3% SG&A expenses were $83.7 million compared with $84.8 million Net loss was $18.1 million, or $0.33 per share, compared with $28.1 million, or $0.52 per share Adjusted net loss* was $6.3 million, or $0.11 per share*, compared with $17.8 million, or $0.33 per share Adjusted EBITDA* was $11.3 million versus negative adjusted EBITDA* of $4.7 million "We kicked off the year with a strong Q1 performance, building on the positive momentum from the second half of 2025, with net sales, gross margin and adjusted EBITDA all exceeding expectations," said Josh Simon, Chief Executive Officer of Funko. "International sales were robust, particularly in Europe, and our Core Collectibles business increased 17% year-over-year, contributing to the highest reported gross margin in our history. As we focus on bringing the biggest cultural moments to life, we're excited to continue executing against our strategic plan, moving at the speed of culture, meeting fans wherever they are and giving them new ways to connect with the stories they love." First Quarter 2026 Net Sales by Category and Geography The tables below show the breakdown of net sales on a brand category and geographical basis (in thousands): Balance Sheet Highlights - At March 31, 2026 vs December 31, 2025 Total cash and cash equivalents were $34.3 million at March 31, 2026 compared with $42.1 million at December 31, 2025 Inventories were $76.8 million at March 31, 2026 down from $83.1 million at December 31, 2025 Total debt was $215.9 million at March 31, 2026 versus $225.3 million at December 31, 2025. Total debt includes the amount outstanding under the company's term loan facility, net of unamortized discounts, revolving line of credit and the company's equipment finance loan Outlook for 2026 The company reiterated its 2026 full-year outlook and provided 2026 second-quarter guidance, as follows: Webcast Conference Call The company will host a webcast at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time) today, May 7, 2026, to further discuss its first quarter results and business update. A live webcast, presentation materials and a replay of the event will be available on the Investor Relations section on the company’s website at investor.funko.com. The replay of the webcast will be available for one year. Use of Non-GAAP Financial Measures *This release contains references to non-GAAP financial measures, including adjusted net income (loss), including per share amounts, adjusted EBITDA, adjusted EBITDA margin and adjusted net loss margin, which are financial measures that are not prepared in conformity with United States generally accepted accounting principles (U.S. GAAP). Management uses these measures internally for evaluating its operating performance, for planning purposes, including the preparation of our annual operating budget and financials projections, to assess incentive compensation for our employees, and to evaluate our capacity to expand our business. The company's management believes that the presentation of non-GAAP financial measures provides useful supplementary information regarding operational performance because it enhances an investor's overall understanding of the financial results for the company's core business. Additionally, it provides a basis for the comparison of the financial results for the company's core business between current, past and future periods as they remove the impact of items not directly resulting from our core operations. The company also believes that including adjusted EBITDA and the other non-GAAP financial measures presented in this release is appropriate to provide additional information to investors and help to compare against other companies in our industry. Non-GAAP financial measures have limitations as analytical tools and should be considered only as a supplement to, and not as a substitute for or as a superior measure to, financial measures prepared in accordance with U.S. GAAP. We caution investors that amounts presented in accordance with our definitions of adjusted net income (loss), including per share amounts, adjusted EBITDA and adjusted EBITDA margin may not be comparable to similar measures disclosed by our competitors, because not all companies and analysts calculate these measures in the same manner. Detailed reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the financial tables following this release. A reconciliation of adjusted EBITDA outlook to the corresponding GAAP measure on a forward-looking basis cannot be provided without unreasonable efforts, as we are unable to provide reconciling information with respect to certain items. However, for the second quarter of 2026 the company expects equity-based compensation of approximately $4 million, depreciation and amortization of approximately $15 million and interest expense of approximately $5 million. For the full year 2026, the company expects equity-based compensation of approximately $14 million, depreciation and amortization of approximately $60 million and interest expense of approximately $18 million, each of which is a reconciling item to net loss. See "Use of Non-GAAP Financial Measures" and the attached reconciliations for more information. About Funko Headquartered in Everett, Washington, Funko is a leading pop culture and collectibles brand. Funko designs, sources and distributes licensed pop culture products across multiple categories, including vinyl figures, action toys, plush, apparel, housewares and accessories for consumers who seek tangible ways to connect with their favorite pop culture brands and characters. Learn more at Funko.com, Loungefly.com and MondoShop.com, and follow us on TikTok, X, and Instagram. Forward Looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including statements regarding our strategic plans and anticipated financial results, including without limitation, our full year and second quarter 2026 guidance. These forward-looking statements are based on management’s current expectations. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the following: impacts from economic downturns; changes in the retail industry and markets for our consumer products; risks associated with our international operations, including risk related to tariffs and trade restrictions; risks relating to our indebtedness, including our ability to comply with financial and negative covenants under our Credit Agreement, as amended; our ability to execute our business strategy; our ability to manage our inventories and growth; our ability to identify or complete any strategic alternative transaction; our dependence on content development and creation by third parties; our ability to obtain, maintain and protect our intellectual property rights or those of our licensors; fluctuations in our gross margin and seasonal impacts; our dependence on vendors and outsourcers; risks relating to government regulation; risks relating to litigation, including products liability claims and securities class action litigation; risk resulting from our e-commerce business and social media presence; our ability to successfully operate our information systems and implement new technology; our ability to secure additional financing on favorable terms or at all; the influence of our significant stockholder, TCG, and the possibility that TCG’s interests may conflict with the interests of our other stockholders; risks relating to our organizational structure; including the Tax Receivable Agreement ("TRA") which confers certain benefits upon the parties to the TRA ("TRA Parties") that will not benefit Class A common stockholders to the same extent as it will benefit the TRA Parties; and volatility in the price of our Class A common stock. These and other important factors discussed under the caption "Risk Factors" in our quarterly report on Form 10-Q for the quarter ended March 31, 2026 and our other filings with the Securities and Exchange Commission could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management’s estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release. The following tables reconcile the Non-GAAP Financial Measures to the most directly comparable U.S. GAAP financial performance measure, which is net loss, for the periods presented: View source version on businesswire.com: https://www.businesswire.com/news/home/20260507667390/en/ Contacts Investor Relations: [email protected] Media: [email protected]