Toronto, Canada — Spin Master Corp. announced its financial results for the three months ended March 31, 2025. The Company’s full Management’s Discussion and Analysis (“MD&A”) for the three months ended March 31, 2025. “We had a solid start to 2025 reflecting the power of our three creative centre approach and global appeal of our toy brands, entertainment content and digital play experiences,” said Max Rangel, Spin Master’s Global President & CEO. “We drove an increase in revenue while meeting profitability targets. Digital Games revenue showed renewed strength driven by higher engagement and monetization in Toca Boca World. Given the uncertainty related to the implementation of U.S. tariffs, which affects our Toys creative centre, we are moving quickly and firmly to mitigate the impact to the business from both a sourcing, pricing and cost management perspective. We remain committed to providing kids and their families with access to the joy of play across our Toys, Entertainment and Digital Games creative centers.”

“We had a strong first quarter with revenue up just under 14% over last year, driven by a strong Toys and Digital Games performance,” said Mark Segal, Spin Master’s Chief Financial Officer. “We continued to manage our balance sheet carefully and reduced net debt by over $70 million compared to the same quarter last year. From a capital allocation perspective, we continue to be active on our NCIB, which was renewed to March 2026. Given the uncertainty created by the implementation of U.S. tariffs on various countries where we produce toys, we are withdrawing our 2025 outlook until the environment stabilizes.”

Consolidated Financial Highlights for Q1 2025 as compared to the same period in 2024

• Q1 2025 Revenue was $359.3 million, an increase of 13.6%. Toy Revenue was $273.7 million compared to $226.4 million. Toy Gross Product Sales1 were $313.7 million, an increase of $49.6 million or 18.8% from $264.1 million.
• Q1 2025 Operating Loss was $22.1 million compared to $61.8 million. Operating Loss in the prior year included the fair value adjustment for inventories acquired, and transaction and integration costs related to the acquisition of Melissa & Doug.
• Q1 2025 Adjusted EBITDA1 was $21.6 million, compared to $18.6 million, an increase of $3.0 million. Adjusted EBITDA Margin1 was 6.0% compared to 5.9%.
• Q1 2025 Net Loss was $24.5 million or $(0.24) per share compared to $54.8 million or $(0.53) per share. Adjusted Net Loss1 was $12.0 million or $(0.12) per share compared to $19.5 million or $(0.19) per share.
• Q1 2025 Total Net Cost Synergies2 of $6.5 million related to the acquisition of Melissa & Doug were realized, which represents an annualized run-rate of $21.6 million towards the target of $25 million to $30 million in Run-rate Net Cost Synergies2 by the end of 2026.
• Q1 2025 Cash provided by operating activities was $24.8 million compared to $24.3 million.
• Q1 2025 Free Cash Flow1 was $(10.8) million compared to $(0.6) million.
• Q1 2025 results were not affected by the changes to global tariff policies.
• Repurchased and cancelled 1,157,099 subordinate voting shares for $21.7 million (C$31.2 million) in 2025 through the Company’s Normal Course Issuer Bid (the “NCIB”) program. Subsequent to March 31, 2025, the Company repurchased and cancelled 363,200 subordinate voting shares for $5.8 million.
• Subsequent to March 31, 2025, the Company declared a quarterly dividend of C$0.12 per outstanding subordinate voting share and multiple voting share, payable on July 11, 2025.

2025 Outlook

The Company has decided to withdraw its 2025 outlook previously provided on February 24, 2025 in connection with 2025 Gross Product Sales1, 2025 Revenue and 2025 Adjusted EBITDA Margin1, due to the current uncertainty arising from ongoing changes to global tariff policies, making it difficult to provide reliable projections.

Consolidated Financial Results as compared to the same period in 2024

(US$ millions, except per share information)	Q1 2025	Q1 2024	$ Change
Consolidated Results
Revenue4	359.3	316.2	43.1
Operating Loss	(22.1)	(61.8)	39.7
Operating Margin2	(6.2) %	(19.5) %
Adjusted Operating Loss1,3	(5.9)	(14.5)	8.6
Adjusted Operating Margin1	(1.6) %	(4.6) %
Net Loss	(24.5)	(54.8)	30.3
Adjusted Net Loss1,3	(12.0)	(19.5)	7.5
Adjusted EBITDA1,3,4	21.6	18.6	3.0
Adjusted EBITDA Margin1	6.0 %	5.9 %
Earnings Per Share (“EPS”)
Basic EPS	$(0.24)	$(0.53)
Diluted EPS	$(0.24)	$(0.53)
Adjusted Basic EPS1	$(0.12)	$(0.19)
Adjusted Diluted EPS1	$(0.12)	$(0.19)
Weighted average number of shares (in millions)
Basic	102.3	104.2
Diluted	104.5	106.3
Selected Cash Flow Data
Cash provided by operating activities	24.8	24.3	0.5
Cash used in investing activities	(36.6)	(980.4)	943.8
Cash (used in) provided by financing activities	(70.3)	457.2	(527.5)
Free Cash Flow1	(10.8)	(0.6)	(10.2)

1 Non-GAAP financial measure or ratio. See “Non-GAAP Financial Measures and Ratios, Supplementary Financial Measures”.

2 Operating Margin is calculated as Operating Income (Loss) divided by Revenue.

3 Refer to the “Reconciliation of Non-GAAP Financial Measures” section for further details on the adjustments.

Q1 2025 Operating Loss was $22.1 million, a change of $39.7 million from $61.8 million, primarily driven by the decrease in Operating Loss in the Toys segment of $40.2 million, partially offset by a decrease in Operating Income in the Entertainment & Digital Games segments. In addition, Toys Operating Loss in the prior year included $20.6 million of fair value adjustment for inventories acquired, and $6.2 million of transaction and integration costs related to the acquisition of Melissa & Doug.

Q1 2025 Adjusted Operating Loss1 was $5.9 million, a change of $8.6 million from $14.5 million. The decrease in Adjusted Operating Loss1 was mainly driven by a decrease in Toys Adjusted Operating Loss1 of $16.2 million, partially offset by declines in Adjusted Operating Income1 in Digital Games segment of $5.7 million and Entertainment segment of $3.0 million.

Q1 2025 Adjusted EBITDA1 was $21.6 million compared to $18.6 million. The increase was primarily driven by higher Adjusted Gross Profit and lower administrative and distribution costs, partially offset by increased marketing, selling and product development costs. Adjusted EBITDA Margin1 remained relatively flat at 6.0% compared to 5.9%. The change in Adjusted EBITDA Margin1 was driven by higher revenue resulting in operating leverage, partially offset by higher marketing expenses and lower Adjusted Gross Margin1.

Segmented Financial Results as compared to the same period in 2024

(US$ millions)	Q1 2025					Q1 2024
	Toys	Entertain- ment	Digital Games	Corporate & Other1	Total	Toys	Entertain- ment	Digital Games	Corporate & Other1	Total
Revenue	273.7	37.8	47.8	—	359.3	226.4	43.8	46.0	—	316.2
Operating (Loss) Income	(50.6)	25.9	8.2	(5.6)	(22.1)	(90.8)	28.6	13.2	(12.8)	(61.8)
Adjusted Operating (Loss) Income2	(40.0)	26.1	9.5	(1.5)	(5.9)	(56.2)	29.1	15.2	(2.6)	(14.5)
Adjusted EBITDA2	(20.5)	31.7	11.9	(1.5)	21.6	(32.5)	36.4	17.3	(2.6)	18.6

1 Corporate & Other includes certain corporate costs, foreign exchange, transaction and integration costs, and investment income (loss), net.

2 Non-GAAP financial measure or ratio. See “Non-GAAP Financial Measures and Ratios, Supplementary Financial Measures”.

Toys Segment Results

The following table provides a summary of the Toys segment operating results, for the three months ended March 31, 2025 and 2024:

(US$ millions)	Q1 2025	Q1 2024	$ Change	% Change
Preschool, Infant & Toddler and Plush	142.4	122.8	19.6	16.0 %
Activities, Games & Puzzles and Dolls & Interactive	72.5	80.5	(8.0)	(9.9) %
Wheels & Action	66.4	40.7	25.7	63.1 %
Outdoor	32.4	20.1	12.3	61.2 %
Toy Gross Product Sales1	313.7	264.1	49.6	18.8 %
Sales Allowances2	(40.4)	(38.2)	(2.2)	5.8 %
Sales Allowances % of Toy Gross Product Sales1	12.9 %	14.5 %		(1.6) %
Toy Net Sales	273.3	225.9	47.4	21.0 %
Toy – Other Revenue	0.4	0.5	(0.1)	(20.0) %
Toy Revenue	273.7	226.4	47.3	20.9 %
Toys Operating Loss	(50.6)	(90.8)	40.2	(44.3) %
Toys Operating Margin3	(18.5) %	(40.1) %		21.6 %
Toys Adjusted EBITDA1	(20.5)	(32.5)	12.0	(36.9) %
Toys Adjusted EBITDA Margin1	(7.5) %	(14.4) %		6.9 %

1 Non-GAAP financial measure or ratio. See “Non-GAAP Financial Measures and Ratios, Supplementary Financial Measures”.

2 The Company enters arrangements to provide sales allowances requested by customers relating to cooperative advertising, contractual and negotiated promotional discounts, volume rebates, markdowns, and costs incurred by customers to sell the Company’s products.

3 Operating Margin is calculated as segment Operating Income divided by segment Revenue.

• Toy Revenue increased by $47.3 million to $273.7 million.
• Toy Gross Product Sales1 increased by $49.6 million to $313.7 million. Toy Gross Product Sales1 increased primarily as a result of higher shipment volumes related to partner licensed brands.
• Sales Allowances increased by $2.2 million to $40.4 million. As a percentage of Toy Gross Product Sales1, Sales Allowances decreased to 12.9% from 14.5% driven by lower markdowns and promotional activity and a change in geographic market mix.
• Toys Operating Loss was $50.6 million compared to $90.8 million. The decrease in Toys Operating Loss was driven by higher Gross Profit due to higher shipment volumes and lower distribution expenses, partially offset by higher selling and marketing expenses.
• Toys Operating Margin was (18.5)% compared to (40.1)%.
• Toys Adjusted EBITDA1 was $(20.5) million compared to $(32.5) million.
• Toys Adjusted EBITDA Margin1 was (7.5)% compared to (14.4)%. The increase in Toys Adjusted EBITDA Margin1 was driven by higher Toy Revenue resulting in operating leverage relative to administrative and distribution expenses, partially offset by higher selling and marketing expenses and lower Adjusted Gross Margin1.

Entertainment Segment Results

The following table provides a summary of Entertainment segment operating results, for the three months ended March 31, 2025 and 2024:

(US$ millions)	Q1 2025	Q1 2024	$ Change	% Change
Entertainment Revenue	37.8	43.8	(6.0)	(13.7) %
Entertainment Operating Income	25.9	28.6	(2.7)	(9.4) %
Entertainment Operating Margin	68.5 %	65.3 %		3.2 %
Entertainment Adjusted Operating Income1	26.1	29.1	(3.0)	(10.3) %
Entertainment Adjusted Operating Margin1	69.0 %	66.4 %		2.6 %

1 Non-GAAP financial measure or ratio. See “Non-GAAP Financial Measures and Ratios, Supplementary Financial Measures”.

• Entertainment Revenue declined by $6.0 million to $37.8 million, primarily driven by lower distribution revenue.
• Entertainment Operating Income declined by $2.7 million to $25.9 million, primarily due to lower distribution revenue, partially offset by lower amortization due to fewer content deliveries and lower marketing expenses.
• Entertainment Operating Margin increased to 68.5% from 65.3%.
• Entertainment Adjusted Operating Income1 declined by $3.0 million to $26.1 million.
• Entertainment Adjusted Operating Margin1 increased to 69.0% from 66.4%, primarily due to lower amortization of production costs and marketing expenses, partially offset by lower distribution revenue.

Digital Games Segment Results

The following table provides a summary of Digital Games segment operating results, for the three months ended March 31, 2025 and 2024:

(US$ millions)	Q1 2025	Q1 2024	$ Change	% Change
Digital Games Revenue	47.8	46.0	1.8	3.9 %
Digital Games Operating Income	8.2	13.2	(5.0)	(37.9) %
Digital Games Operating Margin	17.2 %	28.7 %		(11.5) %
Digital Games Adjusted Operating Income1	9.5	15.2	(5.7)	(37.5) %
Digital Games Adjusted Operating Margin1	19.9 %	33.0 %		(13.1) %

1 Non-GAAP financial measure or ratio. See “Non-GAAP Financial Measures and Ratios, Supplementary Financial Measures”.

• Digital Games Revenue increased by $1.8 million to $47.8 million driven by growth in subscriptions across Piknik and PAW Patrol Academy and higher in-game purchases in Toca Boca World.
• Digital Games Operating Income declined by $5.0 million to $8.2 million.
• Digital Games Operating Margin decreased from 28.7% to 17.2%.
• Digital Games Adjusted Operating Income1 declined by $5.7 million to $9.5 million.
• Digital Games Adjusted Operating Margin1 decreased from 33.0% to 19.9%.
• The decline in Digital Games Operating Income, Operating Margin, Adjusted Operating Income1, and Adjusted Operating Margin1 was due to higher marketing expenses related to paid user acquisition costs across the Digital Games portfolio.