Funko Reports First Quarter 2025 Financial Results
Q1 Net Sales Within Guidance Range, Gross Margin and Adjusted EBITDA Above Expectations; Withdraws 2025 Full-Year Outlook Due to Tariff-Related Uncertainties–
Evertt, WA.— Funko reported its consolidated financial results for the first quarter ended March 31, 2025.
First Quarter Financial Results Summary: 2025 vs 2024
- Net sales were $190.7 million compared with $215.7 million
- Gross profit was $76.9 million, equal to gross margin of 40.3%, compared with $86.3 million, equal to gross margin of 40.0%
- SG&A expenses were $84.8 million. This compares with $85.6 million, which included non-recurring charges of $5.1 million. Details related to the non-recurring charges can be found in footnotes 3 and 4 of the attached reconciliation tables
- Net loss was $28.1 million, or $0.52 per share, compared with $23.7 million, or $0.45 per share
- Adjusted net loss* was $17.8 million, or $0.33 per share*, compared with $9.2 million, or $0.17 per share
- Negative adjusted EBITDA* was $4.7 million versus adjusted EBITDA* of $9.6 million
“Despite a challenging Q1 environment, we were able to deliver net sales within our guidance range and better than expected gross margin and adjusted EBITDA,” said Cynthia Williams, Chief Executive Officer of Funko. “International continues to be a strength for both our business and our brand. Market research shows we’re gaining share as we outpace the broader toy industry, our sell-through increased in the European G5 markets, and we’re expanding our global footprint. Our roadmap is working—and we’re moving fast to build a stronger, more global Funko.
“Since the beginning of April, the extent and volatility of tariffs have intensified, especially with regard to imports from China. As a result, we have taken swift and decisive action to protect our margins and liquidity. Those actions include reducing costs, adjusting pricing, and accelerating our diversified sourcing strategy. We now expect approximately 5% of our future US bound product to be sourced from China by year end.”
First Quarter 2025 Net Sales by Category and Geography
The tables below show the breakdown of net sales on a brand category and geographical basis (in thousands):
| Three Months Ended March 31, | Period Over Period Change | |||||||||||
| 2025 | 2024 | Dollar | Percentage | |||||||||
| Net sales by brand category: | ||||||||||||
| Core Collectible | $ | 144,479 | $ | 157,121 | $ | (12,642 | ) | (8.0 | )% | |||
| Loungefly | 35,374 | 40,676 | (5,302 | ) | (13.0 | )% | ||||||
| Other | 10,886 | 17,902 | (7,016 | ) | (39.2 | )% | ||||||
| Total net sales | $ | 190,739 | $ | 215,699 | $ | (24,960 | ) | (11.6 | )% | |||
| Three Months Ended March 31, | Period Over Period Change | |||||||||||
| 2025 | 2024 | Dollar | Percentage | |||||||||
| Net sales by geography: | ||||||||||||
| United States | $ | 121,909 | $ | 146,366 | $ | (24,457 | ) | (16.7 | )% | |||
| Europe | 54,205 | 54,243 | (38 | ) | (0.1 | )% | ||||||
| Other International | 14,625 | 15,090 | (465 | ) | (3.1 | )% | ||||||
| Total net sales | $ | 190,739 | $ | 215,699 | $ | (24,960 | ) | (11.6 | )% | |||
Balance Sheet Highlights – At March 31, 2025 vs December 31, 2024
- Total cash and cash equivalents were $25.9 million at March 31, 2025 compared with $34.7 million at December 31, 2024
- Inventories were $87.7 million at March 31, 2025 down from $92.6 million at December 31, 2024
- Total debt was $202.2 million at March 31, 2025 versus $182.8 million at December 31, 2024. 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. As of March 31, 2025, the company was in compliance with all debt covenants.
Outlook for 2025
The Company has decided to withdraw its 2025 full-year outlook, previously provided on March 6, 2025, due to the current uncertainty and ongoing changes to global tariff policies, making it difficult to provide reliable projections.
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| Funko, Inc.
Condensed Consolidated Statements of Operations (Unaudited) |
|||||||
| Three Months Ended March 31, | |||||||
| 2025 | 2024 | ||||||
| (In thousands, except per share data) | |||||||
| Net sales | $ | 190,739 | $ | 215,699 | |||
| Cost of sales (exclusive of depreciation and amortization) | 113,868 | 129,427 | |||||
| Selling, general, and administrative expenses | 84,807 | 85,595 | |||||
| Depreciation and amortization | 15,262 | 15,579 | |||||
| Total operating expenses | 213,937 | 230,601 | |||||
| Loss from operations | (23,198 | ) | (14,902 | ) | |||
| Interest expense, net | 3,849 | 6,311 | |||||
| Other expense, net | 168 | 1,553 | |||||
| Loss before income taxes | (27,215 | ) | (22,766 | ) | |||
| Income tax expense | 844 | 900 | |||||
| Net loss | (28,059 | ) | (23,666 | ) | |||
| Less: net loss attributable to non-controlling interests | (471 | ) | (1,003 | ) | |||
| Net loss attributable to Funko, Inc. | $ | (27,588 | ) | $ | (22,663 | ) | |
| Loss per share of Class A common stock: | |||||||
| Basic | $ | (0.52 | ) | $ | (0.45 | ) | |
| Diluted | $ | (0.52 | ) | $ | (0.45 | ) | |
| Weighted average shares of Class A common stock outstanding: | |||||||
| Basic | 53,530 | 50,706 | |||||
| Diluted | 53,530 | 50,706 | |||||
| Funko, Inc.
Condensed Consolidated Balance Sheets (Unaudited) |
|||||||
| March 31, 2025 |
December 31, 2024 |
||||||
| (In thousands, except per share data) | |||||||
| Assets | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 25,934 | $ | 34,655 | |||
| Accounts receivable, net | 90,850 | 119,882 | |||||
| Inventories | 87,735 | 92,580 | |||||
| Prepaid expenses and other current assets | 32,217 | 39,942 | |||||
| Total current assets | 236,736 | 287,059 | |||||
| Property and equipment, net | 75,660 | 78,357 | |||||
| Operating lease right-of-use assets, net | 50,514 | 52,846 | |||||
| Goodwill | 133,759 | 133,652 | |||||
| Intangible assets, net | 147,636 | 151,547 | |||||
| Other assets | 4,096 | 3,793 | |||||
| Total assets | $ | 648,401 | $ | 707,254 | |||
| Liabilities and Stockholders’ Equity | |||||||
| Current liabilities: | |||||||
| Line of credit | $ | 85,000 | $ | 60,000 | |||
| Current portion of long-term debt | 22,611 | 22,512 | |||||
| Current portion of operating lease liabilities | 17,343 | 17,102 | |||||
| Accounts payable | 56,958 | 63,130 | |||||
| Accrued royalties | 42,957 | 61,362 | |||||
| Accrued expenses and other current liabilities | 53,351 | 81,688 | |||||
| Total current liabilities | 278,220 | 305,794 | |||||
| Long-term debt | 94,610 | 100,303 | |||||
| Operating lease liabilities | 57,248 | 60,390 | |||||
| Other long-term liabilities | 4,168 | 4,414 | |||||
| Commitments and Contingencies | |||||||
| Stockholders’ equity: | |||||||
| Class A common stock, par value $0.0001 per share, 200,000 shares authorized; 54,252 and 52,967 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively | 5 | 5 | |||||
| Class B common stock, par value $0.0001 per share, 50,000 shares authorized; 648 and 1,430 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively | — | — | |||||
| Additional paid-in-capital | 348,358 | 343,472 | |||||
| Accumulated other comprehensive income (loss) | 807 | (1,676 | ) | ||||
| Accumulated deficit | (136,370 | ) | (108,782 | ) | |||
| Total stockholders’ equity attributable to Funko, Inc. | 212,800 | 233,019 | |||||
| Non-controlling interests | 1,355 | 3,334 | |||||
| Total stockholders’ equity | 214,155 | 236,353 | |||||
| Total liabilities and stockholders’ equity | $ | 648,401 | $ | 707,254 | |||
| Funko, Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited) |
|||||||
| Three Months Ended March 31, | |||||||
| 2025 | 2024 | ||||||
| (In thousands) | |||||||
| Operating Activities | |||||||
| Net loss | $ | (28,059 | ) | $ | (23,666 | ) | |
| Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | |||||||
| Depreciation and amortization | 15,262 | 15,045 | |||||
| Equity-based compensation | 3,265 | 3,824 | |||||
| Other, net | 697 | 1,045 | |||||
| Changes in operating assets and liabilities: | |||||||
| Accounts receivable, net | 29,939 | 28,803 | |||||
| Inventories | 5,633 | 6,767 | |||||
| Prepaid expenses and other assets | 9,936 | 16,802 | |||||
| Accounts payable | (8,318 | ) | (6,844 | ) | |||
| Accrued royalties | (18,405 | ) | (12,479 | ) | |||
| Accrued expenses and other liabilities | (32,212 | ) | (14,790 | ) | |||
| Net cash (used in) provided by operating activities | (22,262 | ) | 14,507 | ||||
| Investing Activities | |||||||
| Purchases of property and equipment | (6,552 | ) | (4,157 | ) | |||
| Sale of Funko Games inventory and certain intellectual property | — | 6,754 | |||||
| Other, net | 193 | 161 | |||||
| Net cash (used in) provided by investing activities | (6,359 | ) | 2,758 | ||||
| Financing Activities | |||||||
| Borrowings on line of credit | 25,000 | — | |||||
| Payments on line of credit | — | (13,500 | ) | ||||
| Payments of long-term debt | (5,756 | ) | (13,941 | ) | |||
| Other, net | 86 | 2 | |||||
| Net cash provided by (used in) financing activities | 19,330 | (27,439 | ) | ||||
| Effect of exchange rates on cash and cash equivalents | 570 | (169 | ) | ||||
| Net change in cash and cash equivalents | (8,721 | ) | (10,343 | ) | |||
| Cash and cash equivalents at beginning of period | 34,655 | 36,453 | |||||
| Cash and cash equivalents at end of period | $ | 25,934 | $ | 26,110 | |||
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:
| Three Months Ended March 31, | |||||||
| 2025 | 2024 | ||||||
| (In thousands, except per share data) | |||||||
| Net loss attributable to Funko, Inc. | $ | (27,588 | ) | $ | (22,663 | ) | |
| Reallocation of net loss attributable to non-controlling interests from the assumed exchange of common units of FAH, LLC for Class A common stock (1) | (471 | ) | (1,003 | ) | |||
| Equity-based compensation (2) | 3,265 | 3,824 | |||||
| Acquisition transaction costs and other expenses (3) | — | 3,184 | |||||
| Certain severance, relocation and related costs (4) | — | 1,866 | |||||
| Foreign currency transaction loss (5) | 176 | 1,576 | |||||
| Income tax expense (6) | 6,788 | 3,979 | |||||
| Adjusted net loss | $ | (17,830 | ) | $ | (9,237 | ) | |
| Adjusted net loss margin (7) | (9.3 | )% | (4.3 | )% | |||
| Weighted-average shares of Class A common stock outstanding – basic | 53,530 | 50,706 | |||||
| Equity-based compensation awards and common units of FAH, LLC that are convertible into Class A common stock | 1,067 | 2,725 | |||||
| Adjusted weighted-average shares of Class A stock outstanding – diluted | 54,597 | 53,431 | |||||
| Adjusted loss per diluted share | $ | (0.33 | ) | $ | (0.17 | ) | |
| Three Months Ended March 31, | |||||||
| 2025 | 2024 | ||||||
| (amounts in thousands) | |||||||
| Net loss | $ | (28,059 | ) | $ | (23,666 | ) | |
| Interest expense, net | 3,849 | 6,311 | |||||
| Income tax expense | 844 | 900 | |||||
| Depreciation and amortization | 15,262 | 15,579 | |||||
| EBITDA | $ | (8,104 | ) | $ | (876 | ) | |
| Adjustments: | |||||||
| Equity-based compensation (2) | 3,265 | 3,824 | |||||
| Acquisition transaction costs and other expenses (3) | — | 3,184 | |||||
| Certain severance, relocation and related costs (4) | — | 1,866 | |||||
| Foreign currency transaction loss (5) | 176 | 1,576 | |||||
| Adjusted EBITDA | $ | (4,663 | ) | $ | 9,574 | ||
| Adjusted EBITDA margin (8) | (2.4 | )% | 4.4 | % | |||
| (1) | Represents the reallocation of net income attributable to non-controlling interests from the assumed exchange of common units of FAH, LLC for Class A common stock in periods in which income was attributable to non-controlling interests. | |
| (2) | Represents non-cash charges related to equity-based compensation programs, which vary from period to period depending on the timing of awards. | |
| (3) | For the three months ended March 31, 2024, costs of $3.2 million related to contract settlement agreements and related services for assets held for sale (including fair market value adjustments of $135,000) related to a potential business initiative and the sale of certain assets under Funko Games. | |
| (4) | For the three months ended March 31, 2024, includes charges related severance and benefit costs related to certain management resignations. | |
| (5) | Represents both unrealized and realized foreign currency losses on transactions denominated other than in U.S. dollars, including derivative gains and losses on foreign currency forward exchange contracts. | |
| (6) | Represents the income tax expense effect of the above adjustments. This adjustment uses an effective tax rate of 25% for all periods presented. | |
| (7) | Adjusted net loss margin is calculated as adjusted net loss as a percentage of net sales. | |
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