Spin Master Reports Q4 2025 Financial Results
Toronto, Canada — Spin Master Corp. announced financial results for the three months and year ended December 31, 2025.
“We navigated a challenging fourth quarter for U.S. toy sales, while increasing our POS, achieving double-digit gains in digital games, and strategically expanding the audience for PAW Patrol ahead of its third movie release,” said Christina Miller, CEO of Spin Master. “Entering 2026 we are setting the stage to return to sustainable growth by investing in innovation in our core toy portfolio and digital platforms, expanding into higher-growth categories, and accelerating collaboration across our creative centers to unlock the full potential of our portfolio and brands.”
“The power of our financial model remained evident in 2025 as we generated more than $300 million in operating cash flows,” said Jonathan Roiter, Spin Master’s CFO. “This enabled us to make important investments into technology, supply chain diversification, toy innovation, new entertainment content and our digital platforms. We also returned more than $80 million in capital to shareholders through our dividend and share buybacks, while maintaining a strong balance sheet and prudent leverage.”
Consolidated Financial Highlights for Q4 2025 as compared to the same period in 2024
- Revenue was $618.2 million, a decrease of 4.8%. Constant Currency Revenue1 was $607.4 million, a decrease of 6.4%.
- Operating Loss was $163.7 million, compared to Operating Income of $47.1 million. Operating Loss in the current year includes $229.1 million of non-cash impairment of goodwill and intangible assets.
- Adjusted Operating Income1 was $66.4 million, compared to $81.3 million.
- Net Loss was $184.3 million or $(1.85) per share compared to Net Income of $21.1 million or $0.21 per share (diluted). Net Loss in the current year includes $229.1 million of non-cash impairment of goodwill and intangible assets.
- Adjusted Net Income1 was $42.3 million or $0.41 per share (diluted) compared to $57.4 million or $0.55 per share (diluted).
- Adjusted EBITDA1 was $111.3 million, a decrease of $2.6 million.
- Adjusted EBITDA Margin1 was 18.0% compared to 17.5%.
- Cash provided by operating activities was $194.3 million compared to $203.4 million.
- Free Cash Flow1 was $128.0 million compared to $175.0 million.
- Repurchased and cancelled 441,195 subordinate voting shares for $6.7 million (C$8.9 million) in Q4 2025 through the Company’s Normal Course Issuer Bid (the “NCIB”) program. Subsequent to December 31, 2025, the Company repurchased and cancelled 313,833 subordinate voting shares for $4.4 million. Additionally, the TSX has accepted the Company’s notice to launch another NCIB commencing on March 7, 2026.
- Subsequent to December 31, 2025, the Company declared a quarterly dividend of C$0.12 per outstanding subordinate voting share and multiple voting share, payable on April 10, 2026.
2026 Outlook
For the full year 2026, the Company expects:
- Revenue: stable to low single digit percentage growth compared to 2025.
- Adjusted EBITDA1: mid to high single digit percentage growth compared to 2025.
Consolidated Financial Results as compared to the same period in 2024
|
(US$ millions, except per share information) |
Q4 2025 |
Q4 2024 |
$ Change |
|
Consolidated Results |
|||
|
Revenue |
618.2 |
649.1 |
(30.9) |
|
Operating (Loss) Income |
(163.7) |
47.1 |
(210.8) |
|
Operating Margin2 |
(26.5) % |
7.3 % |
|
|
Adjusted Operating Income1,3 |
66.4 |
81.3 |
(14.9) |
|
Adjusted Operating Margin1 |
10.7 % |
12.5 % |
|
|
Net (Loss) Income |
(184.3) |
21.1 |
(205.4) |
|
Adjusted Net Income1,3 |
42.3 |
57.4 |
(15.1) |
|
Adjusted EBITDA1,3 |
111.3 |
113.9 |
(2.6) |
|
Adjusted EBITDA Margin1 |
18.0 % |
17.5 % |
|
|
Earnings Per Share (“EPS”) |
|||
|
Basic EPS |
$(1.85) |
$0.21 |
|
|
Diluted EPS |
$(1.85) |
$0.20 |
|
|
Adjusted Basic EPS1 |
$0.43 |
$0.56 |
|
|
Adjusted Diluted EPS1 |
$0.41 |
$0.55 |
|
|
Weighted average number of shares (in millions) |
|||
|
Basic |
99.5 |
102.4 |
|
|
Diluted |
102.3 |
105.2 |
|
|
Selected Cash Flow Data |
|||
|
Cash provided by operating activities |
194.3 |
203.4 |
(9.1) |
|
Cash used in investing activities |
(79.3) |
(30.5) |
(48.8) |
|
Cash used in financing activities |
(137.9) |
(49.5) |
(88.4) |
|
Free Cash Flow1 |
128.0 |
175.0 |
(47.0) |
|
1 Non-GAAP financial measure or ratio. See “Non-GAAP Financial Measures and Ratios”. |
|||
|
2 Operating Margin is calculated as Operating (Loss) Income divided by Revenue. |
|||
|
3 Refer to the “Reconciliation of Non-GAAP Financial Measures” section for further details on the adjustments. |
Segmented Financial Results as compared to the same period in 2024
|
(US$ millions) |
Q4 2025 |
Q4 2024 |
||||||||
|
Toys |
Entertain-ment |
Digital Games |
Corporate & Other1 |
Total |
Toys |
Entertain-ment |
Digital Games |
Corporate & Other1 |
Total |
|
|
Revenue |
522.3 |
42.5 |
53.4 |
— |
618.2 |
561.7 |
41.3 |
46.1 |
— |
649.1 |
|
Operating (Loss) Income |
(171.0) |
14.3 |
3.0 |
(10.0) |
(163.7) |
31.7 |
19.7 |
(0.5) |
(3.8) |
47.1 |
|
Adjusted Operating Income (Loss)2 |
40.4 |
14.2 |
14.4 |
(2.6) |
66.4 |
53.5 |
20.3 |
11.5 |
(4.0) |
81.3 |
|
Adjusted EBITDA2 |
61.6 |
33.5 |
18.8 |
(2.6) |
111.3 |
76.2 |
26.3 |
15.4 |
(4.0) |
113.9 |
|
1 Corporate & Other includes certain corporate costs (such as certain employee compensation, corporate social responsibility and professional services expenses), foreign exchange, acquisition related transaction costs, as well as investment income and loss. |
||||||||||
|
2 Non-GAAP financial measure or ratio. See “Non-GAAP Financial Measures and Ratios”. |
Toys Segment Results
The following table provides a summary of the Toys segment operating results, for the three months ended December 31, 2025 and 2024:
|
(US$ millions) |
Q4 2025 |
Q4 2024 |
$ Change |
% Change |
|
Preschool, Infant & Toddler and Plush |
336.8 |
345.7 |
(8.9) |
(2.6) % |
|
Activities, Games & Puzzles and Dolls & Interactive |
175.7 |
206.2 |
(30.5) |
(14.8) % |
|
Wheels & Action |
107.1 |
91.7 |
15.4 |
16.8 % |
|
Outdoor |
7.8 |
16.4 |
(8.6) |
(52.4) % |
|
Toy Gross Product Sales1 |
627.4 |
660.0 |
(32.6) |
(4.9) % |
|
Sales Allowances2 |
(107.3) |
(102.5) |
(4.8) |
4.7 % |
|
Sales Allowances % of Toy Gross Product Sales1 |
17.1 % |
15.5 % |
1.6 % |
|
|
Toy Net Sales |
520.1 |
557.5 |
(37.4) |
(6.7) % |
|
Toy – Other Revenue |
2.2 |
4.2 |
(2.0) |
(47.6) % |
|
Toy Revenue |
522.3 |
561.7 |
(39.4) |
(7.0) % |
|
Toys Operating (Loss) Income |
(171.0) |
31.7 |
(202.7) |
(639.4) % |
|
Toys Operating Margin3 |
(32.7) % |
5.6 % |
(38.3) % |
|
|
Toys Adjusted EBITDA1 |
61.6 |
76.2 |
(14.6) |
(19.2) % |
|
Toys Adjusted EBITDA Margin1 |
11.8 % |
13.6 % |
(1.8) % |
|
1 Non-GAAP financial measure or ratio. See “Non-GAAP Financial Measures and Ratios”. |
||||
|
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 declined by $39.4 million to $522.3 million due to lower Toy Gross Product Sales1 and higher markdowns and promotional activities to manage inventory levels and support sell-through. Constant Currency Toy Gross Product Sales1 was $614.2 million, a decrease of 6.9%. Constant Current Toy Revenue was $512.9 million, a decrease of 8.7%.
- Toy Gross Product Sales1 decreased by $32.6 million to $627.4 million, primarily due to global market uncertainties resulting in part from ongoing changes to tariff policies, including a continued slowdown in U.S. retailer orders.
- Sales Allowances increased by $4.8 million to $107.3 million. As a percentage of Toy Gross Product Sales1, Sales Allowances increased to 17.1% from 15.5% driven by higher markdowns and promotional activities.
- Toys Operating Loss was $171.0 million compared to Operating Income of $31.7 million. The change was primarily driven by non-cash impairment of goodwill related to Melissa & Doug and lower Toy Revenue, partially offset by a decrease in selling, general and administrative expenses. The impairment of goodwill related to Melissa & Doug was due to revised cash flow projections for the Melissa & Doug CGU due to the ongoing global trade policy uncertainty and other macroeconomic headwinds. Toys Operating Margin was (32.7)% compared to 5.6%.
- Toys Adjusted EBITDA1 was $61.6 million compared to $76.2 million. Toys Adjusted EBITDA Margin1 was 11.8% compared to 13.6%. The decrease in Toys Adjusted EBITDA1 was driven by lower Toy Revenue, partially offset by lower marketing due to a shift in timing of marketing spend in the Toys segment driven by higher investments in the first half of the year to support key brand initiatives and retailer programs and lower distribution expenses due to inventory and warehouse optimization, partially offset by higher outbound transportation costs from increased domestic sales volumes.
Entertainment Segment Results
The following table provides a summary of Entertainment segment operating results, for the three months ended December 31, 2025 and 2024:
|
(US$ millions) |
Q4 2025 |
Q4 2024 |
$ Change |
% Change |
|
Entertainment Revenue |
42.5 |
41.3 |
1.2 |
2.9 % |
|
Entertainment Operating Income |
14.3 |
19.7 |
(5.4) |
(27.4) % |
|
Entertainment Operating Margin |
33.6 % |
47.7 % |
(14.1) % |
|
|
Entertainment Adjusted Operating Income1 |
14.3 |
20.3 |
(6.0) |
(29.6) % |
|
Entertainment Adjusted Operating Margin1 |
33.4 % |
49.2 % |
(15.8) % |
|
1 Non-GAAP financial measure or ratio. See “Non-GAAP Financial Measures and Ratios”. |
- Entertainment Revenue increased by $1.2 million to $42.5 million, primarily driven by distribution revenue from higher volume of content deliveries, partially offset by lower ongoing distribution revenue from PAW Patrol: The Mighty Movie and licensing & merchandising revenue.
- Entertainment Operating Income declined by $5.4 million to $14.3 million, primarily due to increased amortization of production costs from higher volume of content deliveries in the current year and lower ongoing distribution revenue from PAW Patrol: The Mighty Movie.
- Entertainment Operating Margin decreased from 47.7% to 33.6%.
- Entertainment Adjusted Operating Income1 declined by $6.0 million to $14.3 million.
- Entertainment Adjusted Operating Margin1 decreased from 49.2% to 33.4%, primarily due to the dilutive effect of higher volume of content deliveries in the current year and lower ongoing distribution revenue from PAW Patrol: The Mighty Movie.
Digital Games Segment Results
The following table provides a summary of Digital Games segment operating results, for the three months ended December 31, 2025 and 2024:
|
(US$ millions) |
Q4 2025 |
Q4 2024 |
$ Change |
% Change |
|
Digital Games Revenue |
53.4 |
46.1 |
7.3 |
15.8 % |
|
Digital Games Operating Income (Loss) |
3.0 |
(0.5) |
3.5 |
(700.0) % |
|
Digital Games Operating Margin |
5.6 % |
(1.1) % |
6.7 % |
|
|
Digital Games Adjusted Operating Income1 |
14.3 |
11.5 |
2.8 |
24.3 % |
|
Digital Games Adjusted Operating Margin1 |
27.0 % |
24.9 % |
2.1 % |
|
1 Non-GAAP financial measure or ratio. See “Non-GAAP Financial Measures and Ratios”. |
- Digital Games Revenue increased by $7.3 million to $53.4 million, driven by revenue generated from strategic distribution partnerships, higher in-game purchases in Toca Boca World from growth in user engagement, and higher subscription revenue from Piknik.
- Digital Games Operating Income was $3.0 million, a change of $3.5 million from Digital Games Operating Loss of $0.5 million, primarily driven by revenue generated from strategic distribution partnerships, partially offset by higher non-cash impairment of digital game and app development assets. The impairment reflects a strategic decision to streamline the Digital Games business and concentrate investments in core areas with long-term growth potential.
- Digital Games Operating Margin was 5.6% compared to (1.1)%.
- Digital Games Adjusted Operating Income1 increased by $2.8 million to $14.3 million, primarily due to revenue generated from strategic distribution partnerships.
- Digital Games Adjusted Operating Margin1 increased from 24.9% to 27.0%.
Liquidity
The Company has an unsecured revolving credit facility (the “Facility”) with a borrowing capacity of $510.0 million and contains certain financial covenants, maturing on June 27, 2030.
The Company has a non-revolving credit facility (the “Acquisition Facility”) related to the acquisition of Melissa & Doug, with a borrowing capacity of $225.0 million and contains certain financial covenants, maturing on June 27, 2027.
During the year ended December 31, 2025, the Company repaid $178.0 million (2024 – $135.0 million) and drew $55.0 million (2024 – $300.0 million) against the Facility. As at December 31, 2025, there was $42.0 million outstanding (December 31, 2024 – $165.0 million) under the Facility and $225.0 million outstanding (December 31, 2024 – $225.0 million) under the Acquisition Facility. For the year ended December 31, 2025, the weighted average interest rates on the Facility and Acquisition Facility were 5.8% and 5.6%, respectively (2024 – 6.5% and 6.5%).
As at December 31, 2025, the Company had available liquidity of $566.9 million, comprised of $104.6 million in cash and $462.3 million under the Company’s committed credit facilities.
Cash Flows for Q4 2025 as compared to the same period in 2024
Cash flows provided by operating activities were $194.3 million compared to $203.4 million driven by changes in non-cash working capital, partially offset by changes in non-cash provisions and other assets and higher income taxes received. Changes in non-cash working capital increased by $90.0 million as compared to an increase of $126.8 million, due to changes in trade receivables and other receivables, partially offset by changes in trade payables and accrued liabilities.
Cash flows used in financing activities were $137.9 million compared to $49.5 million, driven by repayment of $148.0 towards the Facility (2024 – $20.0 million), lease payments of $2.7 million (2024 – $9.4 million) and shares repurchased under the Company’s NCIB for $6.7 million (2024 – $7.8 million), partially offset by proceeds of $30.0 million from the Facility (2024 – $nil).
Free Cash Flow1 was $128.0 million compared to $175.0 million, primarily due to higher investment in leasehold improvements, computer software, and Entertainment content.
Dividends
The Company’s Board of Directors declared a dividend of C$0.12 per outstanding subordinate voting share and multiple voting share, payable on April 10, 2026 to shareholders of record at the close of business on March 27, 2026. The dividend is designated to be an eligible dividend for purposes of section 89(1) of the Income Tax Act (Canada).
|
________________________________ |
|
|
1 |
Non-GAAP financial measure or ratio. See “Non-GAAP Financial Measures and Ratios”. |
F
Consolidated statements of financial position
|
Dec 31, |
Dec 31, |
|
|
(In US$ millions) |
2025 |
2024 |
|
Assets |
||
|
Current assets |
||
|
Cash and cash equivalents |
104.6 |
233.5 |
|
Trade receivables, net |
508.1 |
499.4 |
|
Other receivables |
71.5 |
54.9 |
|
Inventories, net |
149.7 |
184.7 |
|
Income tax receivable |
19.3 |
— |
|
Prepaid expenses and other assets |
44.3 |
48.7 |
|
897.5 |
1,021.2 |
|
|
Non-current assets |
||
|
Intangible assets |
865.8 |
837.4 |
|
Goodwill |
164.0 |
368.1 |
|
Right-of-use assets |
174.3 |
149.5 |
|
Property, plant and equipment |
92.0 |
60.2 |
|
Deferred income tax assets |
175.7 |
167.1 |
|
Other assets |
34.0 |
29.9 |
|
1,505.8 |
1,612.2 |
|
|
Total assets |
2,403.3 |
2,633.4 |
|
Liabilities |
||
|
Current liabilities |
||
|
Trade payables and accrued liabilities |
436.0 |
429.5 |
|
Loans and borrowings |
264.1 |
389.1 |
|
Provisions |
22.9 |
24.7 |
|
Lease liabilities |
33.6 |
22.3 |
|
Deferred revenue |
31.5 |
22.0 |
|
788.1 |
887.6 |
|
|
Non-current liabilities |
||
|
Deferred income tax liabilities |
215.8 |
209.9 |
|
Lease liabilities |
161.1 |
123.0 |
|
Provisions |
14.7 |
10.5 |
|
391.6 |
343.4 |
|
|
Total liabilities |
1,179.7 |
1,231.0 |
|
Shareholders’ equity |
||
|
Share capital |
753.6 |
765.6 |
|
Retained earnings |
442.2 |
640.1 |
|
Contributed surplus |
35.2 |
45.5 |
|
Accumulated other comprehensive loss |
(7.4) |
(48.8) |
|
Total shareholders’ equity |
1,223.6 |
1,402.4 |
|
Total liabilities and shareholders’ equity |
2,403.3 |
2,633.4 |
Consolidated statements of (loss) earnings and comprehensive (loss) earnings
|
Year Ended Dec 31, |
||
|
(In US$ millions, except earnings per share) |
2025 |
2024 |
|
Revenue |
2,112.9 |
2,263.0 |
|
Cost of sales |
967.6 |
1,072.1 |
|
Gross Profit |
1,145.3 |
1,190.9 |
|
Expenses |
||
|
Selling, general and administrative |
908.6 |
931.9 |
|
Depreciation and amortization |
70.3 |
72.7 |
|
Impairment of non-current assets |
250.4 |
20.7 |
|
Other (income) expense, net |
(11.3) |
1.6 |
|
Foreign exchange loss (gain), net |
14.5 |
(1.5) |
|
Operating (Loss) Income |
(87.2) |
165.5 |
|
Interest expense |
42.5 |
50.5 |
|
Interest income |
(2.5) |
(4.0) |
|
(Loss) Income before income tax expense |
(127.2) |
119.0 |
|
Income tax expense |
21.3 |
37.1 |
|
Net (Loss) Income |
(148.5) |
81.9 |
|
Earnings per share |
||
|
Basic |
(1.46) |
0.79 |
|
Diluted |
(1.46) |
0.77 |
|
Weighted average number of shares (in millions) |
||
|
Basic |
101.4 |
103.3 |
|
Diluted |
103.9 |
105.8 |
|
Year Ended Dec 31, |
||
|
(In US$ millions) |
2025 |
2024 |
|
Net (Loss) Income |
(148.5) |
81.9 |
|
Items that may be subsequently reclassified to Net (Loss) Income |
||
|
Foreign currency translation gain (loss) |
41.4 |
(34.0) |
|
Items that will not be reclassified to Net (Loss) Income |
||
|
Loss on minority investment |
(3.0) |
— |
|
Other comprehensive income (loss) |
38.4 |
(34.0) |
|
Total comprehensive (loss) income |
(110.1) |
47.9 |
Consolidated statements of cash flows
|
Year Ended Dec 31, |
||
|
(in US$ millions) |
2025 |
2024 |
|
Operating activities |
||
|
Net (Loss) Income |
(148.5) |
81.9 |
|
Adjustments to reconcile net loss to cash provided by operating activities |
||
|
Income tax expense |
21.3 |
37.1 |
|
Interest expense |
30.2 |
38.4 |
|
Interest income |
(2.5) |
(4.0) |
|
Depreciation and amortization |
142.1 |
136.8 |
|
(Gain) Loss on disposal of non-current assets |
(12.0) |
1.3 |
|
Accretion expense |
11.5 |
10.6 |
|
Amortization of facility fee costs |
0.6 |
1.2 |
|
Loss on portfolio investments, net |
0.2 |
0.3 |
|
Impairment of non-current assets |
250.4 |
20.7 |
|
Loss on minority interest investments |
1.0 |
0.5 |
|
Unrealized foreign exchange loss, net |
(3.7) |
(8.4) |
|
Share-based compensation expense |
11.5 |
29.3 |
|
Fair value adjustment on inventory sold |
— |
66.3 |
|
Net changes in non-cash working capital |
40.8 |
24.9 |
|
Net changes in non-cash provisions and other assets |
27.4 |
(21.0) |
|
Income taxes paid |
(48.7) |
(66.7) |
|
Income taxes received |
5.4 |
4.3 |
|
Interest paid |
(21.7) |
(29.2) |
|
Interest received |
2.5 |
3.7 |
|
Cash provided by operating activities |
307.8 |
328.0 |
|
Investing activities |
||
|
Investment in property, plant and equipment |
(71.2) |
(34.0) |
|
Investment in intangible assets |
(113.0) |
(83.6) |
|
Business acquisitions, net of cash acquired |
(12.7) |
(952.9) |
|
Portfolio investments |
(3.0) |
(1.1) |
|
Minority interest investments |
(1.8) |
— |
|
Change in restricted cash |
— |
3.1 |
|
Cash used in investing activities |
(201.7) |
(1,068.5) |
|
Financing activities |
||
|
Proceeds from loans and borrowings |
55.0 |
525.0 |
|
Repayment of loans and borrowings |
(178.0) |
(135.0) |
|
Payment of lease liabilities, net of lease incentives received |
(25.6) |
(37.8) |
|
Dividends paid |
(34.7) |
(27.5) |
|
Repurchase of subordinate voting shares |
(46.6) |
(54.5) |
|
Payment of financing costs related to the facility |
(1.7) |
— |
|
Cash (used in) provided by financing activities |
(231.6) |
270.2 |
|
Effect of foreign currency exchange rate changes on cash |
(3.4) |
(1.9) |
|
Net decrease in cash during the period |
(128.9) |
(472.2) |
|
Cash, beginning of the year |
233.5 |
705.7 |
|
Cash, end of the year |
104.6 |
233.5 |
Non-GAAP Financial Measures and Ratios
In addition to using financial measures prescribed under International Financial Reporting Standards (“IFRS”), references are made in this Press Release to the following terms, each of which is a non-GAAP financial measure:
- Toy Gross Product Sales
- Adjusted EBITDA
- Toys Adjusted EBITDA
- Entertainment Adjusted EBITDA
- Digital Games Adjusted EBITDA
- Adjusted Operating Income (Loss)
- Toys Adjusted Operating Income (Loss)
- Entertainment Adjusted Operating Income (Loss)
- Digital Games Adjusted Operating Income (Loss)
- Adjusted Net Income (Loss)
- Free Cash Flow
|
(in US$ millions) |
Q4 2025 |
Q4 2024 |
$ Change |
% Change |
|
|
Operating (Loss) Income |
(163.7) |
47.1 |
(210.8) |
(447.6) % |
|
|
Adjustments: |
|||||
|
Impairment of goodwill1 |
215.6 |
12.9 |
202.7 |
n.m |
|
|
Impairment of intangible assets2 |
13.5 |
5.5 |
8.0 |
145.5 % |
|
|
Transaction and integration costs3 |
5.1 |
5.0 |
0.1 |
2.0 % |
|
|
Foreign exchange loss (gain)4 |
4.2 |
(4.7) |
8.9 |
(189.4) % |
|
|
Amortization of intangible assets acquired5 |
1.7 |
1.7 |
— |
— % |
|
|
Impairment of property, plant and equipment6 |
1.0 |
0.1 |
0.9 |
n.m |
|
|
Acquisition related deferred incentive compensation7 |
0.7 |
(1.1) |
1.8 |
(163.6) % |
|
|
Investment loss, net8 |
0.2 |
0.1 |
0.1 |
100.0 % |
|
|
Restructuring and other related costs9 |
0.2 |
3.9 |
(3.7) |
(94.9) % |
|
|
Legal settlement expense |
— |
0.6 |
(0.6) |
(100.0) % |
|
|
Share based compensation10 |
(1.1) |
7.6 |
(8.7) |
(114.5) % |
|
|
Acquisition related deferred consideration11 |
(1.2) |
2.6 |
(3.8) |
(146.2) % |
|
|
Gain on sale of asset12 |
(9.8) |
— |
(9.8) |
n.m. |
|
|
Adjusted Operating Income |
66.4 |
81.3 |
(14.9) |
(18.3) % |
|
|
Depreciation and amortization13 |
44.9 |
32.6 |
12.3 |
37.7 % |
|
|
Adjusted EBITDA |
111.3 |
113.9 |
(2.6) |
(2.3) % |
|
|
Income tax recovery (expense) |
(10.0) |
(15.5) |
5.5 |
(35.5) % |
|
|
Interest expense |
(10.6) |
(10.5) |
(0.1) |
1.0 % |
|
|
Depreciation and amortization13 |
(44.9) |
(32.6) |
(12.3) |
37.7 % |
|
|
One-time income tax expense14 |
— |
8.1 |
(8.1) |
(100.0) % |
|
|
Tax effect of normalization adjustments15 |
(3.5) |
(6.0) |
2.5 |
(41.7) % |
|
|
Adjusted Net Income |
42.3 |
57.4 |
(15.1) |
(26.3) % |
|
|
Cash provided by operating activities |
194.3 |
203.4 |
(9.1) |
(4.5) % |
|
|
Cash used in investing activities |
(79.3) |
(30.5) |
(48.8) |
160.0 % |
|
|
Add: |
|||||
|
Cash used in business acquisitions, asset acquisitions, portfolio investments, investment in associate and minority interest investments, net of investment distribution income |
13.0 |
2.1 |
10.9 |
n.m |
|
|
Free Cash Flow |
128.0 |
175.0 |
(47.0) |
(26.9) % |
|
|
1 |
Impairment of goodwill primarily related to the Melissa & Doug cash generating unit (“CGU”). |
|
2 |
Impairment of intangible assets primarily related to Digital game and app development. |
|
3 |
Transaction and integration costs incurred relating to acquisitions. |
|
4 |
Includes foreign exchange losses (gains) generated by the translation and settlement of monetary assets/liabilities denominated in a currency other than the functional currency of the applicable entity and losses (gains) related to the Company’s hedging programs. |
|
5 |
Relates to the amortization of intangible assets acquired with Melissa & Doug. |
|
6 |
Impairment of property, plant and equipment related to tooling. |
|
7 |
Deferred incentive compensation associated with acquisitions. |
|
8 |
Investment loss (income), net includes unrealized and realized (gain)/loss on portfolio investments and minority interest investments and share of (income)/loss from an investment in associate. |
|
9 |
Restructuring and other related costs related to the reduction in the Company’s global workforce. |
|
10 |
Related to non-cash expenses associated with long-term incentive plan and includes mark to market loss of deferred share units (“DSUs”). |
|
11 |
Expense (recovery) associated with contingent consideration for acquisitions. |
|
12 |
Gain on disposal of intangible asset. |
|
13 |
Depreciation and amortization for the calculation of Adjusted EBITDA excludes $1.7 million of amortization of intangible assets acquired with Melissa & Doug. |
|
14 |
Adjustment for one-time income tax expense in Q4 2024. |
|
15 |
Tax effect of adjustments (Footnotes 2-12). Adjustments are tax effected at the effective tax rate of the given period. |
Segment Results
The Company’s results from operations by reportable segment for the three months ended December 31, 2025 and 2024 are as follows:
|
(US$ millions) |
Q4 2025 |
Q4 2024 |
||||||||
|
Toys |
Entertain-ment |
Digital Games |
Corporate & Other1 |
Total |
Toys |
Entertain-ment |
Digital Games |
Corporate & Other1 |
Total |
|
|
Revenue |
522.3 |
42.5 |
53.4 |
— |
618.2 |
561.7 |
41.3 |
46.1 |
— |
649.1 |
|
Operating (Loss) Income |
(171.0) |
14.3 |
3.0 |
(10.0) |
(163.7) |
31.7 |
19.7 |
(0.5) |
(3.8) |
47.1 |
|
Adjusting items: |
||||||||||
|
Impairment of goodwill |
215.6 |
— |
— |
— |
215.6 |
10.0 |
— |
2.9 |
— |
12.9 |
|
Impairment of intangible assets |
2.4 |
0.4 |
10.7 |
— |
13.5 |
— |
— |
5.5 |
— |
5.5 |
|
Transaction and integration costs |
2.4 |
— |
0.1 |
2.6 |
5.1 |
2.6 |
— |
— |
2.4 |
5.0 |
|
Foreign exchange loss (gain) |
— |
— |
— |
4.2 |
4.2 |
— |
— |
— |
(4.7) |
(4.7) |
|
Amortization of intangible assets acquired |
1.7 |
— |
— |
— |
1.7 |
1.7 |
— |
— |
— |
1.7 |
|
Impairment of property, plant and equipment |
1.0 |
— |
— |
— |
1.0 |
0.1 |
— |
— |
— |
0.1 |
|
Acquisition related deferred incentive compensation |
0.1 |
— |
0.6 |
— |
0.7 |
0.2 |
— |
(1.3) |
— |
(1.1) |
|
Investment loss, net |
— |
— |
— |
0.2 |
0.2 |
— |
— |
— |
0.1 |
0.1 |
|
Restructuring and other related costs |
— |
(0.1) |
0.3 |
— |
0.2 |
1.7 |
0.1 |
2.1 |
— |
3.9 |
|
Legal settlement expense |
— |
— |
— |
— |
— |
— |
— |
— |
0.6 |
0.6 |
|
Share based compensation |
(0.8) |
(0.4) |
(0.3) |
0.4 |
(1.1) |
5.1 |
0.5 |
0.6 |
1.4 |
7.6 |
|
Acquisition related deferred consideration |
(1.2) |
— |
— |
— |
(1.2) |
0.4 |
— |
2.2 |
— |
2.6 |
|
Gain on sale of asset |
(9.8) |
— |
— |
— |
(9.8) |
— |
— |
— |
— |
— |
|
Adjusted Operating Income (Loss) |
40.4 |
14.2 |
14.4 |
(2.6) |
66.4 |
53.5 |
20.3 |
11.5 |
(4.0) |
81.3 |
|
Adjusted Operating Margin |
7.7 % |
33.4 % |
27.0 % |
n.m. |
10.7 % |
9.5 % |
49.2 % |
24.9 % |
n.m. |
12.5 % |
|
Depreciation and amortization2 |
21.2 |
19.3 |
4.4 |
— |
44.9 |
22.7 |
6.0 |
3.9 |
— |
32.6 |
|
Adjusted EBITDA |
61.6 |
33.5 |
18.8 |
(2.6) |
111.3 |
76.2 |
26.3 |
15.4 |
(4.0) |
113.9 |
|
Adjusted EBITDA Margin |
11.8 % |
78.8 % |
35.2 % |
n.m. |
18.0 % |
13.6 % |
63.7 % |
33.4 % |
n.m. |
17.5 % |
|
1 Corporate & Other includes certain corporate costs (such as certain employee compensation, corporate social responsibility and professional services expenses), foreign exchange, acquisition related transaction costs, as well as investment income and loss. |
||||||||||
|
2 Depreciation and amortization for the calculation of Adjusted EBITDA excludes $1.7 million (Q4 2024 – $1.7 million) of amortization of intangible assets acquired with Melissa & Doug. |
SOURCE Spin Master Corp.
For further information: For further information: Tim Foran, Vice President, Investor Relations, Tim.Foran@spinmaster.com
