Spin Master Posts Q2 Financial Results
Toronto, Ontario, Canada — Spin Master announced its financial results for the three and six months ended June 30, 2026.
“We recorded a strong second quarter, powering our return to profitable growth,” said Christina Miller, CEO of Spin Master. “Our results were driven by solid sales of core brands, including PAW Patrol and Monster Jam, along with compelling new products. Entering the back half of the year, we remain sharply focused on investing in innovation across our creative centers, accelerating growth by expanding into collectibles and strategic trading cards, and unlocking the full value of our brands by bringing them to global audiences in stores, on screen, and online.”
“We generated significant free cash flow in the first half of the year illustrating the cash generating power of our business,” said Jonathan Roiter, CFO of Spin Master. “This has enabled us to continue returning significant capital to shareholders while paying down debt. Since the acquisition of Melissa & Doug, we have reduced our gross debt by more than $350 million while returning almost $200 million in capital to shareholders.”
Consolidated Financial Highlights for Q2 2026 as compared to the same period in 2025
- Revenue was $436.4 million, an increase of 8.9%. Constant Currency Revenue1 was $434.1 million, an increase of 8.3%.
- Operating Income was $45.7 million, compared to Operating Loss of $52.4 million.
- Adjusted Operating Income1 was $19.2 million, compared to Adjusted Operating Loss1 of $0.9 million.
- Net Income was $29.7 million or $0.29 per share (diluted) compared to Net Loss of $46.5 million or $(0.46) per share.
- Adjusted Net Income1 was $8.6 million or $0.08 per share (diluted) compared to Adjusted Net Loss1 of $7.4 million or $(0.07) per share.
- Adjusted EBITDA1 was $51.6 million, an increase of $22.9 million.
- Adjusted EBITDA Margin1 was 11.8% compared to 7.2%.
- Cash provided by operating activities was $57.8 million compared to $26.1 million.
- Free Cash Flow1 was $19.2 million compared to $(15.2) million.
- Repurchased and cancelled 697,358 subordinate voting shares for $9.3 million (C$13.2 million) in Q2 2026 through the Company’s Normal Course Issuer Bid (the “NCIB”). Subsequent to June 30, 2026, the Company repurchased and cancelled 95,681 subordinate voting shares for $1.5 million.
- Subsequent to June 30, 2026, the Company declared a quarterly dividend of C$0.12 per outstanding subordinate voting share and multiple voting share, payable on October 9, 2026.
2026 Outlook
For the full year 2026, the Company continues to expect:
- Revenue: stable to low single digit percentage growth compared to 2025.
- Adjusted EBITDA1: mid to high single digit percentage growth compared to 2025.
| 1 Non-GAAP financial measure or ratio. See “Non-GAAP Financial Measures and Ratios”. |
Consolidated Financial Results as compared to the same period in 2025
| (US$ millions, except per share information) | Q2 2026 | Q2 2025 | $ Change | |
| Consolidated Results
Revenue |
436.4 | 400.7 | 35.7 | |
| Operating Income (Loss) | 45.7 | (52.4) | 98.1 | |
| Operating Margin2 | 10.5 % | (13.1) % | ||
| Adjusted Operating Income (Loss)1,3 | 19.2 | (0.9) | 20.1 | |
| Adjusted Operating Margin1 | 4.4 % | (0.2) % | ||
| Net Income (Loss) | 29.7 | (46.5) | 76.2 | |
| Adjusted Net Income (Loss)1,3 | 8.6 | (7.4) | 16.0 | |
| Adjusted EBITDA1,3 | 51.6 | 28.7 | 22.9 | |
| Adjusted EBITDA Margin1 | 11.8 % | 7.2 % | ||
| Earnings Per Share (“EPS”)
Basic EPS |
$0.30 | $(0.46) | ||
| Diluted EPS | $0.29 | $(0.46) | ||
| Adjusted Basic EPS1 | $0.09 | $(0.07) | ||
| Adjusted Diluted EPS1 | $0.08 | $(0.07) | ||
| Weighted average number of shares (in millions)
Basic |
100.5 | 101.6 | ||
| Diluted | 103.6 | 104.5 | ||
| Selected Cash Flow Data
Cash provided by operating activities |
57.8 | 26.1 | 31.7 | |
| Cash used in investing activities | (38.6) | (43.1) | 4.5 | |
| Cash used in financing activities | (81.0) | (4.2) | (76.8) | |
| Free Cash Flow1 | 19.2 | (15.2) | 34.4 | |
| 1 Non-GAAP financial measure or ratio. See “Non-GAAP Financial Measures and Ratios”. | ||||
| 2 Operating Margin is calculated as Operating Income (Loss) divided by Revenue. | ||||
| 3 Refer to the “Reconciliation of Non-GAAP Financial Measures” section for further details on the adjustments. |
Segmented Financial Results as compared to the same period in 2025
| (US$ millions) | Q2 2026 | Q2 2025 | ||||||||
| Toys | Entertain
-ment |
Digital Games |
Corporate & Other1 |
Total | Toys | Entertain- ment |
Digital Games |
Corporate & Other1 |
Total | |
| Revenue | 361.1 | 31.2 | 44.1 | — | 436.4 | 322.3 | 32.1 | 46.3 | — | 400.7 |
| Operating Income (Loss) | 34.3 | 15.5 | 6.2 | (10.3) | 45.7 | (39.7) | 15.7 | (15.5) | (12.9) | (52.4) |
| Adjusted Operating Income (Loss)2 | 4.0 | 15.8 | 7.6 | (8.2) | 19.2 | (20.8) | 17.7 | 7.7 | (5.5) | (0.9) |
| Adjusted EBITDA2 | 24.0 | 24.4 | 11.4 | (8.2) | 51.6 | (0.7) | 24.3 | 10.6 | (5.5) | 28.7 |
| 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 June 30, 2026 and 2025:
| (US$ millions) | Q2 2026 | Q2 2025 | $ Change | % Change |
| Preschool, Infant & Toddler and Plush | 209.6 | 185.0 | 24.6 | 13.3 % |
| Activities, Games & Puzzles and Dolls & Interactive | 106.1 | 88.3 | 17.8 | 20.2 % |
| Wheels & Action | 86.1 | 88.8 | (2.7) | (3.0) % |
| Outdoor | 11.9 | 8.9 | 3.0 | 33.7 % |
| Toy Gross Product Sales1 | 413.7 | 371.0 | 42.7 | 11.5 % |
| Sales Allowances2 | (53.0) | (48.9) | (4.1) | 8.4 % |
| Sales Allowances % of Toy Gross Product Sales1 | 12.8 % | 13.2 % | (0.4) % | |
| Toy Net Sales | 360.7 | 322.1 | 38.6 | 12.0 % |
| Toy – Other Revenue | 0.4 | 0.2 | 0.2 | 100.0 % |
| Toy Revenue | 361.1 | 322.3 | 38.8 | 12.0 % |
| Toys Operating Income (Loss) | 34.3 | (39.7) | 74.0 | (186.4) % |
| Toys Operating Margin3 | 9.5 % | (12.3) % | 21.8 % | |
| Toys Adjusted EBITDA1 | 24.0 | (0.7) | 24.7 | n.m. |
| Toys Adjusted EBITDA Margin1 | 6.6 % | (0.2) % | 6.8 % |
| 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 (Loss) divided by segment Revenue. |
- Toy Revenue increased by $38.8 million to $361.1 million primarily due to higher Toy Gross Product Sales1. Constant Currency Toy Revenue1 was $359.1 million, an increase of 11.4%.
- Toy Gross Product Sales1 increased by $42.7 million to $413.7 million, primarily driven by shipments ahead of the upcoming theatrical release of PAW Patrol: The Dino Movie. In addition, Toy Gross Product Sales1 in the prior year was impacted by a slowdown in U.S. retailer orders due to global tariff policies. Constant Currency Toy Gross Product Sales1 was $410.9 million, an increase of 10.8%.
- Sales Allowances increased by $4.1 million to $53.0 million. As a percentage of Toy Gross Product Sales1, Sales Allowances decreased to 12.8% from 13.2% primarily driven by a change in geographic and customer mix.
- Toys Operating Income was $34.3 million compared to Toys Operating Loss of $39.7 million. The change was primarily driven by the International Emergency Economic Powers Act tariff refund (“Tariff Refund”) of $37.9 million in the current year, higher Toy Revenue and a shift in timing of marketing spend compared to the prior year, partially offset by higher selling expenses. Toys Operating Margin was 9.5% compared to (12.3)%.
- Toys Adjusted EBITDA1 was $24.0 million compared to $(0.7) million. The increase was primarily driven by higher Toy Revenue, lower marketing expenses, partially offset by higher administrative and selling expenses.
- Toys Adjusted EBITDA Margin1 was 6.6% compared to (0.2)%, primarily driven by operating leverage due to higher Toy Revenue as well as higher Gross Margin driven by a shift in product mix and lower Sales Allowances.
| 1 Non-GAAP financial measure or ratio. See “Non-GAAP Financial Measures and Ratios”. |
Entertainment Segment Results
The following table provides a summary of Entertainment segment operating results, for the three months ended June 30, 2026 and 2025:
| (US$ millions) | Q2 2026 | Q2 2025 | $ Change | % Change |
| Entertainment Revenue | 31.2 | 32.1 | (0.9) | (2.8) % |
| Entertainment Operating Income | 15.5 | 15.7 | (0.2) | (1.3) % |
| Entertainment Operating Margin | 49.7 % | 48.9 % | 0.8 % | |
| Entertainment Adjusted Operating Income1 | 15.8 | 17.7 | (1.9) | (10.7) % |
| Entertainment Adjusted Operating Margin1 | 50.6 % | 55.1 % | (4.5) % | |
| 1 Non-GAAP financial measure or ratio. See “Non-GAAP Financial Measures and Ratios”. |
- Entertainment Revenue declined by $0.9 million to $31.2 million, primarily driven by lower ongoing distribution revenue from PAW Patrol: The Mighty Movie.
- Entertainment Operating Income was relatively flat at $15.5 million. Entertainment Operating Margin increased from 48.9% to 49.7%.
- Entertainment Adjusted Operating Income1 declined by $1.9 million to $15.8 million, primarily due to lower ongoing distribution revenue and the delivery of Vida the Vet in the current year (distribution revenue less amortization of production costs), partially offset by lower marketing expenses.
- Entertainment Adjusted Operating Margin1 decreased from 55.1% to 50.6%, primarily due to the dilutive effect of the delivery of Vida the Vet in the current year and lower ongoing distribution revenue.
Digital Games Segment Results
The following table provides a summary of Digital Games segment operating results, for the three months ended June 30, 2026 and 2025:
| (US$ millions) | Q2 2026 | Q2 2025 | $ Change | % Change |
| Digital Games Revenue | 44.1 | 46.3 | (2.2) | (4.8) % |
| Digital Games Operating Income (Loss) | 6.2 | (15.5) | 21.7 | (140.0) % |
| Digital Games Operating Margin | 14.1 % | (33.5) % | 47.6 % | |
| Digital Games Adjusted Operating Income1 | 7.6 | 7.7 | (0.1) | (1.3) % |
| Digital Games Adjusted Operating Margin1 | 17.2 % | 16.6 % | 0.6 % | |
| 1 Non-GAAP financial measure or ratio. See “Non-GAAP Financial Measures and Ratios”. |
- Digital Games Revenue declined by $2.2 million to $44.1 million, driven by lower in-game purchases in Toca Boca World, partially offset by revenue generated from strategic distribution partnerships.
- Digital Games Operating Income was $6.2 million, compared to a loss of $15.5 million. The change was primarily driven by $17.1 million of prior year’s impairment for digital game and app development assets and a decrease in administrative expenses. Digital Games Operating Margin increased from (33.5)% to 14.1%.
- Digital Games Adjusted Operating Income1 was relatively flat at $7.6 million.
- Digital Games Adjusted Operating Margin1 increased from 16.6% to 17.2%, primarily driven by revenue generated from strategic distribution partnership and lower administrative expenses.
| 1 Non-GAAP financial measure or ratio. See “Non-GAAP Financial Measures and Ratios”. |
Liquidity
The Company has a committed unsecured revolving credit facility (the “Facility”) with a borrowing capacity of $510.0 million and contains certain financial covenants. On May 26, 2026, the Company entered into an agreement to amend its existing Facility, which now matures on May 26, 2031. The amendment also introduced an additional three-year revolver tranche with a borrowing capacity of $225.0 million that matures on May 26, 2029. This new tranche was used to settle the $225.0 million non-revolving credit facility (“Acquisition Facility”) that was originally entered into on November 20, 2023 to fund the acquisition of Melissa & Doug, which was cancelled on May 26, 2026.
As at June 30, 2026, there was $150.0 million outstanding (December 31, 2025 – $42.0 million) under the Facility, no amount outstanding (December 31, 2025 – $225.0 million) under the Acquisition Facility, and $20.6 million of bank overdraft outstanding (December 31, 2025 – $nil). During the six months ended June 30, 2026, the Company drew $50.0 million (2025 – $25.0 million) and $20.6 million (2025 – $nil) on the Facility and bank overdraft, respectively, and repaid $167.0 million (2025 – $30.0 million) against the Facility. For the six months ended June 30, 2026, the weighted average interest rates on the Facility and Acquisition Facility were 5.5% and 5.2%, respectively (2025 – 5.9% and 5.6%).
As at June 30, 2026, the Company had available liquidity of $627.3 million, comprised of $48.5 million in cash and $578.8 million under the Company’s committed credit facilities.
Cash Flows for Q2 2026 as compared to the same period in 2025
Cash flows provided by operating activities were $57.8 million compared to $26.1 million driven by change in net income, adjusted for non-cash items, partially offset by changes in non-cash working capital. Changes in non-cash working capital increased by $6.3 million as compared to a decrease of $45.9 million.
Cash used in investing activities was $38.6 million for the three months ended June 30, 2026 compared to $43.1 million primarily as a result of lower investments in Entertainment content development and leasehold improvements, partially offset by higher investments in moulds, dies and tools.
Cash flows used in financing activities were $81.0 million compared to $4.2 million, driven by repayment of $75.0 million towards the Facility (2025 – $nil), lease payments of $8.1 million (2025 – $10.6 million) and shares repurchased under the Company’s NCIB for $9.3 million (2025 – $10.6 million), partially offset by $20.6 million drawn from the bank overdraft (2025 – $nil) and $nil drawn against the Facility (2025 – $25.0 million).
Free Cash Flow1 was $19.2 million compared to $(15.2) million, primarily due to higher net income, adjusted for non-cash items, partially offset by changes in non-cash working capital.
Condensed consolidated interim statements of financial position
| (In US$ millions) | Jun 30,
2026 |
Jun 30,
2025 |
Dec 31,
2025 |
| Assets | |||
| Current assets | |||
| Cash and cash equivalents | 48.5 | 128.0 | 104.6 |
| Trade receivables, net | 340.7 | 355.9 | 508.1 |
| Other receivables | 64.6 | 61.9 | 71.5 |
| Inventories, net | 187.3 | 225.0 | 149.7 |
| Income tax receivable | 31.3 | 46.0 | 19.3 |
| Prepaid expenses and other assets | 48.8 | 65.7 | 44.3 |
| 721.2 | 882.5 | 897.5 | |
| Non-current assets | |||
| Intangible assets | 877.2 | 858.5 | 865.8 |
| Goodwill | 160.6 | 368.6 | 164.0 |
| Right-of-use assets | 167.2 | 147.3 | 174.3 |
| Property, plant and equipment | 88.7 | 63.7 | 92.0 |
| Deferred income tax assets | 175.9 | 168.3 | 175.7 |
| Other assets | 35.3 | 28.5 | 34.0 |
| 1,504.9 | 1,634.9 | 1,505.8 | |
| Total assets | 2,226.1 | 2,517.4 | 2,403.3 |
| Liabilities | |||
| Current liabilities | |||
| Trade payables and accrued liabilities | 393.5 | 375.7 | 436.0 |
| Loans and borrowings | 167.9 | 382.2 | 264.1 |
| Provisions | 25.9 | 21.6 | 22.9 |
| Lease liabilities | 36.4 | 22.4 | 33.6 |
| Deferred revenue | 37.2 | 35.2 | 31.5 |
| 660.9 | 837.1 | 788.1 | |
| Non-current liabilities | |||
| Deferred income tax liabilities | 215.6 | 209.7 | 215.8 |
| Lease liabilities | 157.0 | 126.9 | 161.1 |
| Provisions | 7.2 | 11.0 | 14.7 |
| 379.8 | 347.6 | 391.6 | |
| Total liabilities | 1,040.7 | 1,184.7 | 1,179.7 |
| Shareholders’ equity | |||
| Share capital | 757.4 | 762.3 | 753.6 |
| Retained earnings | 423.6 | 544.7 | 442.2 |
| Contributed surplus | 29.0 | 34.1 | 35.2 |
| Accumulated other comprehensive loss | (24.6) | (8.4) | (7.4) |
Condensed consolidated interim statements of earnings and comprehensive earnings
| Six Months Ended Jun 30, | ||||
| (In US$ millions, except earnings per share) | Q2 2026 | Q2 2025 | 2026 | 2025 |
| Revenue | 436.4 | 400.7 | 764.9 | 760.0 |
| Cost of sales | 167.9 | 190.7 | 323.2 | 355.1 |
| Gross Profit | 268.5 | 210.0 | 441.7 | 404.9 |
| Expenses | ||||
| Selling, general and administrative | 206.5 | 221.0 | 401.2 | 416.3 |
| Depreciation and amortization | 16.0 | 16.9 | 32.9 | 34.0 |
| Other expense, net | 1.9 | 19.1 | 2.8 | 19.2 |
| Foreign exchange (gain) loss, net | (1.6) | 5.4 | (6.6) | 9.9 |
| Operating Income (Loss) | 45.7 | (52.4) | 11.4 | (74.5) |
| Interest expense | 8.1 | 9.9 | 16.6 | 20.2 |
| Interest income | (1.7) | (0.8) | (2.2) | (1.5) |
| Income (Loss) before income tax expense (recovery) | 39.3 | (61.5) | (3.0) | (93.2) |
| Income tax expense (recovery) | 9.6 | (15.0) | (0.7) | (22.2) |
| Net Income (Loss) | 29.7 | (46.5) | (2.3) | (71.0) |
| Earnings per share | ||||
| Basic | 0.30 | (0.46) | (0.02) | (0.70) |
| Diluted | 0.29 | (0.46) | (0.02) | (0.70) |
| Weighted average number of shares (in millions) | ||||
| Basic | 100.5 | 101.6 | 100.4 | 101.9 |
| Diluted | 103.6 | 104.5 | 103.0 | 104.5 |
| Six Months Ended Jun 30, | ||||
| (In US$ millions) | Q2 2026 | Q2 2025 | 2026 | 2025 |
| Net Income (Loss) | 29.7 | (46.5) | (2.3) | (71.0) |
| Items that may be subsequently reclassified to Net Income (Loss) | ||||
| Foreign currency translation (loss) gain | (6.1) | 27.0 | (17.2) | 40.4 |
| Other comprehensive (loss) income | (6.1) | 27.0 | (17.2) | 40.4 |
| Total comprehensive income (loss) | 23.6 | (19.5) | (19.5) | (30.6) |
Condensed consolidated interim statements of cash flows
| Six Months Ended Jun 30, | ||
| (Unaudited, in US$ millions) | 2026 | 2025 |
| Operating activities
Net Loss |
(2.3) | (71.0) |
| Adjustments to reconcile net loss to cash provided by operating activities | ||
| Income tax recovery | (0.7) | (22.2) |
| Interest expense | 10.6 | 14.4 |
| Interest income | (2.2) | (1.5) |
| Depreciation and amortization | 76.9 | 60.7 |
| Loss on disposal of non-current assets | 0.7 | 0.9 |
| Accretion expense | 6.3 | 5.2 |
| Amortization of facility fee costs | 0.4 | 0.3 |
| Investment loss, net | 0.4 | 0.2 |
| Impairment of non-current assets | — | 18.7 |
| Unrealized foreign exchange (gain) loss, net | (11.7) | 0.5 |
| Share-based compensation expense | 11.8 | 7.4 |
| Net changes in non-cash working capital | 108.6 | 70.7 |
| Net changes in non-cash provisions and other assets | (19.6) | (0.3) |
| Income taxes paid | (25.6) | (24.5) |
| Income taxes received | 12.0 | 0.4 |
| Interest paid | (7.1) | (10.5) |
| Interest received | 2.2 | 1.5 |
| Cash provided by operating activities | 160.7 | 50.9 |
| Investing activities
Investment in property, plant and equipment |
(17.5) | (21.7) |
| Investment in intangible assets | (52.9) | (55.2) |
| Portfolio investments | (0.6) | (2.0) |
| Minority interest investments | — | (0.8) |
| Cash used in investing activities | (71.0) | (79.7) |
| Financing activities
Proceeds from loans and borrowings |
70.6 | 25.0 |
| Repayment of loans and borrowings | (167.0) | (30.0) |
| Payment of lease liabilities, net of lease incentives received | (16.1) | (20.4) |
| Dividends paid | (17.2) | (17.1) |
| Repurchase of subordinate voting shares | (15.0) | (32.0) |
| Payment of financing costs related to the Facility | (0.8) | — |
| Cash used in financing activities | (145.5) | (74.5) |
| Effect of foreign currency exchange rate changes on cash | (0.3) | (2.2) |
| Net decrease in cash during the period | (56.1) | (105.5) |
| Cash, beginning of period | 104.6 | 233.5 |
| Cash, end of period | 48.5 | 128.0 |
| (in US$ millions) | Q2 2026 | Q2 2025 | $ Change | % Change |
| Operating Income (Loss) | 45.7 | (52.4) | 98.1 | (187.2) % |
| Adjustments: | ||||
| Share based compensation1 | 6.1 | 4.8 | 1.3 | 27.1 % |
| Restructuring and other related costs2 | 3.0 | 12.1 | (9.1) | (75.2) % |
| Amortization of intangible assets acquired3 | 1.7 | 1.8 | (0.1) | (5.6) % |
| Transaction and integration costs4 | 0.9 | 7.5 | (6.6) | (88.0) % |
| Acquisition related deferred consideration5 | 0.7 | 0.5 | 0.2 | 40.0 % |
| Acquisition related deferred incentive compensation6 | 0.6 | 0.7 | (0.1) | (14.3) % |
| Investment loss, net7 | — | 0.2 | (0.2) | (100.0) % |
| Impairment of intangible assets8 | — | 18.5 | (18.5) | (100.0) % |
| Foreign exchange (gain) loss9 | (1.6) | 5.4 | (7.0) | (129.6) % |
| Tariff Refund10 | (37.9) | — | (37.9) | n.m |
| Adjusted Operating Income (Loss) | 19.2 | (0.9) | 20.1 | n.m |
| Depreciation and amortization11 | 32.4 | 29.6 | 2.8 | 9.5 % |
| Adjusted EBITDA | 51.6 | 28.7 | 22.9 | 79.8 % |
| Income tax expense (recovery) | (9.6) | 15.0 | (24.6) | (164.0) % |
| Interest expense12 | (7.8) | (9.1) | 1.3 | (14.3) % |
| Depreciation and amortization11 | (32.4) | (29.6) | (2.8) | 9.5 % |
| Tax effect of normalization adjustments13 | 6.8 | (12.4) | 19.2 | (154.8) % |
| Adjusted Net Income (Loss) | 8.6 | (7.4) | 16.0 | (216.2) % |
| Cash provided by operating activities | 57.8 | 26.1 | 31.7 | 121.5 % |
| Cash used in investing activities | (38.6) | (43.1) | 4.5 | (10.4) % |
| Add: | ||||
| Cash used in business acquisitions, asset acquisitions, portfolio investments, investment | ||||
| in associate and minority interest investments, net of investment distribution income | — | 1.8 | (1.8) | (100.0) % |
| Free Cash Flow | 19.2 | (15.2) | 34.4 | (226.3) % |
| 1 Related to non-cash expenses associated with long-term incentive plan and includes mark to market loss of deferred share units (“DSUs”). |
| 2 Restructuring and other related costs related to the reduction in the Company’s global workforce. |
| 3 Relates to the amortization of intangible assets acquired with Melissa & Doug. |
| 4 Transaction and integration costs incurred relating to acquisitions. |
| 5 Expense (recovery) associated with contingent consideration for acquisitions. |
| 6 Deferred incentive compensation associated with acquisitions. |
| 7 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. |
| 8 Impairment of intangible assets primarily related to Digital game and app development. |
| 9 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. |
| 10 Tariff Refund of $37.9 million received in Q2 2026. |
| 11 Depreciation and amortization for the calculation of Adjusted EBITDA excludes $1.7 million of amortization of intangible assets acquired with Melissa & Doug. |
| 12 Excludes interest income received related to Tariff Refund of $1.4 million. |
| 13 Tax effect of adjustments (Footnotes 1-10,12). Adjustments are tax effected at the effective tax rate of the given period. |
Segment Results
The Company’s results from operations by reportable segment for the three months ended June 30, 2026 and 2025 are as follows:
| (US$ millions) | Q2 2026 | Q2 2025 | ||||||||
| Toys | Entertain- ment |
Digital Games |
Corporate & Other1 |
Total | Toys | Entertain- ment |
Digital Games |
Corporate & Other1 |
Total | |
| Revenue | 361.1 | 31.2 | 44.1 | — | 436.4 | 322.3 | 32.1 | 46.3 | — | 400.7 |
| Operating Income (Loss) | 34.3 | 15.5 | 6.2 | (10.3) | 45.7 | (39.7) | 15.7 | (15.5) | (12.9) | (52.4) |
| Adjusting items: | ||||||||||
| Share based compensation | 2.3 | 0.2 | 0.4 | 3.2 | 6.1 | 3.7 | 0.3 | 0.7 | 0.1 | 4.8 |
| Restructuring and other related costs | 2.4 | 0.1 | 0.5 | — | 3.0 | 9.3 | 0.8 | 2.0 | — | 12.1 |
| Amortization of intangible assets acquired | 1.7 | — | — | — | 1.7 | 1.8 | — | — | — | 1.8 |
| Transaction and integration costs | 0.4 | — | — | 0.5 | 0.9 | 2.9 | — | 2.9 | 1.7 | 7.5 |
| Acquisition related deferred consideration | 0.7 | — | — | — | 0.7 | 0.5 | — | — | — | 0.5 |
| Acquisition related deferred incentive compensation | 0.1 | — | 0.5 | — | 0.6 | 0.2 | — | 0.5 | — | 0.7 |
| Investment loss, net | — | — | — | — | — | — | — | — | 0.2 | 0.2 |
| Impairment of intangible assets | — | — | — | — | — | 0.5 | 0.9 | 17.1 | — | 18.5 |
| Foreign exchange (gain) loss | — | — | — | (1.6) | (1.6) | — | — | — | 5.4 | 5.4 |
| Tariff Refund | (37.9) | — | — | — | (37.9) | — | — | — | — | — |
| Adjusted Operating Income (Loss) | 4.0 | 15.8 | 7.6 | (8.2) | 19.2 | (20.8) | 17.7 | 7.7 | (5.5) | (0.9) |
| Adjusted Operating Margin | 1.1 % | 50.6 % | 17.2 % | n.m. | 4.4 % | (6.5) % | 55.1 % | 16.6 % | n.m. | (0.2) % |
| Depreciation and amortization2 | 20.0 | 8.6 | 3.8 | — | 32.4 | 20.1 | 6.6 | 2.9 | — | 29.6 |
| Adjusted EBITDA | 24.0 | 24.4 | 11.4 | (8.2) | 51.6 | (0.7) | 24.3 | 10.6 | (5.5) | 28.7 |
| Adjusted EBITDA Margin | 6.6 % | 78.2 % | 25.9 % | n.m. | 11.8 % | (0.2) % | 75.7 % | 22.9 % | n.m. | 7.2 % |
| 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 (Q2 2025 – $1.8 million) of amortization of intangible assets acquired with Melissa & Doug. |
The following tables present the composition of Percentage change in Constant Currency Toy Gross Product Sales, Percentage change in Constant Currency Sales Allowances, Percentage change in Constant Currency Entertainment Revenue, Percentage change in Constant Currency Digital Games Revenue, and Percentage change in Constant Currency Revenue for the three months ended June 30, 2026 and 2025:
| $ Change | % Change | ||||||||
| (US$ millions) | Q2 2026 | Q2 2025 | As reported |
Impact of foreign exchange |
In Constant Currency |
As reported |
In Constant Currency |
||
| Toy Gross Product Sales | 413.7 | 371.0 | 42.7 | (2.8) | 39.9 | 11.5 % | 10.8 % | ||
| Sales Allowances | (53.0) | (48.9) | (4.1) | 0.8 | (3.3) | 8.4 % | 6.7 % | ||
| Toy Net Sales | 360.7 | 322.1 | 38.6 | (2.0) | 36.6 | 12.0 % | 11.4 % | ||
| Toy – Other Revenue | 0.4 | 0.2 | 0.2 | — | 0.2 | n.m. | n.m. | ||
| Toy Revenue | 361.1 | 322.3 | 38.8 | (2.0) | 36.8 | 12.0 % | 11.4 % | ||
| Entertainment Revenue | 31.2 | 32.1 | (0.9) | — | (0.9) | (2.8) % | (2.8) % | ||
| Digital Games Revenue | 44.1 | 46.3 | (2.2) | (0.3) | (2.5) | (4.8) % | (5.4) % | ||
| Revenue | 436.4 | 400.7 | 35.7 | (2.3) | 33.4 | 8.9 % | 8.3 % | ||
