Toronto, Canada — Spin Master Corp. reported its financial results for the three and nine months ended September 30, 2025.

“This quarter, our Toys, Entertainment, and Digital Games once again captured the imagination of kids and parents and we grew our Toy market share within our total addressable market,” said Christina Miller, CEO of Spin Master. “We are well-positioned for the holiday season with a broad range of our award-winning toys and brands featured on retailers’ top toy lists, a first PAW Patrol Christmas special set to air on broadcast networks, platforms and in theaters globally this November, and a robust lineup of new features, content releases, and strategic partnerships across our Digital Games business. Across our creative centres, we continue to execute on our strategy to unlock value through cross-collaboration, engaging consumers and driving long-term, sustainable, and profitable growth.”

“Toy Revenue declined in the quarter due to the uncertain macroeconomic environment as well as the shift in retailer buying behavior driven by the impact of tariffs,” said Jonathan Roiter, Spin Master’s Chief Financial Officer. “These impacts were partially offset by another strong quarter for Digital Games, reflecting improved monetization of our platforms. Our balance sheet and cash conversion is strong and we’re making important investments in key areas to drive both growth and higher returns in future years.”

Consolidated Financial Highlights for Q3 2025 as compared to the same period in 2024

• Q3 2025 Revenue was $734.7 million, a decrease of 17.0%, primarily driven by a decrease in Toy Revenue.
• Q3 2025 Operating Income was $151.0 million, a decrease of 25.7%.
• Q3 2025 Net Income was $106.8 million or $1.03 per share (diluted) compared to $140.1 million or $1.36 per share (diluted). Adjusted Net Income1 was $115.2 million or $1.11 per share (diluted) compared to $169.7 million or $1.60 per share (diluted).
• Q3 2025 Adjusted EBITDA1 was $195.5 million, a decrease of $82.0 million. Adjusted EBITDA Margin1 was 26.6% compared to 31.3%.
• Q3 2025 Cash provided by operating activities was $62.6 million compared to $74.9 million.
• Q3 2025 Free Cash Flow1 was $21.6 million compared to $44.7 million.
• Repurchased and cancelled 482,362 subordinate voting shares for $7.9 million (C$11.0 million) in Q3 2025 through the Company’s Normal Course Issuer Bid (the “NCIB”) program. Subsequent to September 30, 2025, the Company repurchased and cancelled 174,878 subordinate voting shares for $2.5 million.
• Subsequent to September 30, 2025, the Company declared a quarterly dividend of C$0.12 per outstanding subordinate voting share and multiple voting share, payable on January 9, 2026.

Consolidated Financial Results as compared to the same period in 2024

Q3 2025 Operating Income was $151.0 million, a decrease of $52.2 million from $203.2 million, mainly driven by declines in Operating Income in the Toys segment of $54.7 million and in the Entertainment segment of $8.0 million, partially offset by an increase in the Digital Games segment of 10.8 million.

Q3 2025 Adjusted Operating Income2 was $162.4 million, a decrease of $81.0 million from $243.4 million, mainly driven by declines in Adjusted Operating Income1 in the Toys segment of $83.0 million and in the Entertainment segment of $8.7 million, partially offset by an increase in Adjusted Operating Income1 in Digital Games segment of $10.0 million.

Q3 2025 Adjusted EBITDA1 was $195.5 million, a change of $82.0 million from $277.5 million. The decrease was primarily driven by the Toys segment, with lower Toy Revenue primarily due to global market uncertainties resulting in part from ongoing changes to tariff policies, including a continued slowdown in U.S. retailer orders, partially offset by the Digital Games segment driven by revenue generated from strategic partnerships, continued growth in subscriptions across Piknik and higher in-game purchases in Toca Boca World from continued user engagement..

Q3 2025 Adjusted EBITDA Margin1 was 26.6% compared to 31.3%.  The decrease was primarily driven by a decline in revenue resulting in lower operating leverage.

Segmented Financial Results as compared to the same period in 2024

Toys Segment Results

The following table provides a summary of the Toys segment operating results, for the three months ended September 30, 2025 and 2024:

• Toy Revenue declined by $160.5 million to $650.4 million.
• Toy Gross Product Sales3 decreased by $180.0 million to $742.7 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 decreased by $18.7 million to $94.0 million. As a percentage of Toy Gross Product Sales1, Sales Allowances increased to 12.7% from 12.2% driven by a change in customer mix.
• Toys Operating Income was $128.8 million compared to $183.5 million. The decrease in Toys Operating Income was driven by lower Toy sales volume.
• Toys Operating Margin was 19.8% compared to 22.6%.
• Toys Adjusted EBITDA1 was $156.4 million compared to $242.2 million. The decrease in Toys Adjusted EBITDA1 was driven by lower Toy Revenue.
• Toys Adjusted EBITDA Margin1 was 24.0% compared to 29.9%. The decrease in Toys Adjusted EBITDA Margin1 was due to a decline in Toy Revenue resulting in lower operating leverage.

Entertainment Segment Results

The following table provides a summary of Entertainment segment operating results, for the three months ended September 30, 2025 and 2024:

• Entertainment Revenue declined by $4.3 million to $32.8 million, primarily driven by lower on-going distribution revenue from PAW Patrol: The Mighty Movie and licensing & merchandising revenue.
• Entertainment Operating Income declined by $8.0 million to $11.9 million.
• Entertainment Operating Margin decreased from 53.6% to 36.3%.
• Entertainment Adjusted Operating Income1 declined by $8.7 million to $12.2 million.
• Entertainment Adjusted Operating Margin1 decreased from 56.3% to 37.2%.
• The decrease in Entertainment Operating Income, Entertainment Operating Margin, Entertainment Adjusted Operating Income1 and Entertainment Adjusted Operating Margin1 was primarily due to lower Entertainment Revenue and increased investments in marketing.

Digital Games Segment Results

The following table provides a summary of Digital Games segment operating results, for the three months ended September 30, 2025 and 2024:

• Digital Games Revenue increased by $13.8 million to $51.5 million, driven by revenue generated from strategic partnerships, continued growth in subscriptions across Piknik and higher in-game purchases in Toca Boca World from continued user engagement.
• Digital Games Operating Income increased by $10.8 million to $15.9 million.
• Digital Games Operating Margin increased from 13.5% to 30.9%.
• Digital Games Adjusted Operating Income4 increased by $10.0 million to $17.3 million.
• Digital Games Adjusted Operating Margin1 increased from 19.4% to 33.6%.
• The increase in Digital Games Operating Income, Digital Games Operating Margin, Digital Games Adjusted Operating Income1 and Digital Games Adjusted Operating Margin1 was primarily due to revenue generated from strategic partnerships.

Liquidity

The Company has an unsecured revolving credit facility (the “Facility”) with a borrowing capacity of $510.0 million and contains certain financial covenants. On June 27, 2025, the Company entered into an agreement to amend its existing Facility, which now matures 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. On June 27, 2025, the Company entered into an agreement to amend its existing Acquisition Facility, which now matures on June 27, 2027.

During the nine months ended September 30, 2025, the Company drew $25.0 million (2024 – $300.0 million) and repaid $30.0 million (2024 – $115.0 million) against the Facility. As at September 30, 2025, there was $160.0 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 nine months ended September 30, 2025, the weighted average interest rates on the Facility and Acquisition Facility were 5.7% and 5.6%, respectively (2024 – 6.6% and 6.6%).

As at September 30, 2025, the Company had available liquidity of $472.2 million, comprised of $127.9 million in cash and $344.3 million under the Company’s credit facilities.

Cash Flows for Q3 2025 as compared to the same period in 2024

Cash flows provided by operating activities were $62.6 million compared to $74.9 million driven by lower Net Income, adjusted for non-cash items, partially offset by the change in non-cash working capital and lower income taxes paid. Change in non-cash working capital increased by $119.9 million as compared to an increase of $183.8 million, due to changes in trade receivables, partially offset by changes in trade payables and accrued liabilities.

Cash flows used in financing activities were $19.2 million compared to $88.5 million, driven by shares repurchased under the Company’s NCIB for $7.9 million (2024 – $21.1 million), lease payments of $2.5 million (2024 – $11.4 million) and no repayment towards the Facility (2024 – $50.0 million).

Free Cash Flow5 was $21.6 million compared to $44.7 million, primarily due to higher investment in leasehold improvements, computer software, intellectual property and office equipment, partially offset by lower investment in Entertainment content development.

Capitalization

The Company’s Board of Directors declared a dividend of C$0.12 per outstanding subordinate voting share and multiple voting share, payable on January 9, 2026 to shareholders of record at the close of business on December 24, 2025. The dividend is designated to be an eligible dividend for purposes of section 89(1) of the Income Tax Act (Canada).

The weighted average basic and diluted shares outstanding as at September 30, 2025 were 101.7 million and 104.3 million, compared to 103.6 million and 106.1 million in the prior year, respectively.

Subsequent Event

On October 8, 2025, the Company completed the acquisition of 100% of the shares of a Sweden-based digital reading and storytelling company for a preliminary total consideration of $20.0 million. The acquisition will be reported in the Digital Games segment.

Condensed consolidated interim statements of financial position

Condensed consolidated interim statements of earnings and comprehensive income

Condensed consolidated interim statements of cash flows

Adjusted Operating Margin is calculated as Adjusted Operating Income (Loss) divided by Revenue. Management uses Adjusted Operating Margin to evaluate the Company’s performance compared to internal targets and to benchmark its performance against key competitors.

Toys Adjusted Operating Margin is calculated as Toys Adjusted Operating Income (Loss) divided by Toy Revenue. Management uses Toys Adjusted Operating Margin to evaluate the Company’s performance compared to internal targets and to benchmark its performance against key competitors.

Entertainment Adjusted Operating Margin is calculated as Entertainment Adjusted Operating Income (Loss) divided by Toy Revenue. Management uses Entertainment Adjusted Operating Margin to evaluate the Company’s performance compared to internal targets and to benchmark its performance against key competitors.

Digital Games Adjusted Operating Margin is calculated as Digital Games Adjusted Operating Income (Loss) divided by Digital Games Revenue. Management uses Digital Games Adjusted Operating Margin to evaluate the Company’s performance compared to internal targets and to benchmark its performance against key competitors.

Adjusted Basic EPS is calculated by dividing Adjusted Net Income (Loss) by the weighted average number of shares outstanding during the period. Adjusted Diluted EPS is calculated by dividing Adjusted Net Income (Loss) by the weighted average number of shares outstanding, assuming the conversion of all dilutive securities were exercised during the period. Management uses Adjusted Basic EPS and Adjusted Diluted EPS to measure the underlying financial performance of the business on a consistent basis over time.

Sales Allowances as a percentage of Toy Gross Product Sales is calculated by dividing Sales Allowances by Toy Gross Product Sales. Management uses Sales Allowances as a percentage of Toy Gross Product Sales to identify and compare the cost of doing business with individual retailers, different geographic markets and amongst various distribution channels.

Reconciliation of Non-GAAP Financial Measures

The following table presents a reconciliation of Operating Income to Adjusted Operating Income, Adjusted EBITDA, Adjusted Net Income, and cash used in operating activities and investing activities to Free Cash Flow for the three months ended September 30, 2025 and 2024:

Segment Results

The Company’s results from operations by reportable segment for the three months ended September 30, 2025 and 2024 are as follows: