Loading...
01/11 17:44
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presents a mixed picture: while international sales and product launches show promise, domestic sales and financial health raise concerns. The Q&A reveals cautious optimism but highlights tariff impacts and financial instability. The strategic plan suggests potential growth, but execution risks and economic uncertainties temper expectations. Overall, the company's outlook is balanced, leading to a neutral sentiment.
Total Net Sales $250.9 million, a decrease of approximately $11 million year-over-year. The decrease is attributed to SKU rationalizations and a reduction of clearance sales.
Direct-to-Consumer Sales Mix 18% of gross sales, down from 20% in last year's Q3. The decline is due in part to a pullback in marketing spend.
Gross Profit $100.8 million, with a gross margin of 40.2%. This was better than expected, as price increases fully offset the impact of increased tariffs.
SG&A Expenses $79.8 million, down from $92.7 million last year. The reduction is attributed to cost reduction actions taken in Q2 and a reduction in marketing spend.
Adjusted Net Income $3.2 million or $0.06 per diluted share. No specific reasons for change were mentioned.
Adjusted EBITDA $24.4 million, which was higher than expectations. No specific reasons for change were mentioned.
Cash and Cash Equivalents $39.2 million as of September 30. No year-over-year comparison or reasons for change were mentioned.
Net Inventory $99.8 million. No year-over-year comparison or reasons for change were mentioned.
Total Debt Approximately $241 million. No year-over-year comparison or reasons for change were mentioned.
KPop Demon Hunters product line: Funko quickly recognized the appeal of Netflix's most popular movie and launched a product line including pop figures, backpacks, and accessories. This became one of their biggest presale items ever, brought to market within a few months.
Bitty Pop!: Introduced as mini vinyl figures, Bitty Pop! was added to Walmart's 2025 top toy list and featured in their toy catalog. It will also have out-of-aisle placement in 1,800 Walmart stores.
Blind Box and Mystery Minis: Funko plans to expand its Blind Box offerings, including Mystery Minis, to include new IPs, genres, and fandoms.
Premium Blind Box collection: Launched a limited artist-driven product line with chase variants, with plans to expand into new IPs in 2026.
International Expansion: Focused on growth in Asia and Latin America, leveraging expertise from Netflix to excel in these regions.
Direct-to-Consumer Enhancements: Plans to simplify e-commerce site and app, including AI-powered customization for Pop! Yourself and new retail experiences like vending machines for Bitty Pop!.
Speed to Market: Funko operationalized quick strike and hyper strike processes to bring products like KPop Demon Hunters to market faster than competitors.
Cost Reductions: Achieved a reduction in SG&A expenses by $12.9 million year-over-year, partly due to cost-cutting measures and reduced marketing spend.
Make Culture POP! Strategy: Focused on culture, creativity, and commerce to align priorities and drive growth. Includes expanding into new fandoms like K-pop, sports, and influencers.
Licensing Agreements: Signed multiyear renewals with major partners like Disney, Warner Bros., and NBC Universal, ensuring a strong portfolio of licenses.
Market Conditions: The company faces challenges from SKU rationalizations and a reduction in clearance sales, which contributed to a decrease in net sales. Additionally, the pullback in marketing spend has impacted direct-to-consumer sales.
Competitive Pressures: The company needs to improve execution around limited editions, storytelling, and drop cadence to rebuild credibility and enthusiasm with core collectors and mega fans. This indicates competitive pressure to maintain relevance among collectors.
Regulatory Hurdles: Increased tariffs have impacted gross margins, although price increases have offset some of the effects. This highlights exposure to regulatory and trade policy risks.
Supply Chain Disruptions: The company is operationalizing its quick strike and hyper strike offense to improve speed to market, indicating potential challenges in supply chain efficiency and responsiveness.
Economic Uncertainties: The company has disclosed concerns about its ability to continue as a going concern, with ongoing refinancing processes and a high level of total debt ($241 million). This reflects financial instability and exposure to economic uncertainties.
Strategic Execution Risks: The company is undergoing a strategic transformation with its 'Make Culture POP!' strategy, which involves expanding into new product categories and geographies. This ambitious plan carries risks related to execution, resource allocation, and market acceptance.
Q4 2025 Net Sales: Expected to increase modestly from Q3 2025, driven by the launch of Pop! Yourself in Europe and sales of KPop Demon Hunters product lines.
Gross Margin: Projected to be approximately 40% for Q4 2025.
Adjusted EBITDA Margin: Anticipated to be in the mid- to high single digits range for Q4 2025.
International Expansion: Significant growth opportunities identified in Asia and Latin America, with plans to expand presence in these regions.
Direct-to-Consumer (D2C) Enhancements: Plans to simplify the e-commerce site and app, including improved functionality for limited edition drops, wishlists, and loyalty programs.
AI-Powered Builder: A new AI-powered builder for Pop! Yourself is planned for launch later this year, allowing users to upload pictures for customized recommendations.
Retail Innovations: Plans to introduce Bitty Pop! vending machines and expand Pop! Yourself kiosks in the U.S. and Europe starting early next year.
Product Line Expansion: Plans to expand the Bitty Pop! line with more licenses, original characters, and environments, as well as growth in the Blind Box format with new IPs and genres.
The selected topic was not discussed during the call.
The earnings call presents a mixed picture: while international sales and product launches show promise, domestic sales and financial health raise concerns. The Q&A reveals cautious optimism but highlights tariff impacts and financial instability. The strategic plan suggests potential growth, but execution risks and economic uncertainties temper expectations. Overall, the company's outlook is balanced, leading to a neutral sentiment.
The earnings call reveals significant challenges: a 22% sales decline, increased SG&A expenses, and liquidity concerns due to high debt. The going concern disclosure and CEO transition add to the uncertainty. Despite some positive responses to price increases, the overall sentiment is negative, with management's vague responses in the Q&A section raising further concerns. The withdrawal of 2025 guidance and tariff impacts compound the negative outlook, likely leading to a stock price decline of -2% to -8% over the next two weeks.
The earnings call reveals significant challenges: withdrawal of 2025 outlook due to tariffs, a noted financial strain with increased debt, and a 20% workforce reduction. Despite some positive elements like direct-to-consumer growth and better-than-expected adjusted EBITDA, the overall sentiment is negative. The Q&A section highlights uncertainties, particularly around pricing and tariffs. Given these factors, the stock price is likely to decline, falling into the negative category (-2% to -8%).
The earnings call reveals several concerning factors: withdrawal of 2025 outlook due to tariff impacts and economic uncertainty, negative Q2 expectations, and increased debt. Despite some positive aspects like cost discipline and slight margin improvements, the lack of a share repurchase program and unclear future impact of headcount reduction add to the negative sentiment. The Q&A section highlights mixed POS trends and lack of clarity in management responses, further contributing to a negative outlook.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
