Financial Data and Key Metrics Changes - Total net sales for Q4 2024 were $293.7 million, up 1% year-over-year and at the top end of guidance range [30] - Gross profit reached $124.4 million with a gross margin of 42.4%, an improvement from 37.6% in Q4 2023 [31] - Adjusted net income was $4.4 million, or $0.08 per diluted share, significantly up from $0.1 million in Q4 2023 [33] - Adjusted EBITDA for Q4 was $26.3 million, exceeding expectations [33] - For the full year, net sales were $1.05 billion, down from $1.1 billion in 2023, while adjusted EBITDA improved to $94.7 million from a negative $11.8 million in 2023 [34] Business Line Data and Key Metrics Changes - Direct-to-consumer sales increased by 20% year-over-year, comprising 29% of gross sales compared to 25% in Q4 2023 [30][22] - Core collectibles business grew over 10% in Q4, with sales outside the US increasing by 23% [9] - Biddy Pop line saw an impressive 83% year-over-year growth in Q4 [21] Market Data and Key Metrics Changes - Sales in Europe were up more than 20%, driven by strong seasonal performance [30] - POS in the US grew by 1% year-over-year, while Europe experienced a 17% increase [72] Company Strategy and Development Direction - The company is focusing on expanding its sports product line, which currently represents only 4% of total revenue, with significant growth potential identified in the $35 billion sports memorabilia market [12][64] - Plans to enhance direct-to-consumer sales and expand the Pop Yourself product line into new international territories [39] - The company aims to improve brand value by avoiding sales into discount channels, which could dilute brand perception [51] Management's Comments on Operating Environment and Future Outlook - Management acknowledged softening consumer behavior in the US market and the impact of tariffs and inflation on operations [28] - Confidence in navigating external challenges is bolstered by proactive mitigation plans and a strong leadership team [28] - Anticipated modest top-line growth in 2025, with expectations for a stronger second half of the year as strategic initiatives take effect [40] Other Important Information - The company has strengthened its leadership team with key additions to enhance brand positioning and sales operations [25][27] - The fan loyalty program, Fan Rewards, added 120,000 new members in 2024, indicating strong customer engagement [24] Q&A Session Summary Question: Guidance assumptions regarding tariffs and consumer sentiment - Management highlighted green shoots in the business, particularly in direct-to-consumer and sports segments, while acknowledging headwinds from tariffs and consumer sentiment [46][47] Question: Future of the sports strategy - Management sees significant potential in the sports category, with plans for regional capsules and activations to engage fans [59][64] Question: POS performance in the US retail channel - Management reported a 1% increase in US POS, with strong performance in Europe at 17% [72] Question: Decline in first-quarter sales guidance - Management attributed the expected decline to lower foot traffic in major retailers and cautious consumer spending [78][79] Question: Impact of tariffs and pricing adjustments - Management confirmed that guidance includes anticipated tariffs and is exploring pricing adjustments as a mitigation strategy [87]

Funko, Inc. (NASDAQ:FNKO) Q4 2024 Earnings Call March 6, 2025 4:30 PM ET Company Participants Rob Jaffe - Director, Investor Relations Cynthia Williams - Chief Executive Officer Yves Le Pendeven - Chief Financial Officer Conference Call Participants Stephen Laszczyk - Goldman Sachs Linda Weiser - D.A. Davidson Operator This call is being broadcast live at investors. funko. com. A playback will be available for at least one year on the company's website. I want to remind everyone that during the course of th ...

Financial Performance - Q4 2024 net sales reached $293.7 million, a 0.9% increase from $291.2 million in Q4 2023[5] - Gross profit for Q4 2024 was $124.4 million, with a gross margin of 42.4%, compared to $109.4 million and 37.6% in Q4 2023[5] - Adjusted EBITDA for Q4 2024 was $26.3 million, up from $23.1 million in Q4 2023[5] - For the full year 2024, net sales totaled $1.05 billion, down from $1.10 billion in 2023[5] - Full-year gross profit was $434.5 million, with a gross margin of 41.4%, compared to $333.0 million and 30.4% in 2023[5] - Net sales for Q4 2024 were $293.7 million, a slight increase from $291.2 million in Q4 2023, while total net sales for the year decreased to $1,049.9 million from $1,096.1 million in 2023[17] - The company reported a net loss of $1.5 million for Q4 2024, compared to a net loss of $10.8 million in Q4 2023, and a total net loss of $15.1 million for the year, down from $164.4 million in 2023[17] - Adjusted net income for the twelve months ended December 31, 2024, was $8,687,000, compared to a loss of $74,666,000 in 2023[22] Debt and Cash Management - Total debt decreased by $90 million to $182.8 million at the end of 2024, down from $273.6 million at the end of 2023[8] - Cash and cash equivalents at the end of Q4 2024 were $34.7 million, slightly down from $36.5 million at the end of Q4 2023[19] - The company reduced its line of credit from $120.5 million in 2023 to $60 million in 2024, indicating improved financial management[19] - Total current assets decreased to $287.1 million in 2024 from $336.8 million in 2023, primarily due to a reduction in inventories[19] - Interest expense for the twelve months ended December 31, 2024, was $20,575,000, down from $27,970,000 in 2023, showing a reduction of 26.5%[23] Operational Efficiency - Total operating expenses for Q4 2024 were $288.3 million, a decrease from $294.6 million in Q4 2023, with significant reductions in cost of sales and selling, general, and administrative expenses[17] - The company reported a significant increase in depreciation and amortization expenses, totaling $62.6 million for the year, compared to $57.4 million in 2023[21] - Net cash provided by operating activities for 2024 was $123.5 million, a substantial increase from $30.9 million in 2023[21] - Adjusted EBITDA margin for Q4 2024 was 8.9%, compared to 7.9% in Q4 2023, indicating improved operational efficiency[23] Future Projections - The company expects 2025 full-year net sales to be between $1.050 billion and $1.082 billion[9] - Adjusted EBITDA for 2025 is projected to be between $80 million and $100 million[9] - The company anticipates a measured top-line growth in 2025, particularly in the second half of the year[6] Strategic Initiatives - Funko plans to expand its presence in high-potential categories such as sports, music, and gaming[6] - The company made no acquisitions in 2024, contrasting with $5.4 million spent on acquisitions in 2023[21] Shareholder Information - The weighted average shares of Class A common stock outstanding increased to 52.8 million in Q4 2024 from 50.4 million in Q4 2023[17] - Adjusted earnings per diluted share for Q4 2024 was $0.08, compared to a loss of $1.43 per share in Q4 2023[22] - The weighted-average shares of Class A common stock outstanding for Q4 2024 increased to 52,826,000 from 50,384,000 in Q4 2023[22] Currency and Other Gains - The company reported a foreign currency transaction gain of $2,398,000 for the twelve months ended December 31, 2024[22]

Core Viewpoint - Funko, Inc. (FNKO) is expected to report its fourth-quarter 2024 earnings on March 6, 2025, after market close [1] Earnings Performance - In the year-ago quarter, FNKO's adjusted earnings and net sales exceeded the Zacks Consensus Estimate by 250% and 1.1%, respectively [2] - Year-over-year, the top line decreased by 6.4%, while the bottom line saw a significant increase of 366.7% [2] - FNKO has reported better-than-expected earnings in three of the last four quarters, with an average surprise of 115.7% [2] Earnings Estimates - The Zacks Consensus Estimate for FNKO's adjusted earnings per share has increased to two cents from one cent over the past 30 days, indicating a 100% year-over-year growth [3] Factors Influencing Q4 Results - FNKO's fourth-quarter performance is likely impacted by low sales volume in the U.S. and European markets, partially offset by higher sales in other international markets [4] - The company anticipates net sales to be between $280 million and $294 million, compared to $291.2 million in the same quarter last year [4] Operating Expenses and EBITDA - The bottom line is expected to grow year-over-year due to lower operating expenses, particularly a decline in selling, general, and administrative (SG&A) expenses [5] - The expected range for fourth-quarter SG&A expenses is $93 million to $99 million, down from $97.4 million reported in the previous year [6] - Adjusted EBITDA is projected to be between $17 million and $22 million, a decrease from $23.5 million in the fourth quarter of 2023 [6] Earnings Prediction Model - The current model does not predict an earnings beat for FNKO, as the Earnings ESP stands at 0.00% and the company holds a Zacks Rank of 3 (Hold) [7][8]

Core Viewpoint - Growth stocks are appealing due to their potential for above-average financial growth, but identifying stocks that can fulfill their growth potential is challenging due to associated risks and volatility [1] Group 1: Company Overview - Funko-A (FNKO) is currently recommended as a strong growth stock based on the Zacks Growth Style Score, which evaluates a company's genuine growth prospects beyond traditional metrics [2] - The company has a favorable Growth Score and a top Zacks Rank, indicating strong potential for performance [2] Group 2: Earnings Growth - Funko-A has a historical EPS growth rate of 64.4%, but the projected EPS growth for this year is significantly higher at 413.6%, far exceeding the industry average of 13.7% [4] Group 3: Asset Utilization - The asset utilization ratio for Funko-A is 1.37, indicating that the company generates $1.37 in sales for every dollar in assets, which is above the industry average of 1.02, showcasing better efficiency [5] Group 4: Sales Growth - Funko-A's sales are expected to grow by 11% this year, compared to the industry average of 1.8%, highlighting its strong sales growth potential [6] Group 5: Earnings Estimate Revisions - The current-year earnings estimates for Funko-A have been revised upward by 1.9% over the past month, indicating a positive trend that correlates with potential stock price movements [7] Group 6: Conclusion - Funko-A has achieved a Zacks Rank 1 and a Growth Score of A, suggesting it is a potential outperformer and a solid choice for growth investors [9]

Investors seek growth stocks to capitalize on above-average growth in financials that help these securities grab the market's attention and produce exceptional returns. But finding a great growth stock is not easy at all.That's because, these stocks usually carry above-average risk and volatility. In fact, betting on a stock for which the growth story is actually over or nearing its end could lead to significant loss.However, the Zacks Growth Style Score (part of the Zacks Style Scores system), which looks ...

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Core Insights - Funko, Inc. (FNKO) reported third-quarter 2024 results with both revenue and earnings exceeding Zacks Consensus Estimates, despite a year-over-year revenue decline [1][4] - The company achieved a significant increase in gross margin, leading to better-than-expected profitability, prompting management to raise its full-year adjusted EBITDA guidance [1][13] Financial Performance - Adjusted earnings were 14 cents per share, surpassing the Zacks Consensus Estimate of 4 cents per share, and improved from 3 cents per share in the prior year [4] - Net sales were $292.8 million, a decrease of 6.4% from $312.9 million in the previous year, but above the Zacks Consensus Estimate of $289 million [5] - Gross margin expanded by 770 basis points year-over-year to 40.9%, aided by improved inventory reserves [5] - SG&A expenses decreased by 1.4% to $92.7 million from $94 million in the prior year [6] - Adjusted EBITDA rose to $30.9 million from $25.4 million in the year-ago period, with an adjusted EBITDA margin increase of 250 basis points to 10.6% [6] Segment Performance - Core Collectible sales declined by 2.3% year-over-year to $227.8 million, while Loungefly net sales fell by 17.6% to $47.3 million [7] - Other net sales decreased by 20.8% year-over-year to $17.6 million [7] - Geographically, U.S. net sales decreased by 7.4% to $194.4 million, and European sales fell by 9.1% to $74.5 million, while Other International sales increased by 13.5% to $23.9 million [8] Guidance and Outlook - For Q4 2024, management expects net sales between $280 million and $294 million, with a gross margin of 38-40% [10] - Adjusted EBITDA is projected to be between $17 million and $22 million, down from $23.5 million in the same quarter last year [11] - Full-year 2024 net sales outlook has been revised to $1.037-$1.050 billion, down from the previous range of $1.047 billion to $1.103 billion [12] - However, full-year adjusted EBITDA guidance has been raised to $85 million to $90 million, up from the previous forecast of $65 million to $85 million [13]

Financial Data and Key Metrics Changes - Net sales for Q3 2024 were $293 million, down compared to Q3 of the previous year but at the high end of the guidance range [8] - Gross margin was 41%, and adjusted EBITDA was $31 million, both exceeding the top end of the guidance range [8][26] - Adjusted net income was $8 million, or $0.14 per diluted share, well above the guidance range for the quarter [26] - Cash and cash equivalents decreased to $28.5 million from $41.6 million at the end of Q2 [27] - Total debt was approximately $223.4 million, slightly down from $223.9 million at the end of Q2 [28] Business Line Data and Key Metrics Changes - Direct-to-consumer sales were down 7% year-over-year, comprising 20% of gross sales [25] - The Pop! Yourself business showed modest year-over-year growth despite no special gifting occasions in Q3 [25] - Sales of Pop! Yourself with NFL accessory packs exceeded launch expectations, with over 40% of sales including NFL accessories [16] Market Data and Key Metrics Changes - POS sales globally were down single-digit year-over-year, with the US market seeing low-double-digit declines [36] - EMEA market showed double-digit growth, contrasting with the US performance [36] Company Strategy and Development Direction - The company is focusing on a fan-centric approach to grow its business, which includes delighting core fans and attracting new ones [13] - A strategic plan for 2025 and beyond is being developed, with details expected to be shared in the Q4 call [13][33] - The company is expanding its collaboration with the NFL and Warner Bros. to enhance product offerings [15][23] Management's Comments on Operating Environment and Future Outlook - Management noted that consumers are increasingly looking for value, leading to cautious behavior from wholesale customers ahead of the holiday season [9][30] - The outlook for net sales for the full year has been lowered to $1.037 billion to $1.05 billion, while adjusted EBITDA guidance has been raised to $85 million to $90 million [9][31] - Management expressed optimism about the upcoming holiday season, expecting a rebound in direct-to-consumer sales [29] Other Important Information - The Pop! Yourself product was recognized as a finalist for the 2024 Collectible of the Year award [23] - The company has diversified its supply base away from China, with about one-third of products manufactured there [43] Q&A Session Summary Question: Concerns about cautiousness from wholesalers - Management indicated that POS trends vary by region, with the US seeing declines while EMEA is performing well [36] Question: Direct-to-consumer sales responsiveness to promotions - Management noted that promotional activities have led to increased responsiveness from consumers, with expectations for a strong Q4 [39][41] Question: Impact of potential tariffs on supply chain - Management stated that about one-third of products are manufactured in China, with plans to further diversify supply chains [43][45] Question: Drivers of higher margins in Q3 - Higher margins were attributed to lower-than-expected inventory reserves and reduced freight costs [50][52] Question: Upcoming film slate and its impact - Management highlighted excitement around the film "Wicked" and its associated product offerings [54][56] Question: Consumer sensitivity to promotions - Management clarified that consumer responsiveness is more pronounced in the average price range products rather than high-end collectibles [60][62] Question: Cost structure and potential savings - Management discussed ongoing cost efficiencies and the need for additional talent to support growth initiatives [68][70]

Funko-A (FNKO) came out with quarterly earnings of $0.14 per share, beating the Zacks Consensus Estimate of $0.04 per share. This compares to earnings of $0.03 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 250%. A quarter ago, it was expected that this company would post a loss of $0.14 per share when it actually produced earnings of $0.10, delivering a surprise of 171.43%.Over the last four quarters, the company has surpass ...