Group 1 - Funko's shares have experienced a significant decline, down 50.3% over the last year and 64.1% year to date [1] - The decline in Funko's stock price is attributed to weak performance [1] Group 2 - Crude Value Insights provides an investing service focused on oil and natural gas, emphasizing cash flow and companies with growth potential [1] - Subscribers have access to a stock model account, cash flow analyses of exploration and production firms, and live discussions about the sector [2] - A two-week free trial is available for new subscribers to explore the oil and gas sector [3]

Financial Data and Key Metrics Changes - Total net sales for Q1 2025 were $190.7 million, in line with guidance [21] - Gross profit was $76.9 million, resulting in a gross margin of 40.3% [22] - Adjusted net loss was $17.8 million, or $0.33 per share, which was better than expected [22] - Negative adjusted EBITDA was $4.7 million, also better than expected [22] - Cash and cash equivalents stood at $25.9 million, with total debt at approximately $202.2 million, an increase of $19.4 million from the previous quarter [23] Business Line Data and Key Metrics Changes - Direct to consumer sales accounted for 22% of gross sales, comparable to the previous year [21] - Shipping delays affected sales of the Pop Yourself line in Q1 [22] Market Data and Key Metrics Changes - In the U.S. market, year-to-date point of sale (POS) was down mid-single digits, but improved to low single digits in the past four weeks [37] - In Europe, POS showed high single-digit year-over-year growth, significantly outpacing the overall toy industry [39] Company Strategy and Development Direction - The company aims to diversify into sports, gaming, and music to attract new fans [5] - Funko is focusing on improving retail opportunities and experiential engagements to delight collectors [5] - The company is withdrawing its 2025 outlook due to uncertainties related to global tariffs and macroeconomic conditions [9][24] - A cross-functional tariff task force has been established to mitigate tariff impacts and optimize operations [10] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the accelerated pace of change in the macro environment and its impact on business decisions [6] - The company is confident in its strategy and is taking disciplined actions to strengthen its foundation [8] - Management expects to fully offset the impact of incremental tariffs within the year through various initiatives [25] Other Important Information - The company is expanding its global footprint with new licensed stores in the UAE, China, and the Philippines [8] - Funko is committed to maintaining pricing to protect the fan experience despite rising costs [13] Q&A Session Summary Question: Can you offer extra color on mitigation efforts regarding price adjustments and retailer sentiment? - Management indicated that pricing decisions were made in January, and retail partners have been supportive of maintaining price points despite tariffs [32] Question: Can you discuss POS trends and expectations for the upcoming months? - Management noted that POS in the U.S. has shown improvement recently, while Europe continues to see strong growth [38] Question: Were the pricing changes planned prior to the tariffs? - Management confirmed that the pricing changes were planned before the tariffs were announced [43] Question: What drove the better-than-expected margins? - Management attributed the improved margins to slight improvements across product margins and inventory reserves, with no major drivers impacting Q1 [46] Question: How will the headcount reduction impact future quarters? - Management explained that the headcount reduction will provide cost savings throughout the year, with most reductions already implemented [48]

Financial Data and Key Metrics Changes - For Q1 2025, total net sales were $190.7 million, in line with guidance, with a gross margin of 40.3% and adjusted EBITDA at a negative $4.7 million, both better than expected [7][22][20] - Adjusted net loss was $17.8 million or $0.33 per share, which was also better than expectations [22] - Cash and cash equivalents stood at $25.9 million, total debt increased to approximately $202.2 million, and total company liquidity decreased to $90.9 million [23][24] Business Line Data and Key Metrics Changes - Direct to consumer sales accounted for 22% of gross sales, comparable to the previous year [21] - Shipping delays affected sales of the Pop Yourself line in Q1, indicating operational challenges [22] Market Data and Key Metrics Changes - In the U.S. market, year-to-date point of sale (POS) was down mid-single digits, but recent trends showed low single-digit growth in the past four weeks [35][37] - In Europe, POS grew by 8%, significantly outpacing the overall toy market growth of 1% [8][38] Company Strategy and Development Direction - The company aims to diversify into sports, gaming, and music while enhancing retail opportunities and experiential engagements [6] - A focus on tariff mitigation strategies has been implemented, including sourcing diversification and cost discipline measures [10][11] - The company is committed to maintaining pricing to ensure accessibility for fans, despite rising costs [13][34] Management's Comments on Operating Environment and Future Outlook - Management acknowledged intensified pressures from tariffs and selective consumer behavior, leading to the withdrawal of the 2025 outlook [9][24] - The company remains confident in its ability to offset incremental tariff costs through strategic actions [25][26] - Management emphasized the importance of partnerships and community engagement in navigating the current macro environment [28] Other Important Information - The company has reduced its global workforce by over 20% as part of cost-saving measures [12][46] - A cross-functional tariff task force has been established to address the impact of tariffs on operations [10] Q&A Session Summary Question: Can you offer extra color on mitigation efforts regarding price adjustments and retailer sentiment? - Management indicated that pricing decisions were made in January, and discussions with retail partners have been positive, supporting the decision to maintain price points [32][33] Question: Can you discuss POS trends and expectations for the upcoming months? - Management noted that while the U.S. market faced challenges, recent trends showed improvement, and Europe continued to perform well with high single-digit POS growth [35][38] Question: Clarification on pricing plans and margin drivers? - Management confirmed that planned price adjustments were not in direct response to tariffs and that gross margins exceeded expectations due to slight improvements across various metrics [42][44] Question: Regarding the headcount reduction, how should it be viewed moving forward? - Management explained that the majority of the headcount reduction has already occurred, with ongoing benefits expected throughout the year [46][48]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FUNKO, INC. (Exact name of registrant as specified in its charter) Delaware 35-2593276 (State or other jurisdiction of incorporation or organization) 2802 Wetmore Avenue 98201 Everett Washington (Address of principal executive offices) (Zip Code) (I.R.S. Employer Identification No.) For the quarterly period ended March 31, 2025 OR ☐ TRANS ...

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) Funko's Q1 2025 net sales decreased year-over-year, but gross margin improved and Adjusted EBITDA was better than expected, despite a wider net loss Q1 2025 vs Q1 2024 Financial Summary | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $190.7M | $215.7M | -11.6% | | Gross Profit | $76.9M | $86.3M | -10.9% | | Gross Margin | 40.3% | 40.0% | +30 bps | | Net Loss | $(28.1)M | $(23.7)M | Increased Loss | | Adjusted Net Loss* | $(17.8)M | $(9.2)M | Increased Loss | | Adjusted EBITDA* | $(4.7)M | $9.6M | Negative Swing | | Diluted EPS | $(0.52) | $(0.45) | Increased Loss | | Adjusted Diluted EPS* | $(0.33) | $(0.17) | Increased Loss | - The company delivered net sales within its guidance range, while gross margin and adjusted EBITDA were better than expected despite a challenging environment[1](index=1&type=chunk)[3](index=3&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) CEO Cynthia Williams highlighted resilience and international strength, taking decisive action on tariffs and accelerating supply chain diversification - International business remains a key strength, with increased sell-through in the European G5 markets and an expanding global footprint[3](index=3&type=chunk) - Due to intensified and volatile tariffs on imports from China, the company has taken swift action to protect margins and liquidity[4](index=4&type=chunk) - Funko is accelerating its diversified sourcing strategy and expects only **5%** of its future US-bound products to be sourced from China by the end of the year[4](index=4&type=chunk) [Business Performance Analysis](index=1&type=section&id=Business%20Performance%20Analysis) Total net sales declined **11.6%** year-over-year, driven by a **16.7%** drop in the United States market, while European sales remained stable [Net Sales by Brand Category](index=1&type=section&id=Net%20Sales%20by%20Brand%20Category) All brand categories experienced year-over-year sales declines in Q1 2025, with the 'Other' category showing the sharpest decrease at **39.2%** Net Sales by Brand Category (in thousands) | Brand Category | Q1 2025 | Q1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Core Collectible | $144,479 | $157,121 | (8.0)% | | Loungefly | $35,374 | $40,676 | (13.0)% | | Other | $10,886 | $17,902 | (39.2)% | | **Total Net Sales** | **$190,739** | **$215,699** | **(11.6)%** | [Net Sales by Geography](index=2&type=section&id=Net%20Sales%20by%20Geography) Sales decline was concentrated in the United States with a **16.7%** decrease, while European sales were nearly flat Net Sales by Geography (in thousands) | Geography | Q1 2025 | Q1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | United States | $121,909 | $146,366 | (16.7)% | | Europe | $54,205 | $54,243 | (0.1)% | | Other International | $14,625 | $15,090 | (3.1)% | | **Total Net Sales** | **$190,739** | **$215,699** | **(11.6)%** | [Balance Sheet Highlights](index=2&type=section&id=Balance%20Sheet%20Highlights) Q1 2025 balance sheet showed decreased cash and inventories, with total debt increasing to **$202.2 million** from **$182.8 million** Balance Sheet Comparison (in millions) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $25.9 | $34.7 | | Inventories | $87.7 | $92.6 | | Total debt | $202.2 | $182.8 | - As of March 31, 2025, the company was in compliance with all its debt covenants[11](index=11&type=chunk) [2025 Full-Year Outlook](index=2&type=section&id=Outlook%20for%202025) Funko withdrew its 2025 full-year financial outlook due to significant uncertainty and ongoing changes in global tariff policies - The company withdrew its 2025 full-year outlook, previously provided on March 6, 2025[8](index=8&type=chunk) - The withdrawal is attributed to the current uncertainty and ongoing changes in global tariff policies[8](index=8&type=chunk) [Consolidated Financial Statements (Unaudited)](index=5&type=section&id=Consolidated%20Financial%20Statements%20(Unaudited)) Unaudited Q1 2025 financial results show a net loss of **$28.1 million**, decreased total assets, and negative cash flow from operations [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q1 2025 net sales decreased to **$190.7 million**, with loss from operations widening to **$23.2 million**, resulting in a net loss of **$28.1 million** Q1 Statement of Operations Summary (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net sales | $190,739 | $215,699 | | Loss from operations | $(23,198) | $(14,902) | | Net loss | $(28,059) | $(23,666) | | Loss per share (Basic & Diluted) | $(0.52) | $(0.45) | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets were **$648.4 million**, down from year-end 2024, reflecting lower cash, receivables, and inventories Balance Sheet Summary (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total current assets | $236,736 | $287,059 | | Total assets | $648,401 | $707,254 | | Total current liabilities | $278,220 | $305,794 | | Total liabilities | $434,246 | $470,901 | | Total stockholders' equity | $214,155 | $236,353 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Q1 2025 saw a net cash outflow from operating activities of **$22.3 million**, a reversal from the prior year, with financing activities providing **$19.3 million** Q1 Statement of Cash Flows Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(22,262) | $14,507 | | Net cash (used in) provided by investing activities | $(6,359) | $2,758 | | Net cash provided by (used in) financing activities | $19,330 | $(27,439) | | **Net change in cash and cash equivalents** | **$(8,721)** | **$(10,343)** | | **Cash and cash equivalents at end of period** | **$25,934** | **$26,110** | [Reconciliation of Non-GAAP Financial Measures](index=8&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) Q1 2025 Adjusted Net Loss was **$17.8 million** and Adjusted EBITDA was **negative $4.7 million**, reflecting a significant decline in adjusted profitability Reconciliation to Adjusted Net Loss (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss attributable to Funko, Inc. | $(27,588) | $(22,663) | | Adjustments (Equity comp, etc.) | $9,758 | $13,426 | | **Adjusted net loss** | **$(17,830)** | **$(9,237)** | | **Adjusted loss per diluted share** | **$(0.33)** | **$(0.17)** | Reconciliation to Adjusted EBITDA (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net loss | $(28,059) | $(23,666) | | EBITDA | $(8,104) | $(876) | | Adjustments | $3,441 | $8,650 | | **Adjusted EBITDA** | **$(4,663)** | **$9,574** | | **Adjusted EBITDA margin** | **(2.4)%** | **4.4%** |

Core Insights - The U.S. toy industry is facing significant challenges due to increased tariffs imposed by President Trump, with a 10% baseline tariff affecting nearly all countries and much higher tariffs on China (54%) and Vietnam (46%) [3][5][6] - The tariffs are expected to lead to substantial price increases for consumers, with estimates suggesting potential hikes of 35% to 50% on toys [8][9] - Major toy companies like Hasbro and Mattel are already experiencing stock declines, with Mattel shares dropping over 16.5% and Hasbro losing more than 12% following the tariff announcements [7] Industry Impact - Approximately 77% of toys imported into the U.S. come from China, with Vietnam being a significant secondary source [4] - The tariffs are causing toy companies to scramble for solutions, including potential production shifts to other countries, but these alternatives are also facing tariffs [5][6] - Analysts predict that companies will attempt to renegotiate contracts and alter packaging to mitigate costs, but ultimately, consumers will bear the burden of the increased tariffs [7][8] Consumer Effects - The Toy Association anticipates that price hikes will align with the back-to-school season, disproportionately affecting lower-income consumers [9] - The industry's profit margins are already thin, making it difficult for companies to absorb the tariff costs without passing them on to consumers [8]

Group 1 - The article discusses the necessity of exploring lesser-known, higher-risk stocks during volatile market conditions, particularly as major momentum trades like Tesla are losing traction [1] - Gary Alexander, with extensive experience in technology and startups, provides insights into current industry trends and themes shaping the market [1] Group 2 - The article does not provide any specific financial data or performance metrics related to companies mentioned [2][3]

Financial Performance - Consolidated net sales for the year ended December 31, 2024, were $1,049.85 million, a decrease from $1,096.09 million in 2023, and $1,322.71 million in 2022 [414]. - The net loss attributable to Funko, Inc. for 2024 was $14.72 million, compared to a net loss of $154.08 million in 2023 [414]. - The company reported a loss per share of Class A common stock of $0.28 for 2024, consistent with the loss per share of $3.19 in 2023 [414]. - The company experienced a comprehensive loss of $16.21 million in 2024, compared to a comprehensive loss of $151.66 million in 2023 [418]. - The net loss for the year ended December 31, 2024, was $15.07 million, compared to a net loss of $164.44 million in 2023 and a net loss of $5.24 million in 2022 [534]. - Funko, Inc. reported a net loss of $15.07 million for the year ended December 31, 2024, compared to a net loss of $164.44 million in 2023 and $5.24 million in 2022, indicating a significant reduction in losses year-over-year [555]. - The basic loss per share of Class A common stock was $(0.28) for 2024, down from $(3.19) in 2023 and $(0.18) in 2022, reflecting improved performance despite ongoing losses [555]. Revenue and Sales - Total net sales for the year ended December 31, 2024, were $1,049.85 million, a decrease of 4.2% from $1,096.09 million in 2023 and a decline of 20.6% from $1,322.71 million in 2022 [534]. - Core Collectible sales accounted for $804.41 million in 2024, slightly up from $803.18 million in 2023, but down from $998.44 million in 2022 [534]. - The Company recorded net sales of $681.99 million in the United States for 2024, down from $755.62 million in 2023 and $966.32 million in 2022 [534]. Expenses and Costs - The cost of sales for 2024 was $615.32 million, down from $763.09 million in 2023, indicating a reduction in costs [414]. - Total operating expenses for 2024 were $1,036.86 million, a decrease from $1,199.91 million in 2023 [414]. - The company reported depreciation and amortization expenses of $62,583,000 in 2024, up from $57,389,000 in 2023 [427]. - Advertising and marketing costs increased to $51.6 million in 2024 from $31.3 million in 2023, reflecting a strategic push in marketing efforts [450]. - Product design and development costs were $6.8 million in 2024, down from $8.0 million in 2023, suggesting a potential shift in R&D focus [452]. Assets and Liabilities - Total assets decreased from $798,585,000 in 2023 to $707,254,000 in 2024, a decline of approximately 11.4% [421]. - Current assets fell from $336,816,000 in 2023 to $287,059,000 in 2024, representing a decrease of about 14.8% [421]. - Long-term debt decreased from $130,986,000 in 2023 to $100,303,000 in 2024, a reduction of about 23.5% [421]. - Accounts receivable decreased from $130,831,000 in 2023 to $119,882,000 in 2024, a decline of approximately 8.5% [421]. - Inventories decreased from $119,458,000 in 2023 to $92,580,000 in 2024, representing a decrease of about 22.5% [421]. - Total long-lived assets decreased to $134.996 million as of December 31, 2024, from $160.586 million in 2023 [534]. Debt and Interest - As of December 31, 2024, the company had $172.2 million of variable rate debt outstanding under its Credit Facilities, including $112.2 million under the Term Loan Facility and $60.0 million under the Revolving Credit Facility [384]. - A 1% increase or decrease in the effective interest rate would result in an approximate $1.1 million change in interest expense over the next 12 months [384]. - The company’s interest expense for 2024 was $20.58 million, down from $27.97 million in 2023 [414]. - The total term debt decreased from $153.1 million in 2023 to $122.8 million in 2024, a reduction of approximately 19.7% [482]. - The Revolving Credit Facility borrowings decreased from $120.5 million in 2023 to $60.0 million in 2024, a reduction of approximately 50% [490]. - The weighted average interest rate on outstanding borrowings under the Revolving Credit Facility decreased from 9.45% in 2023 to 6.71% in 2024 [490]. Tax and Regulatory Compliance - The company’s operations are subject to compliance with various data privacy laws, including GDPR and CCPA, which could result in fines up to €20 million or 4% of total global annual turnover for violations [249][250]. - The company may face limitations in using certain tax attributes if it undergoes an "ownership change," which could adversely impact its financial condition and operating results [246]. - The Company established a full valuation allowance of $123.2 million against its deferred tax assets as of December 31, 2023, indicating challenges in realizing tax benefits [455]. - The Company’s annual effective tax rate for 2024 is (43.4)%, significantly lower than the statutory rate of 21% due to valuation allowance and foreign taxes [503]. Legal Matters - The Company has accrued a liability of $14.75 million related to a settlement in a class action lawsuit as of December 31, 2024 [524]. - The consolidated complaint in the securities litigation alleges violations of the Securities Act, seeking compensatory damages and attorneys' fees [524]. - The Company is currently involved in ongoing legal proceedings, but does not believe these will materially affect its financial condition [529]. Equity and Stock - The Company has authorized the issuance of up to 200 million shares of Class A common stock, 50 million shares of Class B common stock, and 20 million shares of preferred stock [537]. - The Company recognized equity-based compensation expenses of $13.6 million, $10.5 million, and $16.6 million for the years ended December 31, 2024, 2023, and 2022, respectively [549]. - The weighted-average fair value of stock options granted was $4.90, $6.71, and $10.85 per share for the years ended December 31, 2024, 2023, and 2022, respectively [548]. - The Company reported an intrinsic value of $915,000 for stock option exercises in 2024, with cash received for exercise price totaling $1.41 million [547]. - As of December 31, 2024, there was $25.0 million of total unrecognized equity-based compensation expense expected to be recognized over a remaining weighted-average period of 2.7 years [550].

Group 1 - Funko's shareholders have experienced a challenging period recently, with a downgrade from 'strong buy' to 'buy' on January 3rd of this year [1] - The company's stock performance has been under scrutiny, indicating potential concerns regarding its market position and future growth [1] Group 2 - Crude Value Insights provides an investment service focused on oil and natural gas, emphasizing cash flow and companies with growth potential [2] - Subscribers benefit from a comprehensive stock model account and in-depth cash flow analyses of exploration and production firms [2] - The service includes live chat discussions about the oil and gas sector, enhancing community engagement among investors [2]

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]