Core Insights - Funko Inc has undergone significant changes since 2023, including a new CEO and a strategic pivot towards digital gaming and younger demographics [3][4][23] - The company reported a positive earnings performance with an EPS of $0.10, beating expectations, and revenue of $247.66 million, reflecting a 3.18% year-over-year increase [6] - Funko Fusion, a new gaming platform, is set to launch on September 13, 2024, aiming to diversify revenue streams and engage younger audiences [5][23] Management Changes - Cynthia Williams has been appointed as the new CEO, previously leading Hasbro's Wizards of the Coast division, indicating a shift towards innovative product offerings [4] - The management change is expected to drive the company into new markets and enhance revenue growth [4][23] Financial Performance - The latest earnings call highlighted a strong performance with net sales guidance for FY 2024 projected between $1.047 billion and $1.103 billion, alongside adjusted EBITDA expectations of $65-$85 million [6] - The "bitty pop" product line has seen significant sales growth, more than doubling year-over-year in Q2 [6][11] Revenue Segmentation - The core collectible segment accounted for 75.4% of sales in 2024, showing an increase from 73.1% in 2023, while Loungefly's contribution decreased to 16.8% [8] - Total net sales for the U.S. market were $309.39 million for the first half of 2024, down from $348.28 million in the same period of 2023 [9] Market Strategy - Funko is diversifying its product lineup to include more interactive and playable toys aimed at children, moving away from the collector-focused Funko Pop! line [7][23] - The company is also exploring digital gaming as a new revenue source, which is expected to enhance brand engagement [5][23] Valuation Metrics - Funko's current price-to-sales ratio stands at 0.46, indicating potential for revenue growth relative to its market cap [21] - The company is facing challenges with share dilution and high long-term debt, which may impact future investment decisions [17][22] Future Outlook - The upcoming launch of Funko Fusion is seen as a critical catalyst for revenue growth and market expansion [5][23] - Despite positive developments, the company’s high debt levels and share dilution remain concerns for potential investors [17][24]

11 August 2024 | 10:46PM EDT Sell 2131d4eaf4cb4d50b1d51c8af07b64b4 Funko Inc. (FNKO) Earnings Review: Key takes coming out of 2Q24 results FNKO 12m Price Target: $6.50 Price: $9.62 Downside: 32.4% Funko reported 2Q24 results that came in above the company's 2Q24 guidance and Visible Alpha Consensus Data expectations. Results featured a beat to Revenues ($284M vs. consensus of $231M), Adjusted EBITDA ($28M vs consensus $12M), and Adjusted Diluted EPS estimates ($0.10 vs consensus -$0.13). The beat to Revenue ...

Core Insights - Funko exceeded expectations in its second-quarter earnings report, resulting in a 9.6% increase in stock price [1] Financial Performance - Revenue increased by 3% to $247.7 million, surpassing estimates of $231 million [2] - Gross margin improved significantly from 29.2% to 42%, attributed to higher-than-expected sales and inventory reserve relief [2] - Selling, general, and administrative expenses decreased from $85.6 million to $77.9 million, contributing to improved profitability [3] - Adjusted EBITDA reached $27.9 million, a turnaround from a loss of $7.6 million [3] - Adjusted EPS was $0.10, compared to a loss of $0.43 in the same quarter last year [3] Management Commentary - New CEO Cynthia Williams highlighted strong demand for collectible products in Europe and other international markets as a key driver of performance [4] Future Guidance - For the third quarter, Funko projects revenue between $282 million and $297 million, indicating a potential decline of 7% and falling short of estimates of $319.2 million [4] - The adjusted EPS forecast for the third quarter is between $0.01 and $0.06, which is lower than the consensus estimate of $0.20 [4] Market Reaction - Despite the conservative guidance, investors are optimistic that the momentum from the second quarter will continue [5]

Financial Data and Key Metrics Changes - For Q2 2024, net sales were $248 million, representing a 3% increase year-over-year, marking the first quarter of year-over-year growth since Q3 2022 [4][20] - Gross margin was reported at 42%, and adjusted EBITDA was $28 million, both exceeding guidance expectations [4][16] - Adjusted net income was $5.6 million, or $0.10 per diluted share, which was above the guidance range for the quarter [16] Business Line Data and Key Metrics Changes - Sales of Bitty Pop!, a new product line, more than doubled compared to the same quarter last year, contributing positively to overall performance [4] - Direct-to-consumer sales accounted for 23% of gross sales in Q2, up from 18% in the same quarter last year, with a 33% growth in this channel [15][16] Market Data and Key Metrics Changes - The company experienced a pull forward of approximately $9 million in sales due to customers placing orders earlier to secure vessel space amid rising freight costs [16] - In Europe, the company saw a 20% sales growth, particularly driven by Eastern Europe, Greece, and the Middle East [34] Company Strategy and Development Direction - The company aims to grow by focusing on a fan-centric approach, emphasizing four principles: delighting core fans, attracting new fans, selling where fans are, and improving the fan experience [8][14] - Plans include expanding the direct-to-consumer channel, which has doubled from 12% of total sales in 2022 to approximately 25% today [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's future, citing a passionate employee base and strong fan engagement as key drivers for success [31] - The outlook for 2024 remains stable despite uncertainties in freight costs and consumer spending, with guidance for net sales between $1.047 billion and $1.103 billion [18][20] Other Important Information - The company has appointed Yves LePendeven as Chief Financial Officer, who has been with the company for five years and is well-regarded within the industry [15] - The company is focusing on improving its e-commerce experience and customer service as part of its growth strategy [14] Q&A Session Summary Question: What were the biggest surprises in EBITDA for the quarter? - Management highlighted that the net sales exceeded guidance, with a significant portion pulled forward from Q3, and inventory reserve relief contributed to margin favorability [21][22] Question: What needs to happen in Q4 to achieve the low end of the EBITDA guidance? - Management indicated that sales are expected to be weighted more heavily in the second half, and they are monitoring various economic indicators to ensure they meet their guidance [24] Question: How are wholesale channel inventories compared to previous years? - Management noted that retail partners are in a healthy inventory position, typically maintaining 15 to 20 weeks of supply, which is favorable heading into the holiday season [26][27] Question: What are the drivers of growth in Europe compared to the U.S.? - Management explained that the U.S. market faced challenges due to a strategic pullback in mass channel expansion and a weaker content slate, while Europe experienced strong growth driven by evergreen products [33][34]

Group 1 - Funko-A (FNKO) reported quarterly earnings of $0.10 per share, exceeding the Zacks Consensus Estimate of a loss of $0.14 per share, and showing improvement from a loss of $0.43 per share a year ago, resulting in an earnings surprise of 171.43% [1] - The company achieved revenues of $247.66 million for the quarter ended June 2024, surpassing the Zacks Consensus Estimate by 6.84% and increasing from $240.03 million year-over-year [2] - Funko-A has outperformed the S&P 500, gaining approximately 11.4% since the beginning of the year compared to the S&P 500's gain of 9% [3] Group 2 - The earnings outlook for Funko-A is mixed, with the current consensus EPS estimate for the coming quarter at $0.22 on revenues of $322.4 million, and for the current fiscal year at -$0.05 on revenues of $1.08 billion [7] - The Zacks Industry Rank indicates that the Consumer Products - Discretionary sector is currently in the bottom 25% of over 250 Zacks industries, which may negatively impact stock performance [8]

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 For the quarterly period ended June 30, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________to _____________ Commission file number: 001-38274 FUNKO, INC. (Exact name of registrant as specified in its charter) Delaware 35-2593276 (State or other jur ...

Core Viewpoint - Funko has faced significant challenges in recent years, including declining revenues and increased net losses, but recent improvements in operational metrics and management's optimistic guidance suggest potential for recovery and further upside in stock performance [1][2][3][4][17] Financial Performance - In 2023, Funko's revenue was $1.10 billion, a decline of 17.1% from $1.32 billion in 2022, primarily due to slower inventory restocking and a challenging retail environment [2] - The company's net loss expanded from $8 million in 2022 to $154.1 million in 2023, influenced by rising interest expenses and costs associated with expansion and depreciation [3] - For Q1 2024, Funko reported a revenue of $215.7 million, a 14.4% drop compared to $251.9 million in Q1 2023, with a 17.4% decline in the US market and a 7.2% drop in Europe [4] Cost Management - In Q1 2024, Funko's net loss was $22.7 million, significantly improved from a $55.3 million loss in the same quarter the previous year, with cost of sales decreasing from 80.3% of revenue to 60% [4] - Operating cash flow improved from negative $30.3 million to positive $14.5 million in Q1 2024, while EBITDA shifted from negative $14 million to positive $9.6 million [4] Future Outlook - Management projects 2024 revenue between $1.05 billion and $1.10 billion, indicating a potential year-over-year decline of only 1.9% [4] - The company anticipates EBITDA of between $65 million and $85 million for the fiscal year 2024 [4] Debt and Inventory Management - Funko has successfully reduced net debt from $275.6 million in Q1 2023 to $220.3 million in Q1 2024, indicating improved financial stability [13] - Inventory levels have decreased from $265.8 million in Q3 2022 to $112.3 million in Q1 2024, suggesting a resolution of previous inventory overhang issues [14] Investment Potential - Despite past challenges, Funko's improving fundamentals, including lower net debt and inventory levels, combined with management's expectations for revenue growth, present an appealing investment opportunity [17]

From a technical perspective, Funko, Inc. (FNKO) is looking like an interesting pick, as it just reached a key level of support. FNKO's 50-day simple moving average crossed above its 200-day simple moving average, which is known as a "golden cross" in the trading world. There's a reason traders love a golden cross -- it's a technical chart pattern that can indicate a bullish breakout is on the horizon. This kind of crossover is formed when a stock's short-term moving average breaks above a longer-term movin ...

Investors interested in Consumer Discretionary stocks should always be looking to find the best-performing companies in the group. Funko-A (FNKO) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? By taking a look at the stock's year-to-date performance in comparison to its Consumer Discretionary peers, we might be able to answer that question. Funko-A is a member of our Consumer Discretionary group, which includes 286 di ...

Funko, Inc. (FNKO) reported first-quarter 2024 results, wherein the top line missed the Zacks Consensus Estimate and declined year over year. The bottom line fared better than both the Zacks Consensus Estimate and the year-ago quarterly number. FNKO has notably achieved a significant boost in gross margin, particularly driven by higher margins on the sales of value channel and lower-than-expected freight costs. This achievement showcases the effectiveness of the inventory management processes undertaken by ...