August 4, 2022 Second Quarter 2022 Earnings 2 HOLLYWOOD UPDATE Cautionary Notes This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this presentation, including statements regarding our future results of operations and financial position, industry dynamics, our mission, growth opportunities, business strategy and plans and our objectives for future operations, i ...

Part I FINANCIAL INFORMATION [Financial Statements](index=6&type=section&id=Item%201.%20Financial%20Statements) The company reported significant net sales growth but decreased net income for Q2 and H1 2022, with increased inventory and negative operating cash flow [Condensed Consolidated Statements of Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Q2 2022 net sales grew **33.7%** to **$315.7 million**, but net income fell **24.6%** to **$15.8 million**, driven by higher costs | Financial Metric | Three Months Ended June 30, 2022 (in thousands) | Three Months Ended June 30, 2021 (in thousands) | YoY Change | Six Months Ended June 30, 2022 (in thousands) | Six Months Ended June 30, 2021 (in thousands) | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $315,716 | $236,110 | 33.7% | $624,059 | $425,287 | 46.7% | | **Income from Operations** | $8,943 | $27,291 | -67.2% | $28,746 | $44,086 | -34.8% | | **Net Income** | $15,793 | $20,944 | -24.6% | $30,311 | $32,030 | -5.4% | | **Diluted EPS (Class A)** | $0.28 | $0.34 | -17.6% | $0.53 | $0.52 | 1.9% | [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets reached **$1.14 billion** by June 30, 2022, driven by a **40.6%** inventory increase and new **$70.0 million** line of credit borrowing | Balance Sheet Item | June 30, 2022 (in thousands) | December 31, 2021 (in thousands) | Change | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $56,191 | $83,557 | -32.7% | | Inventory | $233,974 | $166,428 | 40.6% | | **Total Assets** | **$1,138,680** | **$967,503** | **17.7%** | | Line of credit | $70,000 | $0 | N/A | | Total long-term debt, net | $147,094 | $155,818 | -5.6% | | **Total Liabilities** | **$718,717** | **$570,945** | **25.9%** | | **Total Stockholders' Equity** | **$419,963** | **$396,558** | **5.9%** | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating activities resulted in a **$30.1 million** net cash outflow for H1 2022, a reversal from prior year, mainly due to inventory build-up | Cash Flow Activity (Six Months Ended June 30) | 2022 (in thousands) | 2021 (in thousands) | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(30,139) | $71,431 | | Net cash used in investing activities | $(47,620) | $(11,129) | | Net cash provided by (used in) financing activities | $51,335 | $(17,116) | | **Net change in cash and cash equivalents** | **$(27,366)** | **$43,219** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the **$14.0 million** Mondo acquisition, **$166.5 million** term loan, **$70.0 million** revolver, and sales breakdown by product and geography - On June 8, 2022, the company acquired 100% of Mondo, a high-end pop culture collectibles company, for a preliminary purchase consideration of **$14.0 million** in cash. This acquisition is intended to expand Funko's product offerings into vinyl records, posters, and other high-end collectibles[29](index=29&type=chunk) - As of June 30, 2022, the company had **$166.5 million** outstanding under its New Term Loan Facility and **$70.0 million** in borrowings under its New Revolving Credit Facility, with **$30.0 million** remaining available[48](index=48&type=chunk) | Net Sales by Product Category (Six Months Ended June 30) | 2022 (%) | 2021 (%) | | :--- | :--- | :--- | | Core Collectible | 75.7% | 82.0% | | Loungefly | 19.2% | 13.5% | | Other | 5.1% | 4.5% | | Net Sales by Geography (Six Months Ended June 30) | 2022 (in thousands) | 2021 (in thousands) | | :--- | :--- | :--- | | United States | $463,361 | $299,704 | | Europe | $120,449 | $91,810 | | Other International | $40,249 | $33,773 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Q2 revenue grew **33.7%**, but gross margin declined due to higher freight costs, and SG&A expenses rose **50.7%**, impacting liquidity and necessitating a **$70.0 million** credit facility draw [Results of Operations](index=27&type=section&id=Results%20of%20Operations) Q2 2022 net sales increased **33.7%** to **$315.7 million**, but income from operations fell **67.2%** due to a **6.4 p.p.** gross margin decline and **50.7%** rise in SG&A expenses | Metric (Q2 2022 vs Q2 2021) | 2022 (in millions) | 2021 (in millions) | Change | | :--- | :--- | :--- | :--- | | Net Sales | $315.7M | $236.1M | +33.7% | | Gross Margin % | 32.7% | 39.1% | -6.4 p.p. | | SG&A Expenses | $82.7M | $54.9M | +50.7% | | Income from Operations | $8.9M | $27.3M | -67.2% | - The decrease in gross margin was primarily driven by an increase in shipping and freight costs due to continued global supply chain capacity constraints and fuel-based surcharges[101](index=101&type=chunk) - By product category in Q2 2022, Core Collectible sales grew **21.3%** to **$233.0 million**, while Loungefly branded products saw a significant increase of **114.3%** to **$70.0 million**[99](index=99&type=chunk) [Liquidity and Financial Condition](index=36&type=section&id=Liquidity%20and%20Financial%20Condition) Cash and equivalents decreased to **$56.2 million**, with **$30.1 million** net cash used in operations for H1 2022, leading to a **$70.0 million** credit facility draw and subsequent increase to **$215.0 million** - Net cash used in operating activities was **$30.1 million** for the first six months of 2022, compared to net cash provided of **$71.4 million** in the prior year period, primarily due to a significant increase in inventory[134](index=134&type=chunk)[135](index=135&type=chunk) - On July 29, 2022, the company amended its credit agreement, increasing its New Revolving Credit Facility from **$100.0 million** to **$215.0 million**[139](index=139&type=chunk)[330](index=330&type=chunk) - As of June 30, 2022, the company had **$56.2 million** in cash and cash equivalents and **$140.3 million** of working capital[148](index=148&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=42&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risk profile, encompassing interest rates, foreign currency, and inflation, remains materially unchanged since fiscal year 2021 - The company is exposed to market risks including interest rates, foreign currency, and inflation, with no material changes reported since the end of fiscal year 2021[157](index=157&type=chunk) [Controls and Procedures](index=42&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2022, with no material changes to internal control over financial reporting during Q2 2022 - Management concluded that as of June 30, 2022, the company's disclosure controls and procedures were effective at a reasonable assurance level[159](index=159&type=chunk) - There were no material changes to the company's internal control over financial reporting during the second quarter of 2022[160](index=160&type=chunk) Part II OTHER INFORMATION [Legal Proceedings](index=43&type=section&id=Item%201.%20Legal%20Proceedings) Material legal proceedings are discussed in detail within Note 7, "Commitments and Contingencies - Legal Contingencies," of the financial statements - For a discussion of material legal proceedings, the report refers to Note 7, "Commitments and Contingencies - Legal Contingencies," in the Notes to Unaudited Condensed Consolidated Financial Statements[162](index=162&type=chunk) [Risk Factors](index=43&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant business, operational, organizational, and ownership risks, including supply chain issues, license dependency, TCG's influence, and potential stock dilution [Business, Economic, Market and Operating Risks](index=43&type=section&id=Business%2C%20Economic%2C%20Market%20and%20Operating%20Risks) Operational risks include supply chain disruptions, high dependence on third-party licenses (e.g., **49%** from Disney-owned properties), economic downturns, and a **170.9%** increase in inventory - The business is highly dependent on license agreements, with the top ten licensors accounting for approximately **80%** of sales for the six months ended June 30, 2022, and Disney-owned properties (Disney, LucasFilm, Marvel) collectively accounting for about **49%** of sales[170](index=170&type=chunk) - The company faces risks from economic downturns and inflation, which can reduce discretionary consumer spending and increase costs, leading to price increases on certain products to mitigate these pressures[175](index=175&type=chunk)[176](index=176&type=chunk) - Inventory management is a key risk. As of June 30, 2022, inventories increased **170.9%** over the prior year, primarily due to longer transit times from global supply chain issues. This could lead to excess inventory if consumer demand shifts[200](index=200&type=chunk) [Organizational Structure Risks](index=69&type=section&id=Organizational%20Structure%20Risks) Organizational risks include TCG's significant influence, substantial cash payments under the Tax Receivable Agreement, and Funko, Inc.'s dependence on distributions from FAH, LLC - Following the ACON Sale, TCG has significant influence over the company, including the right to designate two directors as long as it holds at least **20%** of Class A common stock and veto power over certain corporate actions if it holds **22%** or more[271](index=271&type=chunk)[274](index=274&type=chunk)[275](index=275&type=chunk) - The Tax Receivable Agreement requires Funko to pay Continuing Equity Owners **85%** of the tax benefits it realizes from the redemption or exchange of FAH, LLC common units. These payments could be significant and may be accelerated under certain conditions like a change of control[282](index=282&type=chunk)[283](index=283&type=chunk) - As a holding company, Funko, Inc.'s principal asset is its interest in FAH, LLC. It depends on distributions from FAH, LLC to pay taxes, operating expenses, and payments under the Tax Receivable Agreement[279](index=279&type=chunk) [Ownership of Our Class A Common Stock Risks](index=76&type=section&id=Ownership%20of%20Our%20Class%20A%20Common%20Stock%20Risks) Class A common stockholders face risks of dilution from unit redemptions, no anticipated dividends, and increased compliance costs upon losing "emerging growth company" status by December 31, 2022 - Stockholders face potential dilution from the redemption of FAH, LLC common units held by Continuing Equity Owners for Class A common stock, and from shares issued under the company's equity incentive plans[291](index=291&type=chunk)[293](index=293&type=chunk)[294](index=294&type=chunk) - The company does not anticipate paying any cash dividends on its Class A common stock in the foreseeable future, intending to retain funds for business growth and debt repayment[297](index=297&type=chunk) - The company will cease to be an "emerging growth company" on December 31, 2022. This will subject it to increased regulatory requirements, including the auditor attestation of internal control over financial reporting required by Section 404(b) of the Sarbanes-Oxley Act[306](index=306&type=chunk)[308](index=308&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=83&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities were reported during the period - None[328](index=328&type=chunk) [Other Information](index=84&type=section&id=Item%205.%20Other%20Information) On July 29, 2022, the company amended its credit agreement, increasing the revolving credit facility to **$215.0 million** and transitioning the interest rate to SOFR - On July 29, 2022, the company amended its credit agreement, increasing the revolving credit facility from **$100.0 million** to **$215.0 million** and converting the interest rate index from LIBOR to SOFR[330](index=330&type=chunk) [Exhibits](index=85&type=section&id=Item%206.%20Exhibits) This section indexes exhibits filed with the Form 10-Q, including CEO/CFO certifications and the second amendment to the credit agreement - Key exhibits filed include Amendment No. 2 to the Credit Agreement, CEO and CFO certifications pursuant to Sarbanes-Oxley, and various XBRL data files[334](index=334&type=chunk)

Financial Performance - Net sales increased by 63% to $308.3 million compared to Q1 2021[8, 9] - Core Collectible Brands grew 53% to $239.6 million[8] - Loungefly net sales grew 103% to $50.1 million[8] - Toy & Game Brands and Digital Brands collectively increased 140% to $18.6 million[8] - Gross margin contracted 610 bps to 35%[8] - Net income increased 31% to $14.5 million[8] - Adjusted EBITDA increased 22% to $36.3 million[8] Strategic Initiatives - The Chernin Group-Led Consortium is set to acquire 25% of Funko shares from ACON Investments for $263 million[6] - Funko and eBay are partnering to make eBay the preferred resale channel for Funko, as well as creating exclusive product releases[8] Balance Sheet - Cash & Cash Equivalents decreased 55.6% year-over-year to $33.1 million[19] - Inventory increased 160.8% year-over-year to $161.5 million[19] - Total debt decreased 7.7% year-over-year to $168.9 million[19]

Funko, Inc. (NASDAQ:FNKO) Q1 2022 Earnings Conference Call May 5, 2022 4:30 PM ET Company Participants Ben Avenia-Tapper - Director of Investor Relations Andrew Perlmutter - Chief Executive Officer & Director Jennifer Fall Jung - Chief Financial Officer Conference Call Participants Stephanie Wissink - Jefferies Megan Alexander - JPMorgan Operator Good afternoon, and welcome to Funko's Conference Call to discuss Financial Results for the First Quarter of 2022. At this time, all participants are in a listen-o ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 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 jurisdiction of incorporation or or ...

Funko, Inc. (NASDAQ:FNKO) Q4 2021 Earnings Conference Call March 3, 2022 4:30 PM ET Company Participants Ben Avenia-Tapper - Director-Investor Relations Andrew Perlmutter - Chief Executive Officer Jennifer Fall Jung - Chief Financial Officer Conference Call Participants Stephanie Wissink - Jefferies Linda Bolton-Weiser - D.A. Davidson Megan Alexander - JPMorgan Operator Good afternoon, and welcome to Funko's Conference Call to discuss Financial Results for the Fourth Quarter of 2021. At this time, all parti ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ___________________________________________________________________________________ FORM 10-K ___________________________________________________________________________________ (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the ...

Funko, Inc. (NASDAQ:FNKO) Q3 2021 Earnings Conference Call November 4, 2021 4:30 PM ET Company Participants Ben Avenia-Tapper – Director-Investor Relations Brian Mariotti – Chief Executive Officer Andrew Perlmutter – President Jennifer Fall Jung – Chief Financial Officer Conference Call Participants Erinn Murphy – Piper Sandler Garrett Johnson – BMO Linda Bolton Weiser – D.A. Davidson Tami Zakaria – JPMorgan Operator Good afternoon. And welcome to Funko's Conference Call to discuss Financial Results for the ...

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 September 30, 2021 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 othe ...

August 5, 2021 Second Quarter 2021 Earnings 2 HOLLYWOOD UPDATE Cautionary Notes This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this presentation, including statements regarding our future results of operations and financial position, industry dynamics, our mission, growth opportunities, business strategy and plans and our objectives for future operations, i ...