Funko(FNKO) - 2025 Q1 - Quarterly Results

Financial Highlights 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][3] Management Commentary 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] - Due to intensified and volatile tariffs on imports from China, the company has taken swift action to protect margins and liquidity[4] - 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] Business Performance Analysis 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 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 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 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] 2025 Full-Year Outlook 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] - The withdrawal is attributed to the current uncertainty and ongoing changes in global tariff policies[8] Consolidated Financial Statements (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 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 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 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 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% |