Funko(FNKO) - 2025 Q4 - Annual Results

Financial Performance - Q4 2025 net sales were $273.1 million, a decrease of 7.0% from $293.7 million in Q4 2024[6] - Gross profit for Q4 2025 was $111.6 million, with a gross margin of 40.9%, down from $124.4 million and 42.4% in Q4 2024[6] - The net loss for Q4 2025 was $0.2 million, or $0.00 per share, compared to a net loss of $1.5 million, or $0.03 per share in Q4 2024[6] - Full-year 2025 net sales totaled $908.2 million, down from $1.05 billion in 2024[6] - The company experienced a significant decline in net sales from the Core Collectible category, which fell by 5.0% to $220.96 million in Q4 2025[7] - The net loss attributable to Funko, Inc. for Q4 2025 was $183, compared to a net loss of $1.5 million in Q4 2024[22] - The total net loss for the twelve months ended December 31, 2025, was $68,295,000, compared to a net loss of $15,070,000 for the same period in 2024[23] Expenses and Costs - SG&A expenses in Q4 2025 were $90.9 million, compared to $102.8 million in Q4 2024[6] - The company reported a total operating expense of $267.1 million for Q4 2025, down from $288.3 million in Q4 2024[17] - The company incurred interest expense of $5.2 million in Q4 2025, compared to $4.2 million in Q4 2024[17] - Interest expense, net, increased to $5,199,000 for the three months ended December 31, 2025, compared to $4,212,000 in the same period of 2024[23] - Depreciation and amortization expenses were $14,778,000 for the three months ended December 31, 2025, down from $16,174,000 in 2024[23] - Equity-based compensation for the three months ended December 31, 2025, was $2,630,000, a decrease from $3,072,000 in the same period of 2024[23] - The company incurred acquisition transaction costs and other expenses of $(302,000) for the three months ended December 31, 2025[23] Cash Flow and Assets - Cash used in operating activities for the year ended December 31, 2025, was $(5.1) million, a significant decline from $123.5 million in 2024[21] - Total current assets increased to $290.4 million in 2025 from $287.1 million in 2024, primarily driven by cash and cash equivalents rising to $42.1 million[19] - Cash and cash equivalents at the end of the period increased to $42.1 million from $34.7 million in the previous year[21] Debt and Liabilities - The company reduced inventory levels to $83.1 million in Q4 2025 from $92.6 million in Q4 2024 and paid down $16 million of debt[5][8] - Total liabilities decreased to $498.4 million in 2025 from $470.9 million in 2024, with long-term debt increasing significantly to $202.2 million from $100.3 million[19] - The company has amended its credit agreement, extending maturity to December 31, 2027, providing financial flexibility for long-term plans[5] Future Outlook - The 2026 full-year outlook projects net sales to be flat to up 3% compared to 2025, with gross margin expected to be around 41% to 43%[9] - Adjusted EBITDA for 2026 is projected to be between $70 million and $80 million[9] Margins - The adjusted net income margin for Q4 2025 was 0.9%, down from 1.5% in Q4 2024[22] - The adjusted EBITDA margin for the three months ended December 31, 2025, was 8.5%, slightly down from 8.9% in the previous year[23] - The adjusted net income margin for the twelve months ended December 31, 2025, was 2.9%, down from 9.0% in 2024[23] Shareholder Information - The weighted average shares of Class A common stock outstanding increased to 54.99 million in Q4 2025 from 52.83 million in Q4 2024[22] Foreign Currency Impact - The company recognized a foreign currency transaction loss of $208,000 for the three months ended December 31, 2025[23]