Spin Master Reports Q2 2025 Financial Results

Core Insights - Spin Master Corp. reported its financial results for Q2 2025, highlighting a commitment to a diversified portfolio across Toys, Entertainment, and Digital Games despite revenue pressures from global tariffs [2][3][4] Financial Performance - Q2 2025 revenue was $400.7 million, a decrease of 2.7% from $412.0 million in Q2 2024, primarily due to a decline in Toy revenue, partially offset by growth in Digital Games revenue [5][12] - Operating loss for Q2 2025 was $52.4 million, compared to a loss of $23.0 million in Q2 2024, reflecting challenges in the Toys segment and strategic investments [5][8] - Net loss for Q2 2025 was $46.5 million or $(0.46) per share, compared to a net loss of $24.5 million or $(0.24) per share in the prior year [5][42] - Adjusted EBITDA for Q2 2025 was $28.7 million, down from $53.6 million in Q2 2024, with an adjusted EBITDA margin of 7.2% compared to 13.0% [5][11] Segment Performance - Toys Segment: Revenue decreased by $18.6 million to $322.3 million, with a significant decline in Activities, Games & Puzzles and Dolls & Interactive categories [14][15] - Entertainment Segment: Revenue declined by $4.3 million to $32.1 million, primarily due to lower distribution and licensing revenue [16][19] - Digital Games Segment: Revenue increased by $11.6 million to $46.3 million, driven by higher in-game purchases and subscriptions [17][20] Cost Management and Synergies - The company achieved total net cost synergies of $5.6 million related to the acquisition of Melissa & Doug, exceeding the target of $25 million to $30 million in annualized run-rate synergies [5][10] - Strategic investments in marketing and higher selling expenses impacted profitability, but operational efficiencies helped mitigate some costs [10][11] Liquidity and Capital Structure - As of June 30, 2025, the company had available liquidity of $473.2 million, consisting of $128.0 million in cash and $345.3 million under credit facilities [22][25] - The company declared a quarterly dividend of C$0.12 per share, payable on October 10, 2025 [29] Future Outlook - Spin Master is focused on navigating macroeconomic headwinds by emphasizing consumer engagement, innovation, and scaling global franchise brands [2][5]