Business
Funko Reports Strong Second Quarter 2026 Financial Results; Reiterates Full-Year Net Sales Outlook and Raises Adjusted EBITDA Guidance
Funko Reports Strong Second Quarter 2026 Financial Results; Reiterates Full-Year Net Sales Outlook and Raises Adjusted EBITDA
About this update from Funko, Inc.
Funko, Inc. (Nasdaq: FNKO), a leading pop culture lifestyle brand, today reported its consolidated financial results for the second quarter ended June 30, 2026. Second Quarter Financial Results Summary: 2026 vs 2025 Net sales increased 7% to $207.7 million, compared with $193.5 million Gross profit was $117.6 million, equal to gross margin of 56.6%, compared with $62.0 million, equal to gross margin of 32.1% SG&A expenses were $79.7 million compared with $82.3 million, and improved 413 basis points as a percentage of sales to 38.4% from 42.5% Net income was $15.4 million, or $0.27 per diluted share, compared with a net loss of $40.5 million, or $0.74 per diluted share Adjusted net income* was $15.0 million, or $0.26 per diluted share*, compared with an adjusted net loss* of $26.7 million, or $0.48 per diluted share* Adjusted EBITDA* was $40.9 million, compared with negative Adjusted EBITDA* of $16.5 million Gross margin, net income, adjusted net income* and adjusted EBITDA* for the second quarter of 2026 each included a pre-tax benefit of $25.4 million related to the recognition of expected tariff refunds and the release of accrued tariffs “Q2 was a strong quarter for Funko. We delivered 7% sales growth, above the high end of our guidance range. Core Collectibles grew 9%, and gross margin reached a record high for the second consecutive quarter. Together with continued SG&A discipline, that performance drove adjusted EBITDA well above our guidance range. These results are evidence that Make Culture Pop! is becoming a more deliberate and disciplined growth engine. We are getting better at identifying where fan demand is forming, moving faster to turn those signals into distinctive and repeatable products, and scaling them through the channels with the strongest economics. That progress showed up in broad-based POS momentum across theatrical, anime, gaming and sports, as well as rapid-response releases around live cultural moments and the launch of POP! Mystery. At the same time, we are improving the quality of the business through tighter assortments, better SKU productivity, continued cost discipline, and concentrating our resources behind the products, fandoms and channels with the greatest demand and return potential.” Second Quarter 2026 Net Sales by Category and Geography The tables below show the breakdown of net sales on a brand category and geographical basis (in thousands): Three Months Ended June 30, Period Over Period Change 2026 2025 Dollar Percentage Net sales by brand category: Core Collectibles $ 171,641 $ 157,477 $ 14,164 9.0 % Loungefly 31,302 31,847 (545 ) (1.7 )% Other 4,776 4,145 631 15.2 % Total net sales $ 207,719 $ 193,469 $ 14,250 7.4 % Three Months Ended June 30, Period Over Period Change 2026 2025 Dollar Percentage Net sales by geography: United States $ 121,845 $ 117,874 $ 3,971 3.4 % Europe 68,976 57,784 11,192 19.4 % Other International 16,898 17,811 (913 ) (5.1 )% Total net sales $ 207,719 $ 193,469 $ 14,250 7.4 % Balance Sheet Highlights - At June 30, 2026 vs December 31, 2025 Total cash and cash equivalents were $40.7 million at June 30, 2026 compared with $42.1 million at December 31, 2025 Inventories were $88.8 million at June 30, 2026 up from $83.1 million at December 31, 2025 Total debt was $201.1 million at June 30, 2026 versus $225.3 million at December 31, 2025. Total debt includes the amount outstanding under the company's term loan facility, net of unamortized discounts, revolving line of credit and the company's equipment finance loan. In Q2, the company executed a participation sale of $22.1 million in tariff claims for $19.2 million. Half of the proceeds from the sale were used to pay down the company’s term loan. Outlook for 2026 The company updated its 2026 full-year outlook to reflect its strong second quarter performance, expected continued growth in Core Collectibles, and its decision to rationalize Loungefly’s SKU count and concentrate the assortment behind products with stronger demand and return potential. The company also provided 2026 third-quarter guidance. Current Outlook 2026 Full Year Net Sales Reiterating net sales guidance of flat to up 3% Gross Margin % Raising to 46%-47%, including the $25.4 million Q2 tariff-related benefit, up from 41%-43% Adjusted EBITDA* Raising to $100M-$110M, including the $25.4 million Q2 tariff-related benefit, up from $70M-$80M 2026 Third Quarter Net sales Approximately flat year-over-year Gross margin % Approximately 43%-44% Adjusted EBITDA* $25 million to $30 million Webcast Conference Call The company will host a webcast at 4:30 p.m. Eastern Time (1:30 p.m. Pacific Time) today, August 6, 2026, to further discuss its second quarter results and business update. A live webcast, presentation materials and a replay of the event will be available on the Investor Relations section on the company’s website at investor.funko.com , as well as the Funko YouTube Channel at youtube.com/@FunkoIR . The replay of the webcast will be available for one year. Use of Non-GAAP Financial Measures This release contains references to non-GAAP financial measures, including adjusted net income (loss), per share amounts, adjusted EBITDA, adjusted EBITDA margin and adjusted net income (loss) margin, which are financial measures that are not prepared in conformity with United States generally accepted accounting principles (U.S. GAAP). Management uses these measures internally for evaluating its operating performance, for planning purposes, including the preparation of our annual operating budget and financial projections, to assess incentive compensation for our employees, and to evaluate our capacity to expand our business. The company's management believes that the presentation of non-GAAP financial measures provides useful supplementary information regarding operational performance because it enhances an investor's overall understanding of the financial results for the company's core business. Additionally, it provides a basis for the comparison of the financial results for the company's core business between current, past and future periods as they remove the impact of items not directly resulting from our core operations. The company also believes that including adjusted EBITDA and the other non-GAAP financial measures presented in this release is appropriate to provide additional information to investors and help to compare against other companies in our industry. Non-GAAP financial measures have limitations as analytical tools and should be considered only as a supplement to, and not as a substitute for or as a superior measure to, financial measures prepared in accordance with U.S. GAAP. We caution investors that amounts presented in accordance with our definitions of adjusted net income (loss), including per share amounts, adjusted EBITDA and adjusted EBITDA margin may not be comparable to similar measures disclosed by our competitors, because not all companies and analysts calculate these measures in the same manner. Detailed reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the financial tables following this release. A reconciliation of adjusted EBITDA outlook to the corresponding GAAP measure on a forward-looking basis cannot be provided without unreasonable efforts, as we are unable to provide reconciling information with respect to certain items. However, for the third quarter of 2026 the company expects equity-based compensation of approximately $4 million, depreciation and amortization of approximately $15 million and interest expense of approximately $5 million. For the full year 2026, the company expects equity-based compensation of approximately $13 million, depreciation and amortization of approximately $60 million and interest expense of approximately $20 million, each of which is a reconciling item to net income. See “Use of Non-GAAP Financial Measures” and the attached reconciliations for more information. About Funko Headquartered in Everett, Washington, Funko is a leading pop culture and collectibles brand. Funko designs, sources and distributes licensed pop culture products across multiple categories, including vinyl figures, action toys, plush, apparel, housewares and accessories for consumers who seek tangible ways to connect with their favorite pop culture brands and characters. Learn more at Funko.com , Loungefly.com and MondoShop.com , and follow us on TikTok , X , and Instagram . Forward-Looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including statements regarding our strategic plans, growth strategies, expectations in sales trends and anticipated financial results, including without limitation, our full year and third quarter 2026 guidance. These forward-looking statements are based on management’s current expectations. These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the following: impacts from economic downturns; changes in the retail industry and markets for our consumer products; risks associated with our international operations, including risk related to tariffs and trade restrictions; risks relating to our indebtedness, including our ability to comply with financial and negative covenants under our Credit Agreement, as amended; our ability to execute our business strategy; our ability to manage our inventories and growth; our ability to identify or complete any strategic alternative transaction; our dependence on content development and creation by third parties; our ability to obtain, maintain and protect our intellectual property rights or those of our licensors; fluctuations in our gross margin and seasonal impacts; our dependence on vendors and outsourcers; risks relating to government regulation; risks relating to litigation, including products liability claims and securities class action litigation; risk resulting from our e-commerce business and social media presence; our ability to successfully operate our information systems and implement new technology; our ability to secure additional financing on favorable terms or at all; the influence of our significant stockholder, TCG, and the possibility that TCG’s interests may conflict with the interests of our other stockholders; risks relating to our organizational structure; including the Tax Receivable Agreement ("TRA") which confers certain benefits upon the parties to the TRA ("TRA Parties") that will not benefit Class A common stockholders to the same extent as it will benefit the TRA Parties; and volatility in the price of our Class A common stock. These and other important factors discussed under the caption “Risk Factors” in our quarterly report on Form 10-Q for the quarter ended June 30, 2026 and our other filings with the Securities and Exchange Commission could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management’s estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release. Funko, Inc. Condensed Consolidated Statements of Operations (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (In thousands, except per share data) Net sales $ 207,719 $ 193,469 $ 408,638 $ 384,208 Cost of sales (exclusive of depreciation and amortization) 90,090 131,429 202,182 245,297 Selling, general, and administrative expenses 79,723 82,259 163,410 167,066 Depreciation and amortization 15,767 14,528 30,541 29,790 Total operating expenses 185,580 228,216 396,133 442,153 Income (loss) from operations 22,139 (34,747 ) 12,505 (57,945 ) Interest expense, net 5,198 4,522 10,082 8,371 Other expense, net 480 887 936 1,055 Income (loss) before income taxes 16,461 (40,156 ) 1,487 (67,371 ) Income tax expense 1,016 848 4,169 1,692 Net income (loss) 15,445 (41,004 ) (2,682 ) (69,063 ) Less: net income (loss) attributable to non-controlling interests 61 (514 ) 9 (985 ) Net income (loss) attributable to Funko, Inc. $ 15,384 $ (40,490 ) $ (2,691 ) $ (68,078 ) Income (loss) per share of Class A common stock: Basic $ 0.28 $ (0.74 ) $ (0.05 ) $ (1.26 ) Diluted $ 0.27 $ (0.74 ) $ (0.05 ) $ (1.26 ) Weighted average shares of Class A common stock outstanding: Basic 55,860 54,362 55,644 53,948 Diluted 57,461 54,362 55,644 53,948 Funko, Inc. Condensed Consolidated Balance Sheets (Unaudited) June 30, 2026 December 31, 2025 (In thousands, except per share data) Assets Current assets: Cash and cash equivalents $ 40,713 $ 42,148 Accounts receivable, net 93,561 117,018 Inventories 88,800 83,136 Prepaid expenses and other current assets 51,540 48,094 Total current assets 274,614 290,396 Property and equipment, net 64,498 68,679 Operating lease right-of-use assets, net 41,671 46,928 Goodwill 133,848 133,900 Intangible assets, net 127,925 135,826 Other assets 11,191 9,505 Total assets $ 653,747 $ 685,234 Liabilities and Stockholders’ Equity Current liabilities: Revolving credit facility $ 1,500 $ 1,125 Current portion of term debt 16,939 21,932 Current portion of operating lease liabilities 16,989 18,792 Accounts payable 58,206 64,748 Accrued royalties 54,712 59,821 Accrued expenses and other current liabilities 87,583 77,499 Total current liabilities 235,929 243,917 Long-term debt 182,659 202,246 Operating lease liabilities 43,273 48,680 Other long-term liabilities 3,867 4,261 Commitments and Contingencies Stockholders’ equity: Class A common stock, par value $0.0001 per share, 200,000 shares authorized; 55,989 and 55,327 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively 5 5 Class B common stock, par value $0.0001 per share, 50,000 shares authorized; 91 and 91 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively — — Additional paid-in-capital 362,526 357,330 Accumulated other comprehensive income 4,003 4,621 Accumulated deficit (178,833 ) (176,142 ) Total stockholders’ equity attributable to Funko, Inc. 187,701 185,814 Non-controlling interests 318 316 Total stockholders’ equity 188,019 186,130 Total liabilities and stockholders’ equity $ 653,747 $ 685,234 Funko, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) Six Months Ended June 30, 2026 2025 (In thousands) Operating Activities Net loss $ (2,682 ) $ (69,063 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 30,541 29,790 Equity-based compensation 5,196 6,377 Other, net 1,133 1,301 Changes in operating assets and liabilities: Accounts receivable, net 23,318 24,572 Inventories (6,160 ) (5,761 ) Prepaid expenses and other assets 2,499 5,529 Accounts payable (5,992 ) 3,207 Accrued royalties (5,109 ) (14,967 ) Accrued expenses and other liabilities (19,114 ) (25,427 ) Net cash provided by (used in) operating activities 23,630 (44,442 ) Investing Activities Purchases of property and equipment (18,954 ) (16,211 ) Other, net — 970 Net cash used in investing activities (18,954 ) (15,241 ) Financing Activities Borrowings on revolving credit facility — 85,000 Debt amendment costs (3,648 ) — Payments of term debt (21,303 ) (11,530 ) Proceeds from sale of tariff receivable 19,248 — Payments under tax receivable agreement (249 ) — Other, net 179 193 Net cash (used in) provided by financing activities (5,773 ) 73,663 Effect of exchange rates on cash and cash equivalents (338 ) 516 Net change in cash and cash equivalents (1,435 ) 14,496 Cash and cash equivalents at beginning of period 42,148 34,655 Cash and cash equivalents at end of period $ 40,713 $ 49,151 The following tables reconcile the Non-GAAP Financial Measures to the most directly comparable U.S. GAAP financial performance measure, which is net income (loss), for the periods presented: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (In thousands, except per share data) Net income (loss) attributable to Funko, Inc. $ 15,384 $ (40,490 ) $ (2,691 ) $ (68,078 ) Reallocation of net income (loss) attributable to non-controlling interests from the assumed exchange of common units of FAH, LLC for Class A common stock (1) 61 (514 ) 9 (985 ) Equity-based compensation (2) 2,782 3,112 5,196 6,377 Foreign currency transaction loss (3) 588 1,463 1,104 1,639 Tax receivable agreement liability adjustments (4) — — 112 — Third-party debt amendment fees (5) 106 — 3,655 — Income tax (benefit) expense (6) (3,968 ) 9,743 1,280 16,531 Adjusted net income (loss) $ 14,953 $ (26,686 ) $ 8,665 $ (44,516 ) Adjusted net income (loss) margin (7) 7.2 % (13.8 )% 2.1 % (11.6 )% Weighted-average shares of Class A common stock outstanding - basic 55,860 54,362 55,644 53,948 Equity-based compensation awards and common units of FAH, LLC that are convertible into Class A common stock 1,601 749 187 907 Adjusted weighted-average shares of Class A stock outstanding - diluted 57,461 55,111 55,831 54,855 Adjusted earnings (loss) per diluted share $ 0.26 $ (0.48 ) $ 0.16 $ (0.81 ) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (amounts in thousands) Net income (loss) $ 15,445 $ (41,004 ) $ (2,682 ) $ (69,063 ) Interest expense, net 5,198 4,522 10,082 8,371 Income tax expense 1,016 848 4,169 1,692 Depreciation and amortization 15,767 14,528 30,541 29,790 EBITDA $ 37,426 $ (21,106 ) $ 42,110 $ (29,210 ) Adjustments: Equity-based compensation (2) 2,782 3,112 5,196 6,377 Foreign currency transaction loss (3) 588 1,463 1,104 1,639 Tax receivable agreement liability adjustments (4) — — 112 — Third-party debt amendment fees (5) 106 — 3,655 — Adjusted EBITDA $ 40,902 $ (16,531 ) $ 52,177 $ (21,194 ) Adjusted EBITDA margin (8) 19.7 % (8.5 )% 12.8 % (5.5 )% (1) Represents the reallocation of net income attributable to non-controlling interests from the assumed exchange of common units of FAH, LLC for Class A common stock in periods in which income was attributable to non-controlling interests. (2) Represents non-cash charges related to equity-based compensation programs, which vary from period to period depending on the timing of awards. (3) Represents both unrealized and realized foreign currency losses on transactions denominated other than in U.S. dollars, including derivative gains and losses on foreign currency forward exchange contracts. (4) Represents recognized adjustments to the tax receivable agreement liability. (5) Represents non-recurring third-party debt fees paid as part of the Fifth Amendment to the Credit Agreement. (6) Represents the income tax expense effect of the above adjustments, including adding back the valuation allowance to the net loss. This adjustment uses an effective tax rate of 25% for all periods presented. (7) Adjusted net income (loss) margin is calculated as adjusted net income (loss) as a percentage of net sales. (8) Adjusted EBITDA margin is calculated as adjusted EBITDA as a percentage of net sales. 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