Spin Master (TOY) investor relations material

Executive summary

• Achieved profitable growth in Q2 2026, with revenue rising 8.9% year-over-year to $436.4M, driven by strong core brand performance, innovation, and new product launches.

• Operating income for Q2 was $45.7M, reversing a $52.4M loss last year; net income reached $29.7M compared to a $46.5M loss.

• Adjusted EBITDA for Q2 increased 79.8% to $51.6M, with margin improving to 11.8%.

• Focused on leveraging the PAW Patrol movie, expanding Toca Boca engagement, and innovation in collectibles and trading cards.

• Significant free cash flow enabled capital returns to shareholders and debt reduction.

Financial highlights

• Consolidated revenues increased 8.9% year-over-year to $436.4M, with toys up 12% and a $40M pull-forward of Q3 sales.

• Q2 gross profit was $269.0M, up from $210.0M, with gross margin improving to 61.5% aided by a $37.9M tariff refund.

• Free cash flow was $19.2M, up from negative $15.2M; YTD free cash flow was $90.3M.

• SG&A expenses decreased 6.6% year-over-year in Q2 to $206.5M.

• Operating cash flows for H1 increased by CAD 110M to CAD 160M, reflecting improved profitability and working capital management.

Outlook and guidance

• Reiterated 2026 guidance for stable to low single-digit revenue growth and mid to upper single-digit Adjusted EBITDA growth.

• Q3 expected to be stable due to Q2 pull-forward; Q4 anticipated to comprise a larger share of annual revenue.

• Guidance reflects both growth drivers and downside risks from economic and geopolitical uncertainty.