Funko (FNKO) Q2 2025 earnings summary

Executive summary

• Net sales declined 21.9% year-over-year to $193.5 million in Q2 2025, with gross margin dropping to 32.1% from 42.0% and a reported net loss of $41.0 million.

• Adjusted net loss was $26.7 million ($0.48 per share), and negative adjusted EBITDA was $16.5 million, compared to positive $27.9 million last year.

• Interim CEO is leading while a search for a permanent CEO is underway, with a focus on organic growth, financial and strategic options, and operational improvements.

• Performance was significantly impacted by U.S. tariff policy changes, leading to sales disruptions, cost increases, and mitigation actions such as a 20% workforce reduction, production shifts out of China, and price increases.

• Opened first licensed Southeast Asia store in Manila in July 2025 and achieved strong fan engagement at San Diego Comic Con, expanding global presence.

Financial highlights

• Q2 2025 net sales were $193.5 million, down 21.9% year-over-year; gross profit was $62.0 million (gross margin 32.1%), down from $104.0 million (42.0%) last year.

• Adjusted net loss was $26.7 million ($0.48 per share); reported net loss was $41.0 million ($0.74 per share); negative adjusted EBITDA was $16.5 million.

• SG&A expenses were $82.3 million, up from $77.9 million last year (which included a $1.5 million non-recurring benefit).

• Cash and cash equivalents at quarter-end were $49.2 million; total debt was $256.6 million.

• Operating cash flow was negative $44.4 million for the first half of 2025; net cash provided by financing activities was $73.7 million.

Outlook and guidance

• Second half 2025 performance expected to improve over first half, with net sales projected to be down high single digits year-over-year.

• Adjusted EBITDA margin for the second half projected in the mid to high single digits, with Q4 ramping up over Q3.

• Management expects continued pressure on sales, margins, and liquidity due to tariffs, macroeconomic uncertainty, and retailer inventory reductions.

• Strategic alternatives, including a potential sale, are being evaluated; no timeline or assurance of outcome.

• Outlook includes current tariff rates but excludes potential future tariff actions.