Funko (FNKO) Q4 2025 earnings summary

Executive summary

• Q4 net sales reached $273.1 million, up 9% sequentially from Q3 and above expectations, driven by strong entertainment property sales and successful product launches in Europe.

• Gross margin for Q4 was 40.9%, slightly above guidance and at the high end of expectations.

• Adjusted EBITDA for Q4 was $23.3 million, at the high end of guidance.

• Advanced 'Make Culture POP!' strategy, expanded partnerships, and renewed key licensing deals, including a creative partnership with Rideback for original content.

• Paid down $16 million of debt in Q4 and amended credit agreement, extending maturity to December 2027.

Financial highlights

• Q4 net sales were $273.1 million, up 9% sequentially but down from $293.7 million year-over-year.

• Gross margin was 40.9% in Q4, down from 42.4% year-over-year.

• Adjusted EBITDA was $23.3 million (8.5% margin), compared to $26.3 million (8.9%) last year.

• SG&A expenses in Q4 were $90.9 million, down 12% year-over-year.

• Adjusted net income was $2.5 million, compared to $4.4 million in Q4 2024.

Outlook and guidance

• 2026 net sales expected to be flat to up 3% year-over-year, with core lines up high single digits but Loungefly down double digits due to SKU cuts.

• Adjusted EBITDA guidance for 2026 is $70–80 million, a substantial improvement over 2025.

• Gross margin expected at 41–43% in 2026, driven by licensing renewals and lower royalties.

• Q1 2026 net sales guidance is flat to down 2% year-over-year; adjusted EBITDA expected to be approximately break-even.

• No additional borrowing expected in 2026; continued debt paydown planned.