Mattel (MAT) Q4 2025 earnings summary

Executive summary

• Q4 2025 gross billings grew 6%, with 7% in North America and 4% internationally; full-year results were impacted by weak U.S. December sales and a 5% North America decline, partially offset by 6% international growth.

• Vehicles and Challenger categories drove growth, with Hot Wheels achieving its eighth consecutive record year; Dolls and ITPS declined for the year, while American Girl grew for the fifth consecutive quarter.

• Announced acquisition of full ownership of Mattel163 mobile games studio for $159 million, expected to close by end of Q1 2026 and contribute $150 million in 2026 sales.

• Board authorized a new $1.5 billion share repurchase program through 2028, with $600 million repurchased in 2025 and $1.2 billion over the last three years.

• Secured global multi-year rights to develop Teenage Mutant Ninja Turtles products starting in 2027 and expanded partnerships with major entertainment IPs.

Financial highlights

• Q4 net sales: $1.77 billion, up 7% year-over-year; full-year net sales: $5.35 billion, down 1%.

• Adjusted gross margin Q4: 46% (down 480 bps); full-year: 48.9% (down 200 bps), impacted by higher discounting, inflation, FX, and tariffs.

• Adjusted operating income Q4: $160 million (flat); full-year: $620 million (down 16%).

• Adjusted EBITDA for 2025: $927 million (down 12% year-over-year).

• Free cash flow: $411 million (down from $598 million); year-end cash: $1.24 billion.

Outlook and guidance

• 2026 net sales growth expected at 3–6% in constant currency, with FX as a 1.5% tailwind and partial year contribution from Mattel163.

• Adjusted gross margin targeted at ~50% for 2026.

• Adjusted operating income guidance: $550–$600 million; adjusted EPS: $1.18–$1.30.

• Strategic investments of ~$110 million in 2026, mainly in digital games, D2C, and AI; $40 million in digital performance marketing.

• Double-digit adjusted operating income growth expected in 2027, with investments becoming self-funding.