Funko, Inc. reported fourth‑quarter 2025 results that showed net sales of $273.1 million, down 7.3% from $293.7 million a year earlier, while gross profit rose to $111.6 million and the gross margin held steady at 40.9%. The company beat revenue estimates of $260.7 million to $265.9 million and posted an adjusted earnings per share of $0.05, exceeding the consensus range of $0.0034 to $0.04.
The decline in revenue was driven largely by a 9% sequential drop in the Loungefly segment, which is undergoing SKU rationalization, offset by a 9% sequential increase in core collectibles sales. The company’s licensing strategy, including renewed agreements that lower minimum guaranteed royalties, helped maintain the gross margin despite the revenue dip.
Gross margin improvement from the prior quarter’s 40.2% was largely attributable to a shift toward higher‑margin licensed products and disciplined cost control, which offset the impact of higher raw‑material costs and tariff expenses that totaled roughly $40 million in 2025.
Funko guided for full‑year 2026 net sales that are flat to up 3% versus 2025, with adjusted EBITDA projected between $70 million and $80 million. For the first quarter of 2026, the company expects net sales to be flat to down 2% versus Q1 2025, with adjusted EBITDA around breakeven. The guidance for 2026 revenue falls below analyst consensus of approximately $1.01 billion, contributing to a cautious market reaction.
CEO Josh Simon said, "We closed the year with two consecutive quarters of solid financial results." CFO Yves Le Pendeven noted that Q4 net sales were up 9% sequentially, exceeding expectations. Investors reacted cautiously, focusing on the conservative 2026 outlook despite the Q4 earnings beat.
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