Funko, Inc.

What they do

Funko designs and sells licensed pop culture products across figures, plush, bags, wallets, apparel, accessories, homewares, vinyl records and limited-edition posters, at accessible price points. Products are sold to retailers and directly to consumers in North America, Europe, Latin America, Asia and Africa; about 41% of net sales in the six months ended June 30, 2026 came from outside the United States. Inventory is sourced and assembled primarily in Vietnam, China and Cambodia.

Revenue drivers

• Core Collectibles — The largest brand category, generating $171.6 million of $207.7 million in Q2 2026 net sales, up 9.0% year over year, including figures and collectibles tied to licensed film, TV, anime, gaming and sports properties.
• Loungefly — The bag, wallet and accessories brand, with $31.3 million in Q2 2026 net sales, down 1.7% year over year; management is rationalizing its SKU count to concentrate on stronger-demand products.
• Other — A small category at $4.8 million in Q2 2026 net sales, up 15.2%, covering products outside Core Collectibles and Loungefly.
• International sales — Europe net sales were $68.9 million in Q2 2026, up 19.4%, and Other International was $16.9 million, down 5.1%; U.S. net sales were $121.8 million, up 3.4%.

Recent performance

Q2 2026 net sales rose 7.4% to $207.7 million from $193.5 million, with Core Collectibles up 9.0% and Europe up 19.4%. Gross margin was 56.6%, compared with 32.1% a year earlier, and included a $25.4 million pre-tax benefit from expected tariff refunds and release of accrued tariffs. Net income was $15.4 million, or $0.27 per diluted share, versus a net loss of $40.5 million, or $0.74 per diluted share, a year ago. Adjusted EBITDA was $40.9 million versus negative $16.5 million. Full-year 2025 net sales were $908.2 million with a net loss of $67.4 million; operating cash flow was negative $5.1 million in 2025.

Strategy

Management describes its Make Culture Pop! plan as a more deliberate and disciplined growth engine, focused on identifying fan demand, moving faster to launch products, and scaling through channels with the strongest economics. The company is tightening assortments, improving SKU productivity, and concentrating resources on higher-demand fandoms and channels; it is rationalizing Loungefly's SKU count. It is also diversifying into personalized products such as Pop! Yourself, micro collectibles and blind boxes including the POP! Mystery launch. The company reduced total debt to $201.1 million at June 30, 2026 from $225.3 million at December 31, 2025, using part of $19.2 million in proceeds from a $22.1 million participation sale of tariff claims to pay down its term loan.

Risks

• Tariff and trade policy — U.S. tariffs imposed under IEEPA were ruled unauthorized in February 2026 and Funko has paid about $20 million in such tariffs, with refunds applied for but not yet certain.
• Retail and discretionary demand — A substantial majority of net sales are to retail customers, exposing Funko to retail volatility, recessions and reduced consumer discretionary spending.
• Macroeconomic and cost pressures — Inflation, higher interest rates, wage pressure and geopolitical instability in regions including Eastern Europe, the Middle East and Southeast Asia could raise costs or reduce demand.
• Profitability and cash flow volatility — Funko reported net losses in 2022 through 2025 and negative operating cash flow of $5.1 million in 2025, with reliance on sourcing concentrated in Vietnam, China and Cambodia.

Outlook

Management reiterated its full-year 2026 net sales outlook and raised its Adjusted EBITDA guidance, citing strong Q2 performance and expected continued Core Collectibles growth. It also issued third-quarter 2026 guidance and factored in the decision to rationalize Loungefly's SKU count. The company expects continued cost discipline and resource concentration behind higher-return products and channels.