Funko (NASDAQ:FNKO) closed out 2025 with fourth-quarter results that executives said came in ahead of expectations, while outlining a 2026 outlook calling for modest sales growth and a “substantial improvement” in profitability. The company held its earnings call from the Funko store in Hollywood, where Chief Executive Officer Josh Simon, about six months into the role, emphasized brand momentum and product speed as key themes.
Fourth-quarter results came in above expectations
Chief Financial Officer Yves Le Pendeven reported fourth-quarter net sales of $273 million, saying the company had guided to Q4 being up modestly over Q3 but ultimately delivered 9% growth versus Q3.
2026 guidance: modest sales growth, higher profitability
For 2026, Funko guided to net sales flat to up 3% compared with 2025 and adjusted EBITDA of $70 million to $80 million.
Le Pendeven said Funko expects its core product lines to be up “high single digits” year-over-year, offset by Loungefly being down “double digits,” primarily due to SKU cuts implemented last year.
Gross margin guidance for 2026 was 41% to 43%. Le Pendeven attributed the expected improvement to the renewal of key licensing agreements with major studio partners, which he said will result in lower minimum guaranteed royalties. He added that the company’s tariff assumptions for guidance include tariff rates remaining around 15% for the remainder of the year, and said the company is “exploring all avenues” regarding refunds and will update guidance when it has more information later in the year.
In response to an analyst question about the cadence of the revenue outlook, Le Pendeven said the plan is not dependent on a second-half “hockey stick,” and that growth should be “pretty consistent throughout the year.” He said Q2 is expected to be up compared with last year, which he described as disrupted by the initial tariff announcements, with “pretty steady” growth expected through Q3 and Q4.
Brand and product momentum: Bitty Pop!, Pop! Yourself, and speed-to-market
Simon highlighted several product and brand initiatives discussed on the call, including K-pop “Demon Hunters,” which he said showed Funko’s ability to move quickly from design to product availability—about four months from ideation to consumer delivery in Q4. Simon also said the product won The Toy Book’s “Viral Hit of the Year” award.
Other Q4 highlights management mentioned included:
- Pop! Yourself launching in Europe, allowing consumers to create custom Funko Pops.
- Bitty Pop! rolling out across all Walmart doors, including incremental placement in the toy aisle and out-of-aisle/impulse placements. Simon said the rollout helped drive strong Q4 sales.
- A “HyperStrike” program aimed at designing, manufacturing, and delivering products in “days or weeks,” which Simon said the company began experimenting with in Q4 and plans to roll out more commercially later this year.
Simon also pointed to what he called Funko’s “superpower” in translating cultural moments into collectibles, and said the company manages about 900 active licenses. He described sports as a “nascent” area for Funko, but highlighted a partnership with Topps and Fanatics tied to an MLB “Super Pack” that includes trading cards and blind Bitty Pop! products distributed at retailers including Walmart, Target, GameStop, and Dick’s.
International growth focus and Europe strength
Simon described Europe as Funko’s primary growth driver outside the U.S. and said that at year-end, Funko was the second largest collectible brand by market share in Europe, behind Pokémon. He cited Circana Retail Tracking Service data indicating that from January 2025 to January 2026, Funko’s EU sales were up 20%, about double overall market growth.
Simon said the company is now focused on building similar momentum in Latin America and Asia, and announced that Andy Oddie, Funko’s longtime Chief Commercial Officer, has been named Chief International Officer to focus on growth in those regions. Simon highlighted the size of the toy markets in China and Japan and said global cultural trends influenced by Asia—such as anime and “K culture”—represent both a business opportunity and a broader brand halo effect.
When asked about point-of-sale trends and restocking, management said Europe continued to see “great double-digit growth” in POS sales. In the U.S., management said trends improved throughout Q4 to a positive year-over-year comparison and that the positive trend continued into Q1. Management added that retailer inventory appears healthy and restocking is tracking as expected.
Loungefly, content strategy, and balance sheet commentary
On Loungefly, Simon said Funko is excited about the long-term potential of what he called “wearable storytelling.” He noted that Funko hired its first general manager for Loungefly, Jessica Kong, who he said joined about a month ago and is helping shape a strategy to return the brand to growth. Simon said more details would be shared next quarter.
Simon also discussed longer-term ambitions in original content, referencing a partnership with production company Rideback. He said Funko is developing feature and animated series ideas and cited an AI-based animation toolkit from Rideback called Spurry, which he said could help create content faster. Responding to a question about investment needs, Simon said Funko expects to partner with major studios and that it “shouldn’t be a significant capital investment” from Funko.
On leverage and liquidity, Le Pendeven said the company does not expect to need additional borrowing in 2026 and is managing through operating cash flows. He said Funko makes regular quarterly principal and interest payments and may make incremental debt paydowns later this year and early next year, similar to actions taken in Q4.
Le Pendeven also quantified tariff costs, saying total tariffs and duties in 2025 were close to $40 million, with about half related to IEPA tariffs that he said were recently struck down.
Looking to 2026, Simon said he expects a strong entertainment slate and also pointed to broader industry trends—collectibles, licensed IP, and “kidult”—as areas aligned with Funko’s portfolio. The company said it plans to provide another update when it reports next quarter.
About Funko (NASDAQ:FNKO)
Funko, Inc is a pop culture consumer products company best known for its stylized vinyl figures, apparel, accessories and other licensed collectible goods. The company’s signature product line, Funko Pop!, features bobblehead-style figurines that showcase characters from a wide array of entertainment franchises, including film, television, gaming, sports and music. In addition to vinyl figurines, Funko’s portfolio encompasses plush toys, action figures, stationery, home goods and novelty items, all leveraging licensing agreements with major global brands.
Founded in 1998 by Mike Becker in Washington state, Funko initially focused on creating nostalgic bobbleheads before expanding its product offerings under current leadership.
