Second quarter 2026
Filed Aug 6, 2026Funko Reports Strong Second Quarter 2026 Financial Results; Reiterates Full-Year Net Sales Outlook and Raises Adjusted EBITDA Guidance
Net sales increased 7%, Core Collectibles sales increased 9%, gross margin reached 56.6%, and adjusted EBITDA was $40.9 million. Results included a pre-tax benefit of $25.4 million related to expected tariff refunds and the release of accrued tariffs.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net salesGAAP | $207.7 million | – | 7% |
| Gross profitGAAP | $117.6 million | – | – |
| Gross marginGAAP | 56.6% | – | – |
| SG&A expensesGAAP | $79.7 million | – | – |
| SG&A expenses as a percentage of salesGAAP | 38.4% | – | improved 413 basis points |
| Net incomeGAAP | $15.4 million | – | – |
| Diluted earnings per shareGAAP | $0.27 per diluted share | – | – |
| Adjusted net incomenon-GAAP | $15.0 million | – | – |
| Adjusted diluted earnings per sharenon-GAAP | $0.26 per diluted share | – | – |
| Adjusted EBITDAnon-GAAP | $40.9 million | – | – |
| Pre-tax benefit related to expected tariff refunds and release of accrued tariffsother | $25.4 million | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Core CollectiblesThe company cited broad-based POS momentum across theatrical, anime, gaming and sports, rapid-response releases around live cultural moments, and the launch of POP! Mystery. | $171,641 | – | 9.0% |
| LoungeflyThe company plans to rationalize Loungefly’s SKU count and concentrate the assortment behind products with stronger demand and return potential. | $31,302 | – | (1.7)% |
| OtherNo category-specific driver was provided. | $4,776 | – | 15.2% |
| United StatesNo geography-specific driver was provided. | $121,845 | – | 3.4% |
| EuropeNo geography-specific driver was provided. | $68,976 | – | 19.4% |
| Other InternationalNo geography-specific driver was provided. | $16,898 | – | (5.1)% |
2026 Full Year and 2026 Third Quarter outlook
- Revenue2026 Full Year: flat to up 3%; 2026 Third Quarter: Approximately flat year-over-year
- Gross margin2026 Full Year: 46%-47%, including the $25.4 million Q2 tariff-related benefit; 2026 Third Quarter: Approximately 43%-44%
- Note2026 Full Year Adjusted EBITDA: $100M-$110M, including the $25.4 million Q2 tariff-related benefit
- Note2026 Third Quarter Adjusted EBITDA: $25 million to $30 million
- Note2026 Third Quarter equity-based compensation: approximately $4 million
- Note2026 Third Quarter depreciation and amortization: approximately $15 million
- Note2026 Third Quarter interest expense: approximately $5 million
- Note2026 Full Year equity-based compensation: approximately $13 million
- Note2026 Full Year depreciation and amortization: approximately $60 million
- Note2026 Full Year interest expense: approximately $20 million
What drove it
- Net sales increased 7% to $207.7 million.
- Core Collectibles sales increased 9%.
- The company reported broad-based POS momentum across theatrical, anime, gaming and sports.
- The company cited rapid-response releases around live cultural moments and the launch of POP! Mystery.
- Gross margin reached a record high for the second consecutive quarter.
- The company cited tighter assortments, better SKU productivity, continued cost discipline, and concentrating resources behind products, fandoms and channels with the greatest demand and return potential.
- Gross margin, net income, adjusted net income and adjusted EBITDA each included a pre-tax benefit of $25.4 million related to the recognition of expected tariff refunds and the release of accrued tariffs.
Concerns
- Loungefly net sales declined (1.7)% to $31,302.
- Other International net sales declined (5.1)% to $16,898.
- The company is rationalizing Loungefly’s SKU count.
- The 2026 full-year gross margin and adjusted EBITDA outlook include the $25.4 million Q2 tariff-related benefit.
- Inventories were $88.8 million at June 30, 2026, up from $83.1 million at December 31, 2025.
- Total debt was $201.1 million at June 30, 2026.
What to watch
- Whether Core Collectibles continues its expected growth.
- Third-quarter net sales guidance of approximately flat year-over-year.
- Third-quarter gross margin guidance of approximately 43%-44%.
- Third-quarter adjusted EBITDA guidance of $25 million to $30 million.
- Execution of the Loungefly SKU rationalization and concentration behind products with stronger demand and return potential.
- Progress in reducing debt following use of half the tariff-claim sale proceeds to pay down the term loan.
Balance sheet and cash flow
- Total cash and cash equivalents were $40.7 million at June 30, 2026 compared with $42.1 million at December 31, 2025.
- Inventories were $88.8 million at June 30, 2026 up from $83.1 million at December 31, 2025.
- Total debt was $201.1 million at June 30, 2026 versus $225.3 million at December 31, 2025.
- In Q2, the company executed a participation sale of $22.1 million in tariff claims for $19.2 million.
- Half of the proceeds from the sale were used to pay down the company’s term loan.
Analysis
Funko reported a strong second quarter, with net sales increasing 7% to $207.7 million and Core Collectibles increasing 9% to $171,641. Europe was the strongest reported geography, with net sales up 19.4% to $68,976, while United States sales increased 3.4% to $121,845. Loungefly declined 1.7% to $31,302 and Other International declined 5.1% to $16,898.
Profitability improved sharply. Gross profit was $117.6 million and gross margin was 56.6%, compared with $62.0 million and 32.1%, respectively. SG&A expenses declined to $79.7 million from $82.3 million, while SG&A as a percentage of sales improved 413 basis points to 38.4%. 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. Adjusted EBITDA was $40.9 million versus negative Adjusted EBITDA of $16.5 million.
The quarter's reported margin and earnings results included a pre-tax benefit of $25.4 million from expected tariff refunds and the release of accrued tariffs. Management also described tighter assortments, improved SKU productivity, and continued cost discipline. The company is separately rationalizing Loungefly’s SKU count and focusing its assortment on products with stronger demand and return potential.
Funko reiterated its 2026 full-year net sales outlook of flat to up 3%, raised gross-margin guidance to 46%-47% from 41%-43%, and raised adjusted EBITDA guidance to $100M-$110M from $70M-$80M. Both revised full-year profitability outlooks include the $25.4 million Q2 tariff-related benefit. Third-quarter guidance calls for net sales approximately flat year-over-year, gross margin of approximately 43%-44%, and adjusted EBITDA of $25 million to $30 million.
The balance sheet showed $40.7 million of cash and cash equivalents, $88.8 million of inventories, and $201.1 million of total debt at June 30, 2026. During Q2, Funko executed a participation sale of $22.1 million in tariff claims for $19.2 million, with half of the proceeds used to pay down the term loan.
Not in the filing
stated, not guessed- GAAP operating income was not provided in the supplied filing text.
- Operating cash flow was not provided in the supplied filing text.
- Free cash flow was not provided in the supplied filing text.
- Share repurchases and dividends were not provided in the supplied filing text.
- A tax rate was not provided in the supplied filing text.
- Adjusted EBITDA margin and adjusted net income margin figures were not provided in the supplied filing text.
- Prior-quarter comparisons for reported operating metrics were not provided in the supplied filing text.
- Segment or geography profit and margin metrics were not provided in the supplied filing text.
- No prior earnings release outlook was provided for comparison with actual results.
- No named executive was identified for the included management commentary.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.