Funko Narrows Losses But Revenue Slumps 7% in Q4

Funko (FNKO) reported Q4 2025 earnings on March 12, 2026, with revenue declining 7.0% to $273.10 million but narrowing net losses by 87.3% year-over-year. Non-GAAP EPS of $0.05 exceeded estimates by $0.01, while 2026 guidance for flat to 3% sales growth aligns with market expectations.

Revenue

Funko’s Q4 2025 revenue fell 7.0% to $273.10 million, reflecting weaker demand compared to $293.73 million in Q4 2024.

Earnings/Net Income

The company reduced its net loss to $180,000 in Q4 2025, an 87.3% improvement from a $1.42 million loss in Q4 2024. Earnings per share improved to $0.00 from -$0.03, though the net loss remains a concern for long-term profitability.

Price Action

FNKO shares fell 3.37% in the latest trading day and 3.80% for the week, but gained 13.16% month-to-date.

Post-Earnings Price Action Review

The strategy of buying Funko shares after its Q4 revenue decline and holding for 30 days showed poor performance over three years, with an annualized return of -24.2%, underperforming the market. This suggests limited success in capturing rebounds or corrections, highlighting the need for improved risk management or alternative strategies.

CEO Commentary

CEO Josh Simon highlighted strong sales from KPop Demon Hunters, Stranger Things, Bitty Pop!, and Pop! Yourself in Europe, alongside $16 million in debt paydown. The company extended its credit facility to 2027 and emphasized the “Make Culture POP!” strategy for 2026, focusing on entertainment-driven growth and fan engagement.

Guidance

Funko forecasts 2026 full-year net sales to be flat to up 3% versus 2025, with gross margin of 41–43% and adjusted EBITDA of $70–80 million. Q1 2026 guidance includes flat to down 2% sales, similar gross margin, and adjusted EBITDA near breakeven.

Additional News

Funko faces potential M&A speculation as Pleasant Lake Partners reportedly pushes for a sale process. The company also won the Toy Buck “Viral Hit of the Year” award for Bitty Pop!, underscoring its product innovation. However, Loungefly sales are expected to decline due to SKU cuts implemented in 2025. Tariff impacts totaling $40 million in 2025 remain a headwind, while international expansion in Europe and plans for Asia and Latin America highlight growth opportunities.