Funko Q2 2026 Earnings: Net Income $15.4M, Debt $198.3M

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2026

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________to _____________

Commission file number: 001-38274

FUNKO, INC.

(Exact name of registrant as specified in its charter)

Delaware 35-2593276

(State or other jurisdiction of

incorporation or organization) (I.R.S. Employer

Identification No.)

2802 Wetmore Avenue 98201

Everett Washington

(Address of principal executive offices) (Zip Code)

(425) 783-3616

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol(s) Name of each exchange on which registered

Class A Common Stock,

$0.0001 par value per share FNKO The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated Filer ☒

Non-accelerated filer ☐ Smaller reporting company ☒

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 4, 2026, the registrant had 55,995,766 shares of Class A common stock, $0.0001 par value per share, and 91,276 shares of Class B common stock, $0.0001 par value per share, outstanding.

INDEX

Page

Part I

FINANCIAL INFORMATION

Item 1.

Financial Statements

4

Condensed Consolidated Statements of Operations (unaudited) for the Three and Six Months Ended June 30, 2026 and 2025

4

Condensed Consolidated Statements of ComprehensiveIncome (Loss) (unaudited) for the Three and Six Months Ended June 30, 2026 and 2025

5

Condensed Consolidated Balance Sheets (unaudited) as of June 30, 2026 and December 31, 2025

6

Condensed Consolidated Statements of Cash Flows (unaudited) for the Six Months Ended June 30, 2026 and 2025

7

Condensed Consolidated Statements of Stockholders’ Equity (unaudited) for the Three and Six Months Ended June 30, 2026 and 2025

8

Notes to Unaudited Condensed Consolidated Financial Statements

10

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

28

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

45

Item 4.

Controls and Procedures

46

Part II

OTHER INFORMATION

Item 1.

Legal Proceedings

47

Item 1A.

Risk Factors

48

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

96

Item 5.

Other Information

96

Item 6.

Exhibits

97

SIGNATURES

99

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. All statements contained in this Quarterly Report on Form 10-Q other than statements of historical fact, including statements regarding our future operating results and financial position, the expected impact of general economic and market conditions, including the imposition of tariffs and the uncertainty over U.S. trade and tariff policies, on our business, results of operations and financial condition, capital resources and our ability to generate cash to fund our operations, anticipated benefits from sales under our registration statement on Form S-3 and Sales Agreement, as defined herein, compliance with financial and negative covenants and related impacts to our business, our business strategy and plans, including plans to improve our liquidity and financial condition, plans for expansion in our international markets, plans for product line expansions, our review of strategic alternatives, potential acquisitions, market growth and trends, demand for our products, inventory expectations, anticipated future expenses and payments, future refinancing efforts, efforts to remediate our material weaknesses in internal control over financial reporting and our objectives for future operations, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “could,” “would,” “project,” “plan,” “potentially,” “preliminary,” “likely,” and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including the important factors described in this Quarterly Report on Form 10-Q under Part II, Item 1A. “Risk Factors,” and in our other filings with the Securities and Exchange Commission (“SEC”), that may cause our actual results, performance or achievements to differ materially and adversely from those expressed or implied by the forward-looking statements.

Any forward-looking statements made herein speak only as of the date of this Quarterly Report on Form 10-Q, and you should not rely on forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, performance, or achievements reflected in the forward-looking statements will be achieved or occur. We undertake no obligation to update any of these forward-looking statements for any reason after the date of this Quarterly Report on Form 10-Q or to conform these statements to actual results or revised expectations.

1

Summary of Risk Factors

Our business is subject to numerous risks and uncertainties, including those described in Part II, Item 1A. “Risk Factors” in this Quarterly Report on Form 10-Q. Some of the factors that could materially and adversely affect our business, financial condition, results of operations or prospects include, but are not limited to, the following:

•We are subject to risks related to the retail industry including, but not limited to, potential negative impacts of global and regional economic downturns, changes in retail practices, and our ability to maintain and further develop relationships with our retail customers and distributors.

•Our substantial sales and manufacturing operations outside the United States subject us to risks associated with international operations, including, but not limited to, changes in the global trade markets and policies, including tariffs, as well as fluctuations in foreign currency or tax rates.

•Our indebtedness could adversely affect our financial health and competitive position, and we may not be able to secure additional financing on favorable terms, or at all, to meet our future capital needs.

•There can be no assurance that we will be successful in identifying or completing any strategic alternative, that any such strategic alternative will result in additional value for our stockholders or that the process will not have an adverse impact on our business.

•We are subject to risks related to the operation of our business, including, but not limited to, our ability to execute our business strategy, manage our growth and our inventories, and attract and retain qualified personnel.

•As a purveyor of licensed pop culture consumer products, we are largely dependent on content development and creation by third parties, and are subject to a number of related risks including, but not limited to, the creation of compelling content by licensors, and the market appeal of the properties we license and the products we create.

•We are subject to risks related to intellectual property, including our ability to obtain, protect and enforce our intellectual property rights and our ability to operate our business without violating the intellectual property rights of other parties.

•Our success is dependent on our ability to manage fluctuations in our business, including fluctuations in gross margin, seasonal impacts and fluctuations due to the timing and popularity of new product releases.

•Our business depends in large part on our vendors and outsourcers, and our reputation and ability to effectively operate our business may be harmed by actions taken by these third parties outside of our control.

•We are subject to potential legal risks including, but not limited to, ongoing securities class action litigation, future product liability suits or product recalls, or risks associated with failure to comply with the various laws and regulations to which we are subject, any of which could have a significant adverse effect on our financial condition and results of operations.

•We are subject to risks related to information technology including, but not limited to, risks related to the operation of our e-commerce business, our ability to operate our information systems and our compliance with laws related to privacy and the protection of data.

•TCG has significant influence over us, and its interests may conflict with the interests of our other stockholders.

•There are risks related to our organizational structure, including the Tax Receivable Agreement, which confers certain benefits upon the parties to the TRA (the "TRA Parties") that will not benefit Class A common stockholders to the same extent as it will benefit the TRA Parties.

2

•There are risks associated with the ownership of our Class A common stock including, but not limited to, potential dilution by future issuances and volatility in the price of our Class A common stock.

3

Part I – FINANCIAL INFORMATION

Item 1.

Financial Statements

FUNKO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

(In thousands, except per share data)

Net sales $ 207,719 $ 193,469 $ 408,638 $ 384,208

Cost of sales (exclusive of depreciation and amortization) 90,090 131,429 202,182 245,297

Selling, general, and administrative expenses 79,723 82,259 163,410 167,066

Depreciation and amortization 15,767 14,528 30,541 29,790

Total operating expenses 185,580 228,216 396,133 442,153

Income (loss) from operations 22,139 (34,747) 12,505 (57,945)

Interest expense, net 5,198 4,522 10,082 8,371

Other expense, net 480 887 936 1,055

Income (loss) before income taxes 16,461 (40,156) 1,487 (67,371)

Income tax expense 1,016 848 4,169 1,692

Net income (loss) 15,445 (41,004) (2,682) (69,063)

Less: net income (loss) attributable to non-controlling interests

61 (514) 9 (985)

Net income (loss) attributable to Funko, Inc. $ 15,384 $ (40,490) $ (2,691) $ (68,078)

Income (loss) per share of Class A common stock:

Basic $ 0.28 $ (0.74) $ (0.05) $ (1.26)

Diluted $ 0.27 $ (0.74) $ (0.05) $ (1.26)

Weighted average shares of Class A common stock outstanding:

Basic 55,860 54,362 55,644 53,948

Diluted 57,461 54,362 55,644 53,948

See accompanying notes to the unaudited condensed consolidated financial statements.

4

FUNKO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

(In thousands)

Net income (loss) $ 15,445 $ (41,004) $ (2,682) $ (69,063)

Other comprehensive income (loss):

Foreign currency translation gain (loss) 396 5,708 (620) 8,218

Comprehensive income (loss) 15,841 (35,296) (3,302) (60,845)

Less: Comprehensive income (loss) attributable to non-controlling interests

62 (436) 7 (880)

Comprehensive income (loss) attributable to Funko, Inc. $ 15,779 $ (34,860) $ (3,309) $ (59,965)

See accompanying notes to the unaudited condensed consolidated financial statements.

5

FUNKO, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

June 30,

2026 December 31,

2025

(In thousands, except per share data)

Assets

Current assets:

Cash and cash equivalents $ 40,713 $ 42,148

Accounts receivable, net 93,561 117,018

Inventories 88,800 83,136

Prepaid expenses and other current assets 51,540 48,094

Total current assets 274,614 290,396

Property and equipment, net 64,498 68,679

Operating lease right-of-use assets, net 41,671 46,928

Goodwill 133,848 133,900

Intangible assets, net 127,925 135,826

Other assets 11,191 9,505

Total assets $ 653,747 $ 685,234

Liabilities and Stockholders’ Equity

Current liabilities:

Revolving credit facility $ 1,500 $ 1,125

Current portion of term debt 16,939 21,932

Current portion of operating lease liabilities 16,989 18,792

Accounts payable 58,206 64,748

Accrued royalties 54,712 59,821

Accrued expenses and other current liabilities 87,583 77,499

Total current liabilities 235,929 243,917

Long-term debt 182,659 202,246

Operating lease liabilities 43,273 48,680

Other long-term liabilities 3,867 4,261

Commitments and Contingencies (Note 6)

Stockholders’ equity:

Class A common stock, par value $0.0001 per share, 200,000 shares authorized; 55,989 and 55,327 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively

5 5

Class B common stock, par value $0.0001 per share, 50,000 shares authorized; 91 issued and outstanding as of June 30, 2026 and December 31, 2025, respectively

— —

Additional paid-in-capital 362,526 357,330

Accumulated other comprehensive income 4,003 4,621

Accumulated deficit (178,833) (176,142)

Total stockholders’ equity attributable to Funko, Inc. 187,701 185,814

Non-controlling interests 318 316

Total stockholders’ equity 188,019 186,130

Total liabilities and stockholders’ equity $ 653,747 $ 685,234

See accompanying notes to the unaudited condensed consolidated financial statements.

6

FUNKO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Six Months Ended June 30,

2026 2025

(In thousands)

Operating Activities

Net loss $ (2,682) $ (69,063)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Depreciation and amortization 30,541 29,790

Equity-based compensation 5,196 6,377

Other, net 1,133 1,301

Changes in operating assets and liabilities:

Accounts receivable, net 23,318 24,572

Inventories (6,160) (5,761)

Prepaid expenses and other assets 2,499 5,529

Accounts payable (5,992) 3,207

Accrued royalties (5,109) (14,967)

Accrued expenses and other liabilities (19,114) (25,427)

Net cash provided by (used in) operating activities 23,630 (44,442)

Investing Activities

Purchases of property and equipment (18,954) (16,211)

Other, net — 970

Net cash used in investing activities (18,954) (15,241)

Financing Activities

Borrowings on revolving credit facility — 85,000

Debt amendment costs (3,648) —

Payments of term debt (21,303) (11,530)

Proceeds from sale of tariff receivable 19,248 —

Payments under tax receivable agreement (249) —

Other, net 179 193

Net cash (used in) provided by financing activities (5,773) 73,663

Effect of exchange rates on cash and cash equivalents (338) 516

Net change in cash and cash equivalents (1,435) 14,496

Cash and cash equivalents at beginning of period 42,148 34,655

Cash and cash equivalents at end of period $ 40,713 $ 49,151

See accompanying notes to the unaudited condensed consolidated financial statements.

7

FUNKO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

Class A Common

Stock Class B Common

Stock Additional

Paid-In Capital Other

Comprehensive Income Accumulated Deficit Non-

Controlling Interests Total

(in thousands) Shares Amount Shares Amount

Period ended March 31, 2026 55,830 $ 6 91 $ — $ 359,744 $ 3,608 $ (194,217) $ 259 $ 169,400

Distribution to continuing equity owners — — — — — — — (3) (3)

Equity-based compensation — — — — 2,782 — — — 2,782

Activity under equity-based compensation plans 159 (1) — — — — — — (1)

Cumulative translation adjustment — — — — — 395 — 1 396

Net income — — — — — — 15,384 61 15,445

Period ended June 30, 2026 55,989 $ 5 91 $ — $ 362,526 $ 4,003 $ (178,833) $ 318 $ 188,019

Class A Common

Stock Class B Common

Stock Additional

Paid-In Capital Other

Comprehensive Income Accumulated Deficit Non-

Controlling Interests Total

(in thousands) Shares Amount Shares Amount

Period ended March 31, 2025 54,252 $ 5 648 $ — $ 348,358 $ 807 $ (136,370) $ 1,355 $ 214,155

Distribution to continuing equity owners — — — — — — — (11) (11)

Equity-based compensation — — — — 3,112 — — — 3,112

Activity under equity-based compensation plans 278 — — — 117 — — — 117

Cumulative translation adjustment — — — — — 5,630 — 78 5,708

Net loss — — — — — — (40,490) (514) (41,004)

Period ended June 30, 2025 54,530 $ 5 648 $ — $ 351,587 $ 6,437 $ (176,860) $ 908 $ 182,077

See accompanying notes to the unaudited condensed consolidated financial statements.

8

FUNKO, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

Class A Common

Stock Class B Common

Stock Additional

Paid-In Capital Other

Comprehensive Income Accumulated Deficit Non-

Controlling Interests Total

(in thousands) Shares Amount Shares Amount

Period ended December 31, 2025 55,327 $ 5 91 $ — $ 357,330 $ 4,621 $ (176,142) $ 316 $ 186,130

Distribution to continuing equity owners — — — — — — — (5) (5)

Equity-based compensation — — — — 5,196 — — — 5,196

Activity under equity-based compensation plans 662 — — — — — — — —

Cumulative translation adjustment — — — — — (618) — (2) (620)

Net loss — — — — — — (2,691) 9 (2,682)

Period ended June 30, 2026 55,989 $ 5 91 $ — $ 362,526 $ 4,003 $ (178,833) $ 318 $ 188,019

Class A Common

Stock Class B Common

Stock Additional

Paid-In Capital Other

Comprehensive (loss) Income Accumulated Deficit Non-

Controlling Interests Total

(in thousands) Shares Amount Shares Amount

Period ended December 31, 2024 52,967 $ 5 1,430 $ — $ 343,472 $ (1,676) $ (108,782) $ 3,334 $ 236,353

Distribution to continuing equity owners — — — — — — — (35) (35)

Equity-based compensation — — — — 6,377 — — — 6,377

Activity under equity-based compensation plans 781 — — — 227 — — — 227

Cumulative translation adjustment — — — — — 8,113 — 105 8,218

Redemption of common units of FAH, LLC 782 — (782) — 1,511 — — (1,511) —

Net loss — — — — — — (68,078) (985) (69,063)

Period ended June 30, 2025 54,530 $ 5 648 $ — $ 351,587 $ 6,437 $ (176,860) $ 908 $ 182,077

See accompanying notes to the unaudited condensed consolidated financial statements.

9

FUNKO, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Organization and Operations

The unaudited condensed consolidated financial statements include Funko, Inc. and its subsidiaries (together, the “Company”) and have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and the instructions to Rule 10-01 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete financial statements. All intercompany balances and transactions have been eliminated.