JAKKS Q2 2025 Earnings: Net Sales $119.1M, Net Loss $2.3M

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)

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

For the quarterly period ended June 30, 2025

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: 001-35448

JAKKS Pacific, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware 95-4527222

(State or Other Jurisdiction of

Incorporation or Organization) (I.R.S. Employer

Identification No.)

2951 28th Street Santa Monica, California 90405

(Address of Principal Executive Offices) (Zip Code)

Registrant’s Telephone Number, Including Area Code: (424) 268-9444

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 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, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “non-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 ☒

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

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

Common Stock $.001 Par Value JAKK The NASDAQ Global Select Market

The number of shares outstanding of the issuer’s common stock is 11,146,831 as of August 1, 2025.

JAKKS PACIFIC, INC. AND SUBSIDIARIES

TABLE OF CONTENTS TO QUARTERLY REPORT ON FORM 10-Q

QUARTER ENDED JUNE 30, 2025

ITEMS IN FORM 10-Q

Part I FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited) 3

Condensed Consolidated Balance Sheets 3

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) 4

Condensed Consolidated Statements of Stockholders’ Equity 5

Condensed Consolidated Statements of Cash Flows 6

Notes to Condensed Consolidated Financial Statements 7

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 21

Item 3. Quantitative and Qualitative Disclosures About Market Risk 25

Item 4. Controls and Procedures 25

Part II OTHER INFORMATION

Item 1. Legal Proceedings 26

Item 1A. Risk Factors 26

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds None

Item 3. Defaults Upon Senior Securities None

Item 4. Mine Safety Disclosures None

Item 5. Other Information None

Item 6. Exhibits 26

Signatures 27

Exhibit 31.1

Exhibit 31.2

Exhibit 32.1

Exhibit 32.2

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

JAKKS PACIFIC, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share amounts)

June 30, December 31,

2025 2024

(Unaudited)

Assets

Current assets

Cash and cash equivalents $ 38,195 $ 69,936

Restricted cash 4,861 201

Accounts receivable, net of allowance for credit losses of $5,258 and $4,919 at June 30, 2025 and December 31, 2024, respectively 124,489 131,629

Inventory 71,811 52,780

Prepaid expenses and other assets 22,575 14,141

Total current assets 261,931 268,687

Property and equipment

Office furniture and equipment 10,081 10,049

Molds and tooling 129,385 125,618

Leasehold improvements 7,195 6,956

Total 146,661 142,623

Less accumulated depreciation and amortization 126,890 126,981

Property and equipment, net 19,771 15,642

Operating lease right-of-use assets, net 49,931 53,254

Other long-term assets 1,734 1,781

Deferred income tax assets, net 70,401 70,394

Goodwill 34,950 35,111

Total assets $ 438,718 $ 444,869

Liabilities and Stockholders’ Equity

Current liabilities

Accounts payable $ 65,422 $ 42,560

Accounts payable - Meisheng (related party) — 13,461

Accrued expenses 45,890 48,456

Reserve for sales returns and allowances 29,116 35,817

Income taxes payable — 1,035

Short-term operating lease liabilities 12,405 8,091

Total current liabilities 152,833 149,420

Long-term operating lease liabilities 43,881 48,433

Accrued expenses – long term 3,222 2,563

Income taxes payable 2,045 3,620

Total liabilities 201,981 204,036

Stockholders’ Equity

Common stock, $0.001 par value; 100,000,000 shares authorized; 11,146,831 and 11,025,582 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively 11 11

Additional paid-in capital 299,110 297,198

Accumulated deficit (49,965 ) (39,692 )

Accumulated other comprehensive loss (12,919 ) (17,184 )

Total JAKKS Pacific, Inc. stockholders’ equity 236,237 240,333

Non-controlling interests 500 500

Total stockholders’ equity 236,737 240,833

Total liabilities and stockholders’ equity $ 438,718 $ 444,869

See accompanying notes to condensed consolidated financial statements.

3

JAKKS PACIFIC, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(In thousands, except per share data)

Three Months Ended June 30,

(Unaudited) Six Months Ended

June 30,

(Unaudited)

2025 2024 2025 2024

Net sales $ 119,094 $ 148,619 $ 232,347 $ 238,695

Cost of sales:

Cost of goods 58,784 76,599 113,410 130,420

Royalty expense 19,509 22,394 37,677 36,170

Amortization of tools and molds 1,778 2,041 3,224 3,468

Cost of sales 80,071 101,034 154,311 170,058

Gross profit 39,023 47,585 78,036 68,637

Direct selling expenses 6,710 6,255 15,406 14,352

General and administrative expenses 34,974 33,594 68,935 67,786

Depreciation and amortization 122 93 235 180

Selling, general and administrative expenses 41,806 39,942 84,576 82,318

Income (loss) from operations (2,783 ) 7,643 (6,540 ) (13,681 )

Other income (expense), net 25 72 30 210

Loss on debt extinguishment (417 ) — (417 ) —

Interest income 395 88 757 464

Interest expense (145 ) (256 ) (300 ) (399 )

Income (loss) before provision for (benefit from) income taxes (2,925 ) 7,547 (6,470 ) (13,406 )

Provision for (benefit from) income taxes (606 ) 2,281 (1,769 ) (4,447 )

Net income (loss) (2,319 ) 5,266 (4,701 ) (8,959 )

Net income attributable to non-controlling interests — — — 280

Net income (loss) attributable to Jakks Pacific, Inc. $ (2,319 ) $ 5,266 $ (4,701 ) $ (9,239 )

Net income (loss) attributable to common stockholders $ (2,319 ) $ 5,266 $ (4,701 ) $ (7,909 )

Earnings (loss) per share - basic $ (0.21 ) $ 0.49 $ (0.42 ) $ (0.75 )

Shares used in earnings (loss) per share - basic 11,146 10,801 11,146 10,577

Earnings (loss) per share - diluted $ (0.21 ) $ 0.47 $ (0.42 ) $ (0.75 )

Shares used in earnings (loss) per share - diluted 11,146 11,245 11,146 10,577

Comprehensive income (loss) $ 1,318 $ 5,150 $ (436 ) $ (9,640 )

Comprehensive income (loss) attributable to JAKKS Pacific, Inc. $ 1,318 $ 5,150 $ (436 ) $ (9,920 )

See accompanying notes to condensed consolidated financial statements.

4

JAKKS PACIFIC, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands)

Three and Six Months Ended June 30, 2025

(Unaudited)

Accumulated JAKKS

Additional Other Pacific, Inc. Non- Total

Common Paid-in Accumulated Comprehensive Stockholders’ Controlling Stockholders’

Stock Capital Deficit Loss Equity Interests Equity

Balance, December 31, 2024 $ 11 $ 297,198 $ (39,692 ) $ (17,184 ) $ 240,333 $ 500 $ 240,833

Share-based compensation expense — 2,552 — — 2,552 — 2,552

Repurchase of common stock for employee tax withholding — (3,819 ) — — (3,819 ) — (3,819 )

Cash dividend declared, $0.25 per share — — (2,786 ) — (2,786 ) — (2,786 )

Net loss — — (2,382 ) — (2,382 ) — (2,382 )

Foreign currency translation adjustment — — — 628 628 — 628

Balance, March 31, 2025 11 295,931 (44,860 ) (16,556 ) 234,526 500 235,026

Share-based compensation expense — 3,188 — — 3,188 — 3,188

Repurchase of common stock for employee tax withholding — (9 ) — — (9 ) — (9 )

Cash dividend declared, $0.25 per share — — (2,786 ) — (2,786 ) — (2,786 )

Net loss — — (2,319 ) — (2,319 ) — (2,319 )

Foreign currency translation adjustment — — — 3,637 3,637 — 3,637

Balance, June 30, 2025 $ 11 $ 299,110 $ (49,965 ) $ (12,919 ) $ 236,237 $ 500 $ 236,737

Three and Six Months Ended June 30, 2024

(Unaudited)

Accumulated JAKKS

Additional Other Pacific, Inc. Non- Total

Common Paid-in Accumulated Comprehensive Stockholders' Controlling Stockholders'

Stock Capital Deficit Loss Equity Interests Equity

Balance, December 31, 2023 $ 10 $ 278,642 $ (73,612 ) $ (15,627 ) $ 189,413 $ 708 $ 190,121

New stock issuance 1 — — — 1 — 1

Share-based compensation expense — 2,575 — — 2,575 — 2,575

Non-controlling interests – capital reduction — — — — — (488 ) (488 )

Repurchase of common stock for employee tax withholding — (5,132 ) — — (5,132 ) — (5,132 )

Preferred stock accrued dividends — (390 ) — — (390 ) — (390 )

Preferred stock redemption — 16,329 — — 16,329 — 16,329

Net income (loss) — — (14,505 ) — (14,505 ) 280 (14,225 )

Foreign currency translation adjustment — — — (565 ) (565 ) — (565 )

Balance, March 31, 2024 11 292,024 (88,117 ) (16,192 ) 187,726 500 188,226

Share-based compensation expense — 2,519 — — 2,519 — 2,519

Net income — — 5,266 — 5,266 — 5,266

Foreign currency translation adjustment — — — (116 ) (116 ) — (116 )

Balance, June 30, 2024 $ 11 $ 294,543 $ (82,851 ) $ (16,308 ) $ 195,395 $ 500 $ 195,895

See accompanying notes to condensed consolidated financial statements.

5

JAKKS PACIFIC, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

Six Months Ended

June 30,

(Unaudited)

2025 2024

Cash flows from operating activities

Net loss $ (4,701 ) $ (8,959 )

Adjustments to reconcile net loss to net cash used in operating activities:

Provision for credit losses 422 1,509

Depreciation and amortization 3,459 3,648

Write-off and amortization of debt issuance costs 450 158

Share-based compensation expense 5,740 5,094

Loss on disposal of property and equipment 31 118

Changes in operating assets and liabilities:

Accounts receivable 6,718 (17,718 )

Inventory (19,031 ) 1,320

Prepaid expenses and other assets (6,826 ) (18,449 )

Accounts payable 18,958 12,520

Accounts payable - Meisheng (related party) (12,706 ) 6,254

Accrued expenses (2,878 ) (565 )

Reserve for sales returns and allowances (6,701 ) (9,075 )

Income taxes payable (2,610 ) (3,589 )

Other liabilities 3,744 68

Total adjustments (11,230 ) (18,707 )

Net cash used in operating activities (15,931 ) (27,666 )

Cash flows from investing activities

Purchases of property and equipment (4,470 ) (4,627 )

Investments in employee deferred compensation trusts (1,545 ) (1,549 )

Proceeds from sale of property and equipment — 2

Net cash used in investing activities (6,015 ) (6,174 )

Cash flows from financing activities

Repurchase of common stock for employee tax withholding (3,828 ) (5,131 )

Proceeds from credit facility borrowings — 5,000

Redemption of preferred stock — (20,000 )

Cash dividend paid (5,572 ) —

Net cash used in financing activities (9,400 ) (20,131 )

Net decrease in cash, cash equivalents and restricted cash (31,346 ) (53,971 )

Effect of foreign currency translation 4,265 (681 )

Cash, cash equivalents and restricted cash, beginning of period 70,137 72,554

Cash, cash equivalents and restricted cash, end of period $ 43,056 $ 17,902

Supplemental disclosure of non-cash activities:

Right-of-use assets exchanged for lease liabilities $ 5,068 $ 3,690

Supplemental disclosures of cash flow information:

Cash paid for income taxes, net $ 2,199 $ 13,093

Cash paid for interest $ — $ 104

As of June 30, 2025 and 2024, there was $6.1 million and $4.3 million, respectively, of property and equipment purchases included in accounts payable.

As of June 30, 2025, the debt issuance costs of $0.3 million associated with the Company’s revolving credit facility with BMO Bank N.A. that was entered into on June 24, 2025 were included in accrued expenses (see Note 5 – Credit Facilities).

On March 11, 2024, the Company issued $15.0 million in common stock as part of the consideration to redeem the preferred stock derivative liability (see Note 8 – Common Stock and Preferred Stock).

See Notes 5 and 8 for additional supplemental information to the condensed consolidated statements of cash flows.

See accompanying notes to condensed consolidated financial statements.

6

JAKKS PACIFIC, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

June 30, 2025

Note 1 — Basis of Presentation

The accompanying unaudited interim condensed consolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate to prevent the information presented from being misleading. These financial statements should be read in conjunction with the financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K, which contains audited financial information for the three years in the period ended December 31, 2024.

The information provided in this report reflects all adjustments (consisting solely of normal recurring items) that are, in the opinion of management, necessary to present fairly the financial position and the results of operations for the periods presented. Interim results are not necessarily, especially given seasonality, indicative of results to be expected for a full year.

The condensed consolidated financial statements include the accounts of JAKKS Pacific, Inc. and its wholly-owned subsidiaries (collectively, “the Company”).

In August 2020, the FASB issued ASU 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.” The new guidance eliminates two of the three models in ASC 470-20, which required entities to account for beneficial conversion features and cash conversion features in equity, separately from the host convertible debt or preferred stock. As a result, only conversion features accounted for under the substantial premium model in ASC 470-20 and those that require bifurcation in accordance with ASC 815-15 will be accounted for separately. In addition, the amendments in ASU 2020-06 eliminate some of the requirements in ASC 815-40 related to equity classification. The amendments in ASU 2020-06 further revised the guidance in ASC 260, Earnings Per Share (“EPS”), to address how convertible instruments are accounted for in calculating diluted EPS and require enhanced disclosures about the terms of convertible instruments and contracts in an entity’s own equity. The new standard is effective for the Company for fiscal years beginning after December 15, 2023, including interim periods within these fiscal years, with early adoption permitted. The Company adopted ASU 2020-06 on January 1, 2024. The adoption of this new accounting standard did not have a material impact on the Company’s condensed consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” The amendments in this update improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The new standard is effective for the Company for fiscal years beginning after December 15, 2023, with early adoption permitted. The Company adopted this standard as of December 31, 2024, which resulted in incremental segment disclosures. See Note 2 - Business Segments, Geographic Data and Sales by Major Customers.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” This ASU provides standardization of tax disclosures, primarily related to the rate reconciliation and income taxes paid information. The new standard is effective for the Company for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact that the updated disclosure will have on its condensed consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses”. The new guidance improves disclosures about a public business entity’s expenses by requiring disaggregated disclosures of certain types of expenses, including purchases of inventory, employee compensation, depreciation, intangible amortization and depletion, as applicable, for each income statement caption that includes those expenses. In addition, the standard will require entities to define and disclose total selling expenses. The standard is effective for public business entities such as the Company for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted, and entities may apply the standard prospectively or retrospectively. The Company is currently evaluating the impact of adopting this standard on its condensed consolidated financial statements and related disclosures.

No new additional accounting pronouncements were issued or adopted for the three and six months ended June 30, 2025 that materially impacted the Company.

7

JAKKS PACIFIC, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

June 30, 2025

Note 2 — Business Segments, Geographic Data and Sales by Major Customers

The Company is a worldwide producer and marketer of children’s toys and other consumer products, principally engaged in the design, development, production, marketing and distribution of its diverse portfolio of products. The Company’s segments are (i) Toys/Consumer Products (“TCP”) and (ii) Costumes.

The Toys/Consumer Products segment includes action figures, vehicles, play sets, plush products, dolls, electronic products, construction toys, infant and pre-school toys, child-sized and hand-held role play toys and everyday costume play, foot-to-floor ride-on vehicles, wagons, novelty toys, seasonal and outdoor products, kids’ indoor and outdoor furniture, and related products.

The Costumes segment, under its Disguise branding, designs, develops, markets and sells a wide range of every-day and special occasion dress-up costumes and related accessories in support of Halloween, Carnival, Children’s Day, Book Day/Week, and every-day/any-day costume play.

The Company’s Chief Executive Officer and Chief Financial Officer have been identified jointly as the Chief Operating Decision Maker (“CODM”). The CODM manages and allocates resources on a segment basis. The determination of the two segments is consistent with the financial information regularly reviewed by the CODM for purposes of evaluating performance. Results are regularly reviewed in comparison with current budget, prior forecast, prior year and recent years’ performance in that quarter.