Funko Reports 7.4% Revenue Growth and Net Income Turnaround in Q2 2026

Funko, Inc. reported a significant turnaround in its financial performance for the second quarter of 2026, with net sales reaching $207.7 million, a 7.4% increase from $193.5 million in the same period last year. The company also achieved a net income of $15.4 million, compared to a net loss of $41.0 million in the prior year. This improvement was attributed to increased sales of core Pop! products and the impact of price increases implemented in the third quarter of 2025. For the first half of 2026, Funko's net sales totaled $408.6 million, up 6.4% from $384.2 million in the first half of 2025, although the company still reported a net loss of $2.7 million for the period.

The company's cost of sales decreased significantly, dropping 31.5% to $90.1 million for the second quarter, primarily due to a favorable product mix and the recognition of a receivable for previously paid tariffs. Gross margin for the quarter improved to 56.6%, up from 32.1% a year earlier, reflecting the benefits of cost savings and price adjustments. Selling, general, and administrative expenses also saw a slight reduction, totaling $79.7 million, down 3.1% from the previous year, indicating effective cost management.

In terms of operational developments, Funko has been focusing on geographic expansion, with notable sales growth in Europe, which increased by 19.4% to $69.0 million in the second quarter. The company continues to source and assemble inventory primarily from Vietnam, Cambodia, and China, while navigating challenges related to tariffs and supply chain disruptions. As of June 30, 2026, Funko had cash and cash equivalents of $40.7 million, down from $42.1 million at the end of 2025, and total debt of $198.3 million.

Strategically, Funko amended its Credit Agreement in February 2026, extending the maturity date of its loans to December 31, 2027, and waiving certain financial covenants for specific fiscal quarters. This amendment is expected to enhance the company's liquidity and operational flexibility. Funko's management is optimistic about future performance, citing ongoing cost-saving initiatives and the potential for further product line expansions. However, the company remains cautious about external market conditions, including the impact of tariffs and economic uncertainties, which could affect future sales and profitability.

Looking ahead, Funko plans to continue leveraging its strong brand portfolio and expanding its international presence while managing costs effectively. The company is also exploring strategic alternatives to enhance shareholder value, although no specific plans have been finalized. The management's outlook remains cautiously optimistic, with expectations for improved financial performance in the coming quarters, contingent on favorable market conditions and successful execution of its strategic initiatives.