Funko, Inc.

Funko is a leveraged, loss-making licensed-toy maker with declining sales and weak returns.

Strengths

• Large, diversified license portfolio (250+ providers, ~800 properties) reduces single-property dependence
• Net loss narrowed in growth terms (net income growth 92.7th pct off a low base)

Risks

• FY2025 net loss of $68M with negative ROE (-36%, 23rd pct) and negative FCF (-$38M, 17th pct)
• Revenue fell 13.5% (11th pct) amid tariff/retail headwinds; elevated leverage (D/E 1.09, 80th pct)

Notable findings

• Exec changeRecent 8-K item 5.02 8-K ↗
• Net lossNet loss (net margin -7.4%)
• Cash burnNegative free cash flow (-38.1M)
• Customer concentration~40% of revenue from one customer/distributor — We sell our products in numerous countries across North America, Europe, Latin America, Asia and Africa, with approximately 40% of our net sales generated outside of the United States
• Chronic dilutionShare count +10%/yr over 4y (dilution, book value/share -61%)
• Revenue declineRevenue -26.4% YoY