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Funko, responsible for the broad assortment of simplistic pop culture Funko POP! figurines which became a hot collectible over the past decade or more, recently dropped a sobering Q2 2025 financial report.
Some key metrics outlined in the report include:
- Net sales fell to $193.5 million versus $247.7 million, a 22% drop YoY.
- Gross profit registered at $62 million, equal to a gross margin of 32.1%, set against YoY figures of $104 million, equal to a gross margin of 42%.
- Net loss was posted at $41 million, or $0.74 per share, to be compared against year-prior net income of $5.4 million, or $0.10 per share.
- Negative adjusted EBITDA was pegged at $16.5 million, against EBITDA of $27.9 million YoY.
In remarks attached to the report, Mike Lunsford — interim CEO for Funko — indicated that tariff uncertainty had hampered sales, and that ongoing headwinds were necessarily leading to cost-cutting measures.
“As expected, our 2025 second quarter performance was impacted by a dynamic and uncertain tariff environment,” Lunsford said.
“Looking ahead, we expect headwinds to moderate and our business to improve as a result of the actions we've taken to cut costs, diversify product sourcing and adjust prices. The team is focused on stabilizing the business, accelerating execution on growth initiatives and unlocking Funko's long-term potential,” he added.
According to a 2023 KING 5 report, Funko had been exhibiting "a slow decline" even as of that date, far from the heights of its explosive popularity enjoyed just years prior.
Funko Looks To Cut Costs, Focusing on Stabilization and Growth Potential
And as Retail Dive outlined, Funko had been working to streamline its operations during the second quarter of the year, trimming its workforce by about 20% while concurrently raising prices and shifting production from China to other nations less harried by tariffs.
The brand has also filed paperwork with the SEC concerning an at-the-market equity offering, wherein Funko would be permitted to sell common stock shares worth up to $40 million. Finally, Funko has hired financial services company Moelis & Company to assist with the refinancing of its debt, per CFO Yves LePendeven.
Funko loyalists on Reddit offered casual analysis of the situation, with the top-rated comment suggesting that demand wasn't the problem — overhead was.
"Demand is there. People want Funkos. They don’t do $194 million in sales if people don’t like them," wrote user TechnologyOk3922.
"Their expenses are high. Way too high. And that’s what’s killing them. They did $194m in sales but spent $235 million. They need to figure out how to lower cost. Tariffs is a big one," they concluded.
Other commenters issued criticism of scalpers hewing close to Funko, hurting broader distribution among loyal collectors, as well as complaints related to the restricted nature of NFT distribution.