Q3 Supplemental Information NOVEMBER 2025 Funko, LLC © 2025 Cautionary Notes This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements contained in this presentation that do not relate to matters of historical fact should be considered forward-looking statements, including statements regarding our future results of operations and financial position, industry dynamics, business strategy and plans and our objectives for fut ...

Financial Performance - Net sales for Q3 2025 were $250.9 million, a decrease of 14.3% from $292.8 million in Q3 2024[5] - Gross profit was $100.8 million, resulting in a gross margin of 40.2%, compared to a gross margin of 40.9% in the previous year[6] - Net income for Q3 2025 was $0.9 million, or $0.02 per diluted share, down from $4.6 million, or $0.08 per diluted share in Q3 2024[6] - Adjusted EBITDA for Q3 2025 was $24.4 million, compared to $31.0 million in Q3 2024[6] - Funko, Inc. reported a net loss of $68,115,000 for the nine months ended September 30, 2025, compared to a net loss of $13,650,000 for the same period in 2024[22] - Adjusted EBITDA for the nine months ended September 30, 2025, was $3,238,000, a decrease from $68,476,000 for the same period in 2024[23] - The company reported an adjusted net loss margin of 6.5% for the nine months ended September 30, 2025, compared to 0.6% for the same period in 2024[23] Debt and Liabilities - Total debt increased to $241.0 million as of September 30, 2025, up from $182.8 million at the end of 2024[11] - The company's total liabilities rose significantly to $641,658,000 as of September 30, 2025, compared to $470,097,000 as of December 31, 2024, marking an increase of 36.5%[20] - Funko, Inc. experienced a significant increase in the line of credit, which rose to $135,000,000 as of September 30, 2025, compared to $60,000,000 as of December 31, 2024[20] Assets and Equity - Total current assets increased to $299,943,000 as of September 30, 2025, up from $287,059,000 as of December 31, 2024, representing a growth of 4.5%[20] - Cash and cash equivalents at the end of the period were $39,177,000, an increase from $34,655,000 at the beginning of the period, reflecting a net change of 11.5%[21] - The company’s total stockholders' equity attributable to Funko, Inc. decreased to $182,684,000 as of September 30, 2025, down from $233,019,000 as of December 31, 2024, a decline of 21.6%[20] Inventory and Expenses - Inventories increased to $99.8 million at September 30, 2025, from $92.6 million at December 31, 2024[11] - SG&A expenses were $79.8 million, including a non-recurring charge of $1.0 million, compared to $92.7 million with a non-recurring charge of $0.4 million in the prior year[6] - Funko, Inc. recorded depreciation and amortization expenses of $44,319,000 for the nine months ended September 30, 2025, slightly down from $46,409,000 in 2024[22] - The company’s inventories increased to $99,805,000 as of September 30, 2025, up from $92,580,000 as of December 31, 2024, indicating an increase of 7.3%[20] Strategic Initiatives - The Bitty Pop! line contributed significantly to sales, being featured on Walmart's 2025 Top Toy List[3] - The company expects modest net sales growth from Q3 2025 and a gross margin of approximately 40% for Q4 2025[11] - The company plans to continue expanding into new fandoms and enhancing retail experiences as part of its Make Culture POP! strategy[4]

Core Viewpoint - A prudent approach is recommended for Funko (NASDAQ: FNKO) shares due to limited visibility in the interim, lack of strategic communication, and increased margin pressure dynamics [1] Company Analysis - Funko has successfully established a well-known brand, but faces persistent challenges that may impact its future performance [1] Investment Strategy - The analysts behind the profile focus on uncovering overlooked investment ideas through a second-level thinking approach, aiming for asymmetric results by understanding the company deeply [1]

Group 1 - Crude Value Insights provides an investment service and community focused on the oil and natural gas sector [1] - The service emphasizes cash flow and identifies companies that generate it, highlighting their value and growth prospects [1] - Subscribers have access to a model account with over 50 stocks, detailed cash flow analyses of exploration and production firms, and live discussions about the sector [1] Group 2 - A two-week free trial is available for new subscribers, promoting engagement with the oil and gas market [2]

Group 1 - The article emphasizes the importance of diversifying investment portfolios by focusing on reasonably priced small- and mid-cap stocks, moving away from large-cap growth stocks that have dominated the market [1] - Gary Alexander, with extensive experience in technology and startups, provides insights into current industry trends and themes shaping the market [1] Group 2 - The article does not provide any specific financial data or performance metrics related to the companies mentioned [2][3]

Core Viewpoint - Pomerantz LLP is investigating claims of potential securities fraud or unlawful business practices involving Funko, Inc. and its officers or directors [1] Group 1: Company Developments - Funko announced the departure of its CEO, Cynthia Williams, effective July 5, 2025, which led to a significant stock price drop of $0.51 per share, or 10.49%, closing at $4.35 per share on July 7, 2025 [3] Group 2: Legal Investigation - The investigation by Pomerantz LLP is focused on whether Funko and its executives have engaged in any fraudulent activities that could affect investors [1] - Pomerantz LLP is recognized for its expertise in corporate, securities, and antitrust class litigation, having a long history of fighting for victims of securities fraud and corporate misconduct [4]

Core Insights - Funko has appointed Josh Simon as the new CEO, who has a strong background in entertainment and consumer products, previously working at Netflix, Disney, and Nike [1][5] - Simon's experience includes overseeing global merchandise and live experiences at Netflix, where he managed products for major titles and launched the company's first e-commerce platform [2][4] - Funko aims to leverage Simon's expertise to maximize growth opportunities and expand its business in the pop culture sector [5] Company Overview - Funko is a company focused on fandom and pop culture, with a diverse portfolio that includes brands like Funko, Loungefly, and Mondo, covering vinyl figures, collectibles, fashion accessories, and more [1] - The company is looking to build on its existing fan base and enhance its connection with lifestyle brands [5] Leadership Transition - Josh Simon succeeds interim CEO Mike Lunsford and will also join the board of Funko [4] - Funko's chairman, Charles Denson, expressed confidence in Simon's leadership abilities and his potential to drive the company's growth [5]

Core Insights - Funko has experienced a significant decline in its business, moving from a dominant position in collector culture to facing substantial challenges in its latest earnings report [1][2] - The company's second-quarter 2025 report revealed an adjusted net loss of $0.48 per share, which was worse than the expected loss of $0.44, and revenue fell to $193.5 million, a 21.9% year-over-year decline [2][3] - Gross margin decreased sharply from 42% to 32.1%, and adjusted EBITDA was negative at $16.5 million, indicating worsening profitability [2][3] Financial Performance - Core Collectibles sales dropped approximately 16%, Loungefly-branded products fell nearly 23%, and the "Other" category saw a staggering decline of almost 79% [3] - The overall decline in sales suggests issues beyond macroeconomic factors, pointing to brand fatigue and market oversaturation [3] Market Sentiment - The technical outlook for Funko's shares is negative, remaining below the 200-day moving average and in a persistent downtrend [4] - Analysts have not revised earnings upward in the last 90 days, with multiple downward revisions indicating a lack of confidence in the company's future performance [4] - Management's decision to withdraw full-year guidance reflects significant uncertainty, leading the market to view Funko as a stock to avoid [4] Industry Context - Funko operates within the Consumer Products – Discretionary industry, which ranks in the top 39% of the Zacks Industry Rank [5] - Other companies in the industry, such as Betterware de Mexico and Central Garden and Pet, are currently viewed more favorably within the Zacks Rank [5]

Financial Data and Key Metrics Changes - For Q2 2025, total net sales were $193.5 million, a 22% decline compared to the same quarter last year, primarily due to disruptions from U.S. tariff policies [8][9] - Gross profit was $62 million, resulting in a gross margin of 32.1%, down from 42% in Q2 of the previous year [9][10] - Adjusted net loss was $26.7 million or $0.48 per share, compared to adjusted net income of $5.6 million or $0.10 per diluted share in the prior year [10] - Negative adjusted EBITDA was $16.5 million, compared to adjusted EBITDA of $27.9 million in the same quarter last year [10][11] Business Line Data and Key Metrics Changes - Direct-to-consumer sales comprised 21% of gross sales, down from 23% in the same quarter last year [9] - The company experienced a significant decline in minimum guaranteed royalties due to sales disruptions and increased tariffs [10] Market Data and Key Metrics Changes - In the U.S. market, POS sales reported by larger wholesale customers were down just 5%, indicating resilience compared to the decline in year-over-year sell-in [13] - International business, representing over one-third of sales, saw 18% POS sales growth in the first half of the year and 28% growth in Q2 [13] Company Strategy and Development Direction - The company is focused on accelerating organic growth initiatives and exploring financial and strategic options, including a search for a new CEO [6][18] - A tariff mitigation plan has been implemented, including price increases in the U.S. market and shifting production out of China [14][15] - The company aims to fully offset the financial impact of incremental tariffs within the current year, with estimated costs reduced from $45 million to $40 million [14] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by U.S. trade policies but expressed confidence in a robust plan for improved financial performance in the second half of the year [7][12] - The company expects second half net sales to be down in the high single digits compared to 2024, with adjusted EBITDA margins projected in the mid to high single digits range [12][33] Other Important Information - The company executed an amendment to its credit facilities, providing waivers for financial covenants, which offers additional flexibility during this period [15] - The company is focused on refinancing its debt due in September 2026 and has engaged advisors for this process [16] Q&A Session Summary Question: Adjusted EBITDA and SG&A items - Management noted that almost five points of margin decline year-over-year was attributed to the tariffs announcement, impacting adjusted EBITDA [22][23] Question: Resumption of orders - Management confirmed that orders paused in Q2 have resumed, with good visibility on Q3 order patterns [25][26] Question: Customer reaction to price increases - Early customer reactions to price increases have shown no negative impact on unit volumes, with continued strong sell-through [30][31] Question: Guidance on adjusted EBITDA margins - Adjusted EBITDA margins of mid to high single digits are expected for the second half of the year, with improvement from Q3 to Q4 [33] Question: Cash flow and liquidity - Management acknowledged liquidity challenges but emphasized the flexibility provided by the recent credit agreement amendments and the ATM filing [35][36]

Financial Performance - Q2 2025毛利率为32.1%[7] - 渠道和产品销售组合变化对毛利率产生-0.6%的影响[7] - 产品利润率提高使毛利率增加3.5%[7] - 版权最低保证缺口导致毛利率下降-2.4%[7] - 关税导致毛利率下降-4.6%[7] - 库存准备金调整导致毛利率下降-5.8%[7] Sales & Top Properties - 前十大IP占比净销售额的33%[5] - 前十大IP占比未知[4] Global Expansion & Brand Engagement - Funko于2025年7月在东南亚开设了第一家授权商店，位于菲律宾[9] - Funko在2025年圣地亚哥动漫展（SDCC）上占据了最大的实体展位，通过四个沉浸式区域与各个年龄段和圈子的收藏家互动[13] - SDCC 2025上，每日都有售罄情况发生，表明产品受欢迎和品牌亲和力[13]