The following is a summary of the Funko, Inc. (FNKO) Q2 2024 Earnings Call Transcript:
Financial Performance:
Funko, Inc. reported a net sales of $248 million in Q2 2024, marking a 3% increase year-over-year and representing the first quarter of net sales growth since Q3 2022.
Gross margin for the quarter stood at 42%, and adjusted EBITDA was significantly higher than anticipated at $28 million.
Adjusted net income was $5.6 million or $0.10 per diluted share, which also exceeded guidance.
Business Progress:
Funko has introduced 'Bittyverse', an extension of the Bitty Pop! product line, which features mix-and-match components like new IP-driven rides, towns, and displays.
Launch of Funko Fusion!, a new game in collaboration with 10:10 Games and NBC Universal, expected to feature 20 franchises and enhance direct customer engagement.
Cynthia Williams, as the new CEO, emphasized a fan-centric growth approach, focusing on delighting core fans, attracting new ones, optimizing sales channels, and improving overall fan experience.
Opportunities:
Expansion in the direct-to-consumer segment which has grown to represent 25% of the business, doubling from the previous year and offering a higher gross margin.
Introduction of new product lines like Pop! Yourself which targets untapped fandoms and has attracted over 80% new customers to Funko.
Risks:
Net sales for upcoming quarters anticipate uncertainty due to a weaker content slate and economic factors affecting consumer spending and freight costs, potentially impacting holiday season performance.
More details: Funko IR
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