Spin Master (TOY) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue rose 13.6% year-over-year to $359.3M, driven by strong Toys and Digital Games performance, while Entertainment declined.

• Adjusted EBITDA increased to $21.6M, with margin at 6.0%, reflecting strong execution and improved profitability.

• Net loss was $24.5M, compared to net income of $5.8M in Q1 2024; adjusted net loss was $12.0M.

• Operating loss narrowed to $22.1M from $61.8M, reflecting improved Toys segment results and lower acquisition-related costs.

• 2025 outlook withdrawn due to uncertainty from U.S. tariff changes impacting the Toys segment.

Financial highlights

• Toy revenue grew 20.9% to $273.7M; Toy Gross Product Sales up 18.8% to $313.7M.

• Entertainment revenue declined 13.7% to $37.8M; adjusted operating margin improved to 69.0%.

• Digital Games revenue up 3.9% to $47.8M, with 488,000 Piknik subscribers (+13% year-over-year); adjusted operating margin at 19.9%.

• Adjusted gross profit: $195M (+$17.8M), adjusted gross margin at 54.2%.

• Adjusted SG&A: $186.1M, with SG&A as a percentage of revenue down 310 bps to 51.8%.

Outlook and guidance

• 2025 financial outlook withdrawn due to ongoing global tariff policy changes, making reliable projections difficult.

• Targeting over $100M in cash flow savings in 2025 through cost takeouts and CapEx reductions.

• By Q4 2025, aim for 70% of U.S.-bound toys to be sourced outside China; 75-80% by end of 2026.

• Management expects to move more U.S. production out of China in H2 2025 and beyond to mitigate tariff impacts.

• Pricing strategies and cost management are being implemented to offset tariff and supply chain pressures.