Spin Master (TOY) Q2 2025 earnings summary

Executive summary

• Q2 2025 revenue was $400.7M, down 2.7% year-over-year, mainly due to lower Toy revenue and shifting retailer purchasing patterns, partially offset by double-digit growth in Digital Games and strong licensed business performance.

• Net loss was $46.5M ($0.46/share) and operating loss was $52.4M, both widening year-over-year due to lower revenue and strategic investments.

• POS grew 7.4% in the quarter, outpacing the industry, with leadership in infant/toddler and preschool categories.

• Achieved $5.6M in Q2 cost synergies from Melissa & Doug integration, reaching annualized run-rate targets ahead of plan.

• Repurchased and cancelled 636,632 shares for $10.5M; declared a quarterly dividend of C$0.12 per share.

Financial highlights

• Q2 revenue was $400.7M, with year-to-date revenue at $760.0M; adjusted EBITDA for Q2 was $28.7M (7.2% margin), down from $54M last year.

• Gross profit for Q2 was $224M, with a gross margin of 55.1%; adjusted gross profit was $210M, down $13.8M year-over-year.

• Adjusted SG&A rose by $9.1M to $196.6M (49.1% of revenue), while total SG&A expenses increased 10.3% to $221.0M.

• Operating cash flow was $26.1M; free cash flow was negative $15.2M due to higher investment in software and content development.

• Diluted EPS was ($0.46) for Q2; adjusted diluted EPS was ($0.07).

Outlook and guidance

• H2 expected to benefit from a strong product pipeline, with over 50% of toy SKUs below $20 for the holiday season.

• Double-digit digital games growth anticipated to continue in H2.

• Retailer destocking projected as a $70–$90M headwind, but inventory is well positioned for replenishment.

• No formal guidance reinstated; management remains focused on innovation, scaling global brands, and mitigating macroeconomic headwinds.