Spin Master (TOY) Q4 2024 earnings summary

Executive summary

• 2024 revenue reached $2.3 billion, up 18.8% year-over-year, driven by the Melissa & Doug acquisition and strong toy sales, with $375 million contributed by Melissa & Doug.

• Q4 2024 revenue was $649.1 million, up 29.1%, including $136 million from Melissa & Doug.

• Adjusted EBITDA for 2024 was $463.6 million (20.5% margin), up $44.8 million year-over-year.

• Net income for 2024 was $81.9 million, with adjusted net income at $217.2 million.

• Integration of Melissa & Doug delivered $10.9 million in net cost synergies, with a run-rate of $14 million toward a $25–$30 million target by 2026.

Financial highlights

• Free cash flow for 2024 was $215.5 million, up from $122.9 million in 2023.

• Q4 adjusted EBITDA was $113.9 million (17.5% margin), including $40.9 million from Melissa & Doug.

• Gross margin for 2024 (adjusted) was 55.6%, up 110 bps year-over-year; reported gross margin was 52.1%.

• Returned $82 million to shareholders via buybacks and dividends; repurchased 2.37 million shares for $54.5 million and paid $27.5 million in dividends.

• Available liquidity at year-end was $583.3 million, including $233.5 million in cash.

Outlook and guidance

• 2025 consolidated revenue expected to grow 4%–6%, with toy gross product sales projected to rise 4%–5%.

• Adjusted EBITDA margin guidance for 2025 is 20%–21%.

• CapEx to increase to 8%–9% of revenue in 2025, driven by entertainment and digital games content investment.

• Entertainment revenue expected to decline mid-single digits in 2025, with growth resuming in 2026.

• Digital games revenue expected to grow, driven by Toca Boca and Piknik.