Spin Master (TOY) Q4 2025 earnings summary

Executive summary

• 2025 was challenging for U.S. toy sales due to tariffs and economic uncertainty, with FY 2025 revenue at $2,112.9M, down 6.6% year-over-year, and a net loss of $148.5M; strategic adjustments set up a return to profitable growth in 2026.

• Digital games saw over 20% growth in revenues and adjusted operating income, driven by investments in Toca Boca World and Piknik, with FY 2025 revenue at $199.0M, up 21%.

• Entertainment focused on expanding PAW Patrol, with new content and a third movie planned for 2026; FY 2025 revenue was $145.2M, down 8.4%.

• Supply chain diversification and IT investments improved operational efficiency.

• Over $80 million was returned to shareholders via dividends and share buybacks in 2025.

Financial highlights

• Toy gross product sales declined 8% in 2025, mainly due to a 12% reduction in retailer inventory levels; FY 2025 gross product sales were $2,054.8M, down 7.9%.

• Operating cash flow reached $308 million despite U.S. headwinds; inventory reduced by 20%.

• CapEx was $185 million, including $24 million for IT upgrades and $33 million for a new L.A. office; total capital expenditures in 2025 were $184.2M.

• Free cash flow for FY 2025 was $123.6M, down from $215.5M in FY 2024.

• Net debt (excluding leases) held flat year-over-year; year-end cash and cash equivalents stood at $104.6 million.

Outlook and guidance

• 2026 guidance: stable to low single-digit revenue growth, mid to high single-digit adjusted EBITDA growth.

• Entertainment expected to grow with the PAW Patrol movie; digital games to see modest growth after a strong 2025.

• Toy segment to benefit from new movie, M&D improvements, innovation, and new licenses.

• Q1 2026 expected to see a significant year-over-year decline in toy revenues, with easier comps in later quarters.

• CapEx for 2026 anticipated at $150 million, with $25 million for enterprise software upgrades.