Funko, Inc. (NASDAQ: FNKO)

Funko is a leading pop culture consumer products company. Its business is built on the belief that everyone is a fan of something. The company creates whimsical, fun and unique products that enable fans to express who they are, allowing them to find their community and generate a sense of belonging and joy. Funko achieves this through products people display, wear or carry of their favorite "something"—whether it is a movie, TV show, video game, musician or sports team. The company infuses its distinct designs and aesthetic sensibility into an extensive portfolio of licensed content over a wide variety of product categories, including figures, bags, wallets, apparel, plush, accessories, homewares, vinyl records and limited-edition posters, which it makes available at highly accessible price points under its Funko, Loungefly and Mondo brands. Funko is building out its sports, music, video game and content creator fandoms and diversifying its offering with personalized products, such as Pop! Yourself, micro collectibles and blind boxes containing mystery figures.

Funko generates revenue through the design, manufacture and marketing of licensed pop culture consumer products featuring characters from movies, TV shows, video games, music and sports. Its products combine proprietary brands and distinct designs with properties licensed from content providers. The company’s current products are principally figures, fashion accessories, apparel, plush products, accessories, homewares, vinyl records and limited-edition posters. Funko sells its products through a diverse network of retail customers across multiple retail channels, including specialty retailers, mass-market retailers, and e-commerce sites, as well as directly to consumers primarily through its owned websites and three flagship retail stores. Key retail partners in the United States include Amazon, Hot Topic, Walmart, Target and GameStop. Internationally, key retail customers include Amazon, Smyths Toys, and Carrefour. Direct-to-consumer sales accounted for approximately 24% of sales for the year ended December 31, 2025.

The company operates through the following segments:

• Funko: This segment encompasses the company's core business of designing, manufacturing and marketing licensed pop culture consumer products. Activities include creating figures, bags, wallets, apparel, plush, accessories, homewares, vinyl records and limited-edition posters under brands such as Pop!, Loungefly and Mondo. The segment includes the Core Collectible line (which includes Pop! Vinyl, Bitty Pop! and Pop! Yourself), Loungefly (softlines including bags, wallets, backpacks and apparel) and Other (which includes emerging brands such as Mondo). Pop! Vinyl represented 80% of sales for the year ended December 31, 2025, while Loungefly branded products represented 17% and Other brands represented 3% of sales for the same period.

Funko holds a leading position in the pop culture consumer products industry, competing with toy and fashion accessory companies across its product categories. The company's competitive advantage is based primarily on the creativity and quality of its product designs, its price points, its broad consumer appeal, its extensive license portfolio and its ability to bring new products to market quickly. Funko believes it has one of the largest portfolios of licensed content in the pop culture industry, with strong relationships with many content providers. In 2025, the company had license agreements with over 250 content providers covering approximately 800 active licensed properties. Its top ten licensors collectively accounted for approximately 63% of sales for the year ended December 31, 2025, while its top ten wholesale customers represented approximately 31% of sales for the same period.

Funko sells its products to a diverse network of customers throughout the world, including specialty retailers, mass-market retailers and e-commerce sites. Key retail partners in the United States include Amazon, Hot Topic, Walmart, Target and GameStop. Internationally, the company sells directly to similar retailers primarily in Europe through its subsidiary Funko UK, Ltd., with key international retail customers including Amazon, Smyths Toys, and Carrefour. Funko also sells directly to consumers through its e-commerce business and three flagship retail stores located in the United States. The company believes it has a diverse customer base, with no single customer accounting for over 10% of sales during the year ended December 31, 2025.