What Happened?
Shares of pop culture collectibles manufacturer Funko (NASDAQ: FNKO) jumped 8.8% in the afternoon session after a sharp profitability turnaround and a much higher full-year adjusted EBITDA outlook. Funko swung to adjusted EPS of $0.26 from a year-ago loss—versus Street expectations for another loss—and raised full-year adjusted EBITDA guidance to $100–$110 million from $70–$80 million. Revenue grew 7.4% to $207.7 million, with Core Collectibles up about 9%; the bigger story was margin repair, as operating margin reached 10.7% versus negative 18% a year earlier and gross margin hit record levels. Management credited better product mix, SG&A discipline, and Loungefly SKU rationalization, alongside a sizable tariff-related benefit recognized in the quarter—so part of the EBITDA surge is non-recurring, and the company was explicit that the raised $100–$110 million EBITDA guide includes that roughly $25 million item. Even after stripping some of that noise, the midpoint still sits well above prior Street EBITDA assumptions near the high-$70 millions. Toy/collectibles analysts have been waiting for proof Funko can grow the core while fixing margins and cutting debt; a return to profit plus a formal EBITDA raise is what converts that skepticism into estimate revisions.
The shares closed the day at $5.88, up 11.4% from the previous close.
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What Is The Market Telling Us
Funko’s shares are extremely volatile and have had 51 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 12 months ago when the stock dropped 31.4% on the news that the company reported second-quarter 2025 results that saw key profitability metrics fall short of Wall Street's expectations. While the company's revenue of $193.5 million came in ahead of analysts' forecasts, it still represented a steep 21.9% decline compared to the same quarter last year. The main cause for investor concern was on the bottom line, where Funko's adjusted loss per share of $0.48 missed consensus estimates. The company also reported a significant adjusted EBITDA loss of $16.53 million and burned through $22.18 million in free cash flow. This performance was driven by a sharp deterioration in profitability, with the operating margin plunging to negative 18% from a positive 4.3% a year ago, highlighting the company's ongoing operational challenges.
Funko is up 71.9% since the beginning of the year, and at $5.78 per share, it is trading close to its 52-week high of $6.35 from July 2026. Despite the year-to-date gain, investors who bought $1,000 worth of Funko’s shares 5 years ago would now be looking at only $310.15.
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