Funko proves less is more as it navigates debt with latest pop philosophy

Published 12:34 pm Monday, August 10, 2026

EVERETT — In stark contrast to last year’s financial woes, Funko is still on the upswing after the pop culture collectable manufacturer reported record-setting revenue again Thursday.

After reporting its highest gross margin, 44.2%, in company history during May’s earnings presentation, Funko announced that percentage climbed to 56.6% in the second quarter. This spike is partially due to a $25.4 million benefit from expected tariff refunds and the release of accrued tariffs.

Gross margin is the amount of money remaining after production costs.

While debt remains a problem for the company, Thursday’s financial filings were a night-and-day difference for Funko, which stated in November that it had “substantial doubt” it could continue operations for another 12 months.

Funko’s main headquarters is located in downtown Everett, as well as a retail store offering vinyl figurines based on characters from movies, television and comic books. Funko also operates a retail store in California.

Nine months ago, Funko cited economic uncertainty due to rapid changes in the global economy from tariffs as the cause of its problems. For a company that manufactures almost all its products overseas, the result was falling consumer demand for products, supply chain problems and increased distribution costs.

In November, Funko stated it did not have sufficient cash reserves to fully repay its $241 million in loans, which were set to mature in September 2026. In March, Funko’s CEO, Josh Simon, said in a press release that the company had reached an agreement with its lender group that extended the maturity to Dec. 31, 2027.

Since then, Funko has continued chipping away at its debt, including a $15 million reduction in the second quarter. As of June 30, the company owed $201.1 million compared to the $225.3 million it owed at the end of 2025, according to an earnings statement.

Funko representatives did not immediately respond to a request for comment Friday.

In the presentation, Simon partially credited Funko’s success to its “Make Culture Pop!” philosophy. The strategy hinges on sensing cultural demand earlier, building repeatable platforms by extending proven formats and creating new collecting behaviors and commerce through scaling Funko’s productive channels.

“The magic for us is that we’ve really sort of honed that engine of sensing demand, turning it into products and getting into our fans’ hands in a really repeatable way,” Simon said during the presentation.

This quarter saw a 7% increase in net sales compared to the same quarter last year, although sales for Loungefly, Funko’s apparel division, are still dwindling.

In Thursday’s report, Loungefly sales were down by 1.7%, an improvement from last quarter when Funko reported a decrease of 23%.

Meanwhile, sales of Funko’s core collectables, such as the Standard and Bitty Pop! lines, increased by $14.2 million.

When new media takes off in popularity, Funko is typically one of the first licensees on the market, said Marissa Silva, the editor-in-chief of pop culture publication Pop Insider.

Silva cited Funko’s “KPop Demon Hunters” collectibles, based on the popular 2025 animated film about a girl group secretly fighting demons with their music, as a recent instance of Funko being one of the first to bring its products to the shelves.

KPop Demon Hunters alone provided 7% of Funko’s net sales in the first quarter of this year.

Funko is continuing its fast turnaround with vinyl lines for two popular Hockey romance shows airing within the last year, “Off Campus” and “Heated Rivalry,” and recent horror movie hit “Obsession,” Silva said

“They just very quickly jump on it and get the pre-order links up, so fans immediately have something to buy and solidify their fandom,” she said.

For a while, the collectable market was saturated with Funko Pop! vinyls, Silva said.

“Now I think they’re focusing on not necessarily creating every single possible character, but really focusing on the entertainment properties that are really resonating,” she said.

Outside of jumping on pop culture moments, Silva said she’s noticed the company “tapping into millennial dollars” with nostalgic franchises, such as its July’s release of figurines based on the English girl group, the Spice Girls.

“Funko Pops have become such a staple in people’s collections, sort of like a given,” she said. “Especially in the world where blind boxes are really taking over, and there’s a lot of collectibles that are very of the moment, whereas Funko Pops have a staying power to them.”

Despite the growth, Funko predicted this year’s net sales to come in as flat to up 3%, with core collectables sales growing in the second half, according to the report.

“A lot of their growth for this year was attributed to refunds from some of the tariffs that were imposed upon them in 2025,” Silva said. “I think Q3 might look a little bit softer than Q2 did, but overall, I think their strategy is a winning one.”

Jenna Millikan: 425-339-3035; jenna.millikan@heraldnet.com; X: @JennaMillikan