Funko announces major concerns about company’s future

The beloved collectibles company behind those ubiquitous Pop! vinyl figures is facing a financial crisis that has executives questioning whether the brand can survive another year. Funko, which has become synonymous with pop culture merchandise over the past decade, has revealed mounting debts and catastrophic losses that paint a troubling picture for the company’s future.

Financial losses paint a dire picture

The numbers tell a stark story of decline. During the second quarter of 2025, Funko hemorrhaged a staggering $41 million. While the third quarter showed improvement with losses just under $1 million, this still represents a devastating reversal from the same period in 2024 when the company enjoyed a healthy $8.9 million profit.

The company’s overall revenue has also taken a significant hit, dropping from $292.8 million to $250.9 million year-over-year. The vast majority of these losses stemmed from the United States market, where Funko has traditionally found its strongest customer base.

Company admits survival concerns in official filing

In a sobering filing with the Securities and Exchange Commission, Funko acknowledged what many industry watchers have feared. The company stated there is substantial doubt about its ability to continue as a going concern for the next twelve months. This admission came after Funko had already renegotiated terms on several outstanding loans following earlier devastating losses, suggesting even those revised arrangements may not be enough to steady the ship.

Retail challenges and tariff troubles

Funko executives point to multiple factors contributing to the company’s struggles. The retail environment has become increasingly challenging, with major retailers slowing their restocking processes, maintaining lower inventory levels, and in some cases, canceling orders altogether. The company has also cited tariffs as a significant burden, noting these trade policies reduce net sales, gross margin and net income while potentially impacting consumer discretionary spending in future periods.

The company’s business model may also be part of the problem. Funko has licensed an extensive range of intellectual properties spanning Marvel, DC Comics, The Muppets, Stranger Things and countless other franchises. While this wide-ranging approach once seemed like a strength, consumers may now be overwhelmed by the constant flood of new releases or simply running out of physical space to display their collections.

New CEO remains optimistic despite challenges

Josh Simon, who recently stepped into the CEO role just 60 days ago, is striking a notably positive tone despite the circumstances. He emphasizes that the company delivered a solid third quarter performance with net sales meeting internal expectations and gross margin exceeding projections.

Simon highlighted the success of the Bitty Pop! line, which earned a spot on Walmart’s 2025 Top Toy List as a key contributor to recent performance. He also touted the company’s Make Culture POP! strategy, which focuses on rapid product launches tied to trending pop culture moments.

The CEO specifically pointed to KPop Demon Hunters, a Netflix series, as an example of this approach in action. Funko plans to be one of the only licensees with products on shelves this holiday season for the streaming phenomenon, demonstrating the company’s ability to move quickly when cultural moments emerge.

Sale of company under consideration

Despite the optimistic messaging from leadership, Funko has admitted it is exploring various strategic options to address its financial challenges. Among the possibilities being considered is the potential sale of the company, though no specific details or timeline have been disclosed.

As the holiday shopping season approaches, collectors and investors alike will be watching closely to see whether Funko can turn its fortunes around or if the company that transformed pop culture collecting will become another cautionary tale of overexpansion in a changing retail landscape.

Source: MovieWeb