There is no sugar coating. Funko has roughly put the first quarter into perspective.
Pop from Washington-based manufacturer Everett! Under the Funko, Lounge Fly and Mondo brands, vinyl figures and a wide range of toys, collectibles and lifestyle products attracted the highest attention in 2025. In January, Funko’s shares reached a 52-week high of $14.65. This was bolstered by strong shows at international trade shows, including Spielwarenmasse in Nuremberg and Toy Fair New York.
Momentum was being built. The turnaround came into play with improved gross profit and margins and reduced debt in 2024. Like many in the industry, Funko entered 2025 with a careful optimism that hopes for growth, but issued conservative guidance formed at a 20% tariff in line with the then signal from the White House.
What no one came was a sudden surge in tariffs to 46% of US imports from Vietnam, 145% of US imports from China, combined with inflation and unstable consumer trust. Vietnam’s mutual tariffs returned to 10% baseline amid a 90-day suspension that expired on July 31, but the damage was done.
Net sales fell 11% in the first quarter, with adjusted EBITDA falling to red. Wall Street noticed. Talks of potential loan agreement defaults have emerged, prompting an SEC filing that raised horrifying questions about whether Funko could maintain concerns for the next 12 months. The company’s shares sank at less than $4 per share. This is the new 52-week low. With the first quarter revenue release, Funko retracted guidance for the year, citing tariff volatility and business impact.
Funko is now doubled. The ToyAssociation is pushing for a “zero of zero” tariff policy, focusing on mitigation strategies and leaning towards what is working.
To get deeper than the numbers, Toy Book We sat down with Funko CEO Cynthia Williams and CFO Yves Le Pendeven to talk about resilience, global growth and the path ahead.
Toy Book: Tariffs are the topic of the year, and China is at the top of the list. In your revenue call, you said that about a third of US Funko products are currently sourced from China and that your goal is to get it under 5% by the end of the year. How does it work?
Cynthia Williams: Pop today! The numbers are made in China and Vietnam, where there are groups of vendors. We are also excited to have a highly automated production in Indonesia and take advantage of our long-term relationship with the factory operators to do more.
Our lounge fly products are primarily made in Cambodia, with some in China, but when it comes to production in China, we are in a similar situation as much in the toy industry. pop! My components are made in China for manufacturing skillsets that are not available outside of China. To some extent pop! The numbers that were not clear helped us.
TB: There was a term called in the revenue call that tends to raise many red flags in the industry: “concern.” We’ve seen a lot of companies hit snuggles and come along well. How about these negotiations?
Yves Le Pendeven: We have received contract relief twice in the past, but it is from the same banking group. In the short term, the product is not running. In the long run, things will recover in the quarter and the fourth quarter. This is very similar to what happened during the Covid-19 pandemic.
The problem here comes from external factors, and Funko did nothing wrong. The bank doesn’t want to own this company, so I’m very optimistic that it will be like Covid and we agree with things and move on.
TB: Of all this, Funko had another layoff.
CW: It was really tough to have to make cuts at this point. It was a difficult week. We focused on lasers about what our fans care about and cut SKUs that don’t resonate with them. The majority of the affected positions were related to these projects.
TB: At the same time, there was a debate about raising value propositions and creating pop! Numbers with rising sculpture and packaging. How will Funko do more with a small team?
CW: There are very hardworking teams that can’t take on any more work. Removes something like a repetitive stance [repaints]our fans revealed they don’t like them. We are burning with anime. Looking at some of the recent releases, you can see new sculptures fans love.
With packaging, core collectors wanted real rarity. We’re just the first limited edition legendary drop – Pop! Shinazugawa, the witch from the Demon Slayer. Limited to 1,200 units and sold out in 30 minutes.
TB: Grail, Legendary, Royalty, and Elite – the new limited edition tier is a direct play for consumers.
CW: Retailers do limited runs of 9,000 at the high end. Some of the bigger specialty shops, such as Hot Topics and Box Lunch, and popular partners like Target, film over 3,500 runs.
TB: What was Funko’s first move when Vietnam’s tariffs returned to 10%?
CW: We worked closely with all our partners to quickly get things on the water and plan appropriately.
TB: On the eve of the License Expo, this environment probably poses challenges for that side of the business, with a renegotiated transaction.
CW: Navigating the license created a new question. Many of them come from licensors and ask, “Do you have any products?” We are fortunate that products coming out of Vietnam help to keep retailers stocked and can do that soon. If someone else’s approved product doesn’t accomplish that, it may be possible to fill the gap.
TB: It’s the silver lining that most manufacturers now have. Despite all the challenges, Funko has seen some victories so far this year, so let’s talk about what’s working, including sports and music.
CW: Yes! We planned and prepared [Washington Capitals Captain] Alexander Ovechkin broke Weigletzky’s record with his 895th career goal. Over 15,000 units were sold across all channels.
We want to connect with our fans at moments that are culturally relevant. I did it again with Shabouzei’s appearance at Grammy Awards Sabrina Carpenter and Coachella.
Games are another area of growth. Not surprising, it’s growing. Dungeons & Dragons, Astrobot – we love those moments. And I’m extremely excited about our new collaboration with the WNBA.
TB: You’ve been working towards a “more global fanko” – how hot is the international market today??
CW: International sales in the G5 market are a very healthy business as they outweigh the rest of the toy industry. We have a share in Europe, UAW and China. And the Philippines is Asia’s most powerful market. Our new license store will open there next month.
Despite the headwinds, Williams continues to be energised by his team’s focus and commitment to fanco fandom. Business tightening and tariffs have eased temporarily, leading to 30% (10% baseline + 20% fentanyl tax) from China to the US from a staggering 145%, starting from 145% earlier this month.
The road ahead passes through several major milestones. Funko’s Fan Days will light up Hollywood next month with three days of unforgettable experiences and exclusive drops, returning to Comic-Con International: San Diego (SDCC) in July. But first, the team is turning this week to Las Vegas, ready to make a big move at the License Expo. It seals out the transactions that form the next generation of pop culture products.
