TORONTO, July 31, 2025 /PRNewswire/ – Spin Master Corp. (“Spin Master” or the “Company”) (TSX:TOY) (www.spinmaster.com), a leading global children’s entertainment company, today announced its financial results for the three and six months ended June 30, 2025. The Company’s full Management’s Discussion and Analysis (“MD&A”) for the three and six months ended June 30, 2025 is available under the Company’s profile on SEDAR+ (www.sedarplus.com) and posted on the Company’s web site at www.spinmaster.com. All financial information is presented in United States dollars (“$”, “dollars” and “US$”) and has been rounded to the nearest hundred thousand, except per share amounts and where otherwise indicated.
“Our second quarter results underscore our commitment to building a diversified, resilient portfolio across Toys, Entertainment, and Digital Games,” said Christina Miller, Spin Master’s Chief Executive Officer. “While we experienced revenue pressure due to a shift in retailer ordering patterns driven by global tariffs, strong double-digit growth in our Digital Games segment helped to offset some of that impact in the quarter. Looking ahead, we are positioning Spin Master to navigate broader macroeconomic headwinds by remaining sharply focused on the consumer, accelerating innovation, scaling our global franchise brands, and unlocking new opportunities through our creative centres — laying the foundation for long-term, sustainable growth.”
“We are pleased with our top-line performance, particularly in light of the challenging macroeconomic environment,” said Jonathan Roiter, Spin Master’s Chief Financial Officer. “We maintained and gained market share across the majority of our Toy revenue base, while also continuing to grow Digital Games, driven by our refocused strategy anchoring our efforts in our Toca Boca World and Piknik digital platforms. Profitability was impacted by a lower revenue base and ongoing strategic investments. From a structural cost perspective, we achieved our targeted run-rate cost synergies related to Melissa & Doug, as well as made meaningful progress against our tariff mitigation plan, positioning us well to navigate through the temporary macroeconomic uncertainties.”
Consolidated Financial Highlights for Q2 2025 as compared to the same period in 2024
- Q2 2025 Revenue was $400.7 million, a decrease of 2.7%, primarily driven by a decrease in Toy Revenue, partially offset by an increase in Digital Games Revenue.
- Q2 2025 Operating Loss was $52.4 million compared to $23.0 million.
- Q2 2025 Net Loss was $46.5 million or $(0.46) per share compared to $24.5 million or $(0.24) per share. Adjusted Net Loss1 was $7.4 million or $(0.07) per share compared to Adjusted Net Income of $9.6 million or $0.09 per share (diluted).
- Q2 2025 Adjusted EBITDA1 was $28.7 million, compared to $53.6 million, a decrease of $24.9 million. Adjusted EBITDA Margin1 was 7.2% compared to 13.0%.
- Q2 2025 Total Net Cost Synergies2 of $5.6 million related to the acquisition of Melissa & Doug were realized which represent annualized Run-rate Net Cost Synergies2 of $26.5 million, achieving the target of $25 million to $30 million ahead of plan.
- Q2 2025 Cash provided by operating activities was $26.1 million compared to $25.4 million.
- Q2 2025 Free Cash Flow1 was $(15.2) million compared to $(3.6) million.
- Repurchased and cancelled 636,632 subordinate voting shares for $10.5 million (C$14.8 million) in Q2 2025 through the Company’s Normal Course Issuer Bid (the “NCIB”) program. Subsequent to June 30, 2025, the Company repurchased and cancelled 110,188 subordinate voting shares for $2.0 million.
- Subsequent to June 30, 2025, the Company declared a quarterly dividend of C$0.12 per outstanding subordinate voting share and multiple voting share, payable on October 10, 2025.
Consolidated Financial Results as compared to the same period in 2024
|
Six Months Ended Jun 30, |
||||||
|
(US$ millions, except per share information) |
Q2 2025 |
Q2 2024 |
$ Change |
2025 |
2024 |
$ Change |
|
Consolidated Results |
||||||
|
Revenue |
400.7 |
412.0 |
(11.3) |
760.0 |
728.2 |
31.8 |
|
Operating Loss |
(52.4) |
(23.0) |
(29.4) |
(74.5) |
(84.8) |
10.3 |
|
Operating Margin2 |
(13.1) % |
(5.6) % |
(9.8) % |
(11.6) % |
||
|
Adjusted Operating (Loss) Income1,3 |
(0.9) |
23.6 |
(24.5) |
(6.8) |
9.1 |
(15.9) |
|
Adjusted Operating Margin1 |
(0.2) % |
5.7 % |
(0.9) % |
1.2 % |
||
|
Net Loss |
(46.5) |
(24.5) |
(22.0) |
(71.0) |
(79.3) |
8.3 |
|
Adjusted Net (Loss) Income1,3 |
(7.4) |
9.6 |
(17.0) |
(19.4) |
(9.9) |
(9.5) |
|
Adjusted EBITDA1,3 |
28.7 |
53.6 |
(24.9) |
50.3 |
72.2 |
(21.9) |
|
Adjusted EBITDA Margin1 |
7.2 % |
13.0 % |
6.6 % |
9.9 % |
||
|
Earnings Per Share (“EPS”) |
||||||
|
Basic EPS |
$(0.46) |
$(0.24) |
$(0.70) |
$(0.76) |
||
|
Diluted EPS |
$(0.46) |
$(0.24) |
$(0.70) |
$(0.76) |
||
|
Adjusted Basic EPS1 |
$(0.07) |
$0.09 |
$(0.19) |
$(0.10) |
||
|
Adjusted Diluted EPS1 |
$(0.07) |
$0.09 |
$(0.19) |
$(0.10) |
||
|
Weighted average number of shares (in millions) |
||||||
|
Basic |
101.6 |
103.9 |
101.9 |
103.8 |
||
|
Diluted |
104.5 |
106.0 |
104.5 |
106.0 |
||
|
Selected Cash Flow Data |
||||||
|
Cash provided by operating activities |
26.1 |
25.4 |
0.7 |
50.9 |
49.7 |
1.2 |
|
Cash used in investing activities |
(43.1) |
(27.4) |
(15.7) |
(79.7) |
(1,007.8) |
928.1 |
|
Cash (used in) provided by financing activities |
(4.2) |
(49.0) |
44.8 |
(74.5) |
408.2 |
(482.7) |
|
Free Cash Flow1 |
(15.2) |
(3.6) |
(11.6) |
(26.0) |
(4.2) |
(21.8) |
|
1 Non-GAAP financial measure or ratio. See “Non-GAAP Financial Measures and Ratios, Supplementary Financial Measures”. |
||||||
|
2 Operating Margin is calculated as Operating Income (Loss) divided by Revenue. |
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|
3 Refer to the “Reconciliation of Non-GAAP Financial Measures” section for further details on the adjustments. |
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Q2 2025 Operating Loss was $52.4 million, a change of $29.4 million from $23.0 million, primarily driven by the declines of $19.8 million in the Digital Games segment as result of impairment for digital game and app development assets, reflecting a strategic decision to streamline the Digital Games business and concentrate investments in core areas with long-term growth potential, $4.8 million in the Toys segment, and $2.1 million in the Entertainment segment.
Q2 2025 Adjusted Operating Loss1 was $0.9 million, a change of $24.5 million from Adjusted Operating Income1 of $23.6 million. The change was mainly driven by an increase in Adjusted Operating Loss1 of $22.1 million in the Toys segment, a decline in Adjusted Operating Income1 of $2.3 million in the Entertainment segment, partially offset by an increase in Adjusted Operating Income1 in Digital Games segment of $1.8 million.
Q2 2025 Adjusted EBITDA1 was $28.7 million compared to $53.6 million. The decrease was primarily driven by the Toys segment, with lower Toy Revenue due to a decrease in Toy Gross Product Sales1 and an increase in Sales Allowances. During the quarter, the decline in Toys Gross Product Sales1 was primarily attributable to a temporary slowdown in U.S. retailer orders early in the second quarter due to broader market uncertainty resulting from ongoing changes to global tariff policies. In addition, Adjusted EBITDA1 was impacted by higher investments in marketing to support key brand initiatives and retailer programs and higher selling expenses due to royalties arising from an increase in partner licensed brands sales. This decline was partially offset by the Digital Games segment, which delivered revenue growth driven by continued user engagement and new content releases. Additionally, Adjusted EBITDA1 improved from lower distribution expenses due to operational efficiencies and administrative expenses from ongoing cost synergies related to the acquisition of Melissa & Doug.
Adjusted EBITDA Margin1 was 7.2% compared to 13.0%. The decline was primarily driven by the Toys segment due to a shift in product mix, higher Sales Allowances, marketing and selling expenses. The decline was partially offset by lower distribution expenses due to operational efficiencies and administrative expenses from ongoing cost synergies related to the acquisition of Melissa & Doug.
Segmented Financial Results as compared to the same period in 2024
|
(US$ millions) |
Q2 2025 |
Q2 2024 |
||||||||
|
Toys |
Entertain- |
Digital |
Corporate |
Total |
Toys |
Entertain- |
Digital |
Corporate |
Total |
|
|
Revenue |
322.3 |
32.1 |
46.3 |
— |
400.7 |
340.9 |
36.4 |
34.7 |
— |
412.0 |
|
Operating (Loss) Income |
(39.7) |
15.7 |
(15.5) |
(12.9) |
(52.4) |
(34.9) |
17.8 |
4.3 |
(10.2) |
(23.0) |
|
Adjusted Operating (Loss) Income2 |
(20.8) |
17.7 |
7.7 |
(5.5) |
(0.9) |
1.3 |
20.0 |
5.9 |
(3.6) |
23.6 |
|
Adjusted EBITDA2 |
(0.7) |
24.3 |
10.6 |
(5.5) |
28.7 |
20.9 |
28.4 |
7.9 |
(3.6) |
53.6 |
|
1 Corporate & Other includes certain corporate costs, foreign exchange, transaction and integration costs, and investment income (loss), net. |
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|
2 Non-GAAP financial measure or ratio. See “Non-GAAP Financial Measures and Ratios, Supplementary Financial Measures”. |
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Toys Segment Results
The following table provides a summary of the Toys segment operating results, for the three months ended June 30, 2025 and 2024:
|
(US$ millions) |
Q2 2025 |
Q2 2024 |
$ Change |
% Change |
|
Preschool, Infant & Toddler and Plush |
185.0 |
165.0 |
20.0 |
12.1 % |
|
Activities, Games & Puzzles and Dolls & Interactive |
88.3 |
129.3 |
(41.0) |
(31.7) % |
|
Wheels & Action |
88.8 |
75.7 |
13.1 |
17.3 % |
|
Outdoor |
8.9 |
14.7 |
(5.8) |
(39.5) % |
|
Toy Gross Product Sales1 |
371.0 |
384.7 |
(13.7) |
(3.6) % |
|
Sales Allowances2 |
(48.9) |
(45.7) |
(3.2) |
7.0 % |
|
Sales Allowances % of Toy Gross Product Sales1 |
13.2 % |
11.9 % |
1.3 % |
|
|
Toy Net Sales |
322.1 |
339.0 |
(16.9) |
(5.0) % |
|
Toy – Other Revenue |
0.2 |
1.9 |
(1.7) |
(89.5) % |
|
Toy Revenue |
322.3 |
340.9 |
(18.6) |
(5.5) % |
|
Toys Operating Loss |
(39.7) |
(34.9) |
(4.8) |
13.8 % |
|
Toys Operating Margin3 |
(12.3) % |
(10.2) % |
(2.1) % |
|
|
Toys Adjusted EBITDA1 |
(0.7) |
20.9 |
(21.6) |
(103.3) % |
|
Toys Adjusted EBITDA Margin1 |
(0.2) % |
6.1 % |
(6.3) % |
|
1 |
Non-GAAP financial measure or ratio. See “Non-GAAP Financial Measures and Ratios, Supplementary Financial Measures”. |
|
2 |
The Company enters arrangements to provide Sales Allowances requested by customers relating to cooperative advertising, contractual and negotiated promotional discounts, volume rebates, markdowns, and costs incurred by customers to sell the Company’s products. |
|
3 |
Operating Margin is calculated as segment Operating Income divided by segment Revenue. |
- Toy Revenue declined by $18.6 million to $322.3 million.
- Toy Gross Product Sales1 decreased by $13.7 million to $371.0 million, primarily attributable to a temporary slowdown in U.S. retailer orders due to broader market uncertainty early in the second quarter resulting from ongoing changes to global tariff policies.
- Sales Allowances increased by $3.2 million to $48.9 million. As a percentage of Toy Gross Product Sales1, Sales Allowances increased to 13.2% from 11.9% driven by a change in customer mix and higher markdowns.
- Toys Operating Loss was $39.7 million compared to $34.9 million. The increase in Toys Operating Loss was driven by lower Gross Profit due to lower sales volume, higher selling and marketing expenses, partially offset by lower distribution and administrative expenses.
- Toys Operating Margin was (12.3)% compared to (10.2)%.
- Toys Adjusted EBITDA1 was $(0.7) million compared to $20.9 million.
- Toys Adjusted EBITDA Margin1 was (0.2)% compared to 6.1%. The decrease in Toys Adjusted EBITDA Margin1 was driven by a change in product mix, higher Sales Allowances, higher selling expenses due to royalties arising from an increase in partner licensed brands sales and higher investments in marketing to support key brand initiatives and retailer programs, partially offset by lower administrative expenses from ongoing cost synergies related to the acquisition of Melissa & Doug and lower distribution expenses due to operational efficiencies.
Entertainment Segment Results
The following table provides a summary of Entertainment segment operating results, for the three months ended June 30, 2025 and 2024:
|
(US$ millions) |
Q2 2025 |
Q2 2024 |
$ Change |
% Change |
|
Entertainment Revenue |
32.1 |
36.4 |
(4.3) |
(11.8) % |
|
Entertainment Operating Income |
15.7 |
17.8 |
(2.1) |
(11.8) % |
|
Entertainment Operating Margin |
48.9 % |
48.9 % |
— % |
|
|
Entertainment Adjusted Operating Income1 |
17.7 |
20.0 |
(2.3) |
(11.5) % |
|
Entertainment Adjusted Operating Margin1 |
55.1 % |
54.9 % |
0.2 % |
|
1 Non-GAAP financial measure or ratio. See “Non-GAAP Financial Measures and Ratios, Supplementary Financial Measures”. |
- Entertainment Revenue declined by $4.3 million to $32.1 million, primarily driven by lower distribution and licensing & merchandising revenue.
- Entertainment Operating Income declined by $2.1 million to $15.7 million, primarily due to lower Entertainment Revenue.
- Entertainment Operating Margin was flat at 48.9%.
- Entertainment Adjusted Operating Income1 declined by $2.3 million to $17.7 million.
- Entertainment Adjusted Operating Margin1 was relatively flat at 55.1% compared to 54.9%.
Digital Games Segment Results
The following table provides a summary of Digital Games segment operating results, for the three months ended June 30, 2025 and 2024:
|
(US$ millions) |
Q2 2025 |
Q2 2024 |
$ Change |
% Change |
|
Digital Games Revenue |
46.3 |
34.7 |
11.6 |
33.4 % |
|
Digital Games Operating (Loss) Income |
(15.5) |
4.3 |
(19.8) |
(460.5) % |
|
Digital Games Operating Margin |
(33.5) % |
12.4 % |
(45.9) % |
|
|
Digital Games Adjusted Operating Income1 |
7.7 |
5.9 |
1.8 |
30.5 % |
|
Digital Games Adjusted Operating Margin1 |
16.6 % |
17.0 % |
(0.4) % |
|
1 Non-GAAP financial measure or ratio. See “Non-GAAP Financial Measures and Ratios, Supplementary Financial Measures”. |
- Digital Games Revenue increased by $11.6 million to $46.3 million driven by higher in-game purchases in Toca Boca World and continued growth in subscriptions across Piknik.
- Digital Games Operating Loss was $15.5 million, compared to Operating Income of $4.3 million, primarily due to $17.1 million of impairment for digital game and app development assets. This impairment reflects a strategic decision to streamline the Digital Games business and concentrate investments in core areas with long-term growth potential.
- Digital Games Operating Margin decreased from 12.4% to (33.5)%.
- Digital Games Adjusted Operating Income1 increased by $1.8 million to $7.7 million.
- Digital Games Adjusted Operating Margin1 decreased from 17.0% to 16.6%, primarily due to higher marketing expenses related to paid user acquisition costs across the Digital Games portfolio to drive the increase in Digital Games Revenue.
Liquidity
The Company has an unsecured revolving credit facility (the “Facility”) with a borrowing capacity of $510.0 million and contains certain financial covenants. On June 27, 2025, the Company entered into an agreement to amend its existing Facility, which now matures on June 27, 2030.
The Company has a non-revolving credit facility (the “Acquisition Facility”) for the acquisition of Melissa & Doug, with a borrowing capacity of $225.0 million and contains certain financial covenants. On June 27, 2025, the Company entered into an agreement to amend its existing Acquisition Facility, which now matures on June 27, 2027.
During the six months ended June 30, 2025, the Company drew $25.0 million (2024 – $300.0 million) and repaid $30.0 million (2024 – $65.0 million) against the Facility. As at June 30, 2025, there was $160.0 million outstanding (December 31, 2024 – $165.0 million) under the Facility and $225.0 million outstanding (December 31, 2024 – $225.0 million) under the Acquisition Facility. For …