Pop culture collectibles manufacturer Funko (NASDAQ: FNKO) announced better-than-expected revenue in Q4 CY2025, but sales fell by 7% year on year to $273.1 million. Its non-GAAP profit of $0.05 per share was $0.02 above analysts’ consensus estimates.

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"We closed the year with two consecutive quarters of solid financial results,” said Josh Simon, Chief Executive Officer of Funko.

Company Overview

Boasting partnerships with media franchises like Marvel and One Piece, Funko (NASDAQ: FNKO) is a company specializing in creating and distributing licensed pop culture collectibles.

Revenue Growth

A company’s long-term sales performance is one signal of its overall quality. Any business can have short-term success, but a top-tier one grows for years. Regrettably, Funko’s sales grew at a weak 6.8% compounded annual growth rate over the last five years. This fell short of our benchmark for the consumer discretionary sector and is a poor baseline for our analysis.

We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new product or trend. Funko’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 9% annually.

This quarter, Funko’s revenue fell by 7% year on year to $273.1 million but beat Wall Street’s estimates by 4.8%.

Looking ahead, sell-side analysts expect revenue to grow 9% over the next 12 months. Although this projection indicates its newer products and services will catalyze better top-line performance, it is still below the sector average.

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Operating Margin

Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.

Funko’s operating margin has shrunk over the last 12 months and averaged negative 1.7% over the last two years. Unprofitable consumer discretionary companies with falling margins deserve extra scrutiny because they’re spending loads of money to stay relevant, an unsustainable practice.

In Q4, Funko generated an operating margin profit margin of 2.2%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Sadly for Funko, its EPS declined by 31.6% annually over the last five years while its revenue grew by 6.8%. This tells us the company became less profitable on a per-share basis as it expanded.

In Q4, Funko reported adjusted EPS of $0.05, down from $0.08 in the same quarter last year. Despite falling year on year, this print easily cleared analysts’ estimates. Over the next 12 months, Wall Street is optimistic. Analysts forecast Funko’s full-year EPS of negative $0.70 will flip to positive $0.10.

Key Takeaways from Funko’s Q4 Results

It was good to see Funko beat analysts’ EPS expectations this quarter. We were also glad its revenue outperformed Wall Street’s estimates. On the other hand, its full-year EBITDA guidance missed. Zooming out, we think this was a mixed quarter. The stock traded up 2.6% to $4.42 immediately after reporting.

So should you invest in Funko right now? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).