Spin Master Reports Q3 2025 Financial Results

Executive Summary

• Spin Master reported Q3 2025 revenue of $734.7 M, down 17% year‑over‑year, driven by a sharp decline in Toy revenue.
• Net income fell to $106.8 M ($1.03 per diluted share) from $140.1 M ($1.36 per diluted share) YoY – a material negative earnings surprise.
• Digital Games delivered strong growth (+37% revenue, +212% operating income), partially offsetting weakness in Toys and Entertainment segments.

Key Details

• Revenue: $734.7 M (‑17.0% YoY); Toy segment $650.4 M (‑19.8% YoY).
• Operating Income: $151.0 M (‑25.7% YoY); Toys operating loss of $54.7 M, Entertainment loss of $8.0 M, Digital Games up $10.8 M.
• Net Income: $106.8 M vs. $140.1 M prior year; diluted EPS $1.03 vs. $1.36.
• Adjusted EBITDA: $195.5 M (‑29.5% YoY); Adjusted EBITDA margin 26.6% vs. 31.3%.
• Free Cash Flow: $21.6 M vs. $44.7 M prior year; cash provided by operations $62.6 M.
• Share Repurchases: 482,362 shares for $7.9 M (NCIB) in Q3; additional 174,878 shares for $2.5 M after quarter‑end.
• Dividend: Declared C$0.12 per share payable Jan 9 2026.
• Liquidity: $127.9 M cash on hand; total available liquidity $472.2 M (including credit facilities).
• Credit Facilities: Revolving facility $510 M (maturity 27 Jun 2030); Acquisition facility $225 M (maturity 27 Jun 2027). Draws/repayments net –$5 M in Q3.
• Digital Games Segment: Revenue $51.5 M (+36.6% YoY); operating income $15.9 M (+212% YoY); margin 30.9%. Growth attributed to strategic partnerships, subscription growth (Piknik) and higher in‑game purchases (Toca Boca World).
• Toy Segment: Revenue down $160.5 M; Gross Product Sales down $180.0 M; sales allowances fell $18.7 M but rose as % of gross sales to 12.7%. Operating margin slipped to 19.8% from 22.6%.
• Entertainment Segment: Revenue $32.8 M (‑11.6% YoY); operating income $11.9 M (‑40.2% YoY); margin fell to 36.3% from 53.6%, reflecting lower licensing revenue and higher marketing spend.
• Acquisition Update: Completed acquisition of a Sweden‑based digital reading/storytelling company for $20.0 M on Oct 8 2025; will be reported in Digital Games segment.

Notable Quotes

“We are well‑positioned for the holiday season with a broad range of our award‑winning toys and brands…,” – Christina Miller, CEO
“Toy Revenue declined … partially offset by another strong quarter for Digital Games,” – Jonathan Roiter, CFO