Spin Master Reports Q4 2025 Financial Results
"We navigated a challenging fourth quarter for
"The power of our financial model remained evident in 2025 as we generated more than
Consolidated Financial Highlights for Q4 2025 as compared to the same period in 2024
-
Revenue was
$618.2 million , a decrease of 4.8%. Constant Currency Revenue1 was$607.4 million , a decrease of 6.4%. -
Operating Loss was
$163.7 million , compared to Operating Income of$47.1 million . Operating Loss in the current year includes$229.1 million of non-cash impairment of goodwill and intangible assets. -
Adjusted Operating Income1 was
$66.4 million , compared to$81.3 million . -
Net Loss was
$184.3 million or$(1.85) per share compared to Net Income of$21.1 million or$0.21 per share (diluted). Net Loss in the current year includes$229.1 million of non-cash impairment of goodwill and intangible assets. -
Adjusted Net Income1 was
$42.3 million or$0.41 per share (diluted) compared to$57.4 million or$0.55 per share (diluted). -
Adjusted EBITDA1 was
$111.3 million , a decrease of$2.6 million . - Adjusted EBITDA Margin1 was 18.0% compared to 17.5%.
- Cash provided by operating activities was
$194.3 million compared to$203.4 million . - Free Cash Flow1 was
$128.0 million compared to$175.0 million . - Repurchased and cancelled 441,195 subordinate voting shares for
$6.7 million (C$8.9 million ) in Q4 2025 through the Company's Normal Course Issuer Bid (the "NCIB") program. Subsequent toDecember 31, 2025 , the Company repurchased and cancelled 313,833 subordinate voting shares for$4.4 million . Additionally, the TSX has accepted the Company's notice to launch another NCIB commencing onMarch 7, 2026 . - Subsequent to
December 31, 2025 , the Company declared a quarterly dividend ofC$0.12 per outstanding subordinate voting share and multiple voting share, payable onApril 10, 2026 .
2026 Outlook
For the full year 2026, the Company expects:
- Revenue: stable to low single digit percentage growth compared to 2025.
- Adjusted EBITDA1: mid to high single digit percentage growth compared to 2025.
Consolidated Financial Results as compared to the same period in 2024
|
|
|
|
|
|
(US$ millions, except per share information) |
Q4 2025 |
Q4 2024 |
$ Change |
|
Consolidated Results |
|
|
|
|
Revenue |
618.2 |
649.1 |
(30.9) |
|
|
|
|
|
|
Operating (Loss) Income |
(163.7) |
47.1 |
(210.8) |
|
Operating Margin2 |
(26.5) % |
7.3 % |
|
|
|
|
|
|
|
Adjusted Operating Income1,3 |
66.4 |
81.3 |
(14.9) |
|
Adjusted Operating Margin1 |
10.7 % |
12.5 % |
|
|
|
|
|
|
|
Net (Loss) Income |
(184.3) |
21.1 |
(205.4) |
|
Adjusted Net Income1,3 |
42.3 |
57.4 |
(15.1) |
|
|
|
|
|
|
Adjusted EBITDA1,3 |
111.3 |
113.9 |
(2.6) |
|
Adjusted EBITDA Margin1 |
18.0 % |
17.5 % |
|
|
Earnings Per Share ("EPS") |
|
|
|
|
Basic EPS |
|
|
|
|
Diluted EPS |
|
|
|
|
Adjusted Basic EPS1 |
|
|
|
|
Adjusted Diluted EPS1 |
|
|
|
|
Weighted average number of shares (in millions) |
|
|
|
|
Basic |
99.5 |
102.4 |
|
|
Diluted |
102.3 |
105.2 |
|
|
|
|
|
|
|
Selected Cash Flow Data |
|
|
|
|
Cash provided by operating activities |
194.3 |
203.4 |
(9.1) |
|
Cash used in investing activities |
(79.3) |
(30.5) |
(48.8) |
|
Cash used in financing activities |
(137.9) |
(49.5) |
(88.4) |
|
Free Cash Flow1 |
128.0 |
175.0 |
(47.0) |
|
1 Non-GAAP financial measure or ratio. See "Non-GAAP Financial Measures and Ratios". |
|||
|
2 Operating Margin is calculated as Operating (Loss) Income divided by Revenue. |
|||
|
3 Refer to the "Reconciliation of Non-GAAP Financial Measures" section for further details on the adjustments. |
Segmented Financial Results as compared to the same period in 2024
|
(US$ millions) |
Q4 2025 |
Q4 2024 |
||||||||
|
|
Toys |
Entertain-ment |
Digital Games |
Corporate & Other1 |
Total |
Toys |
Entertain-ment |
Digital Games |
Corporate & Other1 |
Total |
|
Revenue |
522.3 |
42.5 |
53.4 |
— |
618.2 |
561.7 |
41.3 |
46.1 |
— |
649.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (Loss) Income |
(171.0) |
14.3 |
3.0 |
(10.0) |
(163.7) |
31.7 |
19.7 |
(0.5) |
(3.8) |
47.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Operating Income (Loss)2 |
40.4 |
14.2 |
14.4 |
(2.6) |
66.4 |
53.5 |
20.3 |
11.5 |
(4.0) |
81.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA2 |
61.6 |
33.5 |
18.8 |
(2.6) |
111.3 |
76.2 |
26.3 |
15.4 |
(4.0) |
113.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Corporate & Other includes certain corporate costs (such as certain employee compensation, corporate social responsibility and professional services expenses), foreign exchange, acquisition related transaction costs, as well as investment income and loss. |
||||||||||
|
2 Non-GAAP financial measure or ratio. See "Non-GAAP Financial Measures and Ratios". |
Toys Segment Results
The following table provides a summary of the Toys segment operating results, for the three months ended
|
(US$ millions) |
Q4 2025 |
Q4 2024 |
$ Change |
% Change |
|
Preschool, Infant & Toddler and Plush |
336.8 |
345.7 |
(8.9) |
(2.6) % |
|
Activities, Games & Puzzles and Dolls & Interactive |
175.7 |
206.2 |
(30.5) |
(14.8) % |
|
Wheels & Action |
107.1 |
91.7 |
15.4 |
16.8 % |
|
Outdoor |
7.8 |
16.4 |
(8.6) |
(52.4) % |
|
Toy Gross Product Sales1 |
627.4 |
660.0 |
(32.6) |
(4.9) % |
|
|
|
|
|
|
|
Sales Allowances2 |
(107.3) |
(102.5) |
(4.8) |
4.7 % |
|
Sales Allowances % of Toy Gross Product Sales1 |
17.1 % |
15.5 % |
|
1.6 % |
|
Toy |
520.1 |
557.5 |
(37.4) |
(6.7) % |
|
Toy - Other Revenue |
2.2 |
4.2 |
(2.0) |
(47.6) % |
|
Toy Revenue |
522.3 |
561.7 |
(39.4) |
(7.0) % |
|
|
|
|
|
|
|
Toys Operating (Loss) Income |
(171.0) |
31.7 |
(202.7) |
(639.4) % |
|
Toys Operating Margin3 |
(32.7) % |
5.6 % |
|
(38.3) % |
|
Toys Adjusted EBITDA1 |
61.6 |
76.2 |
(14.6) |
(19.2) % |
|
Toys Adjusted EBITDA Margin1 |
11.8 % |
13.6 % |
|
(1.8) % |
|
1 Non-GAAP financial measure or ratio. See "Non-GAAP Financial Measures and Ratios". |
||||
|
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
$39.4 million to$522.3 million due to lower Toy Gross Product Sales1 and higher markdowns and promotional activities to manage inventory levels and support sell-through. Constant Currency Toy Gross Product Sales1 was$614.2 million , a decrease of 6.9%. Constant Current Toy Revenue was$512.9 million , a decrease of 8.7%. - Toy Gross Product Sales1 decreased by
$32.6 million to$627.4 million , primarily due to global market uncertainties resulting in part from ongoing changes to tariff policies, including a continued slowdown inU.S. retailer orders. - Sales Allowances increased by
$4.8 million to$107.3 million . As a percentage of Toy Gross Product Sales1, Sales Allowances increased to 17.1% from 15.5% driven by higher markdowns and promotional activities. - Toys Operating Loss was
$171.0 million compared to Operating Income of$31.7 million . The change was primarily driven by non-cash impairment of goodwill related toMelissa & Doug and lower Toy Revenue, partially offset by a decrease in selling, general and administrative expenses. The impairment of goodwill related toMelissa & Doug was due to revised cash flow projections for the Melissa & Doug CGU due to the ongoing global trade policy uncertainty and other macroeconomic headwinds. Toys Operating Margin was (32.7)% compared to 5.6%. - Toys Adjusted EBITDA1 was
$61.6 million compared to$76.2 million . Toys Adjusted EBITDA Margin1 was 11.8% compared to 13.6%. The decrease in Toys Adjusted EBITDA1 was driven by lower Toy Revenue, partially offset by lower marketing due to a shift in timing of marketing spend in the Toys segment driven by higher investments in the first half of the year to support key brand initiatives and retailer programs and lower distribution expenses due to inventory and warehouse optimization, partially offset by higher outbound transportation costs from increased domestic sales volumes.
Entertainment Segment Results
The following table provides a summary of Entertainment segment operating results, for the three months ended
|
(US$ millions) |
Q4 2025 |
Q4 2024 |
$ Change |
% Change |
|
Entertainment Revenue |
42.5 |
41.3 |
1.2 |
2.9 % |
|
Entertainment Operating Income |
14.3 |
19.7 |
(5.4) |
(27.4) % |
|
Entertainment Operating Margin |
33.6 % |
47.7 % |
|
(14.1) % |
|
Entertainment Adjusted Operating Income1 |
14.3 |
20.3 |
(6.0) |
(29.6) % |
|
Entertainment Adjusted Operating Margin1 |
33.4 % |
49.2 % |
|
(15.8) % |
|
1 Non-GAAP financial measure or ratio. See "Non-GAAP Financial Measures and Ratios". |
- Entertainment Revenue increased by
$1.2 million to$42.5 million , primarily driven by distribution revenue from higher volume of content deliveries, partially offset by lower ongoing distribution revenue from PAW Patrol: The Mighty Movie and licensing & merchandising revenue. - Entertainment Operating Income declined by
$5.4 million to$14.3 million , primarily due to increased amortization of production costs from higher volume of content deliveries in the current year and lower ongoing distribution revenue from PAW Patrol: The Mighty Movie. - Entertainment Operating Margin decreased from 47.7% to 33.6%.
- Entertainment Adjusted Operating Income1 declined by
$6.0 million to$14.3 million . - Entertainment Adjusted Operating Margin1 decreased from 49.2% to 33.4%, primarily due to the dilutive effect of higher volume of content deliveries in the current year and lower ongoing distribution revenue from PAW Patrol: The Mighty Movie.
Digital Games Segment Results
The following table provides a summary of Digital Games segment operating results, for the three months ended
|
(US$ millions) |
Q4 2025 |
Q4 2024 |
$ Change |
% Change |
|
Digital Games Revenue |
53.4 |
46.1 |
7.3 |
15.8 % |
|
Digital Games Operating Income (Loss) |
3.0 |
(0.5) |
3.5 |
(700.0) % |
|
Digital Games Operating Margin |
5.6 % |
(1.1) % |
|
6.7 % |
|
Digital Games Adjusted Operating Income1 |
14.3 |
11.5 |
2.8 |
24.3 % |
|
Digital Games Adjusted Operating Margin1 |
27.0 % |
24.9 % |
|
2.1 % |
|
1 Non-GAAP financial measure or ratio. See "Non-GAAP Financial Measures and Ratios". |
- Digital Games Revenue increased by
$7.3 million to$53.4 million , driven by revenue generated from strategic distribution partnerships, higher in-game purchases inToca Boca World from growth in user engagement, and higher subscription revenue from Piknik. - Digital Games Operating Income was
$3.0 million , a change of$3.5 million from Digital Games Operating Loss of$0.5 million , primarily driven by revenue generated from strategic distribution partnerships, partially offset by higher non-cash impairment of digital game and app development assets. The 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 was 5.6% compared to (1.1)%.
- Digital Games Adjusted Operating Income1 increased by
$2.8 million to$14.3 million , primarily due to revenue generated from strategic distribution partnerships. - Digital Games Adjusted Operating Margin1 increased from 24.9% to 27.0%.
Liquidity
The Company has an unsecured revolving credit facility (the "Facility") with a borrowing capacity of
The Company has a non-revolving credit facility (the "Acquisition Facility") related to the acquisition of
During the year ended
As at
Cash Flows for Q4 2025 as compared to the same period in 2024
Cash flows provided by operating activities were
Cash flows used in financing activities were
Free Cash Flow1 was
Dividends
The Company's Board of Directors declared a dividend of
Normal Course Issuer Bid
The Company today announced the TSX has accepted the Company's notice to launch a Normal Course Issuer Bid (the "Bid"). Under the Bid, the Company may repurchase on the open market at its discretion and subject to compliance with applicable securities laws, during the period commencing on
Under the TSX rules, the average daily trading volume of the subordinate voting shares on the TSX during the six months ended
Purchases are expected to be made through the facilities of TSX and/or alternative Canadian trading systems, or by such other means as may be permitted by the
As of
The Company believes that the purchases are in the best interest of the Company and constitute a desirable use of its funds. The program will be executed in line with
Pursuant to a previous notice of intention to conduct a normal course issuer bid, under which the Company sought acceptance of the TSX to purchase up to 2,417,522 subordinate voting shares and which was announced by the Corporation on
The Company has also agreed to the form of an automatic share purchase plan (an "ASPP") with a designated broker to allow for the purchase of subordinate voting shares under the Bid at times when the Company would ordinarily not be permitted to purchase shares due to regulatory restrictions or self-imposed blackout periods. The ASPP has been cleared by the TSX and will be entered into in connection with the commencement of the Bid.
|
________________________________ |
|
|
1 |
Non-GAAP financial measure or ratio. See "Non-GAAP Financial Measures and Ratios". |
Forward-Looking Statements
Certain statements, other than statements of historical fact, contained in this Press Release constitute "forward-looking information" within the meaning of certain securities laws, including the Securities Act (
Forward-looking statements are necessarily based upon management's perceptions of historical trends, current conditions and expected future developments, as well as a number of specific factors and assumptions that, while considered reasonable by management as of the date on which the statements are made in this Press Release, are inherently subject to significant business, economic and competitive uncertainties and contingencies which could result in the forward-looking statements ultimately being incorrect. In addition to any factors and assumptions set forth above in this Press Release, the material factors and assumptions used to develop the forward-looking information include, but are not limited to: the Company will not have any unusual adjustments resulting from unexpected disruptions including regulatory actions impacting global trade, other macro-economic risks and uncertainties, and/or unforeseeable legal matters or non-recurring items, the Company will be able to successfully integrate acquisitions; the Company will be able to successfully expand its portfolio across new channels and formats, and internationally; the Company's ability to achieve other expected benefits through acquisitions; management's estimates and expectations in relation to future economic and business conditions and other factors in relation to the Company's financial performance in addition to the proposed transaction and resulting impact on growth in various financial metrics; the absence of significant undisclosed costs or liabilities associated with the transactions;
By its nature, forward-looking information is subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct, and that objectives, strategic goals and priorities will not be achieved. Known and unknown risk factors, many of which are beyond the control of the Company, could cause actual results to differ materially from the forward-looking information in this Press Release. Such risks and uncertainties include, without limitation, risks outlined in the "Global Tariffs Uncertainty and 2026 Outlook" section of the Annual MD&A; risks associated with using funds to repurchase subordinate voting shares under the Bid; the risk of a determination not to repurchase subordinate voting shares under the Bid; concentration of manufacturing and geopolitical risks; uncertainty and adverse changes in general economic conditions and consumer spending habits and the factors discussed in the Company's disclosure materials, including the Annual MD&A and the Company's most recent Annual Information Form, filed with the securities regulatory authorities in
There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements are provided for the purpose of providing information about management's expectations and plans relating to the future. The forward-looking statements contained herein are made as of
Conference call
WEBCAST: https://app.webinar.net/qZYJrGejAN7
A link to the webcast will also be available on the Events & Presentations page of the Investors section of
DIAL-IN: To join the conference call without operator assistance, you may register and enter your phone number at https://emportal.ink/3N85slG to receive an instant automated call back. You can also dial direct to be entered to the call by an Operator: 1-416-945-7677 or 1-888-699-1199.
About
Consolidated statements of financial position
|
|
|
|
|
(In US$ millions) |
2025 |
2024 |
|
Assets |
|
|
|
Current assets |
|
|
|
Cash and cash equivalents |
104.6 |
233.5 |
|
Trade receivables, net |
508.1 |
499.4 |
|
Other receivables |
71.5 |
54.9 |
|
Inventories, net |
149.7 |
184.7 |
|
Income tax receivable |
19.3 |
— |
|
Prepaid expenses and other assets |
44.3 |
48.7 |
|
|
897.5 |
1,021.2 |
|
Non-current assets |
|
|
|
Intangible assets |
865.8 |
837.4 |
|
|
164.0 |
368.1 |
|
Right-of-use assets |
174.3 |
149.5 |
|
Property, plant and equipment |
92.0 |
60.2 |
|
Deferred income tax assets |
175.7 |
167.1 |
|
Other assets |
34.0 |
29.9 |
|
|
1,505.8 |
1,612.2 |
|
Total assets |
2,403.3 |
2,633.4 |
|
|
|
|
|
Liabilities |
|
|
|
Current liabilities |
|
|
|
Trade payables and accrued liabilities |
436.0 |
429.5 |
|
Loans and borrowings |
264.1 |
389.1 |
|
Provisions |
22.9 |
24.7 |
|
Lease liabilities |
33.6 |
22.3 |
|
Deferred revenue |
31.5 |
22.0 |
|
|
788.1 |
887.6 |
|
Non-current liabilities |
|
|
|
Deferred income tax liabilities |
215.8 |
209.9 |
|
Lease liabilities |
161.1 |
123.0 |
|
Provisions |
14.7 |
10.5 |
|
|
391.6 |
343.4 |
|
Total liabilities |
1,179.7 |
1,231.0 |
|
|
|
|
|
Shareholders' equity |
|
|
|
Share capital |
753.6 |
765.6 |
|
Retained earnings |
442.2 |
640.1 |
|
Contributed surplus |
35.2 |
45.5 |
|
Accumulated other comprehensive loss |
(7.4) |
(48.8) |
|
Total shareholders' equity |
1,223.6 |
1,402.4 |
|
Total liabilities and shareholders' equity |
2,403.3 |
2,633.4 |
Consolidated statements of (loss) earnings and comprehensive (loss) earnings
|
|
Year Ended |
|
|
(In US$ millions, except earnings per share) |
2025 |
2024 |
|
|
|
|
|
Revenue |
2,112.9 |
2,263.0 |
|
Cost of sales |
967.6 |
1,072.1 |
|
Gross Profit |
1,145.3 |
1,190.9 |
|
|
|
|
|
Expenses |
|
|
|
Selling, general and administrative |
908.6 |
931.9 |
|
Depreciation and amortization |
70.3 |
72.7 |
|
Impairment of non-current assets |
250.4 |
20.7 |
|
Other (income) expense, net |
(11.3) |
1.6 |
|
Foreign exchange loss (gain), net |
14.5 |
(1.5) |
|
Operating (Loss) Income |
(87.2) |
165.5 |
|
Interest expense |
42.5 |
50.5 |
|
Interest income |
(2.5) |
(4.0) |
|
(Loss) Income before income tax expense |
(127.2) |
119.0 |
|
Income tax expense |
21.3 |
37.1 |
|
Net (Loss) Income |
(148.5) |
81.9 |
|
|
|
|
|
Earnings per share |
|
|
|
Basic |
(1.46) |
0.79 |
|
Diluted |
(1.46) |
0.77 |
|
Weighted average number of shares (in millions) |
|
|
|
Basic |
101.4 |
103.3 |
|
Diluted |
103.9 |
105.8 |
|
|
|
|
|
|
Year Ended |
|
|
(In US$ millions) |
2025 |
2024 |
|
Net (Loss) Income |
(148.5) |
81.9 |
|
Items that may be subsequently reclassified to Net (Loss) Income |
|
|
|
Foreign currency translation gain (loss) |
41.4 |
(34.0) |
|
Items that will not be reclassified to Net (Loss) Income |
|
|
|
Loss on minority investment |
(3.0) |
— |
|
Other comprehensive income (loss) |
38.4 |
(34.0) |
|
Total comprehensive (loss) income |
(110.1) |
47.9 |
Consolidated statements of cash flows
|
|
Year Ended |
|
|
(in US$ millions) |
2025 |
2024 |
|
|
|
|
|
Operating activities |
|
|
|
Net (Loss) Income |
(148.5) |
81.9 |
|
Adjustments to reconcile net loss to cash provided by operating activities |
|
|
|
Income tax expense |
21.3 |
37.1 |
|
Interest expense |
30.2 |
38.4 |
|
Interest income |
(2.5) |
(4.0) |
|
Depreciation and amortization |
142.1 |
136.8 |
|
(Gain) Loss on disposal of non-current assets |
(12.0) |
1.3 |
|
Accretion expense |
11.5 |
10.6 |
|
Amortization of facility fee costs |
0.6 |
1.2 |
|
Loss on portfolio investments, net |
0.2 |
0.3 |
|
Impairment of non-current assets |
250.4 |
20.7 |
|
Loss on minority interest investments |
1.0 |
0.5 |
|
Unrealized foreign exchange loss, net |
(3.7) |
(8.4) |
|
Share-based compensation expense |
11.5 |
29.3 |
|
Fair value adjustment on inventory sold |
— |
66.3 |
|
Net changes in non-cash working capital |
40.8 |
24.9 |
|
Net changes in non-cash provisions and other assets |
27.4 |
(21.0) |
|
Income taxes paid |
(48.7) |
(66.7) |
|
Income taxes received |
5.4 |
4.3 |
|
Interest paid |
(21.7) |
(29.2) |
|
Interest received |
2.5 |
3.7 |
|
Cash provided by operating activities |
307.8 |
328.0 |
|
|
|
|
|
Investing activities |
|
|
|
Investment in property, plant and equipment |
(71.2) |
(34.0) |
|
Investment in intangible assets |
(113.0) |
(83.6) |
|
Business acquisitions, net of cash acquired |
(12.7) |
(952.9) |
|
Portfolio investments |
(3.0) |
(1.1) |
|
Minority interest investments |
(1.8) |
— |
|
Change in restricted cash |
— |
3.1 |
|
Cash used in investing activities |
(201.7) |
(1,068.5) |
|
|
|
|
|
Financing activities |
|
|
|
Proceeds from loans and borrowings |
55.0 |
525.0 |
|
Repayment of loans and borrowings |
(178.0) |
(135.0) |
|
Payment of lease liabilities, net of lease incentives received |
(25.6) |
(37.8) |
|
Dividends paid |
(34.7) |
(27.5) |
|
Repurchase of subordinate voting shares |
(46.6) |
(54.5) |
|
Payment of financing costs related to the facility |
(1.7) |
— |
|
Cash (used in) provided by financing activities |
(231.6) |
270.2 |
|
|
|
|
|
Effect of foreign currency exchange rate changes on cash |
(3.4) |
(1.9) |
|
|
|
|
|
Net decrease in cash during the period |
(128.9) |
(472.2) |
|
Cash, beginning of the year |
233.5 |
705.7 |
|
Cash, end of the year |
104.6 |
233.5 |
Non-GAAP Financial Measures and Ratios
In addition to using financial measures prescribed under International Financial Reporting Standards ("IFRS"), references are made in this Press Release to the following terms, each of which is a non-GAAP financial measure:
- Toy Gross Product Sales
- Adjusted EBITDA
- Toys Adjusted EBITDA
- Entertainment Adjusted EBITDA
- Digital Games Adjusted EBITDA
- Adjusted Operating Income (Loss)
- Toys Adjusted Operating Income (Loss)
- Entertainment Adjusted Operating Income (Loss)
- Digital Games Adjusted Operating Income (Loss)
- Adjusted Net Income (Loss)
- Free Cash Flow
Non-GAAP financial measures do not have any standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other issuers.
Additionally, references are made in this Press Release to the following terms, each of which is a non-GAAP financial ratio:
- Adjusted EBITDA Margin
- Toys Adjusted EBITDA Margin
- Toys Adjusted Operating Margin
- Entertainment Adjusted Operating Margin
- Digital Games Adjusted Operating Margin
- Adjusted Operating Margin
- Adjusted Basic EPS
- Adjusted Diluted EPS
- Sales Allowances as a percentage of Toy Gross Product Sales
Non-GAAP financial ratios are ratios or percentages that are calculated using a Non-GAAP financial measure. Non-GAAP financial ratios do not have any standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other issuers.
Management believes the Non-GAAP financial measures, Non-GAAP financial ratios, and supplementary financial measures defined above are important supplemental measures of operating performance and highlight trends in the business. Management believes that these measures allow for assessment of the Company's operating performance and financial condition on a basis that is consistent and comparable between reporting periods. The Company believes that investors, lenders, securities analysts and other interested parties frequently use these Non-GAAP financial measures, Non-GAAP financial ratios, and Supplementary financial measures in the evaluation of issuers.
Non-GAAP Financial Measures
Toy Gross Product Sales represent Toy Revenue, excluding the impact of Sales Allowances. As Sales Allowances are generally not associated with individual products, the Company uses Toy Gross Product Sales to provide meaningful comparisons across product categories and geographical results to highlight trends in
Adjusted EBITDA is calculated as Operating Income before interest income and interest expense and depreciation and amortization (EBITDA) excluding adjustments that do not necessarily reflect the Company's underlying financial performance. These adjustments include restructuring and other related costs, foreign exchange gains or losses, share based compensation expenses, acquisition related contingent consideration, impairment of intangible assets, impairment of goodwill, investment income (loss), net, acquisition related deferred incentive compensation, impairment of property, plant and equipment, legal settlement, transaction cost and gain on disposal of asset. Adjusted EBITDA is used by management as a measure of the Company's profitability. Refer to the "Reconciliation of Non-GAAP Financial Measures" section below for a reconciliation of this metric to Operating Income (Loss), the closest IFRS measure.
Toys Adjusted EBITDA is calculated as Toy Operating Income (Loss) before interest income and interest expense and depreciation and amortization (EBITDA) excluding adjustments that do not necessarily reflect the Company's underlying financial performance. These adjustments include restructuring and other related costs, foreign exchange gains or losses, share based compensation expenses, acquisition related contingent consideration, impairment of intangible assets, impairment of goodwill, investment income (loss), acquisition related deferred incentive compensation, impairment of property, plant and equipment, legal settlement, transaction cost and gain on disposal of asset. Toys Adjusted EBITDA is used by management as a measure of the Company's profitability. Refer to the "Reconciliation of Non-GAAP Financial Measures" section below for a reconciliation of this metric to Toys Operating Income (Loss), the closest IFRS measure.
Entertainment Adjusted EBITDA is calculated as Entertainment Operating Income (Loss) before interest income and interest expense and depreciation and amortization (EBITDA) excluding adjustments that do not necessarily reflect the Company's underlying financial performance. These adjustments include restructuring and other related costs, foreign exchange gains or losses, share based compensation expenses, acquisition related contingent consideration, impairment of intangible assets, impairment of goodwill, investment income (loss), acquisition related deferred incentive compensation, impairment of property, plant and equipment, legal settlement, transaction cost and gain on disposal of asset. Entertainment Adjusted EBITDA is used by management as a measure of the Company's profitability. Refer to the "Reconciliation of Non-GAAP Financial Measures" section below for a reconciliation of this metric to Digital Games Operating Income (Loss), the closest IFRS measure.
Digital Games Adjusted EBITDA is calculated as Digital Games Operating Income (Loss) before interest income and interest expense and depreciation and amortization (EBITDA) excluding adjustments that do not necessarily reflect the Company's underlying financial performance. These adjustments include restructuring and other related costs, foreign exchange gains or losses, share based compensation expenses, acquisition related contingent consideration, impairment of intangible assets, impairment of goodwill, investment income (loss), acquisition related deferred incentive compensation, impairment of property, plant and equipment, legal settlement, transaction cost and gain on disposal of asset. Digital Games Adjusted EBITDA is used by management as a measure of the Company's profitability. Refer to the "Reconciliation of Non-GAAP Financial Measures" section below for a reconciliation of this metric to Digital Games Operating Income (Loss), the closest IFRS measure.
Adjusted Operating Income (Loss) is calculated as Operating Income (Loss) excluding adjustments (as defined in Adjusted EBITDA). Adjusted Operating Income (Loss) is used by management as a measure of the Company's profitability. Refer to the "Reconciliation of Non-GAAP Financial Measures" section below for a reconciliation of this metric to Operating Income (Loss), the closest IFRS measure.
Toys Adjusted Operating Income (Loss) is calculated as Toys Operating Income (Loss) excluding adjustments (as defined in Adjusted EBITDA). Toys Adjusted Operating Income (Loss) is used by management as a measure of the Company's profitability. Refer to the "Reconciliation of Non-GAAP Financial Measures" section below for a reconciliation of this metric to Toys Operating Income (Loss), the closest IFRS measure.
Entertainment Adjusted Operating Income (Loss) is calculated as Entertainment Operating Income (Loss) excluding adjustments (as defined in Adjusted EBITDA). Entertainment Adjusted Operating Income (Loss) is used by management as a measure of the Company's profitability. Refer to the "Reconciliation of Non-GAAP Financial Measures" section below for a reconciliation of this metric to Entertainment Operating Income (Loss), the closest IFRS measure.
Digital Games Adjusted Operating Income (Loss) is calculated as Digital Games Operating Income (Loss) excluding adjustments (as defined in Adjusted EBITDA). Digital Games Adjusted Operating Income (Loss) is used by management as a measure of the Company's profitability. Refer to the "Reconciliation of Non-GAAP Financial Measures" section below for a reconciliation of this metric to Digital Games Operating Income (Loss), the closest IFRS measure.
Adjusted Net Income (Loss) is calculated as Net Income (Loss) excluding adjustments (as defined in Adjusted EBITDA), the corresponding impact these items have on income tax expense. Management uses Adjusted Net Income (Loss) to measure the underlying financial performance of the business on a consistent basis over time. Refer to the "Reconciliation of Non-GAAP Financial Measures" section below for a reconciliation of this metric to Operating Income (Loss), the closest IFRS measure.
Free Cash Flow is calculated as cash flows provided by/used in operating activities reduced by cash flows used in investing activities and adding back cash used for business acquisitions, advance paid for business acquisitions, asset acquisitions, portfolio investments, minority interest investments, proceeds from sale of manufacturing operations and net of investment distribution income. Management uses the Free Cash Flow metric to analyze the cash flows being generated by the Company's business after accounting for operational and capital expenditures. It measures the Company's ability to generate discretionary cash, which can be used to pay dividends, repurchase shares, repay loans and borrowings, and fund business acquisitions. Refer to the "Reconciliation of Non-GAAP Financial Measures" section for a reconciliation of this metric to Cash provided by operating activities, the closest IFRS measure.
Non-GAAP Financial Ratios
Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by Revenue. Management uses Adjusted EBITDA Margin to evaluate the Company's performance compared to internal targets and to benchmark its performance against key competitors.
Toys Adjusted EBITDA Margin is calculated as Toys Adjusted EBITDA divided by Toy Revenue. Management uses Toys Adjusted EBITDA Margin to evaluate the Company's performance compared to internal targets and to benchmark its performance against key competitors.
Adjusted Operating Margin is calculated as Adjusted Operating Income (Loss) divided by Revenue. Management uses Adjusted Operating Margin to evaluate the Company's performance compared to internal targets and to benchmark its performance against key competitors.
Toys Adjusted Operating Margin is calculated as Toys Adjusted Operating Income (Loss) divided by Toy Revenue. Management uses Toys Adjusted Operating Margin to evaluate the Company's performance compared to internal targets and to benchmark its performance against key competitors.
Entertainment Adjusted Operating Margin is calculated as Entertainment Adjusted Operating Income (Loss) divided by Toy Revenue. Management uses Entertainment Adjusted Operating Margin to evaluate the Company's performance compared to internal targets and to benchmark its performance against key competitors.
Digital Games Adjusted Operating Margin is calculated as Digital Games Adjusted Operating Income (Loss) divided by Digital Games Revenue. Management uses Digital Games Adjusted Operating Margin to evaluate the Company's performance compared to internal targets and to benchmark its performance against key competitors.
Adjusted Basic EPS is calculated by dividing Adjusted Net Income (Loss) by the weighted average number of shares outstanding during the period. Adjusted Diluted EPS is calculated by dividing Adjusted Net Income (Loss) by the weighted average number of shares outstanding, assuming the conversion of all dilutive securities were exercised during the period. Management uses Adjusted Basic EPS and Adjusted Diluted EPS to measure the underlying financial performance of the business on a consistent basis over time.
Sales Allowances as a percentage of Toy Gross Product Sales is calculated by dividing Sales Allowances by Toy Gross Product Sales. Management uses Sales Allowances as a percentage of Toy Gross Product Sales to identify and compare the cost of doing business with individual retailers, different geographic markets and amongst various distribution channels.
Reconciliation of Non-GAAP Financial Measures
The following table presents a reconciliation of Operating (Loss) Income to Adjusted Operating Income, Adjusted EBITDA, Adjusted Net Income, and cash used in operating activities and investing activities to Free Cash Flow for the three months ended
|
(in US$ millions) |
Q4 2025 |
Q4 2024 |
$ Change |
% Change |
|
|
Operating (Loss) Income |
(163.7) |
47.1 |
(210.8) |
(447.6) % |
|
|
Adjustments: |
|
|
|
|
|
|
|
Impairment of goodwill1 |
215.6 |
12.9 |
202.7 |
n.m |
|
|
Impairment of intangible assets2 |
13.5 |
5.5 |
8.0 |
145.5 % |
|
|
Transaction and integration costs3 |
5.1 |
5.0 |
0.1 |
2.0 % |
|
|
Foreign exchange loss (gain)4 |
4.2 |
(4.7) |
8.9 |
(189.4) % |
|
|
Amortization of intangible assets acquired5 |
1.7 |
1.7 |
— |
— % |
|
|
Impairment of property, plant and equipment6 |
1.0 |
0.1 |
0.9 |
n.m |
|
|
Acquisition related deferred incentive compensation7 |
0.7 |
(1.1) |
1.8 |
(163.6) % |
|
|
Investment loss, net8 |
0.2 |
0.1 |
0.1 |
100.0 % |
|
|
Restructuring and other related costs9 |
0.2 |
3.9 |
(3.7) |
(94.9) % |
|
|
Legal settlement expense |
— |
0.6 |
(0.6) |
(100.0) % |
|
|
Share based compensation10 |
(1.1) |
7.6 |
(8.7) |
(114.5) % |
|
|
Acquisition related deferred consideration11 |
(1.2) |
2.6 |
(3.8) |
(146.2) % |
|
|
Gain on sale of asset12 |
(9.8) |
— |
(9.8) |
n.m. |
|
Adjusted Operating Income |
66.4 |
81.3 |
(14.9) |
(18.3) % |
|
|
|
Depreciation and amortization13 |
44.9 |
32.6 |
12.3 |
37.7 % |
|
Adjusted EBITDA |
111.3 |
113.9 |
(2.6) |
(2.3) % |
|
|
|
Income tax recovery (expense) |
(10.0) |
(15.5) |
5.5 |
(35.5) % |
|
|
Interest expense |
(10.6) |
(10.5) |
(0.1) |
1.0 % |
|
|
Depreciation and amortization13 |
(44.9) |
(32.6) |
(12.3) |
37.7 % |
|
|
One-time income tax expense14 |
— |
8.1 |
(8.1) |
(100.0) % |
|
|
Tax effect of normalization adjustments15 |
(3.5) |
(6.0) |
2.5 |
(41.7) % |
|
Adjusted Net Income |
42.3 |
57.4 |
(15.1) |
(26.3) % |
|
|
|
|
|
|
|
|
|
Cash provided by operating activities |
194.3 |
203.4 |
(9.1) |
(4.5) % |
|
|
Cash used in investing activities |
(79.3) |
(30.5) |
(48.8) |
160.0 % |
|
|
Add: |
|
|
|
|
|
|
Cash used in business acquisitions, asset acquisitions, portfolio investments, investment in associate and minority interest investments, net of investment distribution income |
13.0 |
2.1 |
10.9 |
n.m |
|
|
Free Cash Flow |
128.0 |
175.0 |
(47.0) |
(26.9) % |
|
|
1 |
Impairment of goodwill primarily related to the |
|
2 |
Impairment of intangible assets primarily related to Digital game and app development. |
|
3 |
Transaction and integration costs incurred relating to acquisitions. |
|
4 |
Includes foreign exchange losses (gains) generated by the translation and settlement of monetary assets/liabilities denominated in a currency other than the functional currency of the applicable entity and losses (gains) related to the Company's hedging programs. |
|
5 |
Relates to the amortization of intangible assets acquired with |
|
6 |
Impairment of property, plant and equipment related to tooling. |
|
7 |
Deferred incentive compensation associated with acquisitions. |
|
8 |
Investment loss (income), net includes unrealized and realized (gain)/loss on portfolio investments and minority interest investments and share of (income)/loss from an investment in associate. |
|
9 |
Restructuring and other related costs related to the reduction in the Company's global workforce. |
|
10 |
Related to non-cash expenses associated with long-term incentive plan and includes mark to market loss of deferred share units ("DSUs"). |
|
11 |
Expense (recovery) associated with contingent consideration for acquisitions. |
|
12 |
Gain on disposal of intangible asset. |
|
13 |
Depreciation and amortization for the calculation of Adjusted EBITDA excludes |
|
14 |
Adjustment for one-time income tax expense in Q4 2024. |
|
15 |
Tax effect of adjustments (Footnotes 2-12). Adjustments are tax effected at the effective tax rate of the given period. |
Segment Results
The Company's results from operations by reportable segment for the three months ended
|
(US$ millions) |
Q4 2025 |
Q4 2024 |
||||||||
|
|
Toys |
Entertain-ment |
Digital Games |
Corporate & Other1 |
Total |
Toys |
Entertain-ment |
Digital Games |
Corporate & Other1 |
Total |
|
Revenue |
522.3 |
42.5 |
53.4 |
— |
618.2 |
561.7 |
41.3 |
46.1 |
— |
649.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (Loss) Income |
(171.0) |
14.3 |
3.0 |
(10.0) |
(163.7) |
31.7 |
19.7 |
(0.5) |
(3.8) |
47.1 |
|
Adjusting items: |
|
|
|
|
|
|
|
|
|
|
|
Impairment of goodwill |
215.6 |
— |
— |
— |
215.6 |
10.0 |
— |
2.9 |
— |
12.9 |
|
Impairment of intangible assets |
2.4 |
0.4 |
10.7 |
— |
13.5 |
— |
— |
5.5 |
— |
5.5 |
|
Transaction and integration costs |
2.4 |
— |
0.1 |
2.6 |
5.1 |
2.6 |
— |
— |
2.4 |
5.0 |
|
Foreign exchange loss (gain) |
— |
— |
— |
4.2 |
4.2 |
— |
— |
— |
(4.7) |
(4.7) |
|
Amortization of intangible assets acquired |
1.7 |
— |
— |
— |
1.7 |
1.7 |
— |
— |
— |
1.7 |
|
Impairment of property, plant and equipment |
1.0 |
— |
— |
— |
1.0 |
0.1 |
— |
— |
— |
0.1 |
|
Acquisition related deferred incentive compensation |
0.1 |
— |
0.6 |
— |
0.7 |
0.2 |
— |
(1.3) |
— |
(1.1) |
|
Investment loss, net |
— |
— |
— |
0.2 |
0.2 |
— |
— |
— |
0.1 |
0.1 |
|
Restructuring and other related costs |
— |
(0.1) |
0.3 |
— |
0.2 |
1.7 |
0.1 |
2.1 |
— |
3.9 |
|
Legal settlement expense |
— |
— |
— |
— |
— |
— |
— |
— |
0.6 |
0.6 |
|
Share based compensation |
(0.8) |
(0.4) |
(0.3) |
0.4 |
(1.1) |
5.1 |
0.5 |
0.6 |
1.4 |
7.6 |
|
Acquisition related deferred consideration |
(1.2) |
— |
— |
— |
(1.2) |
0.4 |
— |
2.2 |
— |
2.6 |
|
Gain on sale of asset |
(9.8) |
— |
— |
— |
(9.8) |
— |
— |
— |
— |
— |
|
Adjusted Operating Income (Loss) |
40.4 |
14.2 |
14.4 |
(2.6) |
66.4 |
53.5 |
20.3 |
11.5 |
(4.0) |
81.3 |
|
Adjusted Operating Margin |
7.7 % |
33.4 % |
27.0 % |
n.m. |
10.7 % |
9.5 % |
49.2 % |
24.9 % |
n.m. |
12.5 % |
|
Depreciation and amortization2 |
21.2 |
19.3 |
4.4 |
— |
44.9 |
22.7 |
6.0 |
3.9 |
— |
32.6 |
|
Adjusted EBITDA |
61.6 |
33.5 |
18.8 |
(2.6) |
111.3 |
76.2 |
26.3 |
15.4 |
(4.0) |
113.9 |
|
Adjusted EBITDA Margin |
11.8 % |
78.8 % |
35.2 % |
n.m. |
18.0 % |
13.6 % |
63.7 % |
33.4 % |
n.m. |
17.5 % |
|
1 Corporate & Other includes certain corporate costs (such as certain employee compensation, corporate social responsibility and professional services expenses), foreign exchange, acquisition related transaction costs, as well as investment income and loss. |
||||||||||
|
2
Depreciation and amortization for the calculation of Adjusted EBITDA excludes |
View original content:https://www.prnewswire.com/news-releases/spin-master-reports-q4-2025-financial-results-302704794.html
SOURCE
