You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q, as well as our audited consolidated financial statements and related notes as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the Securities and Exchange Commission (“SEC”) (the “2025 10-K”). This discussion and analysis contains forward-looking statements based upon current plans, expectations and beliefs involving risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various important factors, including those set forth under “Risk Factors” included in this Quarterly Report on Form 10-Q. As used in this Quarterly Report on Form 10-Q, unless the context otherwise requires, references to: •“we,” “us,” “our,” the “Company,” “Funko” and similar references refer to: Funko, Inc., and, unless otherwise stated, all of its direct and indirect subsidiaries, including FAH, LLC. •“ACON” refers to ACON Funko Investors, L.L.C., a Delaware limited liability company, and certain funds affiliated with ACON Funko Investors, L.L.C. (including each of the Former Equity Owners). •“ACON Sale” refers to the sale by ACON and certain of its affiliates to TCG of an aggregate of 12,520,559 shares of our Class A common stock pursuant to a Stock Purchase Agreement, dated as of May 3, 2022, by and among ACON, certain affiliates of ACON and TCG. •“Continuing Equity Owners” refers collectively to ACON Funko Investors, L.L.C., the Former Profits Interests Holders, certain former warrant holders and certain current and former executive officers, employees and directors and each of their permitted transferees, in each case, that owned common units in FAH, LLC after our initial public offering (“IPO”) and who may redeem at each of their options, their common units for, at our election, cash or newly-issued shares of Funko, Inc.’s Class A common stock. •“FAH, LLC” refers to Funko Acquisition Holdings, L.L.C., a Delaware limited liability company. •“FAH LLC Agreement” refers to FAH, LLC’s second amended and restated limited liability company agreement, as amended from time to time. •“Former Equity Owners” refers to those Original Equity Owners affiliated with ACON who transferred their indirect ownership interests in common units of FAH, LLC for shares of Funko, Inc.’s Class A common stock (to be held by them either directly or indirectly) in connection with our IPO. •“Former Profits Interests Holders” refers collectively to certain of our directors and certain current executive officers and employees, in each case, who held existing vested and unvested profits interests in FAH, LLC pursuant to FAH, LLC’s prior equity incentive plan and received common units of FAH, LLC in exchange for their profits interests (subject to any common units received in exchange for unvested profits interests remaining subject to their existing time-based vesting requirements) in connection with our IPO. •“Fundamental” refers collectively to Fundamental Capital, LLC and Funko International, LLC. •“Original Equity Owners” refers to the owners of ownership interests in FAH, LLC, collectively, prior to the IPO, which include ACON, Fundamental, the Former Profits Interests Holders and certain current and former executive officers, employees and directors. •“Tax Receivable Agreement” or “TRA” refers to a tax receivable agreement entered into between Funko, Inc., FAH, LLC and each of the Continuing Equity Owners and certain transferees. •“TCG" refers to TCG 3.0 Fuji, LP. 28 Overview Funko is a leading pop culture consumer products company. Our business is built on the principle that almost everyone is a fan of something and the evolution of pop culture is leading to increasing opportunities for fan loyalty. We create whimsical, fun and unique products that enable fans to express their affinity for their favorite “something”—whether it is a movie, TV show, video game, musician or sports team. We infuse our distinct designs and aesthetic sensibility into one of the industry’s largest portfolios of licensed content over a wide variety of product categories, including figures, plush, accessories, apparel, homewares, vinyl records and limited-edition posters. We sell our products in numerous countries across North America, Europe, Latin America, Asia and Africa, with approximately 41% of our net sales in the six months ended June 30, 2026 generated outside of the United States. We also source, procure and assemble inventory, primarily out of Vietnam, China and Cambodia. As such, we are exposed to and impacted by global macroeconomic factors. Current macroeconomic factors remain very dynamic, such as greater political uncertainty, unrest or instability in the United States, Central and Eastern Europe (including the ongoing Russia-Ukraine War), the Middle East, and certain Southeast Asia regions as well as financial instability, new or increasing tariffs and general uncertainty over U.S. trade and tariff policies, rising interest rates and heightened inflation that could reduce our net sales or have impacts to our gross margin (as defined below), net income and cash flows. On February 20, 2026, the U.S. Supreme Court ruled that U.S. tariffs imposed under IEEPA on goods imported into the U.S. were unauthorized. The Company’s total IEEPA tariffs paid as of the date of this report is approximately $20 million. In March 2026, the Court of International Trade (“CIT”) ordered U.S. Customs and Border Protection to refund certain tariffs collected under IEEPA. During the quarter ended June 30, 2026, we applied for the refund of invalidated tariffs we paid under IEEPA and executed a participatory sale of $22.1 million in tariff claims for $19.2 million. Half of the proceeds from the sale were used to pay down our Term Loan Facility. The federal government may attempt to impose new or similar tariffs under alternative statutory mechanisms. There remains substantial uncertainty regarding the duration of existing and newly announced tariffs, potential changes or pauses to such tariffs, tariff levels, and whether further additional tariffs or other retaliatory actions may be imposed, modified, or suspended, and the impacts of such actions on our business. This has led and may lead to further continued uncertainty and volatility in U.S. and global financial and economic conditions and commodity markets, declining consumer confidence, significant inflation and diminished expectations for the economy, and ultimately reduced demand for our products. We will continue to monitor changes to the import and export policies of the U.S. and other countries that could impact our financial position, results of operations and cash flows. In addition, we have been and continue to be operating in a challenging retail environment where retailers have slowed their restocking, prioritized lower inventory levels and, in some cases, have negotiated additional discounting for sell-through or canceled their orders. Moreover, tariffs on imports have adversely impacted and may in the future adversely impact our costs, and we have raised prices for certain of our products. This has had an impact across our brands and geographies of reducing our net sales, gross margin and net income. Additionally, tariffs could impact consumer discretionary spending in future periods. We have strategically adjusted our inventory buy-in to focus on non-exclusive core products in order to help mitigate this impact. 29 Key Performance Indicators We consider the following metrics to be key performance indicators to evaluate our business, develop financial forecasts, and make strategic decisions. Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (amounts in thousands) Net sales $ 207,719 $ 193,469 $ 408,638 $ 384,208 Net income (loss) $ 15,445 $ (41,004) $ (2,682) $ (69,063) EBITDA (1) $ 37,426 $ (21,106) $ 42,110 $ (29,210) Adjusted EBITDA (1) $ 40,902 $ (16,531) $ 52,177 $ (21,194) (1)Earnings before interest, taxes, depreciation and amortization (“EBITDA”) and Adjusted EBITDA are financial measures not calculated in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”), or non-GAAP financial measures. For a reconciliation of EBITDA and Adjusted EBITDA to net loss, the most closely comparable U.S. GAAP financial measure, see “Non-GAAP Financial Measures” below. 30 Results of Operations Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025 The following table sets forth information comparing the components of net income (loss) for the three months ended June 30, 2026 and 2025: Three Months Ended June 30, Period over Period Change 2026 2025 Dollar Percentage (amounts in thousands, except percentages) Net sales $ 207,719 $ 193,469 $ 14,250 7.4 % Cost of sales (exclusive of depreciation and amortization) 90,090 131,429 (41,339) (31.5) % Selling, general, and administrative expenses 79,723 82,259 (2,536) (3.1) % Depreciation and amortization 15,767 14,528 1,239 8.5 % Total operating expenses 185,580 228,216 (42,636) (18.7) % Income (loss) from operations 22,139 (34,747) 56,886 (163.7) % Interest expense, net 5,198 4,522 676 14.9 % Other expense, net 480 887 (407) (45.9) % Income (loss) before income taxes 16,461 (40,156) 56,617 (141.0) % Income tax expense 1,016 848 168 19.8 % Net income (loss) 15,445 (41,004) 56,449 (137.7) % Less: net income (loss) attributable to non-controlling interests 61 (514) 575 (111.9) % Net income (loss) attributable to Funko, Inc. $ 15,384 $ (40,490) $ 55,874 (138.0) % Net Sales Net sales were $207.7 million for the three months ended June 30, 2026, an increase of 7.4%, compared to $193.5 million for the three months ended June 30, 2025. The increase in net sales was due primarily to increased sales of core Pop! products and the impact of price increases that went into effect during the third-quarter of 2025. On a geographical basis, net sales in the United States increased 3.4% to $121.8 million in the three months ended June 30, 2026 as compared to $117.9 million in the three months ended June 30, 2025. Net sales in Europe increased 19.4% to $69.0 million in the three months ended June 30, 2026 as compared to $57.8 million in the three months ended June 30, 2025. Net sales in other international locations decreased 5.1% to $16.9 million in the three months ended June 30, 2026 as compared to $17.8 million in the three months ended June 30, 2025. On a branded category basis, net sales of the Core Collectible branded category increased 9.0% to $171.6 million in the three months ended June 30, 2026 as compared to $157.5 million in the three months ended June 30, 2025. Loungefly branded category net sales decreased 1.7% to $31.3 million in the three months ended June 30, 2026 as compared to $31.8 million in the three months ended June 30, 2025. Other branded category net sales increased 15.2% to $4.8 million in the three months ended June 30, 2026 as compared to $4.1 million in the three months ended June 30, 2025. 31 Cost of Sales and Gross Margin (exclusive of depreciation and amortization) Cost of sales (exclusive of depreciation and amortization) was $90.1 million for the three months ended June 30, 2026, a decrease of 31.5%, compared to $131.4 million for the three months ended June 30, 2025. Cost of sales (exclusive of depreciation and amortization) decreased primarily as a result of product mix, as discussed above. In addition, cost of sales for the three months ended June 30, 2026 benefited from one-time items, including the recognition of a receivable for previously paid tariffs and the release of related tariff accruals. Gross margin (exclusive of depreciation and amortization), calculated as net sales less cost of sales as a percentage of net sales, was 56.6% for the three months ended June 30, 2026, compared to 32.1% for the three months ended June 30, 2025. The increase in gross margin (exclusive of depreciation and amortization) for the three months ended June 30, 2026 compared to the three months ended June 30, 2025 was driven primarily by savings in product costs as a result of the product mix sold, price increases, and lower royalty impairment expense. In addition, gross margin for the three months ended June 30, 2026 benefited from one-time items, including the recognition of a receivable for previously paid tariffs and the release of related tariff accruals. Selling, General, and Administrative Expenses Selling, general, and administrative expenses were $79.7 million for the three months ended June 30, 2026, a decrease of 3.1%, compared to $82.3 million for the three months ended June 30, 2025. The decrease was driven primarily by a $4.0 million decrease in personnel and related costs (including salary and related taxes/benefits, commissions and equity-based compensation), partially offset by an increase in advertising and marketing fees of $1.8 million. Selling, general and administrative expenses were 38.4% and 42.5% of net sales for each of the three months ended June 30, 2026 and 2025, respectively. Depreciation and Amortization Depreciation and amortization expense was $15.8 million for the three months ended June 30, 2026, an increase of 8.5%, compared to $14.5 million for the three months ended June 30, 2025, primarily related to the type and timing of assets placed in service. Interest Expense, Net Interest expense, net was $5.2 million for the three months ended June 30, 2026, an increase of 14.9%, compared to $4.5 million for the three months ended June 30, 2025. The increase in interest expense, net was due primarily to higher interest rates under our Credit Agreement and higher average balance of debt outstanding during the three months ended June 30, 2026. Other Expense, Net Other expense, net was $0.5 million and $0.9 million for the three months ended June 30, 2026 and 2025, respectively. Other expense, net for the three months ended June 30, 2026 and 2025 was primarily related to foreign currency gains and losses relating to transactions denominated in currencies other than the U.S. dollar. Income Tax Expense Income tax expense was $1.0 million and $0.8 million for the three months ended June 30, 2026 and 2025, respectively. The Company’s tax expense primarily reflects foreign income taxes in jurisdictions where the Company generates taxable income under its transfer pricing arrangements. The U.S. operations continue to be in a full valuation allowance position, resulting in no material U.S. federal or state income tax expense. 32 Net Income (loss) Net income was $15.4 million for the three months ended June 30, 2026, compared to net loss of $41.0 million for the three months ended 2025. The increase in net income was primarily due to the increase in net sales, in addition to the decrease in operating expenses as compared to the three months ended June 30, 2025. In addition, net income for the three months ended June 30, 2026 benefited from one-time items, including the recognition of a receivable for previously paid tariffs and the release of related tariff accruals. Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025 The following table sets forth information comparing the components of net loss for the six months ended June 30, 2026 and 2025: Six Months Ended June 30, Period over Period Change 2026 2025 Dollar Percentage (amounts in thousands, except percentages) Net sales $ 408,638 $ 384,208 $ 24,430 6.4 % Cost of sales (exclusive of depreciation and amortization) 202,182 245,297 (43,115) (17.6) % Selling, general, and administrative expenses 163,410 167,066 (3,656) (2.2) % Depreciation and amortization 30,541 29,790 751 2.5 % Total operating expenses 396,133 442,153 (46,020) (10.4) % Income (loss) from operations 12,505 (57,945) 70,450 (121.6) % Interest expense, net 10,082 8,371 1,711 20.4 % Other expense, net 936 1,055 (119) (11.3) % Income (loss) before income taxes 1,487 (67,371) 68,858 (102.2) % Income tax expense 4,169 1,692 2,477 146.4 % Net loss (2,682) (69,063) 66,381 (96.1) % Less: net income (loss) attributable to non-controlling interests 9 (985) 994 (100.9) % Net loss attributable to Funko, Inc. $ (2,691) $ (68,078) $ 65,387 (96.0) % Net Sales Net sales were $408.6 million for the six months ended June 30, 2026, an increase of 6.4%, compared to $384.2 million for the six months ended June 30, 2025. The increase in net sales was due primarily to increased sales of core Pop! products and the impact of price increases that went into effect during the third-quarter of 2025, partially offset by a decline in sales of Loungefly products. On a geographical basis, net sales in the United States increased 2.1% to $239.2 million in the six months ended June 30, 2026 as compared to $234.2 million in the six months ended June 30, 2025. Net sales in Europe increased 16.2% to $137.0 million in the six months ended June 30, 2026 as compared to $117.9 million in the six months ended June 30, 2025. Net sales in other international locations increased 1.0% to $32.4 million in the six months ended June 30, 2026 as compared to $32.1 million in the six months ended June 30, 2025. 33 On a branded category basis, net sales of the Core Collectible branded category increased 12.7% to $340.4 million in the six months ended June 30, 2026 as compared to $302.0 million in the six months ended June 30, 2025. Loungefly branded category net sales decreased 13.0% to $58.5 million in the six months ended June 30, 2026 as compared to $67.2 million in the six months ended June 30, 2025. Other branded category net sales decreased 35.5% to $9.7 million in the six months ended June 30, 2026 as compared to $15.0 million in the six months ended June 30, 2025. Cost of Sales and Gross Margin (exclusive of depreciation and amortization) Cost of sales (exclusive of depreciation and amortization) was $202.2 million for the six months ended June 30, 2026, a decrease of 17.6%, compared to $245.3 million for the six months ended June 30, 2025. Cost of sales (exclusive of depreciation and amortization) decreased primarily as a result of product mix, as discussed above. In addition, cost of sales for the six months ended June 30, 2026 benefited from one-time items, including the recognition of a receivable for previously paid tariffs and the release of related tariff accruals. Gross margin (exclusive of depreciation and amortization), calculated as net sales less cost of sales as a percentage of net sales, was 50.5% for the six months ended June 30, 2026, compared to 36.2% for the six months ended June 30, 2025. The increase in gross margin (exclusive of depreciation and amortization) for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 was driven primarily by savings in product costs as a result of the product mix sold, price increases, and lower royalty impairment expense. In addition, gross margin for the six months ended June 30, 2026 benefited from one-time items, including the recognition of a receivable for previously paid tariffs and the release of related tariff accruals. Selling, General, and Administrative Expenses Selling, general, and administrative expenses were $163.4 million for the six months ended June 30, 2026, a decrease of 2.2%, compared to $167.1 million for the six months ended June 30, 2025. The decrease was driven primarily by a $6.1 million decrease in personnel and related costs (including salary and related taxes/benefits, commissions and equity-based compensation), partially offset by an increase of $1.0 million in professional fees, primarily related to the third-party debt fees associated with the Fifth Amendment to our Credit Agreement. Selling, general and administrative expenses were 40.0% and 43.5% of net sales for each of the six months ended June 30, 2026 and 2025, respectively. Depreciation and Amortization Depreciation and amortization expense was $30.5 million for the six months ended June 30, 2026, an increase of 2.5%, compared to $29.8 million for the six months ended June 30, 2025, primarily related to the type and timing of assets placed in service. Interest Expense, Net Interest expense, net was $10.1 million for the six months ended June 30, 2026, an increase of 20.4%, compared to $8.4 million for the six months ended June 30, 2025. The increase in interest expense, net was due primarily to higher interest rates under our Credit Agreement and a higher average balance of debt outstanding during the six months ended June 30, 2026. Other Expense, Net Other expense, net was $0.9 million and $1.1 million for the six months ended June 30, 2026 and 2025, respectively. Other expense, net for the six months ended June 30, 2026 and 2025 was primarily related to foreign currency gains and losses relating to transactions denominated in currencies other than the U.S. dollar. 34 Income Tax Expense Income tax expense was $4.2 million and $1.7 million for the six months ended June 30, 2026 and 2025, respectively. The Company’s tax expense primarily reflects foreign income taxes in jurisdictions where the Company generates taxable income under its transfer pricing arrangements. The U.S. operations continue to be in a full valuation allowance position, resulting in no material U.S. federal or state income tax expense. Net Loss Net loss was $2.7 million for the six months ended June 30, 2026, compared to $69.1 million for the six months ended June 30, 2025. The decrease in net loss was primarily due to the increase in net sales, in addition to the decrease in operating expenses as compared to the six months ended June 30, 2025. In addition, net income for the six months ended June 30, 2026 benefited from one-time items, including the recognition of a receivable for previously paid tariffs and the release of related tariff accruals. Non-GAAP Financial Measures EBITDA, Adjusted EBITDA, Adjusted Net Income (Loss) and Adjusted Earnings (Loss) per Diluted Share (collectively the “Non-GAAP Financial Measures”) are supplemental measures of our performance that are not required by, or presented in accordance with, U.S. GAAP. The Non-GAAP Financial Measures are not measurements of our financial performance under U.S. GAAP and should not be considered as an alternative to net income (loss), income (loss) per share or any other performance measure derived in accordance with U.S. GAAP. We define EBITDA as net income (loss) before interest expense, net, income tax expense, depreciation and amortization. We define Adjusted EBITDA as EBITDA further adjusted for non-cash charges related to equity-based compensation programs, acquisition transaction costs and other expenses, certain severance, relocation and related costs, foreign currency transaction gains and losses and other unusual or one-time items. We define Adjusted Net Income (Loss) as net income (loss) attributable to Funko, Inc. adjusted for the reallocation of income (loss) attributable to non-controlling interests from the assumed exchange of all outstanding common units and options in FAH, LLC for newly issued-shares of Class A common stock of Funko, Inc. and further adjusted for the impact of certain non-cash charges and other items that we do not consider in our evaluation of ongoing operating performance. These items include, among other things, non-cash charges related to equity-based compensation programs, acquisition transaction costs and other expenses, certain severance, relocation and related costs, foreign currency transaction gains and losses and the income tax expense (benefit) effect of these adjustments. We define Adjusted Earnings (Loss) per Diluted Share as Adjusted Net Income (Loss) divided by the weighted-average shares of Class A common stock outstanding, assuming (1) the full exchange of all outstanding common units and options in FAH, LLC for newly issued-shares of Class A common stock of Funko, Inc. and (2) the dilutive effect of stock options and unvested common units, if any. We caution investors that amounts presented in accordance with our definitions of the Non-GAAP Financial Measures may not be comparable to similar measures disclosed by our competitors, because not all companies and analysts calculate the Non-GAAP Financial Measures in the same manner. We present the Non-GAAP Financial Measures because we consider them to be important supplemental measures of our performance and believe they are frequently used by securities analysts, investors, and other interested parties in the evaluation of companies in our industry. Management believes that investors’ understanding of our performance is enhanced by including these Non-GAAP Financial Measures as a reasonable basis for comparing our ongoing results of operations. Management uses the Non-GAAP Financial Measures: •as a measurement of operating performance because they assist us in comparing the operating performance of our business on a consistent basis, as they remove the impact of items not directly resulting from our core operations; 35 •for planning purposes, including the preparation of our internal annual operating budget and financial projections; •as a consideration to assess incentive compensation for our employees; •to evaluate the performance and effectiveness of our operational strategies; and •to evaluate our capacity to expand our business. By providing these Non-GAAP Financial Measures, together with reconciliations, we believe we are enhancing investors’ understanding of our business and our results of operations, as well as assisting investors in evaluating how well we are executing our strategic initiatives. The Non-GAAP Financial Measures have limitations as analytical tools, and should not be considered in isolation, or as an alternative to, or a substitute for net income (loss) or other financial statement data presented in our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q as indicators of financial performance. Some of the limitations are: •such measures do not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments; •such measures do not reflect changes in, or cash requirements for, our working capital needs; •such measures do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments on our debt; •although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and such measures do not reflect any cash requirements for such replacements; and •other companies in our industry may calculate such measures differently than we do, limiting their usefulness as comparative measures. Due to these limitations, Non-GAAP Financial Measures should not be considered as measures of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our U.S. GAAP results and using these non-GAAP measures only supplementally. As noted in the table below, the Non-GAAP Financial Measures include adjustments for non-cash charges related to equity-based compensation programs, acquisition transaction costs and other expenses, certain severance, relocation and related costs, foreign currency transaction gains and losses and other unusual or one-time items. It is reasonable to expect that certain of these items will occur in future periods. However, we believe these adjustments are appropriate because the amounts recognized can vary significantly from period to period, do not directly relate to the ongoing operations of our business and complicate comparisons of our internal operating results and operating results of other companies over time. Each of the normal recurring adjustments and other adjustments described herein and in the reconciliation table below help management with a measure of our core operating performance over time by removing items that are not related to day-to-day operations. 36 The following tables reconcile the Non-GAAP Financial Measures to the most directly comparable U.S. GAAP financial performance measure, which is net income (loss), for the periods presented: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (In thousands, except per share data) Net income (loss) attributable to Funko, Inc. $ 15,384 $ (40,490) $ (2,691) $ (68,078) Reallocation of net income (loss) attributable to non-controlling interests from the assumed exchange of common units of FAH, LLC for Class A common stock (1) 61 (514) 9 (985) Equity-based compensation (2) 2,782 3,112 5,196 6,377 Foreign currency transaction loss (3) 588 1,463 1,104 1,639 Tax receivable agreement liability adjustments (4) — — 112 — Third-party debt amendment fees (5) 106 — 3,655 — Income tax (benefit) expense (6) (3,968) 9,743 1,280 16,531 Adjusted net income (loss) $ 14,953 $ (26,686) $ 8,665 $ (44,516) Weighted-average shares of Class A common stock outstanding - basic 55,860 54,362 55,644 53,948 Equity-based compensation awards and common units of FAH, LLC that are convertible into Class A common stock 1,601 749 187 907 Adjusted weighted-average shares of Class A stock outstanding - diluted 57,461 55,111 55,831 54,855 Earnings (loss) per diluted share $ 0.27 $ (0.74) $ (0.05) $ (1.26) Adjusted earnings (loss) per diluted share $ 0.26 $ (0.48) $ 0.16 $ (0.81) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (amounts in thousands) Net income (loss) $ 15,445 $ (41,004) $ (2,682) $ (69,063) Interest expense, net 5,198 4,522 10,082 8,371 Income tax expense 1,016 848 4,169 1,692 Depreciation and amortization 15,767 14,528 30,541 29,790 EBITDA $ 37,426 $ (21,106) $ 42,110 $ (29,210) Adjustments: Equity-based compensation (2) 2,782 3,112 5,196 6,377 Foreign currency transaction (gain) loss (3) 588 1,463 1,104 1,639 Tax receivable agreement liability adjustments (4) — — 112 — Third-party debt amendment fees (5) 106 — 3,655 — Adjusted EBITDA $ 40,902 $ (16,531) $ 52,177 $ (21,194) (1)Represents the reallocation of net income attributable to non-controlling interests from the assumed exchange of common units of FAH, LLC for Class A common stock in periods in which income was attributable to non-controlling interests. (2)Represents non-cash charges related to equity-based compensation programs, which vary from period to period depending on the timing of awards. (3)Represents both unrealized and realized foreign currency losses on transactions denominated other than in U.S. dollars, including derivative gains and losses on foreign currency forward exchange contracts. 37 (4)Represents recognized adjustments to the tax receivable agreement liability. (5)Represents nonrecurring third-party debt fees paid as part of the Fifth Amendment to the Credit Agreement. (6)Represents the income tax expense effect of the above adjustments including adding back the valuation allowance to the net loss. This adjustment uses an effective tax rate of 25% for all periods presented. Liquidity and Financial Condition Introduction Our primary requirements for liquidity and capital are working capital, inventory management, capital expenditures, debt service and general corporate needs. Our primary sources of cash flows have been cash flows from operating activities and borrowings under the Credit Agreement dated September 17, 2021 with FAH, LLC and certain of its material domestic subsidiaries from time to time (the “Credit Agreement Parties”) (as amended, restated and amended and restated, supplemented, waived or otherwise modified from time to time, the "Credit Agreement"), providing for a term loan facility in the amount of $180.0 million (the "Term Loan Facility") and a revolving credit facility of $125.0 million (the "Revolving Credit Facility" and together with the Term Loan Facility, the "Credit Facilities"). The challenging retail environment, in particular as a result of the tariffs imposed in 2025, and the potential imposition of modified or additional tariffs or export controls by other countries, has adversely impacted and is expected to adversely impact our performance. On February 13, 2026, the Credit Agreement Parties entered into an amendment (the "Fifth Amendment") with the lenders under the Credit Agreement in effect prior to the Fifth Amendment (the "Prior Credit Agreement") and JPMorgan Chase Bank, N.A. as administrative agent. The Fifth Amendment among other things, amended the Prior Credit Agreement to (i) extend the maturity date of the loans under the Prior Credit Agreement from September 17, 2026 to December 31, 2027, and (ii) amend the financial covenants applicable to FAH, LLC and its subsidiaries under the Prior Credit Agreement to, among other things, (a) waive the minimum Fixed Charge Coverage Ratio (as defined in the Credit Agreement) covenant for the fiscal quarter ended December 31, 2025 and the fiscal quarters ending March 31, 2026 and June 30, 2026, (b) provide FAH, LLC additional cushion with respect to the minimum Fixed Charge Coverage Ratio covenant for the fiscal quarters ending September 30, 2026, December 31, 2026 and March 31, 2027 relative to the minimum Fixed Charge Coverage Ratio covenant set forth in the Prior Credit Agreement, (c) introduce a minimum Consolidated EBITDA (as defined in the Credit Agreement) covenant for the six-month period ending June 30, 2026, (d) waive the maximum Net Leverage Ratio (as defined in the Credit Agreement) covenant for the fiscal quarter ended December 31, 2025 and the fiscal quarters ending March 31, 2026, June 30, 2026 and September 30, 2026, (e) subject to certain usage restrictions, permit FAH, LLC to forego testing of the maximum Net Leverage Ratio, minimum Fixed Charge Coverage Ratio, minimum Qualified Cash (as defined in the Credit Agreement) and minimum Consolidated EBITDA covenants (collectively, the "Financial Covenants") for any test period (to the extent required to be tested in such test period) if FAH, LLC makes a voluntary prepayment of the loans under the Credit Agreement in an amount not less than $10.0 million prior to the delivery of a compliance certificate for such test period, (f) requiring amortization payments on the outstanding revolving loans, with each such amortization payment in respect of the outstanding revolving loans permanently reducing the revolving commitments and (g) requiring quarterly mandatory prepayment of the revolving loans with cash (subject to certain exceptions) and cash equivalents in excess of $50.0 million, with each such prepayment permanently reducing the revolving commitments. Consistent with the Prior Credit Agreement, the Credit Parties are subject to a covenant to hold no less than $10.0 million of Qualified Cash at any time. 38 As a result of the Fifth Amendment of the Credit Agreement, we expect that our existing resources and future cash flows from operations and cash and cash equivalents, will provide us with sufficient liquidity to meet our obligations for at least the next twelve months from the issuance date of these financial statements, including compliance with all covenants under the Credit Agreement. As our financial condition continues to improve as a result of the 2025 implemented price increases and cost savings initiatives, we plan to either amend the Credit Agreement to further extend the maturity, seek alternative financing arrangements prior to the maturity of the debt, or opportunistically pursue other business opportunities or strategic transactions with the assistance of financial advisors. However, there can be no assurance these plans will be completed. If we are unable to complete these plans before the end of the fiscal year December 31, 2026, the debt would reclassify from long-term liability to a current liability. If the Credit Agreement is not refinanced before its maturity date of December 31, 2027 on terms that are acceptable to us or, if we do not successfully enter into a transaction(s) to strengthen our balance sheet and increase our financial flexibility, our liquidity, results of operations, cash flows and financial condition would be materially adversely impacted. If we obtain additional capital by issuing equity, the interests of our existing stockholders will be diluted. If we incur additional indebtedness, that indebtedness may contain significant financial and other covenants that may significantly restrict our operations. We cannot assure you that we could obtain refinancing or additional financing on favorable terms or at all. In addition, our Board of Directors intends to continue to evaluate strategic alternatives for the Company from time to time. There can be no assurance that any review of strategic alternatives will result in the identification or consummation of any transaction or action and there is no defined timeline for completion of a review process. Liquidity and Capital Resources The following table shows summary cash flow information for the six months ended June 30, 2026 and 2025 (in thousands): Six Months Ended June 30, 2026 2025 Net cash provided by (used in) operating activities $ 23,630 $ (44,442) Net cash used in investing activities (18,954) (15,241) Net cash (used in) provided by financing activities (5,773) 73,663 Effect of exchange rates on cash and cash equivalents (338) 516 Net change in cash and cash equivalents $ (1,435) $ 14,496 Operating Activities. Net cash provided by operating activities was $23.6 million for the six months ended June 30, 2026, compared to net cash used in operating activities of $44.4 million for the six months ended June 30, 2025. Changes in net cash provided by or used in operating activities resulted primarily from cash received from net sales and cash payments for product costs and royalty expenses paid to our licensors. Other drivers of the changes in net cash provided by operating activities include shipping and freight costs, selling, general and administrative expenses (including personnel expenses and commissions and rent and facilities costs) and interest payments made for our short-term borrowings and long-term debt. Our accounts receivable typically are short term and settle in approximately 30 to 90 days (average 50 days). The increase in net cash provided by operating activities for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 was primarily due to a decrease in net loss of $66.4 million and changes in working capital that increased net cash provided by operating activities by $2.3 million. Within working capital, the primary drivers were increases in accrued expenses and other liabilities of $6.3 million and accrued royalties of $9.9 million, partially offset by decreases in prepaid expenses and other assets of $3.0 million and accounts payable of $9.2 million. 39 Investing Activities. Our net cash used in investing activities primarily consists of purchases of property and equipment. For the six months ended June 30, 2026 and 2025 net cash used in investing activities was $19.0 million and $15.2 million and was primarily related to purchases of tooling and molds used for production of our product lines. Financing Activities. Our financing activities primarily consist of proceeds from the issuance of long-term debt, net of debt issuance costs, the repayment of long-term debt, payments and borrowings under our line of credit facility. For the six months ended June 30, 2026, net cash used in financing activities was $5.8 million, primarily related to payments on the Term Loan Facility, Revolving Credit Facility and Equipment Finance Loan of $21.3 million and payment for debt amendment costs of $3.6 million, partially offset by $19.2 million in proceeds from the one-time sale of a tariff receivable. For the six months ended June 30, 2025, net cash provided by financing activities was $73.7 million, primarily related to borrowings on the Revolving Line of Credit Facility of $85.0 million, partially offset by payments on the Term Loan Facility and Equipment Finance Loan of $11.5 million. Financial Condition We cannot assure you that our cash provided by operating activities and cash and cash equivalents will be sufficient to meet our future needs. There is currently no availability under our Revolving Credit Facility. As of June 30, 2026, the Credit Agreement Parties were in compliance with all of the covenants then in effect and required to be tested under the Credit Agreement, however, we cannot assure you that we will be able to maintain compliance with the Financial Covenants, or that we will be able to further amend the Credit Agreement should circumstances arise in the future. If our operating results fail to improve or if we are otherwise unable to maintain compliance with the Financial Covenants or other covenants under the Credit Agreement, our lenders could, among other things, terminate all outstanding commitments thereunder and accelerate all outstanding borrowings and other obligations, which would require us to seek additional financing. Even in the absence of such event, if we are unable to generate sufficient cash flows from operations in the future, and if availability under our Revolving Credit Facility is not sufficient, or if our debt matures and we are unable to repay amounts owed in full, we may have to obtain additional financing or refinancing. If we obtain additional capital by issuing equity, the interests of our existing stockholders will be diluted. If we incur additional indebtedness, that indebtedness may contain significant financial and other covenants that may significantly restrict our operations. We cannot assure you that we could obtain refinancing or additional financing on favorable terms or at all. 40 Credit Facilities As of June 30, 2026, we had $73.7 million of indebtedness outstanding under our Term Loan Facility (net of unamortized discount of $3.3 million) and $124.6 million outstanding borrowings under our Revolving Credit Facility, leaving no remaining funds available under the Revolving Credit Facility. On March 31, 2026, an amortization payment in an amount equal to $4,500,000 was paid with respect to the Term Loan Facility. At the end of each fiscal quarter thereafter, commencing with the fiscal quarter ending June 30, 2026, (i) the Term Loan Facility, will amortize in quarterly installments equal to $4,125,000, with any outstanding balance due and payable on the Maturity Date and (ii) the revolving credit facility will amortize in quarterly installments equal to $375,000 (accompanied by permanent commitment reductions), with any outstanding balance due and payable on the Maturity Date. On June 30, 2026, we paid the required quarterly installment of $4,500,000, allocated between the debt facilities in accordance with the Credit Agreement. Loans under the Credit Facilities currently bear interest at SOFR plus 4.50% per annum. On the first day of each fiscal quarter, commencing with April 1, 2027, an additional 0.25% per annum will be added to the interest rate applicable to the loans under the Credit Facilities. SOFR rate is subject to a 0% floor. For loans based on SOFR, interest payments are due at the end of each applicable interest period and in the case of loans based on SOFR with an interest period of more than three months' duration, on each day prior to the last day of such interest period that occurs at intervals of three months' duration after the first day of such interest period. The Credit Agreement contains a number of covenants that, among other things and subject to certain exceptions, restrict our ability to: •incur additional indebtedness; •incur certain liens; •consolidate, merge or sell or otherwise dispose of our assets; •make investments, loans, advances, guarantees and acquisitions; •pay dividends or make other distributions on equity interests, or redeem, repurchase or retire equity interests; •enter into transactions with affiliates; •enter into sale and leaseback transactions in respect to real property; •enter into swap agreements; •enter into agreements restricting our subsidiaries’ ability to pay dividends; •issue or sell equity interests or securities convertible into or exchangeable for equity interests; •redeem, repurchase or refinance other indebtedness; and •amend or modify our governing documents. In addition, the Credit Agreement requires FAH, LLC and its subsidiaries to, subject to the proviso at the end of this paragraph, comply with the following Financial Covenants: (i) on a quarterly basis, commencing with the fiscal quarter ending December 31, 2026, a maximum Net Leverage Ratio of 2.50:1.00, (ii) on a quarterly basis, commencing with the fiscal quarter ending September 30, 2026, a minimum Fixed Charge Coverage Ratio of (a) 0.75:1.00 with respect to the fiscal quarter ending September 30, 2026, (b) 0.85:1.00 with respect to the fiscal quarter ending December 31, 2026, (c) 1.00:1.00 with respect to the fiscal quarter ending March 31, 2027, and (d) 1.25:1.00 with respect to the fiscal quarter ending June 30, 2027 and each fiscal quarter thereafter, (iii) at all times, a minimum Qualified Cash covenant of $10.0 million, and (iv) for the six-month period ending June 30, 2026, a 41 minimum Consolidated EBITDA covenant of $15.1 million; provided that if, in any fiscal quarter, FAH, LLC voluntarily prepays, prior to the date on which a compliance certificate is required to be delivered in respect of such fiscal quarter, more than $10.0 million of principal of then-outstanding loans, then all of the applicable Financial Covenants (other than the minimum Qualified Cash covenant), to the extent required to be tested in such fiscal quarter, will be deemed waived for such fiscal quarter (the “Covenant Cure Right”); provided, further, that (x) the Covenant Cure Right is not permitted to be exercised in two (2) consecutive fiscal quarters, and (y) if the Covenant Cure Right is to be exercised in any fiscal quarter, FAH, LLC needs to have complied with the maximum Fixed Charge Coverage Ratio required in respect of the preceding fiscal quarter. As of June 30, 2026, we were in compliance with all covenants under the Credit Agreement. The Credit Agreement also contains certain customary representations and warranties and affirmative covenants, and certain reporting obligations. In addition, the lenders under the Credit Facilities will be permitted to accelerate all outstanding borrowings and other obligations, terminate outstanding commitments and exercise other specified remedies upon the occurrence of certain events of default (subject to certain grace periods and exceptions), which include, among other things, payment defaults, breaches of representations and warranties, covenant defaults, certain cross-defaults and cross-accelerations to other indebtedness, certain events of bankruptcy and insolvency, certain material monetary judgments and changes of control. The Credit Agreement defines “change of control” to include, among other things, any person or group other than TCG and its affiliates becoming the beneficial owner of more than 35% of the voting power of the equity interests of Funko, Inc. Form S-3 Registration Statement Our registration statement on Form S-3 was declared effective by the SEC on August 15, 2025 and will remain effective through August 15, 2028. The Form S-3 allows us to offer and sell from time-to-time up to $100.0 million of Class A common stock, preferred stock, debt securities, warrants, purchase contracts or units comprised of any combination of these securities for our own account and allows certain selling stockholders to offer and sell 12,626,024 shares of Class A common stock in one or more offerings. The terms of any offering under the shelf registration statement will be established at the time of such offering and will be described in a prospectus supplement filed with the SEC prior to the completion of any such offering. The Form S-3 is intended to provide us flexibility to conduct registered sales of our securities, subject to market conditions and our future capital needs. The terms of any future offering under the shelf registration statement will be established at the time of such offering and will be described in a prospectus supplement filed with the SEC prior to the completion of any such offering. At-the-Market Sales Agreement On August 15, 2025, we entered into an At-the-Market Sales Agreement (the “Sales Agreement”) with BTIG, LLC (the “Agent”) relating to shares of our Class A common stock. In accordance with the terms of the Sales Agreement, from time to time we may offer and sell shares of our Class A common stock having an aggregate gross sales price of up to $40.0 million through or to the Agent, acting as sales agent or principal, pursuant to the prospectus supplement. No sales were made under the Sales Agreement during the six months ended June 30, 2026. 42 Future Sources and Uses of Liquidity As of June 30, 2026, we had $40.7 million of cash and cash equivalents and $38.7 million of working capital, compared with $42.1 million of cash and cash equivalents and $46.5 million of working capital as of December 31, 2025. Working capital is impacted by the seasonal trends of our business and the timing of new product releases, as well as our current portion of long-term debt and any availability under our Revolving Credit Facility, which is currently $0. Sources As noted above, historically, our primary sources of cash flows have been cash flows from operating activities and borrowings under our Credit Facilities. We expect cash flows from operations to continue to be our primary sources of liquidity. For a discussion of our credit facilities, see “Credit Facilities” in Note 1, “Organization and Operations” and Note 4, “Debt”. In addition, as described above, on August 15, 2025, we filed a registration statement on Form S-3 for the sale from time-to-time of up to $100.0 million of certain of our securities and for certain selling stockholders to offer and sell shares of Class A common stock in one or more offerings. We also entered into the Sales Agreement to offer and sell shares of our Class A common stock having an aggregate gross sales price of up to $40.0 million, pursuant to the prospectus supplement. Uses As noted above, our primary requirements for liquidity and capital are working capital, inventory management, capital expenditures, debt service and general corporate needs. Except as described above, there have been no material changes to our liquidity and capital commitments as described in our 2025 10-K. Additional future liquidity needs will likely include tax distributions, interest payments, repayment of our debt facilities, the redemption right held by the Continuing Equity Owners that they may exercise from time to time (should we elect to exchange their common units for a cash payment), payments under the Tax Receivable Agreement and general cash requirements for operations and capital expenditures (including a future enterprise resource management system (ERP), additional platforms to support our direct-to-consumer experience, and capital build out of new leased warehouse and office space). The Continuing Equity Owners may exercise their redemption right for as long as their common units remain outstanding. Although the actual timing and amount of any payments that may be made under the Tax Receivable Agreement will vary, we expect that the payments we will be required to make to the TRA Parties will be significant, which will be contingent on future realizability of the Company’s deferred tax assets. Any payments made by us to the TRA Parties under the Tax Receivable Agreement will generally reduce the amount of overall cash flow that might have otherwise have been available to us or to FAH, LLC and, to the extent that we are unable to make payments under the Tax Receivable Agreement for any reason, the unpaid amounts generally will be deferred and will accrue interest until paid by us; provided however, that nonpayment for a specified period may constitute a material breach under the Tax Receivable Agreement and therefore may accelerate payments due under the Tax Receivable Agreement. 43 Seasonality While our customers in the retail industry typically operate in highly seasonal businesses, we have historically experienced only moderate seasonality in our business. Historically, over 50% of our net sales are made in the third and fourth quarters, primarily in the period from August through November, as our customers build up their inventories in anticipation of the holiday season. Historically, the first quarter of the year has represented the lowest volume of shipment and sales in our business and in the retail and toy industries generally and it is also the least profitable quarter due to the various fixed costs of the business. However, the volatility in net sales we have experienced in recent years may have masked the full effects of seasonal factors on our business to date, and as such, seasonality may have a greater effect on our results of operations in future periods. Critical Accounting Policies and Estimates Discussion and analysis of our financial condition and results of operations are based on our unaudited condensed consolidated financial statements which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities and related disclosures of contingent assets and liabilities, revenue and expenses at the date of the unaudited condensed consolidated financial statements. We base our estimates on historical experience and on various other assumptions in accordance with U.S. GAAP that we believe to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. Critical accounting policies and estimates are those that we consider the most important to the portrayal of our financial condition and operating results and require management’s most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Our critical accounting policies and estimates include those related to revenue recognition and sales allowances, royalties, inventory, goodwill and intangible assets, and income taxes. Changes to these policies and estimates could have a material adverse effect on our results of operations and financial condition. Goodwill and Intangible Assets. Goodwill represents the excess of the purchase price over the net amount of identifiable assets acquired and liabilities assumed in a business combination measured at fair value. We evaluate goodwill for impairment annually on October 1 of each year and upon the occurrence of triggering events or substantive changes in circumstances that could indicate a potential impairment by assessing qualitative factors or performing a quantitative analysis in determining whether it is more likely than not that the fair value of the net assets is below their carrying amounts. Intangible assets acquired in a business combination are recognized separately from goodwill and are initially recognized at their fair value at the acquisition date. Intangible assets acquired include intellectual property (product design), customer relationships, and trade names. These are definite-lived assets and are amortized on a straight-line basis over their estimated useful lives. Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets might not be recoverable. Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which an asset is used, or any other significant adverse change that would indicate that the carrying amount of an asset or group of assets may not be recoverable. We have evaluated potential goodwill impairment triggering events as of June 30, 2026, and determined it was more likely than not that the fair value of the reporting unit was above carrying value of the net assets. We will continue to evaluate for other-than-temporary impairment triggering events due to the substantive changes in circumstances, such as market capitalization, which could indicate a potential impairment. We reassess the recoverability of the carrying value our identified intangible and other long-lived assets, to the extent conditions necessitate an impairment assessment. 44 There have been no significant changes to our critical accounting policies to our disclosure reported in “Critical Accounting Policies and Estimates” in our 2025 10-K.