EX-10.1 2 jakkex10-1.htm EXHIBIT 10.1

Exhibit 10.1

 

 

JAKKS PACIFIC REPORTS FOURTH QUARTER AND FULL-YEAR 2025 FINANCIAL RESULTS

Q4 in line with expectations with bottom-line growth; Board approves cash dividend.

 

Santa Monica, California, February 19, 2026 – JAKKS Pacific, Inc. (Nasdaq: JAKK) today reported financial results for the fourth quarter and fiscal year ended December 31, 2025.

 

Fourth Quarter 2025

 

●Net sales were $127.1 million, a year-over-year decrease of 3%

 

○Toys/Consumer Products net sales were $118.0 million, essentially flat to $118.2 million last year

 

○Costumes net sales were $9.1 million, a year-over-year decrease of 28%

 

●Gross margin of 31.0%, up 380 basis points vs. Q4 2024

 

●Gross profit of $39.4 million, up 11% compared to $35.6 million in Q4 2024

 

●Operating loss of $8.6 million in Q4 2025, an improvement of $6.1 million vs. a loss of $14.7 million in Q4 2024
   
●Net loss attributable to common stockholders of $5.3 million or $0.47 per diluted share, compared to net loss attributable to common stockholders of $9.1 million or $0.83 per diluted share in Q4 2024
   
●Adjusted net loss attributable to common stockholders (a non-GAAP measure) of $2.0 million or $0.18 per diluted share, compared to adjusted net loss attributable to common stockholders of $7.4 million or $0.67 per diluted share in Q4 2024

 

●Adjusted EBITDA (a non-GAAP measure) of $(3.8) million vs. $(10.2) million in Q4 2024, an improvement of $6.3 million

 

Full-Year 2025

 

●Net sales were $570.7 million compared to $691.0 million last year, a 17% decrease

 

○Toys/Consumer Products net sales were $461.9 million, a year-over-year decrease of 19%

 

○Costumes net sales were $108.7 million, a year-over-year decrease of 10%

 

●Gross margin of 32.4% compared to 30.8% last year

 

●Gross profit of $185.1 million, down 13% compared to $213.0 million last year

 

●Operating income of $14.2 million compared to $39.7 million last year: a 64% decrease

 

●Net income attributable to common stockholders of $9.9 million, down from a net income attributable to common stockholders of $35.3 million in 2024

 

●Adjusted net income attributable to common stockholders of $18.6 million ($1.62 per diluted share), down from adjusted net income attributable to common stockholders of $42.6 million ($3.79 per diluted share) in 2024

 

●Adjusted EBITDA of $35.4 million, down from $59.3 million in 2024

 

●Cash returned to shareholders of $11.2 million, $1 per common share.

 

●End of year cash and cash equivalents of $54.1 million, down from $70.1 million in 2024

 

Management Commentary

 

“We are pleased with everything we accomplished as 2025 draws to a close. I think when we look back, we’ll see it as a very important year in the history of our company,” said Stephen Berman, Chairman and CEO of JAKKS Pacific. “On the surface, the downward pressure on the full-year financials from tariff policy might be all that some people can see now. What I also reflect upon, however, is the number of areas where we nonetheless made substantial progress towards longer-term goals despite that disruption. We elevated and broadened our relationships with existing factories, licensors and customers, with a global worldview. We also made substantial progress expanding our relationship portfolio in anticipation of a new strategic initiative set to launch in 2027. We were transparent with our shareholders about our perspective on market dynamics and the resulting challenges. We followed through with what we said we would do, refusing to chase topline sales at the expense of bottom-line margin. And we completed our first full year as a cash dividend payer, returning $1 per share in dividends back to our shareholders as we maintained our debt-free balance sheet. We feel we are leaving 2025 stronger than we left 2024 and are excited about 2026’s potential.

 

Our fourth quarter results were roughly in line with our expectations. The significant customer order disruptions of Q2 and Q3 driven by rapidly changing tariff policy abated in Q4 and allowed for a slightly more predictable environment. Our Toy/Consumer Products division net sales were roughly flat in Q4, at $118.0 million, down 0.2% from prior year and down 0.5% from 2023. Costumes were down, although in one of its smaller quarters of the year, but enough to bring total company sales down 2.8% from prior year to $127.1 million, or roughly flat to our 2023 Q4 sales of $127.4 million.  Gross margins improved in the quarter vs. last year and finished the full year at 32.4%, our highest full-year number in fifteen years. Adjusted EBITDA in the quarter improved vs prior year, lifting full-year Adjusted EBITDA to $35.4 million.”

 

 

 

  

Other Financial Highlights

 

Sales in the United States were down 8% in the quarter and 24% on a full-year basis compared to the previous year. Sales outside of the United States were up 10% in the quarter, and up 6% for the full year outside the United States, led by Europe.

 

Inventory was $59.8 million as of December 31, 2025, compared to $52.8 million as of December 31, 2024, driven primarily by our expanded warehouse network in the European Union.

 

The Board of Directors has declared a quarterly dividend of $0.25 per share on the company’s common stock, payable March 30, 2026, to shareholders of record February 27, 2026

 

Use of Non-GAAP Financial Information and Reconciliation of GAAP to Non-GAAP measures:

 

In addition to the preliminary results reported in accordance with U.S. GAAP included in this release, the Company has provided certain non-GAAP financial information including Adjusted EBITDA and Adjusted Net Income (Loss) that exclude various items that are detailed in the financial tables and accompanying footnotes reconciling GAAP to non-GAAP results contained in this release. The non-GAAP financial measures included in the press release are reconciled to the corresponding GAAP financial measures below, as required under the rules of the Securities and Exchange Commission regarding the use of non-GAAP financial measures.

 

We define Adjusted EBITDA as income (loss) from operations before depreciation, amortization and adjusted for certain non-recurring and non-cash charges, such as reorganization expenses and restricted stock compensation expense. Net income (loss) is similarly adjusted and tax-effected to arrive at Adjusted Net Income (Loss). Adjusted EBITDA and Adjusted Net Income (Loss) are not recognized financial measures under GAAP, but we believe that they are useful in measuring our operating performance, enhance an overall understanding of the Company’s past financial performance, and provides useful information to the investor by comparing our performance across reporting periods on a consistent basis. Investors should not consider these measures in isolation or as a substitute for net income, operating income, or any other measure for determining the Company’s operating performance that is calculated in accordance with GAAP. In addition, because these measures are not calculated in accordance with GAAP, they may not necessarily be comparable to similarly titled measures employed by other companies.

 

The non-GAAP financial measures included in the press release are reconciled to the corresponding GAAP financial measures below, as required under the rules of the Securities and Exchange Commission regarding the use of non-GAAP financial measures. See “Use of Non-GAAP Financial Information” for additional disclosures with respect to the use of non-GAAP financial information.

 

Conference Call Live Webcast

 

JAKKS Pacific, Inc. invites analysts, investors and media to listen to the teleconference scheduled for 5:00 p.m. ET / 2:00 p.m. PT on February 19, 2026. A live webcast of the call will be available on the “Investor Relations” page of the Company’s website at www.jakks.com/investors. To access the call by phone, please go to this link (4Q25 Registration link), and you will be provided with dial-in details. To avoid delays, we encourage participants to dial into the conference call fifteen minutes ahead of the scheduled start time. A replay of the webcast will also be available for a limited time at (www.jakks.com/investors).

 

About JAKKS Pacific, Inc.

 

JAKKS Pacific, Inc. is a leading designer, manufacturer and marketer of toys, costumes and consumer products sold throughout the world, with its headquarters in Santa Monica, California. JAKKS Pacific’s popular proprietary brands include Disguise®, Fly Wheels®, Charming®, KidTopia®, Moose Mountain®, Maui®, ReDo® Skateboard Co., Sky Ball®, and Xtreme Power Dozer® as well as a wide range of entertainment-inspired products featuring premier licensed properties. Through their products and charitable donations, JAKKS is helping to make a positive impact on the lives of children. Visit us at www.jakks.com and follow us on Instagram (@jakkspacific.toys), X (@jakkstoys), YouTube (@JAKKSPacific), Facebook (@jakkspacific.toys) and LinkedIn (JAKKS Pacific).

 

Forward Looking Statements

 

This press release may contain “forward-looking statements” (within the meaning of the Private Securities Litigation Reform Act of 1995) that are based on current expectations, estimates and projections about JAKKS Pacific’s business based partly on assumptions made by its management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such statements due to numerous factors, including, but not limited to, those described above, changes in demand for JAKKS Pacific’s products, product mix, the timing of customer orders and deliveries, the impact of competitive products, tariff policy and pricing, or any future transactions will result in future growth or success of JAKKS. The “forward-looking statements” contained herein speak only as of the date on which they are made, and JAKKS undertakes no obligation to update any of them to reflect events or circumstances after the date of this release.

 

CONTACT:

JAKKS Pacific Investor Relations

(424) 268-9567

Lucas Natalini

investors@jakks.net

 

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JAKKS Pacific, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)

 

   December 31, 
   2025   2024 
   (In thousands) 
Assets        
Current assets:        
Cash and cash equivalents  $52,197   $69,936 
Restricted cash   1,869    201 
Accounts receivable, net   138,341    131,629 
Inventory   59,805    52,780 
Prepaid expenses and other assets   16,873    14,141 
Total current assets   269,085    268,687 
           
Property and equipment   152,224    142,623 
Less accumulated depreciation and amortization   133,216    126,981 
Property and equipment, net   19,008    15,642 
           
Operating lease right-of-use assets, net   46,776    53,254 
Deferred income tax assets, net   69,569    70,394 
Goodwill   35,077    35,111 
Other long-term assets   2,682    1,781 
Total assets  $442,197   $444,869 
           
Liabilities and Stockholders’ Equity          
           
Current liabilities:          
Accounts payable  $55,558   $42,560 
Accounts payable - Meisheng (related party)   -    13,461 
Accrued expenses   43,076    48,456 
Reserve for sales returns and allowances   33,569    35,817 
Income taxes payable   2,119    1,035 
Short term operating lease liabilities   13,784    8,091 
Total current liabilities   148,106    149,420 
           
Long term operating lease liabilities   39,578    48,433 
Accrued expenses - long term   4,463    2,563 
Income taxes payable   945    3,620 
Total liabilities   193,092    204,036 
           
Stockholders’ equity:          
Common stock, $.001 par value   11    11 
Additional paid-in capital   302,408    297,198 
Accumulated deficit   (41,021)   (39,692)
Accumulated other comprehensive loss   (12,293)   (17,184)
Total JAKKS Pacific, Inc. stockholders’ equity   249,105    240,333 
Non-controlling interests   -    500 
Total stockholders’ equity   249,105    240,833 
Total liabilities and stockholders’ equity  $442,197   $444,869 

 

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Supplemental Balance Sheet and Cash Flow Data (Unaudited)

 

   December 31, 
Key Balance Sheet Data:  2025   2024 
           
Accounts receivable days sales outstanding (DSO)   100    93 
Inventory turnover (DSI)   63    51 

 

   Twelve Months Ended
December 31,		 
Condensed Cash Flow Data:  2025   2024 
         
Cash flows from operating activities  $8,492   $38,947 
Cash flows used in investing activities   (12,344)   (12,889)
Cash flows used in financing activities and other   (12,219)   (28,475)
Decrease in cash, cash equivalents and restricted cash  $(16,071)  $(2,417)
           
Capital expenditures  $(9,563)  $(11,246)

 

4

 

 

JAKKS Pacific, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations (Unaudited)

 

   Three Months Ended
December 31,		       Twelve Months Ended
December 31,		     
   2025   2024   Δ (%)   2025   2024   Δ (%) 
   (In thousands, except per
share data)		       (In thousands, except per
share data)		     
Net sales  $127,114   $130,741    (3)%  $570,671   $691,042    (17)%
Less: Cost of sales                              
Cost of goods   65,265    72,373    (10)   283,521    361,563    (22)
Royalty expense   20,605    20,623    (0)   92,381    106,804    (14)
Amortization of tools and molds   1,843    2,192    (16)   9,689    9,654    0 
Cost of sales   87,713    95,188    (8)   385,591    478,021    (19)
Gross profit   39,401    35,553    11    185,080    213,021    (13)
Direct selling expenses   15,519    18,201    (15)   36,858    40,105    (8)
General and administrative expenses   32,325    31,953    1    133,460    132,840    0 
Depreciation and amortization   162    117    38    544    392    39 
Selling, general and administrative expenses   48,006    50,271    (5)   170,862    173,337    (1)
Income (loss) from operations   (8,605)   (14,718)   (42)   14,218    39,684    (64)
Other income (expense):                              
Loss from joint ventures   -    -    -    -    -    - 
Other income (expense), net   32    8    300    450    302    49 
Change in fair value of preferred stock derivative liability   -    -    -    -    -    - 
Loss on debt extinguishment   (9)   -     nm     (427)   -     nm  
Interest income   163    308    (47)   995    841    18 
Interest expense   (69)   (157)   (56)   (471)   (1,095)   (57)
Income (loss) before provision for (benefit from) income taxes   (8,488)   (14,559)   (42)   14,765    39,732    (63)
Provision for (benefit from) income taxes   (3,168)   (5,446)   (42)   4,894    5,532    (12)
Net income (loss)   (5,320)   (9,113)   (42)   9,871    34,200    (71)
Net income (loss) attributable to non-controlling interests   -    -    -    -    280     nm  
Net income (loss) attributable to JAKKS Pacific, Inc.  $(5,320)  $(9,113)   (42)%  $9,871   $33,920    (71)%
Net income (loss) attributable to common stockholders  $(5,320)  $(9,113)   (42)%  $9,871   $35,250    (72)%
Earnings (loss) per share - basic  $(0.47)  $(0.83)       $0.88   $3.27      
Shares used in earnings (loss) per share - basic   11,282    11,008         11,190    10,781      
Earnings (loss) per share - diluted  $(0.47)  $(0.83)       $0.86   $3.14      
Shares used in earnings (loss) per share - diluted   11,282    11,008         11,491    11,226      

 

5

 

 

   Three Months Ended
December 31,		       Twelve Months Ended
December 31,		     
   2025   2024   Δ bps   2025   2024   Δ bps 
           Fav/(Unfav)           Fav/(Unfav) 
Net sales   100.0%   100.0%   -    100.0%   100.0%   - 
Less: Cost of sales                              
Cost of goods   51.4    55.3    390    49.7    52.3    260 
Royalty expense   16.2    15.8    (40)   16.2    15.5    (70)
Amortization of tools and molds   1.4    1.7    30.0    1.7    1.4    (30)
Cost of sales   69.0    72.8    380    67.6    69.2    160 
Gross profit   31.0    27.2    380    32.4    30.8    160 
Direct selling expenses   12.2    13.9    170    6.4    5.8    (60)
General and administrative expenses   25.5    24.5    (100)   23.4    19.2    (420)
Depreciation and amortization   0.1    0.1    -    0.1    0.1    - 
Selling, general and administrative expenses   37.8    38.5    70    29.9    25.1    (480)
Income (loss) from operations   (6.8)   (11.3)   450    2.5    5.7    (320)
Other income (expense):                              
Loss from joint ventures   -    -         -    -      
Other income (expense), net   -    -         0.1    0.1      
Change in fair value of preferred stock derivative liability   -    -         -    -      
Loss on debt extinguishment   -    -         (0.1)   -      
Interest income   0.1    0.2         0.2    0.1      
Interest expense   -    (0.1)        (0.1)   (0.2)     
Income (loss) before provision for (benefit from) income taxes   (6.7)   (11.2)        2.6    5.7      
Provision for (benefit from) income taxes   (2.5)   (4.2)        0.9    0.8      
Net income (loss)   (4.2)   (7.0)        1.7    4.9      
Net income (loss) attributable to non-controlling interests   -    -         -    -      
Net income (loss) attributable to JAKKS Pacific, Inc.   (4.2)%   (7.0)%        1.7%   4.9%     
Net income (loss) attributable to common stockholders   (4.2)%   (7.0)%        1.7%   5.1%     

 

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JAKKS Pacific, Inc. and Subsidiaries

Reconciliation of Non-GAAP Financial Information (Unaudited)

 

   Three Months Ended December 31,       Twelve Months Ended December 31,     
   2025   2024   Δ ($)   2025   2024   Δ ($) 
   (In thousands)       (In thousands)     
EBITDA and Adjusted EBITDA                        
Net income (loss)  $(5,320)  $(9,113)  $3,793   $9,871   $34,200   $(24,329)
Interest expense   69    157    (88)   471    1,095    (624)
Interest income   (163)   (308)   145    (995)   (841)   (154)
Provision for (benefit from) income taxes   (3,168)   (5,446)   2,278    4,894    5,532    (638)
Depreciation and amortization   2,005    2,309    (304)   10,233    10,046    187 
EBITDA   (6,577)   (12,401)   5,824    24,474    50,032    (25,558)
Adjustments:                              
Other (income) expense, net   (32)   (8)   (24)   (450)   (302)   (148)
Restricted stock compensation expense   2,781    2,255    526    10,913    9,535    1,378 
Loss on debt extinguishment   9    -    9    427    -    427 
Adjusted EBITDA  $(3,819)  $(10,154)  $6,335   $35,364   $59,265   $(23,901)
Adjusted EBITDA/Net sales %   (3.0)%   (7.8)%   480 bps    6.2%   8.6%   -240 bps 

 

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   Trailing Twelve Months Ended
December 31,		     
   2025   2024   Δ ($) 
   (In thousands)     
TTM EBITDA and TTM Adjusted EBITDA            
TTM net income  $9,871   $34,200   $(24,329)
Interest expense   471    1,095    (624)
Interest income   (995)   (841)   (154)
Provision for income taxes   4,894    5,532    (638)
Depreciation and amortization   10,233    10,046    187 
TTM EBITDA   24,474    50,032    (25,558)
Adjustments:               
Other (income) expense, net   (450)   (302)   (148)
Restricted stock compensation expense   10,913    9,535    1,378 
Change in fair value of preferred stock derivative liability   -    -    - 
Loss on debt extinguishment   427    -    427 
TTM Adjusted EBITDA  $35,364   $59,265   $(23,901)
TTM Adjusted EBITDA/TTM Net sales %   6.2%   8.6%   -240 bps 

 

   Three Months Ended December 31,       Twelve Months Ended December 31,     
   2025   2024   Δ ($)   2025   2024   Δ ($) 
   (In thousands, except per share data)       (In thousands, except per share data)     
Adjusted net income (loss) attributable to common stockholders                        
Net income (loss) attributable to common stockholders  $(5,320)  $(9,113)  $3,793   $9,871   $35,250   $(25,379)
Restricted stock compensation expense   2,781    2,255    526    10,913    9,535    1,378 
Loss on debt extinguishment   9    -    9    427    -    427 
Tax impact of additional charges   521    (544)   1,065    (2,632)   (2,225)   (407)
Adjusted net income (loss) attributable to common stockholders  $(2,009)  $(7,402)  $5,393   $18,579   $42,560   $(23,981)
Adjusted earnings (loss) per share - basic  $(0.18)  $(0.67)  $0.49   $1.66   $3.95   $(2.29)
Shares used in adjusted earnings (loss) per share - basic   11,282    11,008    274    11,190    10,781    409 
Adjusted earnings (loss) per share - diluted  $(0.18)  $(0.67)  $0.49   $1.62   $3.79   $(2.17)
Shares used in adjusted earnings (loss) per share - diluted   11,282    11,008    274    11,491    11,226    265 

 

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JAKKS Pacific, Inc. and Subsidiaries

Net Sales by Division and Geographic Region

 

(In thousands)  QTD Q4   (In thousands)  YTD Q4 
Divisions  2025   2024   2023   % Change
2025 v 2024		   % Change
2024 v 2023		   Divisions  2025   2024   2023   % Change
2025 v 2024		   % Change
2024 v 2023		 
Toys/Consumer Products  $118,040   $118,233   $118,855    -0.2%   -0.5%  Toys/Consumer Products  $461,937   $570,018   $580,687    -19.0%   -1.8%
Dolls, Role-Play/Dress-Up   48,806    62,603    73,272    -22.0%   -14.6%  Dolls, Role-Play/Dress-Up   242,763    313,679    319,962    -22.6%   -2.0%
Action Play & Collectibles   56,229    47,209    35,312    19.1%   33.7%  Action Play & Collectibles   181,962    215,521    219,446    -15.6%   -1.8%
Outdoor/Seasonal Toys   13,005    8,421    10,272    54.4%   -18.0%  Outdoor/Seasonal Toys   37,212    40,818    41,279    -8.8%   -1.1%
Costumes  $9,074   $12,508   $8,541    -27.5%   46.4%  Costumes  $108,734   $121,024   $130,870    -10.2%   -7.5%
Total  $127,114   $130,741   $127,396    -2.8%   2.6%  Total  $570,671   $691,042   $711,557    -17.4%   -2.9%
                                                      
(In thousands)  QTD Q4   (In thousands)  YTD Q4 
Regions  2025   2024   2023   % Change
2025 v 2024		   % Change
2024 v 2023		   Regions  2025   2024   2023   % Change
2025 v 2024		   % Change
2024 v 2023		 
United States  $86,155   $93,468   $96,304    -7.8%   -2.9%  United States  $416,605   $545,013   $557,865    -23.6%   -2.3%
Europe   25,504    25,359    17,988    0.6%   41.0%  Europe   81,379    71,392    76,464    14.0%   -6.6%
Latin America   8,849    4,292    4,434    106.2%   -3.2%  Latin America   36,421    38,159    32,024    -4.6%   19.2%
Canada   3,084    4,257    4,686    -27.6%   -9.2%  Canada   24,426    20,983    26,992    16.4%   -22.3%
Asia   1,388    1,523    2,140    -8.9%   -28.8%  Asia   4,982    6,101    8,543    -18.3%   -28.6%
Australia & New Zealand   1,228    1,116    1,486    10.0%   -24.9%  Australia & New Zealand   4,953    7,409    7,542    -33.1%   -1.8%
Middle East & Africa   906    726    358    24.8%   102.8%  Middle East & Africa   1,905    1,985    2,127    -4.0%   -6.7%
Total  $127,114   $130,741   $127,396    -2.8%   2.6%  Total  $570,671   $691,042   $711,557    -17.4%   -2.9%
                                                      
(In thousands)  QTD Q4   (In thousands)  YTD Q4 
Regions  2025   2024   2023   % Change
2025 v 2024		   % Change
2024 v 2023		   Regions  2025   2024   2023   % Change
2025 v 2024		   % Change
2024 v 2023		 
North America  $89,239   $97,725   $100,990    -8.7%   -3.2%  North America  $441,031   $565,996   $584,857    -22.1%   -3.2%
International   37,875    33,016    26,406    14.7%   25.0%  International   129,640    125,046    126,700    3.7%   -1.3%
Total  $127,114   $130,741   $127,396    -2.8%   2.6%  Total  $570,671   $691,042   $711,557    -17.4%   -2.9%
                                                      
(In thousands)  QTD Q4   (In thousands)  YTD Q4 
Regions  2025   2024   2023   % Change
2025 v 2024		   % Change
2024 v 2023		   Regions  2025   2024   2023   % Change
2025 v 2024		   % Change
2024 v 2023		 
United States  $86,155   $93,468   $96,304    -7.8%   -2.9%  United States  $416,605   $545,013   $557,865    -23.6%   -2.3%
Rest of World   40,959    37,273    31,092    9.9%   19.9%  Rest of World   154,066    146,029    153,692    5.5%   -5.0%
Total  $127,114   $130,741   $127,396    -2.8%   2.6%  Total  $570,671   $691,042   $711,557    -17.4%   -2.9%

 

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