Hi, everyone. I'm here with Josh and Eve, and we're here at San Diego Comic-Con. Seems like the perfect place to have this discussion about Funko and his business because so much of Funko is here and has been here for the past 20 years.
Yeah, I mean, I often think there wouldn't be the Funko that exists today without Comic-Con, so it's a massive highlight of the year for us. We're excited you were able to join us and excited to take a little bit of a walk around in a bit here.
Well, I've been your booth several times, several years, so now it makes sense to come together like this. But before we get into the nitty-gritty, that's something I want to talk about because you've been here for 20 years. The booth has grown. The product has grown. The fandom has grown. So just what is that general feeling? Does this feel like a celebration when you come to San Diego every year?
It does. I mean, you'll see the folks who work in our booth are largely fans from all over the world who are, like, taking time off of work and out of their lives to come and, you know, hang out here and help interact. And it's also a great way for just these community of fans from all across the country and the world to come and, you know, celebrate Funko, experience the brand, buy some incredibly coveted limited edition products. I mean, it's flattering and humbling and wild to see the lines at our booth for people who are here to kind of get the exclusive product you can only get here at Comic-Con.
Absolutely. Well, it's obviously great to see this fandom that happens here, but I've seen those exclusives get off those shelves, so I know some finances happened here as well. So let's get into that. How has this quarter been for Funko?
Yep. Numbers have been great, and it's really a reflection of our make culture pop strategy gaining traction so we were really pleased to report sales were up seven percent in the quarter and that's building on the growth from q1 so for the first half of the year we were up six percent and the good news is it wasn't really one product or region or IP it was really broad-based right so in the US we were up three percent in Europe we were at nineteen percent and then from a product perspective our core collectibles were up nine percent and although lounge fly was down two It was an improving trend from what we saw in Q1, and we're really pleased with the better SKU productivity.
Very nice. I'm going to say that increase in the U.S., about 0.045%. That might just be me. But no, that's great to hear. So, Josh, what are some highlights of this quarter with Funko?
Well, I mean, Eve mentioned the momentum that we're seeing, and I think a big part of that is we've talked a lot about the make culture pop strategy, and I think we're really seeing that go from strategy to execution and take form you know it's really about culture sensing and creating demand across you know the entertainment and pop culture landscape uh creativity giving it form in products and then commerce putting it in fans hands all over the world you know on the on the culture side it's really about how we get faster at sensing what's happening and then turning that into products the last two quick things i'll mentioned is creativity on the product side. We're going to take a walk around in a little bit and you're going to get to see our brand new pop mystery platform and you know that's really about taking what people love about pop and just turning it into kind of a broader experience you know and a new product format and so excited to show you how that's about to materialize. You know it's great to sort of see that make culture pop strategy coming together and really moving from idea to execution in the quarter.
Yeah and it's interesting because it seems like you obviously there's some franchises you're ready and prepared for like Avengers Doomsday for example or something like that but then you have these ones you got to kind of predict the popularity and then you have an obsession or like last year with k-pop demon hunters where it's like boom this explosion of nowhere how do we jump on that as fast as possible so is that a constant turning strategy between predicting versus following up it is and I think because we can't predict those things what we really have to do is build this repeatable offense so having sort of upstream teams in place that are really ready very quickly to make the licensing deals the capacity internally to design the products and manufacture them and get them to shelves and then those retail relationships either with wholesale partners our own
DTC channel to get those out to consumers quickly and I think the magic for us is that we've really sort of honed that engine of you know sensing demand turning it into products and getting into our fans hands in a really repeatable way and we're starting to see that happen more and more you only have to do that with movies, television, sports, anime. Only.
Pop culture in general. Yeah. And maybe Jimothy, the raccoon that's taking the world by storm right now.
Well, should we go take a look at it?
I think we should. I'm very excited to see what you have here on the show floor. All right. Great.
Let's go check it out after you.
All right. Let's check out what's over here. So this is Husnal, our chief product officer.
Hi, Husnal. Nice to to meet you, pleasure. All right, so obviously got some great products here, but there's a special one here, this pop mystery. Can you tell us about that?
Yes, at San Diego Comic-Con over here, we are launching our pop mystery line.
Yes, and I see this is the floral, flora pack right here?
Yes, this is the flora pack.
Okay, so tell us about flora.
Flora is a plant line that we started off as a, you know, a regular standard pop, and now we've made it into a mystery collection piece, and it is absolutely fabulous. I love that, and it seems here you can get one of six possible ones that are common each drop has six commons but very good cards and then we have the chase as well as the global one-of-one chase which is which is what differentiates us from the market and it's extremely exciting you say one of one there's only one of these and one of these and imagine if you're a fan but the one oh my gosh that's wow well I gotta see which one is inside right okay what if this is the worldwide chase That'd be wild.
All right, let's open this one up. Ooh, it's pretty. I like that. Oh, it's the tool.
Not the one-on-one, but it's so cute.
It's not the one-on-one, but I still like it a lot. And that's what I think is great. And we're obviously revealing this here at Comic-Con. But there's other licensing partners. This, as you mentioned, is original IP that we've created. And then, of course, we're also launching with some of the biggest IP in the world as well.
It's with One Piece as well as with the Warner Brothers with the Horrors line.
And speaking of Warner Brothers horror, One Piece and Flora, they have a little bit of an activation going on over here, right?
Yes, and we are giving away the Flora line in that activation, so you might want to go check it out.
I think I do want to check it out. Let's go take a look. Let's see what this is here. Ooh, got a knock.
Give it a knock. Yeah, let's see.
Oh, hey. Andre, this is Nick, our head of the marketing and brand. Oh, nice to meet you.
Oh, my gosh. Wow, this is beautiful.
Speaker 0
Welcome to the Pop Flora Greenhouse.
Tell me about what it's like to create experiences for people at San Diego Comic Con when it comes to Funko. Obviously, they're getting the pops, but you're giving a more immersive experience to the brand, right?
Speaker 0
100%. You know, this is such a special opportunity to be at San Diego Comic Con. We really consider this sort of our World Cup, our Super Bowl all-in-one. and it just provides us an amazing opportunity to be on the ground with our fans. As part of the launch of Pop Mystery, we created these mystery game rooms. This is the Pop Flora greenhouse, and we really wanted to bring our own IP and our fandom to life. This isn't just a banner ad. This isn't a shelf display. This is a greenhouse that you can stand in to experience this world yourself.
I really like that because it almost brings more into the fandom when you're able to do some kind of experience along with the product.
100 percent now let's uh let's see some more stuff let's get you out all right thank you for stopping by yes this is really cool we also have a one piece one here and wb horror and k-pop demon hunters thanks again nick that was really cool good good yeah all right let's let's take a look around this way okay you know obviously we talked about this earlier but uh you know selling a lot of exclusive products that you can only get here yes um obviously kind of massive lines of people which is like super humbling and look i think what you experienced and saw over uh in the mystery room is sort of our first step into doing something that's more experiential yes and then one of like the most compelling experiences that you know we've become known for both online and soon rolling out into some wholesale partners is the pop yourself experience i've been able to do that at the funko hollywood store you can do it at the hollywood store um there's a couple stores will announce soon where you'll be able to to start doing it as well you can do it at uh the inner miami stadium with the football club there okay and of course here celebrating the upcoming launch of spider-man brand new day we have a great pop yourself experience as well wait so here at comic-con you tell me i can pop myself as spider-man right now you sure can a limited edition you can only you can only get it here okay um but obviously sort of a version of our kiosk experience where you can pick your body type your skin tone your hair yeah you
know your your clothes and and like I said some very specific Spidey outfits that you can only get here at a comic-con all right you want to give it a try I have to pop myself here okay let me start building so you said this is an exclusive spider-man brand new day pop yourself exclusive only here to uh to comic-con all right let me pick my body type here nice okay let's go with some skin tone love that yeah it's a really customize it here your lashes yes your hair lots of different hairstyles oh there we go this looks like me I like that I like that very nice I gotta do the glasses glad you have some glasses options it's your trademark yeah there we go okay yes and then some exclusive of accessories as well so we got a VIP badge perfect for for Spider-Man going to Comic-Con all right you can hold the mask in his hand and then we also got some web shooting here all right I'm gonna go with that mask and then I can pick another one right yeah let's definitely do the webs very nice what's really cool I see you have a little Hulk here is that also it comes with a Biddy Pop Hulk. Oh, that's awesome. All right, so I get a Biddy Pop Hulk with my Spider-Man outfit here. All right, got to package that pop.
There you go. Look at that.
Wow! It's me in the Spider-Man outfit. There's the web shooting. There's the mask. There's the exclusive Hulk Biddy Pop in there. Oh, that is great. And that's a really cool experience to come here if you're excited for Spider-Man, Brandon Dave, if you're excited for Pop yourself, and you get to have this experience right here at San Diego Comic-Con.
And obviously, the ability to create these sort of geo-specific experiences is something that will start to roll out and test later this year with some retail partners. So you can imagine something like this starting to kind of pop up in other parts of the world and really create something unique and specific to a location.
Oh, that's interesting. Because I was thinking you could do this at the Funko stores, but now you're saying there might be other stores around the world to do this to? Stay tuned for that, huh?
Let's check out the next part of the booth here. All right, let's go by the Mondo booth. Oh, yes! As you know, Mondo is sort of our premium collector toy line. These guys are amazing artists. I've got some fair figures in my home right now.
And we're going to kind of cut through the crowds here.
Speaker 1
How's it going, man?
Good to see you. I am a huge Ninja Turtles fan, so I'm very excited about what's going on here.
Speaker 1
Yes, this is the TMNT Mondoverse, where our partnership with Paramount has given us permission and access to create our own what-if scenario sequel story to the 90s films. So we're bringing in all the characters and whimsy and wildness of the comics, video games, and cartoons into this real-world, gritty, man-in-a-suit vibe that the movies have. Paramount has given us the blessing to reimagine all of the character history. And so, for example, we're introducing new versions of the Punk Frogs as kid brothers that Mikey finds in the sewers. And that's the kind of story expansion that we're able to do with the Mondoverse. It's our sandbox.
And I was curious about that because you have Funko and Mondo under the same roof, but obviously you're doing different types of products. Have you seen this interesting transition in any kind of way from Funko to Mondo as far as getting figures more detailed or upgrades?
Speaker 1
Oh, well, it's like we have the artist in-house to do all the technique, right? What we get from Funko is the support, the credibility, and the doors being blasted open for us to get licenses and access and relationships that we otherwise might not be able to get. So it's really an amazing pairing that creates another collectible through line. So you might have been collecting Funko Pops for a long time, and you have a beautiful collection of them, and you're just like, I'm a Turtles guy, I got all the Turtles Pops, but I also want a realistic 1.6 scale. So you can stay in-house at Funko through Mondo and have a really diverse collection.
Thank you for stopping by, man.
Speaker 1
We're so proud of it. I can't wait to show you guys more.
This is awesome, man. Oh, my gosh. It's so much nostalgia here, too, man. Real Ghostbusters, Master of the Universe, Street Sharks. All right. One more stop. One more stop on this tour. All right, we've seen the booths, we've seen the fans having a wonderful time buying the pops, enjoying the experiences. This feels like a good out to go on in San Diego.
It does, and we're in the big pop mystery box. I think the mystery is going to be where we end up after this, after this box closes.
But for now, should we go and take some investor questions? I think we should. Thank you so much for all of this.
Yeah, you ruined the mystery.
Oh, I just remembered. They told me that one exclusive IP is coming up soon. It's going to be... Well, that was fast. One minute we're dodging crowds at Comic-Con, and next we're here in the Funko office. And somehow, Josh, you made it all the way to London.
I am. I'm across the pond spending some time with our EMEA team and partners. But it's a late night, but, you know, excited to be reunited with you here live. Absolutely.
The Magic Mystery Box can do multiple locations, apparently, with multiple drop-offs. So now that we've shared all the fun stuff at Comic-Con, Eve, can you tell us a little bit more about the financials?
Sure, I'd be happy to. So, like I mentioned earlier, sales were up 7% in Q2 and 6% in the first half. In addition to that, we reported a gross margin of 56.6 percent compared to 32.1 percent last year. And to be clear, our Q2 gross margin benefited from the recognition of a $25 million credit that was related to the expected tariff refunds and release of accrued tariffs. So just for sake of comparison to our guidance range of 42 to 44 percent, our gross margin normalized for that $25 million credit was 44.4%, which was still a record high for Funko. SG&A expenses improved as a percentage of sales by over 400 basis points compared to last year. And finally, adjusted EBITDA was $40.9 million compared to negative adjusted EBITDA of $16.5 million last year. Again, excluding that tariff-related benefit, we delivered adjusted EBITDA of $15 million, well above our guidance range. I'd also like to highlight that in the quarter, we executed a sale of our IEPA tariff claims, a total of $22 million for proceeds of $19 million. And we use that to pay down debt by a total of $15 million, making more progress on deleveraging our balance sheet.
Sounds like great results. And what about the outlook?
Yeah. So for the outlook, we're reiterating our net sales guidance flat to up 3%, and we're raising our adjusted EBITDA guidance to $100 million to $110 million. And that raise is driven by, again, that $25 million tariff credit from Q2, as well as $5 million from improved profitability. That's great. Thank you, Eve.
Now, Josh, what can investors expect in the second half of the year from Funko?
Well, I mean, look, I think the results that Eve just talked about this quarter really highlight the model that we're building, you know, sensing demand earlier, creating more repeatable ways to sort of take that demand and, you know, create products that can scale selectively through the right retail channels around the world. Look, I think in the second half, our consolidated sales will reflect, you know, more of a normalized year-over-year shipment comparison. And, you know, I think we'll continue to be prudent just sort of given some of the broader consumer environment that's out there. And also just to kind of double back on one of the things Eve mentioned earlier about lounge fly and the SKU reductions that we've discussed. Now, we've made some meaningful progress in that area. I definitely would not declare the work there finished. We have an exciting, exciting plans, but still, you know, ways to go. But the encouraging signal in Q2 is that, you know, as Eve said, sales were down 2% with approximately 50% fewer skews. So really seeing that increased productivity. For the remainder of the year, importantly, you know, I think the headline is that we definitely expect a core collectibles to continue growing in the second half. So, you know, when you step back from it, the core is growing, lounge fly is becoming healthier, our underlying earnings power is improving, and Q2 is really a strong and early proof point that, you know, everything we've talked about in the make culture pop strategy um is underway and our focus is now just about consistent execution nice and um what are you excited for for the rest of the year particularly in terms of how the way the company is evolving well i mean there's a lot to choose from um that i'm super excited about i guess um a couple things that i would highlight first overall is just speed you know i've talked about this a lot how do we make sure that we're part of these really great cultural or entertainment moments while they're happening. And, you know, really the key to speed is being able to sort of sense demand earlier and respond quickly. And hopefully in some cases it would be even less inventory exposure. So one thing I've mentioned a couple of times, but excited to kind of more formally announce now, we have formalized a partnership with HP on the additive manufacturing front. This is part of our hyper strike strategy, which means we're able to create products in a matter of weeks instead of, you know, months or sometimes years that go into the traditional manufacturing process. We've already sort of launched our first product with this partnership at Fanatics Fest a couple of weeks ago. We did a really awesome mashup between WWE and the Garbage Pale Kids. The products sold it out at Fanatics Fest. They're selling for multiples more than what we originally sold them for on eBay. So, you know, we're really excited to work with HP on that front. By the way, our normal quick strike offerings from a speed standpoint has also, you know, continued to be off and running. We had pre-orders for Heated Rivalry off campus and obsession. So a lot of surprise entertainment hits out there that we've been able to get after pretty quickly, including a pre-order when the Knicks won the NBA championships. The night that they won, we went live with a championship five-pack. So we're really kind of building that repeatable speed capability. The second thing I'll mention is we actually are announcing today that we're hiring a new chief commercial officer. It's a role that we've had open for a little bit now, Kristen Hamilton. She joins us most recently from Crunchyroll, where she was senior vice president, head of global e-commerce and direct to consumer. Obviously excited about her commercial experience there and her experience in the anime world, which is obviously a huge fandom for us. Before Crunchyroll, she spent about 15 years at Hasbro across a ton of different leadership roles, global e-commerce, consumer product strategy, transformation, brand management, marketing. She's done a ton there. She officially starts on August 24th. And so I guess that's another big exciting thing for me in the second half of the year.
All right. Well, the second half is looking promising. Nice. So we're going to take some questions from some analysts right now. First one is from Eric Wald at Texas Capital. How would you characterize the level of wholesale order demand in the third quarter of 2026 into the upcoming holiday season?
Sure. So I'll take that one. I think what we're seeing this year, you know, we continue to have about three or four months visibility with our wholesale customers placing orders. I would say compared to last year, we're seeing a return of a little bit more normalized seasonality, like Josh mentioned. Last year, Q2 was pretty disrupted post Liberation Day announcement. And then there was an element of kind of catching up with people's orders in Q3 and into Q4. This year, obviously, we're kind of shipping orders as our customers want them. We're seeing great POS trends in our wholesale channel globally. Our POS sales were up 6% year over year. So, again, always looking for that balance between sell-in and sell-through, which we saw in Q2. So, you know, by all the metrics that we gauge, the business is healthy, inventory and the channel is healthy. And we see that there's a good demand from our wholesale partners and from our end customers as well.
Okay. Another question. What are you seeing from your major retail partners around shelf space allocation in recent quarters and into the holiday season?
And what categories are likely to see the most benefit from those gains? let's see well look i think i'll start off just kind of by uh you know the fact that i'm here in uh in europe and i've been spending some time with our european retailers um you know we've secured um extra diorama displays in about 350 stores um across smith's which is you know one of the most like preeminent toy retailers in europe and certainly even i would say in the world HMV, Gift Universe, a bunch of independent retailers. And look, those are sort of like fully designed, kind of built out displays that are really showcase our product out of the packaging on shelves. We're also seeing increase some end cap displays at Smith's for Biddy Pop. You know, if you walk around the city right now, we have pretty high profile windows at Hemley's. another iconic toy retailer that sort of is a Disney and Funko collaboration that's really giving us a lot of high visibility and like prime tourist destinations. And actually right now, even we have another partnership across Sony, Disney with HMV on a big Spider-Man activation at HMV Oxford Street. So, you know, look, things like Biddy Pop have continued to lead incremental shelf space for us. Things like Spider-Man have led to incremental placement, you know, with like pallet trains at, you know, at Walmart. So I think, you know, alongside these big entertainment releases and alongside our, you know, new and growing product lines, we're seeing it generate incremental shelf space for us at retail.
Nice. I look forward to seeing people post some photos with photo ops with all those displays there. All right. Well, now we have some questions from Keegan Cox at DA Davidson. In regards to the strong entertainment slate we have had this year, which franchises or categories are generating the strongest demand? And he highlights this quarter. And what properties are you most excited for in the second half of the year?
Well, thanks. Thank you, Keegan, for the question. Look, I mean, for us, obviously, a strong content slate always helps. And, you know, we knew going into this year at least suspected that there would be some big hits. And I think you're really seeing that in box office attendance and box office records overall. But we have a pretty, first I'll just say like broad base across fandoms. We've seen momentum for us across anime, gaming, obviously theatrical, sports, and some of our own programs. I'll remind everyone in this quarter, I think our top 10 franchises and programs represented about 32% of Q2 sales. So, you know, our business is not necessarily dependent on like any one property, but they obviously help. So, you know, Mando, Grogu was great for us. Toy Story 5, which was a massive hit for Disney, also doing really well for us. You saw our Spider-Man brand new day activation at Comic-Con that has, you know, has recently proven to be huge for us. And we're really glad that we made a bet on that film early on. And then, you know, couldn't be more excited for Avengers Doomsday and what the Russo brothers and Marvel and Disney are going to kind of bring to screens at the end of the year. But look beyond that one piece and Pokemon and in sort of the anime and gaming space continue to be huge sports delivered. I mentioned, I mean, the excitement around the Knicks was, was somewhat, you know, unprecedented for us in this sort of certainly in the world of nba championships compared to past seasons uh the excitement around the world cup i think was you know was palpable and reflected in some you know some strong sales for us and then look i i have to just sort of mention it again on the quick strike front but you know you have uh movies like obsession um which you know kind of came from out of nowhere as a surprise and you know was a major record-setting box office and so So we were able to, you know, very quickly go on presale for, you know, for that film, along with things like heated rivalry and off campus. And I'll even say a personal favorite of mine in this past quarter, a great line of products celebrating the Spice Girls. And I'm not just saying that because I'm over in the UK right now. I would have said that if I were in America as well. But across LoungeFly and Funko, you know, a dream come true, honestly, to be able to collaborate with those folks. So a pretty broad representation of franchises, Keegan. All right. Save me a mail, be Funko Pop.
I need that. All right. And put intakes on the guidance. What are the assumptions that you get to the high and low ends of your guidance? Have you seen any impact from higher input costs like freight? Sure.
So I would start by, you know, to the upside, especially on sales. I mentioned our order book visibility in Q3. So we feel good about that. Obviously, then the holiday period in Q4, we have a bit less visibility, too, but we're excited about the content slate. You know, I think obviously any upside would depend on continued sell through performance. We're hoping the consumer stays resilient through the holiday period. You know, to the downside, we've I would call out tariffs. Obviously, we factored in the latest announced tariffs that are in effect of 10 to 12 percent. But for everyone who's following the news that, you know, there can continue to be surprises on that front. So, again, you know, chose to be prudent within our gross margin guidance in particular. And then as far as, you know, freight costs or raw materials costs, we're cautiously optimistic. But obviously, any kind of, you know, higher oil prices and things like that could negatively impact us as well. Understood.
All right. Here's some questions from Stephen Lechik at Goldman Sachs. So Funko noted that point of sale tailwinds from the first quarter entertainment slate carried into early second quarter. But this positive trend continued through the remainder of the quarter. And what gives management confidence that these trends are sustainable through 2026?
Sure. I mean, I'll start with the trends that we saw in Q2. So, again, I mentioned in the wholesale channel, 6% growth in units year over year in POS sales. For the year to date, it's 9% growth. And again, for the year to date in the in the US of mid single digit in Europe, slightly over 20 percent POS growth. So it's a really strong trend. We're loving to see that momentum. I believe, you know, based on the content slate and some of the products that we have coming up in the lineup that we should see that trends continue. And that's kind of what we factored into our guidance.
Okay. Now, to what extent does management expect new formats like Biddy Pop, Pop Mystery, and the sports-related launches to be revenue contributors in 2026? And what does management view as the key growth levers for Funko in 2026 and beyond outside of the core Pop products?
Well, I'll jump in. I mean, I think first on Pop Mystery, it's a little bit too early to, you know, to sort of size that one responsibly. But what I think is most important about it, and I think kind of signals a lot of what we've been talking about as part of our strategy, is that it's just sort of the platform potential of it. So, you know, if you think about pop mystery just as another dimension and extension of the core pop product, it can send it can really extend across like any entertainment franchise sports. We're doing it with our own IP that you saw sort of down at Comic-Con with the floral line. And it can go in, you know, multiple channels, markets, you know, around the world, I would say sort of that blind box craze is showing no signs of slowing down. And for us, I think it's a unique way that kind of, you know, encourages what our fans have always loved, that like thrill of the chase, discovery, and then that sort of motivation for, you know, repeat participation. Like they want to try and seek out the, you know, that one specific item that they love. So, you know, we'll keep a close eye on sort of the initial launch and judge, you know, sell through and reorders and consumer behavior and scale based on that. But I'd say from a license or standpoint, we have like a pretty exciting and awesome lineup of pop mystery products going all the way through next year. So I am feeling encouraged about that one. And then, you know, you mentioned sort of, you know, Stephen, your question sort of biddy is just sort of another example that, you know, I mentioned we're, you know, we're seeing incremental placement now at Smith's around Europe, another extension of what people love about pop and what makes it iconic. But it's sort of it's becoming its own platform, appealing to a slightly different consumer, getting us incremental placement. We'll continue to look at new ways to dimensionalize pop. We have we have a few different ideas that are in development that will roll out end of this year and early next year. And then, look, honestly, there's about, I would say, half a dozen totally brand new formats that we have in development that will start to roll out early next year and beyond. And the idea with all of those is, you know, trying to establish new platforms for our fans to engage, sort of capitalizing on what we know best around sort of, you know, culture and our licensor relationships and being part of these iconic, you know, entertainment and cultural moments. But in new and exciting ways that I think hopefully will, you know, will set the stage for hopefully the next, you know, pop franchise to come.
All right. Well, we'll look forward to all of that. And I definitely look forward to seeing who gets a one-of-one worldwide chase out there with these mystery pops. All right. Well, that's all the time we have for questions for today. Even, Josh, thank you so much for all your information about the success as well as how you handle certain challenges. So, Josh, are there any thoughts before we let everyone go today?
Yes. Well, first of all, thank you for, you know, for being with us down at Comic-Con and in the office there in Burbank. And look, for me, I would just say the financial highlights that, you know, this quarter shows us is really early evidence that the Make Culture Pop strategy is beginning to take hold. And it's really becoming a more deliberate and disciplined growth engine for us. Ultimately, I think we're getting better at sensing where fan demand is coming from, moving faster to turn those signals into distinctive products and in repeatable ways and building platforms like I was just talking about. And then scaling them through channels all over the world. So look, this quarter, I think, was an early proof point, not the end of the work. But I think, you know, the growth and SKU productivity and certainly that record underlying gross margin gives us confidence that we're on the right track. And so and look, other than that, I just want to say thank you to our shareholders for your continued confidence. Most importantly, thank you to our fans for showing up in the way that you always do. I loved, you know, sort of the energy and everyone who made their way down to Comic-Con this year. I love talking with everyone and hearing their ideas. is it's just an awesome reminder of you know why we do this um and we're certainly excited for the rest of the year so i'll just say again andre thanks to everyone for joining us and we will see you all next quarter
