JAKKS Pacific (JAKK) investor relations material

Executive summary

• Q2 2026 net sales rose 17% year-over-year to $139.2 million, led by Toys/Consumer Products up 21% and Costumes up 8%.

• Gross profit increased 15% to $45.0 million, with gross margin at 32.3%, down 50 basis points from last year.

• Net income was $5.9 million, reversing a $2.3 million loss in Q2 2025, aided by refunded tariff expenditures.

• Adjusted net income was $2.9 million ($0.25 per diluted share), up from $0.4 million ($0.03) last year; Adjusted EBITDA more than doubled to $5.4 million.

• Highest first-half international sales in over a decade, with strong momentum in Action Play & Collectibles and Dolls, Role-Play, Dress-Up segments.

Financial highlights

• Year-to-date net sales totaled $245.9 million, up 6% year-over-year, the best first half since 2023.

• Toys/Consumer Products net sales reached $97.5 million in Q2, up 21% year-over-year; Costumes net sales were $41.7 million, up 8%.

• Adjusted EBITDA margin improved to 3.9% from 1.9% in Q2 2025.

• Cash and equivalents at quarter-end were $60.6 million, up from $43.1 million last year.

• Inventory decreased to $58.3 million from $71.8 million year-over-year.

Outlook and guidance

• No new toy introductions planned for the second half to support holiday releases, making the year more front-weighted.

• Management expects continued strong performance in 2026 and is building for growth in 2027 and beyond, with major releases from Sonic and Frozen franchises in 2027.

• Anime, manga, and VTuber initiatives are on track for a 2027 launch, with no revenue expected from these in 2026.

• Management reports positive momentum heading into the second half of 2026, with strong sell-through and positive consumer response to recalibrated pricing.

• Forward-looking statements are subject to risks and uncertainties, with estimates based on current market trends.