For many celebrities, receiving a Funko Pop! doll symbolizes recognition in Hollywood. These 4-inch vinyl figurines with oversized heads and black dot eyes are iconic. Fans buy, celebrate, and display them as part of pop culture. Funko’s flagship store in Hollywood offers thousands of options, from NFL players to Disney princesses and characters from Netflix’s ‘Bridgerton.’ Despite the popularity, Funko Inc. has faced some challenges.
In the previous year, Funko reported a $67.4 million loss on $908.2 million in sales, marking a 13% drop. The company revealed debts of $225 million. Based in Everett, Washington, the company warned of potential issues meeting debt obligations citing tariffs in China, where most toys are produced, canceled retail orders, and expected breaches of loan agreements.
Leading the turnaround is Josh Simon, the new CEO who joined Funko from Netflix in September 2025. Simon, the third CEO in two years, aims to address significant challenges while capitalizing on deep fandom. ‘Funko was at an interesting inflection point,’ Simon stated, noting the existing problems and the potential for revitalizing fan enthusiasm.
The Rise and Fall of Funko
Funko’s journey began in 1998 when Mike Becker started selling bobbleheads from his garage. Under Brian Mariotti in 2005, Funko expanded its character licensing. The introduction of ‘Pop!’ figurines in 2010 fueled a sales boom. Funko went public in 2017, expanding into backpacks and other products. Despite early success, Funko faced a setback in 2025 following a global trade conflict.
Funko misjudged market demand, resulting in overproduction and wrong character choices, said Gerrick Johnson, an analyst at Seaport Research Partners. Furthermore, tariffs imposed by President Trump increased costs, leading to markdowns and disappointing collectors.
Adults collecting toys, known as kidults, have supported the brand through tough times. Enthusiasts, including Simon, appreciated Pop! figurines long before his tenure. Simon emphasized distilling character appeal into figurines. ‘The excitement for a Funko Pop! relates to a star on the Hollywood Walk of Fame,’ he explained. Custom dolls at events like Pokémon conventions spread brand appeal.
Turnaround Strategy
Despite being based in Washington, Funko operates a significant team in Los Angeles, sharing offices with the Hollywood store. The company also has employees in other locations, including Arizona and London.
Under Simon, Funko diversified its supply chain, moving production to Vietnam and other countries. For better cash flow, Funko renegotiated debt timings and accelerated product launches. An example is the quick release of ‘KPop Demon Hunters’ figurines, hitting markets ahead of competitors.
With John Cena’s final WWE match, Funko rapidly produced a doll depicting his attire, which became a bestseller. This agility, according to WWE’s Scott Zanghellini, capitalizes on fan engagement with rapidly evolving events.
Funko is expanding its licensing scope, producing figures from ‘The Folk of the Air’ series and original characters. The aim is to participate actively in cultural moments.
Fan engagement remains crucial. At PokémonXP, Funko offered custom figures, allowing fans to create unique items. Jeff Leu, a San Francisco resident with a substantial collection, enjoyed customizing Pop! models for his children.
Early turnaround indicators are positive. Second-quarter sales showed a 7% increase to $207.7 million, resulting in a net income of $15.4 million, aided by tariff refunds. Despite ongoing challenges, Funko’s share price saw a modest rise, though still below earlier values. According to Johnson, ‘It’s an interesting point in Funko’s history, and Josh Simon has a valuable opportunity.’