Funko, the downtown Everett pop-culture collectibles company that warned in November it might not survive another year, reported a record 56.6% gross margin and $15.4 million in net income for the second quarter of 2026, according to the company's earnings release issued Thursday, Aug. 6.

That's a $56 million swing from a $41 million net loss in Q2 2025.

CEO Josh Simon, who started Sept. 1, 2025, after Funko announced a roughly 20% workforce reduction alongside his appointment in August of that year, called the quarter evidence that his "Make Culture Pop!" turnaround strategy is working.

"The magic for us is that we've really sort of honed that engine of sensing demand, turning it into products and getting into our fans' hands in a really repeatable way," Simon said during the Aug. 6 earnings presentation, as reported by The Herald.

What changed

Net sales hit $207.7 million, up 7% from $193.5 million a year earlier and above the company's own guidance range of 1%–6% growth. Core collectibles, including the Standard and Bitty Pop! vinyl lines, grew 9% to $171.6 million.

The record gross margin got a significant boost from a one-time $25.4 million benefit tied to expected tariff refunds and the release of accrued tariffs.

Without that windfall, the underlying margin would have been lower, and Funko itself guided Q3 gross margin back down to 43%–44%.

Debt still looms

In November 2025, Funko told the SEC it had "substantial doubt" about its ability to continue operating, citing $241 million in loans maturing in September 2026. Simon secured a maturity extension to Dec. 31, 2027, in March 2026, buying the company time.

Since then, Funko has chipped away at the balance. The company reduced debt by $15 million in Q2 alone, bringing total debt to $201.1 million as of June 30, down from $225.3 million at the end of 2025.

What it means for Everett

Funko's headquarters and flagship retail store sit along Wetmore Avenue in downtown Everett. The company's current local headcount has not been disclosed since the 2025 workforce reduction. But the financial turnaround removes the immediate existential threat that hung over one of downtown's most visible employers.

Funko also announced Monday, Aug. 10, the hiring of Kristin Hamilton as chief commercial officer, a signal the company is adding leadership rather than cutting it.

Looking ahead

Funko raised its full-year adjusted EBITDA guidance to $100 million–$110 million, up from $70 million–$80 million previously. Full-year gross margin guidance rose to 46%–47%. Net sales guidance remains flat to up 3% for 2026.

Marissa Silva, editor-in-chief of pop culture trade publication Pop Insider, told The Herald the company's rapid-response licensing approach has sharpened.

"Now I think they're focusing on not necessarily creating every single possible character, but really focusing on the entertainment properties that are really resonating," Silva said.

Q3 results will show whether the momentum holds without the tariff tailwind.