All right, we will get started. First and foremost, welcome everybody to Funko's first Press and Investor Day. We're super excited to have you here. Really excited that we could participate in person and have a webcast for those that cannot be here. Should be a great day. Why are we here? Well, you know, we have the opportunity to talk to most of you in the room on a quarterly basis. We usually spend our time, and more so even for some of you, but we spend a lot of our time talking about the last three months and the next three months. We never get enough time to really talk about what is the future of Funko. That's really what we wanna talk about today. Not about really what's happening in 2022, but what's happening in 2023 and beyond. We're super excited to share our vision and our story with you and really lay out what the future of Funko is. The agenda for the day will be, Andrew Perlmutter, our CEO, will kick us off with the vision and strategy of the future of Funko. Brian Mariotti, our Chief Creative Officer, will talk about our house of brands. Our newly re-appointed CRO, Andy Oddie, will talk about our distribution and geography strategy. We're super excited to have Andy join us. He's been with the company for quite some time. He was part of our Underground Toys acquisition, but based on all the great work he did in EMEA, he is now our Chief Revenue Officer. We can welcome Andy. I will come back up and do a financial recap, and then Andrew will wrap it up. With that, I'm going to play a short video and then turn it over to Andrew, who will kick us off. Before we get there, sorry, one more detail. We will be doing Q&A after the presentation, but to make sure, in fairness to those that cannot participate live, but they are on the webcast, there's a QR code on the table. If you could submit all your questions via QR code, then we'll consolidate all the questions and make sure that we get through them. We won't be doing live questions. It'll all be through the QR code. With that, I will play the video. Funko Fam, how we doing? We're all made of stories. Stories of heroes and villains. What? Triumph and heartbreak. Nearby places and distant worlds. The Funko Boogie. They define who we are, unite us together, and make our journeys great. But most of all, they're what make life fun. Oh, you better make some more noise than that. Funko Family. I love the energy in here. Oh my goodness. Funko: Follow your fun. Hey, everybody. Welcome. Thank you all for coming out today. We're excited to kick off our first ever IR day. As part of that, I just wanna set the table. This morning at the press conference that we held, we talked a little bit about where we've come from and a little bit about where we are now as far as products and new news is coming out. We had some really great announcements. Probably the highlight was the Snoop Dogg store. We're very excited about that announcement, and Brian's gonna take you through that a little bit here in a little bit. I will say that, you know, the point of today is to talk about a little bit about where we are, and then where we're going over the next five years. As we start, we highlight what Funko is all about, you've heard us talk about fandom, and you just saw what that is. There's no definition on a slide that can tell you what fandom's all about, like the video you just saw. It's core to Funko. It's core to who we are. It's core to how we wanna move forward in the future with our brand. For those that don't know, Funko sits uniquely between the content creators and the fan. That is something that we have developed over the years and really expanded on. You'll see the content categories down the left-hand side of that slide, movies, TV, streaming, video games, sports, music, and our anime. You know, you've heard us talk about areas of focus, right? Lately, we've been really focused on anime, sports, and music, and you'll see how that plays into some of what we're gonna be talking about coming up. Another thing that really separates us from other companies out there is our engagement with our community. That, along with fandom, is core to what we do and who we are. Whether it's at a Comic-Con or it's a virtual event during a pandemic that we're interacting with our fans or in stores, either our own or wholesale accounts like Walmart, or Target Con, these events that we host every year, we interact with our fans, and it shows. Here you'll see the number of people who follow @OriginalFunko. It's really impressive. When you start to compile all the brands in our portfolio, you start to see a story of that interaction. That's gonna be something we're gonna continue to focus on as we move forward. As most of you in this room know, it all started with Pop! Vinyl back in 2010. That was our entry point into this new realm of diversified demographic. That's where we brought in a whole new audience that was a lot more female than we had seen in the past. That's where we really started to explode the number of licenses and properties that we have in our portfolio. It really became the platform and set forth the road ahead. The platform for delivering pop culture in real time across all the licenses that our fans are interested in seeing, and has really helped us as the Trojan horse to help build our business with both our direct-to-consumer and our wholesale accounts. In 2017, we acquired Loungefly. We were keenly interested in getting to the soft lines, bags, accessories category, and we knew that Loungefly was the brand in that category for pop culture fans. The synergy that was developed between Funko and Loungefly, and we're gonna talk about case studies a little bit about just how successful this partnership has been and why, more importantly, and how we're gonna repeat it in the future. We think this is a repeatable format. We think that having the overlap of pop culture combined with additional categories that people are looking to get into is a recipe for success and growth in the future. In 2019, we made the acquisition of Forrest-Pruzan Creative, now Funko Games. That was important for two reasons. One, that was a category that we saw at retail, always side by side with big events. Whether it was a big movie release or a holiday, feature or end cap, there was always our products and then this, the shelf of games that went along with it. We thought, you know, obviously, those games are going hand in hand with the pop culture and the end cap, the moment that we're on. We want that whole business. We don't wanna have somebody else participate in this feature that we've created with our retailers. We acquired the game studio. You know, the trailing twelve months, we do get NPD for this particular category 'cause it actually makes sense. It's very hard on our core business just 'cause of our diverse distribution. I will say that this time last year, we were the 12th-largest game manufacturer in the United States, which was surprising to me. We just got that report. We're number six now. We've doubled our position with this acquisition. We couldn't be happier with that. We're thrilled with the progress we're making. The progress that we're making in the toy aisle in general, a lot of people are kinda confused about Funko, and they still lump us in with the toy companies. We understand that. Obviously, we don't. That's not who our core demographic is, but we do have business in the toy aisle, and it's very successful. Our Five Nights at Freddy's business has grown year-over-year. We just launched brand-new product lines, which you can see over there. It's our new SNAPS! line. We're really excited about it. That's the first time we've really brought innovation into that Five Nights at Freddy's in a little while. We're thrilled with that launch. Pop! Digital. Last year, we came out with. We had talked about buying a 51% stake in TokenWave, and we were going to get into this NFT business. We knew that it just made sense for our brand to be in the NFT business. If you take a look at what it is, it's people collecting digital assets, and our success to date has been phenomenal in this area. We've had 20+ drops. The success rate has been through the roof. We had a drop with DC Comics where we had almost 500,000 people waiting to buy our NFTs. It was amazing. We're thrilled with that, and Brian's gonna talk a little bit more about that, as we talk about some product stuff. Mondo, we just acquired Mondo in June. Mondo brings three unique categories that we weren't taking a part in, which are vinyl records. That was something that on the table to my left, you'll see, and hopefully afterwards you can take a look at, the high-quality collectible hand-poured vinyl records, limited edition, that they're making. We think that this, the only bottleneck here is production, and we think we're gonna find a solve for that. We've got people saying, "Make more. We want it. We want more of these vinyl records." The high-end art posters is another category people have been asking us to make for a while. One of the questions that we got at San Diego Comic-Con was, you know, "Are you guys gonna just start making pop posters?" The answer is no. We are not. We are not looking to change the DNA of the Mondo brand any more than we've changed the DNA of Loungefly, which is none. We have not. We've left it alone. The brand stands on its own. Last but not least are the high-end collectibles, which are more sort of on-model version of collectibles. The price points go from $125 upwards of $500. So we're thrilled with that. A little bit about where we were since we did our IPO in November 2017 as compared to the Russell 2000. You can see on this chart that we have outpaced not only the index, but also in the first half of this year, we've shown tremendous growth. We're excited about being a growth company. We're excited to stay a growth company. We have aspirations which we'll get into shortly, and that's the reason why we're here today, is to remind everybody that we are a growth company and the road ahead looks fantastic for us. If you take a look at the addressable market, we are a tiny percentage, not even 1% of the addressable market. As we look at expanding into new different categories and building out sports and music, sports is a huge category, and we're just dipping our toe in it. Music is the most productive per SKU category we have, and we are just getting started on music as well. We think the best is yet to come. That leads us to, so what is the five-year organic growth plan? The organic plan is to double our business. We've doubled our business since we went public in November of 2017, and we are confident that organically we can double that business again. We've talked about the growth pillars. Anyone who's listened to our earnings call, the growth pillars on how we're gonna achieve this growth have been laid out. It's maximize the core business by growing our core collectibles business. It's expanding into new category, whether that means internally, like Popsies and taking over a four-foot section of greeting cards at Walmart in 2,500 stores, which is a major feat, leading to a partnership with Hallmark, wanting to license the Funko brand and bring it into their world because they're seeing how wildly successful we are. Or acquiring companies that we don't have the skill set internally to manufacture ourselves, like a Loungefly or a Mondo. D2C growth is something that three or four years ago was a nascent business for us. We decided we needed to focus on that ahead of the pandemic, maybe a little close to the pandemic, and we really focused on it. I'm gonna talk a little bit about that in more detail, but the D2C business is not only important to us for funko.com, funkoeurope.com and loungefly.com, but we think that there's a tremendous opportunity globally to talk to our consumers directly through our e-commerce platform. Last but not least is international growth. International growth is something that you've seen us when we focus on that international growth. Case study there is in 2017, we purchased Underground Toys. Underground Toys was our European distributor. Europe is now 28% of our business. That's what happens when we decide to focus and acquire a company and then put that company into the Funko flywheel. You'll hear me talk about that. What is the Funko flywheel? It's 1,100 licensed IP properties. It's global distribution across mass, across drug, across specialty, mass specialty. That's the Funko flywheel, and we think that as we continue to grow, there's a huge component of that that's gonna be international growth. As we talk about our core collectibles business, there's innovation that comes both from within the Pop! brand itself, which you've seen over the years, whether it be Pop! Albums. You can see over there we launched Pop! Albums last year. Huge success, right? We've done Pop! Moments. We've done mini Pop!. We've done Pop! Keychains. There are so many different versions of Pop! that we have not gotten to yet. We have a Pop! Die-Cast line that's a direct-to-consumer only exclusive that retails for $50 and sells out immediately every time we do a drop. The sky's the limit for that brand, and we think that both globally and looking at localizing content like we've done in the past, there's a tremendous upside for the brand ahead. We've also got emerging brands. I referenced Pop, Popsies. You know, Popsies, which you're seeing Pennywise there. We've got Gold in the background, which is focused on sports and music mainly right now. And we think there's tremendous opportunity. Last but not least is Soda, Vinyl Soda, our fastest-growing collectible outside of Pops. Our second to Pops, I should say. And we think that we have incubated that line in the specialty market for a couple of years now, and it is doing phenomenal. It sells out every time we make a SKU. Now that we've incubated a little bit through that specialty market, we're ready to bring it to the masses. We've been asked by some of our mass market partners for years, "When can we have Vinyl Soda?" Well, the answer is in 2023, we are going to bring out Vinyl Soda to the masses. We are also going to continue to have a special selection for our specialty customers to ensure that it continues to do well for that channel. We've talked a little bit about expanding both internally and through acquisitions. You can take a look at the Loungefly business, whether it be Loungefly or games or the NFT business. When we get into these businesses and we put them into the Funko flywheel, we see growth. I've made mention of the tremendous success that we're seeing in our games business. That's really exciting. The NFTs. We think the sky's the limit. As a case study here, when we talk about the power of the Funko flywheel, you can see that Loungefly, that brand has grown 12x since we acquired them in 2017. Distribution, licensing, incorporating them into our direct-to-consumer platforms, and we think that the sky's the limit for the Loungefly brand, especially as we look to bring it globally. A reminder that a large percentage of this business is done domestically in the U.S. It's getting some traction in Europe, and it's growing quickly in Europe, but we have the rest of the world to attack on this brand, so we're thrilled with that. As we talk about direct-to-consumer, there are a couple of areas of focus. Right now we're looking to unlock some technology to continue to grow. We need to be able to. Right now, a lot of our retailers are able to pre-sell products that we're not able to pre-sell. There's no loyalty program on funko.com, loungefly.com. They are separate websites with separate baskets. We think that as we take a look at investing, continuing to invest, and this year, we've made a lot of those investments, and we think 2023 is gonna be a major unlock for taking advantage of some of the investments that we've made in this. We'll talk a little bit about that as we go forward, one basket checkout. You can buy a Loungefly bag and a Funko Pop, check out in the same, and it ships together. These are all things that have not happened yet. We think that there's tremendous unlocks, both domestically and internationally, on direct-to-consumer. International growth, this is one of the largest areas that we're looking to expand. We've had tremendous success in a relatively lightly resourced area of our company. The one example that I'll use is LATAM. LATAM is one of our fastest-growing territories, and we've got a team of three salespeople based in Everett, Washington. Now we're looking at making investments into these territories to accelerate the growth of these individual territories. One of the biggest opportunities, in our opinion, and one that maybe has taken us longer to get to than it should have, is China and Asia in general. We are making investments in that territory to continue to expand and grow, and in some cases, really just get started in these territories. International growth is gonna be one that you'll continue to hear about, and we think is one of our largest opportunities in the near term to really accelerate growth. When we talk about organic and then upside, right? There's organic, which is what I just took you through, and then there's upside. How do we take advantage of other opportunities that are out there that we're not ready to talk to you guys about in a five-year plan just yet? I think that we talked a little bit about unlocking new streams of revenue from categories that we're not already participating in, that our fans want and that our fans are buying, and that are partaking in pop culture. I think that there's that. You know, when we bring in an acquisition, let's use Mondo for example, and we're bringing all these new customers into the funnel that may have, A, not liked Funko Pop. Believe it or not, a lot of people are, that's, they don't collect it, right? But they do like vinyl, or they do like art posters, and they do like high-end collectibles. They like more realistic-looking action figures than stylized versions. We think that unlocking the customer funnel through new brands and bringing them into our D2C ecosystem is extremely important. Something that this room is gonna be keenly aware of is accretive margins. Looking at companies and categories that have accretive margins so that we can continue to build on our profitability as we expand that top-line growth. That's something that we're keenly aware of. Last but certainly not least is the unlock of technology to help us get where we're going faster and better. That's some of the investments that we've made this year, and that we're always keeping a look at or keeping our eye on what are the next investments we need to do to ensure our success and ensure this growth. As we talk about other areas that take us beyond that organic growth plan that I mentioned, the secondary market is one that almost everyone in this room has talked to us about at one time or the other. We estimate that between $700 million and $1 billion are spent on Funko products alone in the secondary market. That's eBay, that's Whatnot, that's PopShop Live selling. Then obviously, if you've ever walked the floor at Comic-Con, people are like, "Wait, you have booths all over the place." We're like, "Nah, that's not our booths." Right? Like, those are products that we sold three years ago, and there's complete businesses run off of that. We know that there's an opportunity in a market that we're right now not participating in. As we mentioned earlier, we have a partnership with eBay. They were part of the consortium that invested in us, and we've had multiple meetings. We are opening or have opened a marketplace store on eBay. We have done some exclusive drops with them, and we are working on how do we drive to get some of that secondary value in the secondary marketplace. Very productive conversations with them, and they're really excited to partner up with us. Last but not least, you've heard me talk about technology, right? Technology. How do we use technology to take advantage of some of this other beyond $2 billion in revenue? We think that is something that we are exploring on multiple fronts. Again, not quite ready to talk to you guys about today. Outside of that core direct-to-consumer investment that we have been making and we expect to come to pay off in 2023, we think that there are other accelerators out there that we're excited about and that we're looking to invest in. Last but not least is music. I mentioned earlier that music is the most productive category per SKU that we have. That means it's more productive than our movies, our TVs, our video games. We think that there's huge investments, both with our recent acquisition of Mondo, with the core collectible business, as we look to how do we grow that. We're thrilled to keep you guys in the loop as we make those investments, and we see that part of our business continue to grow. With that, I'm gonna hand it over to Brian. Brian's gonna come up here, and he's got one or two other some direct-to-consumer highlights to share with you guys. With that, I'm gonna hand it over to Brian. Can I start with a song? Yeah. Okay. I feel like a BTS boy band of this little microphone on here. Which is super exciting. You guys, we're really excited to be here. Our goal is to get you super hyped on what we think our pop culture world is without giving away too many trade secrets to our competitors. It's always a delicate balance of trying to get you guys hyped of what we think, how we can grow this amazingly huge sandbox of what is pop culture. How we can use the synergies of our company with our other brands like Loungefly and Mondo, and then yet not alert other people to what we're doing. It's a delicate balance, but we are excited to show you. I always like to remind people who our base customer is. We've been obsessed with our fan since day one. A little-known story is I started collecting Funko Bobbleheads back in 1998, and I saw them on Hollywood in a little shop, and it was everything that was from my childhood, Evel Knievel, Huckleberry Hound, Yogi Bear, Speed Racer. It was amazing. It was all the breakfast cereals I ate every day, Count Chocula, Frosted Flakes with Tony the Tiger. You know, when I bought it in 2005, I thought about one thing is like, how can we monetize fandom in a way that no one else has done before, and not use spreadsheet analysis to say, "I can build this product here and tie it to this amazing fan base." We haven't done that. We've done... We are the first ones to license The Golden Girls and Bob Ross, and first ones with Squid Game, first one with Fortnite products out. We think fandom is everybody, and everybody is consuming more content than ever before, and we are producing more content than ever before. Part of Wall Street that they don't understand, and we've struggled, is you're dependent on licensing content. Yeah, it is our strength. We're depending on 1,100 unique licenses, and nobody has 1,100 unique licenses. We are a unicorn in that we have everything for pop culture, and that's how we monetize. We bring it to our fans, we connect our fans to the things they love, and we've grown the business exponentially since we've done that. Still an adult-based company, but our tween and teen categories are on fire. We're more and more seeing when we interact with our fans, either at our stores or at our events, seeing our demographic get younger and younger. That's exciting for us to see tween and teens engaging with our brand. Before, a lot of people know this category pretty well about fandom. When I bought the company, we were 99% male and 100% geeky, and now we have 51% of the people buying our products are female, and they're buying them for themselves because they love pop culture. We found ways and formats and product categories that they can engage and show their fandom about. We're very excited and just always wanna start with reminding you what that's about. Okay. Technical difficulties. See? God, this is hard. There's one button and they're like aiming it. Extremely difficult. You know, I won't spend a lot of time on this. Andrew's gone through a lot of this stuff, but when we're looking to acquire companies, it's really simple. I personally stalked the two owners of Loungefly for nearly two years to convince them to sell to us. They had no desire to sell the company. Andrew and I stalked Mondo for years to get that deal done. We're looking for a couple things. This is not really a secret. We're looking for somebody that's a brand and not a commodity. There were bigger companies than Loungefly in this space, did way more revenue than Loungefly in this space. They were commodity-based. You go look at a Boba Fett T-shirt at Walmart, you'd have to look at like five different places to see who actually made the T-shirt. Loungefly was the one brand, the geeky Gucci of pop culture, as I like to call them, that had a brand, had a fan base, had habitually $10 million-$12 million of revenue for almost a decade straight. We put them into the Funko flywheel and you see 12x growth in four and a half short years. It was a category we knew we wanted to be in, our fans were already participating in. Those synergies are what helped us grow Loungefly the way it is. You're seeing the same thing with Mondo. Mondo is the category leader in limited edition vinyl records. They are the category leader in art and vinyl posters. They have posters that sell for $5,000-$7,000 on the secondary market. They are one of three amazing brands in the space, along with Sideshow and Hot Toys in high-end collectibles. I don't need to go buy a Hot Toys or a Sideshow when we got Mondo, and we can give them access to all of our licenses. We'll just take the poster and art category as an example. They make only movie posters. That's it. Not television posters from Squid Game or Yellowstone. They don't make cool music posters from Pearl Jam or Led Zeppelin. They don't make posters from great sport events like the 2022 NBA champion Golden State Warriors. Think about how we take that and proliferate their amount of licenses to leverage. They didn't have the money to afford licenses. They're owned by a company that went bankrupt in the pandemic, which is a movie house, Alamo Drafthouse. We're gonna be able to put them in the Funko flywheel exactly like we put Loungefly, grow them, take care of their procurement, take care of their testing, take care of their licenses, their financial audits with our licensors, and spool that up. The same thing we've been able to do with Funko Games. We have three more acquisitions that are coming in the very, very near future. I'm talking about in the next foreseeable couple months. Again, you're gonna see a similarity in what these brands are, what categories they participate in, and how we're gonna put them in the Funko flywheel. That is extremely important for what we're doing. NFTs, I'll get in on a little bit later on that, but I think one thing that's interesting is the Pop brand. I mean, it is our iPhone. It is our Trojan horse into any retailer around the world, whether it's Primark or Fnac or Carrefour, three amazing companies that Andy, our Chief Revenue Officer, opened in Europe. These are everybody wants Pop. It is the gateway into their business and pop culture. These retailers all over the world look for Funko to do one thing, put them in the business of pop culture. We are the category captain, we are the category leader, and we are the one that has all of the licenses and all the different categories that are important in this space for fans, and we are a one-stop solution for our retail partners. Since we've built the Funko Pop brand, we're up four times on the category of other Pop. That's Pop! Movie Posters, Pop! Comic Covers, Pop! Die-Cast, Pop! Trading Cards, our deal with Topps and Panini, which is just amazing. On fire with that. The price points are going higher and higher and higher. That's a really good indication for us that our fans want higher-end pieces and their price elasticity is allowing us to go higher and higher with our average price point, and it's super exciting for our future. Advent calendars. We redefined what a countdown or advent calendar is, bringing these things to retailers who've never carried our products in the past. Everything from Halloween countdown calendars to Valentine's Day to obviously the holiday season. Again, 0- $25 million in three short years. This category has continued to grow. The whole category of U.S. and seasonal with all of our retail partners on a global basis is a category to watch for us in the future. We are just starting to hit the tip of the iceberg of what that's gonna be about. The POP! Yourself brand strategy, which you guys, I honestly believe is one of the most interesting thing Funko has. We all know we do a couple things really well. We have a great fan base we've been engaging for over 20 years. They know how to find us, whether it's Harry Potter or the latest TV game like Squid Game. How do we find a different demographic? What if we came up with a product that you can customize and personalize in real time, ship anywhere in the United States in less than 48 hours, is the ultimate gift for your son, your daughter, your girlfriend, your husband, your grandma, or your boss at work. The people who've been lucky enough to go to our Hollywood store, which is a 44,000 sq ft pop culture flagship, or our Everett store, which is about 15,000 sq ft, you see these amazing touchscreens there. It's been our number one product for the last two years. I'm gonna give you guys a quick demo, but afterwards, I encourage you guys to play with this. Basically, these kiosks are there. It's been our number one product for the last two years in the store. You get started just real easy by touching it. I pick a body type. Let's pick a female. Skin color there. Next. Lashes, yes, absolutely. Let's see. I'm gonna scroll through hair. Let's see what we got. I'll go here. I can change the color of her, of her hair. Blonde, blue, light brown. I'm gonna go like that. That looks good. Come back. No glasses. That's not fun. Not gonna do glasses. Let's see what else we can do. Let's put an outfit on. I can change the colors again of the outfits. Stripes. Bottoms on. That's great. Okay, accessories. Let's see here. What's something fun we can pick here? Well, let's see. I should have more accessories than this here. How about a glass of red wine? This is interesting 'cause this is starting to look like Steph Wissink from Jefferies. She likes red wine. Good red wine. Not bad red wine. Okay, so we got that. Let's see. All right, I'm just gonna name it Steph. Why not? Except I gotta spell it right first. All right. Yes, continue. Okay, want my name. Let's see here. B, and put my phone number. No crank calls, please. All right. Oh, I forgot one digit there. All right. And then I can add a buddy. I don't know if Steph's got a dog or not, but we'll just go there, and magically it prints this little receipt out. So the technology online, this is gonna go great, right to our DCs. They're gonna build this within 48 hours. They're gonna ship it early next year. What's really cool is, like, this one just shot out a Steph Wissink Pop. Look at that. It's amazing how fast that technology is. This is really cool 'cause I believe this is a gateway for non-pop culture fans. I liken it to the Build-A-Bear meets pop culture, right? The idea of doing collabs with our great licensing partners. Right now, this is 100% royalty-free, license-free product that's been killing it for two years. This is gonna be a great gateway as the ultimate gift to the people you love, the people you work with, and we're bringing this early next year online in North America, and I think very closely next year all over the world. I think this is something that's really gonna drive our D2Cs, and we're super excited about this. I'll be hawking this limited edition Steph Wissink Pop on eBay later once I get her to autograph it. This oughta go for some big dollars here. You saw the tech around it. It's super fun. It's touchscreen. You get to play with it. Same thing's gonna be happening online. The customization, the amount of hairstyles and glasses and accessories are gonna just get better and better. There were little Loungefly bags in there. There was foam fingers we can do with sports teams. We can do Super Bowl editions where you bring the two teams that are in the Super Bowl out there. The capabilities of what this can do for us online direct to consumer. Nobody's got this to this level, this well thought out. Two years of trial and error on working out all the kinks in the system, and to bring this online, this is a Trojan horse into our brands, and we're super excited about that is. Funko Gold, Funko Soda, I'm not gonna spend a lot of time on this. These are just, again, new ways we're connecting to our fan bases that are really exciting. I think the one that we're really excited about are the Bitty Pops and the Bitty Sodas, 'cause everything small is hot. These little Bitty Sodas and Bitty Pops are less than an inch. They're acrylic Pop boxes and little mini aluminum soda cans. The Bitty POP!, for example, you can stack all 16 in a series. They stack on top of each other in these little 4-pack collector acrylic cases, and they form one giant silhouette of one Pop. 16 equals one Pop. We're really excited about that. We teased this to our fan base at San Diego Comic-Con. They lost their minds. We're about innovation with our lens of pop culture to all aspects of retail stores and directly to our fan. We had an opportunity with Patrick Bowman, who ran Toys Forever at Walmart, got promoted to greeting cards. He didn't feel like that was a promotion and said, "Greeting cards are dead. How can you help me out?" We came up with an idea and had it on shelf in less than six months, and including a technology that made these things function. No matter how many times you pop... Push a Popsies, the message comes up, it functions, goes down and pops up right back up again. This is killing it. 2,500 stores in Walmart, four feet of dedicated space. We have the follow-up product to this called Pop Me Open. We are increasing our space in all of our Walmarts early next year because it's doing so well, and we're taking this now to other retailers. It was a Walmart, quote-unquote, "year exclusive" with them. This brand, we all know what the greeting card category is. Our ability to disrupt this category is exponential. This is. I'll give you an example. These retail at Walmart for $6.97. Every single greeting card I probably ever had in my entire life probably was above that price. I read it, make sure there wasn't any money in it, I threw it right in the garbage can. This is a really cool way to actually keep whatever person has been thoughtful enough to give you a greeting card, and the next one we're coming out with is even cooler than this. We're really excited. We have stationery going in this category as well through Loungefly, and some other really cool, innovative ideas. We are bringing disruption of pop culture into some of our greatest retail partners in a way that no one else on this planet can do. We started with 44 individual SKUs with, I think, 26 individual licenses from launch, all under six months. Mondo. Again, you guys, we talk about the Funko flywheel. What does this mean to have a category leader in vinyl records and art and high-end figures? We are so excited about this brand and what we're gonna be able to do with it. We went to Comic-Con. This was the highest ever show. Our licensors coming to us and saying, "Oh my God, you guys buying Mondo is the greatest thing ever because now all the products I love from them are gonna have all the licenses I can't get from them when they're only handling 6, 7, 8, 9 licenses per year." This is where we're gonna turn this thing up on high heat and get pop culture in ways that we've never done before into their fan base. This is all about Mondo, not Funko. Just like Loungefly has been all about Loungefly, not Funko. Sports, music, and anime. This was nonexistent for us five, six years ago. Anime is still driving a majority of this business. As you can see, from 8% of our overall business to over 21%, mostly driven by anime, yet music is our number one category in this. The idea of what we can do with music and what we can do with sports, having guys like Charlie Denson, who ran Nike brand for years with Mark Parker, the CEO of Nike. Trevor Edwards, who's on our board, ran Nike marketing. Rich Paul, maybe the most powerful sports agent in the world, investing in us. The idea of us taking world-class athletes and world-class musicians doing collabs and helping us build our brand and our identity in this space is insanely exciting for us. The guy in the middle is named Zayn. It's Zayn. I tell you this because I didn't know how to pronounce his name three weeks ago. And it turns out he's in a boy band called One Direction with Harry Styles, who's much more well-known. We released a Pop from this guy, and he had no new album out, and I'm like, I was looking at the comments, and I'm like, "This can't be possible. I don't know how to pronounce this guy's name." He shattered every single one of Funko's social media records, like bigger than Squid Game, bigger than Baby Yoda in The Mandalorian, bigger than The Avengers. I'm like, "What am I missing?" It's the category of music. This is why, number one, why we wanted to buy Mondo. We are big, big believers in the category of music. Records, vinyl records are up 300% since 2019, and there is a production shortage, which we are gonna be solving by investing in music in a big, big way. We're gonna solve some of the problems that the industry can't seem to solve on our own. We are gonna build a moat around what we're doing in music, and we are very, very excited. Loungefly continues to innovate silhouettes, and the idea that there is an actual category of collectible fashion is utterly amazing to me because I was thinking to myself like, "There's no way that these amazing, cool silhouettes from Loungefly," and I encourage you guys all to go look at them after this event, "could be collectible." Yet there's picture upon picture upon pictures of fans with 60, 70, 80 backpacks curated with their favorite figures, whether it's from Funko or not. Loungefly has got two of the most amazing creative directors that are continuing to lead the way in what is pop culture fashion. It is super exciting what we're doing in this space. Andrew's already talked about how successful we are in the games and the toy aisle. Again, not a huge focus for us, but when we do put our efforts into it, a really nice piece of the pie in terms of our overall revenue. Then NFTs. 20 straight drops, 20 straight sellouts. The only company in the world that is really taking the strategy of digital meets physical. Taking digital NFTs and putting real, rare, physical products along with them. We set 500,000 people in our first drop for DC Comics. That's just staggering. We have a world-class marketplace built by the guys from TokenWave, which are all ex-Apple guys. So you see the cleanliness of the website. You will realize it's coming from a bunch of genius Apple guys. This thing continues to just grow and grow and grow. We came off our largest revenue day ever in NFTs just last week on DC Comics Series Two. Big things, we have some more innovation in this space, including a new strategy we're really excited about to bring at the end of this year. With that, Andy Oddie, our Chief Revenue Officer. Thanks, Brian. Yep. Go sell this on eBay while you're talking. Which one is it? This one? That one right there. Thank you. Hi, guys. Afternoon. I guess taking on this role, which was a recent thing for me, I realized that in truth, we've been focused on top-line revenue for a long time, and that you've seen that growth over the last four or five years. We've not been particularly strategic with that growth. I think we have more power, more influence, more leverage over our retail partners and our other partners than we believe, whether it be licensors or retailers themselves. With that, one of my main initiatives is to grow strategically through channel management. I think, you know, if we're gonna get to $2 billion from $1 billion, which we are clearly, we need to do that through a thoughtful process of channel management. That's one of the biggest areas that I'm gonna look after. You'll hear a bit from me now that you've already heard, but the truth is, retailers need us. They want our footfall. It's unique footfall. It's not footfall that they've necessarily had before. We're driving people to stores not to buy the milk, but to buy something completely new and unique, and not many sellers can do that. I think we can ask for more. We can ask for more in terms of brand exposure, space, category inclusion, and a number of other areas that we perhaps didn't necessarily understand as we went through our growth cycle, we have the power to do. In addition, of course, we've got our other channel, D2C, which is on fire. You know, it's grown hugely in the last several years. But let's first just talk about retail. We're in every major retailer. I think the most important part of that equation is that no one retailer makes up more than 8% of our business. You will not find many makers, I don't think, who are in that position. Puts us in a very strong spot as we negotiate with those retailers around space and terms. Dare I say it, price, you know. This is a decision we've made strategically now to move forward from a channel perspective, not overcrowd channels, look at channels in a different way to grow our business. Taking that forward, what else can we do in channels? Value. There's over 70,000 value doors in EMEA. We're in barely 15,000 of those retailer doors. That's significant. We're doing the same in the US. We're working with Five Below now to sell under $5 items that still speak to the Funko philosophy, but at a lower price point. Talk about Lidl and Aldi and B&M. These are huge European retailers. There's retailers in the US we can do the same thing with, and we're looking at that as a huge piece of business going forward. Channel is incredibly important to us. Just one example, value. International growth. Yes, EMEA has kinda dominated that growth over the last several years. Lo and behold, now we've actually got a team in Asia. We hired two execs and opened a Hong Kong office and a China office. We do 1% of our revenue in Asia. That's really not acceptable. One percent is not a number anyone recognizes, I don't think, for a region as big as Asia. We're going after that with new people, new offices. I think that area will grow materially over the next few years, so will LATAM. LATAM, we're looking at converting some of our distributor relationships to retail relationships, direct-to-retail relationships, giving us that control over the marketplace that probably we haven't got through a distro. Another area of opportunity there, and of course, that'll deliver more margin. In Europe, I mean, we think of Europe as being quite developed now with five years of growth, but in actual fact, only 15% of our business is mass in Europe, which is pretty low when you consider the US is over 30%-35%. There's an opportunity there, and that seems like a fairly straightforward gap to close in Europe, our mass penetration being quite light. So just a few areas of examples there, and there are many more. Moving back to B2C. Yes, fantastic growth. 100% and odd last year. How do we take it to the next level? How do we triple that? Well, one method will be clearly to add a different kind of platform to deliver. Last year, we had 680,000 unique purchasers on our website. That's pretty strong, but when you look at the addressable market, it's actually kinda tiny, that Andrew spoke to earlier. So our target is to at least triple that and more. That doesn't even include new geographies or acquisitions. Huge opportunity there with probably double the margin we see at wholesale. D2C, what's the big? How are we gonna get there on D2C? How do we get even bigger? A new platform that we're gonna launch next year. Brian talked about it a little bit. It's gonna include loyalty that delivers points for consumers who then get experiential opportunity and added value that they don't currently get. We're gonna be able to let our consumers pre-order. They can't pre-order right now. Most of our customer competitors allow their consumers to pre-order. That's a huge advantage 'cause a lot of the demand sucks in before the actual product ships, and we can get insights around what people are gonna buy and the quantities and plan better for that procurement by that advanced information. POP! Yourself, Brian talked about it. That's coming next year as well. Our best-selling SKU in our stores is POP! Yourself, and you're gonna be able to get it dropped to your door in a few days. Pretty compelling, I think. Finally, I suppose, and there are other benefits, data. Data analysis, data interrogation. We can use that data not only for ourselves, but we can share some of that with appropriate strategic retailers. Through those channel conversations, we can tell retailers where we think they should be spending their money. I think that's a big advantage. All in all, across all these strategies, I think, when you think about the geographies, the channels, the categories, there's so much more to come, and actually it's a lot of white space. None of this is completely revolutionary. It's all fairly obvious. It's in front of us, but we've never really got after it in the way that I hope we will in the next couple of years. Hopefully you agree, and with that, I think I'll hand back to Jen. All right. Thanks, Andy. Appreciate it. All right, Andrew already went over this, but I just wanna remind everybody, you know, we are a growth company, and we have been growing. We've been outpacing the Russell 2000 fairly consistently. Even in the first half of the year, we had very strong sales growth. With this strong sales growth, we've also had adjusted EBITDA growth as well. We're a profitable growth company. We feel really, really good about what we've been able to achieve. How have we been able to grow like this, and why do we think we can continue to grow? It really is all predicated based on our strategy. First of all, you know, we are diversifying our revenues, and we've been pretty successful at doing that so far. From IPO to 2021, we were able to diversify our revenue stream, both from a brand category perspective, and D2C and our product mix perspective, as well as our international capabilities. We have a track record of growing these three pillars, and we feel by the end of 2026, we will continue to add to these pillars. You can see on the graph there, illustrative of where the growth will be. That's right, got a point. Again, we feel by 2026 we will be a $2 billion company. We doubled the size of our company from 2017, which is our IPO, to 2021. We will double it again by the year 2026. The growth will come from Core Collectibles, Loungefly, and our other brands. We believe our Core Collectibles will be growing from high single digits to low double digits. Loungefly, we have a growth trajectory of high teens to 20%, and our other brands will outpace the growth of our total corporate portfolio. From an adjusted EBITDA perspective, and this one's for you, Will, we think we're gonna get to 20% adjusted EBITDA. We know we're gonna get to 20% adjusted EBITDA over the course of this time. The natural question next is, and why do we have confidence that that's the number? As we look at our business, you know, we do know that, you know, COVID did set most companies back from a margin perspective, and there were some supply chain headwinds. We do think there's opportunity both in the product margin as well as in the operating margin. From a product margin perspective, we feel that with the reduction of the shipping costs that we're starting to see within the business, that we should normalize those costs. They won't get back to where they were historically, but they won't be at the elevated rates that they have been over the past 12 months. Also, our channel shift. Continuing to push our D2C business will help our overall gross margin business. It's a major growth area for us, and it will continue to add to our overall margin profile. Finally, price realization. Last year we did raise prices, but we only raised it on our core standard pops. We did not go across all of our brands. We didn't go across all of our product categories. We do think there's opportunity for price realization across the entire portfolio of Funko. Improve operating margin. With our new DC, we feel we can improve our overall operating costs and leverage by streamlining our logistics. As we continue to build our house of brands, there should be organizational leverage as we move towards really kind of bringing all those brands into our house and making sure that we're kinda streamlining our business operations, and our ERP will be instrumental in this. Then finally, also our longer term efficiencies that we will deliver from our ERP. As we had talked about in our last earnings call, that will be launching next year, but we think over the long run and once we get that up and running, we will have some efficiencies there. What does this mean from a capital deployment perspective? Obviously, getting to $2 billion organically, which does not include any acquisitions, and a 20% adjusted EBITDA margin, we must have a capital deployment strategy. First and foremost, we will be investing in our internal investments. Innovation, we're constantly innovating, as you saw on the other slide, how much our Core Collectibles has grown. Talent, we've been able to bring a lot of talent into the organization, and we will continue to build on that capability. As Andy mentioned, we have both geographic and direct-to-consumer investments to make to continue to grow those sides of the business. We'll continue to look at our distribution capabilities as we continue to grow and as well as our digital capabilities. I mean, we've just started to scratch the surface of digital. You know, Brian spoke a little bit about it, and we think there's a ton of opportunity to continue to grow that very margin-accretive business. We will also turn to M&A. As Brian and both Andrew mentioned, we've been very strategic about our M&A, and they've been fairly successful. When we think about M&A, we always wanna make sure that first and foremost, it's accretive to both our top line as well as our bottom line. There are a ton of companies out there that we've looked at, and I know we've only announced really the Mondo acquisition, but you know, there are a lot of them that just you know, don't make sense for Funko because they don't offer this value. New categories. We will always look at categories where we don't have the talent in-house to execute on. Geographic expansion. Both Loungefly as well, as Mondo really didn't have much of an international presence. This is a great way to grow the business. Synergistic diversification. Absolutely, we are always focused on our debt levels. I think we reduced our long-term debt since I joined in 2019 by about 30%, and we will continue to make sure that we always monitor our debt levels. Going a little bit one step deeper into M&A criteria, how do we think about it? This, these are not in any particular order, but always wanna look at extending our core and diversifying our product base. Along with that, we need to think about long-term secular growth trends. Getting into the NFT business was a perfect example of this. Going into a sector that we didn't have the expertise on, we had to buy the expertise, but it was a growing industry, and we've been fairly successful in this line. As I mentioned earlier, always wanna make sure that we're enhancing our financial portfolio. Just two quick case studies of the acquisitions that we have been talking about. First of all, Loungefly. As you guys know what Loungefly is, our licensed brand accessories. It was a clear fit with Funko. It was a product extension. They just didn't have the licensing capabilities or the distribution points. We put them into the Funko flywheel, and we're able to really grow their revenue by 12x. Feel really good about that acquisition. They fit all of our criteria, and so we are very diligent about making sure we filter those as we consider different opportunities. Underground Toys, a little bit of a different acquisition. This is more of a distribution that Andy was speaking to earlier. Really what this allowed us to do is kinda control our own destiny, take out the middleman, focus our distributor on our products and our products only, and also expand into the regions we wanted to expand on, not who our distributor wanted to expand to. This was also a great example of where we've been strategic and successful in the acquisition territory. With that, I'm going to turn it over to Andrew to wrap up. Thank you, Jen. Mm-hmm. All right, you know, a couple of things that we wanna make sure that you leave here today with is, first and foremost, that organic growth. We believe that we can organically double our revenue by 2026, and that is by growing our D2C, that is by growing internationally, and that's continued product innovation and maximizing that core business. That's one of the biggest takeaways we hope that you leave here with. This talks about the ways that we're gonna deliver it. Then there's that upside potential, right? You've heard me differentiate between organic, right? There are accelerators to our business. Jen just talked to the M&A, so I'm not gonna go over that again. I will talk about that pre-owned market again. We think that there's a business there to be had for us to participate in something that we are not participating in today. We are getting started with our eBay relationship, and that's been a fantastic start for us with that relationship. We're gonna keep our eye on that secondary market. Then technology. I've talked about that. We've highlighted some of the capital projects that we've invested in, whether they be the ERP or our new e-commerce platform. We believe that there are other opportunities out there for technology to play a role in how we interact and in some cases, how we sell to our customers. We think that there's a big opportunity out there. Last but not least, you know, Brian had mentioned the success that we're seeing with the Mondo and the music and the opportunity out there if we can just, you know, unclog that bottleneck of production. There's, you know, the sky's the limit on that category. With that, I wanna say thank you guys all for attending. You know, this was our first Investor Day, and we were thrilled with having you guys all come out. Thank you very much. Appreciate it. We'll do a Q&A session. Are we going straight into that, Ben? Okay, awesome. Thank you. Oh, we'll just grab those. Okay, we'll start. Can you hear me okay? Yep. Okay, we'll start with an NFT question. Any plans to bring additional NFT utility, NFT gaming, NFT blends, NFT burns on future and previous Funko NFT drops? I'll take that one, Ben. Yeah, all of that. All the above. We are looking at different ways to partner to grow our marketplace in terms of a white label solution to expand our licensing base, to gamify some of our products, to find different ways of bringing NFTs to market, whether it's through OpenSea and open auction, be it experience, be it physical. Again, early days in that space, hyper successful so far, but tons of innovation going on in the back end as we continue to invest in that business as well. You know, as we continue to see all these dollars and investments in warehouses and ERPs and e-commerce solutions, eventually it's gonna be so exciting to be able to reap the benefits of these investments. I think you're gonna see some of the investments we're making behind the scenes in the digital space are also gonna pay off with just significant growth year-over-year and a real excitement to our fan base and expanding our fan base and making it a larger fan base 'cause we're seeing certainly about 35%-40% of our revenue in NFT is coming out of the United States, so we're excited about that as well. Next question about the implied growth rate of our five-year plan. Question asks, it's a little bit lower than what we've generated over the past four since IPO. Is that conservatism? What might cause us to reach growth above that number? The pacing, is that linear? Is it more back-loaded? How can you talk about that? Thanks for the question. Yeah, as you think about our growth within our long-range plan, that's our organic growth. What we have in our history of 2017 to 2021 is not only organic growth, but really building up the Loungefly business, acquiring our EMEA business. Really that does represent what's in our four walls today. You know, we aren't really giving an annual guidance or annual directive in terms of how we get there over the course of the five years. It is organic. It doesn't include any additional M&A, and we feel, you know, it's it might be on a dollar or on a growth rate perspective, a little bit slower, but we only grew half a million or half a billion in the first four years, and this is an additional $1 billion. It's a pretty big number, and we feel really good about it. Did I get the whole question in there, Ben? I think you got it. Okay. What are the opportunities for internally generated IP, as opposed to licensed? Is that a potential route to a higher gross margin? Yeah. I'll start on this one and then I'll hand it over to Brian. We are excited about exploring you know various ways to create and amplify our already created IP. We had mentioned the 10:10 Games partnership. We think that that is a perfect example of. We mentioned the Hallmark partnership and the Ferrero partnership. These are good examples of people who are looking to our IP, which is resonating globally right now to amplify their brands. We know that there are opportunities beyond video games and whether it be movies or TV streaming there are. We have been approached multiple times on that. We now have a partner with The Chernin Group, who we think will bring some expertise to the table in that area, where we might have been a little bit light out in the past. With that, I'll hand it over to you. You stole a little bit of my thunder, but I can add to that, which is our number two product for the year was Pop! Protectors, which is unlicensed. Our POP! Yourself technology for two years is also unlicensed. Funko is last four or five quarters, like, we've been in the top 10 in terms of licenses in those quarters numerous times, which is the Funko own original IP. We are excited about that. There are really unique ways we are monetizing. I'll just give you one fun example. In Droppp, our website for NFTs, we continually reward our Droppp consumers by giving them free NFTs. By giving them free, there is a really large secondary market that we participate in by giving away a free product. We also made NFTs for our press event for everybody at the press event. The money's just come pouring in right now on those NFTs from the press event. We're continually innovating, and any discussion with whether television or movies is gonna come with original IP with somebody else's IP married, I can guarantee you that. We're excited about our participation in the top ten in terms of our licensing partners, and I think you're gonna see just great things coming out of our own original IP. A follow-up question to that. Beyond the 10:10 Games announcement, are there any other movies, TV shows, video games on the horizon that Funko's announced? Yeah. Nothing we can talk about. You know, we have rules, unfortunately, 'cause I just tell you guys everything. I love to spill the beans, but I get slapped afterwards. Some of my auditions for some of these movies have not gone very well, so I can't announce any of those. No, we have a lot of great conversations. Like Andrew said, The Chernin Group being part of this, as we're talking to some of these big, big streaming services, has been invaluable. There is a lot of appetite to work with us. We just wanna make sure it represents the brand in a spectacular way, and that, you know, our narrative to our fans is met, first and foremost. We have built this company about on one thing, which is fan service. Again, it goes back to when I acquired the company back in 2005, serving the fans and just making great products that are affordable, that tie them to things they love. It will continue to be how we grow much larger than we are today. Based on the levers that will get us to a higher EBITDA margin, can you talk about the cadence there? Is that back-end weighted, or is that more evenly distributed? You know, each one of them represent a different phase. Obviously, we aren't launching our ERP until next year. For those of you that have experienced an ERP, you know, it's, you know, always something that you need to continually iterate on. I will mention that. You know, we still gotta do some of the work on the price increases, you know, that work will come as well. Obviously, the shipping, you know, for 2023, by the time we get into 2023, we would expect that to not be as much of a headwind as it has been in the past 12 months. You know, there'll be some that are more near term and some that are more longer term. you know, but I think it's a good cadence, and we'll continue to drive each and every one of them, as much as we can. I'm gonna add one thing to that. I think 'cause Charlie, our board of directors leader, said really interestingly enough, we sell so many of our products at a very low price point that people think that shipping couldn't be that big of an issue. Well, I think we sold close to 300 million units last year. Shipping is an issue. It adds up significantly when you go from $2,500 a container to upwards of $18,000-$19,000 a container, moving that many individual widgets in a single year. It is something that obviously I think the shipping costs down 60%-70% in the last six months. We're pretty excited about the again a return to somewhat normal in that regard. Outside of China, what opportunities are you most excited about in the international space? What regions, specific countries, et cetera? I think LATAM remains a huge opportunity going directly. We've grown the business to close to $65 million, I think, this year. You know, next year with direct relationships and beyond, I think there's a huge opportunity there. I think I touched on it before, EMEA, we're still not there. There's a long way to go in EMEA, yeah, particularly in mass. Yeah. One thing Andrew's brought up in a couple of different calls is that, just on Amazon Mexico, Funko Pop is either the number one, number two, or number three search term every single month. Funko Pop also is usually in the top 20 on amazon.com. We're seeing an appetite. This is one of the reasons why we announced earlier today at the press event, we're going to the Brazil Comic-Con for the first time. We are really excited about building out that infrastructure. What we've been managed to do with two or three people in that territory is staggering. Now to put proper resources and a proper leader over that environment is truly exciting for our growth. In North America, outside of mass, what makes up the rest of your business? What channels are you most excited about outside of the mass channel? As we've mentioned in the past, diversification of distribution is one of our strengths. You know, unlike some other people in our industry, if you can call them that, or you know, that you can compare us to, we have a very strong specialty business. We work very closely with anyone from a mom and pop up to what I call mass specialty, which is like multi-door, over-50 chain retailers, BoxLunch, Hot Topic, GameStop, FYE, you know, all that. You know, a lot of mall retailers, Barnes & Noble. You know, these are all retailers that we've built relationships with over time. We drive a ton of foot traffic to them with exclusive products, similarly to what you have seen with Walmart, Target, Amazon, and so forth. In the U.S. specifically, both with Loungefly, more so with Loungefly, obviously, than Funko, the specialty business is very important to us. I'll just add that our own D2C business is our largest customer at 11%, and none of our other retailers represent more than 8%. D2C is also a big focus as well. Following up on the D2C point, where are you in terms of elevating the D2C capabilities? What types of major investments are required to achieve some of the capabilities that you referenced? What we've talked about as far as our current investments are somewhat locked into the ERP. The ERP is step number one, and then there's the e-commerce platform is number two. That's gonna unlock some of the capabilities around loyalty, around pre-order, around combined carts, and combined shipping capabilities. Those are the big unlocks. There are other technology unlocks that we're reviewing that we're not quite ready to talk about today, that we think could be an accelerator to that business. One thing about the pre-order that's really interesting is we did these virtual events over the pandemic in New York Toy Fair. We were sending $10s of millions of pre-orders to all of our retail partners except for ourselves. A big hit like Squid Game, we did like $20 million-$25 million in wholesale revenue in just terms of pre-orders. We received zero of that. Obviously, that capability is gonna be so exciting 'cause pop culture moves fast. It's a very different dynamic than the traditional toy aisle that sets two times a year, and there's big, huge linear feet to individual properties. We're about freshness and newness constantly, 365 days a year. That ability to take something, develop it, and the second it's approved by a licensor, start taking pre-orders on your own website, is a really powerful tool that has not been in our toolbox yet. Combine that with loyalty, which means, experience for our fans, it's really exciting what those capabilities are gonna bring in the early half of next year. We've covered a little bit of this, but how big can the NFT business get? And how big a factor is it in that, you know, the 2026 number? How much is that part of your plan? Yeah. Certainly insanely conservative in that regard. My number's much different than Jen's number, so I won't disclose that number. I will tell you that it makes up a very, very small part of what you saw. Again, we have tremendous upside here. I looked at NFTs as, let's not be Blockbuster Video in this category. Let's not sit back and let Redbox come in. This could be around for a decade. It could be gone in two or three years. We are highly profitable. It's probably our largest profitable margin item that we make. So margin accretive to the overall business, growing like a weed, and we continue to add top-level licenses. Not to despair Iron Maiden or Bob's Big Boy, but we kinda launched with some pretty small licenses to begin with as our licensing partners struggled to understand what the NFT space was. We had to actually help them write boilerplate contracts. The stars that were in my eyes when we acquired this thing, and Andrew and I talked about do we wanna be in this business or not, didn't move as fast as we wanted to. We continue to find ways to engage with our fans, differentiate in a very rocky macro environment the last three, four months in the crypto space. We've continued to kill it, and now you're starting to see the portfolio of really high level licenses coming into our portfolio when it comes to NFT. I'll just tell you, the plan shows very little, and I'm more than optimistic that I'm gonna blow Jen's number away. That's all I'll say. How many artists does Mondo have, and is that a near-term limiter on growth? What steps can you take to unlock that growth? Yeah. That's a really interesting dynamic. They use 100% outside artists, I mean, artists that have been known for decades sometimes in the pop culture space. There are these partnerships where they're bringing outside licensors and artists in. What we've been able to do is look at all their contracts over the last six months as we put this deal together, find ways to leverage those deals with the artists to provide bigger upside for them, knowing they're gonna get more production out of us through increased distribution, eyeballs on their websites, new categories, and marrying those really beloved artists in a bunch of different ways than what you're seeing right here. I do encourage you guys to go over and look at the Mondo stuff. It's truly amazing the categories they disrupt in. They're working with over 150 independent, unique artists, and that ability to do more. They work in almost three individual silos, and the company really doesn't talk to each other very much in each of the silos, and that's something that we're helping them understand through a global merchandising strategy that says, "Hey, this is what we're doing as a company. We might wanna participate in some of these big initiatives." We're also making you aware what each of you guys are doing and how that can roll into Loungefly and some of these other acquisitions we're gonna be announcing very, very shortly. You've talked about getting into the secondary market. Can you give us a little bit more color on how you'll be monetizing that? A little bit, 'cause we don't wanna give away any trade secrets. Look, you know, our goal has always been, for 20 years, is there a secondary market because we do a lot of things right. We don't overproduce. We do limited edition. We do special event. Andrew and I could put a program together, I can't tell you how many times, even as a small company, we put a program together at Walmart for an end cap that was supposed to last for 45 days. Their products flew out in three days. They wanted us to make more, and I said, "Nope. We'll fill it out with something new." Those smart business decisions create a secondary market. When you see companies like eBay, like Whatnot, like Popshop Live selling. Walk into any Comic-Con, there's a hundred different booths selling Funko products. We think upwards of $700 million to $1 billion in secondary top-line revenue across all of our brands, including Mondo and Loungefly and a couple that we're gonna acquire. We're participating in none of that. eBay's a really great first step for us to start to realize some of that, 'cause that goes right to the bottom line. I'm gonna leave it very vague, but I'm telling you, we have a solution for this. It's super exciting. Yeah, I think EBITDA margins in 50%-60%. I'm kidding, Jen. It's gonna be really margin accretive to the overall business. We're really excited about this part of our business, and I think we have a really good handle on how we're gonna handle it in the near future. As the company expands its SKUs and verticals into potentially more niche areas, does that incorporate greater inventory risk if you get into a space that has fewer fans than you expect? Yeah. I don't see a connection with as we expand into new categories, you know, take Mondo, for example. I don't think that there's any inherent inventory risk in the expanding categories. Maybe it comes down to the specific category that we haven't looked at yet. But right now, in all the categories that we're talking about, I don't see any correlation to inventory risk. Yeah. I think we would probably be wary of that upon that acquisition if there was some sort of inherent risk that we weren't familiar with. Yeah. One way to look at that, Ben, is really simple. These businesses are almost primarily D2C driven. The ability to take pre-orders on any item we make in this space virtually eliminates any inventory risk. We're gonna be very careful with Mondo. My goal is not necessarily to bring Mondo to Walmart or Target. Our goal is to make the most amazing products across an array of 1,100 unique licenses, focus highly on D2C, and use all of our new capabilities of our ERP and our e-commerce system to take pre-orders and identify to the T what quantity we'll make. I'll give you one example. Right after acquisition, Mondo made a very expensive He-Man action figure that sold for $260. They put it on pre-order for half an hour, and their dollars generated was the largest day ever in terms of Funko.com for revenue. It wasn't sold on Funko.com, it was sold on mondoshop.com with one-tenth, no, one-twentieth of the eyeballs on that website as our Funko has. The idea of pre-order, which somehow Mondo's figured out and us bigger company, like us, just struggle to, but we're close, is really exciting. I think that's gonna allay any kind of concerns on inventory risk here. SG&A as a percentage of revenue has increased a bit over the past few years. How does that trend reverse and, what's the biggest source of operating leverage for you? Yeah, what you saw for the H1 of the year, so far in this year is really the investments that we've made in the ERP as well as in the distribution center. We've been making investments for the future and those have been coming in on the P&L. You know, as we look forward, we did talk about operating leverage to get to our adjusted EBITDA margin of 20%. We feel we have a good path to get there. With regards to your expansion plans for China, do you have the relationships that you need? If not, how long will it take you to get those? Yeah, yeah. I'll take part of this, and I'll turn it over to Andy. One thing we've been doing really, really well in China is actually started about a year and a half ago, which is the localization of content, taking Disney and bringing it into, like, the culture, the Chinese culture. I think that's one thing we worked with the Chinese museum in terms of, like, accurate outfit representation of their culture and taking beloved characters and introducing that into the marketplace is a strategy to get people to understand our format, our take on design, the whimsy nature of our products as Pop! The other thing they've done really, really well in China is put these very large shows in some of the biggest high-profile malls in all of China. We've showed this dedication to opening up China to our licensing partners. They couldn't be any more thrilled. Like, I'll turn it over to Andy, but I think we've got a really good start on what that strategy is. Yeah. All I'd say is, the two leaders we've hired have got about 40 years experience in the region. One speaks fluent local language. Huge opportunity for that. The other one brought Peppa Pig to China, was part of that merchandise release in the region. I think we've got very high hopes. We understand it's a different market. That's why we need people on the ground, which we have not had at all anywhere in Asia, really, until now. Expanding the lens globally, what areas do you currently have the direct sales that you need, or planning to expand direct sales? Where are you working with distributors? Where do you have no exposure that you would like to have exposure in the near term? Yeah, look, I think we've got some. We can't, again, tell you all of our path here. I will tell you, bringing Andy on as Chief Revenue Officer was a brilliant idea by Andrew, and it's worked amazing, just not only for us domestically in our sales organization there that we're continuing to invest in on a higher level, but basically unveiling a strategy internally on how we're gonna disrupt, how we're gonna feed APAC direct to consumer, how we're gonna grow LATAM, direct to consumer, how we're gonna invest in LATAM. You know, I think those are the two big areas right now is APAC and LATAM. We're doing very, very well in Oceania, but we're gonna continue to find a new way to disrupt that territory as well. Yeah, just add, it'll be a blend of different strategies. I don't think there's any given strategy in any given sub-market. We'll pick the right strategy in the right sub-market. It might even be that in a region, given the new platform we've got on D2C, we didn't really talk about it, but that D2C platform we're bringing will be far easily transferable to a new market than what we have today. It's gonna be horses for courses. I'd say it'll just be test and learn, but certainly you'll see more of our activity localized in each of those markets. What factors drove the H2 2021 and into first half 2022 decline in gross margins? What factors could get those gross margins back up? What do you see for the gross margins necessary to get to your 2026 objectives? Okay, the question was what drove back half 2021 gross margins and H1 2022 gross margins lower. Make sure I understood the question correctly. Correct. Yeah. Or wasn't that- What brought down gross margins and what will bring them up by 2026? Yeah. What you saw, you know, obviously shipping has been a factor. Also our product mix as well as our regional mix in the first half of the year was another factor. A lot of mix underneath the covers. We did mention that, you know, historically, we've had price increases on just our standard Pop! We did not articulate any price increases for the rest of our product line. As we continue to add more and diversify our core collectibles business, it's just making sure that we, you know, get price realization on those as well. What are the most obvious channels domestically and internationally, channels or retailers for increased distribution? I think I touched on value as being a huge opportunity, if I understood your question correctly. Giant amount of doors globally we've not really addressed at all in the past, and we haven't had. The reason we haven't partly is because we didn't develop a line. We now have a line which is on fire in a couple of retailers globally, and we've barely got selling that yet. I think that would be one of my largest. Yeah, I think the introduction of Bitty POP! and Bitty Soda too are wonderful ways. We have four packs for some of our retailers because they wanna hit certain price points, but the ability to break those down into smaller assortments, whether it be a single or a double, really has an advantage on some of the strategy. We were really careful to make sure that we don't put, like, POP!, for example, in the dollar store. We wanna protect our brands and we have to find the right horse for the right race in terms of, like, finding that exact retailer partner. Five Below is just a wonderful story of taking our Mystery Minis line and opening up the box and window and then finding a great success story with a product that we've been selling for over seven years. There's some really interesting angles we're taking with products designed for certain parts of the store, like the greeting card aisle with the Popsies that we're really excited about. In these other channels too. Can you drill down a little bit on some of the components that will drive future growth in Loungefly? Look, I think first and foremost, in the last year, their social media reach has increased almost fourfold. They're growing exponentially quicker than we were, because they had no dedicated resources and didn't have a marketing team behind that. You know, we've made a lot of progress in Loungefly. Well, I made a lot of mistakes too, on how to integrate that business. We have their own planning team now. They're giving the keys to creating a really great sales team. They have their own marketing team, and I think what you're seeing is more eyeballs on the brand. The diversity of licenses is what is fueling that, right? People love their products, but if you don't hit the license they love, they're not gonna partake. That's solving it. Innovative silhouettes that are just continually just light years ahead of the more commodity-based lower-end people that are always chasing Loungefly for inspiration. Just even like we talked about the greeting card aisle and the ability to take a category that we're excited about, like stationery, and have Loungefly elevate what stationery is in a very disruptive way. These are categories. The other one is doggy fashion. I know you're excited about that, Ben, 'cause I like doggy fashion too. This is an area where they're gonna put their unique spin on this at a high level. We love Loungefly 'cause it's about going up in price point, not going down. I think what they're gonna do in doggy fashion, I just can't say that word enough, is really exciting. They got a lot of stuff up their sleeve. We've seen all of it. Our licensors are very excited about it, and we know that fans are gonna be really excited about it too. POP! Yourself, is that forever a D2C opportunity, or is there a scenario where those kiosks or that capability goes to your channel partners? I think right now, it, for the foreseeable future, it's certainly D2C heavily focused. We've got some innovative ideas on specific events and how we can disrupt in a way that's very unique, taking some of the big sporting events in the world and how we can get that in front of, you know, the guys at ESPN or Fox or something like that in a very interesting way. You know, I think there's over 78 articles that were written about us just at San Diego Comic-Con, about Funkoville and how Funko is the epicenter of the biggest pop culture event in the world. I think using that technology to allow someone to customize themself in a very specific way to an event is really exciting for us. Who knows how we utilize this thing in the future with our great partners. We are hyper obsessed with bringing as many people into our environment as we can. We really believe this is a Trojan horse to bring a much greater demographic into funko.com, and we will be prepared to use it that way. You referenced the growth in non-standard Pops, what our CFO likes to call luxury Pops. Ooh. What’s the margin profile for those products, and how does that contribute to your 2026 margin objectives? Well, that's the best word I've heard since doggy fashion, that luxury Pop thing. I like that. Look, it's a category that's just really doing well. Some of the items are larger. Shipping certainly affected some of those larger items, and we sold a lot of them this year. There was an impact in terms of large format and then getting hit with those shipping costs. We have moved some of that diversification around in terms of production. We have a world-class sourcing team. Two years ago, our sourcing team consisted of one person. It is now 16. 13 might have come from Disney or something like that. We're really excited about bringing that expertise into our establishment and then diversifying our factories to find the factories that can produce at that high of level but at a margin that's a little bit better than us. We're pretty excited about. I think we could also add that, you know, a lot of our strategy around the larger format product will be to sell it directly FOB and touch it less because there is no point touching it more than we need to. That'll be one way around it for 2023. Does Funko have any plans to create a crypto token or a Funko cryptocurrency in the future? If I said anything like that, I'd be hit on stage, so I'm gonna abstain from that. No. You have two brick-and-mortar stores. Any plans for more, Funko-owned brick and mortar in the future? There's definitely opportunities out there to continue to expand the brand and get in front of our customers. Obviously, those two stores have been phenomenally successful, you know, both in revenue and marketing capabilities. While obviously we, you know, announced the Snoop Dogg co-branded store across from SoFi, which is super exciting, there are unique opportunities for crossover like that, and there may be opportunities internationally that we're looking at. Obviously, we have the franchise store in Dubai. We think that there are several markets globally that it could make sense. We don't have plans right now to implement those, but that conversation is always on the table. I wanna make sure I understand this question. I think it's, you're in Seattle, could there be a Boeing Pop? A Boeing Pop? Correct. You're the creative one. Go with that. Yeah, I don't know how to answer that one. I guess it's like an airplane that looks like a Pop. Yeah, sure. It's a Boeing Pop ride. Maybe. There you go. I have no idea. You know, we've always found licenses we've said no to, and then somehow we develop a new format. We're like, "Hey, remember when we said no to that company? We should probably give them a call again." I keep going back to something Andrew's alluded to earlier, just that the amount of inbound interest in our brand is one of the things I think after doing this for 18 years, I think it's the most surprising thing that I've seen for us. I know we mean a lot to our fans, and I knew we have a great licensing. We had a great thesis when we bought the company, which is to find a way to connect people to the things they love, which we do now and will do forever. The idea is that Hallmark and Ferrero and 10:10 Games and some of these big production houses wanna associate themselves with our brand. For every deal we do, we turn down 15. Sometimes we turn down licenses that don't make sense because we don't have a format that makes sense in it, and then we have a chance to come back and create a new format or acquire somebody that would lend itself much better to a new format like vinyl records or bags, purses, and wallets. That's kinda how we're thinking about that. Are you able to provide any commentary on what the drivers of margin expansion in the second half of this year might be? Yeah. We're really excited to host this event today, and what we're really focused on is really 2023 and beyond for today. You know, we're not gonna comment on the back half of the year. D2C is presumably margin accretive. How much of a factor is it in getting to your 2026 EBITDA margin objective? No. It's definitely a contributor. We haven't specifically bridged that out for you guys just yet, but it's obviously the more we grow our D2C business, especially as we, you know, bring POP! Yourself on board, that even, you know, amplifies the margin accretiveness of our D2C business. Channel mix is definitely a piece of getting to our 2026 EBITDA. I would just like to add one thing to that. I think Andy alluded to this, but I just kinda wanna drive it home. There is an opportunity when we get the new platform up and running to use our direct-to-consumer e-commerce channel to get into new territories first. Whether that means taking over the digital rights for a territory and having funko.com or funko.mx you know be the go-to destination for products, for our products online. You know, I think that that's something that we're looking as an accelerator to that business. I think that it will play as we mentioned in the presentation. It'll play a major part and we're really excited to help us grow our distribution globally through D2C and the new platform. Has the company or at what point might the company consider either a share buyback, announcing a share buyback or potentially a dividend? You know, as we stated through our presentation, we are definitely. We have been, and we will continue to be a growth company, and our capital allocation policy will align with a growth company. As I laid out earlier, you know, first and foremost, we wanna invest in the business for profitable sales growth of our existing core business. Look at strategic M&A that is aligned with our financial objectives as well as, you know, our product objectives and really kinda continues to help us grow the company. You know, obviously we'll always have an eye on debt. You know, our just our normal growth profile as a stock wouldn't suggest, you know, putting those ahead of some of our other alternatives. A follow-up to that, can you help us quantify how much investment is needed for that internal growth or how much internal investment is needed for the growth? You know, for the most part, you know, from a capital perspective, I think you're talking about the core business growth. We've been pretty diligent about our capital. It's really been to support our tools and molds and to continue to expand our product categories. You know, obviously, down the road, we'll eventually need probably more distribution capabilities to continue to support the growth, but that's more of a, you know, future down the road within the five-year plan, but, you know, not directly related, you know, within the next, call it, you know, 12 months or so. Sort of product innovation adjacent, are there any plans to improve packaging to ensure that products arrive, you know, in a pristine state? Yeah. Again, this talks to the considerable investment we've made into sourcing and procurement departments that really just didn't exist very much. Diversification of factories, whether it's more into you know, Indonesia and Cambodia for, like, Loungefly or Vietnam or moving some of that ratio back from Vietnam back into China into larger scale factories. All of which we have a team now that looks at every aspect of testing more closely, product development from day one more closely, product margins more closely. I think we will continue to innovate there, and we continue to find a higher level of even, like, recycled materials in all of our products in terms of just the actual products themselves, which went from zero recycled materials into the plastics in Funko Pops to as high now as 25%-30%, and in almost all of our packaging now is just about recyclable. We're gonna look at it from every angle, but again, having a world-class team on board in terms of sourcing and procurement is really gonna help lead the way. These investments in some of these great industry leaders in our space to site in Asia to help support those teams in the US is pretty exciting to have those feet on the ground. Okay, we've got time for just a couple more. How much of your growth over the next five years will be driven by ASP growth versus unit growth? I can start. You know, I think it's gonna be a combination of both. I mean, we're acquiring brands that sell at a higher price point and can command a higher price point because they are brands that are leaders in our industry of pop culture. They might not be sizable, but we've seen, and hopefully you guys have seen, what we can do with somebody put into the Funko flywheel, whether it's Underground Toys and distribution, what we're doing with Funko Games, what we're doing with Loungefly, what we are gonna do with Mondo and some of these other acquisitions are gonna come up very, very shortly. They all sell mostly D2C, much higher price points than Funko, all brand leaders in their space, and then all will be able to have access to our 1,100 licenses, our sourcing team, our procurement team, our worldwide distribution. A lot of that worldwide distribution is earmarked for direct-to-consumer globally. I think it's gonna be a part of that, but we also believe that today, when a lot of brands are struggling to grow in these times, we have never seen a higher demand for our products. Our products still are desired by everybody in every way, shape, or form. We love that, and I think it's gonna be a combination of both. In the secondary market space, is there a potential for Funko to have its own secondary market where it collects, you know, a fee similar to the NFT resale? Yeah, I think with that, the secondary market, I think we're gonna be as big as we possibly can, but we are excited about it. We know it's something we have to participate in, and we're gonna participate in a very thoughtful way, just like we participated in the NFT space in a very thoughtful way, which is fan first. We're gonna put our fans always first in anything we ever do. Whatever we do in this space is gonna be very well thought out, and very well, I think, embraced. I think that's something that we will continue to always do as a company. I think when you think it through that lens, you're gonna really basically prohibit yourself from making a really big mistake in an area in an attempt to garner revenue where there might not be one. I think this is a question specific to Latin America, but generally, globally, do you factor in new price points or accounting for the fact that there are sort of different income levels globally or different willingness to pay? Yeah. The best example I can give you is South Africa, where we've had to be helpful to that region due to what's happened to the currency over the years. Yeah, for sure, we do think about that. There are sensible price points, and there are nonsensible price points, and that changes over time. Not necessarily down to the demographic, but it might be down to something as simple as currency. For sure, we do look at that and think about it. I think this will be our last question, but I hope that everyone in the room can stick around for happy hour after. Management will be able to chat. I think for the last one, the China distributor relationship, do you have anyone specifically targeted there? Or if not, how will you expand that? Yeah, look, I'll let Andy chime in, too. We do have a partner there and has helped us set up some of these really large-scale shows. Some of the people behind that have run Disney Asia and DreamWorks Asia. We've got a great beginning there. I think Andy's got a much bigger plan for how we're gonna grow that business. I think we at least have the foundation and a starting point here with some really knowledgeable people that are on that side of the fence that have run, like I said, DreamWorks and Disney in the China market. Yeah, just that it's a blank slate, you know, other than the existing partner, who we will absolutely stay loyal to. It's a blank slate. We're gonna start again and figure out what's right for us and using all those techniques we've just been talking about by region and sub-region. Yeah, I'll be taking doggy fashion questions over there in the corner if anyone wants to talk to me about doggy fashion. Thank you, guys. From Andy and Andrew and Jen, thank you so much for coming. This is super exciting. It's fun to just talk about our future for a while and all the cool things, 'cause I know the calls sometimes after earnings are really down in the weeds. It's fun to talk big picture stuff. If you can't tell, we are insanely excited about our business and where we at, where we sit at the epicenter of pop culture and tying fans to the things they love. You know, we are gonna kill it in the future, and we are so excited about what that's gonna bring for Funko. Thank you. Thanks, everybody.