Is Funko Pop Going Out of Business? – Full Analysis

Funko Pop may still be on store shelves, but behind the scenes, the company is facing a critical financial crisis. Despite remaining operational into early 2026, recent SEC filings and Q3 2025 financial reports reveal that Funko has expressed “substantial doubt” about its ability to continue unless drastic financial measures are taken.

Here’s what you need to know:

• Funko’s net income dropped 80% year-over-year
• It faces $241 million in loans maturing by September 2026
• The company is undergoing a major restructuring to avoid bankruptcy
• New CEO Josh Simon is spearheading a bold turnaround strategy

In this full analysis, we’ll explore what led to Funko’s current challenges, how the company is responding, and what the future holds for collectors, investors, and pop culture enthusiasts alike.

What Sparked Concerns About Funko Pop’s Future?

The first public signs of distress emerged in late 2025, when Funko’s financial filings showed significant red flags. The company had experienced a 14% decline in quarterly net sales compared to the previous year. Even more concerning, its net income plummeted by nearly 80%, dropping to under $1 million.

These numbers, on their own, painted a grim picture. But it was the language in Funko’s November 2025 SEC filing that sent shockwaves through the industry.

The company included a “going concern” warning, an accounting term used when there is substantial doubt that a business can remain operational without drastic changes.

The collectible toy giant, once considered a darling of pop culture merchandising, was now on the brink. The combination of slowing demand, rising debt, and poor inventory control raised the question: Could Funko be next in line for bankruptcy or acquisition?

The news didn’t just rattle shareholders. Retailers, fans, and collectors began reevaluating their relationship with the brand. Online forums lit up with speculation, and the industry began to watch Funko with a mixture of concern and curiosity.

How Severe Is Funko’s Financial Situation in 2026?

Funko’s problems are not short-term. Instead, they reveal deep-rooted issues in cash flow, revenue management, and operational structure.

By Q3 2025, the company had earned $250.9 million in net sales, down from $291.6 million in the same quarter the year prior. Net income, once a healthy $8.6 million, had plummeted to just $948,000, a staggering 89% drop.

In addition, Funko’s Mondo division, which focuses on high-end vinyl collectibles and records, saw a 67% revenue drop, falling from $17.6 million to $5.8 million.

Funko’s Financial Performance (Q3 2024 vs Q3 2025):

Equally concerning is the total liability situation. Funko’s total debt reached $241 million by the end of Q3 2025, with nearly $457 million in liabilities on its balance sheet. A significant portion of this debt matures in September 2026, creating a countdown for financial resolution.

As a Funko representative stated during an investor call:

“We’re not out of options, but we are running out of time.”

Why Did Funko Issue a ‘Going Concern’ Warning?

In corporate terms, a “going concern” warning is not just an alert, it’s a red flag that suggests a company may not be able to meet its financial obligations over the next year. Funko issued this warning publicly in November 2025, citing insufficient liquidity and looming debt maturities as critical risk factors.

Key Drivers of the Warning:

• Declining Sales Performance: Continuous year-over-year revenue drops across both core products and niche lines like Mondo.
• Weak Cash Flow: Funko lacks the working capital required to sustain day-to-day operations or reinvest into growth without outside financing.
• Inventory Mismanagement: In 2023, Funko destroyed millions of dollars’ worth of unsold inventory, exposing overproduction flaws.
• Tariff Pressures: With most of its production based in Vietnam, Funko has faced 20% tariffs, a major drag on its margins.
• Retail Contraction: Retailers began shrinking their Funko inventory, further reducing sales velocity.

In response, the company engaged Moelis & Company, a financial advisory firm, to help evaluate refinancing or potential sale options. But results remain pending.

As CFO Yves LePendeven succinctly put it:

“Our future liquidity depends on refinancing or raising capital, both of which are actively being pursued.”

What Business Decisions Led to Funko’s Struggles?

Funko’s challenges in 2026 are not solely the result of economic conditions. They stem from a series of internal decisions made during its rapid expansion phase, particularly around production volume, cost management, and brand positioning. These choices gradually weakened demand and strained relationships across the supply chain.

Overproduction and Inventory Mismanagement

Funko released too many variations of the same characters, which diluted exclusivity and led to collector fatigue. Demand slowed, but production did not.

By 2023, warehouses were overflowing with unsold products, forcing the company to destroy inventory worth millions, an event that exposed serious forecasting and inventory planning failures.

• Excessive character variants reduced perceived value
• Large-scale inventory write-offs damaged margins

Cost Pressures and Retail Resistance

Heavy reliance on Vietnam-based manufacturing left Funko vulnerable to tariffs introduced during the Trump administration, increasing production costs.

At the same time, major retailers began reducing or pausing orders due to weaker sell-through, signalling declining confidence in Funko’s product performance.

• Tariffs tightened already thin margins
• Retailers pushed back on new inventory

Brand Fatigue and Failed Premium Expansion

Funko’s attempt to move into higher-end collectibles through its Mondo division failed to gain mass-market traction, particularly during an economic slowdown.

As James Zahn, Editor-in-Chief of The Toy Book, observed,

“Funko’s collectibles have become ubiquitous. Some characters are simply overproduced, and the novelty has worn off.”

What were once manageable issues have now become long-term threats to the brand’s stability.

How Has Leadership Shifted During the Crisis?

Instability at the top levels of leadership has further complicated Funko’s recovery. In just one year, from late 2024 to mid-2025, the company cycled through three CEOs. This high turnover at the executive level disrupted strategic continuity and hindered long-term planning.

Investors, employees, and industry observers viewed the leadership shuffle as a sign of deeper organizational uncertainty. Each new leader brought a different approach, which created inconsistent messaging both internally and externally.

Leadership Transitions

1. Cynthia Williams (Nov 2024 – July 2025): Former Hasbro executive who led the company for only 14 months before being let go amid poor performance.
2. Michael Lunsford (Interim CEO, July 2025): A board member who temporarily took the reins while the company searched for permanent leadership.
3. Josh Simon (Aug 2025 – Present): Former VP of Consumer Products at Netflix, brought in to stabilize operations and rebrand Funko’s future.

Simon’s appointment brought a noticeable shift in tone and ambition.

In his first official earnings call, he struck a hopeful yet realistic note:

“I’m only 60 days into the role, but it’s already clear how powerful the Funko brand is and how much growth opportunity lies ahead.”

He’s since launched the “Make Culture Pop” strategy, a foundational pillar in Funko’s fight for survival.

What Is the ‘Make Culture Pop’ Turnaround Plan?

As Funko faced mounting debt and declining sales, the new CEO’s recovery roadmap needed to be bold and effective. The result was the “Make Culture Pop” initiative, a strategic turnaround plan focused on speed, efficiency, and relevancy.

This initiative aims to shift Funko from reactive production to proactive cultural engagement. Rather than flooding the market with generic collectibles, the company is now prioritizing limited runs, trend-driven releases, and fan-centric experiences.

Strategic Focus Areas

• Faster Product Cycles: Funko aims to launch new figures within weeks of a pop culture trend. This agile approach contrasts with the previous 6–12 month product development cycle.
• Preorder-Driven Sales Model: To avoid overstocking, Funko is implementing a system where consumers preorder collectibles before they’re manufactured. This reduces storage costs and matches supply with demand.
• Micro-Collectibles Bitty Pops: The launch of Bitty Pops, smaller and more affordable versions of Pop figures, targets a younger audience and appeals to casual collectors. Their lower price point also makes them suitable for retail displays and impulse purchases.
• International Expansion: Funko plans to enter new regions, with a particular focus on Asia and Latin America, where demand for collectibles tied to global franchises continues to grow.

A Retail Win

One standout example of this strategy in action is the KPop Demon Hunters line. Tied to the breakout animated film of late 2025, Funko launched these figures within weeks of the movie’s release. The result? The product made Walmart’s Top Toy List for the holiday season.

As Simon explained during an earnings call:

“Speed to market is our biggest weapon. When we move quickly, we can still capture excitement and demand in real time.”

Early results suggest that this agile, culturally attuned strategy may be Funko’s best bet for survival.

Could Funko Be Acquired or Restructured?

Yes, an acquisition or formal restructuring is not only possible but increasingly likely. Funko’s board has already retained Moelis & Company to explore strategic alternatives, signalling that leadership is actively preparing for major financial decisions.

While no official outcome has been announced, several realistic paths are being evaluated as the company approaches a critical debt deadline in September 2026.

One option is refinancing the company’s $241 million debt, which would extend loan maturities or renegotiate terms to ease short-term pressure.

Another possibility is selling part or all of the business to a larger toy or licensing company seeking to acquire Funko’s intellectual property and brand recognition. A more drastic but viable route would be filing for Chapter 11 bankruptcy, allowing Funko to restructure operations while continuing to trade.

Given current liabilities, refinancing or acquisition remains Funko’s strongest chance of survival.

How Are Retailers and Collectors Reacting?

The impact of Funko’s financial crisis isn’t limited to boardrooms, it’s being felt across stores and collector communities.

Retailer Response

Retailers have begun reducing or halting orders for new Pop figures. Overcrowded shelves and slower sell-through rates have made buyers cautious. Some stores are choosing to focus on evergreen items instead of investing in every new Funko release.

Collector Sentiment

In online spaces like Reddit and YouTube, collectors are split. While some hope that Funko’s decline will increase the rarity and resale value of existing figures, others are frustrated by oversaturation and what they call “lazy variant production.”

One Reddit user summed it up poignantly:

“When there are 10 versions of the same Marvel character, it just stops feeling special.”

The uncertainty has injected volatility into the resale market, with certain rare figures jumping in value while others stagnate.

What Are the Possible Scenarios for Funko in 2026?

With $241 million in loans maturing by September 2026, Funko’s path forward must become clear soon. These are the most realistic outcomes on the horizon:

Most Likely Scenarios:

• Successful Debt Refinancing: If Moelis & Company can negotiate new loan terms, Funko could buy valuable time to recover.
• Strategic Sale or Merger: A larger entity could absorb Funko and integrate its IP into a broader portfolio.
• Bankruptcy Filing (Chapter 11): While not the end of the road, this would allow Funko to restructure with legal protections.
• Partial Shutdown: Segments like Mondo may be closed entirely if they remain unprofitable, helping to reduce overhead.

While none of these paths guarantee success, they do provide possible lifelines. What’s certain is that 2026 will decide whether Funko continues to “make culture pop” or becomes a cautionary tale in collectibles history.

Should You Still Invest in or Buy Funko Pops?

Whether buying or investing in Funko Pops makes sense depends largely on your personal goals and risk tolerance. For casual buyers, there is little reason to stop purchasing figures if you genuinely enjoy collecting them.

Funko continues to produce, ship, and sell Pop figures through both online platforms and physical retail stores, and the brand remains widely available.

For collectors, the current situation adds a layer of speculation. If Funko were to collapse or significantly restructure, certain rare, vaulted, or limited-edition figures could rise in value. However, because most Funko Pops are mass-produced, only select releases are likely to appreciate over time.

For investors, caution is essential. Funko’s stock remains volatile and carries significant risk. Without clear refinancing or acquisition news, the company does not currently represent a safe long-term investment.

Conclusion

Funko is not going out of business, yet, but it stands at a critical crossroads. With mounting debt, falling sales, and operational missteps, the company faces a challenging 2026. Its future hinges on the success of its turnaround plan, potential refinancing, or a strategic acquisition.

Under CEO Josh Simon’s leadership, Funko is adapting with faster product cycles and a shift toward demand-driven production. While uncertainty looms, Funko remains active, and there is still hope for recovery. For fans and collectors, now is a time to watch closely.

The coming months will determine whether Funko can reestablish its legacy, or become a collector’s relic itself.

FAQs

What does “substantial doubt” mean in a financial filing?

It’s an official notice from the company’s auditors that there are risks to its ability to continue operations within the next 12 months.

Has Funko officially filed for bankruptcy?

No. As of early 2026, Funko has not filed for bankruptcy, but it remains a potential outcome if restructuring fails.

What’s happening with Funko’s Mondo division?

The Mondo division, which makes high-end figures and collectibles, saw a 67% revenue drop and may face closure in 2026.

How do tariffs affect Funko’s operations?

Funko’s heavy reliance on Vietnamese manufacturing exposes it to a 20% tariff, significantly squeezing its profit margins.

Are Funko Pops losing resale value?

Mass-market figures are declining in value, but rare or retired editions could appreciate if production ceases.

Who is Josh Simon?

Funko’s CEO since August 2025, Simon was formerly at Netflix. He’s leading the turnaround strategy “Make Culture Pop.”

Why is the preorder model important for Funko?

It helps manage inventory risk by producing only what is already sold, reducing warehouse costs and losses.