Spin Master Corp (“Spin Master” or the “Company”), a leading global children’s entertainment company, announced preliminary unaudited Revenue and Toy Gross Product Sales for Q4 and the full year ended December 31, 2023. All financial information is presented in United States dollars (“$”, “dollars” and “US$”) and has been rounded to the nearest hundred thousand, except where indicated.
These preliminary unaudited Revenue results for the fourth quarter and full year 2023 are intended to provide context for Spin Master’s performance in line with timing of financial results for the broader industry. Spin Master is scheduled to report its financial results for Q4 and year ended December 31, 2023 after the close of business on February 28, 2024.
“We are very pleased with how our team navigated the challenging macroeconomic environment to deliver revenue growth in the 4th quarter,” said Max Rangel, Global President & CEO. “We harnessed the strength of our three creative centers to meet our full-year revenue expectations. While our Toy revenue declined for the full year compared to 2022, our POS remained ahead of the industry2 and we grew market share globally, by introducing innovation into the toy aisle, engaging fans of popular franchises both licensed and owned, and growing our evergreen brands to create magical play experiences for millions of children globally. We saw strong increases in Entertainment from the PAW Patrol movie and the delivery of the Unicorn Academy series, and we grew Digital Games revenue, highlighting the power of our diversified portfolio to drive long-term growth.”
Preliminary Spin Master Revenue Highlights for Q4 2023 as compared to the same period in 2022
Revenue was $502.6 million, up 7.9% from $465.8 million, due to increases in Entertainment, Toy and Digital Games revenue of 76.9%, 2.5% and 7.1% respectively. Constant Currency Revenue was $493.9 million, an increase of 6.0% from $465.8 million.
Toy Revenue
- Toy revenue increased by $10.1 million or 2.5% to $406.8 million driven by an increase in Toy Gross Product Sales partially offset by an increase in Sales Allowances.
- Toy Gross Product Sales grew by $23.1 million or 4.8% to $502.3 million from $479.2 million. Constant Currency Toy Gross Product Sales increased by $11.4 million or 2.4% to $490.6 million from $479.2 million. The increase was driven by Wheels & Action and Preschool and Dolls & Interactive, partially offset by a decline in Outdoor.
- The growth in Toy revenue and Toy Gross Product Sales arose from higher order volumes.
- Toy Gross Product Sales in Preschool and Dolls & Interactive grew by $3.0 million or 1.5% to $204.7 million from $201.7 million, primarily driven by Bitzee and Gabby’s Dollhouse, partially offset by PAW Patrol and Purse Pets.
- Toy Gross Product Sales in Activities, Games & Puzzles and Plush was flat at $160.6 million, with increases in GUND and Kinetic Sand offset by declines in Orbeez and Pixobitz.
- Toy Gross Product Sales in Wheels & Action increased by $23.3 million or 25.9% to $113.3 million from $90.0 million, from increases in Monster Jam and HEXBUG.
- Toy Gross Product Sales in Outdoor decreased by $3.2 million or 11.9% to $23.7 million from $26.9 million primarily driven by SwimWays.
- Sales Allowances increased to $95.5 million from $82.5 million. Sales Allowances as a percentage of Toy Gross Product Sales were 19.0%, compared to 17.2%, primarily driven by higher markdowns and promotional activity, caused by pressure on consumer discretionary spending levels.
Entertainment Revenue
Entertainment revenue was $55.2 million, an increase of $24.0 million or 76.9% from higher distribution revenue associated with new content deliveries including Unicorn Academy, Rubble & Crew and Vida the Vet and from on-going distribution revenue from PAW Patrol: The Mighty Movie. Constant Currency Entertainment Revenue increased by $24.1 million or 77.2% to $55.3 million, from $31.2 million.
Digital Games Revenue
Digital Games revenue was $40.6 million, an increase of $2.7 million or 7.1% from $37.9 million, due to higher in-game purchases in Toca Life World and higher subscription revenue from both the Piknik bundle and PAW Patrol Academy. Constant Currency Digital Games Revenue increased by $2.6 million or 6.9% to $40.5 million, from $37.9 million.
Preliminary Revenue Highlights for Year Ended December 31, 2023, as compared to the same period in 2022
Revenue was $1,904.9 million, a decrease of 5.7% from $2,020.3 million driven by a decline in Toy revenue, partially offset by an increase in Entertainment and Digital Games revenue. Constant Currency Revenue was $1,889.6 million, a decrease of 6.5% from $2,020.3 million. Revenue, excluding PAW Patrol: The Mighty Movie Distribution Revenue of $15.6 million, declined by 6.5% to $1,889.3 million.
Entertainment Revenue
Entertainment revenue increased by $71.3 million or 60.0% to $190.1 million, from higher distribution revenue associated with new content deliveries including PAW Patrol: The Mighty Movie, Unicorn Academy, Rubble & Crew and Vida the Vet as well as the Company’s share of revenue from the PAW Patrol series and the continued distribution of PAW Patrol: The Movie. Constant Currency Entertainment Revenue increased by $71.3 million or 60.0% to $190.1 million, from $118.8 million.
Digital Games Revenue
Digital Games revenue increased by $10.0 million or 6.1% to $173.9 million, from higher in-game purchases in Toca Life World. Constant Currency Digital Games Revenue increased by $12.7 million or 7.7% to $176.6 million, from $163.9 million.
Outlook
Toy Gross Product Sales, declined by 9.7% for the year ended December 31, 2023 compared to 2022, consistent with the high single digits guidance provided on November 1, 2023.
Revenue, excluding PAW Patrol: The Mighty Movie Distribution Revenue of $15.6 million, declined by 6.5% for the year ended December 31, 2023 compared to 2022, consistent with the mid-single digits guidance provided on November 1, 2023.
The Company continues to expect 2023 Adjusted EBITDA Margin excluding PAW Patrol: The Mighty Movie Distribution Revenue of $15.6 million1 to be up compared to 2022 Adjusted EBITDA Margin, consistent with the guidance provided on November 1, 2023.