Spin Master Corp. — Interim / Quarterly Report 2025

Jul 31, 2025

Spin Master Corp.

Condensed consolidated interim financial statements (unaudited)

For the three and six months ended June 30, 2025 and June 30, 2024

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Table of contents

1. Condensed consolidated interim statements of financial position
2. Condensed consolidated interim statements of loss and comprehensive loss
3. Condensed consolidated interim statements of changes in shareholders' equity
4. Condensed consolidated interim statements of cash flows
   5 - 23. Notes to the Condensed consolidated interim financial statements

Spin Master Corp. Q2 2025 Condensed consolidated interim financial statements

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Condensed consolidated interim statements of financial position

(Unaudited, in US$ millions)	Notes	Jun 30, 2025	Jun 30, 2024	Dec 31, 2024
Assets
Current assets
Cash	9	128.0	154.6	233.5
Restricted cash	9	—	3.1	—
Trade receivables, net	10	355.9	315.7	499.4
Other receivables	10	61.9	57.8	54.9
Inventories, net	11	225.0	275.4	184.7
Income tax receivable		46.0	68.4	—
Prepaid expenses and other assets	12	65.7	39.2	48.7
		882.5	914.2	1,021.2
Non-current assets
Intangible assets	13	858.5	825.0	837.4
Goodwill	14	368.6	378.7	368.1
Right-of-use assets		147.3	168.6	149.5
Property, plant and equipment		63.7	66.3	60.2
Deferred income tax assets		168.3	160.1	167.1
Other assets	12	28.5	36.4	29.9
		1,634.9	1,635.1	1,612.2
Total assets		2,517.4	2,549.3	2,633.4
Liabilities
Current liabilities
Trade payables and accrued liabilities	15	375.7	364.4	429.5
Loans and borrowings	16	382.2	458.4	389.1
Provisions		21.6	23.9	24.7
Lease liabilities		22.4	32.2	22.3
Deferred revenue		35.2	13.7	22.0
		837.1	892.6	887.6
Non-current liabilities
Deferred income tax liabilities		209.7	225.1	209.9
Lease liabilities		126.9	127.6	123.0
Provisions		11.0	11.5	10.5
		347.6	364.2	343.4
Total liabilities		1,184.7	1,256.8	1,231.0
Shareholders' equity
Share capital	17	762.3	776.6	765.6
Retained earnings		544.7	505.6	640.1
Contributed surplus		34.1	34.0	45.5
Accumulated other comprehensive loss		(8.4)	(23.7)	(48.8)
Total shareholders' equity		1,332.7	1,292.5	1,402.4
Total liabilities and shareholders' equity		2,517.4	2,549.3	2,633.4

Approved by the Board of Directors on July 30, 2025.

The accompanying notes are an integral part of these Condensed consolidated interim financial statements.

1 | Spin Master Corp. Q2 2025 Condensed consolidated interim financial statements

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Condensed consolidated interim statements of loss and comprehensive loss

(Unaudited, in US$ millions, except per share information)	Notes	Q2 2025	Q2 2024	Six Months Ended Jun 30,
				2025	2024
Revenue	3	400.7	412.0	760.0	728.2
Cost of sales	6, 11	190.7	212.4	355.1	372.1
Gross Profit		210.0	199.6	404.9	356.1
Expenses
Selling, general and administrative	6	221.0	200.3	416.3	398.0
Depreciation and amortization	6	16.9	15.3	34.0	35.1
Other expense, net	4	19.1	2.2	19.2	3.4
Foreign exchange loss, net	7	5.4	4.8	9.9	4.4
Operating Loss		(52.4)	(23.0)	(74.5)	(84.8)
Interest expense	5	9.9	12.2	20.2	25.0
Interest income		(0.8)	(1.1)	(1.5)	(2.4)
Loss before income tax recovery		(61.5)	(34.1)	(93.2)	(107.4)
Income tax recovery	8	(15.0)	(9.6)	(22.2)	(28.1)
Net Loss		(46.5)	(24.5)	(71.0)	(79.3)
Loss per share
Basic		(0.46)	(0.24)	(0.70)	(0.76)
Diluted		(0.46)	(0.24)	(0.70)	(0.76)
Weighted average number of shares (in millions)
Basic		101.6	103.9	101.9	103.8
Diluted		104.5	106.0	104.5	106.0
(Unaudited, in US$ millions)				Six Months Ended Jun 30,
		Q2 2025	Q2 2024	2025	2024
Net Loss		(46.5)	(24.5)	(71.0)	(79.3)
Items that may be subsequently reclassified to Net Loss
Foreign currency translation gain (loss)		27.0	(1.9)	40.4	(8.9)
Other comprehensive income (loss)		27.0	(1.9)	40.4	(8.9)
Total comprehensive loss		(19.5)	(26.4)	(30.6)	(88.2)

The accompanying notes are an integral part of these Condensed consolidated interim financial statements.

2 | Spin Master Corp. Q2 2025 Condensed consolidated interim financial statements

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Condensed consolidated interim statements of changes in shareholders' equity

(Unaudited, in US$ millions)	Note	Share capital	Retained earnings	Contributed surplus	Accumulated other comprehensive (loss)	Total
Balance at January 1, 2024		783.4	623.1	27.4	(14.8)	1,419.1
Net Loss		—	(79.3)	—	—	(79.3)
Other comprehensive loss		—	—	—	(8.9)	(8.9)
Share-based compensation	17	—	—	13.5	—	13.5
Dividends declared	17	—	(13.7)	—	—	(13.7)
Shares issued upon settlement of long-term incentive plan^{1}	17	6.9	—	(6.9)	—	—
Subordinate voting shares purchased and cancelled	17	(13.7)	(12.2)	—	—	(25.9)
Change in obligation for automatic share purchase plan	17	—	(12.3)	—	—	(12.3)
Balance at June 30, 2024		776.6	505.6	34.0	(23.7)	1,292.5
Balance at January 1, 2025		765.6	640.1	45.5	(48.8)	1,402.4
Net Loss		—	(71.0)	—	—	(71.0)
Other comprehensive income		—	—	—	40.4	40.4
Share-based compensation	17	—	—	7.4	—	7.4
Dividends declared	17	—	(17.4)	—	—	(17.4)
Shares issued upon settlement of long-term incentive plan	17	18.8	—	(18.8)	—	—
Subordinate voting shares purchased and cancelled^{2}	17	(22.1)	(10.6)	—	—	(32.7)
Change in obligation for automatic share purchase plan	17	—	3.6	—	—	3.6
Balance at June 30, 2025		762.3	544.7	34.1	(8.4)	1,332.7

1 Includes $12.0 million related to a reclassification between share capital and contributed surplus for historical LTIP settlements.
2 Includes premium and tax on shares repurchased and cancelled of $10.1 million and $0.5 million, respectively, in retained earnings.

The accompanying notes are an integral part of these Condensed consolidated interim financial statements.

3 | Spin Master Corp. Q2 2025 Condensed consolidated interim financial statements

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Condensed consolidated interim statements of cash flows

(Unaudited, in US$ millions)	Notes	Six Months Ended Jun 30,
		2025	2024
Operating activities
Net Loss		(71.0)	(79.3)
Adjustments to reconcile net loss to cash provided by operating activities
Income tax recovery	8	(22.2)	(28.1)
Interest expense	5	14.4	18.9
Interest income		(1.5)	(2.4)
Depreciation and amortization	6	60.7	66.6
Loss on disposal of non-current assets		0.9	0.3
Accretion expense	5	5.2	5.4
Amortization of facility fee costs	5	0.3	0.7
Loss on portfolio investments, net		0.2	0.3
Impairment of non-current assets	13,14	18.7	2.1
Unrealized foreign exchange loss (gain), net	7	0.5	(0.7)
Share-based compensation expense	17	7.4	13.5
Fair value adjustment on inventory sold	11	—	44.7
Net changes in non-cash working capital	18	70.7	81.9
Net change in non-cash provisions and other assets		(0.3)	(23.0)
Income taxes paid		(24.5)	(41.8)
Income taxes received		0.4	3.7
Interest paid		(10.5)	(15.8)
Interest received		1.5	2.7
Cash provided by operating activities		50.9	49.7
Investing activities
Investment in property, plant and equipment		(21.7)	(17.8)
Investment in intangible assets	13	(55.2)	(37.1)
Business acquisitions, net of cash acquired	21	—	(952.9)
Portfolio investments		(2.0)	—
Minority interest investments	12	(0.8)	—
Cash used in investing activities		(79.7)	(1,007.8)
Financing activities
Proceeds from loans and borrowings	16	25.0	525.0
Repayment of loans and borrowings	16	(30.0)	(65.0)
Payment of lease liabilities		(20.4)	(17.0)
Dividends paid	17	(17.1)	(9.2)
Repurchase of subordinate voting shares	17	(32.0)	(25.6)
Cash (used in) provided by financing activities		(74.5)	408.2
Effect of foreign currency exchange rate changes on cash		(2.2)	(1.2)
Net decrease in cash during the period		(105.5)	(551.1)
Cash, beginning of period		233.5	705.7
Cash, end of period		128.0	154.6

The accompanying notes are an integral part of these Condensed consolidated interim financial statements.

4 | Spin Master Corp. Q2 2025 Condensed consolidated interim financial statements

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1. Description of business

Spin Master Corp. was formed by the amalgamation of Spin Master Corp. (formerly SML Investments Inc. which was incorporated on June 9, 2004 under the Business Corporations Act (Ontario)), SML Investments 2008 Inc. and Varadi Bee Corp. pursuant to the filing of articles of amalgamation under the Business Corporations Act (Ontario) on July 29, 2015. The Company is a leading global children's entertainment company, creating exceptional play experiences through its three creative centres: Toys, Entertainment and Digital Games. Its head and registered office is located at 225 King Street West, Suite 200, Toronto, Canada, M5V 3M2. Spin Master Corp. and its subsidiaries are together referred to, in these Condensed consolidated interim financial statements, as the "Company" or "Spin Master".

The Company has three reportable operating segments: Toys, Entertainment and Digital Games (see Note 23).

2. Summary of material accounting policy information

(A) Statement of compliance

These Condensed consolidated interim financial statements have been prepared in accordance with IAS 34, Interim Financial Reporting ("IAS 34") as issued by the International Accounting Standards Board (IASB). Accordingly, certain information and footnote disclosure normally included in annual financial statements prepared in accordance with IFRS® Accounting Standards as issued by the IASB, have been omitted or condensed. The preparation of financial statements in accordance with IAS 34 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies. The same accounting policies, presentation and methods of computation have been followed in these Condensed consolidated interim financial statements as were applied in the preparation of the Company's audited Consolidated financial statements for the year ended December 31, 2024.

Effective January 1, 2025, the Company adopted the IASB issued The Effects of Changes in Foreign Exchange Rates - Lack of Exchangeability. The amendments to IAS 21 clarify the definition of exchangeability and how to estimate an exchange rate when there is a lack of exchangeability. New disclosure requirements are introduced when using an estimated exchange rate on the financial statements. The adoption of this standard did not have any impact on these Condensed consolidated interim financial statements.

All financial information is presented in millions of United States dollars ("US$") and has been rounded to the nearest hundred thousand, except as otherwise indicated.

These Condensed consolidated interim financial statements and accompanying notes were approved and authorized for issuance by the Board of Directors of the Company on July 30, 2025.

(B) Basis of preparation

These Condensed consolidated interim financial statements include the accounts of Spin Master Corp. and its subsidiaries and should be read in conjunction with the Company's audited Consolidated financial statements, including the notes thereto, for the year ended December 31, 2024.

The Company has assessed significant accounting judgments and estimates in preparing the Company's Condensed consolidated interim financial statements for the three and six months ended June 30, 2025 and June 30, 2024. The accounting policies, judgments and estimates as disclosed in Note 3 of the Company's audited Consolidated financial statements for the year ended December 31, 2024 have been applied consistently in the preparation of these Condensed consolidated interim financial statements.

3. Revenue

The Company earns revenue from the following primary sources: Toys, Entertainment and Digital Games.

(US$ millions)	Q2 2025	Q2 2024	Six Months Ended Jun 30, 2025	Six Months Ended Jun 30, 2024
Toy revenue	322.3	340.9	596.0	567.3
Entertainment revenue	32.1	36.4	69.9	80.2
Digital Games revenue	46.3	34.7	94.1	80.7
Revenue	400.7	412.0	760.0	728.2

For the three and six months ended June 30, 2025, the Company recognized revenue of $7.0 million (2024 - $0.1 million) and $7.8 million (2024 - $3.6 million), respectively, relating to amounts previously deferred.

5 | Spin Master Corp. Q2 2025 Condensed consolidated interim financial statements

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4. Other expense, net

(US$ millions)	Notes	Q2 2025	Q2 2024	Six Months Ended Jun 30,
				2025	2024
Impairment on non-current assets	13	18.5	1.8	18.7	2.1
Acquisition related deferred incentive compensation		0.7	1.1	1.2	2.6
Acquisition related deferred consideration		0.5	(0.5)	0.1	(2.1)
Investment loss, net	12	0.1	0.3	0.3	0.3
Legal settlement recovery		—	—	—	(0.6)
Other		(0.7)	(0.5)	(1.1)	1.1
Other expense, net		19.1	2.2	19.2	3.4

5. Interest expense

(US$ millions)	Notes	Q2 2025	Q2 2024	Six Months Ended Jun 30,
				2025	2024
Interest on loans and borrowings		5.3	7.5	10.9	15.8
Interest on lease liabilities and accretion expense		2.6	2.8	5.2	5.4
Bank fees and financing charges		1.8	1.7	3.6	3.2
Amortization of facility fee costs		0.1	0.3	0.3	0.7
Change in fair value of interest rate swaps	22	0.1	(0.1)	0.2	(0.1)
Interest expense		9.9	12.2	20.2	25.0

6. Expenses

Selling, general and administrative expenses

(US$ millions)	Q2 2025	Q2 2024	Six Months Ended Jun 30,
			2025	2024
Administrative	113.5	108.6	215.8	232.3
Marketing	53.6	43.7	96.6	74.7
Selling	27.5	19.1	51.7	35.5
Distribution	15.3	19.9	30.5	38.9
Product development	11.1	9.0	21.7	16.6
Selling, general and administrative	221.0	200.3	416.3	398.0

Depreciation and amortization

(US$ millions)	Q2 2025	Q2 2024	Six Months Ended Jun 30,
			2025	2024
Included in cost of sales	14.5	16.4	26.7	31.4
Included in expenses	16.9	15.4	34.0	35.2
Depreciation and amortization	31.4	31.8	60.7	66.6

7. Foreign exchange

(US$ millions)	Q2 2025	Q2 2024	Six Months Ended Jun 30,
			2025	2024
Unrealized foreign exchange (gain) loss, net	(3.8)	5.1	0.5	(0.7)
Realized foreign exchange loss (gain), net	9.2	(0.3)	9.4	5.1
Foreign exchange loss, net	5.4	4.8	9.9	4.4

Spin Master Corp. Q2 2025 Condensed consolidated interim financial statements

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8. Income tax

The income tax recovery recognized in the Condensed consolidated interim statements of loss and comprehensive loss comprises of the following:

(US$ millions)	Q2 2025	Q2 2024	Six Months Ended Jun 30,
			2025	2024
Current income tax recovery	(15.9)	(13.6)	(21.9)	(35.5)
Deferred income tax expense (recovery)	0.9	4.0	(0.3)	7.4
Income tax recovery	(15.0)	(9.6)	(22.2)	(28.1)

The income tax recovery is calculated as follows:

(US$ millions)	Six Months Ended Jun 30,
	2025		2024
Loss before income tax recovery	(93.2)		(107.4)
Income tax recovery at Canadian statutory tax rate of 26.5%	(24.7)	26.5 %	(28.5)	26.5 %
Effect of:
Different tax rates of subsidiaries operating in other jurisdictions	2.6	(2.8)%	4.9	(4.6)%
Recognition of previously unrecognized tax losses and other deferred tax assets	0.9	(1.0)%	—	—%
Expense not deductible in determining taxable income	—	—%	(2.4)	2.2%
Unused tax losses and tax attributes not recognized as deferred tax assets	(0.2)	0.2%	(0.1)	0.1%
Other	(0.8)	0.9%	(2.0)	1.9%
Income tax recovery	(22.2)	23.8%	(28.1)	26.1%

The tax rate used for the reconciliation above is the Canadian statutory tax rate of Spin Master Corp., payable by corporate entities in the Company, on taxable profits under tax laws in the respective jurisdictions in which the Company operates.

9. Cash

As at June 30, 2025, the Company held $8.3 million of cash in a geographic region which is subject to certain limitations (June 30, 2024 - $8.1 million, December 31, 2024 - $7.7 million).

In addition, as at June 30, 2024, $3.1 million was included in a demand deposit cash account, which was pledged as cash collateral to a letter of credit facility.

10. Trade and other receivables, net

Trade receivables

(US$ millions)	Jun 30, 2025	Jun 30, 2024	Dec 31, 2024
Trade receivables^{1}	590.1	531.2	797.0
Provisions for sales allowances	(223.5)	(205.9)	(286.4)
Allowance for doubtful accounts	(10.7)	(9.6)	(11.2)
Trade receivables, net	355.9	315.7	499.4

Trade receivables disclosed above include any amounts that are past due as at the end of the reporting period.

Other receivables

(US$ millions)	Jun 30, 2025	Jun 30, 2024	Dec 31, 2024
Investment tax credits receivables	52.1	53.9	46.2
Sales tax receivables	6.5	2.5	3.6
Other	3.3	1.4	5.1
Other receivables	61.9	57.8	54.9

Spin Master Corp. Q2 2025 Condensed consolidated interim financial statements

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11. Inventories, net

(US$ millions)	Jun 30, 2025	Jun 30, 2024	Dec 31, 2024
Finished goods	220.3	271.4	183.2
Raw materials	4.7	4.0	1.5
Inventories, net	225.0	275.4	184.7

Inventories as at June 30, 2025 are net of $11.8 million for the provision of inventories to net realizable value (June 30, 2024 - $12.8 million, December 31, 2024 - $15.1 million).

The cost of inventories recognized as an expense in cost of sales during the three and six months ended June 30, 2025 was $157.1 million (2024 - $182.2 million) and $289.0 million (2024 - $311.8 million), respectively.

On January 2, 2024, the Company acquired $179.6 million of inventories as part of the acquisition of Melissa & Doug, of which $66.3 million relates to a fair value adjustment, representing the difference between inventory cost and its fair value less cost of disposal. The fair value adjustment is recognized as an expense in cost of sales as the related inventories are sold. For the three and six months ended June 30, 2025, the Company did not recognize any fair value adjustment in cost of sales as it was fully recognized in 2024 (2024 - $24.2 million and $44.8 million, respectively). As at June 30, 2025, the fair value adjustment for inventory was $nil (June 30, 2024 - $21.5 million, December 31, 2024 - $nil).

12. Prepaid expenses and other assets

(US$ millions)	Notes	Jun 30, 2025	Jun 30, 2024	Dec 31, 2024
Prepaid expenses		28.9	19.9	25.4
Advances on royalties		31.8	16.9	16.8
Foreign exchange forward contracts		5.0	2.4	6.5
Prepaid expenses and other assets		65.7	39.2	48.7
		Jun 30, 2025	Jun 30, 2024	Dec 31, 2024
(US$ millions)
Minority interest investments		9.8	9.5	9.0
Investment tax credits - non-current portion		6.1	4.4	5.6
Portfolio investments		6.3	3.5	4.5
Advances on royalties		2.5	4.9	4.0
Investment in associate		3.4	2.8	3.4
Trade receivables - non-current portion		0.4	11.1	3.4
Unrealized gain on interest rate swaps	22	—	0.1	—
Other assets, non-current		28.5	36.4	29.9

Minority interest investments

Minority interest investments classified as fair value through other comprehensive income ("FVTOCI") is comprised of equity instruments that the Company has irrevocably elected to recognize in this category. These are strategic investments, and the Company considers this classification to be most relevant.

During the six months ended June 30, 2025, the Company invested $0.8 million in a new minority interest investment classified as fair value through profit or loss ("FVTPL") (2024 - $nil).

8 | Spin Master Corp. Q2 2025 Condensed consolidated interim financial statements

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12. Prepaid expenses and other assets (continued)

The carrying value of the six minority interest investments held as at June 30, 2025 (June 30, 2024 - six investments, December 31, 2024 - five investments) were as follows:

(US$ millions)	Carrying value at,
	Jun 30, 2025	Jun 30, 2024	Dec 31, 2024
Minority interest investments classified as FVTOCI	3.0	3.0	3.0
Minority interest investments classified as FVTPL	6.8	6.5	6.0
Minority interest investments	9.8	9.5	9.0

Investment in associate

For the three and six months ended June 30, 2025, the Company recognized $0.1 million and $0.2 million of loss, respectively, from its associate (2024 - $nil) in Other expense, net in the Condensed consolidated interim statements of loss and comprehensive loss.

Portfolio investments

For the three and six months ended June 30, 2025, the Company recognized $0.1 million of net unrealized loss (2024 - $0.3 million) in Other expense, net in the Condensed consolidated interim statements of loss and comprehensive loss. The Company did not recognize any realized loss in Other expense, net for the three and six months ended June 30, 2025 (2024 - $nil).

13. Intangible assets

At June 30, 2025, the Company assessed intangible assets for any indication of impairment. The Company recorded $18.5 million of impairment for the three and six months ended June 30, 2025, primarily related to $17.1 million for digital game and app development assets and $0.9 million for entertainment content development assets, reflecting changes in management's strategies (2024 - $1.8 million related to content development project and components of computer software) in the Condensed consolidated interim statements of loss and comprehensive loss.

14. Goodwill

At June 30, 2025, the Company assessed goodwill for any indication of impairment. The impact of ongoing changes to global tariff policies on the Company's future financial results remains uncertain, including tariffs on goods imported to the United States ("U.S"). Management has, to the extent reasonable, incorporated known facts and circumstances into the significant estimates and assumptions made in its assessment. As a result, there was no impairment during the three and six months ended June 30, 2025 (2024 - $nil) in the Condensed consolidated interim statements of loss and comprehensive loss.

15. Trade payables and accrued liabilities

The Company is enrolled in a supplier financing arrangement program with a third-party financial institution that provides financing to certain suppliers of the Company. This arrangement allows these suppliers to elect to be paid by the financial institution at a discount earlier than the maturity date of the receivable. The payment term for the arrangement is on average 21 days from the invoice date under the program. The Company will pay the full amount owing to the financial institution according to the terms negotiated with the supplier on the maturity dates, which generally ranges between 60 and 75 days.

The amount outstanding to the financial institution under this program as at June 30, 2025 was $30.7 million (June 30, 2024 - $31.7 million, December 31, 2024 - $30.1 million), of which suppliers have received payment of $25.0 million from the financial institution under the program (June 30, 2024 - $25.3 million, December 31, 2024 - $22.3 million).

The activity related to this program is classified as an operating activity within the Condensed consolidated interim statements of cash flows.

9 | Spin Master Corp. Q2 2025 Condensed consolidated interim financial statements

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16. Loans and borrowings

(US$ millions)	Jun 30, 2025	Jun 30, 2024	Dec 31, 2024
Unsecured debt (at amortized cost)
Facility (i)	160.0	235.0	165.0
Acquisition Facility (ii)	225.0	225.0	225.0
	385.0	460.0	390.0
Less:
Unamortized financing costs	(2.8)	(1.6)	(0.9)
Total unamortized financing costs	(2.8)	(1.6)	(0.9)
Current	382.2	458.4	389.1
Total loans and borrowings	382.2	458.4	389.1

Unsecured Debt

Bank facilities

i. The Company has a committed unsecured revolving credit facility (the "Facility") with a borrowing capacity of $510.0 million and contains certain financial covenants. The Facility also has an option which permits the Company to increase the total capital available by an additional $200.0 million. On June 27, 2025, the Company entered into an agreement to amend its existing Facility, which now matures on June 27, 2030. During the six months ended June 30, 2025, the Company drew $25.0 million (2024 - $300.0 million) and repaid $30.0 million (2024 - $65.0 million) against the Facility.

Total financing costs of $3.2 million, which include Facility amendment fees and related legal fees, are offset in Loans and borrowings and are being amortized over the term of the amended and restated agreement.

As at June 30, 2025, there was $4.7 million (June 30, 2024 - $3.6 million, December 31, 2024 - $4.8 million) in letters of credit outstanding under the Facility.

ii. On November 20, 2023, the Company entered into a non-revolving credit facility (the "Acquisition Facility") with a borrowing capacity of $225.0 million, which contains certain financial covenants. On June 27, 2025, the Company entered into an agreement to amend its existing Acquisition Facility, which now matures on June 27, 2027. The Acquisition Facility was used to fund the acquisition of Melissa & Doug. Total financing costs of $1.2 million, which include facility arranger fees, agency fees and related legal fees, are offset in Loans and borrowings and are being amortized over the term of the Acquisition Facility.

During the six months ended June 30, 2025, the Company made no drawings (2024 - $225.0 million) and made no repayment (2024 - $nil) against the Acquisition Facility.

For the six months ended June 30, 2025, the weighted average interest rates on the Facility and Acquisition Facility were 5.9% and 5.6%, respectively (2024 - 6.6% and 6.6%).

The Company was in compliance with all financial covenants as at June 30, 2025, June 30, 2024 and December 31, 2024.

Bank overdraft facility

The Company has an uncommitted overdraft facility agreement (the "European Facility") for €15.0 million (equivalent to $15.9 million). The European Facility will be used, if needed, to fund working capital requirements in Europe. As at June 30, 2025, the outstanding balance was $nil (June 30, 2024 - $nil, December 31, 2024 - $nil).

Secured Debt

Bank facilities

The Company has an uncommitted revolving credit facility to finance television and film production (the "Production Facility"). The limit of the Production Facility is $10.0 million (equivalent to $7.4 million). As at June 30, 2025, the outstanding balance of the Production Facility was $nil (June 30, 2024 - $nil, December 31, 2024 - $nil).

Spin Master Corp. Q2 2025 Condensed consolidated interim financial statements

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17. Share capital

(a) Authorized as at June 30, 2025 and June 30, 2024

• Unlimited number of multiple voting shares with no par value;
• Unlimited number of subordinate voting shares with no par value; and
• Unlimited number of preferred shares issuable in series with no par value.

Multiple voting shares and subordinate voting shares entitle the holder to receive dividends, and to receive the proceeds of liquidation, dissolution or winding up the Company in proportion to the number of shares held. These rights are subject to the prior rights of the holders of any shares ranking prior to the multiple voting shares and the subordinate voting shares.

The holders of the multiple voting shares are entitled to 10 votes for each share held and the holders of the subordinate voting shares are entitled to 1 vote for each share held.

Multiple voting shares are convertible at any time into an equivalent number of subordinate voting shares. Subordinate voting shares do not have any redemption or conversion rights.

Preferred shares of each series will be entitled to preference over the multiple voting shares and subordinate voting shares with respect to the payment of dividends and the proceeds of liquidation, dissolution or winding up of the Company.

| | Six months ended
Jun 30, 2025 | | Six months ended
Jun 30, 2024 | |
| --- | --- | --- | --- | --- |
| | Shares (millions) | Amount (US$ millions) | Shares (millions) | Amount (US$ millions) |
| Multiple voting shares: | | | | |
| Outstanding, beginning of period | 68.5 | 350.5 | 68.7 | 350.5 |
| Conversion to subordinate voting shares | — | — | (0.2) | — |
| Outstanding, end of period | 68.5 | 350.5 | 68.5 | 350.5 |
| Subordinate voting shares: | | | | |
| Outstanding, beginning of period | 33.9 | 415.1 | 35.0 | 432.9 |
| Issuance | 0.7 | 18.8 | 0.9 | 6.9 |
| Purchased and cancelled | (1.8) | (22.1) | (1.1) | (13.7) |
| Conversion from multiple voting shares | — | — | 0.2 | — |
| Outstanding, end of period | 32.8 | 411.8 | 35.0 | 426.1 |
| Shares issued and outstanding, end of period | 101.3 | 762.3 | 103.5 | 776.6 |

On February 28, 2024, the Company launched, and the Toronto Stock Exchange ("TSX") accepted the notice to launch, a Normal Course Issuer Bid ("NCIB"). Under this NCIB, the Company was able to repurchase (and cancel) its subordinate voting shares on the open market at its discretion and subject to compliance with applicable securities laws and the rules of the TSX. This NCIB commenced on March 4, 2024, and was scheduled to end on the earlier of March 3, 2025, and the completion of purchases under the NCIB, of up to 2,984,559 subordinate voting shares, which represented approximately 10% of the "public float" (within the meaning of the rules of the TSX) upon launch of the NCIB. As at March 31, 2025, the Company had repurchased an aggregate of 2,984,559 subordinate voting shares under this NCIB.

On March 4, 2025, the TSX accepted the Company's notice to launch a NCIB. Under this NCIB, the Company is permitted to repurchase (and cancel) its subordinate voting shares on the open market at its discretion and subject to compliance with applicable securities laws and the rules of the TSX. This NCIB commenced on March 7, 2025, and will end on the earlier of March 6, 2026, and the completion of purchases under the NCIB, of up to 2,417,522 subordinate voting shares, which represented approximately 10% of the "public float" (within the meaning of the rules of the TSX) upon launch of the NCIB.

On June 17, 2025, the Company entered into an automatic share purchase plan pursuant to which a broker is authorized to purchase subordinate voting shares under the NCIB for a period up to August 1, 2025. As at June 30, 2025, an obligation for the outstanding repurchase commitments of $3.5 million was recognized in trade payables and accrued liabilities (June 30, 2024 - $12.3 million, December 31, 2024 - $7.0 million). Subsequent to June 30, 2025, the Company repurchased and cancelled 110,188 subordinate voting shares for $2.0 million.

Spin Master Corp. Q2 2025 Condensed consolidated interim financial statements

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17. Share capital (continued)

Below is a summary of the Company's activities under NCIBs for the six months ended June 30, 2025 and 2024.

(US$ millions, unless otherwise noted)	Six Months Ended Jun 30,
	2025	2024
Subordinate voting shares repurchased for cancellation (number of shares)	1,793,731	1,111,581
Consideration¹	32.2	25.9
Reduction in share capital	22.1	13.7
Premium on repurchased and cancelled shares recorded in retained earnings	10.1	12.2

¹ $0.2 million of the consideration was paid subsequent to June 30, 2025.

The following table provides a summary of dividends declared and paid in 2025 and 2024.

Declaration Date	Record Date	Payment Date	Dividend per Share (C$)	Dividends declared and paid (in US$ millions)¹
Jul 30, 2025	Sep 26, 2025	Oct 10, 2025	0.12	—
Apr 30, 2025	Jun 27, 2025	Jul 11, 2025	0.12	8.9
Feb 24, 2025	Mar 28, 2025	Apr 11, 2025	0.12	8.5
Oct 30, 2024	Dec 27, 2024	Jan 10, 2025	0.12	9.1
Jul 30, 2024	Sep 27, 2024	Oct 11, 2024	0.12	9.1
May 7, 2024	Jun 28, 2024	Jul 12, 2024	0.12	9.1
Feb 28, 2024	Mar 29, 2024	Apr 12, 2024	0.06	4.6
Nov 1, 2023	Dec 29, 2023	Jan 12, 2024	0.06	4.6

¹ Dividends declared on July 30, 2025 will be accrued on record date of September 26, 2025.

During the six months ended June 30, 2025, dividends of $17.1 million (2024 - $9.2 million) were paid.

(b) Share-based plans

The total expense recognized for employee services received during the six months ended for June 30, 2025 and 2024 for equity-settled transactions is shown in the following table:

(US$ millions)	Six Months Ended Jun 30,
	2025	2024
Share-based compensation expense	7.4	13.5

Share-based compensation expense is recorded in administrative expenses in the Condensed consolidated interim statements of loss and comprehensive loss with a corresponding amount recorded in contributed surplus.

Long-Term Incentive Plan ("LTIP")

As at June 30, 2025, the aggregate number of subordinate voting shares that may be issued pursuant to grants under the LTIP may not exceed 12,717,065 (June 30, 2024 - 9,669,599, December 31, 2024 - 9,669,599). As at June 30, 2025, 3,695,458 (June 30, 2024 - 1,718,760, December 31, 2024 - 1,664,257) subordinate voting shares remained reserved for issuance under the LTIP.

The Company settled vested LTIP grants through the issuance of shares. For the six months ended June 30, 2025, $18.8 million (2024 - $6.9 million, net of $12.0 million related to a reclassification between share capital and contributed surplus for historical LTIP settlements) was transferred from contributed surplus to share capital.

12 | Spin Master Corp. Q2 2025 Condensed consolidated interim financial statements

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17. Share capital (continued)

Restricted Share Units ("RSU") and Performance Share Units ("PSU")

Below is a summary of the activity related to RSUs outstanding as at June 30, 2025 and June 30, 2024.

(number of units)	Jun 30, 2025	Jun 30, 2024
Outstanding, beginning of period	1,330,731	1,146,027
Granted	746,591	811,751
Settled	(641,293)	(503,008)
Forfeited	(75,654)	(58,556)
Outstanding, end of period	1,360,375	(1,396,213)

Below is a summary of the activity related to PSUs outstanding as at June 30, 2025 and June 30, 2024.

(number of units)	Jun 30, 2025	Jun 30, 2024
Outstanding, beginning of period	763,664	722,624
Granted	372,022	480,099
Settled	(90,880)	(418,802)
Cancelled/ Forfeited¹	(141,666)	(18,975)
Outstanding, end of period	903,140	764,946

¹ Cancelled PSUs includes awards granted which did not vest as the vesting condition was not satisfied.

Share Options ("Options")

The Company did not issue any Options in 2025 and 2024. As at June 30, 2025, 476,224 (June 30, 2024 - 476,224, December 31, 2024 - 476,224) Options are outstanding with a weighted average exercise price of C$34.78 (June 30, 2024 - C$34.78, December 31, 2024 - C$34.78).

Deferred Share Unit ("DSU") Plan

Below is a summary of the activity related to the DSUs outstanding as at June 30, 2025 and June 30, 2024.

(number of units)	Jun 30, 2025	Jun 30, 2024
Outstanding, beginning of period	277,038	256,680
Granted	53,786	42,434
Settled	—	(60,744)
Outstanding, end of period	330,824	238,370

The fair value of the DSUs is determined to be the share price on the grant date. Share based compensation expense of $0.4 million (2024 - $486.7 million) and $0.9 million (2024 - $487.2 million) was recorded for the three and six months ended June 30, 2025, respectively.

A mark to market gain of $0.2 million (2024 - gain of $1.2 million) and gain of $2.1 million (2024 - gain of $1.2 million) on the DSU liability is recorded for the three and six months ended June 30, 2025, respectively.

The share based compensation and mark to market gain related to DSUs are reflected in administrative expenses in the Condensed consolidated interim statements of loss and comprehensive loss. A corresponding amount was recorded in accrued liabilities.

The total share based compensation expense for the three and six months ended June 30, 2025, of $5.1 million and $7.4 million (2024 - $6.2 million and $12.3 million), respectively, includes the equity-settled RSU and PSU share based compensation and the mark to market gain on DSUs of $0.2 million and gain of $2.1 million (2024 - gain of $1.2 million and gain of $1.2 million) respectively.

13 | Spin Master Corp. Q2 2025 Condensed consolidated interim financial statements

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18. Net changes in non-cash working capital

(US$ millions)	Six Months Ended Jun 30,
	2025	2024
(Increase) decrease in assets:
Trade receivables, net	142.6	193.6
Other receivables	(3.6)	(2.3)
Inventories, net†	(40.3)	(39.8)
Prepaid expenses and other assets	(15.3)	4.6
	83.4	156.1
Increase (decrease) in liabilities:
Trade payables and accrued liabilities	(24.9)	(76.1)
Deferred revenue	13.2	2.7
Provisions	(1.0)	(0.8)
	(12.7)	(74.2)
Net changes in non-cash working capital	70.7	81.9

† Excludes fair value adjustment to Melissa & Doug's inventory of $66.3 million recorded as part of the acquisition on January 2, 2024 (Note 11).

19. Related party transactions

In the normal course of operations, the Company engaged the services of a media company owned by a member of the Company's Board of Directors on terms equivalent to those that prevail in arm's length transactions.

For the three and six months ended June 30, 2025, the related party transactions for the media company were included in marketing expenses in the Condensed consolidated interim statements of loss and comprehensive loss of the Company in the amount of $0.2 million (2024 - $nil).

20. Commitments for expenditures

As at June 30, 2025, the Company had minimum guarantees due to licensors of $56.4 million (June 30, 2024 - $51.9 million, December 31, 2024 - $54.2 million).

21. Business acquisition

Summary of prior year acquisition

Acquisition of MND Holdings I Corp

On January 2, 2024, the Company, through its subsidiaries, completed the acquisition of all issued and outstanding capital stock of MND Holdings I Corp ("Melissa & Doug"). Melissa & Doug is a leading brand in early childhood play with offerings of open-ended, creative, and developmental toys. Management performed an analysis under IFRS 3, Business Combinations ("IFRS 3") and has determined that the assets and processes acquired comprised a business and accounted for the transaction as a business combination using the acquisition method of accounting. The addition of Melissa & Doug complements the Company's existing offering by adding complementary early childhood products and further diversifies its portfolio across new channels and formats. This acquisition has been reported in the Toys segment within the Preschool, Infant & Toddler and Plush product category and included in the Melissa & Doug cash generating unit beginning from the date of acquisition.

On January 2, 2024, cash consideration paid was $991.7 million, which includes $36.2 million in cash acquired, resulting in net purchase consideration of $955.5 million. During the year ended December 31, 2024, the purchase consideration was reduced by $2.6 million for working capital adjustments, resulting in purchase consideration of $989.1 million. The purchase consideration was allocated to the identifiable intangible assets based on their estimated fair values of $536.2 million (related to brands and customer relationships), tangible assets of $501.4 million and assumed liabilities of $263.9 million with the remaining $215.4 million allocated to goodwill. The Company funded the acquisition with $466.7 million cash and $525.0 million of debt. The debt was sourced through a drawdown of $300.0 million from the Facility and $225.0 million from the Acquisition Facility (see Note 16).

The purchase price allocation is based on management's best estimates of fair value. The tables below summarize the purchase price allocation of the purchase consideration of $989.1 million:

Spin Master Corp. Q2 2025 Condensed consolidated interim financial statements

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15 | Spin Master Corp. Q2 2025 Condensed consolidated interim financial statements

21. Business acquisition (continued)

Assets acquired and liabilities assumed at the date of acquisition

(US$ millions)	Fair value as at Jan 2, 2024
Assets acquired
Cash	36.2
Restricted Cash	3.1
Inventories, net	179.6
Prepaid expenses and other assets	3.0
Trade receivables, net	104.7
Deferred income tax assets	50.5
Intangible assets	536.2
Other assets	1.2
Property, plant and equipment	37.1
Right-of-use assets	86.0
	1,037.6
Liabilities assumed
Trade payables and accrued liabilities	39.6
Deferred income tax liabilities	161.6
Lease liabilities	61.2
Income tax payable	0.7
Provisions	0.8
	263.9
Fair value of identifiable net assets acquired	773.7
Goodwill arising on acquisition
Purchase consideration	989.1
Fair value of identifiable net assets acquired	773.7
Goodwill arising from transaction	215.4

Goodwill arose on the acquisition as the consideration paid effectively included amounts for the benefit of expected revenue growth and future market development. These benefits are not recognized separately from goodwill as they do not meet the recognition criteria for identifiable intangible assets. As at the date of acquisition, $215.4 million of goodwill is not expected to be deductible for income tax purposes.

Net cash outflow on acquisition

Cash consideration	991.7
Less: cash balance acquired	36.2
Net cash outflow on acquisition	955.5

22. Financial instruments and risk management

Foreign currency risk

Due to the structure of the Company's international operations, it is exposed to foreign currency risk driven by fluctuations in exchange rates. Risk arises because the value of monetary assets, liabilities, revenues and expenditures from transactions denominated in foreign currencies may vary due to changes in exchange rates ("transaction exposures") and because the non-US$ denominated financial statements of the Company's subsidiaries may vary on translation into the US$ presentation currency. These exposures could impact the Company's earnings and cash flows.

The Company enters into derivative financial instruments such as foreign exchange forward contracts to manage its foreign currency risk on cash flows denominated in currencies other than the US$.

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22. Financial instruments and risk management (continued)

As at June 30, 2025, the Company was committed under outstanding foreign exchange contracts representing a total net sell commitment notional value of $107.4 million (December 31, 2024 - net sell commitment of $110.1 million). These foreign exchange contracts have maturity dates varying from July 2025 to December 2026. For the six months ended June 30, 2025, net realized gains on the Company's matured foreign exchange contracts were $2.0 million (2024 - realized losses of $1.8 million) and are included in the Condensed consolidated interim statements of loss and comprehensive loss.

| As at Jun 30, 2025
(in millions) | Notional value:
foreign currency
(Sell)/Buy | | Notional value:
US$ | Unrealized
(loss) gain: US$ |
| --- | --- | --- | --- | --- |
| Foreign exchange contracts | | | | |
| Buy US$ | GBP | (13.5) | (18.5) | (0.8) |
| Buy US$ | EUR | (50.6) | (60.2) | (3.2) |
| Buy US$ | MXN | (501.2) | (26.1) | (1.3) |
| Buy US$ | AUD | (7.8) | (5.1) | — |
| Sell US$ | CAD | 293.6 | 217.3 | 5.0 |
| Total | | | 107.4 | (0.3) |
| As at Dec 31, 2024
(in millions) | Notional value:
foreign currency
(Sell)/Buy | | Notional value:
US$ | Unrealized
(loss) gain: US$ |
| Foreign exchange contracts | | | | |
| Buy US$ | GBP | (10.8) | (13.9) | 0.4 |
| Buy US$ | EUR | (37.9) | (42.1) | 2.1 |
| Buy US$ | MXN | (587.7) | (30.9) | 3.6 |
| Buy US$ | AUD | (8.9) | (5.9) | 0.4 |
| Sell US$ | CAD | 276.9 | 202.9 | (8.7) |
| Total | | | 110.1 | (2.2) |

Interest rate risk

Interest rate risk is the risk that the Company's financial assets and liabilities will increase or decrease in value due to a change in interest rates. The Facility and the Acquisition Facility bear interest at variable rates. As a result, the Company is exposed to interest rate cash flow risk due to fluctuations in short term rates. The Company manages its interest rate risk by using variable to fixed interest rate swaps, where the Company pays the fixed interest rate.

On March 27, 2024, the Company entered into interest rate swap agreements with an aggregate notional of $140.0 million, effective on April 1, 2024, maturing in four tranches until December 31, 2025. The interest rate swap is a derivative financial instrument. The Company's swap agreement is measured at fair value with gains and losses in fair value presented in interest expense in the Company's Condensed consolidated interim statements of loss and comprehensive loss.

The following interest rate swaps were outstanding as at June 30, 2025 and December 31, 2024:

| (US$ millions)
Effective date | Contract expiry | Jun 30, 2025 | | Dec 31, 2024 | |
| --- | --- | --- | --- | --- | --- |
| | | Notional value | Unrealized loss | Notional Amount | Unrealized loss |
| Apr 01, 2024 | Sep 30, 2025 | 35.0 | (0.1) | 35.0 | (0.1) |
| Apr 01, 2024 | Dec 31, 2025 | 35.0 | (0.1) | 35.0 | (0.2) |
| Total | | 70.0 | (0.2) | 70.0 | (0.3) |

Fair value measurements

The following table presents the fair value of financial assets and financial liabilities. The carrying values of the Company's financial instruments approximate their fair values except for foreign exchange forward contracts, interest rate swaps, portfolio investments and minority interest investments, which are recorded at fair value.

16 | Spin Master Corp. Q2 2025 Condensed consolidated interim financial statements

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1. Financial instruments and risk management (continued)

(US$ millions)	Level	Jun 30, 2025	Jun 30, 2024	Dec 31, 2024
Financial assets
Cash	1	128.0	154.6	233.5
Restricted cash	1	—	3.1	—
Trade receivables, net	1	355.9	315.7	499.4
Other receivables	1	61.9	57.8	54.9
Other assets:
Trade receivables - non-current portion	1	0.4	11.1	3.4
Minority interest investments	3	9.8	9.5	9.0
Portfolio investments	3	6.3	3.5	4.5
Investment tax credits - non-current portion	1	6.1	4.4	5.6
Foreign exchange forward contracts	2	5.0	2.4	6.5
Unrealized gain on interest rate swaps	2	—	0.1	—
Financial assets		573.4	562.2	816.8
Financial liabilities
Trade payables and accrued liabilities^{1}	1	370.2	364.3	420.5
Foreign exchange forward contracts	2	5.3	0.1	8.7
Interest rate swaps	2	0.2	—	0.3
Loans and borrowings	1	382.2	458.4	389.1
Financial liabilities		757.9	822.8	818.6

1 Excludes foreign exchange forward contracts and interest rate swaps recorded within accrued liabilities.

There were no transfers in either direction between levels for financial instruments remaining at the end of the reporting period in 2025 or 2024.

23. Segment information

Spin Master is a global children's entertainment company with a portfolio that includes children's products, brands, and entertainment content spanning toys, games, licensed products, film and television programming and digital games.

The Company has three reportable operating segments, which are as follows:

i. Toys
ii. Entertainment
iii. Digital Games

The Toys segment engages in the creation, design, manufacturing, licensing, and marketing of toys, games, and products around the world. The Entertainment segment engages in the creation and production of multi-platform content, stories and characters in original shows, short-form series, and films. The Digital Games segment engages in the creation of digital games, which include subscription services. The Company also presents Corporate & Other which includes certain corporate costs, foreign exchange and transaction and integration related costs, as well as investment income and loss.

The Chief Operating Decision Maker measures total segment performance based on Adjusted EBITDA¹, as reported internally to management.

¹ Operating income before interest income and interest expense and depreciation and amortization (EBITDA) excluding adjustments that do not necessarily reflect the Company's underlying financial performance.

17 | Spin Master Corp. Q2 2025 Condensed consolidated interim financial statements

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23. Segment information (continued)

Segment revenue and operating results

The Company's results from operations by reportable operating segment for the three months ended June 30, 2025 and June 30, 2024 are as follows:

(US$ millions)
	Toys	Entertainment	Q2 2025		Total
			Digital Games	Corporate & Other
Revenue	322.3	32.1	46.3	—	400.7
Operating (Loss) Income	(39.7)	15.7	(15.5)	(12.9)	(52.4)
Adjustments:
Impairment of intangible assets	0.5	0.9	17.1	—	18.5
Restructuring and other related costs	9.3	0.8	2.0	—	12.1
Foreign exchange loss	—	—	—	5.4	5.4
Transaction and integration costs	2.9	—	2.9	1.7	7.5
Share based compensation	3.7	0.3	0.7	0.1	4.8
Amortization of intangible assets acquired	1.8	—	—	—	1.8
Acquisition related deferred incentive compensation	0.2	—	0.5	—	0.7
Acquisition related deferred consideration	0.5	—	—	—	0.5
Investment loss, net	—	—	—	0.2	0.2
Total Adjustments	18.9	2.0	23.2	7.4	51.5
Depreciation and amortization	20.1	6.6	2.9	—	29.6
Adjusted EBITDA	(0.7)	24.3	10.6	(5.5)	28.7
Total Adjustments	(18.9)	(2.0)	(23.2)	(7.4)	(51.5)
Depreciation and amortization	(20.1)	(6.6)	(2.9)	—	(29.6)
Interest income	—	—	—	0.8	0.8
Interest expense	—	—	—	(9.9)	(9.9)
(Loss) Income before income tax recovery	(39.7)	15.7	(15.5)	(22.0)	(61.5)

1 Share based compensation includes mark to market gain related to DSUs of $0.2 million.
2 Depreciation and amortization excludes $1.8 million of amortization of intangible assets acquired with Melissa & Doug.

(US$ millions)
	Toys	Entertainment	Q2 2025		Total
			Digital Games	Corporate & Other
Capital expenditures	17.6	15.1	8.6	—	41.3

Spin Master Corp. Q2 2025 Condensed consolidated interim financial statements

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23. Segment information (continued)

(US$ millions)
	Toys	Entertainment	Q2 2024		Total
			Digital Games	Corporate & Other
Revenue	340.9	36.4	34.7	—	412.0
Operating (Loss) Income	(34.9)	17.8	4.3	(10.2)	(23.0)
Adjustments:
Fair value adjustment for inventories acquired	24.2	—	—	—	24.2
Transaction and integration costs	4.3	—	—	2.0	6.3
Share based compensation^{1}	5.5	0.4	0.9	(0.6)	6.2
Foreign exchange loss	—	—	—	4.8	4.8
Amortization of intangible assets acquired	1.8	—	—	—	1.8
Impairment of intangible assets	—	1.8	—	—	1.8
Acquisition related deferred incentive compensation	0.4	—	0.7	—	1.1
Restructuring and other related costs	0.5	—	—	—	0.5
Investment loss, net	—	—	—	0.4	0.4
Acquisition related deferred consideration	(0.5)	—	—	—	(0.5)
Total Adjustments	36.2	2.2	1.6	6.6	46.6
Depreciation and amortization^{2}	19.6	8.4	2.0	—	30.0
Adjusted EBITDA	20.9	28.4	7.9	(3.6)	53.6
Total Adjustments	(36.2)	(2.2)	(1.6)	(6.6)	(46.6)
Depreciation and amortization^{2}	(19.6)	(8.4)	(2.0)	—	(30.0)
Interest income	—	—	—	1.1	1.1
Interest expense	—	—	—	(12.2)	(12.2)
(Loss) Income before income tax recovery	(34.9)	17.8	4.3	(21.3)	(34.1)

1 Share based compensation excludes mark to market gain related to DSUs of $1.2 million.
2 Depreciation and amortization excludes $1.8 million of amortization of intangible assets acquired with Melissa & Doug.

(US$ millions)
	Toys	Entertainment	Q2 2024		Total
			Digital Games	Corporate & Other
Capital expenditures	12.1	9.1	8.8	—	30.0

19 | Spin Master Corp. Q2 2025 Condensed consolidated interim financial statements

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23. Segment information (continued)

The Company's results from operations by reportable operating segment for the six months ended June 30, 2025 and June 30, 2024 are as follows:

(US$ millions) Six Months Ended Jun 30, 2025
	Toys	Entertainment	Digital Games	Corporate & Other	Total
Revenue	596.0	69.9	94.1	—	760.0
Operating (Loss) Income	(90.3)	41.6	(7.3)	(18.5)	(74.5)
Adjustments:
Impairment of intangible assets	0.5	0.9	17.1	—	18.5
Restructuring and other related costs	10.5	0.8	2.2	—	13.5
Transaction and integration costs	9.2	—	2.9	3.1	15.2
Foreign exchange loss	—	—	—	9.9	9.9
Share based compensation^{1}	5.4	0.5	1.1	(1.8)	5.2
Amortization of intangible assets acquired	3.6	—	—	—	3.6
Acquisition related deferred incentive compensation	0.5	—	0.7	—	1.2
Investment loss, net	—	—	—	0.3	0.3
Impairment of property, plant and equipment	0.2	—	—	—	0.2
Acquisition related deferred consideration	(0.4)	—	0.5	—	0.1
Total Adjustments	29.5	2.2	24.5	11.5	67.7
Depreciation and amortization^{2}	39.6	12.2	5.3	—	57.1
Adjusted EBITDA	(21.2)	56.0	22.5	(7.0)	50.3
Total Adjustments	(29.5)	(2.2)	(24.5)	(11.5)	(67.7)
Depreciation and amortization^{2}	(39.6)	(12.2)	(5.3)	—	(57.1)
Interest income	—	—	—	1.5	1.5
Interest expense	—	—	—	(20.2)	(20.2)
(Loss) Income before income tax recovery	(90.3)	41.6	(7.3)	(37.2)	(93.2)

1 Share based compensation excludes mark to market gain related to DSUs of $2.1 million.
2 Depreciation and amortization excludes $3.6 million of amortization of intangible assets acquired with Melissa & Doug.

(US$ millions) Six Months Ended Jun 30, 2025
	Toys	Entertainment	Digital Games	Corporate & Other	Total
Capital expenditures	31.5	29.1	16.3	—	76.9

20 | Spin Master Corp. Q2 2025 Condensed consolidated interim financial statements

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23. Segment information (continued)

(US$ millions) Six Months Ended Jun 30, 2024
	Toys	Entertainment	Digital Games	Corporate & Other	Total
Revenue	567.3	80.2	80.7	—	728.2
Operating (Loss) Income	(125.7)	46.4	17.5	(23.0)	(84.8)
Adjustments:
Fair value adjustment for inventories acquired	44.8	—	—	—	44.8
Transaction and integration costs	10.5	—	—	12.5	23.0
Share based compensation^{1}	9.7	0.8	1.7	0.1	12.3
Foreign exchange loss	—	—	—	4.4	4.4
Restructuring and other related costs	2.9	0.1	0.5	—	3.5
Amortization of intangible assets acquired	3.5	—	—	—	3.5
Acquisition related deferred incentive compensation	1.2	—	1.4	—	2.6
Impairment of intangible assets	—	1.8	—	—	1.8
Investment loss, net	—	—	—	0.4	0.4
Impairment of property, plant and equipment	0.3	—	—	—	0.3
Legal settlement recovery	—	—	—	(0.6)	(0.6)
Acquisition related deferred consideration	(2.1)	—	—	—	(2.1)
Total Adjustments	70.8	2.7	3.6	16.8	93.9
Depreciation and amortization^{1}	43.3	15.7	4.1	—	63.1
Adjusted EBITDA	(11.6)	64.8	25.2	(6.2)	72.2
Total Adjustments	(70.8)	(2.7)	(3.6)	(16.8)	(93.9)
Depreciation and amortization^{1}	(43.3)	(15.7)	(4.1)	—	(63.1)
Interest income	—	—	—	2.4	2.4
Interest expense	—	—	—	(25.0)	(25.0)
(Loss) Income before income tax recovery	(125.7)	46.4	17.5	(45.6)	(107.4)

1 Share based compensation includes mark to market gain related to DSUs of $1.2 million.
2 Depreciation and amortization excludes $3.5 million of amortization of intangible assets acquired with Melissa & Doug.

(US$ millions) Six Months Ended Jun 30, 2024
	Toys	Entertainment	Digital Games	Corporate & Other	Total
Capital expenditures	21.3	16.9	16.7	—	54.9

Spin Master Corp. Q2 2025 Condensed consolidated interim financial statements

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23. Segment information (continued)

Revenue from major product categories

Spin Master's Toys segment is organized into four major product categories as follows:

i. Preschool, Infant & Toddler and Plush
ii. Activities, Games & Puzzles and Dolls & Interactive
iii. Wheels & Action
iv. Outdoor

The Company's revenues based on its major product categories are as follows:

(US$ millions)	Q2 2025	Q2 2024	Six Months Ended Jun 30,
			2025	2024
Preschool, Infant & Toddler and Plush	185.0	165.0	327.4	287.8
Activities, Games & Puzzles and Dolls & Interactive	88.3	129.3	160.8	209.8
Wheels & Action	88.8	75.7	155.2	116.4
Outdoor	8.9	14.7	41.3	34.8
Toy Gross Product Sales¹	371.0	384.7	684.7	648.8
Sales Allowances	(48.9)	(45.7)	(89.3)	(83.9)
Toy Net Sales	322.1	339.0	595.4	564.9
Toy - Other Revenue	0.2	1.9	0.6	2.4
Toy Revenue	322.3	340.9	596.0	567.3
Entertainment Revenue	32.1	36.4	69.9	80.2
Digital Games Revenue	46.3	34.7	94.1	80.7
Revenue	400.7	412.0	760.0	728.2

¹ Toy Gross Product Sales represent sales of the Company's products to customers, excluding sales allowances.

Geographical information

Revenue by geographical area is based on the location of the customers and non-current assets are based on geographic location of the entity which holds the assets. The North American geographic area is comprised of the United States and Canada. The European geographic area is comprised of the United Kingdom, France, Italy, the Netherlands, Germany, Austria, Switzerland, Belgium, Luxembourg, Slovakia, Hungary, Romania, Czech Republic, Poland, Turkey, Greece, Portugal and Spain. The Rest of World is comprised of Hong Kong, China, Vietnam, India, Australia, New Zealand, Japan and Mexico, and all other areas of the world serviced by the Company's third party distribution network. Entertainment and Digital Games revenue are tracked on a global basis and are presented as such in the table below.

The Company's revenues are derived from the following geographical areas:

(US$ millions)	Q2 2025	Q2 2024	Six Months Ended Jun 30,
			2025	2024
North America	221.3	234.2	427.4	388.8
Europe	97.1	89.3	169.8	163.6
Rest of World	52.6	61.2	87.5	96.4
Toy Gross Product Sales	371.0	384.7	684.7	648.8
Sales Allowances	(48.9)	(45.7)	(89.3)	(83.9)
Toy Net Sales	322.1	339.0	595.4	564.9
Toy - Other Revenue	0.2	1.9	0.6	2.4
Toy Revenue	322.3	340.9	596.0	567.3
Entertainment Revenue	32.1	36.4	69.9	80.2
Digital Games Revenue	46.3	34.7	94.1	80.7
Revenue	400.7	412.0	760.0	728.2

Toy gross product sales for North America include amounts attributable to the United States of $395.2 million (2024 - $364.1 million) and Canada of $32.2 million (2024 - $24.7 million) for the six months ended June 30, 2025.

22 | Spin Master Corp. Q2 2025 Condensed consolidated interim financial statements

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23. Segment information (continued)

Non-current assets by major geographic region are detailed as follows:

(US$ millions)	Jun 30, 2025	Jun 30, 2024	Dec 31, 2024
Non-current assets
North America	1,316.6	1,322.5	1,327.6
Europe	120.7	99.1	107.2
Rest of World	35.3	31.8	28.9
Non-current assets	1,472.6	1,453.4	1,463.7
Other	162.3	181.7	148.5
Total non-current assets	1,634.9	1,635.1	1,612.2

Other includes non-current assets not directly attributable to a specific geographic area.

Non-current assets for North America include assets attributable to Canada of $201.5 million as at June 30, 2025 (June 30, 2024 - $167.7 million, December 31, 2024 - $176.7 million).

Major customers

Sales to the Company's three largest customers accounted for 44.6% (2024 - 49.2%) and 50.8% (2024 - 48.3%) of Toy gross product sales for the three and six months ended June 30, 2025, respectively. The Toys segment sells products to each of the Company's three largest customers. Other than the top three customers, which have remained the same as compared to the comparative period, no other single customer contributed 10% or more to Toy Gross Product Sales for the three and six months ended June 30, 2025 and 2024.

(US$ millions)	Q2 2025	Q2 2024	Six Months Ended Jun 30,
			2025	2024
Toy Gross Product Sales
Customer 1	58.9	79.0	136.5	132.6
Customer 2	67.4	49.3	124.3	84.8
Customer 3	39.2	61.1	87.0	96.2
Total	165.5	189.4	347.8	313.6

23 | Spin Master Corp. Q2 2025 Condensed consolidated interim financial statements