Despite declines in entertainment revenue, Spin Master’s overall Q3 fortunes were buoyed due to sales from its U.S.-based toy brand Melissa & Doug, acquired last year.

The Toronto-based company reported a 24.7% revenue increase to US$885.7 million compared to US$710.2 million in the prior Q3.

The bulk of the revenue came from toy sales at US$810.9 million, up nearly 35% compared to US$601.5 million in Q3 2023. Revenue from Melissa & Doug sales alone represented US$155 million.

The gains were offset by losses in entertainment and digital games revenue. Entertainment revenue came to US$37.1 million in Q3 2024 compared to US$63.4 million in the same period in 2023, while digital games revenue hit US$37.7 million, down 7.6% from US$45.3 million last Q3.

“Both entertainment and digital games revenue declined this quarter as a result of comparisons against the highly successful PAW Movie last year as well as lower in-game purchases in Toca Boca World,” said Spin Master president and CEO Max Rangel in a statement, noting that challenges remain thanks to broader economic conditions.

Spin Master said the entertainment revenue included US$15.6 million in distribution revenue related to the initial delivery of Paw Patrol: The Mighty Movie (pictured)

The revenue boost this quarter stands in contrast to the dip in Q2, which came to US$412 million, 2.1% less than the US$420.7 million in Q2 2023.

Spin Master’s adjusted EBITDA for the quarter also saw a significant increase year-over-year, to US$277.5 million in 2024 from US$234.9 million in 2023. Its operating income was largely unchanged, coming in at US$203.2 million this quarter compared to US$197.2 million in the same period last year.

The company said it expects revenue for the rest of 2024 to be in line with 2023, excluding Melissa & Doug.

“We believe we are well positioned to continue to grow market share and maintain our leadership position within the children’s entertainment industry through the execution of our long-term strategy and focus on reimagining everyday play,” said Rangel.

In September, the company signed several new broadcast and licensing deals for its preschool series Vida the Vet (52 x 11 minutes) from ABC (Australia), Cartoonito (Australia and New Zealand), RTÉ (Ireland) and RTVE Clan (Spain).

Spin Master announced in July that EVP and CFO Mark Segal will retire in the first half of 2025 after two decades at the company.

Image courtesy of Elevation Pictures