While still marking continued declines in quarterly entertainment revenue, kids entertainment company Spin Master saw overall fiscal 2024 revenues increase 18.8% to more than US$2.2 billion.

Unveiling both its Q4 and fiscal 2024 financial results on Monday (February 24), the Toronto-headquartered company highlighted the integration of Connecticut-based toyco Melissa & Doug, which was acquired by Spin Master in 2023 and added its $374.7 million in revenue to Spin Master’s bottom line for the year. The company’s Q4 revenue for the three months ending Dec. 31, 2024 stood at $649.1 million, an increase of 29.1% from the same period the year prior.

Q4 also saw entertainment segment revenue decrease by $13.9 million, or 25.2%, to $41.3 million, due to fewer content deliveries. The segment decline for the year stood at 16.6%. The company saw a similar segment decline in Q3 2024, when entertainment revenue came to $37.1 million compared to $63.4 million in the same period in 2023.

“[The entertainment revenue decline] is in line with our expected content delivery cycle over the next five years,” said Spin Master CFO Mark Segal in an earnings call. “Entertainment revenue will grow in 2026 as we deliver the third [PAW Patrol] movie and other new content on a consolidated basis.”

At the same time, Spin Master’s Q4 operating income for the entertainment segment increased by $10 million or 103.1% to $19.7 million, which the company attributed to lower amortization of production costs and brand promotion costs, primarily related to Unicorn Academy (Spin Master, Mainframe Studios) which was delivered in 2023. The segment’s operating income for the fiscal year also increased by $8 million.

In the fiscal year, revenue also increased by 25.9% in the toys segment, while digital games saw a 5.4% decline. For the quarter, toy revenue increased $154.9 million or 38.1% to $561.7 million, while the digital games segment increased $5.5 million or 13.5% to $46.1 million.

Excluding revenue related to the delivery of PAW Patrol: The Mighty Movie (pictured) in 2023, Spin Master’s adjusted EBITDA in fiscal 2024 increased by $60.4 million, primarily thanks to the Melissa & Doug acquisition.

In 2025, the company expects revenue to increase 4% to 6% compared to 2024. Segal also stated during the call that capital expenditures in 2025 are forecast to be approximately 8% to 9% of revenue — up from 5% in 2024 — as the company continues to invest in creating new entertainment and digital games content. The company recently revealed that a film based on the Bakugan toy franchise is in development.

“You are going to see an elevated [capital expenditure] on entertainment content during that period [in 2025, 2026 and 2027],” said Segal.

As previously announced, the current CFO is expected to retire in the first half of 2025 after two decades at the company. Earlier this month, the company expanded its global distribution team with two Toronto-based appointments.

Image courtesy of Elevation Pictures