Spin Master Corp. - Third Quarter 2026 Results - DEFI TECHNOLOGIES INC

Good morning, ladies and gentlemen. Welcome to the Spin Master third quarter 2026 results conference call. At this time, our lines are in a listen-only mode. Following the presentation, we will conduct a question and answer session for analysts. If at any time during this call you need assistance, please press star zero for the operator. This call is being recorded today, Thursday, October 29th, 2026. I would now like to turn the conference over to Tim Perrin, VP, Investor Relations. Please go ahead. Good morning, everyone, and thank you for joining our call. With me here today are our CEO, Christina Miller, and our CFO, Jonathan Reuter. For your convenience, the press release, MD&A, and consolidated financial statements are available in the Investor Relations section of our website at spinmaster.com and on CDR+. Before we begin, please note that remarks on this conference call may contain forward-looking statements about Spin Master's current and future plans, expectations, intentions, results, levels of activity, performance, goals or achievements, and any other future events or developments. Forward-looking statements are based on currently available information and assumptions that management believes are appropriate and reasonable in the circumstances. However, there can be no assurance that such assumptions will prove to be correct, and many factors could cause actual results to differ materially from those expected or implied by the forward-looking statements. As a result, you are cautioned not to place undue reliance on these forward-thinking statements. For additional information on these assumptions and risks, please consult Cautionary Statements Regarding Forward-Looking Information in our earnings release dated October 29, 2026. Except as BME required by law, SpinMaster disclaims any intention to update or revise any forward- looking statements, whether because of new information in future events or otherwise. Please note that Spin Master reports in U.S. dollars and all dollar amounts today are expressed in U。S. currency unless otherwise noted. Also, unless otherwise noted, all percentage growth rates refer to the periods ending September 30, 2026 relative to the same period in 2025. Also all industry data that we reference related to toys is from Cercana LLC Retail Tracking Service and relates to data from our G11 markets, which are specified in our Q3 2026 supplementary presentation, which is available on our investors' website. I would now like to turn the conference call over to Christina. Thank you, Tim, and good morning to everyone who is joining us for our third quarter call. Our results demonstrate steady progress against our 2026 strategic priorities, And we again delivered on our stated financial expectations for the quarter. On a year-to-date basis, revenue is stable and adjusted EBITDA is up 7%, giving us confidence to reiterate guidance for the full year, which Jonathan will cover. Looking at the quarter specifically, both revenue and adjusted EBTDA were stable, driven by double-digit growth across core brands, Paw Patrol, Melissa & Doug, and Toca Boca World. Within toy, we recorded growth in our owned brands led by a 26% increase in Paw Patrol, 10% in Melissa & Doug, and from new products and existing brands. Within digital games, Tokaboka World revenue increased 13% and Picnic revenue grew 6%, driven by an increased player base for both, a direct result of our investment in improving the player experience and expanding partnerships with key global brands. Finally, revenue in our entertainment center increased by $20 million, the result of distribution revenue we received upon delivery of the Paw Patrol The Dino movie. The movie has been a success. It received the highest critical acclaim of the three movies to date, delighted global audiences, and increased the brand's relevance and franchise strength. I'm proud of the collaboration and execution around the movie across our entire company and with our partners at Paramount Skydance. By fully aligning our combined creative centers, we have engaged new and existing audiences and extended the movie momentum across the Paw Patrol ecosystem. This includes increasing viewership of our content universe, monetizing our Paw Patrol digital apps, activating the brand across consumer products, music, and social platforms, and driving toy sales. The latter achievement resulted in us ranking number one in infant, toddler, and preschool in this quarter. Building on the positive momentum, this week we announced the green light of our fourth movie to be released in association with Nickelodeon Movies and distributed by Paramount, slated for 2029. The first three movies have instantly become family favorites, grossing a combined half a billion dollars in box office revenue. Paw Patrol's success is a great example of building and scaling franchise value across categories and platforms to provide multiple touch points for our fans. We are starting to see the benefits of this approach in other brands in our portfolio, including Melissa & Doug and Tokaboka. We delivered healthy sales growth for Melissa & Dog in the third quarter. The brand benefited from broader distribution in the U.S. and internationally, marketing innovation in core categories, and expansion into new areas of play, including play sets with our new Cherry Lane launch. We are also building Melissa & Doug into a holistic family brand centered around its positioning as a leader in purposeful play. Like our current collaboration with Van Leeuwen, we are building a pipeline of partnerships and out-licensing opportunities that will lead to other toy collaborations and retail experiences. but also new categories including publishing, apparel, and music. Earlier this month, we began expansion of M&D outside the toy aisle with the launch of a line of branded books in partnerships with Penguin Random House. In the third quarter, we saw meaningful results of our strategy to fully realize the potential of Toca Boca by driving reach through a digital to physical loop that bridged the real world and virtual interactions inside and outside the game. We expanded the brand to connect with audiences in new locations and increased social media and fan engagement. This successfully drove players and revenue back into Toca Boca world. It also amplified the brand's industry position as a leader in tween culture. Our Music Month partnership with artists like Olivia Rodrigo and Twice broadened our reach and elevated our brand with this demographic. Our Toca Bocas by Miniso partnership generated strong fan interest, record level of user-generated content, and strong in-game engagement through a physical and digital crossover with exclusive merchandise in more than 400 stores as well as in- game gifts. And with Adidas, we established a first-of-its-kind lifestyle partnership with in-games style packs and in-store activations. Step behind the scenes, we supported this engagement strategy with investments in content quality and technical stability to reduce friction for players. As a result, the game achieved multi-year highs in player engagement and sentiment. Moving into Q4, we are aiming to convert this engagement into increased monetization through more content drops, merchandising, and improving live services. Beyond 2026, Tokaboka is one of our brands that we can scale by expanding into other categories, including content and toys. So we are excited about the momentum of our core brands. In toys, Paw Patrol's dino theme continues to resonate with fans and retailers. In digital games, we are excited about Toca Boca's new collab with K-Pop Demon Hunters that will bring the best of the movie's music, fashion, and characters to life. And in entertainment, Paw patrol, the dino movie, has moved to streaming, where it has been in the top ten across digital storefronts both domestically and globally. We are also making progress on our long-term growth strategy, including expanding into high-growth categories. Our new strategic trading card game, Hellbreak, has added more studio partners. And we will begin selling the first set of cards this quarter with the game going live to consumers in January. And with the close of the HappyCo acquisition, we head into the holiday season with one of the industry's leading new products, StickerBox, a modern creative tool that brings children's ideas to life. Stickerbox has already seen strong results, engagement, and momentum. It is on multiple top toy lists, has been nominated for awards, and made Time Magazine's Best Inventions of 2026, an honor it shares with our Rubik's Tetris Cube. StickerBox has also sold out more than three times since we acquired it. Next year, we will expand distribution into wider channels and markets as part of our growth strategy. This will significantly increase the install base across the world, which in turn drives reoccurring revenue. We also plan to evolve the offering with RIP, licensed partnerships, and new creative play experiences. In short, we see a much bigger vision for Hapico as a platform for modern creativity that will help us define the future of play. With that, I turn it over to Jonathan. Thank you, Christina, and good morning, everyone. As Christina noted, our financial results in Q3 were in line with the expectations we outlined. Consolidated revenues were stable, with underlying growth in our core brands offset by the impact of the timing issues noted in our last call. Specifically in toy, there was a pull forward of approximately $40 million in gross product sales from Q3 into Q2. And in digital games, we generated approximately $12 million in Q3 last year related to the licensing of certain games to partners, the accounting for which was required to be accrued upon delivery as opposed to across the length of the contract. Gross profit before depreciation and amortization was stable on a dollar-in-margin basis as the anticipated decline in toy and digital game margins was offset by higher entertainment revenues. Adjusted EBITDA was also stable on the dollar-margen basis as operating expenses below gross profit remained flat because a guided increase in marketing expenses was offset by lower selling royalties, while higher product development costs related to internal growth initiatives was offset by lower admin costs. Both gross margin after DNA and adjusted operating margins decreased by about 200 basis points, or in dollar terms, around $15 million. Due primarily to a $13 million increase in amortization of entertainment content driven by delivery of the Paw Patrol movie. IFRS operating income declined by a further $24 million related to non-cash impairments. These reflected the continued review of our portfolio since we joined, as we set the foundation for sustained, stronger, profitable growth in the medium term by being more disciplined in our execution. Over the past 12 months or so, we have simplified our operating model, bringing greater focus on growth areas. In addition to organizing our digital investments across two core studios, Toko Boca and Sego Mini, and three main revenue streams, including Toko Boka World, Picnic, and strategic app distribution partnerships, we have wound down some entertainment projects in order to focus, as Christina noted on, content investments within our existing scaled brands. We've also accelerated manufacturing diversification and implemented cost reduction measures to create a more resilient and flexible platform. These savings have allowed us to reinvest in our long-term growth initiatives, such as in advanced technology, both organically and through the recent acquisition of Hapco, as well as our upcoming expansion into high-growth categories, such as strategic trading cards and collectibles. We've also been able to maintain stable market expenditures in 2026 by leaning into and enhancing our organic and social marketing capabilities and delivery. And lastly, we are in a transition period between some licenses we have exited and a number of new licenses we have entered into, many of which have been announced this year and still more to come. Our operating discipline has been reflected in our cash flows. Operating cash flow in the third quarter increased by $40 million. On a year-to-date basis, we have more than doubled operating cash flow through operational execution and working capital management improvements. This has provided us with resources to reinvest in multiple organic and inorganic growth initiatives across the business, while returning capital to shareholders through our dividend and active share buyback program, all the while repaying debt. We ended the quarter with approximately 0.8 turns of net leverage, or 0.3 turns when you exclude leases, both approximately 0 .4 turns less than last year. Now turning to our individual creative center's performance, toy revenues declined by $19 million due to the as-noted pull forward of orders into the second quarter. On a year-to-date basis, both toy GPS and revenues are down about 1%, generally in line with POS, as growth in Paw Patrol, Monster Jam, and other products has been offset by lapping the How to Train Your Dragons and Gabby Dollhouse movies last year, as well as exiting certain licenses. These headwinds will continue in the fourth quarter, but roll off in 2027. From a geographical perspective, positively, GPS in the U.S., our largest market, increased 4% in the quarter and 4% year-to-date. Europe has offset this growth, however, as it has relatively higher exposure to Gabby's and significantly less exposure to Monster Jam and Gun, two important growth brands for us. Combined with Melissa and Doug, we see this under-penetration in Europe as a significant medium-term tailwind opportunity. Lastly, within TOI, adjusted operating income and IFRS operating income decreased by $9 million, as a decrease in gross profit was partly offset by lower operating expenses. Entertainment revenues increased by $20 million, driven by revenues received upon delivery of the Paw Patrol dino movie. Adjusted operating income increased by $11 million as the increase in revenues was partially offset by higher amortization. IFRS operating income declined slightly due to an impairment expense. Digital gains revenue declined modestly by $3 million and adjusted operating income decreased by $12 million, due primarily to the previously noted large strategic distribution partnership revenues recorded last year. IFRS operating income was further impacted by an impairment expense. Now, turning to our outlook, we reiterated our 2026 guidance today for stable to low single-digit growth in revenues and mid to upper single-igit growth in adjusted EBITDA. For the fourth quarter specifically, we are targeting modest revenue and similar adjusted EBitDA growth. However, it is too soon for us to provide specifics on where we expect to land within our full-year guidance range, as 50% of our POS occurs in the fourth quarter, primarily in the holiday period, and a healthy majority of our orders in the fourth quarter are domestic replenishment rather than direct import. With that, operator, please open the line for questions. Thank you. Ladies and gentlemen, if you would like to ask a question, please press star followed by the one on your touchtone phone. You will hear a prompt that your hand has been raised. If you wish to decline from the polling process, please press star followed by the two. And if you are using a speakerphone, please lift the handset before pressing any keys. First question from Adam Shine with National Bank of Canada. Please go ahead. Thanks a lot. Good morning. So, Jonathan, I'll just hand off from the guidance commentary. I'm not going to push you too much. Obviously, year-to-date results are coming in well and you certainly beat on the Q3 in terms of street expectations. Any timing issues worth noting as we go into Q4? Any slippage of costs from Q3 into Q4, for example? And in regards to the comment on replenishment, there's no doubt that could offer some upside subject to timing. And most of that tends to come in December. Is there any line of sight potentially to any earlier replenishment that you might be getting signals from in terms of retailers and then i'll follow up with one or two others sure hey good morning adam and very kind that you're not going to push me um in terms of you know what what can i say so uh we did call out and please do remember that last year in digital games there was the uh the partnership revenue that won't uh materialize again this year so that is kind of one one off you did ask about that and look as we head into the fourth quarter um we we are certainly entering a quarter that is when I switch over to the toy side, it's certainly more of a DOM-focused quarter, certainly more replenishment, as you called out, and ultimately how consumers show up in the back half of the quarter will determine the amount of replenishments that we do, both with the Nussela Doug and our legacy spin business. And so, you know, with 50% of our POS still to come, if you will, there's a lot of baseball left, And it's really hard to be able to pinpoint down how that last quarter will shape up. Okay. I'll pivot, Christina, to you on Hapico. There's no doubt there's a lot of excitement in terms of what you're going to do with this brand going into next year. Is there any sort of potential different seasonality worth noting? or is this going to be a similar, you know, heavily weighted skew to the second half of the year? Maybe not necessarily related to usual toy seasonality, but maybe just in terms of how, you know, momentum and efforts around the brand that you'll deploy will sort of scale into the back half of this year. Anything around, you Know, the growth potential in time would be appreciated. Good morning, Adam. Good to hear from you this morning. You're asking about HappyCo, right? Just to just to clarify. Yes. Great. Yeah. I think if you're asking when we'll start to widen our distribution or get to sort of more mass channels, it will be back half of next year. I don't believe that it is necessarily seasonality related. If you mean like, I think the creativity, that category will continue to be an all-year-round category. But like a lot of our other products, just the seasonality of the industry tends to be back half-weighted. But yes, we will start to ship wider as we get deeper into 2027. Yeah, and Adam, when we talk in late February, we'll give obviously more details on our guidance and we'll kind of clarify when we think we'll be shipping in to the retailers. Okay, thanks. I'll queue up again. Thank you. Thank you. Next question from Brian Morrison with TD Cowen. Please go ahead. Oh, good morning. The question is, when I look at the growth drivers following a PAW movie, can you just touch upon the tail from PAW or the anticipated change next year in contribution, and then the key drivers to more than offset that in 2027? I know you mentioned Europe and Hellbreak, Stickerbox, M&D, but I just want to get a level of confidence that we can offset the PAW benefit from this year? Yeah, so thank you for the question. So from a kind of direct benefit, if you will, on the movie, we expect about $25 million of revenue and EBITDA directly associated with the release of the movie this year. And for modeling purposes, I think, you know, you probably want to assume that that doesn't reoccur as you head to 27. You know, you are right that if you look at our history, from a bottom-line perspective, an EBITDA perspective, post-movie releases, there's been stability or even some decline, depending if you strip out M&A. That being said, so EBIT in some ways is a better metric post-a-moview. And then from a top-line perspect, there's still a lot of growth drivers that we have next year that can offset the movie. So firstly, beginning with PAW, the PAW toys are doing incredibly well. We think there's long legs with the dyno theme, and we anticipate still being able to sell the product well into next year and consumers still buying well into the next year as the movie goes into second-window distribution. And then we have the continuation of growth within M&D. Gun continues to grow. Monster Jam is examples. We have Hellbreak, as you know, Supercell. We just talked about Stickerbox. So there's a breadth of products that we have that we're going to be not only continuing to grow year over year, but then introduce as we head into 2027. Okay. And then maybe a follow-up. Thank you for that, Jonathan. And then, maybe, Christina, can you just talk about, like, where do we stand now on this potential tariff deal with China and U.S.? Like, what is your view, and what are the levers you would pull if it is finalized? Would you let the benefits flow through the bottom line, or would you invest in price to drive share? Yeah. You know, tariffs continues to be a very fluid topic, one that full visibility on continues. You know we don't necessarily have. Ultimately, when we, you know, we don'T really have any updates more to say because I mean, like you were waiting to see. We think most toys would qualify, though, based on what we've heard. But right now, we don't know the timing, don't what happens. And so it's just all premature to kind of get into. And obviously, when we meet again in February, if we have more information, we'll certainly share that. Thank you. And it's about a $30 million tariff headwind this year, correct? The tariffs that we paid was about, yeah, in that realm. Thank you very much, Jonathan. Thank you. Next question from Drew McReynolds with RBC. Please go ahead. Yeah, thanks very much. Good morning. Maybe just a follow-up on the sticker box and APICO acquisition, maybe for you, Christina. Certainly really interesting to kind of combine the physical and digital, and in your opening remarks you highlighted that. Just wondering whether it's through innovation of yours or potential other token acquisitions Like, is this what you see is certainly kind of a growing kind of category here for the company? I definitely think it's a growing category for the industry and an opportunity for us to lead in that category, both from a creative play standpoint and just a future of play standpoint, right? So HappyCo, as a complete acquisition, I think will continue to grow their line. And with the proprietary voice operating system, that can be used both on products to come as well as products in our portfolio or things we're unaware of yet. So I think it gives us a real sort of leading edge into that space with a great first product out of the gate for the company um we're seeing such success already um since we've acquired it sold out another three times and we just see that momentum and buzz continue to build they've won or we've won a lot of awards around that it's a must-have item for this fall um and think it has you know pretty uh just lots more opportunity as we expand out so i think from a category of play from an innovation standpoint, in all those cases, yes. And then, you know, we have a long history of acquisitions and really being able to both grow those acquisitions as well as integrate them into the company beyond where we started. So I think all of that is possible with Hapco, and we're super excited about the first item being StickerBox. Yeah, fantastic. And just one more on Melissa and Doug, in your opening remarks and obviously in the release, you talk about the key drivers. Nothing surprising here. This has been a focus for you. And you talked about these key drivers before, whether it's Shell Space or your own innovation or global expansion. Is there one driver kind of across the flywheel here that's kind of returning it to growth particularly? early. And then I'm assuming you have confidence in sustaining that growth in Q4 and into 2027, but just maybe talk to the outlook here. Yeah, I think it always, you know, beginning, middle, end is product, right? Really driving great product that is both innovative and long tail for Melissa and Doug in particular, right. So I think the success lies in that. And as we continue to execute against our strategy, you know, expanding our shelf space, growing internationally, what is the fuel to doing that? Day in and day out, it will be product. Okay. Thank you very much. Thank you. Next question from Ty Collin with CIBC. Please go ahead. hey good morning thanks for taking my questions uh to start off um you know obviously we're still in a very volatile environment from a commodity standpoint uh so i'm just curious i mean what's your level of confidence that you've kind of built the appropriate level of cost into your product planning for next year and how have you approached that uh just given the level of volatility that still exists. Sure. Let me take that. I think it's the first time we spoke since you were newborn, so congratulations. From a commodities price, well, let's just start with this year. So for this year, we essentially have full visibility on what our cost will look like as we finish up these last really like two and a bit months. Next year, the good news is we've known about this kind of $100 Brent oil since last April, right? Even late March. And so as we've been putting the final touches on what we were showing to our retailers late August, early September in the L.A. Toy Fair, the mix, the construction, the products themselves were all based on that assumption. And so as we head into 2027, we certainly can get our heads around and our arms around what the incremental costs will be. And what we've tried to do is design product and design the right mix to be able to really offset the increased costs in our supply chain. And then lastly, because we've had that nine months of lead time, our full supply chain team, whether it be in Asia, whether we be here in North America or Europe, has been working very diligently on where can we improve our processes and improve how we look at our cost structure to eliminate costs or reduce costs as well to be able to offset some of that. So, you know, as we head into 27, I think we are pretty comfortable with the heightened commodity prices, both from an internal perspective, what we've done to reduce costs, and then also from how we're building out our product. Okay, great. Appreciate the answer and the congratulations as well. So maybe just for my follow-up, sort of on a related note, there's been some headlines around about, you know, toy prices kind of rising as we approach this holiday season. You know, I know you guys have been very much focused on continuing to hit those key price points. But, you Know, I'm sure some of your smaller competitors, you Now, are quite as able to keep costs down. So, I mean, do you think that your price positioning has kind of gotten a little bit better relative to your competitors as you approach the holidays? And I mean, how does that all play into what you're thinking about the promotional environment? Hi, Ty, it's Christina. I would say that our prices and our pricing strategy holds, you know, steady from earlier in this year. We continue to have about 50 percent of our product price below the 1999 range. So where I think create availability for all economic brackets and all parents and people shopping for toys, I don't think that it has changed. And as it relates to our competitors, you know, I always say I don�t sit in their chair, so I�m not sure one way or the other if, you know, if they�re increasing prices or not. But I will�we�re keeping it steady. Okay. Appreciate the comments. All the best. Thank you. Thank you, next question from Luke Hannon with Canon Continuity. Please go ahead. Thanks, good morning everyone. I wanted to start with the license in business, if we can. Jonathan, you had mentioned, clearly you guys are in a bit of a transition period where some of the licenses you had previously are rolling off. There's also some new licenses that I'm sure you guys will be announcing in short order. Or can you just, maybe it's a two-part question. First is, can you just confirm the overall mix of licensing revenues, percentage of overall GPS, that that's not really going to change? And maybe, secondly, what is Spin Master's positioning or has Spin Master positioning changed at all as being the licensee of choice, I guess, within the toy space more broadly? Sure. Hey, Luke. I'll answer the numeric question, then pass it on to Christina. last year our license mix was so the industry is kind of call it one third two thirds if you kind of take a full step back last year we were certainly higher than that rate I think long term will continue to be kind of like like the average of the industry and so this year we certainly are closer to the average of the investor in terms of licensed and non-licensed and known brands as it relates to sort of licensee of choice. I believe we still are. What I would say is that what you see this year versus last year is last year we were heavily indexing in licensed movies, and this year we're not. But when you look at where we are, where we continue to deepen our relationships, it's with our partners like Universal. We recently announced Preschool Jurassic Park and Core Plush, expanding our licenses with them as a core partner. You see us building deeper into our Hellbreak partnerships with other studios, and then obviously the extension of SELD that we announced earlier this year. So when you just look at the day-to-day, it's like we have very deep, ongoing day-in and day-out partnerships. This year in particular, slightly lighter on movie-based partnerships. And then if you just look at a little bit of the reshaping of the industry, you see that there's more licenses by segment than master, if you will. So you look at something like K-pop Demon Hunter, where we have a nice piece of it as it relates to our platforms or our core products and brands. I think you're going to see more of that. But where there is a big license, a big moment, we will be at the table to pitch every time. that's helpful thanks and then for my my follow-up and this is a bit of a broader question on the digital games segment and i realize the the impairment that you guys recorded this this quarter is not something related to necessarily a new property or anything it's from decisions that you had made previously but i guess my my question is more broadly if we look three to five years out i think what most investors are focused on is is the ability for you guys to be able to deliver sustained above uh above above average growth we'll say within the digital game segment as as a function of you guys monetizing some of the existing ip that you have within toys what is the plan over the course of the next three or five years to be able to bring that bring that level of growth up i guess is it more of a focus on on having the internal capabilities to be able to monetize that ip do you maybe entertain the idea of licensing licensing out some of that some partners in order to get there? I'm just trying to wrap my head around basically what does digital games look like three or five years from now and what do you need to put in place in order to achieve what you're envisioning here? Let me start off. Let me start off so you know first of all just from a kind of numerical perspective this year um remember we have uh two focus areas but three revenue streams and the third revenue stream around partnership revenue creates headwinds or creates noise if you will on looking at the underlying performance of our studios um the performance of her studios we can you know grew um we expect them to grow this year we expect him ultimately to be able to grow at rates that are combined higher than our overall business. That's the beauty, if you will, of the Digital Games Creative Center. Within TOCA, this was the year where we said we wanted to begin to fully realize the potential of TOCA. We've done that. We've shown the proof point that a token can be taken out of the digital world and brought into the physical with our partnership with Miniso that has exceeded all our expectations and will lead to some, you know, very interesting announcements as we go into, as we're in 27, excuse me. So we really do believe that TOCA can continue to expand outside of the digital world. And that's where you will see the above rate of growth being driven by. You know, it's an at-scale business. It's got 60 million active users. It's a very large business. So that's Where you'll see the outsized growth rate. Picnic is still, you know, I call it an infancy. Like, we're still building out the capabilities. We're still being able to content. We're building out building out the reasons for parents to stay on the platform. Lily was a recent acquisition that will help with that. We're at about half a million subscribers, you know growing to ultimately to keep growing at an above rate on our subscriber rate and keeping families longer because we have better content will drive the above average rate of growth in our business within that platform. Yeah, and the only things I would add to that is that when you look at Tokaboka, really, we talk a lot about fully realizing its potential, both in and out of game and continuing to grow and monetize that platform, and I think you see us doing it with lots of partnerships as well. If you were to go in today, you'd notice K-pop Demon Hunter is a big partnership. We did a really big partnership with Adidas. So I think being that, like leaning fully into that position, number one with tweens, is core to the strategy today and as we go to the future. In addition, you look at something like Gabby's Dollhouse and what we were able to build there across our picnic business. You can look for moments like that, but we are very focused. We spent a lot of time saying, hey, we're going to clean up our business models and be focused about how we go to market in digital, build our own IP in Tokaboka and build out that platform and live capabilities there, Picnic to be a subscription-based business, and then know that we have a downstream revenue to tap into as we create more and more. So I think fully realizing those business models and building IP inside of them is really where we drive the future value. Got it. Thanks. Thank you. Next question from Martin Landry with Staple. Please go ahead. To know how you're approaching Black Friday at retail, trying to understand a little bit, how's your shelf space allocation right now versus last year? You know, do you have any specific promotions like NCAP or pallets that you want to highlight? Just trying to understand a little bit what's your strategy with Black Friday coming up in less than a month. Hey, good morning, Martin. I'm Martin. We work with each of our partners, our retail partners. We work within to ensure that our brands are prominently displayed, whether it be on NCAPs, whether it'd be on pallet drops, whether it be in-shelf, and have the right level of marketing and promotion associated with it. When you look at kind of, you know, the growth brands that we have this year, whether it'd be Monster Jam, Primal Hatch, Hatch & Yoshi, Gun, Crystal Links, 4D, I mean, this is where our retail partners are going to, Rubix, Coolmaker, this is где наши retail партнеры будут отмечать, потому что мы видим много позитивного момента, Melissa and Doug, a lot of positive momentum with our brand. So we'll work with our retail partners. We'll make sure that they have the product. We'll makes sure they have right prices, and we'll make sure they're the right promotional dollars associated with it so that we can be successful, helping them be successful, bring our product to the end consumer. Okay. And I'm sorry, you may have touched it earlier on. I didn't fully understand, but can you talk a little bit about your inventory levels at retail? How does it compare versus last year? How do you look at them right now? Both our inventory and at the retail level, I think you would see on our balance sheet, you'd see how healthy our inventory levels are. And then at the retailer as well, as you know, there was that shift last year from FOB to DOM. That means that ultimately we're more in Q4 of a replenishment business. And so we like how we're positioned from a retailer kind of health of inventory position across all of our or most of our retail partners. Okay. And then just lastly, you know, any color and how October has trended so far? yeah from from uh uh october is kind of playing out as we as we expected uh both from uh a gps perspective both from a digital game um and from uh from a pos perspective i mean i think one nice thing that we saw so far is then the um in the pay-per-view of uh the movie it's done exceptionally well. I think, you know, it was in the top three at one point. It's certainly the top five on the pay-per-view of choices that families have. So, I think that's been, I don't want to say a pleasant surprise, but that certainly has been something we liked as we began October and we're ending October. Perfect. Thank you for all the callers and best of luck. Thank you. Thank you, there are no further questions at this time. I'll turn the call back over to Christina for closing remarks. Christina Miller, Chief Executive Officer, Spin Master Corp. Thank you all for being with us today. We look forward to talking to you again on our year-end call in February. Have a good day. Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.