MATTEL INC /DE/ (MAT)

CIK: 0000063276. SIC: 3942 Dolls & Stuffed Toys. Latest 10-K as of: 2026-02-23.

SIC breadcrumb: Manufacturing > SIC Major Group 39 > SIC 3942 Dolls & Stuffed Toys

SEC company page: https://www.sec.gov/edgar/browse/?CIK=63276. Latest filing source: 0001628280-26-010716.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-23. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000063276.json. Derived margins are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Missing metrics are omitted rather than fabricated.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-01. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000063276.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0001628280-26-029316.

Extracted between Part I Item 2 and the next Item 3/4 or Part II heading after HTML sanitization. Confidence: high. Filing date: 2026-05-01. Report date: 2026-03-31.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

In the discussion that follows, "Mattel" refers to Mattel, Inc. and/or one or more of its subsidiaries.

The following discussion should be read in conjunction with the consolidated financial statements and the related notes that appear in Part I, Item 1 "Financial Statements" of this Quarterly Report on Form 10-Q. Mattel's business is seasonal with consumers making a large percentage of all toy purchases during the traditional holiday season; therefore, results of operations are most comparable to corresponding periods.

The following discussion includes currency exchange rate impact, a non-GAAP financial measure within the meaning of Regulation G promulgated by the SEC ("Regulation G"), to supplement the financial results as reported in accordance with GAAP. The currency exchange rate impact reflects the portion (expressed as a percentage) of changes in Mattel's reported results that are attributable to fluctuations in currency exchange rates. Mattel uses this non-GAAP financial measure to analyze its continuing operations and to monitor, assess, and identify meaningful trends in its operating and financial performance. Management believes that the disclosure of this non-GAAP financial measure provides useful supplemental information to investors to allow them to better evaluate ongoing business performance and certain components of Mattel's results. This measure is not, and should not be viewed as, a substitute for GAAP financial measures.

The following discussion also includes the use of gross billings, a key performance indicator. Gross billings represent amounts invoiced to customers. It does not include the impact of sales adjustments, such as trade discounts and other allowances. Mattel presents changes in gross billings as a metric for comparing its aggregate, categorical, brand, and geographic results to highlight significant trends in Mattel's business. Changes in gross billings are discussed because, while Mattel records the details of sales adjustments in its financial accounting systems at the time of sale, such sales adjustments are generally recorded by customer and not associated with categories, brands, or individual products.

Amounts shown in millions or billions within this Item 2 may not sum due to rounding.

Overview

Mattel is a leading global play and family entertainment company and owner of one of the most iconic brand portfolios in the world. Mattel's mission is to create innovative products and experiences that inspire fans, entertain audiences, and develop children through play, and its purpose is to empower generations to explore the wonder of childhood and reach their full potential.

Mattel is focused on the following brand-centric strategy to grow its intellectual property ("IP") driven play and family entertainment business:

•Grow its toy brands with more breakthrough innovation and adult fans and collectors, as well as evolved demand creation;

•Expand its direct-to-consumer and commercial reach through first party data, retail development, and new channels;

•Broaden content offering in film, television, and short-form content, accelerate licensing in consumer products, location-based entertainment, and publishing, and expand with new business models;

•Scale digital play through mobile games self-publishing, Mattel163 mobile games studio, licensing, and creator platforms; and

•Optimize operations and leverage artificial intelligence across its systems and supply chain.

Mattel is the owner of a portfolio of iconic brands and partners with global entertainment companies to license other IP. Mattel's portfolio of owned and licensed brands and products are organized into the following categories:

Dolls—including brands such as Barbie, American Girl, Disney Princess, Disney Frozen, Monster High, Polly Pocket, and KPop Demon Hunters. Mattel's Dolls portfolio is driven by the flagship Barbie brand and a collection of complementary brands offered globally. Empowering girls since 1959, Barbie has inspired the limitless potential in every girl, sparking imaginations and shaping futures through play. Monster High, a character-driven franchise, engages fans of all ages, encouraging them to be their authentic selves and celebrate what makes them unique. American Girl, with an extensive portfolio of dolls and accessories, content, and lifestyle products, is best known for imparting valuable life lessons that instill confidence through its inspiring dolls and books, featuring characters from past and present.

Vehicles—including brands such as Hot Wheels (including Hot Wheels Monster Trucks and Hot Wheels RC), Matchbox, and Cars (Disney Pixar). Hot Wheels has continued to push the limits of performance and design since 1968, and ignites and nurtures the challenger spirit in kids, adults, and collectors. From die-cast vehicles to tracks, playsets, and accessories, the Mattel Vehicles portfolio has broad appeal that engages and excites fans of all ages.

30

Infant, Toddler, and Preschool—including brands such as Fisher-Price (including Little People) and Thomas & Friends, is organized into three subcategories: Fisher-Price, Preschool Entertainment, and Baby Gear and Power Wheels. The first subcategory is Fisher-Price, the power brand, which includes core Infant and Toddler product lines. As a leader in play and child development, Fisher-Price is dedicated to giving families the best possible start to life by making the most fun, enriching products for infants, toddlers, and preschoolers. The second subcategory is Preschool Entertainment, which includes owned IP such as Thomas & Friends and partner entertainment brands. Thomas & Friends is an award-winning preschool train brand franchise that lays the tracks to inspire, entertain, and develop young train fans through toys, content, live events, and other consumer products. The third subcategory is Baby Gear and Power Wheels, in which Mattel has strategically out-licensed or exited certain product lines.

Action Figures, Building Sets, Games, and Other—including brands such as Masters of the Universe, Mattel Brick Shop, MEGA, UNO, Jurassic World (NBCUniversal), Minecraft (Microsoft), WWE, Toy Story (Disney Pixar), and Star Wars (Disney's Lucasfilm). Mattel's Action Figures portfolio is comprised of product lines associated with licensed entertainment franchises, such as Jurassic World and WWE, as well as product lines from Mattel-owned IP, such as Masters of the Universe. Introduced in 2025 as a new challenger brand in Building Sets, Mattel Brick Shop is designed to introduce differentiated building experiences through innovative features, materials, and techniques intended to expand traditional building play. Within Games, UNO is the classic matching card game that is easy to learn and fast fun for everyone, while the rest of the portfolio includes beloved heritage games such as Pictionary, Skip-Bo, Phase 10, and Blokus. Other includes Plush, which contains products associated with movie releases from licensed entertainment franchises such as Minecraft, as well as Mattel-owned IP.

Recent Developments

Mattel's net sales in the first quarter of 2026 increased 4% compared to the first quarter of 2025. Gross margin declined to 44.9% in the first quarter of 2026 compared to 49.4% in the first quarter of 2025, due to the gross incremental cost of tariffs, unfavorable foreign exchange, and inflation. Gross margin benefited from mitigating actions to offset tariffs and realized savings from the Optimizing for Profitable Growth program (the "OPG program"), partially offset by other factors.

Mattel continued to progress its strategy to grow its IP driven play and family entertainment business as Mattel completed its acquisition of full ownership of Mattel163 Limited mobile games studio ("Mattel163"), on March 2, 2026 (the "Acquisition Date"). The Mattel163 acquisition is expected to advance Mattel’s digital games business and add development, publishing, and digital customer acquisition expertise. The purchase price for the remaining 50% equity interest was $178.6 million, including working capital and other adjustments, and is subject to customary post-closing adjustments. Since Mattel held a 50% equity interest in Mattel163 immediately prior to the Acquisition Date and accounted for that investment under the equity method, Mattel remeasured its prior equity interest to the estimated fair value of $178.6 million as of the Acquisition Date and recognized a gain of $147.9 million in other non-operating income, net in the consolidated statement of operations during the three months ended March 31, 2026. Mattel now owns 100% of Mattel163 and began consolidating its financial results in Mattel's consolidated financial statements following the Acquisition Date.

Global trade policy continues to evolve and the ultimate impact of recent developments with respect to U.S. tariffs is unclear. On February 20, 2026, the U.S. Supreme Court issued a ruling that tariffs imposed under the International Emergency Economic Powers Act ("IEEPA") on goods imported into the United States were unauthorized. Following that ruling, the U.S. Court of International Trade issued an order directing the U.S. Customs and Border Protection ("CBP") to process refunds of the IEEPA tariffs, although the Court immediately suspended the order while CBP develops and implements the refund process. The IEEPA tariffs and related refund framework remain subject to ongoing litigation, including potential appeals, as well as regulatory and administrative developments. Accordingly, the ultimate availability, timing, and amount of any potential refunds of such tariffs remain highly uncertain. Following the Supreme Court’s decision, the U.S. presidential administration announced its intention to invoke other laws to collect tariffs and announced new tariffs on imports from all countries, in addition to any existing non-IEEPA tariffs. There remains substantial uncertainty regarding the duration of various existing and newly announced or intended tariffs, potential changes or pauses to such tariffs, tariff levels, and whether further additional tariffs or other retaliatory actions may be imposed, modified, suspended, or invalidated, and the impacts of such actions on Mattel's business. Mattel continues to monitor and evaluate these developments and assess their potential impact on Mattel’s business, financial condition, and results of operations.

Mattel is operating in an uncertain geopolitical and macro-economic environment with significant volatility that may impact consumer demand. To the extent the geopolitical or macro-economic environment worsens, including due to further developments in the Middle East or regulatory actions impacting global trade, it may have a material effect on Mattel's results of operations and financial condition. Refer to Part I, Item 1A "Risk Factors" in the 2025 Annual Report on Form 10-K for further discussion regarding potential impacts on Mattel's business.

31

Results of Operations—First Quarter

Consolidated Results

The following table presents Mattel's consolidated results for the first quarter of 2026 and 2025:

For the Three Months Ended

Year/Year Change

March 31, 2026

March 31, 2025

Amount

% of Net

Sales

Amount

% of Net

Sales

%

Basis Points

of Net Sales

(In millions, except percentage and basis point information)

Net sales

$

862.2 

$

826.6 

4 

%

Cost of sales

475.4 

55.1 

%

418.5 

50.6 

%

14 

%

450 

Gross profit

386.8 

44.9 

%

408.1 

49.4 

%

-5 

%

(450)

Advertising and promotion expenses

92.9 

10.8 

%

70.2 

8.5 

%

32 

%

230 

Other selling and administrative expenses

396.6 

46.0 

%

390.9 

47.3 

%

1 

%

(130)

Operating loss

(102.7)

-11.9 

%

(53.0)

-6.4 

%

94 

%

(550)

Interest expense

31.1 

3.6 

%

29.2 

3.5 

%

6 

%

10 

Interest (income)

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high. Filing date: 2026-02-23. Report date: 2025-12-31.

Item 7.    Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion should be read in conjunction with the consolidated financial statements and the related notes. See Item 8 "Financial Statements and Supplementary Data." Amounts shown in millions or billions within this Item 7 may not sum due to rounding.

Mattel has omitted discussion of 2023 results where it would be redundant to the discussion previously included in Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations," of Mattel's Annual Report on Form 10-K for the year ended December 31, 2024.

The following discussion includes currency exchange rate impact, a non-GAAP financial measure within the meaning of Regulation G promulgated by the SEC ("Regulation G"), to supplement the financial results as reported in accordance with generally accepted accounting principles in the United States ("GAAP"). The currency exchange rate impact reflects the portion (expressed as a percentage) of changes in Mattel's reported results that are attributable to fluctuations in currency exchange rates. Mattel uses this non-GAAP financial measure to analyze its continuing operations and to monitor, assess, and identify meaningful trends in its operating and financial performance. Management believes that the disclosure of this non-GAAP financial measure provides useful supplemental information to investors to allow them to better evaluate ongoing business performance and certain components of Mattel's results. This measure is not, and should not be viewed as, a substitute for GAAP financial measures.

The following discussion also includes the use of gross billings, a key performance indicator. Gross billings represent amounts invoiced to customers. It does not include the impact of sales adjustments, such as trade discounts and other allowances. Mattel presents changes in gross billings as a metric for comparing its aggregate, categorical, brand, and geographic results to highlight significant trends in Mattel's business. Changes in gross billings are discussed because, while Mattel records the details of sales adjustments in its financial accounting systems at the time of sale, such sales adjustments are generally recorded by customer and not associated with categories, brands, or individual products.

Overview

Mattel is a leading global play and family entertainment company and owner of one of the most iconic brand portfolios in the world. Mattel's mission is to create innovative products and experiences that inspire fans, entertain audiences, and develop children through play, and its purpose is to empower generations to explore the wonder of childhood and reach their full potential.

Mattel is focused on the following new brand-centric strategy to grow its IP driven play and family entertainment business:

•Grow its toy brands with more breakthrough innovation and adult fans and collectors, as well as evolved demand creation;

•Expand its direct-to-consumer and commercial reach through first party data, retail development, and new channels;

•Broaden content offering in film, television, and short-form content, accelerate licensing in consumer products, location-based entertainment, and publishing, and expand with new business models;

•Scale digital play through mobile games self-publishing, Mattel163 mobile games studio, licensing, and creator platforms; and

•Optimize operations and leverage AI across its systems and supply chain.

Recent Developments

2025 was marked by uncertainty in U.S. trade dynamics that affected retailer ordering patterns for much of the year. Although U.S. retailers had delayed orders during the second and third quarters of 2025, there was a significant acceleration in orders in the fourth quarter. Despite overall growth in the fourth quarter, growth was less than anticipated in the United States and Mattel's full year results were below expectations. Full year net sales decreased 1%, as compared to the prior year. Gross margin was 48.7% in 2025, as compared to 50.8% in 2024, and net income per diluted common share was $1.24 in 2025, as compared to $1.58 in 2024.

30

Global trade policy continues to evolve and the ultimate impact of recent developments with respect to U.S. tariffs is unclear. On February 20, 2026, the United States Supreme Court issued a ruling striking down certain tariffs previously imposed under the International Emergency Economic Powers Act ("IEEPA"). The ultimate availability, timing, and amount of any potential refunds of such tariffs remain highly uncertain and are subject to further legal, regulatory, and administrative developments. Following the Supreme Court’s decision, the U.S. presidential administration announced its intention to invoke other laws to collect tariffs and announced new tariffs on imports from all countries, in addition to any existing non-IEEPA tariffs. There remains substantial uncertainty regarding the duration of existing and newly announced tariffs, potential changes or pauses to such tariffs, tariff levels, and whether further additional tariffs or other retaliatory actions may be imposed, modified, or suspended, and the impacts of such actions on Mattel's business. Mattel continues to monitor and evaluate these developments and assess their potential impact on Mattel’s business, financial condition, and results of operations.

Mattel is tracking ahead of its multi-year savings target related to the Optimizing for Profitable Growth program ("OPG program"), and in the fourth quarter of 2025 Mattel increased its targeted annual gross cost savings from $200 million to $225 million. Mattel ended the year with cash and equivalents of $1.24 billion, as compared to $1.39 billion at the end of 2024, after $600.0 million of share repurchases during the year, which exhausted the remaining share repurchase authorization under the program announced on February 5, 2024. On February 9, 2026, the Board of Directors authorized a new $1.50 billion share repurchase program. Additionally, in November 2025, Mattel issued $600.0 million of senior notes and used the proceeds of the offering plus cash on hand to repay $600.0 million of senior notes that were scheduled to mature in April 2026.

On February 10, 2026, Mattel announced it had entered into a definitive agreement to acquire the remaining 50% ownership interest in Mattel163 Limited ("Mattel163"), a mobile games studio, for approximately $159 million, subject to customary closing adjustments. The completion of the transaction is subject to the satisfaction of customary closing conditions. Upon closing, Mattel will own 100% of Mattel163 and will begin consolidating its future financial results in Mattel's consolidated financial statements.

Mattel is operating in a macro-economic environment that may impact consumer demand. To the extent the macro-economic environment worsens, it may have a material effect on Mattel's results of operations and financial condition. Refer to Part I, Item 1A "Risk Factors" for further discussion regarding potential impacts on Mattel's business.

Results of Operations

Consolidated Results

The following table presents Mattel's consolidated results for 2025 and 2024:

For the Year Ended

Year/Year Change

December 31, 2025

December 31, 2024

Amount

% of Net

Sales

Amount

% of Net

Sales

%

Basis Points

of Net Sales

(In millions, except percentage and basis point information)

Net sales

$

5,347.6 

$

5,379.5 

-1 

%

Cost of sales

2,742.0 

51.3 

%

2,645.5 

49.2 

%

4 

%

210

Gross profit

2,605.7 

48.7 

%

2,734.1 

50.8 

%

-5 

%

(210)

Advertising and promotion expenses

522.0 

9.8 

%

507.3 

9.4 

%

3 

%

40

Other selling and administrative expenses

1,537.2 

28.7 

%

1,532.5 

28.5 

%

— 

%

20

Operating income

546.4 

10.2 

%

694.3 

12.9 

%

-21 

%

(270)

Interest expense

118.7 

2.2 

%

118.8 

2.2 

%

— 

%

—

Interest (income)

(45.0)

-0.8 

%

(51.5)

-1.0 

%

-13 

%

20

Other non-operating expense, net

13.3 

4.5 

Income before income taxes

459.5 

8.6 

%

622.5 

11.6 

%

-26 

%

(300)

Provision for income taxes

89.8 

105.6 

(Income) from equity method investments

(27.9)

(24.9)

Net income

$

397.6 

7.4 

%

$

541.8 

10.1 

%

-27 

%

(270)

Sales

31

Net sales in 2025 were $5.35 billion, a decrease of $31.9 million, or 1%, as compared to $5.38 billion in 2024. The decrease in net sales was primarily due to an increase in sales adjustments of $77.7 million, partially offset by an increase in gross billings of $45.8 million.

Gross billings represent amounts invoiced to a customer and do not include the impact of sales adjustments, such as trade discounts and other allowances. Changes in gross billings are discussed below because, while Mattel records the details of sales adjustments in its financial accounting systems at the time of sale, such sales adjustments are generally recorded by customer and are not associated with categories, brands, or individual products. The following tables provide a summary of Mattel's consolidated gross billings by categories, along with supplemental information by brand, for 2025 and 2024:

For the Year Ended

% Change as

Reported

Currency

Exchange Rate

Impact

December 31, 2025

December 31, 2024

(In millions, except percentage information)

Gross Billings by Categories

Dolls

$

2,056.1 

$

2,200.5 

-7 

%

1 

%

Infant, Toddler, and Preschool

786.3 

951.3 

-17 

%

1 

%

Vehicles

1,994.6 

1,791.2 

11 

%

1 

%

Action Figures, Building Sets, Games, and Other

1,242.1 

1,090.4 

14 

%

1 

%

Gross Billings

$

6,079.1 

$

6,033.3 

1 

%

1 

%

Supplemental Gross Billings Disclosure

Gross Billings by Top 3 Power Brands

Barbie

$

1,204.1 

$

1,350.1 

-11 

%

1 

%

Hot Wheels

1,749.7 

1,575.0 

11 

%

1 

%

Fisher-Price

622.3 

700.8 

-11 

%

1 

%

Other

2,503.0 

2,407.4 

4 

%

1 

%

Gross Billings

$

6,079.1 

$

6,033.3 

1 

%

1 

%

Gross billings were $6.08 billion in 2025, an increase of $45.8 million, or 1%, as compared to $6.03 billion in 2024, with a favorable impact from changes in currency exchange rates of one percentage point. The increase in gross billings was due to higher billings of Vehicles and Action Figures, Building Sets, Games, and Other products, partially offset by lower billings of Infant, Toddler, and Preschool and Dolls products.

Dolls gross billings decreased 7%, primarily due to lower billings of Barbie products.

Infant, Toddler, and Preschool gross billings decreased 17%, of which 8% was due to lower billings of Fisher-Price products, 5% was due to lower billings of Baby Gear and Power Wheels products, due to the continued strategic exit from certain product lines in Baby Gear and Power Wheels, and 4% was due to lower billings of Preschool Entertainment products.

Vehicles gross billings increased 11%, primarily due to higher billings of Hot Wheels products.

Action Figures, Building Sets, Games, and Other gross billings increased 14%, of which 18% was due to higher billings of Action Figures products, primarily due to higher billings of Jurassic World and Minecraft products in connection with their theatrical releases in 2025, partially offset by lower billings of Building Sets products of 4%.

Sales adjustments generally represent arrangements with Mattel's customers to provide sales incentives, support customer promotions, and provide allowances for returns and defective merchandise. Such programs are based primarily on customer purchases, customer performance of specified promotional activities, and other specified factors such as sales to consumers. Additionally, sales adjustments may include foreign currency transaction gains and losses from the remeasurement of accounts receivable denominated in currencies that are different from the relevant entity's functional currency. Sales adjustments increased to $731.4 million in 2025, as compared to $653.7 million in 2024. Sales adjustments as a percentage of net sales increased to 13.7% in 2025 from 12.2% in 2024, primarily due to increased promotional activities and a shift in sales channel mix resulting in a higher proportion of sales with higher average sales adjustment rates.

32

Cost of Sales

Cost of sales increased by $96.5 million, or 4%, to $2.74 billion in 2025 from $2.65 billion in 2024. Within cost of sales, product and other costs increased by $63.7 million, or 3%, to $2.14 billion in 2025 from $2.08 billion in 2024. Royalty expense increased by $20.5 million, or 8%, to $264.6 million in 2025 from $244.1 million in 2024. Freight and logistics expenses increased by $12.3 million, or 4%, to $336.4 million in 2025 from $324.1 million in 2024.

Gross Margin

Gross margin decreased to 48.7% in 2025 from 50.8% in 2024. The decrease in gross margin was primarily due to the impact of cost inflation of 100 basis points, unfavorable foreign currency exchange of 60 basis points, and higher discounts and other factors of 160 basis points, partially offset by incremental realized savings from the OPG program of 90 basis points and the net impact of tariff costs, which were more than offset by the timing of mitigating actions of 30 basis points.

Advertising and Promotion Expenses

Advertising and promotion expenses primarily consist of: (i) media costs, which include the media, planning, and buying fees for television, print, and digital advertisements, (ii) non-media costs, which include commercial and website production, merchandising, and promotional costs, (iii) retail advertising costs, which include consumer direct catalogs, and (iv) general advertising costs, which include trade show costs. Advertising and promotion expenses as a percentage of net sales were relatively flat at 9.8% in 2025, as compared to 9.4% in 2024.

Other Selling and Administrative Expenses

Other selling and administrative expenses were $1.54 billion, or 28.7% of net sales, in 2025, an increase of $4.8 million, as compared to $1.53 billion, or 28.5% of net sales, in 2024. The increase in other selling and administrative expenses was primarily due to higher expenses related to inclined sleeper product recalls and related litigation of $30.8 million and higher outside services and other expenses of $69.5 million, partially offset by lower employee compensation related expenses, including lower incentive compensation, of $50.2 million, and realized savings from the OPG program of $40.6 million.

Interest Expense

Interest expense was $118.7 million in 2025, relatively flat as compared to $118.8 million in 2024.

Interest Income

Interest income decreased by $6.5 million to $45.0 million in 2025 from $51.5 million in 2024.

Provision for Income Taxes

Mattel's provision for income taxes was $89.8 million in 2025, as compared to $105.6 million in 2024. The decrease in provision for income taxes was due to lower income before income taxes in 2025, partially offset by a decrease in non-recurring discrete income tax benefits. In 2025, Mattel recognized a net income tax benefit of $26.8 million, primarily related to a change of its indefinite reinvestment assertion with respect to certain foreign subsidiary earnings and release of previously unrecognized tax benefits. In 2024, Mattel recognized a net income tax benefit of $34.8 million related to tax elections filed to amortize certain intangible assets transferred as part of Mattel’s intra-group IP rights transfer and establishment of certain U.S. deferred tax assets.

Evaluating the need for and the amount of a valuation allowance for deferred tax assets often requires significant judgment and extensive analysis of all available evidence to determine whether it is more likely than not that these assets will be realizable. Mattel routinely assesses the positive and negative evidence for this realizability, including the evaluation of sustained profitability and three years of cumulative pretax income for each tax jurisdiction. As of December 31, 2025 and 2024, the valuation allowance was primarily related to foreign net operating loss carryforwards and foreign tax credits that Mattel does not expect to realize, and there were no material changes.

On July 4, 2025, H.R.1- the One Big Beautiful Bill Act ("OBBBA") was enacted in the United States. The OBBBA contains significant provisions, including the permanent extension or restoration of certain expiring corporate income tax provisions, originally introduced by the Tax Cuts and Jobs Act of 2017, and incremental modifications to the international tax framework. The legislation has multiple effective dates, with certain provisions effective for the tax year beginning after December 31, 2024, and others effective for tax years beginning after December 31, 2025. Mattel has evaluated the OBBBA provisions that have been enacted and has included the related impact in the provision for income taxes for the year ended

33

December 31, 2025, which was not material. Mattel will continue to assess the potential future tax implications of this legislation and monitor future developments, including regulatory guidance and interpretations as they become available.

Segment Results

North America Segment

The following tables provide a summary of Mattel's net sales, segment income, and gross billings by categories, along with supplemental information by brand, for the North America segment for 2025 and 2024:

For the Year Ended

% Change as

Reported

Currency

Exchange Rate

Impact

December 31, 2025

December 31, 2024

(In millions, except percentage information)

Net Sales

$

3,001.1 

$

3,168.1 

-5 

%

— 

%

Segment Income

704.7 

840.0 

-16 

%

Net sales for the North America segment in 2025 were $3.00 billion, a decrease of $167.0 million, or 5%, as compared to $3.17 billion in 2024. The decrease in net sales was primarily due to a decrease in gross billings of $132.4 million and an increase in sales adjustments of $34.6 million.

For the Year Ended

% Change as

Reported

Currency

Exchange Rate

Impact

December 31, 2025

December 31, 2024

(In millions, except percentage information)

Gross Billings by Categories

Dolls

$

1,201.4 

$

1,280.1 

-6 

%

— 

%

Infant, Toddler, and Preschool

463.2 

583.3 

-21 

%

— 

%

Vehicles

894.4 

860.6 

4 

%

— 

%

Action Figures, Building Sets, Games, and Other

703.2 

670.6 

5 

%

— 

%

Gross Billings

$

3,262.2 

$

3,394.6 

-4 

%

— 

%

Supplemental Gross Billings Disclosure

Gross Billings by Top 3 Power Brands

Barbie

$

650.8 

$

734.9 

-11 

%

— 

%

Hot Wheels

760.6 

741.3 

3 

%

— 

%

Fisher-Price

369.8 

421.3 

-12 

%

— 

%

Other

1,481.0 

1,497.0 

-1 

%

— 

%

Gross Billings

$

3,262.2 

$

3,394.6 

-4 

%

— 

%

Gross billings for the North America segment were $3.26 billion in 2025, a decrease of $132.4 million, or 4%, as compared to $3.39 billion in 2024. The decrease in the North America segment gross billings was primarily due to lower billings of Infant, Toddler, and Preschool and Dolls products, partially offset by higher billings of Vehicles and Action Figures, Building Sets, Games, and Other products.

Dolls gross billings decreased 6%, primarily due to lower billings of Barbie products.

Infant, Toddler, and Preschool gross billings decreased 21%, of which 9% was due to lower billings of Fisher-Price products, 7% was due to lower billings of Baby Gear and Power Wheels products, due to the continued strategic exit from certain product lines in Baby Gear and Power Wheels, and 5% was due to lower billings of Preschool Entertainment products.

Vehicles gross billings increased 4%, of which 2% was due to higher billings of Hot Wheels products and 1% was due to higher billings of Cars products.

Action Figures, Building Sets, Games, and Other gross billings increased 5%, of which 15% was due to higher billings of Action Figures products, primarily due to higher billings of Jurassic World and Minecraft products in connection with their theatrical releases in 2025, partially offset by lower billings of Building Sets products of 5% and lower billings of Games products of 3%.

34

Sales adjustments increased to $261.2 million in 2025, as compared to $226.5 million in 2024. Sales adjustments as a percentage of net sales increased to 8.7% in 2025 as compared to 7.1% in 2024, primarily due to a shift in sales channel mix resulting in a higher proportion of sales with higher average sales adjustment rates and increased promotional activities.

Cost of sales decreased by $31.0 million, or 2%, to $1.57 billion in 2025 from $1.60 billion in 2024, primarily due to a decrease in product and other costs of $34.8 million.

North America segment income decreased by $135.3 million to $704.7 million in 2025, as compared to $840.0 million in 2024. The decrease was primarily due to lower net sales of $167.0 million, partially offset by lower cost of sales of $31.0 million.

International Segment

The following tables provide a summary of Mattel's net sales, segment income, and gross billings by categories, along with supplemental information by brand, for the International segment for 2025 and 2024:

For the Year Ended

% Change as

Reported

Currency

Exchange Rate

Impact

December 31, 2025

December 31, 2024

(In millions, except percentage information)

Net Sales

$

2,346.6 

$

2,211.5 

6 

%

2 

%

Segment Income

445.0 

389.0 

14 

%

Net sales for the International segment in 2025 were $2.35 billion, an increase of $135.1 million, or 6%, as compared to $2.21 billion in 2024. The increase in net sales was due to an increase in gross billings of $178.1 million, partially offset by an increase in sales adjustments of $43.0 million.

For the Year Ended

% Change as

Reported

Currency

Exchange Rate

Impact

December 31, 2025

December 31, 2024

(In millions, except percentage information)

Gross Billings by Categories

Dolls

$

854.7 

$

920.4 

-7 

%

2 

%

Infant, Toddler, and Preschool

323.1 

368.0 

-12 

%

1 

%

Vehicles

1,100.2 

930.5 

18 

%

2 

%

Action Figures, Building Sets, Games, and Other

538.8 

419.8 

28 

%

3 

%

Gross Billings

$

2,816.8 

$

2,638.7 

7 

%

2 

%

Supplemental Gross Billings Disclosure

Gross Billings by Top 3 Power Brands

Barbie

$

553.3 

$

615.2 

-10 

%

2 

%

Hot Wheels

989.0 

833.7 

19 

%

2 

%

Fisher-Price

252.5 

279.5 

-10 

%

1 

%

Other

1,022.0 

910.3 

12 

%

3 

%

Gross Billings

$

2,816.8 

$

2,638.7 

7 

%

2 

%

Gross billings for the International segment were $2.82 billion in 2025, an increase of $178.1 million, or 7%, as compared to $2.64 billion in 2024, with a favorable impact from changes in currency exchange rates of two percentage points. The increase in the International segment gross billings was due to higher billings of Vehicles and Action Figures, Building Sets, Games, and Other products, partially offset by lower billings of Dolls and Infant, Toddler, and Preschool products.

Dolls gross billings decreased 7%, primarily due to lower billings of Barbie products.

Infant, Toddler, and Preschool gross billings decreased 12%, of which 7% was due to lower billings of Fisher-Price products, 3% was due to lower billings of Preschool Entertainment products, and 2% was due to lower billings of Baby Gear and Power Wheels products, due to the continued strategic exit from certain product lines in Baby Gear and Power Wheels.

Vehicles gross billings increased 18%, primarily due to higher billings of Hot Wheels products.

35

Action Figures, Building Sets, Games, and Other gross billings increased 28%, of which 24% was due to higher billings of Action Figures products, primarily due to higher billings of Jurassic World and Minecraft products in connection with their theatrical releases in 2025, and 7% was due to higher billings of Games products.

Sales adjustments increased to $470.3 million in 2025, as compared to $427.2 million in 2024. Sales adjustments as a percentage of net sales increased to 20.0% in 2025 from 19.3% in 2024, primarily due to increased promotional activities.

Cost of sales increased by $42.3 million, or 4%, to $1.18 billion in 2025 from $1.14 billion in 2024, primarily due to an increase in royalty expense of $17.1 million and an increase in product and other costs of $13.3 million.

International segment income increased by $56.0 million to $445.0 million in 2025, as compared to $389.0 million in 2024, primarily due to higher net sales of $135.1 million, partially offset by higher cost of sales of $42.3 million, higher other selling and administrative expenses of $22.0 million, and higher advertising and promotion expenses of $14.7 million.

Cost Savings Programs

Optimizing for Profitable Growth

On February 7, 2024, Mattel announced the OPG program, a multi-year cost savings program that follows the Optimizing for Growth program (the "OFG program"), which concluded in the fourth quarter of 2023. The OPG program is designed to achieve further efficiency and cost savings opportunities, primarily within Mattel's global supply chain, including its manufacturing footprint. The OPG program includes cost savings actions in connection with discontinuing production at a plant in China, as previously announced in the third quarter of 2023, as well as savings from other previous actions taken in 2023 that were not recognized in the OFG program. Targeted annual gross cost savings from actions associated with the OPG program, which are expected to be completed by the end of 2026, were increased from $200 million to $225 million in the fourth quarter of 2025. Of the $225 million in targeted annual gross costs savings, approximately 55% is expected to benefit cost of sales and 45% is expected to benefit other selling and administrative expenses. Total cash expenditures under the OPG program are expected to be between $115 and $140 million and total non-cash charges are expected to be up to $5 million.

The costs associated with the OPG program are expected to include the following:

Optimizing for Profitable Growth – Actions

Estimate of Cost

Employee severance

$105 to $120 million

Other restructuring costs

$5 to $10 million

Non-cash charges

up to $5 million

Total estimated severance and other restructuring costs

$110 to $135 million

Investments

$5 to $10 million

Total estimated actions

$115 to $145 million

In connection with the OPG program, Mattel recorded severance and other restructuring costs in the following cost and expense categories within operating income in the consolidated statements of operations:

For the Year Ended

December 31,

2025

December 31,

2024

(In millions)

Cost of sales (a)

$

7.8 

$

4.3 

Other selling and administrative expenses (b)

33.5 

44.9 

$

41.3 

$

49.2 

(a)Severance and other restructuring costs recorded within cost of sales in the consolidated statements of operations are included in segment income in "Note 14 to the Consolidated Financial Statements—Segment Information."

(b)Severance and other restructuring costs recorded within other selling and administrative expenses in the consolidated statements of operations are included in unallocated corporate and other operating expenses in "Note 14 to the Consolidated Financial Statements—Segment Information."

36

As of December 31, 2025, in connection with the OPG program, Mattel recorded cumulative severance and other restructuring charges of approximately $116 million, which included approximately $5 million of non-cash charges. Mattel realized cumulative cost savings (before severance, restructuring costs, and cost inflation) of approximately $172 million, which represents approximately 60% benefit to cost of sales, and approximately 40% benefit to other selling and administrative expenses as of December 31, 2025.

Other Cost Savings Actions

Mattel periodically executes additional actions to simplify and streamline its organizational structure that are not included in its cost savings programs. In connection with these actions, Mattel recorded severance charges of $5.6 million within other selling and administrative expenses during 2025. Mattel did not record any such charges in 2024.

Income Taxes

See Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Provision for Income Taxes."

Liquidity and Capital Resources

Mattel's primary sources of liquidity are its domestic and foreign cash and equivalents balances, driven by cash flows from operating activities, short-term borrowing facilities, including its $1.40 billion in aggregate principal amount of senior unsecured revolving credit facilities (the "Credit Facility"), and access to capital markets to fund its operations and obligations. Such obligations may include capital expenditures, debt service, future royalty payments pursuant to licensing agreements, future inventory and service purchases, and required cash contributions and payments related to benefit plans. Of Mattel's $1.24 billion in cash and equivalents at December 31, 2025, $686.1 million was held by foreign subsidiaries, including $74.4 million held in Russia. Mattel's cash held in Russia can be used within the country; however, its movement out of Russia is currently limited. In early 2022, Mattel paused all shipments into Russia.

Cash flows from operating activities could be negatively impacted by decreased demand for Mattel's products, which could result from factors such as, but not limited to, adverse economic conditions and changes in public and consumer preferences, or by increased costs associated with manufacturing and distribution of products, such as tariffs, or shortages in raw materials or component parts. Additionally, Mattel's ability to issue long-term debt and obtain seasonal financing could be adversely affected by factors such as, but not limited to, global economic crises and tight credit environments, inability to comply with its debt covenants and its Credit Facility covenants, or deterioration of Mattel's credit ratings. However, based on Mattel's current business plan and factors known to date, it is expected that existing cash and equivalents, cash flows from operations, availability under the Credit Facility, and access to capital markets, will be sufficient to meet working capital, operating expenditure, and other contractual requirements for the next twelve months and in the long-term.

Mattel has the ability to repatriate foreign earnings, which generally will not be taxable for U.S. federal income tax purposes but may be subject to state income tax and/or foreign withholding tax, in addition to any local country distribution requirements. As such, Mattel has evaluated its intentions related to its indefinite reinvestment assertion and has recorded a $13.8 million deferred tax liability related to approximately $701 million of foreign earnings that will not be indefinitely reinvested.

Current Market Conditions

Mattel is exposed to financial market risk resulting from changes in interest and foreign currency exchange rates.

Mattel intends to utilize its existing cash and cash equivalents, cash flow from operations, and borrowings under the Credit Facility to meet its short-term liquidity needs. At December 31, 2025, Mattel had no outstanding borrowings under the Credit Facility and approximately $9 million in outstanding letters of credit under the Credit Facility.

Market conditions could affect certain terms of other debt instruments that Mattel enters into from time to time.

Mattel monitors the third-party depository institutions that hold Mattel's cash and equivalents. Mattel's emphasis is primarily on safety and liquidity of principal, and secondarily on maximizing the yield on those funds. Mattel diversifies its cash and equivalents among counterparties and securities to minimize risks.

Mattel is subject to credit risks relating to the ability of its counterparties in hedging transactions to meet their contractual payment obligations. The risks related to creditworthiness and nonperformance have been considered in the fair value measurements of Mattel's foreign currency forward exchange contracts. Mattel closely monitors its counterparties and takes action, as necessary, to manage its counterparty credit risk.

37

Mattel expects that some of its customers and vendors may experience difficulty in obtaining the liquidity required to buy inventory or raw materials. Mattel monitors its customers' financial condition and their liquidity in order to mitigate accounts receivable collectability risks, and customer terms and credit limits are adjusted, if necessary. Additionally, Mattel uses a variety of financial arrangements to support the collectability of accounts receivable of customers deemed to be a credit risk, including requiring letters of credit, purchasing various forms of credit insurance with unrelated third parties, or requiring cash in advance of shipment.

Mattel sponsors defined benefit pension plans and postretirement benefit plans for its employees. Actual returns below the expected rate of return, along with changes in interest rates that affect the measurement of the liability, would impact the amount and timing of Mattel's future contributions to these plans. Mattel expects to make cash contributions totaling approximately $14 million to its defined benefit pension and postretirement benefit plans in 2026, substantially all of which will be for benefit payments for its underfunded plans.

Cash Flow Activities

Cash flows provided by operating activities were $593.3 million in 2025, as compared to $800.6 million in 2024. The decrease in cash flows provided by operating activities was primarily due to a decrease in net income, excluding the impact of non-cash items, and an increase in cash used for working capital of $26.8 million.

Cash flows used for investing activities were $154.9 million in 2025, as compared to $189.0 million in 2024. The decrease in cash flows used for investing activities was primarily due to a decrease in purchases of other property, plant, and equipment of $24.6 million, which included the purchase of an office building for $58.8 million in July 2024.

Cash flows used for financing activities were $620.6 million in 2025, as compared to $449.4 million in 2024. The increase in cash flows used for financing activities was primarily due to $200.0 million of increased share repurchases in 2025 compared to 2024.

During 2025, Mattel repurchased 31.4 million shares of its common stock at a cost of $600.0 million. During 2024, Mattel repurchased 21.0 million shares of its common stock at a cost of $400.0 million. Mattel's share repurchase program was first announced on July 21, 2003. On July 17, 2013, the Board of Directors approved a $500.0 million increase to Mattel's share repurchase authorization, which as of December 31, 2023 was exhausted. On February 5, 2024, the Board of Directors authorized a $1.00 billion share repurchase program, which as of December 31, 2025 was exhausted. On February 9, 2026, the Board of Directors authorized a new $1.50 billion share repurchase program. Repurchases under the program will take place from time to time, depending on market conditions. Mattel's share repurchase program has no expiration date.

During 2025 and 2024, Mattel did not pay any dividends to holders of its common stock. The payment of dividends on common stock is at the discretion of the Board of Directors and is subject to customary limitations.

Seasonal Financing

See Item 8 "Financial Statements and Supplementary Data—Note 6 to the Consolidated Financial Statements—Seasonal Financing and Debt."

Credit Ratings

In 2025, Fitch maintained Mattel's credit rating of BBB- with a stable outlook, Standard & Poor's maintained Mattel's credit rating of BBB with a stable outlook, and Moody's maintained Mattel's credit rating of Baa3 with a stable outlook.

Financial Position

Mattel's cash and equivalents decreased $145.0 million to $1.24 billion at December 31, 2025, as compared to $1.39 billion at December 31, 2024, primarily due to share repurchases of $600.0 million and capital expenditures of $182.0 million, partially offset by cash flow provided by operating activities of $593.3 million.

Accounts receivable increased $94.4 million to $1.10 billion at December 31, 2025, as compared to $1.00 billion at December 31, 2024, primarily due to higher net sales in the fourth quarter of 2025 of $120.1 million, partially offset by the timing of collections.

Inventories increased $61.4 million to $563.1 million at December 31, 2025, as compared to $501.7 million at December 31, 2024, primarily due to tariff related impacts in the United States and the impact of foreign currency translation.

Prepaid expenses and other current assets decreased $7.0 million to $227.1 million at December 31, 2025, as compared to $234.1 million at December 31, 2024. The changes included a decrease in derivatives receivable of $17.9 million, partially offset by an increase in prepaid royalties of $17.8 million.

38

Accounts payable and accrued liabilities increased $150.6 million to $1.43 billion at December 31, 2025, as compared to $1.28 billion at December 31, 2024, primarily due to an increase of $156.4 million in accounts payable, an increase in derivative liabilities of $12.8 million, and an increase in accrued royalties of $10.1 million, partially offset by a decrease in accrued incentive compensation expense of $67.0 million and a decrease in accrued advertising of $29.9 million.

A summary of Mattel's capitalization is as follows:

December 31, 2025

December 31, 2024

(In millions, except percentage information)

Cash and equivalents

$

1,242.9 

$

1,387.9 

2010 Senior Notes due October 2040

250.0 

250.0 

2011 Senior Notes due November 2041

300.0 

300.0 

2019 Senior Notes due December 2027

600.0 

600.0 

2021 Senior Notes due April 2026

— 

600.0 

2021 Senior Notes due April 2029

600.0 

600.0 

2025 Senior Notes due November 2030

600.0 

— 

Debt issuance costs and debt discount

(18.3)

(15.6)

Total debt

2,331.7 

51 

%

2,334.4 

51 

%

Stockholders' equity

2,233.0 

49 

2,264.1 

49 

Total capitalization (debt plus equity)

$

4,564.7 

100 

%

$

4,598.5 

100 

%

Total debt was $2.33 billion at December 31, 2025, flat as compared to $2.33 billion at December 31, 2024. During 2025, Mattel issued $600.0 million of 2025 Senior Notes due November 2030 and used the proceeds plus cash on hand to repay $600.0 million of 2021 Senior Notes due April 2026.

Stockholders' equity decreased $31.1 million to $2.23 billion at December 31, 2025, as compared to $2.26 billion at December 31, 2024, primarily due to share repurchases of $600.0 million, partially offset by net income in 2025 of $397.6 million, other comprehensive income of $103.9 million, and the impact of share-based compensation on additional paid-in capital of $79.7 million.

Off-Balance Sheet Arrangements

Mattel is required to provide standby letters of credit to support certain obligations that arise in the ordinary course of business and may choose to provide letters of credit in place of posting cash collateral. Although the letters of credit are off-balance sheet, the majority of the obligations to which they relate are reflected as liabilities in the consolidated balance sheets. Outstanding letters of credit totaled approximately $9 million as of December 31, 2025 and 2024.

Commitments

In the normal course of business, Mattel enters into contractual arrangements to obtain and protect Mattel's right to create and market certain products, and for future purchases of goods and services, including for the purchase of future inventory to ensure availability of materials. These arrangements include commitments for royalty payments pursuant to licensing agreements, which routinely contain provisions for guarantees or minimum expenditures during the terms of the contracts. Mattel also enters into long-term debt arrangements that include periodic interest and principal payments. Mattel also has defined benefit and postretirement benefit plans, which require future cash contributions and benefit payments. Additionally, Mattel routinely enters into lease agreements for premises and equipment used, which contain minimum rental payments. These obligations represent those for which Mattel is contractually obligated and do not represent all future expected purchases. For obligations subject to variable price and/or quantity provisions, a best estimate of such variables is made. Actual cash payments may vary due to the variable pricing components of certain purchase obligations.

39

The following table summarizes Mattel's contractual commitments and obligations:

Total

2026

2027

2028

2029

2030

Thereafter

(In millions)

Long-term debt

$

2,350.0 

$

— 

$

600.0 

$

— 

$

600.0 

$

600.0 

$

550.0 

Interest on long-term debt

775.9 

119.6 

118.1 

84.4 

67.5 

58.1 

328.2 

Leases

442.5 

105.6 

76.8 

57.2 

45.0 

42.8 

115.1 

Minimum guarantees under licensing and similar agreements

336.8 

100.0 

94.3 

70.8 

59.2 

12.5 

— 

Defined benefit and postretirement benefit plans

347.2 

38.2 

34.5 

35.1 

34.4 

35.9 

169.1 

Purchases of inventory, services, and other

455.5 

329.3 

86.2 

26.6 

5.9 

2.5 

5.0 

Total

$

4,707.9 

$

692.7 

$

1,009.9 

$

274.1 

$

812.0 

$

751.8 

$

1,167.4 

Liabilities for uncertain tax positions for which a cash tax payment is not expected to be made in the next twelve months are classified as other noncurrent liabilities. Due to the uncertainty regarding the periods in which examinations will be completed and limited information related to current audits, Mattel is not able to make reasonably reliable estimates of the periods in which cash settlements will occur with taxing authorities for the noncurrent liabilities.

Subsequent Events

See Part II, Item 8 "Financial Statements and Supplementary Data—Note 18 to the Consolidated Financial Statements—Subsequent Events."

Litigation

The content of Item 8 "Financial Statements and Supplementary Data—Note 13 to the Consolidated Financial Statements—Commitments and Contingencies—Litigation" is hereby incorporated by reference in this Item 7.

Application of Critical Accounting Policies and Estimates

Mattel makes certain estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenues and expenses. The accounting policies and estimates described below are those Mattel considers most critical in preparing its consolidated financial statements. These accounting policies and estimates include significant judgments made by management using information available at the time the estimates are made. As described below, however, these estimates could change materially if different information or assumptions were used instead.

Accounts Receivable—Allowance for Credit Losses

The allowance for credit losses is based on collection history and management's assessment of the current economic trends, business environment, customers' financial condition, accounts receivable aging, and customer disputes that may impact the level of future credit losses. Management believes the accounting estimate related to the allowance for credit losses is a "critical accounting estimate" because significant judgment is required to evaluate the creditworthiness of its customers when estimating the collectability of its accounts receivable. In addition, the allowance requires a high degree of judgment since it involves estimation of the impact of both current and future economic factors in relation to its customers' ability to pay amounts owed to Mattel. Significant changes in the assumptions used to develop the estimate could materially affect key financial statement line items, including other selling and administrative expenses, and accounts receivable.

Mattel's products are sold throughout the world. Products within the North America segment are sold directly to retailers, including omnichannel retailers, discount and freestanding toy stores, chain stores, department stores, other retail outlets and, to a limited extent, wholesalers, and directly to consumers through Mattel's e-commerce platforms. Products within the International segment are sold directly to retailers and wholesalers in most European, Latin American, and Asian countries, in Australia and New Zealand, and through agents and distributors in those countries where Mattel has no direct presence.

40

The mass-market retail channel periodically experiences shifts in market share among competitors, causing some large retailers to experience liquidity problems. Mattel's sales to customers are typically made on credit without collateral and are highly concentrated in the third and fourth quarters due to the seasonal nature of toy sales, which results in a substantial portion of trade receivables being collected during the latter half of the year and the first quarter of the following year. There is a risk that customers will not pay, or that payment may be delayed, because of bankruptcy, financial difficulty, or other factors beyond the control of Mattel. This could increase Mattel's exposure to losses from bad debts.

A small number of customers account for a large share of Mattel's net sales and accounts receivable. In 2025, Mattel's three largest customers, Walmart, Target, and Amazon, in the aggregate, accounted for approximately 42% of worldwide consolidated net sales, and its ten largest customers, in the aggregate, accounted for approximately 49% of net sales. As of December 31, 2025, Mattel's three largest customers accounted for approximately 31% of net accounts receivable, and its ten largest customers accounted for approximately 43% of net accounts receivable. Should one or more of Mattel's large customers experience bankruptcy or financial difficulty, the allowance for credit losses may not be sufficient to cover such losses.

Mattel has procedures to mitigate its risk of exposure to losses from bad debts. Credit limits and payment terms are established based on the underlying criteria that collectability must be reasonably assured at the levels set for each customer. Extensive evaluations are performed on an ongoing basis throughout the fiscal year of each customer's financial performance, cash generation, financing availability, and liquidity status. Customers are reviewed at least annually, with more frequent reviews being performed, if necessary, based on the customers' financial condition and the level of credit being extended. For customers who are experiencing financial difficulty, management performs additional financial analyses prior to shipping to those customers on credit. Customers' terms and credit limits are adjusted or revoked, if necessary, to reflect the results of the review. Mattel uses a variety of financial arrangements to ensure collectability of accounts receivable of customers, including requiring letters of credit, purchasing various forms of credit insurance with unrelated third parties, or requiring cash in advance of shipment.

The following table summarizes Mattel's allowance for credit losses:

December 31,

2025

December 31,

2024

(In millions, except percentage information)

Allowance for credit losses

$

17.4 

$

8.2 

As a percentage of total accounts receivable

1.6 

%

0.8 

%

Changes in the allowance for credit losses reflect management's assessment of the factors noted above, including changes in current economic trends, business environment, past due accounts, disputed balances with customers, and the financial condition of customers. The allowance for credit losses is also affected by the time at which uncollectable accounts receivable balances are actually written off.

For the year ended December 31, 2025, Mattel recorded a net expense related to its allowance for credit losses of approximately $3 million, which was recognized within other selling and administrative expenses. For the year ended December 31, 2024, Mattel recorded a net expense related to its allowance for credit losses of approximately $3 million, which was recognized within other selling and administrative expenses. In general, Mattel's allowance for credit loss estimates has historically been within its expectations and in line with the reserves established, and although possible, significant variation is not expected in the future. If significant changes in the assumptions used to develop the estimates occur, they could materially affect key financial statement line items, including other selling and administrative expenses and accounts receivable. A hypothetical 1% increase or decrease of the allowance for credit losses as a percentage of accounts receivable would have impacted 2025 and 2024 other selling and administrative expenses by approximately $11 million and $10 million, respectively.

Inventories—Obsolescence Reserve

Inventories are stated at the lower of cost or net realizable value. Inventory obsolescence reserves are recorded for damaged, obsolete, excess, and slow-moving inventory. Inventory obsolescence expense is recognized in cost of sales and establishes a lower cost basis for the inventory. Management believes that the accounting estimate related to the obsolescence reserve is a "critical accounting estimate" because significant judgment is required to evaluate the level of future demand for inventories held by Mattel as well as the prices at which customers are willing to pay for Mattel's inventories. As more fully described below, obsolescence reserves required for Mattel's inventory could be impacted by changes in public and consumer preferences, demand for product, or changes in the buying patterns of both retailers and consumers and inventory management of customers. Significant changes in the assumptions used to develop the estimate could materially affect key financial statement line items, including cost of sales and inventories.

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In the toy industry, orders are typically subject to cancellation or change at any time prior to shipment. Actual shipments of products ordered and order cancellation rates are affected by consumer acceptance of product lines, strength of competing products, marketing strategies of retailers, changes in buying patterns of both retailers and consumers, and overall economic conditions. Unexpected changes in these factors could result in excess inventory in a particular product line, which would require management to record a valuation adjustment on such inventory.

Mattel bases its production schedules for toy products on customer orders and forecasts, taking into account historical trends, results of market research, and current market information. Mattel ships products in accordance with delivery schedules specified by its customers, who usually request delivery within three months. In anticipation of retail sales in the traditional holiday season, Mattel significantly increases its production in advance of the peak selling period, resulting in a corresponding build-up of inventory levels in the first three quarters of the year. These seasonal purchasing patterns and requisite production lead times create risk to Mattel's business associated with the underproduction of popular toys and the overproduction of toys that do not match consumer demand. Retailers are also attempting to manage their inventories more tightly, requiring Mattel to ship products closer to the time the retailers expect to sell the products to consumers. These factors increase inventory valuation risk because Mattel's inventory levels may be adversely impacted by the need to prebuild products before orders are placed.

When conditions in the domestic and global economies become uncertain, it is difficult to estimate the level of growth or contraction for the economy as a whole. It is even more difficult to estimate growth or contraction in various parts of the economy, including the economies in which Mattel participates. Because all components of Mattel's budgeting and forecasting are dependent upon estimates of growth or contraction in the markets it serves and demand for its products, economic uncertainty makes estimates of future demand for products more difficult. Such economic changes may affect the sales of Mattel's products and its corresponding inventory levels, which could potentially impact the valuation of its inventory.

At the end of each quarter, management within each commercial business segment, North America and International, as well as Mattel's owned and operated manufacturing plants, performs a detailed review of its inventory on an item-by-item basis. Management assesses the need for, and the amount of, an obsolescence reserve based on the following factors:

•Customer and/or consumer demand for the item;

•Overall inventory positions of Mattel's customers;

•Strength of competing products in the market;

•Quantity on hand of the item;

•Sales price of the item;

•Mattel's cost for the item; and

•Length of time the item has been in inventory.

The timeframe between when an estimate is made and the time of disposal depends on the above factors and may vary significantly. Generally, slow-moving inventory is liquidated during the next annual selling cycle.

The following table summarizes Mattel's obsolescence reserve:

December 31,

2025

December 31,

2024

(In millions, except percentage information)

Obsolescence reserve

$

32.1 

$

33.0 

As a percentage of gross inventory

5.4 

%

6.2 

%

For the years ended December 31, 2025 and 2024, Mattel recorded an expense related to its inventory obsolescence reserve of approximately $38 million and $46 million, respectively, which was recognized within cost of sales. In general, Mattel's inventory obsolescence estimates have historically been within expectations and in line with the reserves established, and although possible, significant variation is not expected in the future. If significant changes in the assumptions used to develop the estimate occur, they could materially affect key financial statement line items, including cost of sales and inventories. A hypothetical 1% increase or decrease to obsolescence reserves as a percentage of gross inventory at December 31, 2025 and 2024 would have impacted 2025 and 2024 cost of sales by approximately $6 million and $5 million, respectively.

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Goodwill

Mattel tests goodwill for impairment annually or more often if an event or circumstance indicates that an impairment may have occurred. Management believes that the accounting estimates related to the fair value estimates of its goodwill are "critical accounting estimates" because assessing goodwill for impairment involves a high degree of judgment due to the prospective assumptions that underlie the fair value assessments, such as projecting future cash flows for Mattel's reporting units and estimating the weighted-average cost of capital that a market participant would use as a discount rate. Significant changes in the assumptions used in the goodwill impairment tests could materially affect key financial statement line items, including other selling and administrative expenses and goodwill.

Goodwill is allocated to reporting units for purposes of evaluating whether goodwill is impaired. Mattel's reporting units are: (i) North America, (ii) International, and (iii) American Girl. Mattel then assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. This qualitative assessment is used as a basis for determining whether it is necessary to perform the quantitative goodwill impairment test.

When the quantitative goodwill impairment test is necessary, impairment is determined by estimating the fair value of a reporting unit and comparing that value to the reporting unit's carrying amount. If the carrying amount of the reporting unit exceeds its fair value, an impairment charge is recognized in an amount equal to the excess, limited by the amount of goodwill in that reporting unit.

When performing the quantitative goodwill impairment test, Mattel determines the fair value of its reporting units based upon one or more acceptable valuation approaches. Mattel utilizes the income approach for each of its reporting units and also utilizes the market approach for the North America and International reporting units. The income approach determines the fair value based upon the discounted cash flows that the business can be expected to generate in the future. The market approach determines fair value utilizing earnings multiples of comparable public companies, which are reflective of the market in which each respective reporting unit operates, and recent comparable market transactions. The income approach requires Mattel to make projections of revenue, gross margin, operating costs, and working capital investment for the reporting unit over a multi-year period. Additionally, management must make an estimate of a weighted-average cost of capital that a market participant would use as a discount rate. Changes in these projections or estimates would impact the estimated fair value, which could significantly change the amount of any impairment ultimately recorded.

Mattel performed a quantitative goodwill impairment assessment as of August 1, 2025, and the resulting calculations indicated that the fair values exceeded the carrying amounts of Mattel's reporting units by 3.7 times, 2.5 times, and 1.4 times for the North America, International, and American Girl reporting units, respectively. There were no events or changes in circumstances subsequent to the third quarter assessment that indicate that the carrying amount of a reporting unit may exceed its fair value as of December 31, 2025.

Sales Adjustments

Mattel routinely enters into arrangements with its customers to provide sales incentives, support customer promotions, and provide allowances for returns and defective merchandise. Such programs are based primarily on customer purchases, customer performance of specified promotional activities, and other specified factors such as sales to consumers. Management believes that the accounting estimates related to sales adjustments are "critical accounting estimates" because significant judgment is required to estimate related accruals, such as estimating future customer sales volume to support volume-based sales incentives, estimating volumes of defective products to support reserves for defective merchandise, and estimating future customer performance and consumer preferences that could impact the discretionary sales promotions. Significant changes in the assumptions used to develop the estimates could materially affect key financial statement line items, including net sales and accounts receivable.

The above-described programs primarily involve fixed amounts or percentages of sales to customers. The accruals for such programs, which can either be contractual or discretionary in nature, are based on an assessment of customer purchases, customer performance of specified promotional activities, and other specified factors such as customer sales volume. While certain sales adjustment amounts are readily determinable at year-end and do not require estimates, other sales adjustments, such as discretionary sales adjustments, require significant judgment by management to make these estimates. In making these estimates, management considers all available information, including the overall business environment, historical trends, and information from customers.

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Accruals for these programs are recorded as sales adjustments that reduce net sales in the period the related sale is recognized. Sales adjustments for such programs totaled $731.4 million or 13.7% as a percentage of net sales in 2025 and $653.7 million or 12.2% as a percentage of net sales in 2024. If significant changes in the assumptions used to develop the estimates occur, they could impact Mattel's results of operations or financial condition. A hypothetical 1% increase or decrease in Mattel's sales adjustments as a percentage of net sales during the years ended December 31, 2025 and 2024 would have impacted 2025 and 2024 net sales and accounts receivable by approximately $53 million and $54 million, respectively.

Income Taxes

Mattel's income tax provision and related income tax assets and liabilities are based on actual and expected future income, U.S. federal and foreign statutory income tax rates, and tax regulations and planning opportunities in the various jurisdictions in which Mattel operates. Management believes that the accounting estimates related to income taxes are "critical accounting estimates" because significant judgment is required in interpreting tax regulations in the United States and in foreign jurisdictions, evaluating Mattel's worldwide uncertain tax positions, and assessing the likelihood of realizing certain tax benefits. Actual results could differ materially from those judgments, and changes in judgments could materially affect Mattel's consolidated financial statements.

Certain income and expense items are accounted for differently for financial reporting and income tax purposes. As a result, the income tax expense reflected in Mattel's consolidated statements of operations is different than that reported in Mattel's tax returns filed with the taxing authorities. Some of these differences are permanent, such as expenses that are not deductible in Mattel's tax return, and some are temporary differences that reverse over time, such as depreciation expense. These timing differences create deferred income tax assets and liabilities. Deferred income tax assets generally represent items that can be used as a tax deduction or credit in Mattel's tax returns in future years for which Mattel has already recorded a tax benefit in its consolidated statements of operations. Mattel records a valuation allowance to reduce its deferred income tax assets if, based on the weight of available evidence, management believes expected future taxable income is not likely to support the use of a deduction or credit in that jurisdiction. Management evaluates the level of Mattel's valuation allowances at least annually, and more frequently if actual operating results differ significantly from forecasted results.

Changes in the valuation allowances in 2025 primarily related to changes in assessment of the future realizability of certain deferred tax assets and utilization and expiration of tax attributes. As of December 31, 2025, Mattel's valuation allowances on its U.S. federal and state deferred tax assets and foreign deferred tax assets were approximately $13 million and $87 million, respectively. Changes in the valuation allowances in 2024 primarily related to changes in assessment of the future realizability of certain deferred tax assets, and utilization and expiration of tax attributes. As of December 31, 2024, Mattel's valuation allowances on its U.S. federal and state deferred tax assets and foreign deferred tax assets were approximately $12 million and $85 million, respectively. As of December 31, 2025 and 2024, Mattel has recorded net deferred tax assets of $272.9 million and $252.5 million, respectively.

Mattel records unrecognized tax benefits for U.S. federal, state, local, and foreign tax positions related primarily to transfer pricing, tax credits claimed, tax nexus, and apportionment. For each reporting period, management applies a consistent methodology to measure unrecognized tax benefits and all unrecognized tax benefits are reviewed periodically and adjusted as circumstances warrant. Mattel's measurement of its unrecognized tax benefits is based on management's assessment of all relevant information, including prior audit experience, the status of audits, conclusions of tax audits, lapsing of applicable statutes of limitations, identification of new issues, and any administrative guidance or developments. Mattel recognizes unrecognized tax benefits in the first financial reporting period in which information becomes available indicating that such benefits will more likely than not (a greater than 50 percent likelihood) be realized. As of December 31, 2025 and 2024, the unrecognized tax benefit balance, inclusive of interest and penalties, and net of U.S. federal tax benefit was $168.9 million and $151.7 million, respectively.

In the normal course of business, Mattel is regularly audited by U.S. federal, state, local, and foreign tax authorities. Many of the judgments made in adjusting uncertain tax positions involve assumptions and estimates regarding audit outcomes and the timing of audit settlements, which are often uncertain and subject to change. The ultimate settlement of any particular issue with the applicable taxing authority could have a material impact on Mattel's consolidated financial statements.

New Accounting Pronouncements

See Item 8 "Financial Statements and Supplementary Data—Note 1 to the Consolidated Financial Statements—Summary of Significant Accounting Policies."

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Non-GAAP Financial Measure

To supplement the financial results presented in accordance with GAAP, Mattel presents a non-GAAP financial measure within the meaning of Regulation G promulgated by the SEC. The non-GAAP financial measure that Mattel presents is currency exchange rate impact. Mattel uses this measure to analyze its continuing operations and to monitor, assess, and identify meaningful trends in its operating and financial performance. Mattel believes that the disclosure of this non-GAAP financial measure provides useful supplemental information to investors to allow them to better evaluate ongoing business performance and certain components of Mattel's results. This measure is not, and should not be viewed as, a substitute for GAAP financial measures and may not be comparable to similarly-titled measures used by other companies.

Currency Exchange Rate Impact

The currency exchange rate impact reflects the portion (expressed as a percentage) of changes in Mattel's reported results that are attributable to fluctuations in currency exchange rates.

For entities reporting in currencies other than the U.S. dollar, Mattel calculates the percentage change of period-over-period results at constant currency exchange rates (established as described below) by translating current period and prior period results using these rates and then determines the currency exchange rate impact percentage by calculating the difference between the percentage change at such constant currency exchange rates and the percentage change at actual exchange rates.

The constant currency exchange rates are determined by Mattel at the beginning of each year and are applied consistently during the year. They are generally different from the actual exchange rates in effect during the current or prior period due to volatility in actual currency exchange rates. Mattel considers whether any changes to the constant currency rates are appropriate at the beginning of each year. The exchange rates used for these constant currency calculations are generally based on prior year actual exchange rates.

Mattel believes that the disclosure of the percentage impact of currency changes is useful supplemental information for investors to be able to gauge Mattel's current business performance and the longer-term strength of its overall business since currency changes could potentially mask underlying sales trends. The disclosure of the percentage impact of currency exchange allows investors to calculate the impact on a constant currency basis and also enhances their ability to compare financial results from one period to another.

Key Performance Indicator

Gross billings represent amounts invoiced to customers. It does not include the impact of sales adjustments, such as trade discounts and other allowances. Mattel presents changes in gross billings as a metric for comparing its aggregate, categorical, brand, and geographic results to highlight significant trends in Mattel's business. Changes in gross billings are discussed because, while Mattel records the details of sales adjustments in its financial accounting systems at the time of sale, such sales adjustments are generally recorded by customer and not associated with categories, brands, or individual products.