Hasbro, Inc.

Good morning and welcome to the Hasbro second quarter 2026 earnings conference call. At this time, all parties will be in listen-only mode. If anyone should require operator assistance during the conference, please press star zero from your telephone keypad. Today's conference is being recorded. If you have any objections, you may disconnect at this time. At this time, I'd like to turn the call over to Fred Whiteman, Vice President, Hasbro Investor Relations. Please go ahead.

Thank you and good morning, everyone. Joining me today are Chris Cox, Hasbro's Chief Executive Officer, and Gina Goetter, Hasbro's Chief Financial Officer and Chief Operating Officer. We'll begin today's call with Chris and Gina providing commentary on the company's performance before taking your questions. Our earnings release and presentation slides for today's call are posted on our investor website. The press release and presentation include information regarding non-GAAP adjustments and non-GAAP financial measures. Our call today will discuss certain adjusted measures which exclude these non-GAAP adjustments. A reconciliation of GAAP to non-GAAP measures is included in the press release and presentation. Please note that whenever we discuss earnings per share or EPS, we're referring to earnings per diluted share. Before we begin, I would like to remind you that during this call and the question and answer session that follows, members of Hasbro management may make forward-looking statements concerning management's expectations, goals, objectives, and similar matters. There are many factors that could cause actual results or events to differ materially from the anticipated results or other expectations expressed in these forward-looking statements. These factors include those set forth in our annual report on Form 10-K, our most recent 10Q, in today's press release, and in our other public disclosures. We undertake no obligation to update any forward-looking statements made today to reflect events or circumstances occurring after the date of this call. I'd now like to introduce Chris Cox. Chris?

Thanks, Fred, and good morning, everyone. Hasbro delivered another strong quarter, capping off a remarkable first half of 2026. Despite headwinds from oil and trade policy, The business delivered 15% growth for the first half, with profits up appreciably. Wizards continues to grow at a strong clip. The toy business posted another quarter of growth, and our momentum is broad-based, with Magic, D&D, Hasbro Games, Peppa Pig, Star Wars, and Marvel all showing solid year-over-year performance. Magic is off to a ripping start, up over 32% in Q2 and over 34% in the first half. and on that strength, we're raising our full year Wizards Outlook, which Gina will size in her section. Marvel superheroes set a record for day one and month one revenue and became the fastest set to reach $300 million in revenue with solid reorders and sell-through. The Hobbit is also tracking like a fan favorite. And the growth is broad-based. Expanded distribution, real player growth and universes beyond continuing to pull new fans in through IP they already love. I'm not surprised by the level of interest and questions we get about Magic. While it's by far our biggest brand, in many ways it's also the least understood. So let's define it. While Magic's roots are based in the thousands of local game stores around the world, Magic is not a niche hobby business. It is a mega franchise. Magic the Gathering belongs in the same company as Pokemon, EA Sports, World of Warcraft, and Minecraft. Profitable, durable franchises built to compound for decades. What sets Magic apart is longevity. Magic has been compounding for more than 30 years. It's also a deep game and that depth and complexity is precisely what our players love. Magic fans play and collect for years because mastery never ends and that retention is what powers a robust secondary market and a passionate community of tens of millions of fans who treat the game as a lifelong pursuit rather than a passing trend. The numbers bear it out. Since 2009, our tabletop and digital magic businesses compounded revenue at over 17% a year and grew in 15 of the last 17 years. And those two years that didn't grow, each were declines of less than 3%. Step back and look at magic over any real horizon, and you see one of the most consistent, compounding franchises in entertainment, a genuine peer to the biggest names in gaming. It is a leader in one of the biggest categories in toys, collectibles, and games. And with universes beyond, it is bigger than just a game. It is a platform with platform-level economics and potential. Turning to consumer products, revenue grew 5% in the quarter, and our toy and game business delivered its third consecutive quarter of growth. We're continuing to see benefits from our focus on gem-squared categories, those parts of the toy industry that are gamified, entertainment-driven, multi-purchase, and Multigenerational, which continue to outperform the broader industry. We're continuing to expand the reach of our brands through product innovation and partnerships. We recently launched Blooms, our new aged-up product for Play-Doh. Response from consumers, creators and retail partners has been strong, with the initial launch selling out at major retailers in less than 24 hours. And late last week, we announced a multi-year licensing agreement with Nintendo to develop products inspired by the Legend of Zelda franchise. Thank you for tuning in. from our partners at Aristocrat. Taken together, our second quarter results reinforce what makes Hasbro different. Magic continues to lead the categories for product innovation and fan engagement. Licensing is expanding the reach of our brands across categories and channels. And in toys and games, better execution and stronger innovation are driving growth. That's a balanced portfolio built for durable, long-term value. Before I turn things over to Gina, I want to spend a few minutes on digital. Over the last several quarters, we have reviewed our portfolio and updated our plans for Hasbro's digital future. That work included canceling several games scheduled for release in 2028 and beyond and recording a $56 million non-cash write-down this quarter for related capitalized costs. The write-down reflects the standard we are applying to the portfolio. We are focusing our digital investment behind the franchises, platforms, and partners where we see the clearest upside and where Hasbro has the strongest right to win. Four priorities will guide our digital strategy. Focus, cost discipline, ownable platforms, and partnership. First, focus. Our digital investment will center on trading card games and role-playing games with brands that can become a significant digital franchise and expand across media over time. We already have strong proof points. Magic Gathering Arena is one of the most successful digital TCGs of all time. Baldur's Gate 3 is one of the biggest and most awarded role-playing games of the last decade. Exodus and Warlock are our next two significant owned game options. Both planned for 2027. Exodus extends our role-playing strength into science fiction. Warlock expands on one of the most popular classes in D&D. Both meet the bar we are setting for owned publishing. Big audience potential. Strong Genre Fit, Franchise Potential, and Meaningful Opportunities Beyond the Initial Game. Second, Cost Decision. 2026 should be our peak year for digital investment, as Exodus and Warlock enter their finishing phases. As we move into the next generation of games, our model becomes more efficient. We are past the startup phase. We now have more mature tools, teams, and production processes. We are shifting more development to lower-cost regions with strong talent with Montreal as our base for digital games. And we are increasingly co-developing and co-publishing with partners who bring genre expertise, operating discipline, and cost advantages. As a result, we expect our total digital spend to decrease at least 25% annually by 2028. Third, ownable platforms. Hasbro already controls two of the more valuable platforms in TCGs and tabletop role-playing games. Magic the Gathering Arena has generated nearly $1 billion since its introduction in 2019. D&D Beyond has more than 30 million registered accounts and reaches more than three in four hobby role-playing gamers each year. We also recently announced CharacterOS, our new behavioral licensing platform. CharacterOS is early, but it is a comparatively modest and scalable B2B investment that can bring Hasbro characters into new digital contexts. from location-based entertainment to customer support to interactive avatars. A dozen Hasbro characters are already available for licensing pilots through our six-wall AI studio and our close partner, Eleven Labs' iconic marketplace. Arena, D&D Beyond, and CharacterOS are uniquely Hasbro opportunities with attractive underlying economics and meaningful upside. Fourth, partnerships. As Scopely previously shared, Monopoly Go is on track to exceed $8 billion in lifetime revenue this summer. It proves that Hasbro can create major digital economics without carrying all the costs and risk ourselves. Going forward, Hasbro will lean into a focused set of platforms and genres to create community hubs and major franchise moments for our brands. Our partners will help us scale with more than 200 projects that are active or in development across mobile, casino gaming, and PC. That includes work with Scopely, Aristocrat, Triple Dot, Marmalade, Gameberry Labs, Ubisoft and Gameloft. So the digital strategy is straightforward. We are taking lower conviction projects out of the portfolio, reducing our annual spend base and concentrating investment behind the places where Hasbro has the best chance to build durable digital franchises. Magic, D&D, owned platforms, partner-led economics, and a concentrated number of high conviction owned titles. Hasbro is already the number one digital licensor in the world. Between our internal teams and a robust partner roadmap, our plan is to press that advantage for more upside for our brands and our investors. Now, I'll pass it over to Gina to share more about the numbers and the growth we've delivered across our brands and segments. Gina?