Mattel, Inc.

Ladies and gentlemen, thank you for standing by. My name is Abby and I'll be your conference operator today. At this time, I would like to welcome everyone to the Mattel Incorporated third quarter 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star 1 a second time. Thank you. And I would now like to turn the conference over to Jen Ketnik, Head of Investor Relations. You may begin.

Thank you, Operator, and good afternoon, everyone. Joining me today are Inan Kraiz, Mattel's Chairman and Chief Executive Officer, and Paul Roux, Mattel's Chief Financial Officer. This afternoon, we reported Mattel's third quarter 2025 financial results. We will begin today's call with Inan and Paul providing commentary on our results, after which we will provide some time for questions. Please note that during the question and answer session, we respectfully ask that you limit to one question and one follow-up so that we can get to as many analysts and questions as possible today. Today's discussion, earnings release, and slide presentation may reference certain non-GAAP financial measures and key performance indicators, which are defined in the slide presentation and earnings release appendices. Please note that gross billings figures referenced on this call will be stated in constant currency, unless stated otherwise. Our earnings release, slide presentation, and supplemental non-GAAP information can be accessed through the Investors section of our corporate website, corporate.matel.com, and the information required by Regulation G regarding non-GAAP financial measures, as well as information regarding our key performance indicators is included in those documents. The preliminary financial results included in the earnings release and slide presentation represent the most current information available to management. The company's actual results when disclosed in its Form 10Q may differ as a result of the completion of the company's financial closing procedures, final adjustments, completion of the review by the company's independent registered public accounting firm, and other developments that may arise between now and the disclosure of the final results. Before we begin, I'd like to remind you that certain statements made during the call may include forward-looking statements related to the future performance of our business, brands, categories, and product lines. Any statements we make about the future are by their nature uncertain. These statements are based on currently available information and assumptions, and they are subject to a number of significant risks and uncertainties that could cause our actual results to differ from those projected in the forward-looking statements. We describe some of these uncertainties in the risk factors section of our latest Form 10-K annual report, our latest Form 10-Q quarterly report, our most recent earnings release and slide presentation, and other filings we make with the SEC from time to time, as well as in other public statements. Mattel does not update forward-looking statements and expressly disclaims any obligation to do so, except as required by law. Now, I'd like to turn the call over to Inan.

Thanks, Jen. Good afternoon, and thank you for joining Mattel's third quarter 2025 earnings call. This quarter, our U.S. business was again challenged by industry-wide shifts in retailer ordering patterns. That said, consumer demand for our products grew in every region, including in the U.S., and gross billings increased in our international business. We continue to operate with excellence and maintain a gross margin above 50%. We repurchased $202 million of shares, bringing the total this year to $412 million, and are on track to repurchase $600 million for the full year. Since the beginning of the fourth quarter, orders from retailers in the U.S. have accelerated significantly, and POS for Mattel continues to grow in the U.S. and internationally. are tracking in line with our full-year outlook for 2025. Looking into the balance of the year, we expect a good holiday season for Mattel, strong top-line growth in the fourth quarter, and are reiterating our full-year guidance. We have made important strides in advancing our strategy to grow our IP-driven toy business and expand our entertainment offering. Here are some of the key highlights. We implemented a new brand-centric organizational structure with integrated marketing to enhance and accelerate Mattel's global brand management capabilities. We launched two new standout product lines, which are off to a strong start. Mattel Brick Shop in the building sets category and the Hot Wheels Speed Snap Track system in vehicles. American Girl achieved its fourth consecutive quarter of growth, driven by strength in both direct-to-consumer, omnichannel retail, and wholesale channels. We made meaningful progress on our first two self-published digital games, which we expect to launch next year, with several more in development and pre-production. Mattel Studios recently announced the development of two new live action television series entering an exciting new programming genre. Our strategic collaboration with OpenAI is taking shape as we embed AI capabilities across the organization. And as just announced today, Mattel has been awarded global licensing rights to develop and market a full range of K-pop Demon Hunters products across major categories. This includes dolls, action figures, accessories, collectibles, play sets, collaborations with co-brands, and more. We are excited to partner with Netflix on their most popular film of all time, and bring this vibrant, imaginative world to life. This, in addition to the recent renewal of our multi-year licensing agreement for the Disney Princess and Frozen franchises, further reinforces our leadership position as a partner of choice to major entertainment companies and IP owners. Looking at key financial metrics in the third quarter as compared to the prior year, Net sales, adjusted operating income, and adjusted earnings per share declined, primarily due to U.S. retailers moving from direct import to domestic shipping, shifting orders to the fourth quarter. As always, we are working closely with our retail partners to manage this dread environment. Notwithstanding the shift in retailer ordering patterns, Mattel's POS increased overall with growth in every region, including the U.S. As it relates to category gross billings, vehicles grew, as well as our challenger categories combined, while dolls and infant, toddler, and preschool declined. Per SIRCANA, we gained market share in key categories, including dolls, vehicles, and action figures. The toy industry also grew high single digits in the third quarter, well above the low single digit trends of recent years, reflecting momentum heading into the holiday season and beyond. An important priority for the company is to scale digital games where we are looking to extend physical play to the virtual world by creating games and experiences that drives sustained engagement for fans of all ages. We recently announced three licensed games for console and PC for Hot Wheels, Masters of the Universe, and Barbie, as well as a partnership with Netflix to bring Pictionary into living rooms around the world. We expanded our collaboration with Roblox with a new slate of games and experiences for Barbie, Hot Wheels, Masters of the Universe, and Uno, as well as Monster High, which launches this week. The Fortnite Monster High experience also launched last week. Mattel 163, our joint venture with NetEase, recently released its fourth game, Uno Wonder, which is off to a promising start. and our digital game self-publishing strategy is progressing well with two games expected to launch in 2026 and additional games in development and pre-production. Mattel Studios continues to add more projects to an exciting slate. In film, the Polly Parker live action movie will be co-developed with Reese Witherspoon's Hello Sunshine and Amazon MGM Studios. Two-time Golden Globe nominee Lily Collins will co-produce and star in the movie. In television, we are entering a new phase as we expand into cinematic quality episodic series designed to profitably reach new audiences. Recently, we announced our first two premium live action scripted TV series in development. The first is a series based on Shani, Mattel's first standalone black fashion doll line in development with Amazon MGM Studios. And the second is a series based on Mattel's iconic Magic 8-Ball franchise directed by acclaimed filmmaker M. Night Shyamalan and written by Glee and American Horror Story creator Brad Falchuk. To conclude, While our U.S. business was challenged by ongoing shifts in retailer ordering patterns, our POS increased in every region and gross billings grew in our international business. We continued to operate with excellence and made meaningful progress advancing our IP-driven toy business and expanding our entertainment offering. Notwithstanding the impact of the current trade dynamics, The fundamentals of our business are strong. Consumers are buying our products, and the toy industry is growing. Our supply chain expertise and global commercial capabilities are competitive advantages, putting us in a strong position to work closely with retailers to place the right products at the right amount on the right shelves at the right time. As the environment normalizes, we expect to accelerate growth and continue to successfully execute our strategy. Now, I would like to turn the call over to Paul to discuss our results and outlook in more detail.