And thank you for standing by. My name is Tiffany, and I will be your conference operator today. At this time, I would like to welcome everyone to the Mattel, Inc. Fourth 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, then the number one, on your telephone keypad. I would now like to turn the call over to Greg Gilbert, Investor Relations. Greg, please go ahead.

Thank you, operator, and good afternoon, everyone. Joining me today are Ynon Kreiz, Mattel's Chairman and Chief Executive Officer, and Paul Ruh, Mattel's Chief Financial Officer. This afternoon, we reported Mattel's fourth quarter and full year 2025 financial results. We will begin today's call with Ynon and Paul's 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.mattel.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 10-K, 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 Form 10-Q quarterly reports, 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 Ynon.

Thanks, Greg. Good afternoon, and thank you for joining Mattel's fourth quarter and full year 2025 Earnings Call. In addition to discussing our financial results, we have several strategic updates to cover, including our agreement to acquire full ownership of Mattel 163 announced today, details on the evolution of our strategy, guidance for 2026, as well as midterm expectations and an update on our capital allocation priorities. In the fourth quarter, we achieved 6% growth in gross billings, including 7% in North America, and 4% internationally. However, the growth in the US was less than anticipated, which impacted our full year results relative to expectations. 2025 was marked by uncertainty in US trade dynamics that affected retailer ordering patterns for much of the year. After two challenging quarters where US retailers delayed orders, there was a significant acceleration in orders through most of the fourth quarter. December, however, ended up growing less than anticipated in the US, and our full year results finished below expectations. The challenge was specific to the US, while our international business performed in line with expectations, with growth in every region in the quarter. POS was positive in all regions, including the US, and grew approximately 3% overall for both the quarter and full year. Our supply chain excelled in a volatile environment, adjusting for the shift in shipping patterns from direct import to domestic fulfillment, and our teams effectively managed our owned inventory to finish the year well-positioned for 2026. As it relates to our full year portfolio performance, vehicles continue to grow strongly, challenger categories combined grew driven by outstanding performance in action figures, where dolls and infant toddler in preschool declined. Hot Wheels and UNO continue to perform strongly, and we saw improving trends in Barbie, which was flat for the quarter…

Thanks, Ynon. As you just heard, gross billings grew 6% in the fourth quarter, including 7% in North America, and POS was positive across every region, including the US. However, US gross billings in December ended up growing less than we anticipated, impacting our full year results relative to expectations. Looking at what transpired in the US, trade-related uncertainty led retailers to shift orders from the second and third quarters into the fourth quarter, adopting a more just-in-time approach despite positive POS trends in Q2 and Q3. Entering Q4, POS continued to grow, and retailers' orders accelerated significantly ahead of the holiday season. However, while POS in the US ended positive for the quarter, December finished lower than anticipated. In response, we took actions to manage owned inventory and support our retail partners, which had a larger than expected impact on margins and profitability. These dynamics were specific to the US market, while our international business grew in line with expectations in Q4. Global POS was up approximately 3% for both the quarter and the full year. In looking at fourth quarter results, beginning with gross billings in constant currency, Mattel grew 6%. Dolls and Barbie were comparable, American Girl grew for the fifth consecutive quarter. Vehicles' impressive strength continued, growing 16%. Hot Wheels grew double digits, and Matchbox and Disney and Pixar's Cars performed well. Infant, toddler, and preschool declined 10%, due to continuing strategic exits in Baby Gear and Power Wheels, as well as preschool entertainment. Fisher-Price declined modestly. Challenger categories collectively grew 14%. Action figures performed particularly well, driven by Jurassic, Minecraft, and WWE. Building sets grew, driven by the very successful Mattel Brick Shop launch. Games also grew, primarily driven by UNO, which achieved its tenth consecutive quarter of growth. Turning to the full year, total…

Thank you, Paul. We achieved strong top-line growth in the fourth quarter, and consumer demand was positive in every region for both the quarter and full year. But December gross billings in the US ended up growing less than expected. Our international business was positive for the year, and we gained market share in key categories globally. 2026 will be an important year for Mattel as we implement our new brand-centric strategy to grow our IP-driven play family entertainment business. We expect growth to be led by innovation in toys, major partnerships with leading IP owners, and an inflection in entertainment, with two movie releases and an expansion of digital games amplified by the full acquisition of Mattel 163 mobile games studio. We're making strategic investments that will impact the bottom line this year but are intended to accelerate growth in top and bottom lines in 2027 and beyond. I will now pass it to the operator for Q&A.

At this time, if you would like to ask a question, press star, then the number one on your telephone keypad. To withdraw your question, simply press star 1 again. Your first question comes from the line of Arpine Kocharyan with UBS. Please go ahead.

Hi. Thank you so much for taking my question. Good afternoon. I was wondering if you could unpack a little bit of revenue guidance. It seems like underlying growth is flat to up about 3% because JV integration adds around, by my calculation, about 33% of year-over-year growth. I guess, could you explain what does the lower end versus the higher end entail? Because it's a bit lighter than expectation given the strong film slate that you have, both third-party IP as well as own, as well as new licenses for this year? And then I have a quick follow-up.

Here. Can you hear me better now?

Yes. I can hear you now. I couldn't hear better. Okay. Yes. Now I can. Sorry. Thank you.

I was saying thank you for the question. We put together a plan for 2026 and expect to achieve 3% to 6% growth in constant currency. There are several drivers that we talked about in the prepared remarks, but I would highlight a few. First of all, it will be an important year for Mattel as we roll out our entertainment strategy. We're inflecting our entertainment strategy as part of our new brand-centric strategy to grow our IP-driven play and family entertainment business. We expect to grow in toys, a lot of new innovation, major partnerships with leading IP owners, and more growth in digital games, specifically self-publishing, as well as the integration and full ownership of Mattel 163. The key drivers by category will be vehicles and the action and challenger category as a whole, driven primarily by action figures and games, as well as Mattel Brick Shop, which will scale quickly within the building sets category. We are seeing growth expected to come from Hot Wheels, UNO, which are very strong drivers. So another strong year from these two very important brands for us. The major entertainment partnerships that we are scaling will be with K-Pop Demon Hunters, Pixar Toy Story, Disney Pixar Toy Story 5, and This is Supergirl. Also, I would highlight that we expect to see growth from Mattel Creations, our D2C platform, which serves adult fans and collectors with premium products. This will be another important year for us to scale that business. And, of course, we're very excited with the two movie releases based on our IP, Masters of the Universe in June, and Matchbox in October. Masters of the Universe particularly is expected to be very poetic. You know, the movie is tracking well. Too early to tell, of course, and you don't know until the movie is out. But so far, we couldn't be more excited with where the movie is positioned and the momentum we have heading into the year.

Great. Thanks, Ynon. And then, you know, it sounds like most of these $115,150,000,000 of reinvestment you have to make is in OpEx. And this is around a quarter of earnings space for you, so significantly large investment. You talked about these investments will become self-funding with high ROI starting in 2027. Can you maybe talk about what gives you confidence about returns as early as next year?

Yeah. So, you know, this is very consistent with our capital allocation priority. In fact, the number one priority is to drive organic growth. And this is exactly what we're doing here. We are putting capital behind very specific targeted opportunities where we see high ROI, high margin, opportunity to scale these businesses. And we expect all of these investments in aggregate to be profitable and accretive and contribute to bottom and top line in 2027. I would also say that these investments in areas like first-party data, D2C, breakthrough toy innovation, AI, and infrastructure that will support, and some of it will support specifically our challenger categories where we see white space open opportunities such as Mattel Brick Shop in building sets, investments in the games category, and more expansion with adult fans and collectors. These investments are flexible, very much in line with our capital-light strategy. We can modulate these investments and put more money to work where we see opportunities. Or conversely, adjust downwards if we don't see the return. But this entire plan follows a very rigorous assessment of these investments where we prioritize areas where we see asymmetric opportunity in terms of risk or level of investment relative to the upside. So we're going into this very excited. Yes, it will impact our bottom line in 2026, but we expect it to be highly accretive to both bottom and top line in 2027 and beyond.

Thank you very much.

Your next question comes from the line of Eric Handler with Roth Capital. Please go ahead.

Good evening. Thanks for the question. Ynon, I wondered if you could talk a little bit about the learnings that you're taking away from your partner NetEase and why you felt now was the right time to buy in that part of the joint venture?

Sure, Eric. You know, I should start and say that this is a very important strategic acquisition for Mattel. As you know, it's the first acquisition that we've done since we started the turnaround. And the reason it's important is that it is going to be something that will help us accelerate and scale a very important part of our digital strategy in self-publishing. We've seen the growth of Mattel 163, talked about it before. It was a very clear demonstration of the strength of our brands in the digital space when executed well. And we've been seeing the growth of the JV both in top line and profitability based on just three brands. Four games based on three brands. Very strong growth and high margin. And the acquisition of Mattel 163 or taking full ownership will meaningfully advance our capabilities and expertise. It will give us the ability to scale our business across both Mattel 163 and our self-publishing initiative. It will help us grow the output. It gives us economies of scale, more synergy, more opportunities for cross-promotion, and holistic management of the games that we're releasing into the market. And all of that is as part of expanding beyond physical play. It will allow us to capture full value of our IP in a high-margin, high-growth, highly accretive entertainment vertical. And when you do that and you build on top of the relationships we have already with strong publishers such as Take-Two, Xbox, Supercell, Netflix, Apple Arcade, a high-margin licensing business, as well as all of the work we're doing with the creative platforms such as Roblox and Fortnite, it's becoming an exciting growth driver for us as part of our entertainment strategy. Let me just add that, Eric, just one more comment on Mattel 163. You know, we said in the prepared remarks, and I want to emphasize that this is a highly accretive deal. Already, you know, upon closing immediately, both financially and strategically. The acquisition itself, the transaction we believe, is very favorable for Mattel. And as we mentioned, more than half of the acquisition cost is paid by cash that is sitting on the balance sheet of the JV, not on the Mattel balance sheet. So the actual cash outlay by Mattel is, you know, not significant, especially relative to the strategic value that we will generate from this acquisition.

Okay. And then just as a follow-up, I'm assuming the two games you have coming later this year are probably beta testing in a handful of international markets right now. Can you maybe talk about how those are going and when you think these games might see a full-scale launch?

Yes. We are targeting a soft launch in the first six months of the year. You know, with all these things, it's hard to tell until you're actually in the market. But so far, all the testing that we're doing and all the work that the team is driving, all of this looks very positive. But, again, it will all be tested in real-time. But so far, very happy with the progress. Games look great. They're testing well. And we're very proud of what we're seeing so far.

Thanks, Ynon.

Thank you, Eric.

Your next question comes from the line of James Hardiman with Citi. Please go ahead.

Hi. Good afternoon. Thanks for taking my questions. So I was hoping maybe we could just rewind a little bit and maybe any color you could give us on what you saw in December. Obviously, as of early December, it seemed like you were ultimately gonna hit the number. Maybe as we think about retail, you know, just how bad was the December performance? And then as we think about wholesale and ultimately inventory, trying to figure out if you finished 2025 in a position where, you know, there's cleanup to be done in 2026 just given sort of the sharp turns of retail. I don't know if we think about the 2026 guidance if there's some sort of cleanup involved in that number. Thanks.

Yeah. James, let me take that question. So let me just state very clearly that it's all about December in the US not growing as much as we expected. As simple as that. We expected strong growth in December, and we did see the growth in December, but it was less than anticipated in the US. And our full-year results finished below expectations. We also saw a more promotional environment than usual. Given the trends in the US in December, we took steps to manage our own inventory, including an increase in promotional activity, and that impacted our margins but it positions us well for 2026. Let me put this in context for you. POS was positive across every region, including the US, in Q4 and for the full year. The total company POS grew 3% for both the quarter and the full year. And then, specifically, entering, if we take a step back, 2025, as we know, was a very unique year that was marked by uncertainty in US trade dynamics and that affected retailer ordering patterns. So you had a specific question, what happened in December? We entered the fourth quarter and we saw an acceleration of retail orders and continued POS growth in Q4 that gave us confidence in achieving our full-year guidance. And remember that December, historically, is the biggest month of the year for POS. But because of the shift in retailer ordering pattern this year, orders were more back-end loaded and the volume of orders expected in December was significantly higher. In December, POS in the US finished lower than anticipated, and the retailers managed inventory more conservatively than we anticipated. On the positive side, having taken all those actions, we are in a good starting position for 2026. When it comes to our own inventory and through the promotional activities that we put in place, we also worked with the retailers to make sure that they have a balanced good starting position from a retail inventory perspective as well. So all these actions helped us have a good starting point for 2026.

That's helpful. And I guess along those lines then, you know, obviously, 2026 as we think about your operating income guidance or your EPS guidance is significantly short of, I think, where the street was thinking. A big part of that are the investments that you guys are gonna be making. But I guess if I think about 2026 as a transition year, I think you said 2027, maybe a double-digit, you know, operating income growth next year, but I'm still not sure that gets us back to, you know, even where we thought 2025 would be. So I guess maybe talk to the idea that not only is the 2026 guidance, feel like it's meaningfully worse than we would've thought a few months ago, but even sort of beyond 2026, feels like it's been downgraded to some degree based on some of the numbers that you've given. Is there something big picture that we haven't talked about yet that would lead to such a sort of downward revision?

Yeah. James, the outlook we provided for '27 is directional. When we talk about, excuse me, double-digit growth in profitability, it is directional. And, of course, we'll give you more information as we head closer to the start of '27. That said, the investments we're making in '26 are, we believe, will be highly accretive, as we said, and will help us drive meaningful growth both top and bottom line in 2027 and beyond. So, yes, we are going to see one-year impact in the bottom line given these investments. But they're all, we believe, not just get us back to normal, but will help us accelerate growth in top line and profitability. And this is on top of all the other things that we are doing as part of our day-to-day. In innovating in toys, growing our entertainment business, continuing to strengthen the company with more partnerships, entering more white space opportunities, and driving operational excellence. You know, we expect to be back at the 50% gross margin level in 2026. And we haven't guided to anything beyond that, but we do expect to see numbers and financials improving in '27 and beyond. The investments are designed to accelerate growth, not to underpin growth. And that will help us, you know, execute our strategy at a faster rate. And, again, very much in line with our capital allocation priorities, with the number one being investing in organic growth. So, you know, we've had that as the number one priority on the list for a number of years. And we actually are now doing it, having identified very clear measurable, high ROI, high margin, exciting opportunities for us to accelerate growth.

That's helpful color. Thank you.

Thank you, James.

Your next question comes from the line of Jarrett Johnson with Seaport Research Partner. Please go ahead.

Hey. Good morning. I'm sorry. Good afternoon. Yeah. I have a couple of questions here. First, can you give us how are you thinking about Masters of the Universe and Matchbox in your guidance? And maybe could you give us any sort of metrics or assumptions or guideposts that would help us model those?

Yeah. Hi, Jarrett. The Masters of the Universe movie will be a large global theatrical release. The movie will be, in fact, I would call it, you know, having seen the director's cut, very poetic. And, you know, the testing also, you know, testing that we've seen so far is very positive. And, again, I would caution and say, you don't know until the movie is actually in the market. But it's shaping up to be, you know, a very exciting movie. A big, you know, big event, big production, superhero, coming of age, incredible story. So we're very proud of the movie. Travis Knight, the director, is a big fan himself. And the way he designed and brought this movie to life, we will be able to speak to both the, you know, diehard generational fans all the way to new, new audiences, young audiences that have never seen the, you know, He-Man before. We're very excited about that. Matchbox will be released on Apple TV, so it will not have the theatrical exposure, but it's a great action movie. John Cena in the lead is just incredible. It's a great cast. Sam Hargreaves, the director, also did a masterful job in putting together a super exciting action movie. And there's a whole line of toys that will accompany the movie release. So we're very excited about both. You know, beyond the movies themselves, we are excited because, you know, when Masters of the Universe comes out, you will see the breadth of our offering. You know, from the pink world of Barbie all the way to the dark world of Eternia, and everything in between. And just the breadth of the genre and the execution, we believe, will be very, very telling. So, I'm not, I guess I'm not giving you specific numbers for modeling, but I'm trying to give you color on the opportunity and the potential of these two pictures.

Yeah. Okay. Alright. Okay. Did you say that first-quarter revenue was going to be down low single digits? Is that right?

Yes, Jarrett. That is exactly what I said. We expect a low single-digit decline in the first quarter, given the continued shift from direct import to domestic orders in the US, and the timing of the launch of new product lines.

Okay. Alright. Thank you.

Thank you, Jarrett.

Your next question comes from the line of Kylie Cohu with Jefferies. Please go ahead.

Hey. Thank you, you guys, for taking my questions. Just kind of pivoting back to Holiday for a moment. I'm curious how products under $20 performed relative to the big-ticket items. And just kind of any read-throughs on, you know, the customer or behavior and kind of customer health heading into 2026.

Yeah. I can take that question, Kylie. We saw an elevated retailer promotional environment in Q4. And what we did is we took actions to manage the inventory, both our own inventory and also to support our retail partners, which had a larger than anticipated impact on our margins and profitability. In general, for 2026, we expect to continue to see a promotional environment. And we are factoring this into our guidance. But very specifically, what we saw in December was a more promotional environment and a price-sensitive consumer looking for deals. And we reacted on a timely basis. That's what we've been doing season after season. And we did that to make sure that we have the right starting point from an inventory perspective for both us and the retailers.

Super helpful color. And then just a follow-up on that. How would you classify retail inventory levels now? I know you said that they were being conservative during the holidays, which kind of curious, are they continuing to be conservative so we're not kind of going to get a build-back of that? How should we kind of think about the health of the market right now?

Yeah. Retail inventories are lower in absolute terms compared to the prior year. So that's why we mentioned that the retailers are much more cautious in terms of inventory management. And we do continue to see a shift from DI to domestic into 2026. So we're observing those behaviors and the impact on our shipping carefully. And we are taking the learnings from 2025 and making sure that we have the proper plans in place to continue to drive growth.

Awesome. Super helpful. Thank you, guys.

Our next question comes from the line of Megan Clapp with Morgan Stanley. Please go ahead.

Hi. Good afternoon. Thanks so much. Just had a couple of questions. On SG&A, I wanted to start with, if I look at the implied SG&A guide for '26 and then think about the investments that you called out, I think the guide implies kind of core SG&A growth. If I take out the $150 million of investments, of, like, high single digits year over year, which I guess just feels a bit high to me relative to what you're expecting for the top line and considering you still have some tailwinds from your cost savings program. So maybe you could just start with just helping us understand as we think about kind of that underlying core SG&A guide, what's embedded in that?

Yeah. We did not necessarily provide a specific guide on SG&A, to be clear. What we talked about is that we are putting in place strategic investments to accelerate our profitable growth for 2026 and in '27 and beyond. So the majority of those investments are in the SG&A line, and we talked about the $110 million of investments in digital games. And we also talked about the $40 million in digital performance marketing that we are controlling. The ROI is measurable. We went through a thorough and very rigorous assessment process to make sure that they have a high return on investment. So all of those investments are gonna be something to consider in 2026. But you will see the return in 2027 and beyond. These are self-funding and will drive accelerated growth and profitability in '27 and beyond.

Okay. Fair enough. Maybe just as a follow-up there, wouldn't, and I know Arpine asked about it, but when you say these investments become self-funding, does this imply a net positive contribution to operating income or simply that kind of incremental spend moderates as revenue scales? I'm just trying to understand with this the 110 in particular, is that just structurally higher in the base coming out of '26, or do we kind of get any of that back as maybe some of these costs roll off in '27?

It's the former. Okay, Megan, and we are expecting those investments to be self-funding in 2027 and beyond, and drive accelerated growth in profitability.

Okay. Thanks.

Your next question comes from the line of Stephen Laszczyk with Goldman Sachs. Please go ahead.

Maybe as a follow-up on Mattel 163, Ynon, could you perhaps talk a little bit more about how you expect the strategy to evolve over time from where it's at today, perhaps in terms of the output of the studio or the type of game you hope the studio can produce? And maybe as a part of that, are there any additional investments you feel like need to be added into this studio or funding for capabilities to go after the opportunity you have in mind when making this acquisition?

Yeah, Stephen. What is unique about mobile games is that for a relatively low amount of investment, you can develop high-quality games without owning necessarily heavy production capabilities. So the capital invested in those games, we regard as light. What is more capital-intensive is user acquisition. But in today's world, this is all performance marketing with a very clear ROI. And you only spend the money to the extent you know it will achieve the results you're targeting. There is a lag in terms of investment relative to when you actually see the return, but it's highly measurable, and you have clear visibility into the expected return. We talked about publishing one to two games per year. We are already, as we said, targeting two games in 2026. We expect that the acquisition will increase the output, of course, give us more scale, in capabilities, resources, expertise, and at the same time, give us a built-in very high-quality team that can help us accelerate our business overall. So this is really about scale. It's about leveraging the combined resources and assets. It's about the cross-promotion and holistic management of our brands together, and as part of our brand-centric strategy. You know, the one thing that we didn't really cover here, though we mentioned today, is our brand-centric organization. This is really a new way of how we think about what we do and how we do that. It's about holistic management of our brands in order to capture value across both entertainment and toys, and creating a virtuous cycle where one feeds off the other. And it also helps us focus even more sharply on expanding beyond physical products. And so, when you bring it all together, more scale in digital games, more resources, more capabilities, more expertise, managed as part of a holistic brand management approach, we believe will benefit not just digital but also the toy business. And that's how you achieve the, you really create this virtuous cycle. As we said, the deal will be immediately accretive. The acquisition of Mattel 163 will be immediately accretive both strategically and financially. We expect it will be highly accretive going forward. And, you know, happy with the terms of the deal, that made it even more attractive, putting aside all the strategic benefits that we will drive.

Great. Thanks for that. And then Paul, just quickly, I wanted to see if there was any more help you can maybe give investors on the trajectory of margins throughout the year, just given your expectation for the underlying business and then some of the investments you're making in the cost structure, anything directionally would be helpful. Thank you.

Yep. Happy to do that. So first of all, on the gross margin line, we do expect the return of adjusted gross margin to approximately 50% in 2026. And that includes our OPG savings, the discipline that we constantly display in terms of cost management, the benefit of margin-accretive digital games that we're launching in 2026, and that would be partially offset by product cost inflation and the net tax relief impact of gross margin percentage to the target cost. But the important thing is to keep in mind, we are aiming for 50% gross margin in 2026. And then when it comes to 2027 and beyond, the investments are gonna deliver on the returns, and we are expecting to see profitable growth, i.e., an acceleration in growth and profitability as well.

Great. Thank you both.

Your final question comes from the line of Chris Horvers with JPMorgan. Please go ahead. Chris Horvers, your line is open.

Thanks very much. I'll squeeze them both in at the same time here. Can you talk a little bit about Barbie? I mean, if you think about the magnitude of the shift to the fourth quarter of orders, yeah, it was up slightly year over year and not compensated for the declines in the third quarter. What are you thinking about like the innovation? And when would you expect Barbie to return to growth? And then my, you know, modeling question is, basically, can you talk us through the dynamics of how the acquisition will play out in terms of, you know, grossing up revenues and, you know, how that affects the margin structure and of the business post-acquisition? Thanks very much.

Sure. Thank you, Chris, for the question. You know, Barbie saw improving trends in the fourth quarter. It was flat, although down for the year. It was impacted, as we said, by category trends, overall category trends in some non-core segments such as mini Barbie land. With that, you know, Barbie is the number one doll in the industry, has been so for the last five years. And we could not be more confident in Barbie's strength as one of the most recognized and beloved brands in modern culture, and that it will return to growth. You know, we guided for Barbie to be down in '26, although we will see improving trends. And then it will return to growth, healthy growth, in 2027. You know, there's a big part of our new brand-centric organization was, you know, keeping Barbie in mind and making changes that will put our best team and resources behind the brand. Barbie, as a brand, is healthy and poised for growth. When we launch a new doll or a new experience or a partnership, it's a cultural event. And we know how strong Barbie is. It really is about repositioning it for growth, executing our brand-centric strategy, and having multiple touchpoints around the brand, not just in toys, but around entertainment with more content, experiences, games, and other ways to drive fan engagement, and at the same time, also continue to broaden the demographics with adult fans and collectors. So very confident about Barbie's long-term growth trajectory. And we'll share more at the upcoming New York Toy Fair, even for 2026, but given the time lag and putting new product in the market, it will take a bit of time until we see the results of this work. But very confident about Barbie. In terms of the acquisition, I will let Paul address that. How do we consolidate the acquisition?

Thank you. So in terms of the acquisition, as we mentioned in the release, we expect in 2026 a partial year contribution of about $150 million in sales. And going forward, the equity method investment will be from Mattel's P&L. Royalties will be replaced by full-year revenue recognized by the JV. But more importantly, Mattel 163 Financial will be integrated into the business. We will not be providing specifics on Mattel 163. And this is part of our integral digital game strategy that is accretive from a top line and also from a margin perspective.

That concludes our question and answer session. We will now turn the call back over to Ynon Kreiz for closing remarks.

Thank you, operator. In closing, 2026 will be an important year for Mattel. It is an important year for Mattel already. And we will see growth in the top line while we are investing to accelerate growth in future years. These investments will help us accelerate the work that we're already doing, and we believe we'll see the result in 2027 and beyond. You know, there's one other thing I would like to call out, which we didn't really mention in the Q&A, is our share repurchase program of $1.5 billion that we plan to execute in the coming three years. This obviously reflects not just our cash position and cash flow generation, but also confidence in our plan and our ability to create long-term shareholder value while we continue to drive growth both top and bottom line. And with that, I thank you all for joining us today. And we'll talk again soon. Thank you.

Ladies and gentlemen, this concludes today's call. Thank you all for joining. You may now disconnect.