HAS 10-K & 10-Q changes, risk factors and insider trading

Our Playing to Win business strategy hasevolves evolvedaround our mission to focuscreate joy and community through the magic of play and inspiring a lifetime of play. We are focused on extending the reach of our toy and game products globally to improve our position in the marketplace, increase revenue and increase operating profit.

Failure to execute ourthis strategic plan may harm our business. Our ability to successfully implement and execute ourthese plans and initiatives in a timely basis, if at all, is dependent on many factors, including, among other things:

•our ability to successfully innovate, design, develop, price, commercialize and grow a focused group of brands to global consumers in a wide array of markets;

•our ability to successfully growgrowing and delivering on our digital gaming, licensing, and direct-to-consumersgaming business;

•our ability to optimizereturning our toy business to growth and increased profitability by optimizing the business, including through right-sizing our cost structure andstructure, creating efficiencies in our operations;operations, and designing cost-effective products.

A key component to the success of our strategy is to continue to develop, publish and commercialize digital games.games, including AAA/AA games, games as a service and licensed games based on our existing IP, as well as new and licensed IP. We have invested substantially in our digital gaming business and as a result it has seen significant growth over the past several years. Continued digital game development is a key growth factor for the future, including AAA games, games as a service and licensed games.business. If we are unable to continuesuccessfully to grow this businesslaunch and ensurecommercialize itsexisting integrationand withnew our other business segments,games, our business may be harmed. The digital gaming industry is highly competitive, including for talent, and costs associated with designing, developing and producing digital games and technologically advanced or sophisticated products tend to be higher than for many of our other more traditional products, such as board and trading card games and action figures, with no assurance of success. As a result, we face increased risk of not achieving sales sufficient to recover our costs and we may lose money on the development and sale of these products. There is no guarantyguarantee that a given game will be successful and it is possible we may cease development on a game after significant investment. As a result, we face the risk of significant write-offs in the event a digital game’s development is discontinued prior to commercialization or is not as commercially successful as we planned.

Designing, developing and producing digital gaming and other technologically advanced or innovative products often relies on third parties and requires different competencies and follows different timelines than traditional toys and games. Delays in the design, development or production of our digital gaming products or introduction of competitive digital game products in close proximity to our introduction could have a significant impact on our success. In addition,Further, the pace of change in product offerings and consumer tastes in the electronics and digital gaming areas is potentially even greater than for our other products and this pace of change is expected to accelerate as artificial intelligence is further incorporated into the development of games. If a digital game fails to gain consumer acceptance early in its life cycle, there are limited opportunities to gain such acceptance through secondary launches or distribution through alternative platforms. This pace of change or lack of consumer acceptance means that the window in which a digital gaming product can achieve and maintain consumer interest may be even shorter than traditional toys and games.

Third party licensees and partners of our brands or intellectual property may fail to honor their obligations to us or their actions may put us at risk.

Consumer interests change quickly and acceptance of toysour and games and entertainmentproduct offerings are influenced by technological and outside factors, making it difficult to design and develop innovative products, play patternsproducts and entertainmentother offerings which are and will continue to be popular with children, familiesfamilies, fans and audiences.

Our ability to successfully create innovative toysproducts andthat gamesinspire a lifetime of play is affected by the interests of children, families, fans and audiences which evolve quickly and can change dramatically from year to year and by geography. To be successful, we must correctly anticipate the types of products, play patterns and entertainment which will capture consumers’ interests and imagination, and quickly develop and introduce innovative and value driven products and engaging entertainment which can compete successfully for consumers’ limited time, attention and spending. It is very difficult to predict consumer acceptance with certainty due to, among other things, the increasing utilization of technology at younger and younger ages, social media and digital media in entertainment offerings,media, the increasing breadth of products and entertainment available to consumers, and outside factors such as influencers, critical reviews and promotions. Evolving consumer tastes and shifting interests, coupled with an ever-changing and expanding pipeline of products, technology and entertainment which compete for consumer interest and acceptance, create an environment in which some products, technology and entertainment offerings can fail to achieve consumer acceptance or can be popular during a certain period of time but then be rapidly replaced. As a result, our products and entertainment offerings can have short consumer life cycles with no guarantee of success. ConsumerIn acceptanceaddition, isfrequent evenproduct morereleases, criticalcross-brand forcollaborations or expanded licensing initiatives may contribute to franchise fatigue or oversaturation, which could reduce long-term consumer engagement and diminish the value of our toy business due to the recent decline in the overall toy industry and the impact of declining birthrates globally.brands. Failure to correctly anticipate consumer interests, will harm our revenues and earnings.

Rules governing new technologicalTechnological developments, such as developments in artificial intelligence remainand unsettled,shifts to streaming platforms for entertainment content, continue to evolve, and these developments may affect aspects of our existing business model, including revenue streams for the use of our intellectual property and how we create our products and games. As we incorporate AI tools into aspects of our business, including product and game development, we may face increased costs, operational complexity, IP and data governance challenges, and evolving regulatory requirements, any of which could adversely affect timelines, quality, or expected returns on investment. We may lose opportunities to capitalize on changing market dynamics, technological innovations or consumer tastes if we do not adapt to such changes in a timely manner. If we fail to accurately assess and effectively respond to changes in technology and consumer behavior in the markets in which we operate, our business may be harmed. The use of artificial intelligence in product and game development may also raise intellectual property, data sourcing, ethical or regulatory issues, and disputes or restrictions in these areas could increase costs, delay development or limit the use of certain technologies.

Failure to achieve of our anticipated cost-savings may impact our ability to operate efficiently and profitably.

In mid-2022, we committed to an operational excellence program focusing on designing and running a simple, efficient and effective business aligned with our strategy. There are no assurances that we will achieve cost savings in the amounts we anticipate or within the anticipated timeframes or at all. In addition, any cost savings that we realize may be offset, in whole or in part, by reductions in net sales or through increases in other expenses. Failure to realize the expected cost savings from these cost savings programs could have an adverse effect on our business, financial condition, and results of operations.

The industries in which we compete are highly competitive. If we are unable to compete effectively with existing or new competitors, our revenues, market share and profitability could decline.

The play industry is highly competitive, and if we fail to compete successfully, our business may be harmed. Our primary competition comes from toy and game companies, digital gaming companies and digital gaming developers. We compete with several large companies in our product categories, as well as with many smaller United States and international game and toy designers, manufacturers and marketers. In certain instances, we also compete with large retailers, who offer such products under their own private labels, often at lower prices. Competition is based primarily on meeting consumer preferences and on the quality and play value of our products and experiences.experiences, and, in some cases, the timing of release of other products and games that attract a similar consumer. To a lesser extent, competition is also based on product pricing. We expect that as the use of artificial intelligence becomes more prevalent, we will continue to see increased competition from those using such technology to develop games, toys and content.

In addition to existing competitors, the barriers to entry for new participants in the play industry are low,low. andThe the increasing importanceuse of digital media and the heightened connection between digital media and consumer interest, has further increased the ability for new participants to enter our markets, and has broadened the array of companies we compete with. NewFor example, with the use of influencers and media outlets such as Tik Tok, new participants with a popular product idea can gain access to consumers and become a significant source of competition for our products in a very short period of time. These existing and new competitors may respond more rapidly than us to changes in consumer preferences or may design products that are more desirable than ours. Our competitors’ products may achieve greater market acceptance than our products and potentially reduce demand for our products, lower our revenues and lower our profitability.

We cannot be certain that the products and offerings of companies we may acquire, or acquire an interest in, will achieve or maintain popularity with consumers in the future or that any such acquired companies or investments will allow us to more effectively market our products, develop our competencies or grow our business. In some cases, we expect that the integration of the companies that we may acquire will create production, marketing and other operating, revenue or cost synergies which will produce greater revenue growth and profitability and, where applicable, cost savings, operating efficiencies and other advantages. However, we cannot be certain that these synergies, efficiencies and cost savings will be realized. Even if achieved, these benefits may be delayed, reduced or short-lived in their realization. In other cases, we may acquire or invest in companies that we believe have strong and creative management, in which case we may plan to operate them more autonomously rather than fully integrating them into our operations. We cannot be certain that the key talented individuals at these companies would continue to work for us after the acquisition or that they would develop popular and profitable products, entertainment or services in the future. Acquisitions of businesses and brands could also be adversely affected by changes in our business strategy or external factors, such as any decision to sell, license or otherwise dispose of certain assets, such as our sale our Entertainment One film and television business ("eOne Film and TV") to Lions Gate Entertainment Corp., Lions Gate Entertainment Inc. and Lions Gate International Motion Pictures S.à.r.l (collectively "Lionsgate") in December 2023.assets. We cannot guarantee that any acquisition, disposition, license or investment we may make will be successful or beneficial, and acquisitions, dispositions, licenses and investments can consume significant amounts of management attention and other resources, which may negatively impact other aspects of our business.

Our business may be harmed by the imposition or threat of tariffs, including reciprocal or retaliatory tariffs, in markets in which we operate which could increase our product costs and other costs of doing business, reduce or delay purchases, impact consumer spending, or lower our revenues and earnings.

The current global tariff environment isremains uncertain. For products manufactured outside the U.S., tariffs increase the cost of our products. Tariffs may impact our sales and reduce our profitability. Tariffs may also impact consumer spending if products become more expensive or consumers have less discretionary income or consumer spending power. The current tariff environment, particularly the imposition or threat of tariffs on products manufactured in China for import into the U.S. as well the potential for retaliatory and reciprocal tariffs in other countries in which we do business, has in the past negatively impacted our business and may in the future negatively impact our business, sales and profitability. The threat and imposition of tariffs have resulted in the past, and may in the future result, in the elimination of some direct import orders, where customers take ownership of products near the source of supply and import the product themselves into the U.S., in favor of shifting to domestic orders, which requires us to ship the products to the U.S., and import and warehouse the products prior to delivery to the customer. This shift to domestic orders raises the cost to us, can result in delays in the time of a sale, and may result in the potential loss of some orders entirely due to the lack of timely supply or other delays. We cannot assure you that we will be able to successfully implement actions to lessen the impact of tariffs imposed on our products, including any changes to our supply chain, logistics capabilities, sales policies or pricing of our products.

In developing products, product lines and new brands we have anticipated dates for the associated product and brand introductions. When we state that we will introduce, or anticipate introducing, a particular product, product line or brand at a certain time in the future those expectations are based on completing the associated development, implementation, and marketing work in accordance with our currently anticipated development schedule. If we do not have in place,place appropriate systems and technology, or do not obtain sufficient data, analytics and insights, we may not be able to adequately predict demand for our products. If we fail to accurately forecast demand, we may experience excess inventory levels or a shortage of product to deliver to our customers. Inventory levels in excess of demand have in the past resulted in, and may in the future result in,in inventory write-downs or write-offs, and the sale of excess inventory at discounted prices or through less preferred distribution channels, which could harm our profit margins. If we do not operate our supply chain in an effective manner, we will not be able to manufacture, source and ship new or continuing products in a timely manner and on a cost-effective basis to meet constantly changing consumer demands. This risk is heightened by our customers’ compressed shipping schedules and the seasonality of our business.

TheWe riskare isimplementing exacerbatednew byoriginal design processes for some of our products in an effort to reduce costs and potentially enter into new or underserved markets. At the same time, we are also increasing sophistication of many of the brands and products we are designing and developing in terms of combining digital and traditional technologies, and providing greater innovation and product differentiation. Unforeseen delays or difficulties in the development process, significant increases in the planned cost of development, or changes in anticipated consumer demand for our products and new brands may cause the introduction date for products to be later than anticipated, may reduce or eliminate the profitability of such products, result in excess inventory, or, in some situations, may cause a product or new brand introduction to be discontinued.discontinued or not introduced in certain markets.

We have periodically faced global supply chain challenges with the production and delivery of some products being delayed due to logistics, including labor, trucking and container shortages, strikes, port congestion and other shipping disruptions. We experienced increases in material costs and shortages for some of our products, due in part to higher wages being paid due to labor shortages in China and Vietnam, as well as periodic and unpredictable manufacturing shut-downs or slow-downs due to COVID-19, political instability in certain port regions and tariffs. We attempt to take actions to lessen the impact of these supply chain challenges, such as through the use of alternative ports and air freight, and adjusting inventory purchases in certain cases to ensure product availability for customers, though these actions have resulted and may in the future result in higher costs. We have also increased prices in some cases to help offset increased costs. We can provide no assurance that we will be able to take actions, such as increase pricesprices, in the future and we cannot assure that price increases we have already taken, willto offset the entirety of additional costs we have incurred, and may incur in the future to mitigate the supply chain disruption. Further, if we are unable to negotiate favorable carrier agreements, deliver products on time or otherwise satisfy demand for our products, our business may be harmed.

If we are unable to adaptexpand our businessdirect-to-consumer to the continued shift to direct-to-consumer,relationships, our business may be harmed.

We depend upon a relatively small customer base to sell the majority of our products. During 2024,2025, Wal-Mart,Amazon.com, Inc. and Amazon.com,Wal-Mart, Inc. accounted for approximately 12%11% and 11%,9%, respectively, of our consolidated net revenues. Similarly, sales of certain products of our Wizards business depend in part on the success of specialty hobby stores. Due to our customer concentration and customer base, if one or more of our major customers or specialty hobby stores were to experience difficulties in fulfilling their obligations to us, cease doing business with us, significantly reduce the amount of their purchases from us, favor competitors or new entrants, increase their direct competition with us by expanding their private-label business, change their purchasing patterns, impose unexpected fees on us, alter the manner in which they promote our products or the resources they devote to promoting and selling our products, or return substantial amounts of our products, our business may be harmed.

Our customers generally do not makeenter into binding long-term purchase commitments towith us regarding purchase volumes and make all purchases by delivering purchase orders. Any customer could reduce its overall purchase of our products and reduce the number and variety of our products that it carries and the shelf space allotted for our products. In addition, increased concentration among our customers could negatively impact our ability to negotiate higher sales prices for our products and could result in lower margins than would otherwise be obtained if there were less consolidation among our customers. Furthermore, as we experienced with the bankruptcy of certain of our retailers in the past, the failure or lack of success of a significant retail customer could negatively impact our revenues and profitability.

We operate facilities and sell products and entertainment offerings in numerous countries outside the U.S. Additionally, we utilize third-party manufacturers primarily located in the Far East, including China, Vietnam and India, to produce most of our products. These international operations, including operations in emerging markets, have unique consumer preferences and business climates, present additional challenges and are subject to risks that may significantly harm our sales, increase our costs or otherwise damage our business, including:

Our reliance on third-party manufacturers to produce our products, particularly in China, the U.S., Vietnam and India, presents risks to our business.

Most of our toy and game products are manufactured by third-party manufacturers, thea majoritysubstantial but decreasing number of which are in China, withand a significant amount of our product sourcing also coming from manufacturers in the U.S., Vietnam, India and Japan. Should changes be necessary, our external sources of manufacturing can be shifted,shifted over a significant period of time,time to alternative sources of supply. Working with vendors who have not historically manufactured products for us means these new vendors must successfully develop the capability to manufacture our products to the quality and safety standards we require and within the tight timeframe required by our customers. Newer and less experienced vendors are more susceptible to product quality, logistics and other issues, due in part to their less mature infrastructure or unfamiliarity with our product standards. In addition, our increased use of original design manufacturers ("ODMs") to support cost efficiency and speed to market may reduce our direct control over product design, quality, sourcing and manufacturing processes, and any failure by ODM partners to meet our design specifications, quality standards, delivery requirements or compliance obligations could adversely affect our products, brand reputation, margins and results of operations.

Given that our toy and game manufacturing is conducted by third-party manufacturers, health conditions and other factors affecting social and economic activity where our manufacturers are located may affect the movement of people and products into and from those locations to our major markets, including North America and Europe. The suspension of the operations of a third-party manufacturer by government inspectors in China or another market in which we source products could result in delays to us in obtaining product and may harm sales. Further, increases in the costs of labor and other costs of doing business in markets where we manufacture, could also have a significant negative impact on our operations, revenues and earnings. Prolonged disputes or slowdowns at west coast or other ports can negatively impact both the time and cost of transporting goods into the U.S. Natural disasters or health pandemics impacting our manufacturers had and can have a significant negative impact on our business.

As a part of our transformation efforts to reduce costs, achieve operational efficiencies, and increase productivity and service quality, weWe have relied and expect to further rely on third partythird-party vendor and outsourcing relationships for certain corporate, administrative and other functional areas of the business. Working with third-parties for these critical areas subjects us to risk, including the reduction in full control over certain activities. Any failure to perform timely or accurately or other shortcoming of one of these vendors or outsourcers, could harm our business or could damage our reputation. Transitioning some of these services to a third-party outsourcing vendor is challenging and time-consuming. Problems with transitioning these services and systems to, or operating failures with, these vendors and outsourcers may cause delays to product sales and reduce the efficiency of our operations. We may not achieve the cost-savings we expect, and we may suffer knowledge loss and require significant capital investments to remediate the problem. We cannot guarantee that our outsourcing efforts will be successful.

Our officers and employees are at the heart of all our efforts. It is their skill, innovation and hard work that drive our success. We compete with many other potential employers in recruiting, hiring and retaining our management team and our many other skilled officers and employees around the world. Experienced personnel and top creative talent in the markets in which we operate are in high demand and competition for their talent is intense. The possibility of moving our corporate headquarters may impact our ability to retain and attract key employees. Further, the continuing debate and practice of remote and hybrid work creates further challenges in retaining employees as some employees desire more flexibility in their employment and the ability to work remotely or hybrid opens up more employment opportunities.

As we continue to transform our business to execute on our strategic plan, we have reduced our headcount and may otherwise lose employees due to our decision to eliminate or reduce the amount of work performed relative to non-core aspects of our business and the optimization of our business. The impact of the planned move, recent reductions in workforce or failing to retain key employees can be high due to increased risk of loss of important information, key knowledge and relationships, loss of creative talent, lost productivity, hiring and training costs, all of which could result in lower efficiency, profitability or otherwise harm the business. We cannot guarantee that we will recruit, hire or retain the key personnel we need to succeed.

We rely extensively on various information technology systems and software applications to manage many aspects of our business, including product development, management of our supply chain, sale and delivery of our products, analytics, royalty and financial reporting and various other processes and transactions. As part of our transformation efforts, we are upgradingcontinuing to upgrade some of our technology and systems, and we are relying on the systems of third-party outsourcers for certain critical functions. We are critically dependent on the integrity, security and consistent operations of these systems and related back-up systems. These systems are subject to damage or interruption from power outages, computer and telecommunications failures, computer viruses, malware and other cybersecurity attacks and breaches, catastrophic events such as hurricanes, fires, floods, earthquakes, tornadoes, acts of war or terrorism and usage errors by our employees or partners. The efficient operation and successful growth of our business depends on these information systems, including our ability and the ability of our third-party outsourcers to operate them effectively and to select and implement appropriate upgrades or new technologies and systems and adequate disaster recovery systems successfully. The failure of our information systems or third-party hosted technology to perform as designed or our failure to implement and operate them effectively could disrupt our business, require significant capital investments to remediate a problem or subject us to liability.

We and our third-party outsourcers and other business partners maintain significant amounts of data electronically in locations around the world and in the cloud. This data relates to all aspects of our business, including current and future products and entertainment under development, and also contains certain customer, consumer, supplier, partner and employee data. We and our partners maintain systems and processes designed to protect this data, but notwithstanding such protective measures, there is a risk of intrusion, cyber-attacks or tampering that could compromise the integrity and privacy of this data. Cyber-attacks continue to increase in their frequency, sophistication and intensity, and are becoming increasingly difficult to detect. They are often carried out by motivated, well-resourced, skilled and persistent actors, including nation states, organized crime groups, “hacktivists” and employees or contractors acting with malicious intent. Cyber-attacks could include the deployment of harmful malware and key loggers, ransomware, a denial-of-service attack, a malicious website, artificial intelligence, the use of social engineering and other means to affect the confidentiality, integrity and availability of our or third-party technology systems and data. Cyber-attacks could also include supply chain attacks, which could cause a delay in the manufacturing of our products. In addition, we provide confidential and proprietary information to our third-party outsourcers and business partners in certain cases werewhere doing so is necessary to conduct our business. While we obtain assurances from those parties that they have systems and processes in place to protect such data, and where applicable, that they will take steps to assure the protections of such data by third parties, those outsourcers and partners may also be subject to data intrusion or otherwise compromise the protection of such data. The risk of data loss or breaches is heightened during uncertain economic times, changes in business strategy and reductions in workforce. Any compromise of the confidential data of our customers, consumers, suppliers, partners, employees or ourselves, or failure to prevent or mitigate the loss of or damage to this data through breach of our third party outsourcers and other business partners’ information technology systems could substantially disrupt our operations, harm our customers, consumers, employees and other business partners, damage our reputation, violate applicable laws and regulations, subject us to potentially significant costs and liabilities and result in a loss of business that could be material.

This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements concerning the Company’s expectations and beliefs. SeeRefer to “Statement Regarding Forward-Looking Statements” and Part I, Item 1A. Risk Factors, of this Form 10-K for a discussion of other uncertainties, risks and assumptions associated with these statements.

The following includes a comparison of our consolidated results of operations for fiscal years 20242025 and 2023.2024. For a comparison of our consolidated results of operations for fiscal years 20232024 and 2022,2023, seerefer to Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, of our Annual Report on Form 10-K for the fiscal year ended December 31,29, 2023,2024, filed with the SEC on February 28,27, 2024.2025. Unless otherwise specifically indicated, all dollar or share amounts herein are expressed in millions of dollars or shares, except for per share amounts.

The fiscal yearyears ended December 28, 2025 and December 29, 2024 waswere aboth fifty-two week period and fiscal year December 31, 2023 was a fifty-three week period.periods.

Hasbro Inc. ("Hasbro") is a leading game,games, IP,intellectual property ("IP"), and toy company whose mission is to create joy and community through the magic of play. With over 100 years of expertise, we deliver play experiences forto kids, families, and fans of all ages around the world, through physical and digital games, video games, toys, licensed consumer products, location-based entertainment, film, TV and more.

We generate revenue and earn cash by developing, marketing, licensing and selling products, play and entertainment experiences, based on our global brands as well as other IP in a broad variety of categories. This includes: innovative toy and gaming brands and role-playing and fantasy card collecting games; the marketing and sale of toys and games, including our owned and partner brands, through retail stores, ecommerce platforms and Hasbro Direct,PULSE, our direct-to-consumer platform; the distribution, license and sale of digital games developed both internally and through licensing out our IP to third parties, such as Baldur's Gate 3, Monopoly Go! and Magic: The Gathering Arena and other digital games; and entertainment content. Additionally, the Company generates revenue through licensing our brands to third parties for toys and games, consumer products, such as apparel and publishing, as well as for use in theme park attractions and other forms of location-based entertainment and within formats such as film and TV programming.

Consolidated net revenues for the year ended December 29,28, 20242025 decreasedincreased 17.3%13.7% to $4,135.5$4,701.3 million from $5,003.3$4,135.5 million for the year ended December 31,29, 2023,2024, primarily driven by agrowth $579.0of $675.6 million, or 88%, decline in the Entertainment segment as a result of the sale of the eOne Film and TV business during the fourth quarter of 2023 and a $342.5 million, or 12%, decline in the Consumer Products segment, partially offset by a $53.7 million, or 4%, increase44.7%, in the Wizards of the Coast and Digital Gaming segment. SeeThis growth was offset by a $106.3 million, or 4.2%, decrease in the Consumer Products segment, as well as a $3.5 million, or 4.4%, decrease in the Entertainment segment. Refer to the Segment Results discussion below for further details.

The following table presents net revenues expressed in millions of dollars, by brand portfolio category for 20242025 and 20232024:

PartnerOptimize Brands: PartnerOptimize Brands includerepresent thoseopportunities to maintain or grow share while improving operating profit returns, including brands we license from other parties for which we develop toy and game products. Partner brand revenues fluctuate based primarily on the entertainment releases around these brands in any given year, such as MARVEL,TRANSFORMERS, includingPEPPA SPIDER-MANPIG, and THE AVENGERS, LUCASFILMS'Lucasfilms' STAR WARS, BEYBLADE, GHOSTBUSTERS, and INDIANA JONES.WARS. The PartnerOptimize Brands portfolio net revenues decreased 15%4.6% in 20242025 as compared to 2023.2024. During 2024,2025, PartnerOptimize Brands net revenue decreases were driven by lower net revenues from the Company's products for STAR WARSWARS, andimpacted MARVEL which benefited fromby a broaderreduced slate of entertainment releasesreleases, along with declines from PEPPA PIG and BABY ALIVE. The net revenue decrease was partially offset by continued growth in prior years without a more recent release entertainment release to support revenue in 2024. Additionally, revenue in 2023 was higher due to the Company's products for INDIANA JONES supported by the June 2023 theatrical release of Indiana JonesTRANSFORMERS and theDUEL Dial of Destiny.MASTERS.

Cost of Sales: Cost of sales primarily consists of purchased materials, labor, manufacturing overhead and other inventory-related costs such as obsolescence. Cost of sales decreasedincreased 30.9%9.9% to $1,296.2 million, or 27.6% of net revenues, for 2025 compared to $1,179.5 million, or 28.5% of net revenues, for 2024 compared to $1,706.0 million, or 34.1% of net revenues, for 2023.2024. The Cost of sales decreaseincrease in dollars and as a percent of net revenues was driven primarily by lower sales volumes, lower inventory obsolescence charges, supply chain productivity, and cost savings initiatives,volumes and a $26.7 million benefit recorded during 2024 related to a historical over-accrual of vendor commitment liabilities as discussed in Note 1, Summary of Significant Accounting Policies, in our notes to consolidated financial statements. Additionally, Cost of sales for 2025 includes $44.9 million of tariff costs. These factors were offset by supply chain productivity and cost savings initiatives.

Program Cost Amortization: Program cost amortization totaled $35.8 million, or 0.8% of net revenues in 2025, compared to $49.3 million, or 1.2% of net revenues in 2024, compared to $448.9 million, or 9.0% of net revenues in 2023.2024. The majority of the Company's program costs are capitalized as incurred and amortized using the individual-film-forecast method. The Company also utilizes the percentage of completion methodology, primarily related to unscripted content. Program cost amortization reflects both the phasing of revenues associated with films and television programming, as well as the type of content being produced and distributed. The decrease in dollars and as a percent of net revenues during 20242025 was driven by thereduced impactcontent of the sale of the eOne Film and TV business during the fourth quarter of 2023 as prior year Program costs were primarily associated with the eOne Film and TV business.spend.

Royalties: Royalty expenseRoyalties totaled $368.9 million, or 7.8% of net revenues, in 2025 compared to $284.2 million, or 6.9% of net revenues, in 2024 compared to $428.3 million, or 8.6% of net revenues, in 2023.2024. Fluctuations in royalty expense generally relate to the volume of entertainment-driven products sold in a given period, especially if the Company is selling product tied to one or more major motion picture releases in the period.period, as well as product mix for our toy, game, and trading card products that utilize partner IP. The decreaseincrease in Royalty expenseRoyalties in dollars and as a percent of net revenues during 20242025 directly reflects the impact of theincreased salesales ofrelating to MAGIC: THE GATHERING Universes Beyond sets, such as Final Fantasy, Avatar: The Last Airbender and Marvel's Spider-Man, for which the eOneCompany Filmis andobligated TVto business.pay a royalty.

Product Development: Product development expense in 20242025 totaled $385.6 million, or 8.2% of net revenues, compared to $294.1 million, or 7.1% of net revenues, compared to $306.9 million, or 6.1% of net revenues, in 2023.2024. Product development expenditures reflect the Company’s investment in innovation and anticipated growth across our brand portfolio. The decreaseincrease in Product development expense during 20242025 was driven by costincremental savingsinvestments initiatives,in alongthe with phasingdevelopment of productdigital releases.game titles that have not yet met technological feasibility.

Advertising: Advertising expense in 20242025 totaled $319.5$316.9 million, or 7.7%6.7% of net revenues, compared to $358.4$319.5 million or 7.2%7.7% of net revenues in 2023.2024. The level of the Company’s advertising expense is generally impacted by revenue mix, as well as the amount and type of theatrical releases and television programming delivered. The Advertising expense decrease during 20242025 was primarily driven by the saleConsumer Products segment, which decreased $30.3 million, as the Company sought measures to reduce variable expenses to offset the operating profit impact of tariffs. The reduction in Consumer Products spend was offset by additional spend necessary to support top line growth opportunities within the Grow Brands category, specifically an increase of $28.8 million within the Wizards of the eOne FilmCoast and TVDigital business,Gaming along with declines in the advertising expense in the Consumer Products segment due to lower net revenues.segment.

Loss on Disposal of Business: Loss on disposal of business decreased to $25.0 million, or 0.5% of net revenues, in 2025 compared to $37.4 million, or 0.9% of net revenues, in 2024 compared to $539.0 million, or 10.8% of net revenues, in 2023.2024. The Loss on disposal of business for both periods represents the loss recognized associated with the saledivestiture of the Company's non-core film and TV business (the "eOne Film and TV business") within the Entertainment segmentsegment. duringRefer 2023. Seeto Note 3, Sale of Entertainment One Film and TV Business, in our notes to consolidated financial statements for additional information on the sale of the eOne Film and TV business.

Selling, Distribution and Administration Expenses: Selling, distribution and administration expenses decreased to $1,173.9 million, or 25.0% of net revenues in 2025, from $1,213.2 million, or 29.3% of net revenues in 2024, from $1,480.4 million, or 29.6% of net revenues, in 2023.2024. The decrease in Selling, distribution and administration expenses in dollars and as a percent of net revenues during the2025 compared to 2024 primarily reflects lower administrative expenses due to cost savings initiatives, a prior year intangible asset impairment charges of $65.0 million related to the Company's eOne trademark intangible asset and $51.0 million related to the Company's PJ MASKS intangible asset, along with a non-recurring stock-compensation favorable adjustment of $18.1 million recorded during the first quarter of 2024, partially offset by a non-recurring $31.1 million expense related to historical environmental exposures recorded during 2024, partially offset by a non-recurring stock-compensation adjustment of $18.1 million recorded during 2024, as discussed in Note 1, Summary of Significant Accounting Policies, in our notes to consolidated financial statements.

NON-OPERATING EXPENSE (INCOME)

Interest Income: Interest income was $28.6 million in 2025 compared to $47.3 million in 20242024. compared to $23.0 million in 2023. HigherLower Interest income in 20242025 primarily reflects earnings on the Company's investments in U.S. Treasury bills, which were substantially higher average interest rates in 2024 when compared to 2023, along with the Company's investment in short-term treasury bills in connection with the issuance of the 2034 Notes that fully matured in the fourth quarter of 2024 (see Liquidity and Capital Resources discussion below for further information including description of the 2034 Notes).2025.

Other Expense,(income) expense, Net: Other expense,income, net was $21.7 million in 2025 compared to other expense of $69.1 million in 2024 compared to2024. Other (income) expense, net of $7.0 million in 2023. The change in Other expense, net during 2024 was driven primarilyimpacted by an impairment loss of $78.2 million related to our joint venture investment in the Discovery Family Channel as discussed in Note 8,9, Equity Method Investment, in our notes to consolidated financial statements. The remainder of the change in Other (income) expense, net was primarily driven by foreign currency exchange gains and losses experienced during 2025 as compared to those experienced during 2024.

SubsequentWe previously considered the earnings in our non-U.S. subsidiaries to thebe Unitedindefinitely Statesreinvested passingand, theaccordingly, Taxrecorded Cutsno anddeferred Jobsincome Act (the "Tax Act"), the Company has greater flexibility to manage cash globally. The Company intends to repatriate the accumulated foreign earnings as needed from time to time.taxes. The Company still has significant cash needs outside the United States and continues to consistently monitor and analyze its global working capital and cash requirements. However, we intend to repatriate substantially all of our accumulated foreign earnings when appropriate. As of 2024,December 28, 2025, we have recorded $4.6$5.3 million of foreign withholding and U.S. state income tax liability. The Company will continue to record additional tax effects, if any, in the period that the on-goingongoing distribution analysis is completed and is able to make reasonable estimates.

The summary that follows provides a discussion of the results of operations of our segments: Consumer Products, Wizards of the Coast & Digital GamingGaming, Consumer Products and Entertainment. Corporate and Other, which does not meet the criteria to be an operating segment, provides management and administrative services to the Company's principal reporting segments and consists of unallocated corporate expenses and administrative costs and activities not considered when evaluating segment performance as well as certain assets benefiting more than one segment.

Entertainment segment net revenues decreased 88%4.4% in 20242025 compared to 20232024, primarily driven by lowerthe net revenues as a resulttiming of theentertainment salestreaming of the eOne Film and TV business during the fourth quarter of 2023.renewals.

We and our third-party manufacturers and other business partners maintain significant amounts of data electronically in locations around the world and in the cloud. This data relates to all aspects of our business, including current and future products and entertainment under development, and also contains certain customer, consumer, supplier, partner and employee data. We and our partners maintain systems and processes designed to protect this data, but notwithstanding such protective systems and processes, there have been, and in the future may be, intrusions, cyber-attacks, tampering, or other authorizedunauthorized access, whether intentional or unintentional, that have compromised, and could in the future, compromise the integrity and privacy of this data. Intrusions, cyber-attacks, tampering, and other unauthorized access continue to increase in frequency, sophistication and intensity, and are becoming increasingly difficult to detect and prevent. They are often carried out by motivated, well-resourced, skilled and persistent actors, including nation states, organized crime groups, “hacktivists” and employees or contractors acting with malicious intent. Intrusions, cyber-attacks, tampering, and other unauthorized access could include the deployment of harmful malware and key loggers, ransomware, a denial-of-service attack, a malicious website, artificial intelligence, the use of social engineering and other means to affect the confidentiality, integrity and availability of our or third-party technology systems and data. Intrusions, cyber-attacks, tampering, and other unauthorized access could also include supply chain attacks, which could cause a delay in the manufacturing of our products. In addition, we provide confidential and proprietary information to our third-party manufacturers and business partners to conduct our business. While we obtain assurances from those parties that they have systems and processes in place to protect such data, and where applicable, that they will take steps to assure the protections of such data by third parties, those manufacturers and partners may also be subject to data intrusion or otherwise compromise the protection of such data. The risk of data loss or breaches is heightened during uncertain economic times, changes in business strategy and reductions in workforce. Any compromise of the confidential data of our customers, consumers, suppliers, partners, employees or ourselves, or failure to prevent or mitigate the loss of or damage to this data through breach of our information technology systems, or those of our third party manufacturers and other business partners, as well as any related security incident response, containment, remediation, or mitigation efforts, could substantially disrupt our operations, result in delays of shipping products, result in delays in making or receiving payments, harm our customers, consumers, employees and other business partners, damage our reputation, violate applicable laws and regulations, subject us to potentially significant costs and liabilities and/or result in a loss of business that could be material.

For example, in late March 2026, we identified unauthorized access to our network. Upon discovery, we promptly activated our security incident response protocols, implemented containment measures, including proactively taking certain systems offline, and launched an investigation with the assistance of third-party cybersecurity professionals. Based on analysis with the assistanceAs of outsideJune cybersecurity28, experts and information to date, we believe2026, the unauthorized access has been contained and wethe areCompany making progress inhas fully restoringrestored our systems and returned to standard business operations.

DespiteAny ourfurther effortsincidents to control and remediate the impacts and risks related to theof unauthorized access tocould ourresult network, the duration and magnitude of the related operational disruption may be greater than we currently anticipate; the effectiveness of our response, our business continuity plans and our ongoing assessment of the impact of the unauthorized access may be inadequate and thus fail to preventin adverse effects on our business, operations, financial results, and financial reporting; and any further impacts related to the unauthorized access or other similar unauthorized activity may result in increased costs, including from any legal proceedings. For more information, refer to Part I, Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operation – Unauthorized Network Access” and Note 2 "Unauthorized Network Access.”"

Hasbro, Inc. (“Hasbro”) is a leading game, intellectual property ("IP"), and toy company whose mission is to create joy and community through the magic of play. With over 100 years of expertise, we deliver play experiences to kids, families, and fans around the world, through physical and digital games, video games, toys, licensed consumer products, location-based entertainment, film, TV and more.

In fiscal year 2025, we launched our refreshed strategy "Playing to Win" to refocus the Company on inspiring a lifetime of play across more categories, more partners, and more ways to engage. Through play fueled brand engagement and partner scaled co-investment, including video games, artificial intelligence ("AI"), enabled entertainment, and licensing, we plan to expand our consumer reach as a games, IP, and toy company.

In the first quarterhalf of 2026, wewe've made exciting new steps on executing the Playing Toto Win strategy, including:

Significant changes in trade policy announced by the U.S. government could adversely impact our forward-looking financial results. The Company monitors the impact of tariffs to its business operations on an ongoing basis and may need to implement actions such as price adjustments or making changes in our supply chain sourcing strategies in order to mitigate the impact of tariffs in future periods. The impacts of tariffs may lead to reduced economic activity, increased costs, reduced demand and changes in purchasing behaviors for some or all of our products, actual or potential impairments, write-downs or unrealizability of some of our existing assets, or other economic outcomes that could have a material adverse impact on our sales volumes, prices, and our financial results. During the first three and six months of 2026, the Company recognized approximately $8.3$9.4 million and $17.7 million of tariff costs within Cost of sales.sales, respectively.

In late March 2026, wethe Company identified unauthorized access to our network. Upon discovery, wethe Company promptly activated ourits security incident response protocols, implemented containment measures, including proactively taking certain systems offline, and launched an investigation with the assistance of third-party cybersecurity professionals. Based on analysis withSimultaneously, the assistanceCompany implemented its business continuity plans, including manual ordering and processing procedures at a reduced rate of outsideoperations cybersecurityin experts and informationorder to date,continue weservicing believeits the unauthorized access has been contained and we are making progress in fully restoring our systems and operations.customers.

The Company experienced an increase inCompany's revenue increased from $887.1$980.8 million for the three months ended MarchJune 30,29, 2025 to $1,000.2$1,139.6 million for the three months ended MarchJune 29,28, 2026. The increase in revenue is driven primarily by growth in our Wizards of the Coast and Digital Gaming segment, inclusivespecifically of increased demand for bothwithin tabletop andgaming licenseddriven digitalby gaming.Magic: The Gathering.

The CompanyCompany's alsorevenue had an increase in operating profitincreased from $170.7$1,867.9 million for the threesix months ended MarchJune 30,29, 2025 to $270.3$2,139.8 million for the threesix months ended MarchJune 29,28, 2026. ThisThe increase in operating profitrevenue is driven primarily driven by the revenue growth discussedin above,our asWizards well as benefits from cost savings initiatives that have occurred overof the lastCoast 12and months.Digital Gaming segment, specifically within tabletop gaming.

See below for further discussion on the consolidated and segment results of operations for the three and six months ended MarchJune 29,28, 2026 and MarchJune 30,29, 2025.

The following table presents the consolidated results of operations for the three months ended MarchJune 29,28, 2026 and MarchJune 30,29, 2025:

Net revenues – Net revenues for the firstsecond quarter of 2026 increased 12.7%16.2% to $1,000.2$1,139.6 million from $887.1$980.8 million for the firstsecond quarter of 2025 primarily driven by growth of $119.9$141.4 million, or 25.9%,27.1%, in the Wizards of the Coast and Digital Gaming segment and $20.6 million, or 4.7%, in the Consumer Products segment. This growth was partially offset by a $6.4$3.2 million, or 24.0%,20%, decrease in the Entertainment segment as well as a $0.4 million, or 0.1%, decrease in the Consumer Products segment. See the Segment Results discussion below for further details.

(1) During the first quarter of 2026, the classification of brands within these categories was reviewed and certain brands were reclassified based on changes in growth, profitability or other characteristics. As such, the respective historical revenues associated within these brands has been reclassified into the brands' new brand category.

GROW BRANDS: Net revenues in the Grow Brands portfolio increased $126.7$164.3 million, or 19.2%,22.2%, in the firstsecond quarter of 2026, compared to the firstsecond quarter of 2025. The net revenue increase primarily reflects higher net revenues from MAGICMagic: THEThe GATHERING,Gathering, which grew by $123.3$133.3 million, or 35.6%,32.3%, driven by strong performance of theSecrets Lorwynof EclipsedStrixhaven, andas well as the Teenage Mutant Ninja Turtles Universes Beyond Marvel Super Heroes set released during the quarter. Growth in this category was also impacted by increased demand in toys and games associated with the licensed Marvel and Star Wars brands, driven by a strong content slate in 2026 with no comparable releases in the firstprior quarter of 2026.year.

OPTIMIZE BRANDS: Net revenues in the Optimize Brands portfolio decreased $3.8$8.2 million, or 2.9%,5.1%, in the firstsecond quarter of 2026, compared to the firstsecond quarter of 2025, driven by lower net revenues from TRANSFORMERSPlay-Doh and PLAY-DOH.Duel Masters. The declines were partially offset with an increase in net revenue from GI JOE.Joe.

REINVENT BRANDS: Net revenues in the Reinvent Brands portfolio decreasedincreased $9.8$2.7 million, or 10.3%,3.4%, in the firstsecond quarter of 2026 compared to the firstsecond quarter of 2025. The net revenue decreaseincrease is primarily driven by lowerhigher product sales for Beyblade and other vault brands, partially offset by higherlower sales in BEY BLADENerf and NANOMALS.Furby.

Cost of sales – Cost of sales for the firstsecond quarter of 2026 was $236.1$272.4 million, or 23.6%23.9% of net revenues, compared to $204.5$225.3 million, or 23.1%23.0% of net revenues, for the firstsecond quarter of 2025. The increase in cost of sales was primarily the result of an increase in net revenues period over period, shift in product mix, as well as approximately $8.3$9.4 million of incremental cost related to the impacts of tariffs, primarily as it relates to products imported into the United States to be sold domestically.

Program cost amortization – Program cost amortization decreased to $4.0$3.1 million, or 0.4%0.3% of net revenues, for the firstsecond quarter of 2026 from $7.4$6.2 million, or 0.8%0.6% of net revenues, for the firstsecond quarter of 2025. Program costs are capitalized as incurred and amortized primarily using the individual-film-forecast method which matches costs to the related recognized revenue and is based upon the current slate of entertainment projects.

Royalties – Royalties for the firstsecond quarter of 2026 increased to $77.7$89.9 million, or 7.8%7.9% of net revenues, compared to $57.0$84.5 million, or 6.4%8.6% of net revenues, for the firstsecond quarter of 2025. The increase in Royalties during the firstsecond quarter of 2026 was directly driven by an increase in sales relating to MAGICMagic: THEThe GATHERINGGathering Universes Beyond sets, includingsuch Finalas Fantasy,Marvel Avatar:Super TheHeroes, Lastas Airbender,well as increased toy and Teenagegame Mutantsales Ninjaon Turtles,licensed forbrands whichsuch theas CompanyMarvel isand obligatedStar to pay a royalty.Wars.

Product development – Product development expense for the firstsecond quarter of 2026 was $78.0$93.6 million, or 7.8%8.2% of net revenues, compared to $80.5$77.5 million, or 9.1%7.9% of net revenues, for the firstsecond quarter of 2025. The decreaseincrease in Product development expense during the firstsecond quarter of 2026 was primarily due to the Company's cost saving initiatives over the last 12 months, partially offset with higher incremental investment in the development of Grow Brands under the Company's Playing to Win strategy.

Advertising – Advertising expense for the firstsecond quarter of 2026 was $60.4$74.8 million, or 6.0%6.6% of net revenues, compared to $55.4$63.6 million, or 6.2%6.5% of net revenues, for the firstsecond quarter of 2025. The Advertising expense increase during the firstsecond quarter of 2026 was primarily driven by additional spend necessary to support top line growth opportunities within the Grow Brands category, specifically within the Wizards of the Coast and Digital Gaming segment.

Amortization of intangible assets – Amortization of intangible assets decreased to $14.6 million, or 1.5%1.3% of net revenues, for the firstsecond quarter of 2026, compared to $17.0$17.2 million, or 1.9%1.8% of net revenues, for the firstsecond quarter of 2025. The amortization expense was driven by the straight-line amortization of the Company's definite-lived intangible assets.

Selling, distribution and administration – Selling, distribution and administration expenses decreasedincreased to $259.1$338.7 million, or 25.9%29.7% of net revenues for the firstsecond quarter of 2026, from $269.6$282.8 million, or 30.4%28.8% of net revenues, for the firstsecond quarter of 2025. The decreaseincrease in Selling, distribution and administration expenses during the firstsecond quarter of 2026 is primarily the result of a one-time $56.4 million non-cash impairment charge related to the Company's decision to refocus the Digital Games portfolio, which included the cancellation of certain titles scheduled for release in 2028 and beyond, as well as $10.8 million of incremental costs incurred as a result of the unauthorized network access, partially offset by benefits from cost savings initiatives that have occurred over the last 12 months.

Operating profit (loss) – Operating profit for the firstsecond quarter of 2026 was $270.3$252.5 million, or 27.0%22.2% of net revenues, compared to operating profitloss of $170.7$798.2 million, or 19.2%81.4% of net revenues, for the firstsecond quarter of 2025,2025 driven by the factors discussed above.

Interest incomeexpense – Interest incomeexpense was $10.1$46.5 million for the firstsecond quarter of 2026, compared to $8.9$40.6 million in the firstsecond quarter of 2025. Higher Interestinterest incomeexpense in 2026 is primarily reflectsthe result of an increase in outstanding debt driven by issuance of the 2031 Notes, partially offset by debt repurchases of the Company's cashoutstanding balance2027, 2040, and investments2044 in treasury securities, which were substantially higher in 2026 as compared to 2025.Notes.

OtherInterest (income) expense, net – Other (income) expense, net resulted inInterest income ofwas $5.5$12.9 million for the firstsecond quarter of 2026, compared to expense of $1.4$5.4 million in the firstsecond quarter of 2025. TheHigher changeInterest income in Other2026 (income)primarily expense,reflects netthe duringCompany's cash balance and investments in treasury securities, which were substantially higher in 2026 was driven primarily by variations in the movement of foreign currencies in the first quarter of 2026 whenas compared to the first quarter of 2025.

Income tax expense totaled $44.6$47.4 million on a pre-tax income of $244.1$208.7 million in the firstsecond quarter of 2026 compared to an income tax expense of $37.1$40.0 million on pre-tax incomeloss of $136.6$814.7 million in the firstsecond quarter of 2025. Both periods were impacted by discrete tax events.

During the firstsecond quarter of 2026, the Company recorded a net discrete tax benefit of $8.8$1.0 million primarily associated with share-basedthe compensation.release of uncertain tax positions resulting from the expiration of certain international statutes of limitations. During the firstsecond quarter of 2025, the Company recorded ana unfavorablenon-cash adjustmentgoodwill toimpairment within the LossConsumer onProducts Salesegment of $1,021.9 million with no corresponding tax benefit. Exclusive of the Film and TV reporting unitimpairment of $25.0goodwill, million,the whichCompany generated no tax benefit, and recognizedrecorded a net discrete tax benefit of $0.3$5.9 millionmillion, primarily associated with share-basedthe compensation.release of a valuation allowance.

Absent discrete items, the tax rates for the firstsecond quarter of 2026 and 2025 were 21.9%23.2% and 23.1%,22.1%, respectively. The decreaseincrease in the base rate to 21.9% for the firstsecond quarter of 2026 relative to the firstsecond quarter of 2025 is primarily due to the mix of jurisdictions where the Company earned its profits.

The following table presents net external revenues and operating profit for the Company's reportable segments for the three months ended June 28, 2026 and June 29, 2025:

Wizards of the Coast and Digital Gaming segment net revenues increased 25.9%27.1% in the firstsecond quarter of 2026 to $582.0$663.8 million from $462.1$522.4 million in the firstsecond quarter of 2025. The net revenue increase in the Wizards of the Coast and Digital Gaming segment during the firstsecond quarter of 2026 was primarily attributable to an increase in Tabletop Gaming revenue which increasedgrew 34.0%30.0% behind growthdemand in MAGICMagic: THEThe GATHERINGGathering, driven by the release of the Secrets of Strixhaven and Universes Beyond sets,Marvel primarilySuper dueHeroes to strong demand for Lorwyn Eclipsed, Teenage Mutant Ninja Turtles, as well as other various backlist titles.sets. This growth was accompanied by an increase in digital licensing revenue related to MONOPOLYMonopoly GOGo!, which contributed $41.4$44.2 million of revenue during the quarter.

Wizards of the Coast and Digital Gaming segment operating profit was $297.7$270.0 million, or 51.2%40.7% of segment net revenues for the firstsecond quarter of 2026, compared to operating profit of $230.0$241.9 million, or 49.8%46.3% of segment net revenues, for the firstsecond quarter of 2025. Operating profit increased during the firstsecond quarter of 2026 due to increased net revenues, as discussed above. Operating margin also increaseddecreased during the firstsecond quarter of 2026, primarily driven by increaseda netone-time revenues$56.4 million non-cash impairment charge related to the Company's decision to refocus the Digital Games portfolio, which included the cancellation of certain titles scheduled for release in 2028 and product mix in 2026 as compared to 2025.beyond.

Consumer Products segment operating loss for the firstsecond quarter of 2026 was $47.5$14.5 million, or 11.9%3.1% of segment net revenues, compared to a segment operating loss of $43.9$1,029.5 million, or 11.0%232.7% of segment net revenues, for the firstsecond quarter of 2025. The increasechange in operating loss in the firstsecond quarter of 2026 was driven primarily by increasedthe non-cash goodwill impairment charge of $1,021.9 million recorded during the second quarter of 2025, offset by tariff costs associated with tariffs of approximately $8.3$6.2 million.

Entertainment segment net revenues decreased 24.0%20.0% to $20.3$12.8 million for the firstsecond quarter of 2026, compared to $26.7$16.0 million for the firstsecond quarter of 2025. The net revenue decrease in the Entertainment segment during the firstsecond quarter of 2026 was driven primarily by the timing of entertainment streaming renewals,renewals partiallyand offsetother withcontent continued momentum relating to investments in the PEPPA PIG brand.deals.

Entertainment segment operating profit was $17.3$5.6 million, or 85.2%43.8% of segment net revenues for the firstsecond quarter of 2026, compared to an operating lossprofit of $11.2$6.1 million, or 41.9%38.1% of segment net revenues for the firstsecond quarter of 2025. The increasedecrease in operating profit in the Entertainment segment operating results during the firstsecond quarter of 2026 was primarily driven by the non-recurring $25.0 million Loss on disposal of business that was recordeddecrease in 2025.revenue discussed above.

Corporate and Other operating profitloss was $2.8$8.6 million for the firstsecond quarter of 2026 compared to an operating loss of $4.2$16.7 million for the firstsecond quarter of 2025. The increasechange in operating profitloss in the firstsecond quarter of 2026 as compared to the firstsecond quarter of 2025 primarily reflects the impacts of cost saving initiatives at the Company.Company over the last 12 months, partially offset by incremental costs incurred related to the unauthorized network access described above.