The business, based at Wolverhampton Science Park, made a loss before tax of £4.08 million for the year to January 31.
But chief executive Richard North said 2014 had been a good year with toys dreamed up in Wolverhampton proving a hit in Japan.
He said: "The company remains cash positive and the current year has resumed to profit as forecast with 2015 budgeted to be the second best performing in the company's history."
The company was invested in by equity funders Business Growth Fund in 2012 which has supported significant new technology developments to create toy incorporating digital technology including the new radio controlled racing car system Real FX.
"The item is a sales hit in Japan, the first territory and is now rolling out across 20 territories around the world including the UK, Germany, France, Switzerland, Australia, the Middle East, Spain, South Africa and Canada," said Mr North.
"The gestation period of these technical toy developments are usually two to three years and require substantial investment.
"The investments totalled more than £6 million and the board is pleased to announce that the company has signed major territory distribution deals with Hasbro, the second largest toy company in the world, Vivid Toy Group, the UK's largest independent toy company, Toy Triangle the Middle East's largest toy company and Modern Brands, Australia's largest toy and educational products company.
"More signings for Real FX will be announced in January 2016. Additionally the company has been awarded a special toy inventor award by Hasbro for its high tech robot Terradrone," added Mr North.
Mr North is behind a new TV show that is being developed to find the UK's next big toy.
Britain's Next Hot Toy is expected to come to the screen next year.
The idea for the show came from his other company Wow! Labs, who come up with new developments for Wow! Stuff, which started out in Bilston initially selling a range of gadget gifts.
When it moved to the science park it began coming up with a range of ideas.
The move to toys started with the success of the company's robotic monkey Dave, which sold 250,000 in six weeks in the UK alone.
Since then it has followed up with flying fish Air Swimmers, the Science Museum range, Mensa electronic games, interactive singing and talking toys Singalongz and the My Keepon dancing robot.
Last year also saw the launch of Wow Packs animated back packs for children that come to life with funny expressions and sound effects.
All products are currently made in China and Hong Kong.
Wow! Stuff was employing 35 people in Wolverhampton last year.
Mr North, a former pupil of Regis School in Tettenhall, started his first company in 1994 making binoculars and telescopes. He sold that in 2001 and set up Boysstuff.co.uk, which he sold in 2005 and bought Wow! Stuff a year later.