Release Date: July 22, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Stillfront Group AB (STLFF, Financial) announced a new game, Supremacy: Warhammer 40,000, which is expected to enhance their Supremacy franchise.
- The company has successfully expanded key franchises like Supremacy: WW3 and Ludo Club, showing growth in the quarter.
- Direct-to-consumer (DTC) efforts have significantly improved gross profit margins, with DTC share increasing from 26% in 2023 to 39% in Q2 2025.
- Free cash flow remained strong, with SEK1,089 million reported, marking the third consecutive quarter of over SEK1 billion in LTM free cash flow.
- Cost-saving initiatives have been effective, particularly in North America, contributing to an increase in gross margin from 80% to 82% year-over-year.
Negative Points
- Net revenue declined by 11.3% organically to SEK1,436 million, impacted by currency headwinds of 6.3%.
- Organic decline in Europe was 14.5% year-on-year, attributed to tough comparables and underperformance in the narrative segment.
- North America saw an 18% year-on-year revenue decline on an organic basis, despite restructuring efforts.
- Adjusted EBITDAC decreased from SEK505 million in Q2 2024 to SEK374 million in Q2 2025, partly due to foreign exchange headwinds.
- The Word franchise experienced a negative 9% EBITDAC margin in 2024, prompting a strategic move to Moonfrog in MENA and APAC.
Q & A Highlights
Q: In terms of organic revenue growth in the second half, what are the main factors that will influence the range of possibilities?
A: Alexis Bonte, CEO: We expect a significant improvement in organic growth during H2. However, there's uncertainty with new game launches, which might be delayed for optimal performance. We're seeing good traction in our Supremacy franchise and expect positive results from our investments in Europe. In North America, we're cautious with UA investments, focusing on BitLife's potential. MENA and APAC regions remain solid, though some weaknesses exist in non-key franchises.
Q: With the move of the Word franchise to Moonfrog, are there other similar strategic moves planned?
A: Alexis Bonte, CEO: The move of the Word franchise is part of our strategic review. We're considering various options, including divestments and studio closures, to optimize operations and potentially slow declines or return games to growth.
Q: Can you elaborate on the strategic review and whether assets might be sold if they receive high bids?
A: Alexis Bonte, CEO: We're reviewing all parts of the company to create shareholder value. We're not under pressure to make radical changes and will ensure any deals benefit both shareholders and the company.
Q: Will the Word games be immediately profitable after moving to Moonfrog?
A: Tim Holland, CFO: The Word franchise had a negative EBITDAC margin in 2024. We aim to run them profitably at Moonfrog, with the move expected by the end of Q3. The team at Moonfrog has experience with Word games, which should enhance quality.
Q: What are the expectations for new game launches and their impact on revenue?
A: Alexis Bonte, CEO: New game launches carry uncertainties, but we are optimistic about their potential impact. We will be disciplined in launches, ensuring strong margins and cash flows. The success of new games will influence our H2 performance.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
