Q1 2026 Modern Times Group MTG AB Earnings Call Transcript
Key Points
- Modern Times Group MTG AB (STU:MRTA) reported a record quarter with strong financial results, including a 14% year-over-year proforma revenue increase and 12% organic growth.
- The company achieved a high adjusted EBITDA margin of 25% in Q1, reflecting the strength of its evergreen titles and strategic initiatives.
- Direct-to-consumer revenues rose significantly to 39% of total revenues, showcasing successful strategic initiatives.
- The rapid integration of AI across the business is enhancing game development, publishing, and monetization, providing a competitive advantage.
- The company generated substantial unlevered free cash flow of SEK582 million in Q1, with a conversion rate of 78% on a rolling 12-month basis.
- Revenues in Forge of Empires declined by 30% year-over-year in constant currencies, attributed to a shortage of new content for long-term players.
- The weakening of the US dollar against the Swedish Krona negatively impacted reported revenues and profits.
- The company anticipates a lower pace of new content for Raid Shadow Legends in Q2 and Q3, which may affect revenue growth.
- There is uncertainty in the regulatory environment regarding platform fees, which could impact future direct-to-consumer revenue growth.
- The company is guiding for lower pro forma revenue growth of 5% to 8% for the full year 2026, indicating potential challenges in maintaining Q1's growth momentum.
Good morning, everyone, and thank you for joining us. Today, we have a slightly expanded agenda for you. We will start with a normal Q1 presentation and Q&A, hosted by our CEO, Maria Redin, and our CFO, Nick Hopkins.
After this, the CEO of our Midcourt district, Oliver Bulloss, will join us on the stream to share an update and answer your questions on the progress of our AI adoption in the Midcourt district.
We're also, of course, making really great, exciting strides in our casual district, even though we will not focus on that today.
When it's time for the Q&A, please use the online form if you want to add questions to the livestream or follow the instructions from the operator if you're dialing in by phone.
I will now hand over to Maria. Maria, please go ahead.
Thank you, Anton, and hello, everyone.
We've had a great, but also
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