Q2 2026 Embracer Group AB Earnings Call Transcript
Key Points
- Embracer Group AB (THQQF) reported a 6% organic growth in net sales when considering the impact of divestments and FX.
- Strong performances were noted from key IPs such as Middle-earth Enterprises and Kingdom Come: Deliverance, with increased gamer engagement.
- The company completed a SEK500 million share buyback program, prioritizing the distribution of excess cash to shareholders.
- The Entertainment & Services segment grew organically by 25%, driven by strong merchandising and licensing contributions.
- The Coffee Stain Group spin-off is on track for a December listing, marking a significant step in the company's transformation strategy.
- Net sales for the quarter were SEK3.8 billion, reflecting a 19% year-over-year decline.
- Adjusted EBIT decreased significantly to SEK109 million from SEK513 million in the previous year.
- The PC console segment experienced a 4% organic decline in net sales due to weak performances of new releases.
- Free cash flow was negative at minus-SEK348 million, although slightly better than the previous year.
- Gross margin for the quarter was down 6 points year-on-year, primarily due to the impact of divestments.
Welcome to Embracer Group Q2 interim report 2025, '26. (Operator Instructions)
Now I'll hand the conference over to CEO, Phil Rogers and CFO, Muege Bouillon. Please go ahead.
Thank you, and good morning, everyone, and thank you for joining our webcast today to cover our Q2 results. Muege and I are talking to you today from our Stockholm office again. We have a short presentation to cover the main beats for our operating segments and look at our financial performance and in closing on some key steps looking ahead, before turning over to Q&A. So with that, we'll get straight in.
And this a couple of the highlights for Q2. So overall, group Q2 results reflect a soft quarter for new PC console releases. Net sales were SEK3.8 billion, which represents 19% year-over-year decline but a 6% organic growth when we consider the impact of our divestments and FX.
In amongst that, we saw solid performances from two really important IPs
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