Enad Global 7 AB ((SE:EG7)) has held its Q1 earnings call. Read on for the main highlights of the call.
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EG7’s latest earnings call struck a cautiously upbeat tone, as management acknowledged weaker headline figures but highlighted a return to profitability, strong cash flow, resilient recurring revenues and a bulging release pipeline. Investors were reminded that FX pressure, timing of launches and last year’s exceptional Fireshine catalog explain much of the top-line drop rather than structural demand issues.
Return to profitability
EG7 swung back to the black in the first quarter, posting a net profit of SEK 21 million compared with a loss of SEK 18.5 million a year earlier. Diluted earnings per share came in at SEK 0.24, signaling that despite softer revenues the bottom line benefited from tighter cost control and a more efficient operating structure.
Strong operating cash flow
Operating cash flow surged to roughly SEK 89–90 million in the quarter, around five times the prior-year level and up from SEK 80 million. This stronger cash generation gives the group more flexibility to fund development, manage its balance sheet and navigate uneven quarterly revenues without stressing liquidity.
Resilient predictable revenue base
Live-service and back-catalog titles delivered SEK 314 million in Q1, representing 91% of group net revenues and declining only about 1.5% in the period. Management underscored that this predictable base generated roughly SEK 1.3 billion of revenue over the last 12 months, forming a stable cash engine that underpins ongoing investments and debt service.
Daybreak and Palia drive organic growth
Daybreak remained the growth engine, contributing SEK 190 million or 55% of group net revenue with organic growth of around 17% in local currencies. Within Daybreak, Palia stood out with about 160% year-on-year local-currency growth and reaching 10 million lifetime players, reinforcing EG7’s positioning in scalable live-service franchises.
New release momentum at Fireshine
Fireshine’s latest title Far Far West launched into early access on April 28 and sold around 700,000 units in its first week. With a 96% positive rating on Steam and clear scope for multi-platform expansion, the performance suggests meaningful upside from the title over time, even as Fireshine’s quarterly numbers are lumpy.
Improving unit profitability and recovery
Piranha reported SEK 21 million in revenue, translating to roughly 12–12.5% growth and an adjusted EBITDA of SEK 8 million for a robust 39% margin, up sharply from 17% last year. Big Blue Bubble also returned to growth with around 3.6–4% higher revenue year-on-year and a positive adjusted EBITDA contribution, indicating a broader recovery across studios.
Cost discipline and structural cleanup
The company detailed around SEK 32 million in annualized cost savings, including reductions at Petrol, Piranha and in remuneration expenses. EG7 also accelerated settlement of the Daybreak earn-out, paying roughly USD 11 million to unlock an expected USD 1–3 million of annual cash flow for about 12 years, while recording a one-off gain in the income statement.
Largest product slate in company history
Management emphasized that EG7 is entering 2026 with its largest ever slate, including Far Far West, the Palia Royal Highlands expansion, new MechWarrior downloadable content and upcoming titles like Denshattack and Aliens: Fireteam Elite 2. Additional launches such as EverQuest Legends, continued My Singing Monsters events and six unannounced Fireshine games highlight the depth of the pipeline.
Solid financial position despite investments
The company invested SEK 174 million in Q1, including the accelerated Daybreak earn-out and funding for Palia and Cold Iron, yet ended the quarter with SEK 293 million in cash. With net debt of just SEK 55 million, an unused SEK 100 million credit facility and a SEK 1 billion bond framework, EG7 argued it has ample financial headroom to support its strategy.
Top-line decline and weaker profitability metrics
Quarterly net revenues fell to SEK 345 million, a 24% reported decline year-on-year or about 13% on an FX-neutral basis, reflecting fewer new releases and the absence of last year’s major physical launches at Fireshine. Adjusted EBITDA dropped to SEK 51 million and the margin slipped to 14.8%, with management conceding that current LTM revenue and margins sit below historic norms.
Fireshine’s tough comparison base
Fireshine’s net revenue declined to SEK 45 million from SEK 145 million in the prior-year quarter, largely because three physical titles last year generated around SEK 96 million. The unit was not profitable in Q1 given the lack of comparable releases, but management framed this as a timing issue ahead of a fuller slate later in the year.
FX headwinds and underperforming units
Foreign-exchange movements shaved approximately SEK 50 million off revenue, equal to about 11% of net sales, magnifying the year-on-year decline and masking underlying growth in local currencies. Petrol remained a drag, generating SEK 28 million in revenue but a negative EBITDA, prompting ongoing restructuring and cost optimization across underperforming lines.
KPIs below historical levels
Executives acknowledged that key performance indicators, including LTM net revenue and adjusted EBITDA margin, are currently below the company’s long-term averages. They linked this to FX pressure, release timing and the work still needed to fully realize the benefits of the product pipeline and cost-saving initiatives.
Guidance and outlook
Looking ahead, EG7 guided to “solid potential growth” for the rest of 2026, leaning on its packed release calendar and structural cost cuts to lift revenues and margins. With strong live-service fundamentals, improving studio profitability, annualized savings of around SEK 32 million and freed-up cash from the Daybreak earn-out, management argued that the foundation is set for a gradual recovery in top-line and profitability metrics.
EG7’s earnings call painted a company in transition, balancing near-term pressure on revenue and margins with tangible gains in profitability, cash flow and operational discipline. For investors, the story now hinges on successful execution of the record product slate and continued cost control, which together will determine whether today’s cautious optimism turns into sustained earnings growth.