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An update from Embracer Group AB ( ($SE:EMBRAC.B) ) is now available.
Embracer Group reported a sharp decline in net sales and profitability for the fourth quarter and full year 2025/26, with annual revenue down 25% to SEK 15.9 billion and EBIT plunging into a loss of SEK 7.1 billion. Despite weaker topline and a 68% drop in adjusted EBIT to SEK 905 million, the company delivered stronger-than-expected Q4 earnings and free cash flow, supported by resilient performance in core PC/console IPs like Kingdom Come: Deliverance II, new IP success such as REANIMAL, improved trends in mobile, and solid growth in Entertainment & Services.
Management highlighted FY 2025/26 as a transition year, marked by a quieter release slate and structural changes including the spin-off and listing of Coffee Stain Group, and announced plans to spin off Fellowship Entertainment in 2027 to create two more focused businesses. Embracer is shifting its primary profitability metric to Cash EBIT, which better reflects underlying cash flows from game development, and reported Cash EBIT of SEK 511 million for the year while guiding for at least SEK 1 billion in FY 2026/27, underpinned by the upcoming launch of Metro 2039 and continued focus on cost discipline, portfolio optimization, and stronger cash conversion.
The group’s operational footprint has been streamlined, with headcount reduced and total game development projects cut to 79, as it prioritizes disciplined capital allocation over rapid expansion. While the headline losses and declining sales underscore ongoing challenges in parts of its games portfolio, the combination of improved free cash flow, a growing Entertainment & Services segment, and the introduction of a more cash-focused performance measure signals an attempt to rebuild investor confidence and sharpen strategic positioning in a consolidating gaming market.
The most recent analyst rating on ($SE:EMBRAC.B) stock is a Buy with a SEK90.00 price target. To see the full list of analyst forecasts on Embracer Group AB stock, see the SE:EMBRAC.B Stock Forecast page.
More about Embracer Group AB
Embracer Group AB is a Swedish video game and entertainment company that develops and publishes PC and console titles, mobile games, and runs an Entertainment & Services segment. Its portfolio includes core intellectual properties such as Kingdom Come: Deliverance and the Metro franchise, and it focuses on building long-term value through game development, IP management, and distribution partnerships across global markets.
Average Trading Volume: 723,742
Technical Sentiment Signal: Hold
Current Market Cap: SEK15.75B
Find detailed analytics on EMBRAC.B stock on TipRanks’ Stock Analysis page.